Council hopes to hit one out of the park with new incentives
Published 12:00 am Wednesday, March 19, 2014
SALISBURY — As part of its budget deliberations this spring, Salisbury City Council will consider two new incentive grants for downtown properties.
“This is a home run,” Councilman Brian Miller said during the first day of a two-day retreat at the Rowan Museum.
Miller also called the proposed incentives a “game changer,” another appropriate phrase during the 29th Annual Future Directions & Goal-Setting Conference for the council.
The theme of this year’s conference is “Stepping Up to the Plate,” and city staff members went extra innings in preparing a baseball-type setting for the council, down to a Green Monster (Fenway Park’s left-field wall) backdrop.
As part of the decorations, the Messinger Room at the museum was outfitted with a scoreboard, billboards, benches, a Goodyear blimp, bunting, organ music, pennants and buttons.
The snacks took in Cracker Jack, peanuts and popcorn. City staff also presented council personalized Louisville Sluggers and baseball caps.
More than once, expressions such as “Play ball” and “Hit one out of the park,” were uttered by council members.
But returning to the new downtown incentives discussed Tuesday morning, Miller said, “I’m absolutely behind it.”
Mayor Paul Woodson agreed, saying he could see how there could be a good return on the city’s investment.
Salisbury Planning Director Janet Gapen outlined how the two new incentives would work.
A “Downtown Building Rehab Grant” would promote renovations in the Municipal Service District, the central business district already supported by an extra tax.
The grant would cover 25 percent of a building’s total rehabilitation costs, but would be capped at $25,000. As proposed, the improvements would have to exceed $50,000 to qualify for the city rehabilitation grant.
The project also would have to respect the building’s “architectural integrity and historic features.”
The second available incentive, titled the “Downtown Residential Incentive Grant,” would aim at fostering new residential units in the Municipal Service District, or allow for upgrades to existing residential units.
This residential incentive grant would be calculated at $7 per square foot of living space. It also could be combined with the new building rehabilitation incentive.
The maximum residential grant would be capped at $100,000, and it could be used for either owner-occupied units or rental units.
Again, to receive the residential incentive, a developer would have to meet certain standards of upfit and finishes, while respecting the architectural integrity and historic features of existing buildings.
Gapen gave several scenarios — from one unit and 1,000 square feet to 20 units and 20,000 square feet — of how the two grants could help developers.
Say the rehabilitation costs of a one-unit, 1,000-square-foot downtown apartment were $80,000. The residential grant would be $7,000 ($7 times 1,000). The rehab grant would be $20,000, or 25 percent of $80,000.
With an additional city facade grant of $5,000, the city could provide $32,000 in incentives for the project, or 40 percent. The project might also qualify for historic tax credits of $32,000.
In the scenario of 20 downtown residential units covering 20,000 square feet, the residential grant on a $1.6 million project would be capped at $100,000, and the rehab grant would be the $25,000 maximum.
The project might also qualify for the $5,000 facade grant and a $10,000 fireline grant.
Last year, City Council budgeted $50,000 toward a fireline grant program to help with fireline extensions in downtown Salisbury to serve multiple buildings and parcels.
The incentive grant is aimed at providing a 50 percent match of a fireline extension to a property. This grant’s focus is in a six-block area where fire loops already have been proposed by the Fire Department.
The loops would be installed at the backs of properties and would help address the costs of sprinkler systems for many projects.
In the 20-unit scenario, that kind of project could qualify for $140,000 in city incentives, according to the example.
Gapen said downtown residential incentives would have the overall effect of getting investment in desired product, creating local construction jobs, providing an uptick in real estate activity, opening up housing choices, leading to more people in the downtown on nights and the weekends and causing a higher demand for restaurants and retail.
A downtown resident himself, Assistant City Manager John Sofley said there is a demand for more residential units downtown but currently there’s a lack of product.
The city also can use land incentives in some cases.
Gapen noted the city of Concord is using incentives to help the redevelopment of an old Heilig-Meyers furniture store into a $2.3 million apartment complex.
Concord City Council approved the sale of the land for $1. It is considering a $100,000 grant, in addition to an economic development incentive — a grant covering 85 percent of the property taxes for three years.
The kinds of development incentives currently in place for downtown properties are city facade grants, some parking and streetscape improvement monies and historic tax credits from the state and federal governments, though those tax credits are in jeopardy.
Salisbury City Council will take up the incentives in coming budget sessions.
In another discussion Tuesday, Sofley broached the idea of going to voters in November and asking approval for general obligation bonds to tackle some of the city’s infrastructure needs.
He said the general obligation bonds would be “the absolute best vehicle,” freeing the city’s general fund to finance things such as the downtown incentives and a pilot neighborhood revitalization project, also discussed Tuesday.
Sofley said the city has been asked to fund numerous infrastructure projects over the past 10 years. They have dealt with road improvements, road repaving, additional sidewalks, replacement sidewalks, streetscape improvements, new neighborhood parks, improvements and additions to existing parks and greenways.
Some requests have been met with existing city funds. Others have had to depend on outside grants.
But current, unmet requests still involve items such as providing downtown green space, downtown sidewalk and streetscape improvements, new sidewalks, expanded repaving, providing for left turns at the Square, making improvements to Long and East Innes streets, implementing park master plans, creating more downtown parking and building more greenways.
With the present debt markets and the city’s sound financial position, “now is the time to consider these projects and improve the city’s livability,” Sofley said.
The city historically has made significant investments in its utilities, Sofley noted, but only three times in the past 25 years has it made major investments (without grants) in roads, parks, sidewalks, streetscapes or parking.
Those times were in 1997 for $3 million toward the Salisbury Community Park, in 2000 for park improvements that cost $1 million and in 2008 for $725,000 in downtown parking.
Sofley said a penny increase in the tax rate would support $2.7 million borrowed over 10 years. So 2 cents on the tax rate would support roughly $5 million over the same length of time.
Sofley agreed with Mayor Paul Woodson and Councilman Pete Kennedy who said a specific program for the bonds would have to be spelled out for voters in any referendum.
Woodson added for bonds to pass, they must include infrastructure improvements for the entire city, not just the downtown.
“Things that are going to get my attention,” Miller said, “are things that lead to more economic development. … It doesn’t have to be downtown.”
Sofley noted city of Sanford voters recently passed $14.5 million in general obligation bonds for four specific projects related to sidewalks, streetscapes, an urban park and an urban trail.
In another topic Tuesday, Salisbury Transit Director Rodney Harrison reviewed proposed changes to two of the city’s three bus routes.
The changes, which would cost $40,000, would be aimed at reducing back-tracking and hitting more retail and medical locations. The modifications will be part of Salisbury Transit’s budget request this spring.
Contact Mark Wineka at 704-797-4263.