TO: Mayor and Members of City Council
THRU: Jeffrey Yates, Assistant City Manager
Kelly Olivera, Assistant City Manager
FROM: Chris Cauley, Economic and Community Development Director
Kimberly Leonard, CLGBO, CLGFO, CPA, MPA Budget and Evaluation Director
Robert Van Geons, CEO Fayetteville Cumberland County Economic Development Corporation
DATE: August 12, 2024
RE:
Title
Adoption of Special Revenue Ordinance Close-outs 2025-1, 2025-2, 2025-3, 2025-4 and 2025-5 to close out multiple Rural Economic Development Grants from the Building Reuse Program under the North Carolina Department of Commerce
end
COUNCIL DISTRICT(S):
Council District(s)
Council District 2
Council District 5
Council District 9
b
Relationship To Strategic Plan:
GOAL II: The City of Fayetteville will have a Responsive City Government supporting a diverse and viable economy.
GOAL V: The City of Fayetteville will be a financially sound city providing exemplary city services.
GOAL VI: The City of Fayetteville will continue to have a collaborative citizen and business engagement base.
Executive Summary:
From 2018 through 2022 the Fayetteville Cumberland County Economic Development Corporation (FCEDC) engaged with five business expansion projects aimed to increase the City’s tax base and jobs by utilizing the Rural Economic Development Grant from the Building Reuse Program under the North Carolina Department of Commerce. Two grants were completed but did not hire the full number of jobs resulting in partial grant awards and three others were not started due to various reasons. Council action is required to close these grants and return the local match to the General Fund. Therefore, the Council is requested to adopt the following Special Revenue Ordinance Close-outs (SROCLO): SROCLO 2025-1 to close Special Revenue Ordinance (SRO) 2018-13 for the 208 Hay Street Building Renovation Project, SROCLO 2025-2 to close-out SRO 2021-19 for the 125 Drake Street Building Renovation Project, SROCLO 2025-3 to close-out SRO 2022-14 for the 4101 Raeford Road Building Renovation Project, SROCLO 2025-4 to close-out SRO 2022-10 for the 235 North McPherson Church Road Building Renovation, and SROCLO 2025-5 to close-out SRO 2018-14 for the 1802 Sapona Road Building Renovation Project.
Background:
The Building Reuse Program, under the Rural Grants/Programs Section of the North Carolina Department of Commerce, provides grants to local governments. The Grant is then issued as a grant or forgivable loan to businesses that meet the programs guidelines. 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 grants require a 5% cash match from the city.
On February 12, 2018 City Council adopted Special Revenue Project Fund Ordinance (SRO) 2018-14 to support the creation of 11 new full-time jobs and invest $220,000 in renovations of Kinlaws Rentals, LLC’s current location at an existing commercial facility. Renovations were completed but the company was only able to hire 5 of the 11 new jobs so the grant was partially paid out and is now being closed with $3,000 being returned to the General Fund.
On January 8, 2018, City Council adopted Special Revenue Ordinance Amendment (SRO) 2018-13 to support the creation of 75 new full-time jobs and invest at least $370,000 in renovations of Advanced Computer Learning Co., LLC’s downtown location. Renovations were completed but the company did not meet the job goals so the grant is now being closed and $9,250 will be returned to the General Fund.
On June 28, 2021, City Council adopted Special Revenue Project Fund Ordinance (SRO) 2021-19 to support the creation of 11 new full-time jobs and invest $110,000 in renovations of Showcase Restoration’s (Woodford, LLC) new location at an existing commercial facility. Renovations were completed but the company was only able to hire 10 of the 11 new jobs so the grant was partially paid out and is now being closed with $250 being returned to the General Fund.
On January 24, 2022, City Council adopted Special Revenue Project Fund Ordinance (SRO) 2022-10 to support the creation of 150 new full-time jobs and invest $140,000 in renovations of eClerx, LLC’s current location at an existing commercial facility. This project did not occur so the grant is now being closed and $3,500 will be returned to the General Fund.
On June 13, 2022, City Council adopted Special Revenue Project Fund Ordinance (SRO) 2022-14 to support the creation of 30 new full-time jobs and invest $1,482,500 in renovations of ChenMed, LLC’s current location at an existing commercial facility. This project has been delayed so the grant is now being closed and $15,000 will be returned to the General Fund.
Issues/Analysis:
While these grants are being closed and not all projects resulted in the anticipated job and property value growth, this program and FCEDC’s work represents a proactive approach to build on industry retention and expansion and no funds were paid out that did not result in jobs and property value increase. All the projects were completed in previous fiscal years, audited by the City’s external auditors as part of the annual audit process and are ready for closure.
Budget Impact:
There is no budget impact related to this action. Approximately $31,000 is available to be returned to the General Fund from unused local match. A portion of this may be used, upon subsequent City Council action, for an upcoming Rural Economic Development Grant from the Building Reuse Program under the North Carolina Department of Commerce that has been awarded.
Options:
• Adopt Special Revenue Fund Project Ordinance Closeout 2025-1, Special Revenue Fund Project Ordinance Closeout 2025-2, Special Revenue Fund Project Ordinance Closeout 2025-3, Special Revenue Fund Project Ordinance Closeout 2025-4, and Special Revenue Fund Project Ordinance Closeout 2025-5.
• Do not adopt the closeouts and provide guidance to staff.
Recommended Action:
Staff recommends Council move to adopt Special Revenue Fund Project Ordinance Closeout 2025-1, Special Revenue Fund Project Ordinance Closeout 2025-2, Special Revenue Fund Project Ordinance Closeout 2025-3, Special Revenue Fund Project Ordinance Closeout 2025-4, and Special Revenue Fund Project Ordinance Closeout 2025-5.
Attachments:
Special Revenue Fund Project Ordinance Closeout 2025-1
Special Revenue Fund Project Ordinance Closeout 2025-2
Special Revenue Fund Project Ordinance Closeout 2025-3
Special Revenue Fund Project Ordinance Closeout 2025-4
Special Revenue Fund Project Ordinance Closeout 2025-5