City leaders approved an overhaul of two public incentive programs on Thursday aimed at spurring downtown development, reworking grants the city offers so the funds will be used in a more concentrated area and setting stricter criteria for eligible projects.
Members of the Odessa City Council and their appointees on the Odessa Development Corporation, which oversees a fund intended for economic development, say they hope the changes will yield better results revitalizing a long blighted area.
Effective immediately, grants the city offers for sprucing up the facade or infrastructure of a downtown building will be awarded on a tiered system — offering the most money for projects closest to Grant Avenue and the city-supported hotel and convention center being built nearby.
The downtown boundary approved in 2015 remains: from First Street to 10th Street and Adams Avenue to Bernice Avenue. But grants would be awarded on a tiered scale so that projects spanning further from the core of that area are eligible for less public money.
Downtown properties that are already for sale could not receive the grants. And there would be requirements to reimburse the city for grant money awarded if property owners sell within two years of receiving public funds.
“If their intent is to sell that business, why would the city want to support that… and increase their return,” Marrero said.
Other changes approved Thursday included setting $200,000 as the cap for an infrastructure grant one property owner can receive, and establishing stricter criteria on what that money can be used for. Property owners already had to match, at a minimum, the grant amount awarded by the city. And none of the projects awarded so far have come close to the new cap.
Now, the city will only award infrastructure grants for improvements required by City Code.
No longer can a property owner seek public money under the infrastructure grant program for improvements like Wi/Fi, parking lot upgrades or equipment specific to the property instead of the business. In the past, officials including District 5 Councilman Filiberto Gonzales had objected to public money being used for expenses such as buying kitchen exhaust hoods. That would no longer be allowed.
City officials also revised the facade grant program, choosing to raise the maximum amount of funds a property owner can receive to $25,000, while eliminating a provision allowing big buildings or properties on corner lots to receive a greater amount.
The City Council and the ODC created the downtown grant programs in early 2016, and city officials say they have always been seen as temporary.
So far, the city has awarded more than $500,000 worth of the downtown grants.
Recipients included a cafe and a shooting range downtown — projects that city officials lauded. But other grants helped fund facelifts to attorneys’ offices and in one case incentivized a private parking lot, raising questions about the effectiveness of the programs.
After funding a flooring businesses on the fringes of the downtown boundary, the City Council and the ODC decided put the brakes on the programs in March until the city could overhaul them.
“We want the area by the convention center to look the best, and we need to give Downtown Odessa a little bit of direction to say: These are the most important areas, contact these owners, let’s work with them,” Mayor David Turner said at the time, referring to the city department managing the programs.
The City Council signaled they may further amend the programs. District 3 Councilwoman Barbara Graff said she wanted to create exceptions for certain types of businesses identified as key to drawing more people to the area, such as restaurants, entertainment venues and shops. She suggested allowing those businesses to receive the full grants amounts as long as they build within the downtown boundary.
“I want a loophole,” Graff said. “I want people to come in and put in a restaurant. I want people to put in entertainment — A business that will attract people.”