Facade improvement program’s future up for consideration in
May
Questions about the effectiveness and future of Hollister’s
facade improvement program will put the item on the May 9 City
Council agenda after a scheduled discussion was tabled at this
week’s meeting.
The city council, in its role as the redevelopment agency board,
was set to receive a report about the program guidelines at
Monday’s meeting, but the matter was continued after Councilman
Robert Scattini questioned the value of the redevelopment agency
making loans that conceivably would not have to be repaid.
Facade improvement program’s future up for consideration in May
Questions about the effectiveness and future of Hollister’s facade improvement program will put the item on the May 9 City Council agenda after a scheduled discussion was tabled at this week’s meeting.
The city council, in its role as the redevelopment agency board, was set to receive a report about the program guidelines at Monday’s meeting, but the matter was continued after Councilman Robert Scattini questioned the value of the redevelopment agency making loans that conceivably would not have to be repaid.
“I’m not opposed to giving out loans,” he said. “The problem I have is that I cannot accept the fact that these loans are not going to be paid back at all. It’s taxpayer money and I think it should be given back to the RDA so it can be loaned out again.”
The RDA established the facade improvement program in 1992 as a way to encourage downtown property owners to upgrade the face of their building by offering matching funds from the city. The program was suspended due to financial constraints the next year but was revived in 1999.
Prior to 2010, loans made to building owners were forgiven after a period of five years as long as the property was not sold or transferred. If the property sold within the initial five-year period, all principal and interest – at a rate of 7 percent – became due.
Last year, the repayment period was extended from five to 10 years and a one-to-one match ratio was established for facade improvement projects outside of the downtown area but still within the scope of the redevelopment agency. As part of the program change, a two-to-one dollar match was established for the downtown area.
“It seemed that for the last facade we did there were a couple of concerns from council members and we had a ‘no’ vote,” said Bill Avera, Hollister’s development services director, referring to Scattini’s position. “If we have a program off the shelf, it’s not helpful or useful if we don’t get support for it across the board. We need to amend the program guidelines to meet the agency board’s desires. Taking an individual project to the board is sort of the formality part of it; there shouldn’t be controversy or ‘no’ votes.”
To address those concerns, Avera created a report that details the history and impact of the facade improvement program and offers three alternatives: maintaining the status quo; eliminating the program; or amending the loan requirements.
“Some people say they don’t like the way the payback system works, so I want to make sure we’re all on the same page,” Avera said, noting that 27 projects have been funded over the past decade.
“That’s less than three per year,” he said. “There’s a big misconception that people line up at our door to get this, but it only works if they put out their own money.”
Councilman Victor Gomez said the program is designed to “stir up economic development and growth” and that he expects to have a “healthy discussion” about the matter at the May council meeting.
“The reason this is sort of a grant program is to alleviate the business or property owner from having to make that whole investment,” said Gomez, who operates the local Papa Murphy’s pizza franchise. “We lessen their investment so they can use those extra funds to hire staff or find other ways of using their business resources. You could make it a loan program and get the funds back to use again, but if it turns into a payback type of program, I see it as non-beneficial and I don’t see business owners using it.”
Avera said 2005-06 was the busiest time for the program, “because during that time the economy was doing well and people had money to re-invest in their properties.
“As of late, there haven’t been that many,” he added.
Annual funding for the facade improvement program started at $300,000 in 1992, when loans up to $1,000 were offered for painting and sign improvements and grants from $1,000 to $5,000 were offered at a one-to-one match. The city funded the program at $50,000 per year from 2000-02 and budgeted $100,000 per year from 2003-09, when the two-for-one funding match was implemented.
The budget was doubled to $200,000 in 2010 when the one-to-one match outside of downtown was added.
As part of the program, the RDA records a lien against a property that receives facade improvement funding. If the building owner does not sell or transfer the property within 10 years, the loan is forgiven.
“I think there are a number of buildings that have done a lot of improvements and didn’t ask for agency assistance,” Avera said, noting projects such as the Nino Realty building, the former Tiffany Ford building that houses Intero Realty and the building where Drapoel is located on San Benito Street south of Seventh.
“The RDA is helping those folks who can’t or won’t do it on their own; people who want their building to look good,” he said. “Although there are some vacancies, we have a downtown that looks good for the most part. Buildings are starting to come up with some character. We’ve only spent $400,000 or so over the last 10 years; that’s pretty minimal to make what we consider our mall look good.”
