Economic Vitality Committee Agenda and Packet 2021 10 22

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SUBJECT: ECONOMIC VITALITY STRATEGIC PLAN ITEM #1-3 DATE: OCTOBER 5, 2021 PAGE 4 OF 6 never had a tenant would not be eligible for this rebate; the space must have been previously occupied by a licensed business. Only the retail business itself would be eligible for the bonus. This recommendation aligns with Strategic Plan Item #5- 2 to "Incentivize use of existing vacant space over new commercial buildings where applicable in Business Assistance applications." 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 their 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. An opportunity for some support in the community where the business is already located may also act as a deterrent to look to surrounding communities that would offer incentives to the company as a new business. Create an Administrative Approval Process • All Business Assistance Agreements currently require a presentation 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. • Recommendation: Allow staff discretion to administratively approve any Assistance Agreement where the cap on rebates or incentives is under $50,000. This change would also allow administrative approval of amendments to agreements, as long as the financial impact was a less than 5% increase to the original agreement approved amounts; the majority of amendments are related to project timing and business entities, not increased incentives. These amounts generally align with the City's current purchasing policies, which are included as Attachment #5. Staff would still prepare estimates and recommended incentives and present those to the City Manager for approval. In addition, formal agreements would still be prepared and executed in consultation with the City Attorney. Staff proposes that City Council would still be provided updates on any new assistance approved via the City Manager's Report at Council meetings. As context, this CITY COUNCIL COMMUNICATION Agenda Packet P. 14