ReCAP Program a Success
In 2014, council gave approval to the Community Improvement Corporation (CIC) to manage the re-emergent corridor assistance program (ReCAP), focusing on the city’s industrial corridor of Huntley, Schrock, and Proprietors.
The program had three goals:
Decrease the office vacancy rates by investing in facility improvements
Increase the number of jobs by attracting stable companies
Improve the corridor aesthetics
The program was set up to provide property owners with up to $12,500 in facility renovation grants and up to $12,500 in zero-interest loans.
Within four years, the CIC and council approved 16 projects, totaling $140,000 in grants and $140,000 in loans. This investment spurred more than $560,000 additional investment into improving the corridor.
As a result, we saw the vacancy rates decrease from 8 percent to less than 4 percent.
I personally wanted to see if the program directly impacted this corridor in a positive way. Aesthetically, you can drive through the corridor and see it is much more attractive. The visual appearance is much improved as a direct result of this program.
I called each of the property owners and the tenants in these buildings to determine whether or not there was an increase of jobs, and subsequently payroll (the city receives payroll tax).
According to the property owners and the office tenants, the ReCAP program helped businesses increase jobs by at least 75 employees. This has an estimated value of $1.1 million in payroll. With a payroll/income tax rate of 2.5 percent, the return on investment for this program is less than five years.
As a business case study, this program was successful. Council voted earlier in the year to keep ReCAP program in case other property owners want to take advantage of the incentive. According to city staff, there are currently no other property owners with plans to use this program. So, the CIC recommended a new, but similar, program for other areas of the city.
The new program is an energy reduction program and façade improvements tied to economic development. The program is called façade assistance and corridor enhancement (FACE).
The purpose is to provide grants and loans to office property owners (non-retail) throughout the city. One example of how this program can be used is if a property owner wants to renovate the building’s exterior by replacing windows. Property owners can receive energy rebates and total energy reduction (average is 30 percent reduction) if replacing old windows with more efficient windows.
Realistically, the window replacement can accomplish two goals:
Improve the building aesthetic
Reduce the monthly energy bills
In a large enough office space, the energy bill savings is enough to help fund further economic development and job growth.
Council just launched this program and already has some interest from some large office property owners.
As a public policy, this is a good program. Not only does it decrease energy usage in our community, it incentivizes property owners to upgrade aging facilities and spurs them to increase quality jobs in Worthington.