The city’s economic development board plans to review a program that offers grants funded by taxpayers as incentives for sprucing up downtown buildings to see if the program created about two years ago is proving a worthwhile use of the public money and if it needs to be tweaked.
The Odessa Development Corporation and the Odessa City Council created two programs offering downtown grants to businesses in early 2016. One grant incentivizes façade improvements in the long blighted area and the other matches infrastructure investments in downtown buildings.
Both were pitched as temporary programs aimed at encouraging downtown redevelopment, coupled with the construction of a downtown hotel and convention center supported by a more than $30 million public investment. Construction is still underway on the hotel, expected to open in early 2019.
On Thursday, ODC board members said they wanted to examine the grant program.
“It’s’ time to before we get into the thing of saying: Well, it’s always been done this way,” ODC President Betsy Triplett-Hurt said.
Questions included whether the downtown boundaries should be altered. The boundaries approved by the council in 2015: from First Street to 10th Street and Adams Avenue to Bernice Avenue.
Initial discussions of the grant programs involved plans to focus on a core area surrounding the convention center site. But as it stands, all businesses contained in the downtown boundary can apply.
“There are businesses south of the track that are closer to the convention center than Texas Tech (University Health Sciences Center ) is,” ODC board member Gene Collins said. “Why were they not included? I think we need to have more discussion on that.”
The newest ODC board member, Ted Tuminowski, questioned whether funding the program at all is proper for a board formed in 1998 to develop and diversify the economy after voters approved the creation of a 4A sales tax.
“It’s a wonderful program,” Tuminowski said. “I just don’t see how we can use ODC funds for it.”
When the City Council and ODC approved the programs in 2016, it did signal a significant shift in the way the city invests the sales taxes it collects for economic development. But each board, and the city’s attorneys, deemed the programs justifiable uses of the funds because they promote the city as a place for business, which the law allows.
“The aesthetics of a city is promoting the city,” Collins said. “…If it looks up to date and modern and clean and you see happy faces, that goes a long way to promote it. So people want to go to a town that’s progressive, that’s good for their family, that’s a good environment.”
The law allows economic development agencies like the ODC to spend up to 10 percent of their revenue for promotions. The ODC’s budget for this year estimates more than $8.4 million in sales tax revenue. The ODC also funds marketing and a small business challenge classified as promotional expenses.
The city came close to hitting the 10 percent mark in early 2017, but was able to draw on money budgeted in previous years for promotions but never spent.
And part of the ODC review called for tallying funds spent on the grant programs so far.
The decision to review the program came as the ODC considered a façade grant application by Crenshaw Flooring at 615 E. Eighth St., on the eastern edge of the downtown boundary. The owner requested a $30,000 grant, which is the maximum amount for an individual grant, available for buildings of exceptional size or on corners. The owner also planned to invest more than $51,000 privately in the new exterior.
The ODC decided to a delay a vote on the grant until March.