Downtown businesses talk with city about lost revenue
By Ethan Smith
Published in News on January 20, 2016 1:46 PM
Full SizeSeveral downtown business owners met with Mayor Chuck Allen and City Manager Scott Stevens in a conference room in City Hall Tuesday morning to discuss what the city can do to recoup losses the businesses incurred due to Streetscape.
Three options were offered: Provide a low or no interest loan to the businesses that would be tied to economic development incentives; aid in utility bill repayment by setting up monthslong repayment plans; or the businesses can file a claim against the city for sales lost during the Streetscape project.
Herbert Herbst, owner of Chef Herb's Bistro on Walnut Street, already filed a claim against the city for his lost sales, which was ultimately denied by the city's insurance carrier.
Herbst said the project shut down his business for two and a half days while work was being done on water lines near his business and the water main that connects to Chef Herb's Bistro was disconnected. When water service was cut back on, his water lines were allegedly polluted with contaminants and damage was done to his water filtration system.
He had to pay to repair that out of pocket, as the city's insurance carrier deemed his claim was not valid.
"When they (the city) do turn the water back on, it destroys my filtration system and we have to spend $250 to have that professionally replaced," Herbst said. "The city is responsible for that. I have not heard anything back from that (insurance claim) other than it's been denied."
Several business owners told the city officials that businesses had been forced to shutter their doors during Streetscape, and that businesses suffered significant financial losses during the duration of the project.
District 1 council member Antonio Williams also owns a business on Center Street named The Ice Storm.
"I'm one of them and I'm one of you," Williams told the officials. "I've seen a lot of suffering, I've seen businesses close down. I think, in all fairness, that there should be a resolution. I would hope if we do come to that agreement, that it's left in the hands of someone that will be fair to make sure that each person is equally getting what they deserve, and we resolve it quickly so we can put this behind us."
Stevens said he felt allowing businesses to file insurance claims against the city was one of the most fair ways the city could allow business owners to seek reparations for lost sales.
"The city doesn't have liability," Stevens said. "We can't just pay because we want to pay and be nice. It's not our money. It is the public's money that we move around, and I don't know how to be fair except through the insurance process."
The meeting held Tuesday morning was a follow-up to a meeting held in late August where merchants came to air their grievances against the city for what damage had been caused by Streetscape.
"As the project was sort of near the end, many of the concerns and suggestions expressed during our meeting in August such as better planning, routing, daily updates signage, etc., on what the city could have done better, really weren't practical at the end of August because the project was almost done," Stevens said.
But one idea that did make it out of the meeting and into the chambers of the Goldsboro City Council was something called a business incentive loan, which was also discussed at Tuesday's meeting.
Thus far, the idea has not taken a firm shape and has not been approved by the city, but is one way the city is suggesting it could help businesses recover losses caused by Streetscape.
The idea behind the business incentive loan program is that it must be tied in with economic development incentives, such as a new business opening its doors, as the city cannot directly loan money to existing businesses without the loan being tied to economic incentives.
Therefore, businesses that have been open for more than five years would be excluded from being able to receive the money.
If the city did begin the program, businesses could potentially receive small loans in the range of $2,000 to $4,000 and pay back the loans at little to no interest.
When this idea came before the City Council in October 2015, the council deferred any action the item for discussion at a later date.
It has not come back before the council since then.
One of the main complications in implementing a program like this, the city says, is that projects are also being done on Berkeley Boulevard and Wayne Memorial Drive in the city, and implementing a loan program for downtown could set a precedent for other businesses throughout the city to seek the same form of aid any time a construction project is done in the city limits.
"Businesses there will tell you they've suffered a loss of sales during construction, too. It was awful for them," Stevens said. "We had regular calls from businesses there."
By the end of the meeting, the discussion centered around the positive impacts Streetscape has had after it was completed in late October.
In the last six months since the Streetscape finished, there was a 426 percent increase in private investment in the area when compared to private investments made during the previous year.
For the previous two fiscal years before the 2015-16 fiscal year began, there was a combined $1.4 million in private investment in downtown for those two years.
For the period of July through December, there was $2.2 million in private investment downtown.
"I know the energy I see in downtown, and the folks that tell me repeatedly how nice it is, and how great it is, and how they see people walking around at night," Stevens said. "It appears to be working, and I hope that sales reflect that."