Saturday, June 23, 2018
News Roundup

One year later, Clearwater’s downtown incentive program brings no deals

CLEARWATER — It was pitched as the boldest revitalization strategy yet. The city was so serious about bringing business into downtown, it would essentially pay investors to take the chance.

The Anchor Tenant Incentive Program unveiled in June 2017 offered $250,000 loans for start-up costs and building renovations that would not have to be paid back if the business stayed operating for at least five years.

Thirty-five applied for the incentive, some established entrepreneurs with legitimate business plans, according to records provided by the city. Others had little more to offer than a pipe dream.

But one year after the program launched, not one penny of incentive funding has been awarded.

Various officials blame an underwhelming applicant pool, program requirements still being ironed out and a shakeup in leadership of the Community Redevelopment Agency, which administers the grant, that threw the program in limbo.

PREVIOUS COVERAGE: Clearwater tries new option to lure businesses downtown: cash

In the case of Aspirations Winery, owner Bill Linville said former CRA Director Seth Taylor and Clearwater Downtown Partnership Executive Director Jay Polglaze, who both designed the incentive, made him believe he was a shoo-in for the funding. So he spent $50,000 buying equipment and ramping up production to relocate his winery off U.S. 19 to downtown, a move that fell apart when the incentive never came through.

"It almost put us out of business, it was really bad for us," Linville said. "There were some promises made that were not able to be kept."

Polglaze said the incentive was designed to be ambitious. Downtown, he said, had been struggling under the city’s reputation for overcomplicated permitting and a sense the Church of Scientology’s international headquarters had a stronghold on real estate.

"You’ve got this perception that we realized an incentive program is going to have to be not only very motivational and generous, it’s going to have to be something that’s going to raise eyebrows for people to come," Polglaze said.

But when the City Council, acting as the CRA board, unanimously approved the program in June 2017, the parameters were vague.

If the recipient were to fold before five years, the loan would be collected by the city through a lien or "personal guarantee," according to the application.

As Taylor and Polglaze courted businesses like Aspirations Winery, Polglaze said details for the rules were still being worked out with the city’s legal staff. Polglaze said he was also in discussions with House of Beer and Inoculum Ale Works, although neither has formally applied for the incentive, according to records provided by the city.

Then in October, Taylor resigned in lieu of being fired after police said he drove a golf cart while intoxicated into outdoor tables at the Clear Sky restaurant on Cleveland Street, grabbed a patron filming the incident out of a chair by the neck and fled the scene

Assistant City Manager Micah Maxwell stepped in as interim CRA director. Maxwell said no incentive funding has been awarded because no applicant fully fit the bill.

City Attorney Pam Akin said the only potential applicant she was consulted about was House of Beer, and she and Polglaze disagreed on what should qualify as sufficient collateral a recipient would put up for the loan.

The program requires any recipient to be reviewed first by a staff committee and then approved by the City Council. But no applicant even made the staff review, Akin said.

When Amanda Thompson was hired Jan. 31 to replace Taylor as CRA director, reviewing the incentive program fell in line behind her to-do list of rewriting the downtown redevelopment plan and preparing to market city properties for housing development.

Because of the cloudiness of the original parameters, Thompson is now overhauling it entirely.

She said the new qualifications will be strictly for food and beverage businesses — the original program was targeted to restaurants and breweries but was open to businesses outside of food and drink that were "first-to-market and anticipated to have a catalytic impact" on downtown.

The original program offered funding for building renovations but also startup costs like furniture, rent and equipment. Thompson said she is proposing city incentive funds only be used for structural improvements so the investment stays with the building.

"The CRA doesn’t need to duplicate the role of a private bank," she said. "If someone said we want all the money to buy a stove and we’re going to take that stove with us when we leave, that’s not where we’re most interested."

Thompson said she agrees with the original concept of taking away some risk so investors are more confident to take a chance on downtown. But she said the program also has to be clearly defined.

"I do think it has been a big disappointment for everybody involved that there hasn’t been a lot of movement, and it’s very frustrating," she said. "I can assure you the next thing that gets launched, it’s not going to be launched unless it’s something we can complete. Once it starts, it’s not stopping."

Thompson expects to have the proposed overhaul completed in July, which would have to be reapproved by the City Council.

In the meantime, the program’s difficulties made some business owners reconsider their plans to consider downtown.

After five years operating her Catrinas Taco and Tequila Bar in Tampa, Karol Ortiz proposed relocating to downtown Clearwater, where she saw an opening for upscale Mexican food.

She applied to the anchor tenant incentive program, complete with a business plan detailing her company structure and financial overview. She began negotiating with potential landlords and visited the CRA office for updates.

"It was always, ‘we’ll get back to you,’" Ortiz said. "I basically gave up."

Ortiz ended up opening a restaurant in Sarasota in December instead.

Ethan DePaz thought his business was the definition of a "first-to-market and anticipated to have a catalytic impact" when he applied for the incentive last year.

The four Pinellas County locations of his Ice&Cream Creamery have become destinations for locally made milk shakes and ice cream.

So he was surprised when CRA downtown manager Anne Fogarty France responded in a July email that his business concept did not meet the program requirements.

"Every major downtown, even downtown Dunedin, has an ice cream place that brings people together," DePaz said. "We thought an ice cream place would be something that would help downtown Clearwater."

Linville, the Aspirations Winery owner, said he’s spent the last few months recovering from the financial blow dealt by the incentive program’s fallout. His business has since been named the 2018 Clearwater Regional Chamber of Commerce’s Small Business of the Year and is ranked as a top "must do" in Clearwater on Trip Advisor.

He is now looking to open a second location in Homosassa. And after his experience with Clearwater, he is on the fence about taking another chance on downtown.

"I’m gun shy," Linville said. "There’s definitely hesitancy there and a greater amount of concern. It’s confusing. Are they serious about all this stuff they’re talking about, or are there other things in the works that’s going to keep it the same old Clearwater?"

Contact Tracey McManus at [email protected] or (727) 445-4151. Follow @TroMcManus.

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