TO: Mayor and Members of City Council
THRU: Kelly Olivera, Assistant City Manager
Jeffrey Yates, Assistant City Manager
FROM: Christopher Cauley, MPA, Economic &
Community Development Director
Kimberly Leonard, CLGFO, CLGBO, CPA, MPA,
Budget & Evaluation Director
Derrick McArthur, Economic Development Manager
DATE: September 23, 2024
RE:
Title
Adoption of a Special Revenue Project Ordinance to appropriate $120,000 from a North Carolina Department of Commerce Rural Economic Development Building Reuse Grant for Phillip’s Towing Service, Inc.
end
COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
Goal II: Responsive City Government Supporting a Diverse and Viable Economy
Goal VI: Collaborative Citizen and Business Engagement
Executive Summary:
The City has been awarded a $120,000 Rural Economic Development Grant from the North Carolina Department of Commerce (NCDOC) for a Building Reuse grant for Phillip’s Towing Service, Inc. The Fayetteville-Cumberland Economic Development Corporation (FCEDC), in partnership with the Economic and Community Development Department (ECD), is assisting Phillip’s Towing Service, Inc. with funding for a substantial rehabilitation of an existing commercial facility. The company will undertake substantial renovations of its property at 311 Alexander Street, and in turn, guarantee the creation of 10 full-time jobs.
The grant requires that the City provide a five percent (5%), or $6,000, cash match for the project. The Council is asked to adopt Special Revenue Fund Project Ordinance 2025-7 to appropriate $120,000 of grant proceeds and the City’s $6,000 match from a General Fund transfer from the existing FY25 ECD operating budget.
Background:
The Building Reuse Program, under the Rural Grants/Programs Section of the North Carolina Department of Commerce, provides grants to local governments. Three categories of funding are available for 1) the renovation of vacant buildings, 2) the renovation or expansion of a building occupied by an existing North Carolina company wishing to expand in their current location and 3) the renovation, expansion or construction of health care entities that will lead to the creation of new, full-time jobs.
The amount of state funding approved in the grant is $120,000 based upon the number of jobs that will be created in the specified timeframe of the grant. At the time of the application for the grant, it was projected that total investment by Phillip’s Towing Service, Inc. in the rehabilitation project would reach $2,000,000.
The program delivers the funding to the recipient in the form of a forgivable loan. The Phillip’s Towing Service, Inc. project will be required to create 10 full-time jobs and maintain them in existence for six consecutive months prior to the termination date of the agreement with NCDOC. If the terms of the agreement are not met, the funding must be repaid by the recipient to the City, and subsequently back to the grantor agency.
Issues/Analysis:
Documents required to move this agreement forward include the Grant Agreement between the City and the NCDOC, and Loan Agreement and Legally Binding Commitment between the City and Phillips Towing Service, Inc.
Budget Impact:
There is no impact on the General Fund fund balance. The City’s contribution for this project is not to exceed $6,000, which will be provided by a General Fund transfer. There is sufficient funding available in the ECD general fund budget for fiscal year 2025 to accommodate this grant match.
Options:
1) Adopt Special Revenue Project Ordinance 2025-7 and authorize the City Manager to execute required documents to accept the grant and execute the agreements.
2) Do not adopt Special Revenue Project Ordinance 2025-7 and provide further direction to staff.
Recommended Action:
Staff recommends that the City Council move to adopt Special Revenue Project Ordinance 2025-7 and to authorize the City Manager to execute appropriate documents to accept the grant and execute the agreement with Phillip’s Towing Service, Inc.
Attachments:
• Special Revenue Project Ordinance 2025-7
• Building Reuse Program Grant Agreement