Des Moines staff is proposing a grant program to reenergize the city’s downtown core by attracting new business owners to vacant, street-level commercial spaces.
City economic development staff pitched Restore the Core DSM to Des Moines City Council members at a meeting on Monday, May 4. The program would provide funding incentives to entice tenants to set up shop in empty downtown spaces, making the area more attractive to visitors and prospective residents.
City economic development manager Breann Bye sees the incentives as a way to unlock spaces for retail and service to meet the demand in a downtown that has evolved from a 9-to-5 hub to a growing residential neighborhood.
Once reliant on predictable weekday worker schedules, Des Moines’ downtown has seen traffic shifts, particularly with more people working remotely since the pandemic, as well as competing development throughout the region.
The downtown is still the region’s hub for entertainment, jobs and civic life, Des Moines Economic Development Administrator Carrie Kruse said on Monday. The proposed project’s boundary makes up 0.5% of Des Moines’ land but generates about 17% of the city’s property tax base.
It’s also seeing growth in its residential population. About 50% of the downtown’s housing units were built in the last decade. More than 1,600 housing units are under construction, representing about half a billion dollars in investment.
Still, about 31% of the city’s downtown ground-floor commercial space is vacant. And about 76% of that has been vacant for a year or more. Vacant storefronts can make walking downtown feel fragmented and weaken the experience, Bye told council members.
“That is how our neighbors, our visitors experience downtown when they walk to dinner, when they walk from a hotel to an event or from their apartment to get coffee,” Bye said. “A vacant ground-floor space is visible every single day, and it matters.”
In many cases, the vacant spaces are there not due to lack of interest, but because of barriers for the tenants, Bye said. Issues may be as simple as the space being too large, too expensive to build out, or not configured for the types of businesses that would likely succeed in a time when you can push a button to get food or goods delivered to your door, she said.
How would the Restore the Core DSM program work?
Program plans call for $7 million in tax increment financing funds through the Metro Center Urban Renewal Area. Tax increment financing, or TIF, is an economic development tool where local governments waive property taxes for a period of years on the value of improvements to a site to help a developer offset the cost of construction.
The program would offer matching reimbursement grants up to $200,000 for ground-floor commercial spaces that are not under a development agreement. It would offer up to $100,000 for developments that are under an agreement. The funding could help kickstart 35 projects or more, city officials said.
Uses that could qualify for funding could include retail shops, services like pet grooming, medical offices, restaurants, or studios, economic development project manager Nick Tarpey said. Businesses that would be ineligible would include offices, liquor stores, or nonprofits.
Tenants could use the funding to make improvements to the building’s space, including accessibility improvements, interior demolition and construction, flooring, lighting and painting.
Projects must be at least $50,000 to qualify for the program, and tenants have to complete the project to receive reimbursement. Tenants must also lease the space for at least three years, and their business must be open to the public at least five days a week, five hours per day.
Officials said the program would apply to the downtown area loosely bordered by High Street to the north, Martin Luther King Jr. Parkway to the south, 15th Street to the west, and the Des Moines River to the east.
Virginia Barreda is the Des Moines city government reporter for the Register. She can be reached at vbarreda@dmreg.com.
This article originally appeared on Des Moines Register: Des Moines looks to attract retailers to vacant downtown storefronts
Reporting by Virginia Barreda, Des Moines Register / Des Moines Register
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