Lincoln aldermen discuss investing in rundown business properties

 

[July 10, 2020] 

On Monday evening an item on the agenda for the Lincoln City Council was the 2020-21 Appropriations. The document needs to be approved by the council before the end of the month and submitted to the state.

City Treasurer Chuck Conzo said that the document was ready for review and passage by the council. He said that he wouldn’t go into line by line detail of the document because all the aldermen have seen it. However, if there were any questions about specific lines, he would be happy to expound.

Conzo noted that there is one line not currently in the appropriations that depending on later discussions by the council should be added. Under Welch’s direction, Conzo approached the topic of setting aside $60,000 in the appropriations as incentive investments in the rehabilitations of dilapidated business buildings in town.

The money would be set aside within the city’s general fund as money for structural improvements. It would not be part of the Tax Increment Funding plan, but rather a simple plan to help any or all qualifying property owners with making their buildings viable again.

City Administrator Beth Kavelman said that a small committee had been formed to discuss the condition of some of the buildings in town. She said that there are a number of run down business properties in town that have recently sold or are on the market. In order to make those buildings viable locations for new businesses or better locations for existing businesses, the owners are going to need to invest some money into repairs.

Kavelman said the idea behind the $60,000 was to give these property owners some “incentive’ to move forward with improvements.

She said the committee that had talked about this included herself, Welch, Conzo, Zoning Officer Wes Woodhall, a local realtor, and city attorney John Hoblit who sat in as legal counsel.

It was also noted that the realtor involved, while not named, is not former Mayor Seth Goodman.

Conzo said that the idea for the money included giving out dollars in a fashion similar to the TIF façade grants. He said the committee had discussed issuing incentives of up to $7,500 or 50 percent of the total cost of the project, whichever is lessor.

Kavelman said that offering the incentives would encourage the owners to go forward with repairs. The city would benefit because of the change in property tax assessments, and in some cases it would “get the buildings back on the tax rolls.”

Kevin Bateman said he thought that the plan was a good idea. He wondered though about the dollar amount and offered up the example if the city awarded a few of these grants, but at the end of the year still had money left over. Would it be feasible to give each grantee more money? He said he knew some of the buildings that were being discussed, and that $7,500 would not even be “a drop in the bucket” compared to what was needed.

Welch said that the group had landed on $7,500 taking into consideration that some of these properties would be under repair for more than a year. The building owner could receive $7,500 per year for example for two to three years.

Bateman said he understood and agreed to that part, but he thought that if the city was going to set aside $60,000 per year, then it should spend $60,000 per year. He said the city could look at the applicants and the progress they were making on their projects then approach them to see if they wanted to apply for additional funding. To apply, they would have to justify why they needed more money.

He added that the city could still put a cap on the amount paid to any one project regardless of the leftover funding. His point was that some were going to need more than $7,500 and if they city has more, it could help.

Kavelman said that there would need to be a good application and that there would need to be a commission that carefully scrutinized each application. The applicant would also have to show proof that all the current property taxes were paid up on the properties.

Steve Parrot asked for clarification on who could receive the money, was it for the downtown businesses only? Welch said, no, it is not for downtown businesses only. He said that while many of the buildings that spawned this conversation are downtown, the idea is that there are buildings throughout the city that are empty, but need work in order to be turned back into viable business locations. The money would help the owner and at the same time be a show of support for any new businesses coming into town and also existing businesses already operating in buildings that are less than desirable.

Welch went on to say that the application process could be similar to that of the façade grants, as that process had been well defined. He said the owners would apply for the funding, do the work, have it inspected by Woodhall, and then would receive the cash.

Much of this topic is still undecided and will remain undecided as the committee continues to work out the details. The council on Monday evening was not asked to take any action with the exception of approving adding a new line to the appropriations.

Because the appropriations document is meant to cover all possible scenarios, the city must establish the fund within the appropriations in order to move forward at all. With a nod of the head, aldermen authorized Conzo to go ahead and create that new line item in the appropriations.

Welch drew the conversation to a conclusion saying that with that done, there would be more work done and ‘more to come” for the council’s consideration.

[Nila Smith]