Economic Vitality Committee Agenda and Packet 2025 03 06

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SUBJECT: INCENTIVE IDEAS DATE: MARCH 6, 2025 PAGE 2 OF 5 The thought is that this would encourage businesses to move into vacant spaces, and assist the business with a higher rebate in the earlier years which are often the hardest years to remain open. This would align with our current BAP policy as the incentive would be rebate based on what the business actually produces. In addition, over the years, the rebate amount would decrease, bringing additional sales tax into the City. Once the incentive terminates, the City will retain all of the sales tax generated by the business. To move forward with this option, Staff would bring a BAP program amendment to the full City Council for a vote. Loan Program Some communities create their own or partner with a financial organization to create a loan program. This often takes the form of a revolving loan fund, and the fund can provide loans to businesses at low or no cost. The City would need to determine what types of businesses and projects could be eligible for this type of incentive. Some common examples include a business purchasing their property or a business expansion. The program could include additional eligibility requirements such as business size and annual operating capital. In order for a loan program to be successful, the City would need to determine program eligibility and identify where the initial funds to start the program would come from, and to what amount. To move this option forward, staff would work with for -profit and not -for - profit financial institutions to determine how much funding would be needed, identify criteria and program eligibility to bring back to the EVC for discussion. Rent Assistance There have been conversations surrounding providing rent assistance to targeted businesses in the City of Louisville to assist in the cost of operations. Rent assistance could be provided to small businesses to help close the gap between what businesses can reasonably charge for products and services, and current market rents. The City would need to determine eligibility for the programs and program parameters such as how much rent assistance (dollar amount, percentage, etc.) and length of time. The City does not control market factors such as market rent and there would be no way for the City to make sure that the rent for the property does not go up while providing assistance. In addition, long term rent assistance is typically not sustainable for the business or the City, as the City can not control market factors or rents charged. An additional option for rent assistance would be one time grant assistance to help cover the rent should the business have a slow month or face unforeseen expenses. If the EVC would like to explore rent assistance, Staff would recommend exploring options for one time assistance. This can help businesses recover from one-time unforeseen CITY COUNCIL COMMUNICATION