Item 9 - Commercial Rehabilitation Program
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AGENDA REPORT SUMMARY
DATE:
SUBJECT:
Honorable Mayor and Members of the City Council ~ "-
Honorable Chairman and Members of the Redevelopment Agency ~~~~~co~
James L. Bowersox, City Manager/Executive Dir~
BY:~.ohn D. Fitch, Assistant City Manager/Assista~xecutive Directorl{~
~~arren Shafer, Director of Redevelopment Services -,
David Narevsky, Redevelopment Manager~
June 13, 1995
TO:
FROM:
INITIATED
Commercial Rehabilitation Program
ABSTRACT
At the City Council meeting held on September 6, 1994, Mayor Higginson proposed
consideration of a program for business owners for commercial
revitalization/rehabilitation. The City Council approved and directed staff and the
Redevelopment and Housing Advisory Committee to formulate a plan and policies to bring
back to the City Council for review.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
There is no fiscal impact generated by this report. The fi sca 1 impact of establishing
a commercial rehabilitation program would depend upon the nature of the specific type
of program and guidelines selected.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to the Chamber of Commerce, the Redevelopment and
Housing Advisory Committee and the Poway Road Specific Plan Committee.
RECOMMENDATION
It is the recommendation of the Redevelopment and Housing Advisory Committee (RHAC)
t"t t" Ctt, COlliiiii'd""0""t Ag"" di",t t" '"'C to d",lo, . t"9,t,d
Commercial Rehab. ~Qn Program and approve the concept for the basic program, with
implementation por both programs to be brought back to the City
Council/Redevelopme Agency as soon as possible.
ACTION
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JUN 1 3 1995 ITEM 9
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- AGENDA REPORT
CITY OF POW A Y
TO:
FROM:
INITIATED
Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Redevelopment Agency
James L. Bowersox, City Manager/Executive Dire~ ~
BY:~ohn D. Fitch, Assistant City Manager/Assistant Executive Dire~o
arren Shafer, Director of Redevelopment Services
David Narevsky, Redevelopment Manager DrJ
June 13, 1995
DATE:
SUBJECT:
BACKGROUND
Commercial Rehabilitation Program
At the City Council meeting held on September 6, 1994, Mayor Higginson proposed
consideration of a program for business owners for commercial
revita 1 i zat i on/rehabil i tat i on that was simil ar to the successful affordabl e
housing preservation (rehabilitation) program. As proposed, this program would
provide grants/loans for certain improvements to provide "facel ifts" for
businesses in order to help stimulate and revitalize their growth. The City
Council approved and directed staff and the Redevelopment and Housing Advisory
Committee to formulate a plan and policies to bring back to the City Council for
review.
The Redevelopment and Housing Advisory Committee appointed a Commercial
Rehabilitation Subcommittee to establish the concept program guidelines. The
Subcommittee prepared a report that was presented to the full Committee at their
April 24, 1995 meeting. This report is included as Attachment 1.
FINDINGS
At the April 24, 1995 meeting of the Redevelopment and Housing Advisory
Committee, staff and the Commercial Rehabilitation Subcommittee presented
information concerning typical commercial rehabil itation programs from other
communities. The relationship between the Poway Road Specific Plan and this
proposed program was di scussed, with the Committee i ndi cat i ng that the Commerci a 1
Rehabilitation Program should be compatible with the Poway Road Specific Plan.
The Committee discussed operation of the "basic rehabil itation oroaram."
El i gi bl e imp.I'Llents woul d i ncl ude 1 easeho 1 d upgrades such as carpet, paint, new
fixtures, .(;s, signage and product enhancements, i ncl udi ng design
fabricationnstallation. The attached April 24, 1995 Report includes the
recommendations of the Subcommittee which were adopted by the full Committee.
ACTION:
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JUN 1 3 1995 ITEM 9
Commercial Rehabilitation Program
June 13, 1995
Page 2
Discussion was also held on the concept of a "tarqeted rehabilitation oroqram."
The Committee felt it important to target a portion of the identified
rehabilitation funds for efforts at implementing some of the concepts contained
within the Poway Road Specific Plan. The goal of this targeted rehabilitation
program is to conduct a demonstration of how the Specific Plan and the focused
efforts at implementing the Plan can improve a specific building or area.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
There is no fiscal impact generated by this report. The fiscal impact of
establishing a commercial rehabilitation program would depend upon the nature of
the specific type of program and guidelines selected.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to the Chamber of Commerce, the Redevelopment
and Housing Advisory Committee and the Poway Road Specific Plan Committee.
RECOMMENDATION
It is the recommend at i on of the Redevelopment and Hous i ng Advi sory Committee
that the City Council/Redevelopment Agency:
(1) di rect the Redevelopment and Housi ng Advi sory Committee to develop a
targeted Commercial Rehabilitation Program to focus the use of the first $250,000
in rehabilitation funding for projects that would implement the concepts
contained in the Poway Road Specific Plan, and
(2) approve the concept program guidelines for the basic Commercial
Rehabil itation Program and direct staff and the Redevelopment and Housing
Advisory Committee to bring back implementation plans for both programs to the
City Council for review as soon as possible.
.....
Attachment: ~eommercial Rehabilitation Subcommittee Report dated 4/24/95
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AGENDA REPORT
REDEVELOPMENT AND HOUSING ADVISORY COMMITTEE
TO:
FROM:
DATE:
SUBJECT:
Redevelopment and Housing Advisory Committee
Commercial Rehabilitation Subcommittee
April 24, 1995
Report from Subcommittee
BACKGROUND
The City Council requested that the Committee develop a commercial rehabilitation
program focusing on providing assistance to small businesses. Accordingly, the
Committee appointed a subcommittee of Jim Crosby, Duke Ayers and Mary Mitchell to
develop proposed program guidelines. The Commercial Rehabilitation Subcommittee held
a meeting on Wednesday, April 19, 1995. In their discussion, the Subcommittee
identified a related issue they felt they should bring to the Committee for
discussion. The Committee feels there is a need to request the City Council\
Redevelopment Agency to consider an expansion of the Commercial Rehabilitation
Program. Therefore, the Committee has divided their report to the Committee into
two issues. The first involves the Subcommittee's idea regarding the expanded
rehabilitation concept, and the second is the Subcommittee's recommendations for
operating the basic Commercial Rehabilitation Program.
DISCUSSION
During the Subcommittee's discussion of the program, the issue of how the
rehabilitation program relates to the implementation of the Poway Road Specific Plan
was raised. As originally envisioned, the Commercial Rehabilitation Program was
viewed as a separate program that would be compatible with the Poway Road Specific
Plan but would not be an implementation vehicle for the Specific Plan. During the
Subcommittee discussion, they felt it was important to target some of the
rehabilitation funds for efforts at implementing some of the concepts contained the
Specific Plan: T~bcommittee's conclusion ~as that ~hey wanted to suggest that
the full commlt.port a request to the Clty CounclljRedevelopment Agency that
the basic progr -expanded to provide a targeted rehabilitation program to focus
on certain areas ch would serve to initiate implementation of the Poway Road
Specifi c Pl an.
The second issue the Subcommittee reviewed was options for operating the basic
program. The following details the recommendations of the Subcommittee for the
policy framework for the Commercial Rehabilitation Program. These guidelines would
serve as the basic program policies and, for the most part, would also work for the
expanded program with some additional details. These policies will enable the staff
to develop the additional details for implementation of the basic program.
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Attachment 1
Redevelopment and Housing Advisory Committee
Commercial Rehabilitation Loan Subcommittee
Page 2
Define eligible areas for participation in the Commercial Rehabilitation Program:
All commercially zoned property along Poway Road should be considered eligible,
including the commercial areas on Midland Road, Community Road, Pomerado Road, etc.
What businesses should be considered eligible?
All businesses that are owner/operated with gross sales under $1,000,000 and which
haven't previously been part of assisted redevelopment projects (such as Creekside
Plaza, Wal*Mart and certain auto dealers) should be eligible.
How much money per loan/grant should be provided?
$5,000 per loan, with up to an additional $5,000 loan provided by the Agency that
would require a dollar for dollar match from the Applicant (maximum Redevelopment
Agency contribution of $10,000).
What repayment of the Loan should be required?
No interest loan, forgiving 10% of the loan for each year the business remains open.
Fully forgiven after 10 years.
How much money is being requested for this program?
Program Options:
(1) If an expanded program is approved, the first $250,000 would be set aside
for the targeted commercial rehabilitation, and any funds in excess of that
would be split 50/50 between the basic program and the targeted program.
(2) If the expanded program is not approved, then all funds available be used
on the basic program.
The exact amount of funds which are available is not know at this time.
Who will admini~bis program?
The City's Depa. of Redevelopment Services would administer the program. The
work would be peed by a consultant who would coordinate the program and the
loan/grant process. It is anticipated that this would require 15-20 hours per week
once implemented and approximately 35 hours for the initial program start-up. The
cost of administration is expected to approximately 20% of total program costs.
What improvements are eligible under this prograIJ?
For those properties located within the defined area, any of the following
improvements which enhance the building and or its appearance are eligible:
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JUN 1 3 1995 ITEM 9
Redevelopment and Housing Advisory Committee
Commercial Rehabilitation Loan Subcommittee
Page 3
(1) facade improvements, (including design, permits, construction),
(2) signs,(including design, permits, construction), and
(3) paint and/or outside cosmetic improvements.
What priority ~ill be established for applicants?'
Under the expanded program the Subcommittee suggests that certain areas be targeted
and then be prioritized based on: (1) their impact on the appearance of Poway Road,
(2) the level of involvement between the tenants and the property owners, and most
importantly, (3) how well they implement the concepts identified in the Specific
Plan. If the expanded program is approved by the City Council/Redevelopment Agency
then more definitive criteria would be developed.
Under the basic plan, the process would be as follows. After approval by the City
Council/Redevelopment Agency, staff and consultant would hold a meeting to discuss
the program and distribute applications. The program and the meeting would be
advertised in the Poway News Chieftain. An initial due date would be established
and appl i cat ions randomly put in sequence from the fi rst day's recei pt. All
subsequent applications would be placed behind the first batch in order of receipt.
In reviewing the applications submitted, the Subcommittee feels a priority system
for ranking the requests should be established. The Subcommittee recommends that
the following factors be considered: age of the building, current physical
condition of the building, consistency with Poway Road Specific Plan, and whether
the applicant is coordinating improvements with other tenants/property owners.
Do business owners need to qualify as low/moderate income households?
Low and moderate income status is not required, as Redevelopment Agency Housing Fund
monies are not being used to fund the program.
What business plan or other training is required?
A plan for expeiie of these funds would be required. The plan would have to
provide informa - n what improvements were being requested, why the improvements
are needed, and. he improvements would benefit the business and the community,
as well as be in' ping with the Poway Road Specific Plan.
What other eligibility requirements are there?
(I) All work must be done in compliance with Poway Road Specific Pl an.
(2) All work must be done in accordance with all applicable City and State Codes.
(3) All work must be done by licensed, insured contractors. No portion of the
work may be performed by the business owner or relatives.
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JUN 1 3 1995 ITEM 9
Redevelopment and Housing Advisory Committee
Commercial Rehabilitation Loan Subcommittee
Page 4
4) All work must be inspected by Building Department, as applicable, and by
staff/ consultant in all cases; and performed in a "good workman 1 ike manner."
Loan Security Issues
The Subcommittee feels it is necessary to require both the tenant and landlord to
co-sign for loan. They felt this is needed to insure the tenant has the authority
under their lease to do the work and also to insure that the landlord is aware of
the tenant's plans. This may also encourage landlords to work with other tenants to
undertake a joint project, thereby reducing the Redevelopment Agency's overhead in
administering the program, and most importantly, help to ensure a consistent
appearance in a commercial center.
Fund Control Issues
The Subcommittee feels the best way of handling payments under the program is to
require applicants to pay for the work in full and to then request reimbursement
from the program once the work is completed.
RECOMMENDATION
The SubCommittee recommends that the Committee:
(1) request that the City Council/Redevelopment Agency direct the Committee to
develop a targeted Commercial Rehabilitation program to focus the use of first
$250,000 in rehabilitation funding for projects that would implement the
concepts contained in the Poway Road Specific Plan, and
(2) after review and discussion, approve the program guidelines for the basic
Commercial Rehabilitation Program, and forward them to City
Council/Redevelopment Agency for approval.
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