The City’s Economic Development Implementation Strategy (EDIS) was adopted to serve as a road map to achieving the City’s stated economic development goals of business retention, business attraction, workforce development, redevelopment, and real estate development opportunities. One strategy identified in the EDIS I was the creation and implementation of an economic development incentive and investment program to set forth the type of assistance the City may offer to qualified projects that enhance the City’s economic development strategy. As such, the Economic Development Incentive and Investment Policy (EDIIP) was adopted to create defined criteria for businesses to evaluate and understand the type of investment that would qualify for City assistance as part of relocating or expanding within the City.

 In furtherance of the City’s economic development objectives, the City of Peoria identified the P83 District as an EDIS Investment Zone, and approved the P83 Building Reuse Program (“Program”). The purpose of the Program is to encourage a more diverse use of existing vacant buildings in the P83 District to include professional office, entertainment, and retail tenants as an alternative to continuing to add restaurant users that have a historical failure rate in the area.

 The P83 Program Guidelines have been updated, through this Amendment Number 1, since they were originally adopted in August 2015, in order to allow more flexibility in the forms of security the City will accept, options for payment of eligible reimbursable grant funds, as well as other technical revisions to provide more flexibility and clarity in the Program Guidelines.

City Council approved the P83 Building Reuse Program on August 26, 2015.

A:  Approve Amendment Number 1 to the P83 Building Reuse Program Guidelines to establish more clarity and flexibility into the Program Guidelines.

B:  Do not approve Amendment Number 1 to the P83 Building Reuse Program Guidelines and the original policy will govern.

Discussion and possible action to approve Amendment Number 1 to the City of Peoria P83 Building Reuse Program to assist in the revitalization of the P83 District.

Program Overview:

• The Program will provide up to 50% city matching funds for eligible activities associated with properties located in the Target Area (see Exhibit 2), based upon acceptable performance, including all needed City permits and passing all building, fire and other City inspections for eligible work.

• A person, corporation, association or other legal entity holding fee simple title to commercial real property located within the P83 Building Reuse Program’s Target Area are eligible to apply for assistance under the Program. This Program is not eligible to tenants of commercial property, unless written consent of the property owner(s) has been obtained. Agreements are negotiated on a case-by-case basis.

• Eligible improvements under the Program are limited to interior tenant improvements for buildings with a minimum of 5,000 square feet in size appropriate for use by an office, retail, entertainment user, a targeted industry (as part of the EDIS), or other compelling user as approved by the City.  Priority will be given to commercial users fitting one of the following industry types: advanced business services, healthcare, or software development.

Security Structure:

Option 1 – City’s Preferred Approach

City assistance will be in the form of a reimbursable grant. The Program may provide up to 50% matching funds, on a reimbursement basis, for eligible improvements with 10% of the total grant amount being reimbursed over a period of ten years. This is offered to eligible private property owners for eligible improvements associated with properties located in the Target Area. Should the owner not comply with the terms of the resulting agreement, following city notification of non-compliance and owner’s failure to cure the item(s) of non-compliance, the outstanding and unpaid grant balance will be forfeited. In addition, failure to remain in full operation for the term of the grant (10 years) will result in owner repaying the City all funds received under the Program.

 Option 2 – Alternative Security Structure

The Program will provide up to 50% matching funds, on a lump sum reimbursement basis, to eligible private property owners for eligible improvements associated with properties located in the Target Area. City assistance will be in the form of a reimbursable grant. Should the property owner not comply with the terms of the resulting Agreement, including a promissory note and deed of trust, following city notification of non-compliance and owner’s failure to cure the item(s) of non-compliance, the then outstanding grant balance plus accrued interest shall be immediately due and payable to the city. Upon compliance with the Program Agreement, the grant balance and accrued interest shall be forgiven by ten (10) percent per year over a 10-year grant period. An applicant can prepay the note balance under this option at any time upon prior written notice to the City. The total amount of prepayment is the outstanding amount of the grant and all accrued and unpaid interest through the date of repayment.