AMENDED MEMORANDUM of UNDERSTANDING BETWEEN THE CITY OF WILLIAMSBURG AND THE WILLIAMSBURG ECONOMIC DEVELOPMENT AUTHORITY

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1 AMENDED MEMORANDUM of UNDERSTANDING BETWEEN THE CITY OF WILLIAMSBURG AND THE WILLIAMSBURG ECONOMIC DEVELOPMENT AUTHORITY SUBJECT: City of Williamsburg Funding for EDA Demolition Program and Small Business Improvement Grant This AMENDED MEMORANDUM OF UNDERSTANDING is hereby made and entered into by and between the City of Williamsburg, hereinafter referred to as the CITY, and the Williamsburg Economic Development Authority, hereinafter referred to as the EDA. This agreement amends the prior Memorandum of Understanding approved by the City Council and the Economic Development Authority on July 14, PURPOSE. The purpose of this agreement is to document the use of funds provided by the CITY, to the EDA, for the implementation of the EDA Demolition Grant Program and the Small Business Improvement Grant. This program replaces the EDA Demolition (loan) Program and begins a new grant opportunity for the City s Tourism Zone. 2. THE EDA SHALL: a. Use the funds provided by the CITY to implement the EDA Demolition Grant Program, or the Small Business Improvement Grant as outlined in Attachments A and B. b. Restrict the use of these funds to the EDA Demolition Grant Program or the Small Business Improvement Grant. c. Document the disbursement of the funds under the EDA Demolition Grant Program and the Small Business Improvement Grant. d. Annually report to the CITY the use and balance of the funds. 3. THE CITY SHALL: a. Transfer TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS ($250,000) from the FY17 capital budget to the EDA for increased funding of the EDA Demolition Grant Program and Small Business Improvement Grant. b. Require that these $250,000 of funds be restricted for use by the EDA for the EDA Demolition Grant Program or the Small Business Improvement Grant. c. The City may provide additional funding upon the request of the EDA, at the discretion of City Council. 4. IT IS MUTUALLY UNDERSTOOD AND AGREED BY AND BETWEEN THE PARTIES THAT: a. MODIFICATION. This agreement is amended to add the Small Business Improvement Grant as an authorized use of the funds appropriated by City Council. Further Modifications of the scope of the MOU shall be made by mutual consent of the parties, by the issuance of a written modification, signed and dated by all parties, prior to any changes being performed. b. TERMINATION OF EDA DEMOLITION GRANT PROGRAM. If the EDA Demolition Program is terminated, the EDA shall return any remaining Demolition Program funds to the CITY. Funds from this budget may be used for the Small Business Improvement Grant until June 30, 2018.

2 5. COMMENCEMENT AND TERMINATION DATE. This instrument is executed as of the date of last signature and shall remain in effect until December 31, This MOU may be extended or amended by written request by the CITY or the EDA and subsequent written concurrence of the other. Marvin E. Collins, III City Manager, City of Williamsburg Chair, Williamsburg Economic Development Authority (Date) (Date)

3 Attachment A Demolition Grant Program

4 Williamsburg Economic Development Authority Demolition Grant Program Approved June 2016 The City s commercial areas are visible indicators of the social and economic health of the community. The City Biennial Goals, Initiatives and Outcomes, Comprehensive Plan, and Economic Development Plan identify commercial areas with underused commercial properties with redevelopment potential. When existing underused properties are not feasible for rehabilitation, demolition is an important tool to spark private investment and redevelopment. Purpose The purpose of the Williamsburg Economic Development Authority (EDA) Demolition Grant Program is to encourage private investment enhancements in commercial areas of the city. The program will encourage redevelopment of underused commercial properties in order to improve the economic vitality of commercial areas from functional and aesthetic perspectives. The Demolition Grant Program will be administered by the Williamsburg EDA and will provide grants for the demolition of qualified, underused commercial properties to help move these properties to the redevelopment market for private investment. Grant Details A grant from the Williamsburg EDA is available for the demolition of underused commercial properties in an amount to be determined by the EDA as provided herein. The maximum amount of any grant will not exceed 90 percent of the project cost. While the applicant may use whichever contractor he wishes, the project cost will be determined by the lowest of three separate competitive arms-length demolition bids or estimates obtained by the applicant. However, for good cause shown the EDA may waive the requirement of three arms-length bids or estimates. Eligibility and Procedural Guidelines 1. All fee simple owners of the property must sign the application.

5 2. Awarded funds will be disbursed to the applicant upon satisfactory completion of the demolition project, approval by the City Planning and Codes Compliance Department and submission of all receipts for the work performed. 3. Completion of the demolition project must occur within six months of the EDA approval unless an extension is granted by the EDA for just cause. 4. Awards are not retroactive. The demolition grant must be approved before any demolition activity begins. 5. All applicable City regulations must be followed and approvals must be obtained before the demolition commences. 6. Prior to the distribution of any grant monies, all delinquent real property, personal property, sales, transient occupancy or meals taxes, BPOL, license fees, fines, utility charges, or any other amounts owed by the applicant and property owner to the City of Williamsburg must be paid in full. Selection Criteria Applications are competitive and will be approved on a first come, first served basis. The EDA is not required to approve and make grants to applications. Each application will be evaluated individually based on two factors that will be considered to determine the percentage of the cost of demolition that will be reimbursed with the grant: 1. The extent to which the proposed project (demolition and anticipated redevelopment) corresponds with the City s Biennial Goals, Initiatives and Outcomes. To see the approved Biennial Goals, Initiatives and Outcomes, visit: 2. The projected direct tax revenue to be collected by the City after redevelopment. A signed contract commitment with a prospective user that generates the tax revenue indicated in a pro forma (example chart attached) will increase the weight of this criterion. Applications should describe how the project meets specific aspects of the City s Biennial Goals, Initiatives and Outcomes and provide an anticipated pro forma for ten years of direct local tax revenue (example chart attached) after redevelopment. The following Goals and Initiatives may be applicable: Goal I: Character of the City Protect and enhance Williamsburg s unique character as defined by its urban places, neighborhoods, commercial spaces and open spaces; and by its iconic places the Colonial Williamsburg Historic Area and campus of the College of William and Mary. A. Downtown Vibrancy (new infill development, enhancement of downtown) B. Arts District and Midtown C. Richmond Road Corridor (visual appearance and strengthening of Richmond Road corridor) D. Northeast Triangle (addition of attraction to NET) G. Entry Corridor Beautification H. Commercial Site Assembly (property assembly for private redevelopment)

6 Goal II: Economic Vitality Increase employment opportunities, personal income growth, business success, and city revenues by supporting, promoting and diversifying the city s economic base of heritage tourism and higher education, and other development and redevelopment opportunities. A. Tourism Development (new tourism product) B. Economic Diversification Strategies (transformative commercial uses, creative businesses) C. Redevelopment (partner with private sector to redevelop transitional properties, spur private investment) D. Support Existing Businesses E. Facilities to Increase Overnight Visitation Publicity and Acknowledgement Applicants will receive public recognition for participating in the program. Applicants will allow the EDA to install a sign on the property identifying the project as being affiliated with the Williamsburg EDA Demolition Grant Program. Funding The program may distribute monies appropriated to the EDA by City Council for such purpose. Application Information Contact the Williamsburg Economic Development Office at (757) or via at for more information.

7 Direct Return on Investment Scenario The following chart shows the direct tax revenue the City would receive once an average redevelopment project occurs. This scenario projects a redevelopment project that builds a restaurant with $1,000,000 in annual meals sales. For the purposes of this exercise, we assume real property assessments and annual sales remain consistent over the 10 years after redevelopment, with the exception of first year sales. Year Pre Demolition Tax Collection Real Property (Property Valued at $1.3 million) Real Property (Once redeveloped, property valued at $2.5 million) Post Redevelopment Tax Collection City Sales Tax Collected City Meals Tax Collected BPOL Tax Collected Personal Property Tax Collected New Tax Revenue Projected (New Tax Revenue) (Pre Demolition Revenue) Base $735 $735 $0 $0 $0 $0 $0 One $735 $1,425 $2,000 $10,000 $40 $1,000 $13,730 Two $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Three $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Four $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Five $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Six $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Seven $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Eight $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Nine $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Ten $735 $1,425 $10,000 $50,000 $200 $2,000 $62,890 Total Increase in Tax Collection Over 10 Years $579,740

8 Attachment B Small Business Improvement Grant Program

9 Williamsburg Economic Development Authority Small Business Improvement Grant Program Approved by the EDA October 2016 Williamsburg is excited to offer a new opportunity to encourage private investment in the Williamsburg Tourism Zone. To complement the tax benefits that are available to qualifying businesses within the tourism zone, the Economic Development Authority offers Small Business Improvement Grants within this area to encourage existing businesses and commercial property owners to invest in their properties through façade improvements, interior renovations, landscape enhancements, and other capital investments. The Small Business Improvement Grant Program expires on June 30, To qualify for this program, an eligible business owner or property owner must apply on or before this date. Purpose The Williamsburg Economic Development Authority (EDA) Small Business Improvement Grant Program encourages existing business owners and commercial property owners within the Williamsburg Tourism Zone to make capital investments to enhance the vibrancy and character of this area of the City. The program encourages investment in existing commercial properties to improve the economic vitality of commercial areas from functional and aesthetic perspectives, with the ultimate goal of increasing customer traffic and business revenue. The Small Business Improvement Grant Program will be administered by the Williamsburg EDA and will provide grants for exterior and interior improvements to commercial properties within the Williamsburg Tourism Zone.

10 Qualified Improvements The following improvements are eligible to receive a Small Business Improvement Grant: Exterior Improvements: Design and construction costs associated with qualified improvements Canopy or awning installation and/or repair, where appropriate Repair or replacement of façade materials Landscaping improvements Hardscape improvements (benches, brick sidewalks, etc.) Decorative fencing (chain-link fencing does not qualify) Removal/replacement of architecturally inappropriate or incompatible exterior finishes and materials Repair or replacement of windows, doors and cornices Exterior painting (when associated with a larger rehabilitation effort) Interior Improvements: Flooring Lighting Attached fixtures and/or installment of fixtures Construction of new walls/demolition of unnecessary existing walls Accessibility compliance Mechanical, electrical, and/or plumbing for build-out HVAC, fire suppression, costs of improvements to bring property into compliance with government codes Restrooms Utility upgrades Grant Details A grant from the Williamsburg EDA is available for exterior and interior renovations for existing businesses located within the Williamsburg Tourism Zone. (See attached Map of the Williamsburg Tourism Zone.) The maximum grant award per business and property is the lesser of $10,000 or 50 percent of the costs of the qualified improvements. While the applicant may use whichever contractor he or she wishes, the project cost will be determined by the lower of two separate competitive arms-length demolition bids or estimates obtained by the applicant for each qualified project. However, for good cause shown the EDA may waive the requirement of three arms-length bids or estimates. Grants are made on a first-come, first-served basis, based on availability of program funds. Program funds are limited. The Small Business Improvement Grant Program will expire on June 30, In order to qualify for this program, an eligible business owner or property owner must apply on or before this date.

11 Eligibility and Procedural Guidelines 7. All fee simple owners of the property must sign the application. 8. Awarded funds will be disbursed to the applicant upon satisfactory completion of the qualified improvement project, approval by the City Planning and Codes Compliance Department and submission of all receipts for the work performed. 9. Completion of the qualified improvement project must occur within six months of the EDA approval unless an extension is granted by the EDA for just cause. 10. An individual property may qualify for this program only one time for a maximum grant amount of $10, Awards are not retroactive. The small business improvement grant must be approved before any qualified improvement activity begins. 12. All applicable City regulations must be followed and approvals must be obtained before the improvement work commences. 13. Prior to the distribution of any grant monies, all delinquent real property, personal property, sales, transient occupancy or meals taxes, BPOL, license fees, fines, utility charges, or any other amounts owed by the applicant and property owner to the City of Williamsburg must be paid in full. Publicity and Acknowledgement Applicants agree to public recognition for participating in the program. Applicants will allow the EDA to install a sign on the property identifying the project as being affiliated with the Williamsburg EDA Small Business Improvement Program. Funding The program may distribute monies appropriated to the EDA by City Council for such purpose. Application Information Contact the Williamsburg Economic Development Office at (757) or via at for more information.

12 Map of Williamsburg Tourism Zone

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