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HomeMy WebLinkAboutCAO-18-001 - Downtown Financial Incentive Update Facade Grant ProgramREPORT TO:Finance & Corporate Services Committee DATE OF MEETING:March 5, 2018 SUBMITTED BY:Cory Bluhm, Executive Director, ext. 7065 PREPARED BY: Hilary Abel, Manager of Downtown Community Development ext. 7064 WARD(S) INVOLVED: 9& 10 DATE OF REPORT: February 13, 2018 REPORT NO.:CAO-18-001 SUBJECT:Downtown Financial IncentiveUpdate: Façade Grant Program RECOMMENDATION: That subsection 4.2.1 of Council Policy I-535 be amended to change the expiration date of the Façade Grant Program from December 31, 2017 to December 31, 2020. And further, that staff be directed to bring forward an amendment to the Downtown Community Improvement Plan to enable additional support for upper story façade lighting along Queen Street. BACKGROUND: The Façade Grant Program commenced in 2009, as part of the Downtown Community Improvement Plan (CIP). The City offers matching grants of up to $10,000 per storefront, being no more than 50% of the total project costs. Since the program began, the City has approved 70 applications, encompassing 84 storefronts. Once all of these projects are complete, the estimated total construction value will be $1.83 million, of which the City provided $454,000. As such, for every $1.00 the City contributed, the private sector spent $4.03. REPORT: It is standard practice that all financial incentive programs establish sunset clauses, requiring City Council to repeal, amend, or extend the program, typically on a 5-year basis. In January 2014, City Council extended the Façade Grant program for 4 years expiring December 31, 2017. The current program continues to produce tremendous results, not just in the volume of applications, but in enhancing the overall appearance of Downtown, which is positively affecting Staff estimate that there are upwards of 30+ storefronts that could still benefit from façade enhancements. Most of the previous applicants noted that they would not have enhanced their facades had it not been for the grant program, or they would not have carried out the extent and quality of work completed. 3 - 1 Benefits of the Façade Grant Program 1. Overall Aesthetic/Design Improvements All applications are vetted by staff in accordance with the King Street Façade Guidelines. This ensures that every project is aesthetically pleasing, completed to the highest quality feasible, consistent with neighbouring properties, and respectful of any architectural or historic features. Without this program, the City would have limited opportunities to achieve these design objectives. When the overall design quality of an area is enhanced (particularly in a downtown area), the net results include increased community pride, an enhanced visitor experience, more positive perceptions of safety, increased interest in redevelopment/commercial investment, and increased attractiveness to future commercial tenants. 2. Retail Attraction While Downtown has experienced positive growth over the last 10 years, there are still significant challenges and improvements that need to occur in this area. In particular, the core has lost numerous retailers over the past 3 years, and the resultant number of commercial vacancies on King Street negatively impacts the pedestrian experience, perceptions of safety andneighbouring businesses. Through the Shape DTK 2020 community consultation, stakeholders identified the loss of retailers as a significant issue they would like to see addressed over the next 3 years. In particular, they noted apreference for independent stores, restaurants and services that offer people unique and meaningful experiences. In the changing retail landscape, it will be difficult to attract diverse independent businesses without an incentive program, as they often require a lower cost of entry.Downtown buildings often require more costly and complex enhancements as compared to traditional, turnkey retail space (ex: in a strip plaza). This incentive program can provide support to independent business owners ready to launch or rebrand their business.It can also be a motivating factor as to why a business owner would chose to locate downtown over other areas in the region. As such, the Façade Grant Program would play an important role business attraction efforts for 2018-2020. 3. Supports Streetscape Enhancements Investments in urban streetscape enhancements by the City often lead to increased commercial interest among businesses, building owners and developers. The Façade Grant Program was critic attracting new businesses and encouraging building enhancements. As the City prepares to invest in the Queen Street in 2019, this program could be critical in facilitating private sector investments that complement the new streetscape. 3 - 2 Options Based on the foregoing, staff recommend extending the Façade Grant Program until December 31, 2020. If supported, Council could elect to do either of the following: a) Continue the program as is; or, b) Continue the program as an incentive focused on business attraction, whereby only vacant facades or new businesses (ground floor shops and restaurants) would be eligible. Additional Consideration Enhanced Façade Lighting on Queen Street During the Queen Street Placemaking Plan public consultations, the community identified an opportunity along Queen Street to encourage the private sector to illuminate upper store facades toitecture. It was notedthrough the consultations, that the blocks along Queen Street (between Joseph Street through Duke Street) offer the best collection of traditional main street architecture within the Downtown. Sometimes referred to as the royal crossroads, King and Queen is a major crossing route of the City. If appropriately illuminated, this historic set of buildings would provide a unique nighttime experience/backdrop for pedestrians, shoppers and visitors while contributing to improved perceptions of safety. The Community Improvement Plan could be modified to enable additional façade grants (over and above the current grants) specific to lighting. For example, a building owner could receive up to $10,000 for façade work to the ground level storefront, but also receive up to an additional $10,000 to contribute to lighting the upper facades. Council could limit these improvements to specific streets/blocks where historic buildings are prominent (such as Queen Street). In combination with thstreetscape work, such lighting enhancements would showcase this important cluster of buildings. Before Council could formally consider such an amendment, staff would need to initiate a formal public process, as per the statutory requirements of the Planning Act.The process typically takes 3-4 months. Recommendation Based on the success of the program to date, the significant number of facades still needing Downtown, staff recommend celebrating the historic fabric of Queen Street, staff also recommend initiating an amendment to the CIP to formally consider adding an additional grant to encourage lighting of upper storey facades on Queen Street. FINANCIAL IMPLICATIONS: No new funding is required beyond what is currently allocated in the capital budget. Applications are approved based on the availability of funding. Currently, the program has approximately $55,000 remaining, with a forecasted annual contribution of ~$75,000 per year from the Capital Budget. Over the next three years, if all funding was approved for grants 3 - 3 ($275,000 total), Council could expect to see 27+ individual façade/storefront improvements. Based on past results, this would translate into $1.1 million in private sector investments. Should Council opt to expand the program to include upper level façade lighting, the number of storefront improvements may be reduced but the scope of certain projects may increase. COMMUNITY ENGAGEMENT: Downtown Action & Advisory Committee: This advisory group passed a motion supporting this report and recommending that the program continue as is, allowing both new and existing businesses to be eligible but with an emphasis on attracting new business. Should funding become at risk of depletion, it is recommended that staff be directed to prioritize the approval of new business and vacant storefront applications. Economic Development Advisory Committee: This advisory group discussed the benefits of the Façade Grant Program and were generally supportive of continuing the current program. CONCLUSION: That the Façade Grant Program be extended until December 31, 2020,with staff bringing forward an amendment to the program to encouraged enhanced façade lighting of Queen Street facades between Charles Street and Duke Street. ATTACHMENTS: Downtown Kitchener Community Improvement Plan Project Area Map Draft Revised Council Policy I-535 ACKNOWLEDGED BY: 3 - 4 3 - 5 DRAFT REVISED COUNCIL POLICY I-535 That Council Policy I-535 be amended as follows: st 1., 2020 3 - 6