Economic Vitality Committee Agenda and Packet 2021 10 22

Home Browse Search

SUBJECT: STRATEGIC PLAN ITEM #1-3 DATE: OCTOBER 22, 2021 PAGE 2 OF 3 There was Council conversation around the fifth recommendation, which focused on adding a vacancy bonus incentive. Although this recommendation is a direct tie with the Strategic Plan focus on reducing vacancies and incentivizing the use of existing vacant space over new commercial space where possible, there are a number of administrative issues to align so that the change has the intended impact. The EVC recommended that the vacancy bonus be limited to retail business applicants. Council expanded on this concept with concern that it could be used by a relocating business that chooses to occupy a space that has been vacant for over two years, but also creates a new vacancy through relocation. Administratively, staff feels it would not be burdensome to limit this bonus to new retail businesses within Louisville or an existing business that is opening a second location in a space that meets the outlined criteria. There was also a brief discussion about whether these vacancies should be defined by the two year limitation or focus on particular properties, especially large vacancies. There was not clear direction as to whether this was a concept that required review, so the EVC may want to discuss the definition of the vacancy bonus. Staff recommends that there remain an objective eligibility for this bonus. This will mean that it may not apply to all properties that are a priority, but it is also important to maintain consistency in the process rather than selecting specific properties to be eligible. Some Councilmembers also questioned the cap amount of $50,000 on the vacancy bonus. Staff came up with this amount after the last EVC discussion, when a per square foot rate was selected as the bonus measure. The two largest retail stores in Louisville are currently between 131,000 and 137,000 square feet. So if one of those two stores was vacant for two or more years and filled by a single new retail tenant, without a cap, the City would have a maximum exposure on this particular incentive of $137,000. However, that retailer may also be eligible for and pursue other rebates, such as Building Permit Fee or Sales Tax rebates. Staff is comfortable with revising the cap or recommending the change without a cap. An applicant of that size would not be eligible for the administrative process and so Council would have an opportunity to review and approve the proposed rebate. There are less than five existing spaces that would generate a vacancy bonus incentive of more than $75,000. On October 5 there was also discussion about opportunities for redevelopment and public/private partnerships. Staff believes these discussions are outside of the evaluation of the Business Assistance Program since it was agreed early -on to stay in the same objective structure and format that exists today. Therefore proposed financial packages or redevelopment opportunities fall outside of this scope. Staff suggests that discussion of Strategic Plan Item #1-4 can provide some of the framework for how City Council may want to study other financial investments or redevelopment opportunities. This process would also likely need to consider the City's existing Urban Renewal Plans for both the Highway 42 Area and 550 South McCaslin. Agenda Packet P. 9