Mesa City Council Study Session on Redevelopment Toolkit and Funding Recommendations - March 26, 2026
Mesa City Council Study Session on Redevelopment Toolkit and Funding Recommendations - March 26, 2026
The Mesa City Council held a study session on March 26, 2026, to discuss two major agenda items: a presentation on the proposed redevelopment toolkit and funding recommendations for federal and local community development programs. The meeting focused on staff proposals for eight redevelopment tools designed to address blight, vacancy, and economic development, as well as the annual allocation of Community Development Block Grant (CDBG), HOME Investment Partnerships Program, Emergency Solutions Grant (ESG), Human Services, and Off the Streets funds.
Discussion Items: Redevelopment Toolkit
Staff presented an 80% design phase of a redevelopment toolkit, refined from earlier presentations. The toolkit includes eight programs: demolition and remediation (max $75,000 grant, 1:1 match), code compliance revitalization (max $25,000 grant, 1:1 match), vacancy registration (required ordinance with escalating fees, free initial registration), reuse ready (reimbursable grants for tenant improvements), strategic acquisition and analysis (city analysis and potential acquisition), placemaking (city-led urban landscape improvements), public infrastructure (tiered support up to $50,000 and above), and EDA revolving loan fund (exploration phase due to complex federal requirements). The total proposed budget is $3 million annually from the general fund for a three-year pilot program. Key discussion points included:
- Council members questioned the basis for the $75,000 demolition grant cap, noting demolition costs vary widely. Staff explained the cap was intended to limit city exposure to gift clause issues and to focus on small businesses. Councilmember Duff provided an anecdotal estimate of $50,000 to gut a 1,300 sq ft building.
- Councilmember Adams expressed concerns about the vacancy registration program, calling it "big brother" and worrying about fair enforcement between large REITs and local property owners. Staff emphasized the program is not punitive but aims to connect owners with resources. Vacancy data shows 7.7% of Mesa's commercial buildings are vacant.
- Councilmember Goforth asked about the proportion of vacant properties owned by local versus out-of-state owners; staff did not have data but committed to follow up.
- Councilmember Taylor questioned whether the city could use tax incentives instead of grants; city attorney Jim explained that state law prevents changing sales tax rates for specific businesses.
- Councilmember Taylor also asked about the number of focus groups (17-18 individuals) used to test the toolkit, noting statistical limitations.
- Vice Mayor Summers supported the toolkit, highlighting its potential to help small businesses overcome hidden costs (e.g., code upgrades).
- Councilmember Adams requested performance metrics for the $3 million pilot; staff committed to tracking private capital leverage, tax base growth, and blight reduction, but noted that setting specific goals may be premature in the first year.
Discussion Items: Funding Recommendations for CDBG, HOME, ESG, Human Services, and Off the Streets
Staff presented funding recommendations for fiscal year 2026-27. Key points:
- CDBG: Estimated $3.6 million allocation. Proposed uses include $2.3 million for city emergency repair program (served 165 homeowners, 76% elderly, 48% disabled), and public service awards to Family Promise, Child Crisis Arizona, CAS, and A New Leaf, totaling $573,240.
- HOME: Estimated $1.29 million allocation. Recommended $400,000 for city rental/utility deposit program and $2.3 million for A New Leaf's Lamacita Phase IV (54 senior/veteran units), contingent on receiving Low Income Housing Tax Credits (LIHTC) after two previous denials.
- ESG: $340,000 estimated. Recommended awards to Tempe Community Action, A New Leaf shelter operations, and Save the Family rapid rehousing, totaling $314,515.
- Human Services and ABC (A Better Community) funds: Total $651,663 ($104,500 ABC from donations, $547,163 general fund). Staff initially proposed allocating the $547,163 to Off the Streets program (Windermere), but council direction was to seek alternative funding for Off the Streets. City Manager Butler recommended instead funding community-based nonprofits through the competitive process. The recommended alternative allocates the full $547,163 to agencies including A New Leaf, Child Crisis, House of Refuge (funded under ABC), and others, as listed in the presentation.
Council discussion included:
- Mayor Freeman advocated for shifting more CDBG funds to "place-based" improvements (e.g., code enforcement, redevelopment personnel) rather than primarily social services, calling for a future policy discussion.
- Councilmember Adams supported exploring non-taxpayer-funded solutions and expressed reservations about empowering code enforcement without fairness safeguards.
- Vice Mayor Summers emphasized the importance of continuing human service funding, noting that 52% of Mesa residents have housing costs exceeding 50% of income.
- Councilmember Taylor clarified that ABC funds are not for utility assistance; separate programs exist for that.
- Councilmember Taylor asked about flexibility to change HUD allocations mid-year; staff confirmed changes are possible but require notification.
Key Outcomes
- Redevelopment Toolkit: Council provided general direction to continue developing the toolkit as an 80% design. Staff will return with additional detail, including performance metrics, as part of future budget discussions. No formal vote was taken.
- CDBG, HOME, ESG Funds: Council directed staff to proceed with the proposed recommendations and initiate the required 30-day public comment period. The final resolution is scheduled for council consideration on May 4, 2026.
- Human Services and ABC Funds: Council approved the staff's alternative recommendation to allocate the $547,163 in human services funds to the community-based nonprofit agencies listed, rather than using them for Off the Streets. The Off the Streets program funding gap will be addressed separately.
- Future Process: City Manager Butler committed to returning before the next funding cycle with options for better aligning CDBG and other federal funds with council priorities, including risk analyses for higher-risk activities like economic development.
Meeting Transcript
Again, I'll welcome you to the Mesa City Council study sessions for March 26, 2026. Council members are ready and go forth or participating by Zoom. Otherwise, all council members are present. Item 1A is a presentation on the proposed programs to support redevelopment priorities and initiatives. With that, um we'll move over to the next team. Jeff McVay, Jeff Robbins, Angelica, and Jay O'Donnell, and Nana. Thank you all. Morning, Mayor, uh Council. Uh as you noted, um, we've brought the the lineup of subjects today to to present to you the redevelopment toolkit. Um with me, I have Jeff Robbins, Angelica Glara, Jay O'Donnell, and Nana Paia. Um we have been working hard since last January when we present to the full council. Um and I'd also like to um just take a moment to acknowledge the hard work of the teams that are behind us from development service and account development and urban transformation, particularly you know, Mass and Cox, Amanda Elliott, and Rachel Phillips have been very instrumental in developing these of these tool kits. Um we last presented uh to the full city council in January. We we came to you with the framework for a set of tools that would make up the redevelopment program. Since January, we went back to our to our offices and we've been working hard to get the toolkits to the state that it is today. We're at about what we would call an 80% design state, which means that the toolkits are pretty well built out, but with council's final direction, we'll take it to the next step and be able to finish off the development of the tools, including things like application materials and and specific program guidelines. Um before, if you want to go to the next slide, I'm sorry. We since we since we last presented, we have refined it down to the now we have eight tools, and um we're going to go into and describe each of these tools to you, um, provide a summary of what they are intended to accomplish, the uh the the budget around it, as well as some administration and overall budget for a program. Um but before we get into the toolkit, Jay is first going to share uh an overview of our stakeholder engagement and what we learned from our focus groups as we do as we uh presented these tools to them. Thank you, Jeff. Good morning, Mayor and Council. Um we initially presented this uh council asked us to actually go to the market to get feedback to make sure that we were on the right track. And so we did hold focus groups with private uh companies, small businesses, developers, and property owners, and the feedback was actually very positive, um, very receptive to these programs. Uh the one of the things that they stressed was if we do anything, we need to have a strong marketing plan and a marketing effort to talk about the programs and make sure that we're doing the right kind of outreach. Um they also wanted reasonable reporting requirements, so trying to minimize the red tape and a simple application process, one that was fairly turnkey that was easy to understand with fast approval or denial. And then they also um provided strong support and feedback for the infrastructure tool with published timelines and very clear timelines so that they could understand how this would work from start to finish. So we felt confident that we were on the right track and that the programs that we're presenting to you today would be um well received by the market but also utilized by um the developers, the property owners, and the small businesses who were trying to attract for these redevelopment areas. So the the first program that we're presenting today is the demolition and remediation program. The the point of this program is to really improve neighborhood confidence and market perception for a particular parcel or neighborhood. This would um be exactly as it sounds, um, really removing those obsolete buildings and structures, uh particularly those that are unsafe. Uh and the goal is to really reduce blight and to prepare the site for re-iminvestment. And the mechanics, how this would work is we would really target those areas in redevelopment areas that would be determined to uh to be hazardous or functionally obsolete. The maximum award that a property owner could could receive is 75,000 for the demolition, but that would be a one-to-one match. So the the property owner would actually expend the the money first and then they would be reimbursed. So it's a reimbursable grant. Three bids would be required to qualify for this this funding. Um and then we would also be exploring some additional um options with the Department of Environmental Quality. While we might not be able to get funding for demolition, there would be potential for remediation support with uh environmental analysis uh analyses or uh phase one uh environmental studies. G mayor? Yeah, yeah, I'm just curious. I this is a broad question, so I'll try to paint it correctly. But assuming no re environmental remediation is needed, what's kind of a range for a demolition project, say for a you know, uh an old gas station that doesn't need remediation, smaller building or a drive-thru building that's obsolete versus a small strip mall that they want to clear out. We know this. Mayor, vice mayor. I I think that every project is different. It's hard to say. Um for the this particular project, we were estimating smaller sites. Um I don't I haven't worked on any of the smaller projects. Maybe you could speak more to it, but and have you done a recent development project, Jeff? Jeff, have you knocked over a building?
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