Sanford leaders have created a new grant program to incentivize construction in downtown.
Created by the Sanford Downtown Community Redevelopment Agency (CRA), the New Construction Grant program will reimburse developers for 20 percent of their construction cost. The maximum grant would be $100,000, which would require a developer to incur at least $500,000 in construction costs .
The program is similar to the CRA’s Rehabilitation Loan subsidy that assists property owners in the renovation of historic buildings for commercial use.
With nearly 100 acres of developable property in and around downtown, the goal of the program is to broaden the tax base by encouraging development on vacant and under-used properties.
“We’ve seen quite a bit of success with the rehab program, and the board wanted to supplement that by adding a new construction incentive,” CRA executive director Sonia Fonseca said.
Only new construction projects on vacant land qualify for the grant. Additions or modifications to an existing structure would be considered a rehab project, and would have to apply under that program.
Fonseca said CRA board members would evaluate applicants based on new construction projects’ ability to: Spur additional development and private investment, fill nearby empty retail spaces, increase employment opportunities, and increase area property values.
“We are really looking for projects that have a ‘halo effect,'” she said. “That might be by adding jobs, destination spots or residents.”
Fonseca said applicants must provide a scope of work, drawings, construction bids and pro formas, including funding sources. She stressed that the grant would reimburse the developer only for hard construction costs, not land purchases or permiting and design. In addition, the developer would be reimbursed only after the structure has received a certificate of occupancy.
CRA chairman Charles Davis said the board has budgeted $250,000 dollars for the grant program in this fiscal year. While he admits that is not a substantial amount of money, he said the goal is to see if the incentive program works.
“Since this is our first year with the program, we’re not sure how much interest there will be,” he said. “we hope there is a lot of interest, at which point we can address funding in next year’s budget.”
Davis added that the grant is another tool in the economic development toolbox the city leaders can use to increase Sanford’s tax base. In addition to the rehab loan subsidy, city residents in March approved a tax abatement program that could reduce property taxes by 50 percent over 10 years for qualifying new development throughout the city.
Bob Duncan owns vacant property in downtown Sanford and said he intends to apply for the grant.
“A $100,000 check will get your attention. This encourages developers to take the first step and consider building in downtown,” said Duncan.