Okay, thank you.

I can hear you.

Now let me go.

I want to go over to what you see as you're doing.

Okay, so it's good.

Development authority to order roll call, please.

Bowie here.

Coleman here.

Joast here.

Kim.

Naker.

Here.

Yang?

Here.

Chair Johnson.

Here.

Use remote.

And we have six present, one absent, that being Commissioner Kim.

Item number one is approval of the minutes, MIN 26-10.

Approval of the February 2026 HRA meeting minutes.

Um great.

So I will take a motion from Councilmember Coleman to approve the minutes.

Is there any discussion?

Roll call vote, please.

Bowie.

Aye.

Coleman.

Hi.

Kim.

Oh, she's absent.

Naker?

Aye.

Yang.

Aye.

Chair Joe's.

Hi.

And Chair Johnson.

All right.

Six in favor, zero opposed.

Resolution or the minutes are adopted.

Item number two is a staff report, SR26-33.

Say Paul Commercial Corridors update program guidelines.

Wonderful.

So this is a presentation about our commercial corridors program and our guideline updates.

I'll welcome Daniela Lorenz to this presentation.

Welcome.

Good afternoon, everybody.

As uh Vice Chair Joe said, I'm Daniela Lorenz.

I'm an economic development supervisor on the PED team.

I'm talking about the commercial corridor program recommended changes.

Um, you all saw my colleague Annie give a presentation about this uh about a month ago.

There was discussion at that meeting, some suggestions um for changes that we've updated, so that is what you all are seeing today for consideration.

So first, an overview of those guideline changes.

I'll go through these quickly.

If there are very specific questions, let me know.

The first two are related to geographic changes along these corridors.

Um the first one was just extending the corridors for a couple of uh the boundaries of a couple of the corridors.

These made some logical sense.

They're all contiguous commercial areas um that didn't have a substantial amount of non-commercial land along them, and this is something that we heard feedback from the organizations who've been working on.

Could OTC um bring Councilmember Johnson back up on the middle screen that's inside the dais?

I think we're supposed to be able to see her when she's um remotely participating.

Thank you.

And then the but the presentation on the other two screens.

Thank you so much.

Apologize.

No worries.

All right, we can start from the top.

Um, so again, the first two changes or bullet points on this list are related to geographies.

The first one is extending um the boundaries of four of the corridors to account for some adjacent commercial areas that the organizations who have been selected to work upon those corridors suggested um this is one or two blocks in a couple of different directions for each of these.

Also related to a geographic change, we actually removed the Smith corridor, um, which is on the west side.

It is considered a micro corridor with our new analysis, meaning that there is not a lot of businesses, it's a pretty short length.

Um, so we worked with Westco, who is the organization that works on that those corridors to consider removing that.

We do have, and this is related to the next guideline, um, that will allow for flexibility for staff to approve things on a case-by-case basis.

Um, primarily related to geography, because we've got so many of these corridors that have kind of nodes that don't directly link to the substantial corridor, but the organizations are still seeing the benefit and working in those areas or concentrating some of those funds.

So that's really what that guideline changes um to allow some of the flexibility allows us to do.

So it allows us to be responsive to the organizations on the required needs of the community, which is one of the big goals of this program, while also not just extending these corridors for miles and miles and miles when it just doesn't make a lot of sense.

We are changing the name of the commercial corridors program, not much else to say there.

Um thank you for the applause.

Um, and then the next two we have some more in-depth information about, but really the first one is related to award size reflecting additional variables.

What we heard both from this body, but also the organizations who are doing work is that the way that we were doing it before, we use too blunt of a tool.

It didn't account for all of the different ways that we can think about commercial vitality, a commercial corridor, and opportunities along the corridors, and then finally um some discussion around how we are looking at funding um operating expenses through this port program.

And then finally, um, some discussion around how we are looking at funding um operating expenses through this port program.

So first, this is related to the award size index.

So originally what we were doing with the corridors is we had a really blunt tool.

We said you are either an ACP or an area concentrated poverty or you are not.

The problem with that is it is it is blunt.

Um, and it all it did was give us two kind of award levels, didn't take into account the size of the corridor, didn't take into account the number of businesses, employees, or really kind of the opportunities that a corridor might have to continue to grow and expand.

So as a result, we created the an index that considers these four major areas.

One would be density of businesses, so that's the number of businesses along the corridor divided by the linear square feet.

And I'm gonna look at Bob to make sure that I said that right.

Got it?

Okay, awesome.

Same with employees, the number of employees along a corridor divided by linear square feet of that corridor.

Presented percentage of commercial land use along the corridor, whether or not it is being used by a business at the time doesn't matter.

Just this is the length or a look at what could happen along an entire corridor and basically what like how it's zoned, what that looks like from a land use perspective, and then density of vacant buildings and HRA properties that are ready to sell along the corridor.

Each variable has a maximum score of 25.

I can get more in depth on that if you would like to.

But I think generally what we're looking at here is a much more nuanced tool that allows us to take into account a number of different factors that could tell us this corridor's got a lot of opportunity here.

Maybe it's got some challenges, which would indicate that it would potentially need additional dollars.

So the award sizes, we are also considering um the use of qualified census tracks versus the area of concentrated poverty.

The real reason for this um as a measure of underinvestment, most of our partner organizations, Met Council, even us included, we don't use area of concentrated poverty anymore.

We use qualified census tracts.

So that's just so we're in alignment.

Um those places what they measure a lot of the same um socioeconomic and um investment metrics.

So we have a two-part test essentially now to look at corridor.

I'm actually gonna just go right to the next one.

So we both use the index score, and then we decide whether or not it is a qualified census tract.

And that gets us our new award sizes.

So these are from descending order.

So the top would be they got below 50 on their index score, and they're not in a qualified census tract.

The next level would be they got above 50 on their index score.

Or no, they're still below 50, excuse me, but they are in a qualified census tract.

Then there is the they are at 50 or they're above 50 on their index score, but they are not in an index a qualified um census tract, and then they are both in a qualified census tract and got more than 50.

A lot of detail.

I'm happy to pause there if we've got questions before we move on.

Okay, so we got a few questions, concept of the group.

Thanks, uh, Chair.

Not a question, but as much as a uh thank you as one of the people who I think brought up the complexity of this at last time we talked about it, um, but couldn't imagine what the solution would be.

I think you've done a beautiful job balancing uh size, density, length of the corridor, number of businesses with uh the equity consideration.

So uh so thanks for doing this.

Council Vice President Kim.

Yeah, I had a question about um density of businesses.

Um how is that determined?

So I only asked because Rice Street has a lot of vacant buildings, so is it like existing buildings where businesses could be, or is it actually like existing businesses with current licenses?

So density is measuring actually operating businesses at the time.

So it's number of businesses then divided by the total uh length of the corridor.

What we would add on to that in the case of you brought up Rice Street is then measuring the vacant land and the vacant buildings.

Is that right, Bob?

Okay.

You can come up here if you want.

Bob knows so much more about this index than I do.

I thought I nailed it.

What is up, Bob?

HRAD commissioners, um, Bob's folding.

I didn't expect to be up here, but um thank you.

Um so the we don't measure what what we don't have data on, and it's almost impossible to get it a citywide scale, is um individual vacant retail spaces, which is I think um Commissioner Kim, what you were kind of alluding to.

Um we can get to vacant land because there is data for that.

But the only way to there is no data set that sort of looks at vacant we sold spaces in a consistent way.

Um so that unfortunately is not included in that, but we do um try to sort of have a balance here of capturing both the intensity of current use, but also sort of from an equitable development lens.

What is the unrealized untapped potential as much as we could with the data sources that were available?

So hopefully that begins to answer your question.

It's an imperfect answer, but the best we could do.

Yeah, I guess I'm only bringing that on because as I think about where resources are going, you know, it's much more established versus there's a ton of opportunity to build out um much more commercial corridor for for rice streets and the density of employees.

We have a lot smaller, they're like mom and pop-owned businesses, so they're gonna have naturally fewer employees.

Um, and the majority of them are immigrant-owned.

So I'm just sort of asking the question if you like.

I get that um, you know, everyone, all of these areas are incredibly worthy.

And for some, the opportunity index, I think, is different than areas that have very established, very few vacant businesses.

And so as I think about utilizing dollars to expand the tax base to put more jobs on the table, I just sort of wonder about the density of business as it's sort of like I think unintentionally impacting areas that have the greatest amount of opportunity.

Um so just I'm offering that up.

I'd be interested in kind of like talking, talking to staff with a little bit more about it, but it's a curiosity that I have while recognizing that all of these areas are incredibly worthy.

Um, and I would just would be interested in kind of like what corridors have more opportunity to kind of build out right, like a business corridor, which is what this is, and then um increasing our available like jobs that are available in the city.

So um, as I've gathered my thoughts here, just a few more points of information, not probably a full answer to your question, but um two things.

One one is we did try to compensate somewhat for that with the commercial land use, which will capture vacant spaces and not vacant spaces.

But and the other piece, this just to understand the sort of data elements and how this factors into your question rather than fully answer your question.

The vacant building um demarcation is an entire parcel or an entire building that is vacant.

Um, and so that doesn't again capture for the situation where there's multiple spaces that one could lease, and that's sort of part of the challenge that I was alluding to.

Yeah, that's happy.

Yeah, that makes sense.

And the last thought is just the um density of vacant buildings and HRA properties.

Is that like parcels of land, or is that like HRA owned?

Okay, because in Word 5, I don't think that we actually have that many developable developable that word um properties.

In fact, they're like reasons why we probably won't and are hoping that someone will buy them.

And so it's just to say then there's like a knock against you know this corridor in our area when we are not even invested in developing our own HRA properties because they're just crummy to use.

And so it's just noting that there's an incredible amount of intention, and I I by no means am trying to like poke holes, but I'm I'm offering it as a curiosity to say like how else can we maybe reconsider it because um yeah, how else might we reconsider it?

Um, as a way that kind of just gets guess a little finer tuned, and by no means am I you know saying it must happen, but just offering it as a curiosity to staff, which I know is incredibly um is um I don't know.

I just want to be thoughtful I'm offering it over because I see just such an incredible amount of intention in what's being presented.

So I appreciate the considerations.

Yeah, great.

Um so I think we've got I was just gonna respond.

Oh, yes, Director McKin.

Yeah, I was just um commissioner, Commissioner Kim, really appreciate that feedback, and it's one of those things again, looking at the complexity of trying to try and incorporate all the feedback and come up with the formula.

There's going to be, like you said, impacts on individual corridors, etc.

And so I think um I think this was a really good way to take that feedback and build it into a formula.

And I think what would be I think also great is in the coming months that we're happy to sit down with you and kind of go through the nuance of the formula and talk a little more about it and how it might specifically impact corridors in your ward and in your area and talk through, you know, moving after this year.

You know, we had one year kind of the pilot with how it was, and then this year looking at that, and then moving forward after that.

Is there any nuance or you know, tweaks to be made after that point in another year of seeing the impact of it?

Great.

So I think we've got council president acre, Chair Johnson, and then um council member Yang had questions, so I will go to Council President Daker.

Thank thanks, Chair.

I uh I just I appreciate the questions very much, Vice President Kim.

And I think um, while there's there's I agree always ways to tweak and make this better.

I I do want to acknowledge that it seems like our first two metrics here, density of businesses and employees, um, sort of seem to preference more active uses and spaces, corridors that are more full, um, and then percent commercial land use um and density of vacant buildings seems like it's either neutral or preferences more vacancy.

So I do see staff here trying to make sure that a vacant corridor is not treated, is not disadvantaged because of that solely, um, which was a concern that I had last time as well.

Um, but I appreciate the points about ways to even further fine-tune it.

Great.

Chair Johnson.

Yeah, I was just more so, I guess, switching gears a little bit to hear specifically about the corridor expansions.

So if you can touch on just how they're expanding their geography.

Yes, um Chair Joe or Vice Chair Joe Chair Johnson.

Um so the four corridors that are getting slightly larger would be the East Seventh Street Corridor, the Ford Parkway corridor, Commodale Front, Caesar Chavez and Wabisha.

Um each of them are adding, I think I've got the actual note here.

A couple of blocks in either direction to account for contiguous um commercial area along those corridors.

Um, you know, Como Dale Front is expanding a little bit to the east to capture some additional land.

E7th is going a little bit further down Maryland, actually.

Um, and then Ford Parkway is expanding down to uh Mississippi River Road.

And Millie.

Jump in as well.

That this is the same as was what was presented to you last time.

Yes.

So there's no changes to that from what you saw last time, just clarifying that.

Okay.

Thank you.

Okay, and then as a follow-up chair, I uh just wanted to touch on, and I'm not sure.

I'm looking at the presentation slides um that are posted, and so I had asked just for some clarity and also just the results of the conversation surrounding um operational use and economic development eligibility when it relates to certain corridors.

Because we heard from that and some commissioners have heard from that, and I wasn't sure if there's a slide added.

I don't see it on the slides that are public facing.

So I just wanted to ask that question and have an opportunity for staff to clarify that.

Yeah, thank you, Chair Johnson.

I also noticed that I'll turn it over to Director Van and Florence if you could answer that question.

Vice Chair and Chair, yes, we do have a slide on that.

Okay, so I may be able to is it possible to then post that presentation to the public record?

Perfect.

Okay.

Um Chair, did you have any other questions?

Nope, I'll preserve my uh questions for when they get to that slide.

Okay.

Great.

And then um wait, didn't anyone else have another question?

Okay, thank you, Council Maria.

Thank you, Chair Joelista.

I am I just wanted to give feedback about the formula changes here.

I I am very supportive of the additional of like the the new um formula components you've included in it that come from the qualified census tracts.

I do want to name that as some uh as um the commissioner that led on the equity piece around adding in the areas of concentrated poverty into the firm formula.

I do feel very strongly about keeping that still, and I would like to connect with um our east side business associations that have been reaching out to me and I'm sure many of our other council members too, especially.

So that's ESNDC, Asaba, also Black Business Network, because I'm curious about what their thoughts are if we were to remove the areas of concentrated poverty from the formula.

And I name that because I like one, I I uh um very committed to fighting poverty head on and know from many conversations I've had with the business organizations, even district councils in my ward that because of the um the the poverty that does exist um you know within my ward that I also know really um near is mirrored in many other wards too.

There's just so much more engagement that they have to do to really interact and um and connect with businesses, many of which are owned by people of color, immigrants and refugees.

Some of you know, some business owners like they they don't speak English, but then their children do.

And so that's why sometimes when you go into those mom and pop shops, you even see the their children um at the cashier doing a lot of the the face-to-face interaction and doing the translations for their parents.

And uh also that there's there's just um a lot more effort and resources that have to go into them connecting with entrepreneurs and how this really translates into the work I've heard from district councils is that um you know they've had to um there's there I think there's um I'm conflating the two, but there's a lot of similarities there where um for me it is this is more about how we can really uplift the communities that are living in those marginalized areas, knowing that I mean those are also places where we have food deserts as well, and how can we continue supporting the businesses doing the work?

Um, and then also like a lot of these um these businesses in the areas of concentrated poverty, like they're typically the ones that that don't hear a lot about our city resources, like even STAR.

Um, so at my office, we are actively doing the outreach to connect with them, and I I'm so grateful for the work of our our business organizations and staff too who really understand that gap there.

And so that's why you know I know there's a lot of dedication to trying to um reach out to them more, and I've seen a lot of the work uh really result in more of our BIPOCL and businesses applying for STAR, which I'm really proud of.

And so I just wanted to name that I think there is a lot of value in keeping the ACP component in there, even though I understand what you're saying about how that's not regularly updated in a lot of the staff reports that we get about like programming.

I know that a lot our staff you still regularly talk about the ACPs, though, so I don't think it's any sort of irrelevant information or outdated information.

Instead, I think there's a way where we can uplift it into our work.

So I'm wondering if is there for your formula, did you walk through a scenario at all where you kept the ACP as part of it and then added on those um the new fact, the new like formula components that you are using from the qualified census tracks?

And if not, is that something that um I suppose like you know, if there wasn't support from that from the business organizations I'm gonna connect with, I I wouldn't be interested in pursuing it further.

But if there was support from them to keep the ACP, like is that a scenario you can put together in for us?

Uh Vice Chair Jost, Commissioner Yang, qualified census tracts measure exactly the same thing as area concentrated poverty.

So we are accounting for it, or we feel like we are accounting for it by using that QCT measure.

Um, the removal of the ACP um only impacted the corridor along Snelling and Selby.

Everybody else got the same um score or bump, I guess you would say, from the inclusion of QCT versus the area of concentrated poverty.

Okay.

So I think adding it in, we we certainly could if you're interested in seeing that.

I don't think it's gonna functionally change the scores.

And I think if it's a matter of I just need more explanation from you all, I'm happy to do a one-on-one about that to understand it more because that like what I'm how you know.

I'm I'm hearing the information you're sharing with us, but like to me, there's just some disconnection there.

So I'm not I'm not interpreting it the same way as you all are.

So I'm happy to make some time to understand that more.

Happy to connect.

Great.

Um, thank you for for bringing that up.

I think council vice president Kim also had a question.

I I actually was wondering the same thing.

What what's the difference?

Like my only experience with um qualified census tracts is when I used to work with HUD versus like areas of concentrated poverty, looks at like multiple different specs of like well-being.

Um, but what I'm hearing you say is like they they're they pretty much overlap.

Um, but I'd also be interested if possible to just join that conversation because I'm also really interested in that, but um, more so for like I think more a more robust definition for myself to be working with.

So I'd appreciate to be included.

Thank you.

Great.

All right, I think we'll all right.

Thank you.

So the last piece about this is related to operational expenses or subgrants for operational expenses.

So one of the eligible uses of commercial corridor funds is to subgrant to businesses to do commercial-wide um activities.

Initially, we were thinking about using um these dollars for operational support upon um additional kind of looking at our public purposes, economic development criteria, the purpose of the program.

We're generally not supportive of one-off operational support.

Meaning, if your business comes in and says, you know, I'd like help paying for my staff this month, but I don't really have an additional reason for that, we would not be supportive from that.

It's not strategic, it doesn't really fit in with the corridor-wide kind of impacts that we'd want to see with this program.

However, we do recognize that a lot of exceptions might apply where one of the best things that we could do for a corridor during a disruptive period of time could be to support these businesses operationally so the corridor stays stable and that we're retaining businesses, we're retaining employees and the investment that they've made along the corridor.

So staff is recommending to update the guidelines to allow for operational expenses to be eligible and eligible use when there's unexpected and significant disruption along a corridor.

Um things like construction would be a good example that I think we will continue to hear about.

And within that, what we would really just need to see from the organizations is basically how they determine that there is a corridor-wide impact as a result of a disruption, how they're planning to measure that and document it to us to allow us to say that it is now meeting a public purpose and a corridor-wide um impact.

So this is the proposed language.

Um I'll give you all a second to read it, but happy to answer additional questions about this or anything else that we've discussed.

Could you read the language I think?

I certainly can.

All right, ready?

So it the proposed language is operating expenses may be considered for business stabilization and retention along the corridor when substantial and documented business disruption impacts the corridor as a whole.

Documentation must show a unique and substantial impact on the corridor and may include number of businesses impacted, photographs of the disruption, business bank statements or other financial documentation showing substantial revenue or sales decline and direct correlation to the disruption.

The reception recipient, so this would be the organizations in this case, must provide documentation showing how key economic development indicators will be met and tracked.

Okay.

Thank you.

Council President Nakers.

Uh thanks, Chair Jost.

I really appreciate staff taking a closer look at this.

I know this was a huge concern for many of us.

Um, and I I think that this is a good balance between the need to allow for intermittent and emergency support, but um recognizing that that's those are unique circumstances.

Um one suggestion and one question.

I in the language that you just read and I'm not looking at, but from what you said, I would probably suggest striking the word unique from unique and substantial impact.

I don't necessarily think a corridor should have to demonstrate that it alone has been substantially impacted by something, it might be something affecting every corridor of the city at the same time.

Um and I and actually I think the level of emergency we're talking about often is.

Um so I think it I don't I don't think we need to ask them to demonstrate a unique impact.

Um, and then I just wanted to confirm.

So we're talking about sub-grants in this case, grants directly from the commercial corridor program, say to a business association to hire someone to do something or to do a marketing campaign, which are all operational expenses, those are all well and good all the time.

Um Chair Joe's Commissioner Naker, that is correct.

We allow um for I think it's 20% or 10% of the full funds to support the organizations operationally who are doing the commercial corridor work.

And just and I wasn't clear about this before, but for example, if an organization wanted to hire somebody, say to do a specific, not to support their current operations, but that their project for the commercial quarters program was hiring someone from Main Street Alliance to market the corridor.

Um is that acceptable?

Commissioner, yes.

Okay, yep, thank you.

Okay, we've got Chair Johnson and then Councilmember Coleman.

Chair Johnson.

Yeah, I just wanted to say and kind of echo the same uh sentiment as the as Commissioner Naker has shared.

You know, this was a big thing on the East Side, as well as along Rice Street with their proposals from last year and the proposals from this year.

So that clarity is really helpful and beneficial as so much of the uh plan for the pain and E7th corridor was in response to the uh to the overall construction that they have received.

And so I think this is really intentionally put in a way that would allow for those corridors to be able to respond to the need now.

I am curious of just when it comes to what information they need to track.

Um, are they the host organization responsible for that, or is that something that they can get from the businesses that they're uh supporting, like what the burden be on the businesses to also to establish that need, or are we saying that the hostal organizations would have to um make the case for why that need was there?

Chair Johnson, I the way that it would work um is we would expect all of the information to come to us through the organization that received funding, so all the tracking information that's something they have to provide um quarterly as part of our contracts with them.

How they receive um the information where it necessarily comes from.

I think we're kind of indifferent to that.

We want to hear from them what what is reasonable to track um and what makes the most sense to really capture what's happening on their corridors, which is why you know we're not trying to be overly prescriptive in what we need to see.

Um to allow some of that flexibility, knowing it might be different, and not every single business can provide the same kind of information, not every disruption will be the same.

Um, so yes, it would all come through those organizations.

What it necessarily looks like will um will depend.

Um, but I think you know, we do enough front-end work when they submit their proposals to us, they being the organizations to I think get to a place where we can come up with um, you know, what makes the most sense depending on what the uh organization is proposing to use the dollars for when they first come back to us every year.

Okay, thank you.

Yeah, and I think just as a follow-up, um I also agree with this the aspect of striking the word unique so solely because I do anticipate um a citywide uh case to be made for operation metro surge, you know.

We have a growing need from businesses in local corridors to respond to what has been what has really been uh challenging 2026 for all of our corridors.

So I would not be surprised if we start to see that.

I would argue that's substantial, but if we're looking for kind of differentiation per, you know, and I think construction even could be um seen as happening everywhere because there are many corridors that have experienced that.

It's just that there was some different nuances related to um our east side construction project because it was done, you know, in a different timeline than anticipated.

There were other factors, but it still could be substantiated versus being argued that it's unique or specific to that sole corridor.

Chair Johnson, I if I could respond to that too, and I'd invite our city attorney if they've got any opinions on the unique the striking of it.

Um one thing I just want to be clear about we don't mean that it is a a thing that is only happened to one corridor.

I think it means that it is a unique in time thing that is happening, not that it is only happening to Rice Street or that it is only ever happened to um the Cesar Chavez corridor.

Okay, um turn over to say RC attorney.

Yeah, I um I would agree that there may be some confusion on that.

Maybe we could talk about that.

I think you raised a very good point, Council President.

Um that could be interpreted different ways.

So we can look at that.

But but I think it it sounds like we do share an understanding of what we're trying to achieve with the language, it's just a matter of do we have the right language to that effect.

Okay, and if that's not something that has to be, you know, I think it might be helpful to get that defined when you're saying unique and substantial.

True.

Okay.

Any other questions, Chair Johnson?

Nope, that is my last.

Thank you.

Thanks.

Councilmember Colin.

Thank you, Vice Chair Jost, and thanks for this presentation.

And I apologize because I it was at tab, I think, when we had the first part of this conversation leading to this.

So I might feel free to tell me to read the transcript.

Um, but I I have a question about kind of what we're what we're working to accomplish with this because so it was helpful to hear that the initial, but this was because of Bryce Street.

My head immediately went to Operation Metro Surge.

But I'm wondering the way I read the language currently, is it could be applied to something as broad as a recession or something that is affecting all of our businesses where we might want to provide that emergency aid.

It's not clear to me though that that would be the intention that we are thinking about something that is more hyperlocalized, more time-bound than that a recession or some sort of economic downturn that's just significantly impacting businesses, but with no end in sight.

And I'm curious if that that's intended to be captured here.

If maybe I'm just misreading this, anyway, any thoughts on that?

Director McMahon.

I can maybe try and give a little background and Ms.

Laurence can jump in too as well.

But you know, part of the goal is differentiating between that a day-to-day sort of what I call bread and butter business operations aren't eligible uses.

Simply asking for um subsidy for rent or labor or inventory doesn't meet the economic development purpose of these funds.

And so it's trying to differentiate that that day-to-day, that bread and butter, that that's not what the public dollars are being spent for that private business, but rather when there is sort of this this outlier, if you will, if there is an operation metro surge.

If there is something like that that has that substantial impact on the business that they can show that really the dollars would be needed for business retention to serve that economic development purpose.

So it's trying to get at differentiating between those two different circumstances and what would be eligible.

Thanks.

Um any follow-ups, no, okay.

Council President Acre and then Councilman.

Thanks, uh, and I think Ms.

Coleman, your question is really interesting and sort of makes us sort of pressure test the boundaries of this.

I do like the word time bound, by the way.

Not I'm not a lawyer, but um, but I I also I think it's worth just keeping in mind too that these are subgrants.

So we're making one grant to the business association or the district council, they are then deciding where their corridor most needs this assistance.

And so um, I think there's a certain extent to which we can trust, we give these guidelines and we can trust that that association knows the needs of its area the best and would decide even in some sort of um whether recession or something more long term, whether this limited amount of dollars in that situation um if this was the best use or not.

Um so I just I think there's just some additional, there's another there's another judgment point that we have by having this go through a very locally rooted organization that's aware of the needs.

Thanks, Chair Joseph.

I just want a clarification on on basically who decides like the um that criteria whether it meets it or not, like it's a PED, who does that, and and um so like Isaba, for example, if there's an organization that um wants to uh to receive the subgrant, and they're saying that they um you know they there's a public purpose and economic development for whatever they're asking for.

Is it a Saba that would say actually you don't need it, or yes you do, or would it be PED?

Chair Jose, Commissioner Yang, it would be PED, but how the applic, not even an application proposal process works for this program is every year the selected organizations would give us their budget and essentially justify how it's meeting all of the different public purposes of the program.

Um so in this case, that's how we would treat it.

They would say we need we're experiencing construction disruptions.

We know we've got 10 businesses that won't have direct access.

This is how we're planning to measure it.

We would like to use X amount of dollars for subgrants, and then we in PED would say, yep, this meets our test, or no, we need more information, or that doesn't seem substantial or unique.

Okay, and we enter into a contract with them, and we work city attorney's office reviews the contract that we enter into with them before dispersing the funds.

Okay, and then just a follow-up is that is that a sort um sort of require something that the organization can share with you all at any time.

Um, because you know, we sometimes we can't can't plan for any sort of disasters that might happen.

So, do you have the good deadline they have to do that by, or is it all like sort of like a rolling basis where they can always reach out to you for it?

Uh Commissioner Ying, we would prefer if they mostly stick to the statement of work that they give to us at the beginning of the year, though that additionally that flexibility that gives us the ability on a case-by-case basis to make some changes, that would be captured in here if all of a sudden there's a sinkhole in front of your business that you weren't anticipating that they wanted to use these dollars for.

Um, staff has enough flexibility in these guidelines, I think, to make a judgment call on when it would be appropriate to change that.

And we've done that even in the pilot year of this program as different things have come up.

Great, thank you.

Great.

Um, any other that was was that your last slide?

Yes.

Okay.

Any other questions on this?

I want to make sure we've also got time to uh for the downtown vitality fund.

Thank you so much, Ms.

Thank you.

Um, I oh sorry.

Item number three is staff report SR26-34 downtown vitality fund presentation.

And now we'll turn it over to Director McMahon.

Thank you.

We're just getting a set up.

No, that's not like a little views.

All right.

Okay.

Thank you, Chair Commissioners.

I have a question.

So yeah, yeah.

Yes.

Do you guys know?

Yeah, yeah.

Um, Council More Yang has a quick question.

Yeah, Director Panga.

Can you can you explain to us um it'd be helpful to just know the difference?

Like, I noticed that on the corridor list here, that downtown, it's not factored into the index.

But then I know that we have the vitality fund here for downtown too.

So can you share like why that is just your PED's recommendation around this?

Sure, and I might let Ms.

Lorenz talk a little bit more about the corridor specifically.

The downtown vitality fund has different eligible uses as well.

So they're for different uses, but definitely uh Commissioner Yang, we did look at what the downtown looks like in the index.

It is so unique and different than the rest of the city that it scores like off the charts.

So it's almost not even worth putting the exact scores on there, but they went through the exact same test as all the other corridors.

All right, commissioners.

Thanks so much.

I am really excited that we are before you here today to provide updates on the five million dollar downtown vitality fund, which you approved the budget for both at HRA and City Council as part of this 2026 budget.

So I wanted to start though, just with a little bit to ground us in the importance of our downtown as an economic engine.

It is incredibly important, not just as a neighborhood and a community and a job center, but it's a really unique place with place making that welcomes people from all over the state and all over the region that really reflect a rich diversity of backgrounds.

It is a vibrant part of our city, it has strong cultural institutions, entertainment venues, and unique events and attractions that really bring people into St.

Paul.

We all know, I think all too well, you you all in particular, a lot of the challenges that all downtowns have faced post-COVID, and St.

Paul is not unique in that way.

And there has been a decline in office.

Occupancy and overall foot traffic and this investment into downtown and this downtown vitality fund, we're really hoping will help make a difference to increase the strength of our downtown.

Again, just noting that the goal of this downtown vitality fund is provide financial assistance to both commercial and residential development projects that strengthen and activate our downtown.

And I'm excited to open this five million dollar fund to do that and reinvent downtown.

We now have our housing director and our economic development director will be before you to go through some more slides to talk in more detail about each component of the fundamental.

Well, thank you, uh Director McMahon and Vice Chair Jules.

My name is Jules Atanda, I'm the housing director.

And I would say that the downtown vitality fund is for uh developers planning to create uh housing units or complete an office-to-housing conversion in downtown sample.

The funds uh would be used to uh the resources will be used to fund some activities that are in alignment with the low-income housing um aid program, which is um the most restrictive resource we have in this program.

So these activities include construction, acquisition, rehabilitation, and gap financing to provide affordable housing to households with income that do not exceed 150% of AMI for of uh for homeownership projects or 80% of AMI for uh rental units.

It should be noted that housing developed or react with funds under this program must be affordable to the local workforce.

Um if this program is oversubscribed, we have a few criteria to help prioritize the resources, and those are mostly about um uh um readiness and projects that are prepared to close in 2026 will be prioritized, as well as projects with the greatest number of units created uh created.

There's also a reporting and compliance requirement for this program, and annual reporting is required to a Laha requirement, as well as uh projects uh subject to city and HRE compliance requirements.

Any questions?

This is the housing part of this program.

Otherwise, I will have my colleague Dr.

Lloyd talk about the business assistant fund.

Looks like Council President Maker has a question, and then we'll go to Chairs.

Thanks, Vice Chair Jost.

Um, a couple of questions and appreciate all the hard work on this.

I think one of the key priorities for this these dollars are that they be easy to access and that they um get out the door quickly.

So, one question is uh what is the application process look like?

How long do we expect that it would take before a project would know if it gets financing?

And in particular, this if the fund is oversubscribed, seems to point to an application window as opposed to first come first served rolling basis because if it's rolling, what's to keep the first project from getting all the money, and then we don't actually know how to prioritize amongst them.

So I guess I'm just can you paint a little bit more of a picture of how does the application process work and how quickly does it go?

Vice schedules and Commissioner Maker.

Yes, it's a rolling window.

There is no deadline.

However, if as soon as we open the process, we receive multiple applications, then we go over the the application process is fairly simple.

We receive an intent to apply from developers, that will be reviewed, and obviously we will look at other funding sources they have some commitments from other funders.

We've touched will decide on readiness of a often uh of a proposal.

Just as a follow-up.

Um, would there be well, I guess I'll ask my two questions and then yield to Chair Johnson.

Would there be a value in having application windows such that again?

I'm just imagining there's a ton of need.

Um the project, the opening, the project, the program could launch, and we could very quickly have we could have one application right away, um, and then another application a couple of weeks later.

And I think it it doesn't allow us to prioritize amongst them if we don't allow for a whole bunch to come in at once and be able to choose.

So I'm just I'm just wondering if it makes more sense to have windows that move along the year rather than completely rolling.

And then, secondly, projects that are prepared to close in 2026.

I guess I'm curious, in many cases, it it might be the case that we have applicants who already do own the property but are planning a redevelopment.

So I'm wondering if it's worth having one other prioritization metric in this group that would help us choose even among um projects that are already owned.

Commissioner Aker, we do have some criteria that we wouldn't list here because they are related to underwriting process.

I mentioned commitment from other other funders.

If someone submit uh submits a proposal, and without the uh those commitments from other funders, obviously they are not ready.

So we let them know that they cannot be selected.

All right, um does that answer your question?

Uh Chair Johnson.

Thank you, and thank you, Director Antana, um, from for beginning the conversation too around this vitality fund.

I'm really excited to see both like the the housing and the economic development piece of this proposal, and along the vein of Commissioner Naker kind of wanted to know more about the timelines for what's anticipated.

But I think along that too, what is helpful for me to understand is how these programs and how these initiatives are being staffed.

And I didn't get a chance to ask that.

I forgot to ask that related to the core commercial corridor funding.

Um, because I know that the HRA also budgeted additionally for an additional position to assist that fund.

I wanted to just check with you all of like what is the staffing look like for this?

It's a five million dollar program.

We have housing, we have economic development, but like from the processing in on the housing team, what does that look like if we do do have if we do have like a window for applicants to apply and you know the review process?

What is the staffing look like on the back end for the vitality fund currently?

Director?

Yeah, I'll just jump in a little.

These are existing um funds and programs with staff.

So using Laha funds, we have the existing housing team that is using Laha funds.

There's simply these are specifically for downtown.

Um, and similarly with housing trust fund dollars going in, those are dollars that we do you know, regularly program with existing staff.

It's simply that these are for specifically downtown.

Okay.

Um does that answer your question, Chair.

It doesn't.

So what is staffing look like currently for the fund?

Well, I can let um the housing director and economic development director talk more about their staffing overall and how you know staff is going to be used on this, but because it's not a new program or new staff, there's not not a new program.

There isn't additional staff needed to create and begin a new program.

These are Laha dollars being used for housing.

We have existing Laha dollars and staff that uses Laha dollars.

Is in this case, these dollars will be used for downtown Laha projects and specifically for downtown.

So existing staff that exist doing the Laha work will continue with this.

Vice Chair Jose, Chair Johnson, uh, this is not a new program.

This is an additional resource that we add to our multi-family um program.

I don't know if this is this answers the question.

Okay, so if we did a window application window as what is being kind of recommended by Commissioner Naker here of like an application window that comes through, you get four proposals, the existing staff who were staffing Laha would be the folks reviewing those applications and determining readiness.

Yeah, what schedules uh Chair Johnson, an application window for these uh big development, uh the big developments wouldn't work because we can set an application window in I don't know, two months.

Most likely we will not receive an application.

It's good to have an open window so that whoever is ready with their funding commitments from other lenders can then be selected.

Yeah, uh that is part of the reason for not having a specific window of time because of the staffing of, you know, if we had one month and to do it and process it, not having that ability, right?

Laha dollars also, if folks want to use them, there is an existing application process.

And so it's not changing that.

What we've done is we've added an an interest form to try and make it less onerous so that somebody can fill out an interest form which is two pages long, just letting us know, hey, we're interested in looking at your Laha dollars for downtown as part of this downtown vitality fund.

Okay.

Any other questions about that?

Okay, and then yeah, just as a follow-up, then on average, would you say for the time a project would come to us?

Um, how quickly would we be able to process that and potentially get a definitive yes or no to their readiness?

What is the average time that it's currently taking with the existing staff that you have?

Um Chair Joe, uh Chair Johnson Sorry, could you repeat the question?

Yeah, what is the current timeline that so when we receive like a proposal to determine readiness like from the time that you're that someone might be able to express interest from the time they potentially would be determined eligible or not?

Chair Johnson, there is no timeline.

This is the normal processing of a of a proposal that would come before you, and I don't anticipate having multiple applications.

We may see one or two developments for these type of funding.

That would be a great yeah.

So okay, yeah, I appreciate that because I think you know, with the amount of money that's in the fund is realistic that we would be looking at maybe a project or two, as you mentioned.

So it's not a matter of if we're processing the several applications necessarily.

Is that what you're saying?

That's correct.

Okay.

Um I'm gonna turn it over to council member Bowie and then Council President Naker, who also had questions.

Council.

Thank you, Vice Chair Um Joe's.

I just have a similar question, and then also too, just um, you know, Commissioner Umaker just really sparked my interest, particularly around you know, another uh reason why having a you know versus uh having a time frame versus an open window, just because if we are just anticipating just one or two developments, um, that's even more reason to have competition because you're just really advantaging whoever's ready to go, um, versus who has the best impact or is gonna grow the, you know, bring forth the best proposal.

Um, and you know, I I understand that this is coming to us today, you know, as a recommendation, and I really appreciate all the work that went into designing this fund.

Um, but I I am curious to see, you know, what would the changes look like?

Would that, you know, how would that change in terms of like the the work, the management of this work if we do feel real strongly about having uh a finite time for people to apply versus um having a uh those who are ready a competitive advantage, particularly if we're only looking at funding one or two projects.

I I'll jump in and add that part of that reason and that prioritization was what we heard from you all in terms of trying to move dollars during the budget year in which they were allocated and trying to move projects forward that were most ready to go.

And so that was part of the prioritization of really wanting to make sure these dollars were applied as soon as possible and to get projects moving as quickly as possible.

Uh council president.

Um thanks, Ms.

Just.

I I would agree with the way that Ms.

Bowie just framed that.

I think it's especially exactly as you said.

I I wouldn't recommend a long application window.

Um, I think a month, for example, is a substantially long enough window.

But um, I think what I hear Ms.

Bowie saying isn't necessarily the project that's ready to start construction, but the project that happens to be ready to apply for this the moment that it's released, and if it's completely open and rolling, the first project to jump in and apply for all of the money could potentially get awarded it if the next project comes in two months later, but is actually a priority, a preferred project according to our criteria, we would have given the money away.

So I think having just a window to allow for a few different projects to come forward and choose the best one makes a lot of sense.

I'm not sure I feel the same way about the economic development funding because it looks like again we'll have more dollars there and those can go out more on a rolling basis and be available to more projects.

And I think maybe something that I will throw out for consideration um instead of a hard month or two month application time, because I think that also does limit our flexibility, that there could be something where it's simply uh to guarantee consideration, submit your interest form by this date.

And that would provide incentive to folks to get their forms in to provide for that competitive advantage, if you will, to try and get them all in and have that competition without hamstringing us.

Uh thank you for that.

I I uh if we did it that way, I know there's certain eligible uses and criteria.

Would there need to be another mechanism for making a decision between multiple projects with an application period?

Because otherwise previously we were kind of first come first serve.

Um Director McDonald, what are your thoughts on that?

And I'll just note that so again, these are Laha dollars.

We're just identifying that they're for downtown in that respect.

So if you know, by that date we are over-prescribed, which would be actually kind of an amazing thing if we had so many applications, so many interest forms, I should say, if folks interested to move forward, then it's simply it is a prioritization within that the housing staff would look at the projects and would make that professional recommendation, and then for any approvals, they would have to come to you before the board as the board to approve the dollars being used for that project.

So there is that mechanism by which you all will actually approve the dollars out the door.

Okay.

Great.

Um are there any other questions about the housing portion of this before we move on to economic development?

I think we've got maybe 10 or 15 more minutes left here.

Thank you so much.

Good afternoon, Commissioner Jimmy Lloyd, economic development director, city of St.

Paul.

Um as we continue to talk about the downtop vitality fund.

We also wanted to make sure that nonprofit and for-profit entities were eligible for these dollars.

Um there's a strong feeling that economic development doesn't solely um lie just with for-profit but also with nonprofit partners as well.

Um they do provide a lot of vitality to multiple areas within our city, and we want to make sure that we capture as many people as we can to help us turn um our downtown running and make it more bad capital.

Excuse me, um to make it more vital.

Uh eligible uses we're looking at building capital improvements, equipment purchases, and public realm improvements.

With the capital improvements, we're focused on street level interior and exterior, things that are permanently affixed and visible to enhance a downtown experience.

With equipment purchases, we're looking at things that have a uh useful life of five or more years to update and expand business operations.

So equipment that can help businesses continue their operations for at least that amount of time.

And lastly, public realm improvements uh maintained by private property owners and adjacent businesses, things like lighting, outdoor seating, and public art.

Again, uh, as we just kind of discussed, I think we might need to talk about this a different way.

But if the funds are oversubscribed, some of the things that are of highest priority for us are to activate uh at least 5,000 square feet or more of currently vacant space.

Uh businesses that have employees in the office at least 50% of the time, and projects that can begin within six months of receiving funds.

Also, anyone who's planning on relocating primary operations to um downtown St.

Paul as well.

The funding structure will be determined as follows.

Projects under 100,000 uh will be given a grant that is distributed as reimbursement through the project occurs as it incurs eligible costs.

All the projects will submit a program report and have a monitoring visit for from BED staff within one year of the project completion.

Five percent of the grant will be withheld uh as retage by the city until the project is complete and demonstrates that all of the grant fund costs have been fully paid.

Council President Baker's a push.

Thanks, Vice Chair Jost.

Um, Mr.

Light, I have three questions, and I they take the last three slides, but I waited until I could sort of put them all together.

Um so one of them is about the eligible uses and activities.

I I guess for the building capital improvements you have here, which visibly enhance the downtown experience.

I think I don't know that that's necessary.

I think what we're trying to do is encourage businesses to stay or relocate to downtown, and if they're if the building capital improvements that they need to perform are not visibly enhancing the downtown experience, it's the presence or um continued presence of the business that is the key to the enhancing downtown experience.

So I guess I wouldn't put too much of a premium on that.

Um the other hand, priorities for funding projects that begin within six months of receiving funds.

I six months feels long to me, especially if it's being used as something to distinguish between projects.

Um I would certainly expect that all of these projects would begin within that time frame.

So if this is being used as a differentiator, I might ask, I think about three months or something, you know, that's really somebody who really can make it make use of it right away.

Um then so those are just two suggestions, and then the last one is a question.

The um the fact that the grant is distributed as a reimbursement, and we talk about this a lot with lots of our funding, but the reimbursement always requires the business to have the upfront capital.

Um, and I'm wondering if it if it has to be a reimbursement or if it can truly be a grant grant.

Vice Chair Josecott.

So uh member Naker, thank you for those concerns.

I have um no problem with your your your statement on a visible enhancement.

I can understand how you feel that way.

What I will say is that um three months as opposed to six months for beginning of time.

I think as we've all uh experienced over the past two months is with metro surge, it's really been challenging for projects to maintain um labor from some of those standpoints, and also um acquiring funds for these projects at times can take some time for these businesses to close on them.

I would just um be cautioned, you know, take a cautionary approach as we talk about how we want to um you know enforce that or or expedite that process.

While I hear that six months feels long, I think that uh we're still recovering with from what I'm hearing on the ground from a lot of people who are getting back to work after these past two months, and also um a shortage of people who may not have re-entered the workforce in our labor labor areas as well.

Um so I just want to I want to make that uh offer that as a concern.

Um the reimbursement piece.

The reimbursement piece, uh, we've had this conversation um, I think circularly.

Uh the thing that consistently comes up in the reimbursement is how do we best protect the city dollars and how do we best steward those dollars?

As of today, the the biggest mechanism that we have had is reimbursement.

What that allows for us to do obviously is to pay it upon the cost being incurred.

Um my experience as I've been here, we have not done any grants outward before the work has been completed.

I think that's been very very successful in my opinion.

But I do understand that there could be um room to discuss a different approach to that as well.

Last comment, Vice Chair.

I would just I would really encourage us to think about a way to do that because again, it's um in some ways it's a little bit backward if the or if the business has the money to do the work and then we're reimbursing them.

I think that calls into question the need for our funds even more.

Um, and we are you know, through the for example, the commercial corridors program allocating dollars, not on a reimbursement basis.

So it seems like there is a way to do it.

Yeah, um council member Coleman.

Thanks, Vice Chair.

Thanks, Mr.

Lloyd.

Uh, just a question about the um priorities because I can totally see this going either way, and so I'm just curious about the conversation that was had to get here on businesses re relocating downtown.

Obviously, it feels really important to be bringing businesses downtown.

It also feels so critical to be keeping the businesses that we have downtown, and you know, it feels like such a big win when we get a new business, and it feels like such an incredible loss when we lose a business.

So again, I don't it seems 50-50 to me.

I am just curious kind of how that decision was reached or what that conversation looked like.

Yep.

Vice Chair Joe's council member uh Goldman.

What we were hoping to achieve is by having a fund available that we would make accessible to our current businesses downtown as a show of commitment to their you know them staying downtown, but also invite other businesses to come into downtown as well.

Sometimes an extra incentive may be the thing that would encourage someone to move in.

So uh our hope is that we again we have great relationships with our current business um community downtown.

Keep them here as best as we can, you're very right.

Like it is devastating and it does become a lot more noticeable.

Um let them know what's available for that, but also if there's someone who's saying, like, I would move downtown except for we have a resource to hopefully help tight someone to come be a part of the system.

And I'll add that I think the balance and the prioritization is you know the second bullet point about projects that house businesses employees that have employees in office.

That's part of that retention.

So it's balancing that retention with the attraction, both within that prioritization.

Cool.

Um then chair Johnson's ready.

Thanks, Chair Joel.

I'll be honest, I'm I'm trying my best to follow along.

I mean, I I earlier I mentioned STAR, we're talking about the economic, I mean the vitality fund and now the you know, those the commercial corridor funds, so it's all a jumble.

Like I feel like I'm doing uh working on a puzzle piece and I keep having different puzzle pieces from other puzzle boards, and so I'm trying to um just get some clarification.

So can you can you share with us the the uh economic development component for the vitality fund?

Like how many dollars are are we carving out for that?

Yes.

And it's out of the five million pot, is that right?

Yes, council, uh excuse me, Vice Chair Joe's, Councilmember Yang, we are allocated two million out of the five million for our downtown vitality.

Okay, and then how many projects do you think that will fund uh unknown?

I it's uncertain again.

Um, Councilmember Yang, or excuse me, on Councilmember Naker made a very good point.

Like someone could potentially ask for more dollars, and it could be one project, it could be two.

Um we didn't want to place a you know cap on any of that just for that reason um to see what we would get.

So our hope is that we can serve many businesses.

We can you know definitely talk about a way to do that, but I also would say we have other sources that could maybe help some of the smaller amounts that I think you know we would want to get at as well.

So if there was a project that came in that was larger that would be more suitable for this fund, this could be a good opportunity to leverage that.

So if there was a project that came in that was larger that would be more suitable for this fund, this could be a good opportunity to leverage that.

Okay, and I'll just jump into it.

I think um it might be helpful to think of this as right.

We've got the downtown vitality fund, their existing um resources and programs.

So the housing component, which will be about three million of the five million, is largely Laha dollars.

The split is not exactly a three and two, but largely Laha dollars.

So we have Laha dollars that we do use.

This is saying we really want to focus on downtown and providing this resource existing, but for downtown, and the two million are the housing trust fund dollars, roughly that will be used through the business assistance fund.

Again, an existing business, we have the existing business assistance fund, and this is saying within that, these are dollars being set aside to focus strategically on downtown.

So I it's sort of fund with a capital F, but it's really using existing programs strategically to focus those dollars that we do we are used to using that we do do the business assistance fund and laha dollars to focus on really strengthening our downtown okay, and then for eligible applicants for the economic development uh part of the vitality fund, like you have your for-profit and nonprofit entities.

I just want to make sure, like, does that include businesses too, then the private businesses?

Okay.

Um, I and like director McMahon, I I shared, um, I asked a question earlier around the um commercial corridor fund, like the downtown portion, which is $90,000.

And um, I do want to bring up the question again because you know, I I mean I I've been very supportive of the downtown vitality fund, and the same for commercial corridor fund too.

I'm I think like this is a question I want to put out to to all of the council members, and you mentioned earlier that there it's a different use.

I mean, I'm kind of I'm a bit unclear about the difference just because the economic development part of this vitality fund it seems really similar to star, and like you if you can point out differences that'd be helpful.

If I'm I'm unclear about like the the direct the differences between this economic development vitality fund portion and also commercial corridor, and if it's the same, then my thinking is my thinking is sort of like this is a lot of dollars we're investing into downtown, which we absolutely should, and I want us to, but I'm sort of thinking like is there does it make sense for us to be carving out $90,000 from the commercial corridor fund for downtown as well, or is it a worthy investment for us to just really allow for the other commercial corridors to to have that $90,000 be spread more amongst them, knowing that we don't have you know an additional five million dollar pot going into any every other place that's not downtown.

And so that's that's what the the heart of the question here is about because that's you know that's what I'm thinking of as I look at at the two presentations here.

Um Director McLean.

Sure, and I'll just say holistically, it can get confusing, right?

Sometimes it feels like a Venn diagram where certain aspects overlap of our funding, and depending on the funding source and the area and everything, depends eligibility and uses.

These really, again, for those capital improvements really focus on that street level and that experience downtown for this.

These are also housing trust fund dollars, and that's the sales tax dollars.

So they're two different sources being used as well, is another differentiator.

Thank you, Director O'Man.

I think um before I go over to Chair Johnson, I'll say like the the differences between these funds.

You know, we're talking about a much smaller pot of money for the commercial corridors.

I see a lot of that more as um just really community-oriented local, you know, in Highland, they're probably gonna use the money for like hanging baskets and things like that.

Like we're talking about a much different scale is the way I interpret it and different different funding sources.

Um, but I will turn it over to Chair Johnson.

I think you were next, you had a comment or question.

Yeah, so I actually think Commissioner uh Yang is what I heard from her was specific around the allocation for downtown on the commercial corridor funding.

Um and potentially with the overlap here.

I think I will just name that I think there should be a conversation about whether or not um we can use those resources externally for the commercial corridors that are not going to benefit from this fund in a way that could potentially be equitable to the need.

And so I think that is what I'm understanding from Commissioner Yang is an interest to talk about that.

I don't want to put words in your mouth, uh, Commissioner Yang, but I do think that's what your that's what your part of your question was about.

Yes, I think so.

I is that right?

Honestly, I think I'll have to hear the question again.

And you know, but like I just want to be like I think that you are interested.

Like, are you saying that you're interested in potentially exploring whether or not the commercial corridor dollars that we have for the rest of the city should be going to downtown if downtown is being able to get this out, this vitality fund eligibility.

Yeah, yeah.

And you know, I don't I don't recall like maybe we haven't had that conversation before, but um, I think it's definitely something I'm I'm interested in hearing from you all about.

And also, like, I recognize we're running low on time too, so I'm happy to chat more offline.

Okay.

Yeah, I'll I'll just um share that I think if we didn't we haven't had that conversation before, right?

Because last year the downtown vitality fund didn't exist.

The downtown vitality fund does exist this year with a significant investment.

And you know, five million dollars is no small feat.

Um, I will just share from my end the economic development eligibility threshold here and the economic eligibility threshold um kind of brought to us in form of what can and can't be done with the commercial corridor funding, I think needs to be clarified a little bit when it gets into business operations.

Um helping and assist the business to come downtown, right?

Sounds a little bit like business um like land, you know, acquisition, like helping moving funds, like providing assistance in that regard.

Um, that I don't, you know, I didn't see that kind of in the in the uh eligible uses category for the commercial corridor pieces.

And so I do want to name that I hope that the economic development guidelines and the economic development sources that are being used to benefit downtown are replicated and um pretty like uniform when it comes to the commercial corridor funding use.

Um I heard a question too about like this the uh the financing it I I don't ask I don't actually see a difference in the capital improvements um that we have currently from the fund that we're creating and economic development star dollars or neighborhood star dollars that are going through where we do ask for reimbursement um for any capital improvements and we have certain guidelines from it.

I would be hesitant to change that to just canning the grants out.

Um, you know, just because I don't I do think that doesn't allow for some of the oversight questions that we have and some of the you know real valid things that we can do on the back end when it comes to reimbursements.

Um, and so I just would really be interested in knowing kind of what that would look like and what kind of requirements that we would be lenient on if we did just a grant out, especially if they haven't done the work yet.

To me, that creates a little bit of a dispar uh a little bit of a disparity when it comes to capital improvement dollars we have readily available at the city, um, even right now being currently looked at.

Uh the last note that I'll just say, and I know we're we're has it we're um running up on time, um, but these guidelines that are put in place, you know, we do plan to have votes come back to this body, but I actually am wondering, you know, uh depending on what the timeline looks like and what kind of questions we get afterwards.

I'm pretty committed to ensuring that when these guidelines come back, they're done so with everybody's input.

And so I would be amenable to having this come back um not on the 11th, but the following meeting if we needed to vote on that action, because the the plan is to have the downtown vitality fund and the commercial corridor guidelines come back next week.

Um, if we don't feel like that is enough time, I'm amenable to uh, you know, to bring in the guidelines back for both at the end, but I don't know, uh we won't have a meeting on the 18th, but we will have a meeting that following week.

It doesn't match the urgency that I hope that we kind of operate within.

But I do want to give that as I also saw some of the downtown vitality fund um guidelines and presentations last week.

I'm not sure how much folks have been involved in, but if people do feel like they need more time, I really would appreciate knowing that from commissioners um and just getting the email either to myself or director McMahon saying so.

Um thank you, Chair.

Um okay, so I want to try to wrap us up here in the next couple of minutes.

I guess I would ask I see council president maker, councilmore, if you could keep your comments um as short as questions or comments really short as possible.

I think we even have another slide, and so then I'd ask after your comments if we could is that say under 100,000 or over.

Are we on the last slide?

Looks like we got one more for projects over 100,000.

So if then I want to outdo and now I can ask for some comment.

Okay, yeah, because we can council president naked, how about you go and then we'll get through the last slide and then um if you have a question that you absolutely need to ask today, uh you could ask it, but otherwise I'd like to wrap us up so we can have a break before the council meeting.

Uh thanks, Vice Chair Joe.

So I just wanted to say I appreciate Councilmember Yang's question, because Commissioner Yang's question, I do think we should be constantly looking to make sure we're using our dollars most effectively.

Probably won't surprise anybody at this table to hear me say that I think downtown needs the five million and the 90,000.

Um, they are for very different uses.

I think in particular, the commercial corridors fund, it's not always used this way, but it's how we want it to be used, is really for corridor activation, not for individual businesses to get assistance.

And I think downtown actually needs that even more than some other places where we really could have that placemaking that isn't always happening.

So that said, I'm really open to revisiting that in the future.

I think it might be worth having, as Chair Johnson mentioned, having both programs run this year.

We didn't have the downtown vitality fund last year, and then seeing what happens and whether it makes sense to continue um the commercial corridors program downtown.

And the second thing I would say is I I would strongly prefer for us to actually vote on this and the commercial corridors program next week.

We always talk about how we want to approve items in the budget and have them start as soon as possible in the new year.

We're already almost at the end of the first quarter of the new year.

So I will work double time with anyone who wants to sit down and really sharpen our pencils on the guidelines.

But uh I I would love to be able to approve these next week.

Okay.

Thank you, Council President.

I will turn it back over to you for the last slide.

And for the last slide, projects over 100,000 uh funding will be a deferred forgivable loan with the four-year term for given annually if the borrower provides annual report by year end of each year of the life of the loan, maintain operations in downtown St.

Paul or have the space that is actively being leased to a business operating in downtown St.

Paul for the term of the loan, and a mortgage or other collateral place on the subject property for the life of the loan.

Um notice that says also any projects receiving over 500,000 must be approved by the HRA.

So we feel like this is a good delineation mark for those sizes of projects.

Any other comments or questions?

Councilmember Bowie.

Thank you, um, Vice Chair Joe's, and thank you so much, um, Director Lloyd.

I just wanted to just I'm share some comments, particularly as I'm just looking, you know, reviewing the program.

I'm always like having the question in the forefront of like how are we measuring success?

Um, and what is like it's to our benefit to understand, you know, really what is the city's return on investment because this is a major investment, a necessary and needed investment.

And uh, you know, one of the things particularly that came about in the conversation when I hosted the star grant info session was that there was uh um 80% of the uh star grant goes to downtown.

Um, you know, people in my ward was really you know surprised by that and you know had some questions particularly around equity.

Um and I just want to just you know remind us that you know downtown has a layers of funding.

Um not that it's not necessary, but not only the commercial corridor, we mentioned the STAR grant, we have the St.

Paul downtown alliance.

We just heard Bush Foundation is occurring, um, you know, um invested 30 million dollars.

We've seen in the legislative agenda, the conversion tax credit.

I believe we have $2 million to for the waiver for the conversion tax credit, and also lastly but not least, just 200 million dollars bonding ass at the state for for the wild.

So I think with this particular vitality fund, I really want to see a much sharper focus on like eligible use, just because like to um Commissioners Yang's point, um, there's lots of funds out there.

There's lots of investment, which is good, but it's it's important that people can distinguish, right?

How this set of funds is really going to address the shortage that we've been seeing, um, particularly in retail and restaurants, and last but not least, um, you know, my objective, particularly with these funds when we voted on it last year, was to really grow a healthy tax base.

Um, so you know, although I I don't support that nonprofits should be um um eligible because I really think we need to really jump start a lot of our for-profit and retail um um on businesses.

Um, another uh fund that's really similar to is the the vitality fund, I believe that's uh coming through the St.

Paul Port Authority.

They're not allowing nonprofit businesses because their main objective is you know boosting that um the not only the sales tax, but just our tax revenue.

Um so uh, you know, that's something that I just wanted to just mention.

And I I mean I would like to see some changes with these guidelines, um, but also I would want to ensure that we can, you know, stay on timeline.

But uh I think it would be really important just because you know, from just a consumer basis, you know, um feedback feedback from from people that live and work downtown, just like us, we work downtown.

Um, we would like love to see you know more restaurants and more retail.

Um, people got so excited, and we had so much positive feedback when we heard that all these was here.

Um, there's like clear desperation, right?

Um, for us to use our funds and use our resources to be able to attract some of those retail and grocery stores and restaurants.

So thank you.

Thank you, Commissioner Bowie.

Thank you, council um and commissioners for for your time.

It is imperative that we get this right, not just get it done.

So thank you so much.

Um, I I guess I will director McMahon, did you have a comment that you yeah?

I was just gonna um update on to what the action before you would be next week.

So for the commercial corridors is the update to the guidelines for the commercial corridor program for the downtown vitality fund for the housing component, again, using those existing Laha dollars, that would be this done under the author the state statute and all the requirements of that.

And so projects will be coming back to you for approval.

So there aren't any guidelines for updating for that for the economic development portion of this.

Those will be done through the business assistance fund, which is an existing fund.

So the actual vote before you will be updates to the business assistance fund guidelines.

Just wanted to clarify why that actual action was coming that way next week.

Thank you for making that clarification.

Council President Naker.

Thanks, Ms.

Joe Chair Joe.

Super quickly, I just want to make sure that even though we keep talking about this as not a new program or not new funds, um, we need to make sure we are very clear in communicating that it is a new program, even if it's not new funds and having a web page.

And like I just want to make sure we're ready to go with making a big deal about it, even though it is a reallocation of existing dollars.

We have a website and the interest forms that will be ready to go live on the 12th if the if this body approves the matter on the 11th.

Awesome.

Great.

Um Chair Johnson, yes.

And just a quick clarity.

Um, as I shared earlier, if commissioners are interested in potentially having either the commercial corridor guidelines or the downtown vitality.

So in this case, business assistance fund guidelines.

All I need is an email or um, you know, to make sure that we're able to adjust that.

I'm still amenable to adjusting that if people want to have more time.

That sounds great.

Thanks for saying that because I was going to say something similar to that effect.

Um, and please, I would say please let Chair Johnson know, like within, I don't know, today basically, because we we do currently have this plan on the agenda for next week.

I'll say for myself, I would like to keep it.

I personally would like to keep it on the agenda for next week and do whatever we need to do to get it done, but um, we just Chair Johnson just needs to know needs to know.

Okay, so that's my that's it.

That's kind of my take on that.

Um we are at the end of our agenda.

I want to thank everyone for their attendance today, and with nothing else to come before us, we are adjured.

Next