Clearwater tweaks downtown incentive program

JIM DAMASKE   |   Times The Community Redevelopment Agency is changing its incentive plan for downtown businesses.
JIM DAMASKE | Times The Community Redevelopment Agency is changing its incentive plan for downtown businesses.
Published Oct. 15, 2018

CLEARWATER — On the heels of intensive meetings with downtown property owners and potential business tenants, the city's Community Redevelopment Agency has tweaked its incentive programs designed to attract businesses that would operate at night and serve as weekend destinations.

Amanda Thompson, the agency's director, presented an altered plan and the results of recent forums to the City Council during a recent workshop.

More than a year old, the programs have yet to aid a single business and interest has been weak. For those who did express interest, they found the application process and rules confusing.

So, Thompson invited all parties to hash out their concerns and thoughts at roundtable meetings.

Among the changes to the Anchor Tenant Program, which provides a grant up to $250,000 in reimbursements to property owners and/or tenants for upgrades and/or start-up costs to be "restaurant ready," is that the CRA would require property owners to find their own eligible tenants within 60 days of approval.

Previously, the part of the program's role was to play matchmaker with entities that may have been complete strangers.

"I think you're on the right track with the redo," council member David Allbritton said. "Property owners want to vet their tenants. That's a very big part of this."

The CRA's pool is $1 million and it needs to last during an 18-month game plan it hopes will turn the tide for downtown revitalization. It supports both the Anchor Tenant Program, which focuses on property owners and investors teaming to create a large attraction such as a brewery, and the Food and Drink Incentive Program, designed to assist smaller restaurants and taverns that would be open at nights and weekends and on weekdays fill in what Thompson calls a "happy hour gap." She hopes to give downtown employees a reason to stay after work.

The new plan may also operate on a first-come, first-serve basis that could jump start things by increasing an investor's chances of getting the entire $250,000. The closer to the million dollars being depleted, the less that's available to latecomers.

"The first person coming down here to do this is taking the most risk," Allbritton said, and should thus be rewarded.

Thompson hopes at least four businesses will emerge as a result of the program in the 18-month time period.

Regarding smaller endeavors where no property owner is involved that fall under the food and drink program's realm, Thompson suggested that full-service restaurants be eligible for reimbursement of 35 percent of their costs up to $100,000. Taverns without a kitchen would be eligible for up $15,000 in reimbursement.

In both scenarios, a certificate of occupancy no later than Nov. 1 would be required.

Meanwhile, she said the success of the programs would also rely upon the CRA's desire to see downtown apartment units emerge.

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"The No. 1 issue that we're seeing across the board is the lack of foot traffic," said Thompson in reference to feedback she received from the focus groups and online surveys.

Some research conducted the past month showed mixed signals on the topic.

Compared to downtown St. Petersburg and Tampa, Clearwater showed lower rental rates than both and a lower vacancy rate than Tampa.

However, within a 1-mile radius of the center of downtown, St. Petersburg's population was greater and Tampa's nearly twice as large. From 5 miles out, however, the populations were all similar.

"That's great news for us," Thompson said. "That means we have enough people within five miles to support restaurants. I guess it depends on which direction they drive," Thompson said.

Regarding what's available in the downtown now, only 13 establishments are currently open nights and weekends.

"That's not a lot of choice in this competitive market and region," she said.

Another response, which surprised Thompson, was that many would-be tenants want to buy their own buildings, despite a tight market.

"There are not a lot of buildings for sale," she said.

The focus-group feedback also focused heavily on risk.

"They said, 'The grant helps with year one, but what do I do years two through five?' No one wants to bear the risk. So, the question is, 'How do we balance the risk among everyone involved?'" said Thompson, who noted a minimum cost for building out a restaurant is usually $300,000.

Meanwhile, the feedback indicated that about half of the property owners would be willing to invest in upgrading their buildings, but were also concerned with risk.

Mayor George Cretekos voiced his frustration, noting plenty of businesses have recently taken the perceived risk and succeeded.

"Why do you keep looking to the city to bail you out?" he said in reference to unwilling business entities. "They have a stake in this too."

Thompson said some property owners will likely take notice if apartments are being built and the $55 million Imagine Clearwater plan at Coachman Park, including the redevelopment of neighboring city-owned properties, takes flight. It is just now entering its initial stages.

She also said a negative reputation regarding downtown still persists, whether it be with permitting or project commitments.

"There's a perception out there that the city has a hard time completing its projects," Thompson said, pointing to Phase 3 of the Streetscape project that was discussed for years yet still not under construction.

"We know there are reasons why things take the time they take, but it builds up to the idea that the city won't do what it said it would do," she said. "It's not a fully informed or well-researched opinion, but it's a perception."

Cretekos noted that the first two phases of Streetscape were completed, with the third to which there's a commitment, and took issue with the mindset of downtown property owners.

"Something's troubling me here," he said. "I'm hearing, or at least I think I'm hearing, that the property owners are saying that we don't complete projects and that they won't help fund tenants, but they want us to give them the money to do it.

"Is what I just said accurate?"

Replied Thompson, "You are right. No one wants to bear the risk. They're looking for the city to bear the risk."

She said many surveyed also suggested that the CRA's grant program was not a useful way to spend money.

"That mostly came from the property owners, in particular," said Thompson, who said they reported that promotion costs were toughest on their budgets. "They think our best use of the money is marketing and producing events that take care of the foot-traffic problem."

Council members voiced not only their support, but saw good things to come and felt the time was now to strike.

"It creates an atmosphere of investment in downtown," council member Hoyt Hamilton said of all of the initiatives now in motion.

Added Allbritton, who said he eventually saw good things ahead, "You'll be able to back off on your incentives. People will be clawing to get down here."