COMMUNITY-BASED ECONOMIC DEVELOPMENT MANUAL
FOR GRAND RAPIDS CENTRAL CITY NEIGHBORHOODS MICHIGAN STATE UNIVERSITY
July 1, 1999 Community-Based Organizations Central City Neighborhoods Grand Rapids, Michigan Dear CBOs: This manual was written by three MSU Urban and Regional Planning students. They researched a number of economic development tools that have been used by government and private businesses during the 1990â€™s. The goal of this manual is to enable neighborhood associations and other CBOs to access these tools and then effectively utilize them in their revitalization work. Due to the effects of urban sprawl and other societal dynamics, central city neighborhoods continue to suffer from the consequences of disinvestment and abandonment. Although many revitalization strategies must be employed to make our neighborhoods viable again, community-based economic development efforts must become a strategic priority. This manual explains several tools, how to use them, and when they can be most effective. This toolbox does not include every resource that could be utilized. Hopefully, we will continue to add to the programs that can be tapped by neighborhood associations and Community Development Corporations as they increase their capacity to meet neighborhood development needs. The effective use of any of these tools is predicated upon a comprehensive, neighborhood redevelopment plan. There must be a shared vision among neighborhood stakeholders of what improvements are needed and how the neighborhood should look. Only then can the appropriate tool be selected to accomplish the needed improvement. For example, an abandoned piece of property on a block that needs to be redeveloped so that it fits with the neighborhood vision could come under the Brownfield Redevelopment Authority. The chances of the property being accepted by the Authority are greater if the applicant demonstrates how redevelopment fits into an overall neighborhood development plan. I hope you find this manual useful as you undertake community-building activities. Sincerely, Carol L. Townsend Director MSU Center for Urban Affairs-Grand Rapids
Community-Based Economic Development For Grand Rapids Central City Neighborhoods
MSU Urban & Regional Planning Practicuum Erin Kilpatrick Ron Malega Siew Tan April 19, 1999
This publication was funded through a grant from the Frey Foundation. The grant funded the “United Growth for Kent County – A Community-Based Approach to Sustainable Regional Development” project. This is a joint project of MSU Extension and MSU Center for Urban Affairs. This project links urban reinvestment efforts with farmland preservation and community planning efforts. For more information, contact: MSU-West 5 Lyon N.W. #110 Grand Rapids, MI 49503 (616)458-6805
Acknowledgements We would like to recognize the efforts of the many people involved in producing this manual. Without their help this manual would not be possible. Special regards to Carol Townsend, Director, Michigan State University Center for Urban Affairs, Grand Rapids, Michigan, for all her guidance, motivation, and patience throughout the semester. We would also like to thank the City of Grand Rapids’ staff Beth Byron, Kurt Mai, Steve Pierpoint, Susan Shannon, Kenneth Schilling and Dan Oegema. Rick Chapla of The Right Place was very helpful with information and resources. We appreciate the guidance and support received from Dr. Rex LaMore and Dr. Zenia Kotval. Last, we wish to express our appreciation to the many Neighborhood Association Directors who took time from their schedules to meet with us: Paul Haan of the Creston Neighborhood Association, Danielle Bult of the Garfield Park Neighborhoods Association, Peggy Watson of the South East End Neighborhood Association, and Sandy Stuckhardt of the West Grand Neighborhood Organization.
Table of Contents Executive Summary
Introduction Who This Manual Will Help How to Use the Manual
4 4 4
Capacity Building The Bridge
What is Community Economic Development? Goals of CED CED Categories
6 6 6
Economic Development Toolbox Matrix of Tools Brownfield Redevelopment Authority Homeownership and Housing Rehabilitation Small Business Support The Renaissance Zone Business Assistance Matrix
7 8 9 11 14 18 20
Appendix List of CDBG Funded Neighborhood Associations CDBG Area Map Index
Executive Summary Community-Based Organizations (CBOs) come in a number of forms and are involved in a range of activities. These organizations in Grand Rapids have a difficult time accessing the appropriate tools to perform community economic development. In part, neighborhood organizations lack the capacity to take on complex Community Economic Development (CED) projects. However, some CED may be achieved through the utilization of available tools. Residential Housing Development, Commercial and Industrial Development, Worker Development, and Business Ownership have been identified as areas of CED in which neighborhood organizations can play an active role. This manual explains how such organizations can affect the aforementioned areas through the use of the following ‘tools’: ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
Brownfield Redevelopment Authority Homebuyer Assistance Fund Housing Rehabilitation Programs Michigan Historic Preservation Tax Credits YouthBuild Community Development Corporations Micro Loan Programs Urban Business District Small Business Assistance Programs Business Incubators Tax Abatements Renaissance Zone
Section 1 – Introduction
Introduction Community Based Economic Development Strategies for Grand Rapids Central City Neighbor hoods
Neighborhoods are the basic building blocks of cities. Urban neighborhoods incorporate a wide range of uses and can differ greatly in almost all measurable characteristics. Neighborhoods are dynamic in that each experiences constant inflows and outflows of residents, materials, and money. Consequently, neighborhood stability is dependent upon balancing these opposite flows. Community economic development is designed to develop a sustainable, balanced community. Who This Manual Will Help This manual is targeted at Neighborhood and Community-Based Organizations (CBOs) in Community Development Block Grant (CDBG) Targeted Areas in Grand Rapids (see map in Appendix). It is important to recognize that this workbook can not address every aspect of Community Economic Development (CED). CED is a complex subject. This manual focuses on organizational capacity building, CED, and some of the tools that community-based organizations may use to encourage CED. How to Use the Manual The manual is presented in five sections: 1 Introduction 2 Organizational Capacity Building & The Bridge 3 What is Community Economic Development 4 The Toolbox 5 Final Thoughts
Section One- Introduction includes an introduction to the manual, an explanation of who it will help, and how to use it. Section Two- Capacity Building. “The Bridge” recommends five components of capacity that are vital to enabling a CBO to perform economic development activities. While this section does discuss how to prepare your organization for community economic development, it does not define which organizations should attempt CED or what their role in an economic development program should be. The manual leaves this question for you to decide. Section Three- CED defines Community Economic Development and explains the goals that drive such activities. The manual breaks CED activities down into categories and briefly explains each. Section Four- Toolbox. Provides a list of tools that enable CBOs to perform Community Economic Development. Each section provides a description of the tool, how it may be accessed, and who to contact for more information. Contents of the Toolbox are indicated by the following symbol:
Section Five- Final Thoughts. This section offers a brief wrap up of Community Based Economic Development in Grand Rapids.
Section 2 – Capacity Building
Capacity Building In order for organizations to improve their efficiency and success rate, it is important to have a good understanding of organizational capacity. Before your neighborhood or community-based organization attempts to perform CED activities, it is crucial to conduct a self-evaluation. Some important questions to answer are: What is your organization’s role in the community? ♦ What does the organizational mission statement indicate? ♦ What are your organization’s goals for the neighborhood?
If your organization determines that Community Economic Development falls within its defined role, mission, and goals, then keep reading. The next step in the process is understanding the five components of capacity that are vital to CED. These five components build a “bridge” to CED and enable an organization to be successful.
The Bridge – A Checklist
Evaluate your organization to determine if you are able to complete all of the following steps. Ability to Plan Effectively: CBOs need to develop a strategic plan for their geographic area and create a vision for the neighborhood. This includes gathering information from residents, neighborhood business owners, and other neighborhood stakeholders and involving them in the visioning process. Additionally, this means identifying assets and opportunities for programming, partnering and capacity building.
Ability to Secure Resources: CBOs need to create a relatively stable funding base without wide annual fluctuations. Most CBOs need to seek external support such as grants, loans, contracts, and technical assistance to accomplish their objectives as well as develop internal fundraising ability. Strong Internal Management: The management arm of a CBO must be able to manage resources, account for funds, continually communicate with staff, assemble stakeholders, and reflect sound business principles of accountability that can support multiple CED programs. Program Delivery Capacity: This means that an organization needs to be able to see a project through from beginning to end. This includes planning, development, marketing, and the ongoing management of the project. A CBO should be able to estimate program outcomes, meet expectations, and involve residents in all aspects of the project. Ability to Network: Let other groups help you. A CBO has multiple roles and activities and it is important that you utilize the resources provided by other organizations. Both public and private entities can aid in accomplishing revitalization goals. Partner with housing builders, human resource providers and any group that has successfully provided services that require technical training.
Section 3 – Community Economic Development
“The strength of our neighborhoods determines the viability of Grand Rapids as a place to live and work.” City of Grand Rapids City Limits Newsletter Winter 1998-99
What is Community Economic Development? Most publicly sponsored economic development activities are initiated by government agencies which tend to target broader regions than neighborhoods. Consequently, neighborhoods are not always afforded the opportunity to participate in the planning process and are easily ‘forgotten’ in the larger scheme of regional economic development. For this reason, participation of neighborhood-based organizations in CED is important to ensure that the benefits of such a process are real and realized by neighborhood residents and stakeholders. CED is a process by which communities can initiate and generate their own solutions to their common economic problems and thereby build long term community capacity and foster the integration of economic, social and environmental objectives.
Goals of CED Goals Of CED
♦ ♦ ♦ ♦ ♦ ♦
Reduce unemployment Identify and enhance the competitive advantage of a community Develop economically viable neighborhoods Provide goods and services locally Create opportunities for local ownership and control Build leadership and empower community residents
CED Categories There are four general types of Community Economic Development that occur in Grand Rapids and around the nation. These activities accomplish the goals of CED. 1 2 3 4
Residential housing development Commercial/industrial development Worker development Business ownership and business development
Most CED activities combine two or more of the above categories. For example, YouthBuild ( a tool presented in section Four) combines worker development and residential housing development. Page 8 is a matrix of community economic development tools, broken down by the four CED categories mentioned above.
Section 4 – Toolbox
COMMUNITY ECONOMIC DEVELOPMENT ‘TOOLBOX’ Tool Description ♦ Eligibility for Tool Use ♦ How is a Tool Best Used ♦ Contacts
Section 4 â€“ Toolbox
MATRIX OF TOOLS Residential Housing Development
Brownfield Redevelopment Authority
Improving Job Opportunities & Training
Grand Rapids Homebuyer Assistance Fund
Grand Rapids Housing Rehabilitation Programs
Michigan Historic Preservation Tax Credits
Business Ownership & Development
Community Development Corporations
Micro Loan Programs
Urban Business District
Small Business Assistance Programs
Section 4 – Toolbox
BROWNFIELD REDEVELOPMENT AUTHORITY (BRA)
The chances of a site being considered for inclusion in the brownfield plan may be increased through the following activities: • Formulating a development proposal (to include potential uses of sites, community need for redevelopment, benefits of redevelopment and parties interested in redeveloping the site). • Incorporating the proposal into the community’s economic development strategy. • Gaining community consensus and input in support of the redevelopment goals. • Creating site profiles: collecting detailed data on specific sites, including information about ownership, past uses and suitable potential uses. The aforementioned activities may aid the City and the local BRA to streamline projects that neighborhoods have designated as redevelopment preferences.
Brownfields... “Abandoned, idle or underused Quality). industrial The Grand Rapids Brownfield Redevelopment Auand thority (BRA) is authorized by the Brownfield Redevelopment Financing Act (Act 381), Public commercial Acts of Michigan 1996. The Authority’s aim is to properties “promote the redevelopment of environmentally distressed properties within the Brownfield where Redevelopment Zone”(Grand Rapids Brownfield redevelopment Once a site is approved, the BRA can then establish a Tax Redevelopment Plan, 1998). Increment Financing (TIF) program or tap other sources of is complicated economic development grants available from a variety of The BRA uses a Brownfield Plan that may be by real or modified as necessary in order to achieve the aims of government agencies for the remediation of Brownfield Act 381. At present the following seven properties sites. These funding sources include: perceived are listed on the Grand Rapids Plan: • The Department of Environmental Quality Grants contamina- Site Assessment Program 1) MacDonald’s Industrial Products Property tion”.. - Site Reclamation Program
Tool Description Brownfields are “abandoned, idle, or underused industrial and commercial properties where redevelopment is complicated by real or perceived contamination” (The Department of Environmental
2) Prestige Awnings property 3) Franklin Metal Trading Corporation Property 4) Cherry Street Landing , L.L.C. Property 5) Johnston Coca-Cola Bottling Group, Inc. 6) American Laundry Property 7) 56 Grandville Avenue, L.L.C. Property
A potential brownfield redevelopment site may be presented to the City and BRA for consideration.
Community Development Block Grant Funds - Commercial and Industrial Rehabilitation/ Redevelopment Initiative - Economic Development Infrastructure Program - Economic Development Planning Program - Renaissance Fund
Department of Environmental Quality
Section 4 – Toolbox •
U.S. Economic Development Administration - Economic Adjustment Grant - Public Works and Development Facilities Program - Planning Assistance for Economic Development - Technical Assistance Program
Michigan Department of Transportation - Transportation Economic Development Fund
Funds obtained from the aforementioned sources can be used to begin the process of remediation and redevelopment. This process will include: • • • • •
Environmental Assessment Buyer/Developer-Site Matching Financing Negotiating Project Implementation
How is this Tool Best Used? The Grand Rapids BRA is a relatively new entity. Properties presently included in the Brownfield Plan are in the initial stages of the remediation and redevelopment process. The BRA functions as a centralized resource and mechanism for accessing funds and expertise with regard to brownfield redevelopment. It is in this way that neighborhood associations and other CBOs should seek to utilize the BRA when their economic development strategies call for the following elements: • Small Business Development Many small parcels that are considered brownfield sites are not suitable for large scale development, however, the remediation of a number of small parcels of land has the potential for usage by smaller businesses. This may in turn improve local job opportunities. •
Eligibility The Brownfield Redevelopment Zone incorporates all brownfield sites within the City limits. Properties included in the Brownfield Plan can benefit from the facilitation of financing environmental response activities and from tax incentives made available to property owners willing to invest in the redevelopment of brownfield sites. Unless an organization is planning to clean the property themselves, they are not eligible for funding. However, CBOs may still be involved in the planning process which may enable developers to acquire funds.
Aesthetic, Health and Safety Improvements To Commercial and Residential Areas A number of city neighborhoods struggle with maintaining their physical appearance and preventing blight from becoming widespread. The redevelopment of brownfield sites can improve aesthetics and the perception of residents and outsiders of these neighborhoods, thereby providing incentives for existing residents and businesses to remain, and for new residents and businesses to locate in central city neighborhoods.
Section 4 â€“ Toolbox
Neighborhood associations that are interested in carrying out redevelopment have the opportunity to affect the redevelopment process by attending BRA public meet- HOMEOWNERSHIP AND ings, which are held monthly. The meetings are a forum for HOUSING the discussion of ongoing and future plans. The BRA welREHABILITATION comes public participation. Involvement in this process may consequently allow neighborhoods greater access to brownfield funding and resources. In addition, it will keep In many central city neighborhoods the high number neighborhoods informed about what is happening through- of rental properties negatively impacts neighborhood out the community. stability. Increased homeownership and housing rehabilitation are strategies that may improve neighborhood stability. The following programs have been Contacts identified as tools designed to improve the housing Rick Chapla stock and encourage homeownership in Grand RapBrownfield Redevelopment Authority idsâ€™ central city neighborhoods: Redevelopment Specialist The Right Place Program 111 Pearl NW Grand Rapids, MI 49503 Phone: 616/771-0328 Publication: Grand Rapids Brownfield Redevelopment Plan, 1998. Publication: Brownfield Redevelopment Guide, 1997 Consumers Renaissance Development Corporation 212 W Michigan Avenue Jackson, MI 49201 Kelly Feneley: 517/788-7201 Greg Norththrup: 517/788-2111 Bruce Rasher: 517:/788-0331 Environmental Response Division Michigan Department of Environmental Quality P.O.Box 30426, Lansing, MI 48909 Phone: 517/373-9837
Grand Rapids Homebuyer Assistance Fund (HAF) Tool Description This program provides homebuyers with downpayment and closing cost assistance (up to $3,000) for the purchase of a home. Areas with the greatest share of Homebuyer Assistance Fund purchases include the Garfield Park and West Grand neighborhoods. The program has been very successful and further funds are being applied for by the City. Homebuyers submit their HAF application along with their mortgage application to their mortgage lender, who will forward the application to the Community Development Office at City Hall. Once approved, HAF funds are available upon closing.
Section 4 – Toolbox
Eligibility • Households must be of low or moderate income (earnings of up to $40,000 for a family of four), and first time homebuyers. • Properties must be 1 or 2 bedroom homes. Homebuyers must complete a home-buying education course. How is this Tool Best Used? Neighborhoods experiencing problems of physical deterioration, crime, building code violations, a poor sense of community and other issues associated with neighborhood instability may find this tool useful. Contact City of Grand Rapids Housing and Community Development Offices 300 Monroe NW, Grand Rapids, MI 49503 Phone: 616/456-3445
Grand Rapids Housing Rehabilitation Tool Description • THE HOUSING REHABILITATION PROGRAM provides financial assistance for immediate health/safety concerns, exterior code violations, treatment of hazardous materials and other repairs to low and moderate income owners of homes in Specific Target Areas (see map in Appendix). •
THE ELDERLY/DISABLED HOMEOWNER REHABILITATION PROGRAM provides financial assistance for housing rehabilitation to qualifying low and moderate income elderly or disabled households in the General Target Area (see map in Appendix).
THE RENTAL REHABILITATION PROGRAM provides financial assistance for the rehabilitation of rental properties occupied or to be occupied by low income tenants.
THE NEIGHBORHOOD REHABILITATION PROGRAM provides one-time seed funding and capitalization of rehabilitation services to compliment ongoing City Code Enforcement Team activities. Applications for the programs are to be made through the City Neighborhood Improvement Department.
How are these Tools Best Used? These programs are of particular use in low income neighborhoods experiencing disinvestment and physical decay. Contact City of Grand Rapids Neighborhood Improvement Department, Housing Rehabilitation Division 1120 Monroe NW, Grand Rapids, MI 49503 Phone: 616/456-3030
Michigan Historic Preservation Tax Credits Tool Description This program provides financial incentives to commercial and residential properties to rehabilitate historic property. The program covers tax years 1999, 2000, 2001 & 2002. Credit may be up to 25% of the taxpayers’ qualified rehabilitation expenditures, and applies to the Michigan Single Business Tax and Michigan Income Tax.
Section 4 – Toolbox
This tool can help prevent physical decay and also help create mixed income housing opportunities in a neighborhood. Middle income homeowners are eligible for the tax credits. Lower income homeowners can use these tax credits in conjunction with other rehabilitation programs. Residents and businesses of Historic Districts, such as Wealthy S.E., can access funding to maintain and renovate their houses.
Contacts Alice Bushong City of Grand Rapids Planning Department 300 Monroe NW Grand Rapids, MI 49503 Phone: 616/456-3031
Eligibility • Projects must be certified by the State Historic Preservation Office. • Properties need to be listed in the national or state registers, or within a registered historic district. • Expenditures must be for work that is performed in conformance with the Secretary of Interior’s Standards for Rehabilitation. • Certification must be obtained from the Secretary of Interior confirming that the project’s rehabilitation plans conform to standards. • Upon project completion, the work must be reviewed to ensure standards have been met.
Secretary of the Interior’s Standards for Rehabilitation National Park Service Heritage Preservation Services Phone: 202/343-9578 http://www.cr.nps.gov
How is this Tool Best Used? With regard to central city neighborhoods, this tool is appropriate for use by middle income households who are able to put up front a sum of money for home rehabilitation .
The State Historic Preservation Office Phone: 517/373-1630 http://www.sos.state.mi.us/history
National Trust for Historic Preservation Community Partners Program Phone: 202/588-6000 http//www.nationaltrust.org
YouthBuild Tool Description This program is a method of constructing and rehabilitating homes in low income communities, while providing meaningful work opportunities and training for young people in their communities. Administered by YouthBuild U.S.A., parties interested in setting up a program need to register with YouthBuild and will subsequently receive information on how to start a program in a specific community. HUD supplies grants to organizations taking on Youthbuild projects. For Grand Rapids information, organizations should contact the Grand Rapids HUD Office.
Section 4 – Toolbox
YouthBuild is currently not used in Grand Rapids, but has been used successfully in other urban areas in Michigan to revitalize economically distressed communities through homeownership and rehabilitation strategies, as well as the provision of employment opportunities.
SMALL BUSINESS SUPPORT In Grand Rapid’s central city neighborhoods, small businesses play an important role in servicing local residents. Increasing the variety of services to meet the demand of the local communities may reduce the amount of local household income flowing out of these communities. The following tools are designed to support small business development in economically challenged areas:
Eligibility Youth in areas where YouthBuild Programs operate can take part in programs in their communities. Any organization that wishes to establish a program is eligiCommunity ble to do so. Development Corporations (CDCs) How is this Tool Best Used? The YouthBuild Program would be applicable in most Tool Description central city Grand Rapids neighborhoods to maintain CDCs are tax-exempt non-profit organizations that generally focus on projects within a single geographical and improve housing stock, and to possibly increase homeownership. Furthermore, it provides the oppor- area. Residents from that geographical area usually tunity to increase community involvement (particularly compose a majority of the Board of Directors. CDCs among a community's youth), which is something that can perform a variety of functions: • developing small business loan programs many neighborhood organizations are striving to • small business promotion and marketing achieve. • expanding consumer markets for local foods and products Contacts • affordable housing development YouthBuild U.S.A. • providing housing initiatives for first time 58 Day Street, P.O.Box 440322 buyers Somerville, MA 02144 Phone: 617/623-9900 Four CDCs currently operate in Grand Grand Rapids HUD Rapids. They are: Fred Washington • Heartside Non-Profit- The Dwelling Place Community Development Coordinator 339 S. Division Avenue Phone: 616/ 456-2100 Grand Rapids, MI 49503 Phone: 616/454-0928
Section 4 – Toolbox
Phone: 616/459-9050 • West Grand CDC
650 Stocking N.W. Grand Rapids, MI 49504 Phone: 616/431-2291 • REACH- Messiah Baptist First Church
Development 331 Henry Street S.E. Grand Rapids, MI 49503 Phone: 616/235-0455 • Garfield Development Corporation
1725 S. Division Avenue Grand Rapids, MI 49507 Phone: 616/248-3235 How to access a CDC is dependent upon the organization’s goals. If an organization wishes to utilize the services of a CDC, the aforementioned CDCs may be of use. If an organization wishes to form their own CDC, the Local Initiatives Support Corporation (LISC) can be a resource.
Micro Loan Programs Tool Description Micro Loan programs are nonprofit financial intermediaries targeting impoverished communities and populations. They provide small loans and technical assistance to budding businesses enabling growth and expansion. In Grand Rapids, loan amounts generally range from $500-$10,000. The Micro Loan Fund Program is administered by the Grand Rapids Urban League. Eligibility • Funds must be used to start or expand small businesses in the Grand Rapids central city area. • The business cannot have more than five employees. • The enterprise must have a business plan. The program helps applicants produce one. • Applicants must obtain technical assistance with financial management. The program covers the cost of this help.
How is this Tool Best Used? This could be a particularly useful tool in some Grand Rapids neighborhoods where their commercial districts are experiencing increasing vacancy rates. This tool may encourage the expansion of existing businesses into the vacant buildings or the attraction of How is this Tool Best Used? new businesses into vacant spaces. Neighborhoods CDCs have become a vital tool in all areas in need of community-based housing and economic development. aiming to provide a greater variety of services in their business districts can use this tool to further their goals. Contact Local Initiatives Support Corporation Contact 33 West Fulton Daniel Autamashih Grand Rapids, MI 49503 Grand Rapids Urban League Inc. 745 Eastern Ave. SE Grand Rapids, MI 49503 Eligibility Non-profit organizations, community-based groups, churches and other faith-based organizations are eligible to form a CDC.
Section 4 – Toolbox
Phone: 616/245-2207 ext.35
Urban Business District Tool Description An “Urban Business District” Zone has recently been proposed by the City. The UBD resembles the Traditional Business District in many ways, but is less rigorous with regard to building and area regulations. UBD is a form of zoning which provides neighborhoodoriented retail and service uses. It is similar to Grand Rapid’s C2 (Community Commercial Zone). A UBD zone allows uses that are suited to the physical design of the buildings in the business district and that are compatible with adjoining uses. The district is intended to protect the traditional character of the area and to encourage pedestrian access and use of the business district. The preservation and reuse of existing building stock is of primary importance. Eligibility Please refer to the Grand Rapids City Code, Article 16A, p.1735 for eligible land uses for the Zone under Traditional Business Districts. How is this Tool Best Used? Central city neighborhoods experiencing difficulty maintaining their neighborhood character may find this tool of use. The differences between this Zone and Grand Rapid’s C2 zone are mainly with regard to building regulations (height, width) and area regulations (lot coverage, setback). The UBD imposes greater restrictions in these respects and provides more control over the area’s characteristics.
Contact Kenneth Schilling Assistant Planning Director City of Grand Rapids Phone: 616/456-3031
Small Business Assistance Programs Tool Description The following programs are administered by the Small Business Administration of the federal government: • SMALL BUSINESS INVESTMENT COMPANIES (SBIC) AND MINORITY SMALL BUSINESS INVESTMENT COMPANIES (MSBIC) are privately owned and operated organizations that use capital funds borrowed from the SBA to provide financing to small businesses in the form of equity securities and long term loans. • LOAN GUARANTEES are available for business purposes. Loans are guaranteed for up to $750,000. • WOMEN’S BUSINESS OWNERSHIP offers training and counseling in business management and ownership along with help obtaining SBA guaranteed loans. • MINORITY ENTERPRISE DEVELOPMENT helps provide government contracts for socially and economically disadvantaged businesses. Eligibility Specific requirements for obtaining loans vary, depending on the program, the amount of the loan and the business being established or expanded. How are these Tools Best Used?
Section 4 – Toolbox
These tools are best used to encourage the expansion and attraction of small businesses to neighborhood downtown districts that are striving to increase the usage of the district by residents through the provision of a greater variety of services. Contact Small Business Development Center Eberhard Center 301 West Fulton Grand Rapids, Michigan Phone: 616/771-6693
Business Incubators Tool Description Business incubation is a dynamic process of business enterprise development where young firms are nurtured and supported through the start up period when they are most vulnerable. Incubators provide hands-on management assistance, access to financing and orchestrated exposure to critical business or technical support services. Shared office space, office services and flexible leases are also made available to these businesses. Eligibility Start-up entrepreneurs are eligible for the building space and training services provided by incubators. How is this Tool Best Used? Incubators are best used in areas where tax breaks or incentives are offered by the City. A number of incubators in Grand Rapids are currently located in
Renaissance Zones but do not have training or management support associated with the assistance. Contact Rick Chapla Redevelopment Specialist The Right Place Program 111 Pearl NW Grand Rapids, MI 49503 Phone: 616/771-0328 A Small Business Assistance Matrix follows this Toolbox. The Matrix provides information about business assistance organizations, their service area, clientele, and type of assistance provided.
Tax Abatements Tool Description Tax abatements are government sponsored tax elimination or reduction programs. This tool may be used for the expansion of industrial firms within central city neighborhoods. • An application must be submitted to the City for a plant rehabilitation or industrial development district designation. • Once this application is approved, a public hearing will be held where the developer presents the project to city commissioners. • If the application is ratified by the commission, a project application is then filed to get the tax amount abated. • Another public hearing is subsequently held. Upon approval, the application is sent to the State Tax Commission for endorsement. Eligibility
Since 1975, the City of Grand Rapids has granted $943 million in tax abatements that have resulted in 11,474 new jobs. Grand Rapids Business Journal 1998-1999
Section 4 – Toolbox Available to firms that will add jobs to the workplace, meet Equal Employment Opportunity criteria, and invest at least $600,000.
ual phase-in of taxation will begin in the year 2009. Those choosing to relocate in the Zone must meet notification requirements laid out in the law. The Renaissance Zone is administered by the City and the Michigan Economic Development Corporation (formerly the Michigan Jobs Commission).
How is this Tool Best Used? Central city neighborhoods that are aiming to attract activity to industrial parcels of land may find tax abatements an appropriate locational incentive. Eligibility • Businesses and residents must be located within the Contact designated Renaissance Zone areas. City of Grand Rapids • In order to receive the benefits, business must not Ellen James and Dorothy Knapp be delinquent in state or local taxes abated by the Equal Opportunity Department Renaissance Zone Law. Phone: 616/456-3027 • Businesses need to file annual Single Business Tax Returns, City and State Income Tax returns. Clyde Kimball • Personal property needs to have been located in the Assessor’s Office Zone at least 182 days in the calendar year Phone: 616/456-3296 immediately preceding the year in which the exemption would apply. Dan Oegema Planning Department Phone: 616/456-3681
THE RENAISSANCE ZONE Tool Description Renaissance Zones are select geographic areas approved by the State of Michigan where businesses and residents are exempt from paying the Michigan Single Business Tax, Michigan Personal Income Tax and the City Income Tax. The exemptions are a powerful market-based incentive to spur new jobs and investment.
Contact Michigan Economic Development Corporation 201 North Washington Square Victor Center, 4th Floor Lansing, MI 48913 Phone: 517/373-9808 Michigan Department of Treasury Bureau of Revenue Individual Taxes Division Treasury Building 430 West Allegan Street Lansing, MI 48922 Phone: 517/373/1426
The Grand Rapids Renaissance Zone covers six areas, covering a total of 536 acres (Please see map City of Grand Rapids, Business Advocate on page 19). The tax exemptions took effect in Janu- 300 Monroe, NW ary of 1997 and will last until the year 2012. A grad-
Section 4 â€“ Toolbox Grand Rapids, MI 49503
Grand Rapids Business Assistance Matrix Business Assistance Organizations
City of Grand Rapids
City of Grand Rapids &
Any business in the city
Limited â€“ mostly referrals None
Economic Development Foundation
Kent County & 13 other counties
Small businesses using the SBA 504 Loan Pro-
Help with loan applications, referral to loan
Small business owners
Through students at GVSU
Family Business Counsel
Family members within a family owned business
None at present
Grand Rapids Area Chamber of Commerce
Kent County & Eastern Ottawa
Small business owners
Grand Rapids Opportuni- West Michigan focusing ties For Women (GROW) on Kent County
Focus on women below median income level
Hispanic Center of West Michigan
Open to the public
Michigan Minority Busi- 616 Area code ness Development Center
Members of MMBCD
Neighborhood Business Specialists Program
Neighborhood businesses & business associations
Economic development assistance
The Right Place Program Kent County
Primarily existing businesses
Service Corp of Retired Executives (SCORE)
Start ups, existing businesses, expansions
Financial management, marketing, purchasing
Business skills workshops
Small Business Development Center
Kent, Ottawa, Muskegon Counties
Start ups and existing small businesses
Business start up & growth counseling
Market research, planning, accessing capital
Grand Rapids Urban League
CDBG Target Area
Target Area residents
Business plan writing
City of Grand Rapids CDBG Target Area
Section 5 – Wrap Up
FINAL THOUGHTS Maintaining a neighborhood that is a good place to live takes time, energy, and resources. Neighborhood groups all over the country are thriving by strategically planning, utilizing their resources, and “building the bridge” towards economic development. Once your group has reached the necessary level of capacity, this manual should help you keep your neighborhood economically healthy and assist in revitalization. The manual is intended as a resource to support you in the Community-Based Economic Development process. The longest journeys to redevelopment must begin with the first step. YOU have to take that step. Good luck!
APPENDIX CDBG Funded Neighborhood Associations Baxter Neighborhood Association Creston Neighborhood Association East Hills Neighborhood Association Eastown Community Association Garfield Park Neighbors Association Heritage Hill Association Madison Area Neighborhood Association Midtown Neighborhood Association Neighbors of Belknap Lookout Roosevelt Park Neighborhood Association South East Community Association South East End Neighborhood Association Southwest Area Neighbors West Grand Neighborhood Organization
456-6033 454-7900 454-9079 451-3025 241-2443 459-8950 458-3574 243-2489 454-8413 243-2489 245-4398 247-0900 456-9190 451-0150
Index Abatements Acknowledgements
Bridge, the Brownfield Redevelopment Authority (BRA) Business Incubators Business Improvement Matrix
5 9 17 20
Capacity Building City of Grand Rapids Offices Business Advocate Equal Opportunity Department Housing Office Neighborhood Improvement Department Planning Department Community Development Block Grant Funds Community Development Corporations (CDC) CDBG Neighborhoods Community Economic Development (CED) CED Categories CED Goals
5 18 18 12 12 13 9 14 22 6 6 6
Department of Environmental Quality DEQ Grants Dwelling Place
9, 11 9 14
Elderly & Disabled Homeowner Rehab Programs Executive Summary
Garfield CDC Goals of CED Grand Rapids Homebuyers Program Grand Rapids Housing Rehab Program
15 6 11 12
Homeownership Housing Rehab How to use the Manual HUD
11 11 4 14
LISC Loan Guarantee
Matrix of Tools Michigan Department of Transportation Michigan Historic Preservation Tax Credit Micro Loan Program Minority Enterprise Development MSBIC
8 10 12 15 16 16
National Trust for Historic Preservation Neighborhood Associations Neighborhood Rehab Program Neighborhoods
13 22 12 4
Organizational Capacity Building
REACH Renaissance Zone Rental Rehab Program Right Place, the
15 18, 19 12 11, 17
Secretary of Interior Section 1 Section 2 Section 3 Section 4 Section 5 Small Business Association Programs Small Business Development Small Business Support SBIC
13 4 5 6 7 21 16 10, 14 14 16
Table of Contents Tax Abatements Toolbox
2 17 7
Urban Business Districts Urban League US Economic Development Administration
16 15 10
West Grand CDC Who this Manual Will Help Women Business Ownership
15 4 16