Four applications for city subsidies for Downtown retail development cleared a hurdle Wednesday, but not without a discussion of how the $750,000 available should be used.
In addition to a $100,000 loan for the New York Steam Laundry Building restaurant project, the Downtown Investment Authority’s Retail Enhancement Review Committee recommended approval for another $73,000 in grants for Urban Grind Coffee Co., Jimmy John’s Gourmet Sandwiches and Jersey Mike’s Subs.
RELATED STORY: Breakdown of plans from the four businesses.
Authority Chairman Oliver Barakat questioned the location of Jersey Mike’s, on the ground floor of the SunTrust Tower. He said the program is designed to focus on retail development in older and historic buildings, but Jersey Mike’s will be located in a Class A building. That could raise concerns when the board evaluates the grant application, he said.
“SunTrust is not the kind of building we had in mind for this program,” Barakat said.
Program applications are evaluated by DIA staff on the basis of business plan, job creation, expansion of property and sales tax base and location. Applications must score at least 25 points out of a possible 45 to be reviewed by the committee. Five points may be awarded if the site is in an older building and an additional five points are available if the building has been designated “historic.”
Owners of the Jersey Mike’s franchise are seeking $28,000 to defray a portion of the $149,000 build-out cost for the 1,400-square-foot space.
Barakat questioned how the cost to build a sandwich shop in a modern, code-compliant building might compare to the cost to build the same restaurant in an older space that could have electrical and plumbing issues that would have to be remediated before a business could open at the location.
Barakat said he needs a better understanding of how the $28,000 would be used, since it is unlikely that any funds will be needed to improve the basic services at the site.
“In most cases, the owner and tenant can afford to build out modern space without a city grant,” said Barakat, a senior vice president at the commercial real estate brokerage firm CBRE.
Committee member Jack Meeks pointed out the matrix awards up to 10 points if a building is older and historic. Jersey Mike’s received no points in that category but still had enough points
to be considered by the committee.
“We’re getting a new business opportunity,” Meeks said. “We need activity down here. I’m not offended by doing something in Class-A office space.”
Aundra Wallace, authority CEO, agreed.
“The concept is to reduce the vacancy rate of storefront retail property Downtown,” he said.
Committee Chair Jim Bailey, publisher of the Daily Record, said bringing more retail activity Downtown, especially for residents, has been needed for some time.
He cited what happened several years ago when The Carling and 11 E. Forsyth were converted into apartments.
“The problem was people moved in, but then there was nothing for them to do, so they moved out,” he said. “Retail enhancement is retail enhancement.”
Wallace said while the first projects submitted will allow the authority to review the program’s guidelines, modifying the purpose of the program and how applications are graded would mean changes would have to be submitted to City Council. That would essentially suspend the application process until council approved amendments.
The four applications recommended for approval requested a total of $173,000 of the $750,000 in the fund.
At a workshop in November for grant applicants, Wallace said his hope is to use the grants to bring at least 10 new businesses Downtown and to do it
“I would like nothing better than to have this $750,000 gone by spring,” he said.
After the meeting, Wallace said he plans to work with Barakat and any other authority members who have questions about the program and the first four applications before Jan. 28, when the full authority is scheduled to vote on the proposals.