Politics & Government

EDA May Scale Back On Façade Grants

The Fredericksburg Economic Development Authority wants to better prioritize how to spend its limited dollars on projects that have a specific return on investment.

With the possibility of less funds to spend this coming fiscal year, the Fredericksburg Economic Development Authority discussed refocusing its attention on projects that have a bigger direct return on investment.

This means there could be a pull-back on some of the façade improvement grants to focus on the buildings that need the most help as. EDA members also talked about putting pressure on City Council to seriously fund economic development projects in partnership with the EDA and private developers. For example, the EDA supplies funding for Via Colori and the fireworks programs—two civic-minded events that City Council should be budgeting instead of using valuable EDA monies.

Eagle Village may refinance on its loans and if it does, the EDA could see a drop in revenue from about $300,000 to $200,000. The EDA receives no taxpayer money and gets its funds by facilitating tax-free financing for businesses and organizations, like Eagle Village.

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"I think probably yes we will start to pull more away from beautification projects and maybe toward more events and larger projects," said EDA member Michael Colangelo.

EDA members said the riverfront-Sophia Street redevelopment, Princess Anne Street and Lafayette Boulevard gateways, tourism, retaining and recruiting businesses and the arts are their top priorities.

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EDA member Amy L. LaMarca said the EDA has helped jump start some really good projects with the programs it has, but more attention now needs to be put on the corridors and less on the historic downtown district.

"I don’t think changing priorities is bad," she said. "I think it is actually a sign of success."

Incoming EDA Chairman Chris Hornung said the EDA should focus on getting more businesses to open downtown and the corridors, which need face lifts. He said the façade grants made a splash, but the EDA should scale back spending on the program.  The EDA spent $122,000 on the grants program this past year, but has spent almost double that in year's past.

"I think the grants program has been pretty successful," said EDA member Thomas Crimmins. But the program may have gotten away from economic development, he added.

"The volume of grants or the total amount we put into grants will need to be substantially reduced for the next couple of years," he said.

The EDA unanimously agreed to make the city corridors and downtown district even in terms of the amount of money they can get in a matching grants at $10,000. The corridors were only able to get a $5,000 matching grant. The EDA also agreed that properties named in the Frazier report will get precedence over any other properties that apply for façade grants. EDA Chairman Joe Wilson said the EDA has drifted away from the properties identified in the Frazier report, and it needs to refocus on more significant projects.

EDA member Robert Carter asked how much return on investment is there with the façade improvements already finished? Renatos and Virginia Wine Experience both had recent façade improvements. LaMarca said there is no way to apply a metric to painting a building and seeing any return on investment for the city.

"The challenge for me with the façade program is how do you measure ROI (return on investment)?" she said. "I would like a little bit more diversity in our efforts is the bottom line for what I am looking for this year. I would be interested in being a little more creative in the way we are looking to spend our budget this year and a little more better idea of what we are looking to get in return for it."

Richard Tremblay, the assistant director of Economic Development for the Department of Economic Development and Tourism, said the owner of has reported an increase in business since his façade project was finished.

"It is that the more attractive we can make the downtown area, the more tourists we can attract to the downtown area. Ever since I have been around, tourism is our main economic development tool. Now, is that still true? I think it is, but maybe that can be debated," Wilson said.

Wilson said the city's Business, Professional, Occupational License tax is an "anchor around the neck" for the city.

The EDA talked about involving more advisory committee members or stakeholders to help decide what the next priorities will be. LaMarca said the EDA has been too passive and should be more clear and proactive in getting what is best for the city with the limited dollars it has to spend. Tremblay said the EDA can promote the programs and priorities more proactively, outside of just its website.

The EDA should go all in on something that has significant impact, LaMarca said. "At some point you have to make a strategic decision and go with it."

Karen Hedelt, director of economic development and tourism, said there is a perception of some in city government that there is a built-in generator for tourism here because of the proximity to Interstate 95, hotels and restaurants. So, making a financial commitment to improving tourism, and marketing what is here, is not a high priority for some, she said.

Colangelo said the EDA has failed at educating council members and the public on the importance of economic development and how it pays for critical services in education, fire, police and rescue.

"Maybe we should start swinging for the fence now," he said, by investing in bigger projects that bring more return on investment. "If that means holding some of the smaller projects and waiting for that right pitch to swing at, maybe that’s what we've got to do."

Wilson said the EDA could have less money for the next three years and it hasn't done a good job of thinking outside the box.

"My point is maybe we ought to be more aggressive in trying to figure out how we are going to skin the cat," he said.


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