Go west

Potential franchise business owners in western Independence and commercial property owners in older retail centers along key corridors of the city may have received the incentive needed to spur development in the targeted areas.

During a study session Monday, the Independence City Council was briefed on two economic-related programs that will help attract new franchise operations in the western part of town and reduce the number of long-term vacant properties in commercially zoned districts throughout the city.

The city’s franchise assistance program, developed by officials within City Hall and the Independence Council for Economic Development, will promote growth and diversity of commercial businesses in western Independence by offering grant money to franchise business owners to develop a successful franchise operation in a part of town that has seen businesses leave in droves.

ICED Director Tom Lesnak said to be eligible, a franchise company cannot currently exist in the district designated for the program and must have pre-qualified status with a regional or national franchise. The district is defined as commercially zoned properties located along or adjacent to Noland Road or other commercial districts north of Interstate 70. The franchise must comply with any existing redevelopment plan or overlay district, Lesnak said.

“We want to serve part of the city that is under served,” Lesnak said, adding for years business owners have eschewed the western part of town due to a belief of lower incomes and other debatable elements. “New growth does a great job of changing perceptions.”

The program would be sustained by a 1 percent general fund sales tax generated by the selected franchises. The funds will be captured into a revolving loan fund for a period of three years and granted to new franchises. The city will initiate the franchise program with $100,000 from its City Council Strategic Goals fund. Businesses will be eligible for up to a grant of $25,000.

“This program will be successful,” Lesnak said.

Both Council Members Marcie Gragg and Jim Page said the program could do wonders for the 1st and 4th districts that they respectively represent.

“It’s an exciting proposal. I’m glad to see this,” Gragg said. “It’s a sense of momentum moving (to western Independence).”

“I’m more than happy to see staff come forward and address the needs of western Independence,” Page said. “They have come up with (a plan) to put a reversal on the problems we’ve had. We’ve needed this for a long time. I think this is fantastic.”

The commercial reinvestment program will allow commercial property owners to capture a percentage of incremental annual increase in sales tax revenues generated by the city’s 1 percent general-fund sales tax on the property after improvement is made to the property. Sales tax funds would be used to re-imburse up to 50 percent of eligible, pre-approved improvement cost, said Ann Smith-Tate, Independence’s economic development manager.

Smith-Tate said commercial properties must be 15 years or older, experiencing vacancies of 50 percent or greater for at least a year, be structurally sound and have developers provide the initial funds to make the improvements.

“What we are saying is we really want to help you, but we need to see our vacancy rate go down,” Smith-Tate said.

Projects with capital investment up to $200,000 will be allowed to collect 100 percent of the incremental annual sales tax increase for a five-year period. Projects with capital investments between $200,000 and $1 million in improvements will be allowed to capture 100 percent of the incremental increase for years 1 through 5 and 75 percent for years 6 through 10. Projects with more than $1 million in improvements will be allowed to capture at a rate of 100 percent for years 1 through 5, 75 percent for years 6 through 10 and 50 percent for years 11 through 15.

“This is an innovative and forward thinking process,” Mayor Don Reimal said. “This is our way to reach out to existing businesses or perspective business owners.”

Lesnak said both programs would have long-term impact by creating jobs and entrepreneurial opportunities and increasing property values.

“Independence is an unique urban area and we have some unique issues,” Lesnak said. “These programs will help us address these issues.”