Standing on their own two feet
By Ethan Smith
Published in News on June 21, 2015 1:50 AM
Full Size
News-Argus/CASEY MOZINGO
The newly completed Streetscape revamp downtown -- on one side of Center Street -- is just the first step in a multi-faceted plan to revamp the downtown area to make it more conducive to business development. Part of the support structure includes some grants offered to businesses opening their doors downtown. Now, some members of Goldsboro City Council are wondering if the business incentives should be continued.
This year marks the fifth anniversary of the Downtown Goldsboro Development Corp.'s business incentive grant program, and it is beginning to come under fire from the members of Goldsboro City Council.
Several members of the council in recent budget discussions said they feel that, if the grant is the only thing putting people in business downtown, that those businesses shouldn't be in business in the first place.
Their reasoning is that the grant provides $400 per month for 12 months to the businesses that receive it, and they believe $4,800 per year would not have a significant enough impact on businesses to justify allocating funds in the city's budget each year for the program.
Because of this, there was some debate in the budget discussions about whether to fund the program again for fiscal year 2015-16. Ultimately the council decided to fund the program for one more year, but will look at dissolving the funds during the next budget cycle of fiscal year 2016-17.
"I think if we give it one more year and give it a chance to get the street (that is currently under construction for Streetscape) fixed, and give it a chance (to be free from construction), I think we need to look at it harder next year than we do this year, but that's just my thought," Councilman Bill Broadaway said.
But some council members were reluctant to allow the funding to continue.
"Fundamentally there's two different schools of thought," Mayor Pro-Tem Chuck Allen said. "In my opinion, we've put 20-plus million dollars in downtown, and at some point this downtown has got to stand on its own, its businesses have got to stand on their own. Our job is not to put somebody in business. Our job is to create an environment where somebody can do business. That's what we ought to be doing as a city council. If we do this another year or two, it's not going to be the end of the world, but that money ought to be globally helping downtown instead of individually helping people. If today's not the day (to cut funding) then the day ought to be coming pretty quick."
Broadaway said he agreed with Allen in that there would need to be an end to the program, but that there is still need for support until Streetscape is finished.
"I took a little bit of offense (at the Merchants Association) saying the city wanted to not invest in the businesses downtown," Councilman Gene Aycock said. "We've invested, by the time it's over with, over $20 million. How can they say we haven't invested? We've made an investment. It's the private sector that still hasn't made an investment. You still see so many buildings that are rundown, so many buildings -- I mean, I'd rather see that $19,000 (being used for the business incentive grant program) go toward facade grants or something like that and make downtown look better so people would be willing to come on in. I'm still opposed to giving money to individuals to invest in them going into business. If $400 a month, $4,800 a year is going to make them or break them, then they better stay out of business."
DGDC director Julie Metz said once a business receives the funds from the grant, it is free to spend it as it sees fit although DGDC strongly encourages using the money toward marketing the business or improving its curb appeal.
Ms. Metz said members of the downtown Merchants Association were confused as to why the city council would consider pulling funds for the program, as they feel the funds have been beneficial in opening their businesses. Pulling the funds would make it seem as though the city council no longer felt downtown businesses needed the investment.
The program is set up so that the business has up to six months to be in business to apply for the grant. And if it has been in business for more than six months, it is no longer eligible.
Applicants for the funding must submit a complete business plan, be located in the Municipal Service District and must be a for-profit business.
All applications for the grant funds are reviewed stringently, said Andrew Jernigan, who sits on the Economic Restructuring Committee that is in charge of reviewing applications for the grant funds.
"It's absurd, I've been on this board for about seven years now," Jernigan said. "The quality of the applications we used to get before the city of Goldsboro chose to invest in downtown were abysmal. It was awful. It was literally crayon and bad business plans. We accepted nothing. The quality of the business plans we get now, I couldn't put one together myself. It used to be we could review an application and turn it down in five to 10 minutes because they were so bad. Now there are so many higher quality applications coming in -- and we still turn them down -- but we tear these things apart from every aspect. We take more than two hours on each application to review them. They started as one-pagers, now they're 50- to 60-page applications we're getting and we still turn them down."
Applications are accepted by DGDC four times per year at the cutoff of each financial quarter.
When the program began five years ago, the city council determined what type of businesses it would like to attract to the downtown area. This list included everything from retail locations to bars and pool halls to community centers.
Since the program began, a total of 28 business have either applied or looked into applying for the business incentive grant. Several businesses began the pre-application process, but chose not to proceed in applying for the grant.
Of the businesses that applied 16 were awarded grant money from the program, of which nine of those businesses are still open and two more businesses have applied for grant money but are awaiting approval.
This means 56 percent of the businesses that have received grant funds are still in operation.
Criteria for awarding grant funds were changed in early 2012, and seven of the eight businesses awarded money since then are still in operation, or 87.5 percent.