Economic Vitality Committee Agenda and Packet 2021 09 24

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SUBJECT: STRATEGIC PLAN ITEM #1-3 DATE: AUGUST 20, 2021 PAGE 3 OF 8 • Importance of providing high quality job opportunities to local residents. • Focus on retaining good businesses already in Louisville, especially small brick - and -mortar businesses. • Increase awareness of best practices in relation to sustainability and transportation to be good stewards of the environment. • Ensure stable revenue base to the City for essential services. Commercial Vacancies In July, the Committee briefly discussed the idea of providing a "bonus" to a business that fills an existing commercial vacancy. With such an incentive, it would be important to define a length of vacancy and the amount should likely depend on the size or prominence of the vacancy. Staff would generally not seen any vacancy of less than a year as problematic. Owners and landlords take different approaches to filling vacancies and some are simply more aggressive than others. Changes in the commercial market also significantly impact the types of properties being pursued and market rent might just be too high to attract some tenants. A vacancy that has existing for two to three years is likely the more troublesome as it could impact the surrounding businesses and is a more significant revenue loss for the City. An option with a bonus might be to pay a percentage of the first month's rent, up to a certain amount, tiered by the length of vacancy. Staff and the Committee also noted that the current structure of incentives is not generally as beneficial to existing businesses, many of whom do not do major tenant improvements when occupying new commercial space. In addition, the program currently requires that a business expand its commercial space to be eligible; a business cannot simply move to a similar or smaller location within Louisville. The Committee may wish to consider a slightly different toolkit for existing businesses that might have more of a standard incentive amount for moving but keeping a business within the City. Though a business moving does create a vacancy, a business may move to a location that is harder to fill with a new business and leave a space that may be more likely to attract new tenants. High Quality Jobs Under the current program structure, the number of new or retained jobs, as well as the salary range of those positions, are part of general criteria. However, as noted previously, staff does not weight or rank the criteria, so employment exists at the same as other beneficial factors the business may contribute. Through the application, companies indicate their current number of employees, total annual payroll, and average salaries. They also project how those numbers will change over the first five years of operations. Staff does attempt to track this through our annual state database, but there is not detail about the number of Louisville residents specifically employed by companies. Agenda Packet P. 15