Economic Vitality Committee Agenda and Packet 2021 09 24

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SUBJECT: STRATEGIC PLAN ITEM #1-3 DATE: SEPTEMBER 24, 2021 PAGE 3 OF 4 Revise Program Criteria for Relocating Existing Businesses • The existing BAP requires that to be eligible, an existing business that wishes to remain in Louisville but is relocating, must physically expand. Practically this means a business that is simply relocating without expanding would not be eligible for assistance. There are many reasons a business might wish to relocate but not be able or willing to increase its physical footprint. • Recommendation: Allow a business that is relocating to be eligible even if they do not increase in square footage. Because the program provides for both retention and attraction incentives, there is still a benefit to supporting businesses that are moving even if they are not physically growing. A new location may still allow a business to "grow" —mainly by better market or customer access. Businesses that relocated would be eligible to apply for rebates related to tenant improvements, though rebate eligibility for Sales and Consumer Use Tax would still be limited to the "new" increment of tax generated. Create a Standard Incentive Offering • It is most beneficial to the City, in terms of time and cost effectiveness, to maintain an established business than it is to recruit a new one to fill a vacated space. Retention is also a significant influencing factor on the reputation of the City as a place to do business. BAP rebates for existing small businesses that want to remain in Louisville tend to be lower value, especially for a retailer or a service business that is moving to existing commercial space that may not require much tenant improvement or build -out. However, these businesses are key to the overall fabric of the business community. Recommendation: Create an alternative path to the rebate process where the estimated rebate to the business is anticipated to be less than $5,000. Upon application, staff would calculate the estimated rebates available to the business; if the estimate results in a less than $5,000 rebate, staff would propose a standard incentive of $5,000 to the business, paid after the business commences operations in its new location. This standard incentive would be available to a new business coming to the City or an existing business pursuing relocation. As illustration, in the last two years, the City has only approved two BAPs valued at less than $5,000: one for $2,500 and one for $1,200; under this recommendation, both of those existing businesses would receive instead one payment of $5,000. Create an Administrative Approval Process • All Business Assistance Agreements currently require a hearing before City Council and are adopted by Resolution. Amendments to previously approved Assistance Agreements also receive Council approval, but are generally placed on the Council's Consent Agenda. For smaller assistance packages, the approval process adds significant time for the applicant and may cause uncertainty for the applicant about approval. Boulder for example, approves all incentives administratively under the City Manager's authority. Agenda Packet P. 11