Modesto weighs incentives to make downtown more attractive

kvaline@modbee.comMay 5, 2014 

The Modesto City Council tonight will consider approving two proposals that officials believe will jump-start downtown but could cost the city’s cash-strapped general fund as much as $160,000.

One proposal would cost $100,000 annually and provide cash, tax breaks and other incentives to retain and attract businesses. It would include waiving some fees to encourage downtown residential development. A city report says the funding would come from the general fund.

The second proposal would beautify 10th Street between J and I streets. The city estimates the work could cost as much as $120,000, with the city contributing half of the cost and the rest coming from groups working with the city. Another report says the city’s share of funding could come from the general fund and grants.

Both proposals come as Modesto considers cutting $1 million each from the police and fire budgets for the city’s 2014-15 budget, which starts July 1. The proposed cuts are in addition to the roughly $500,000 each in half-year budget cuts the city recently made to the police and fire budgets. If the 2014-15 cuts are approved, the net result is a $4 million annual cut to public safety and not filling and eliminating about 30 open police officer and firefighter positions.

All of the budget reductions are or would come from the general fund, which primarily pays for public safety.

Even though the two reports cite the general fund as the funding source, Deputy City Manager Dee Williams-Ridley said the city would explore a range of funding options, including grants, if the City Council approves the proposals. Still, Councilman John Gunderson said he’d be reluctant to support the proposals if they were funded by the general fund. Both comments were made Monday at the City Council agenda review meeting.

These proposals are part of the city’s effort over recent years to make downtown more economically vital and attractive. For instance, the council recently approved changing how long motorists can park on certain downtown streets – from one hour to two hours – giving them more time to eat lunch, shop and conduct other business without the fear of getting ticketed.

The council tonight also will be asked to pass a resolution supporting the Downtown Modesto Partnership, which was formed in November to improve the city center. The partnership consists of churches, developers, the city, downtown businesses and others.

The proposal to provide incentives to business includes $50,000 annually toward cash payments to new businesses or businesses relocating to downtown. For instance, a business that creates five to 10 jobs would receive a $2,000 payment. Businesses could get breaks on their sales tax and other taxes by meeting certain requirements. The proposal includes $50,000 annually for matching grants of as much as $10,000 to businesses that improve their facades.

The incentives would be for restaurants and certain types of retailers, such as booksellers, music stores and clothing shops, as well as professional offices, such as legal services.

Supporters of the incentives have said the city won’t be out any money unless businesses open or relocate downtown. City officials say the jobs created through the incentives will spur more economic activity and more jobs. For instance, a new restaurant would purchase supplies, food, and other goods and services.

The proposal to beautify part of 10th Street includes installing public art, planting shade trees in planters – which would be partially set into the ground – and other improvements. A city report says work would not start until the funding has been secured.

The reports for these proposals are available at http://modestogov.com/ccl/agendas. Click on the link for the May 6 council meeting and then scroll down and click on the links for agenda items 25 and 26. The council meeting will start at 5:30 p.m. in the council chambers of Tenth Street Place, 1010 10th St.

Bee staff writer Kevin Valine can be reached at kvaline@modbee.com or (209) 578-2316.

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