The City Council is expected to further consider a North Carolina Rural Economic Development Center grant application that would provide building improvements at the under-construction bakery, cafe and restaurant at 101 Wall St. in downtown Clinton.
Discussion was tabled so that more information could be obtained on the application by Wall Street and Main Inc. Property owner Vince Burgess and manager Rusty Jackson approached the city about applying for a $152,000 grant to improve the building and create 20 full-time jobs at the location.
The jobs would be based on the establishment of three new businesses, including a bakery, cafe and full-service restaurant. If awarded, the grant would be funneled through the city of Clinton and to the applicants with the stipulation that the 20 jobs be maintained for six months. If they are not, then the applicants would have to repay $8,000 for every job not created or maintained. Any necessary action to get the money back would be the responsibility of the city, according to city officials.
“The way this program works is the local government would receive the grant, $8,000 per full-time job created. The jobs must be maintained for a period of six months, 35 hours per week,” said Clinton-Sampson planning director Mary Rose. “The local government’s responsibilities are to verify and maintain records, as well as distribute funds, and that will necessitate us keeping track and making sure it complies with all state and federal regulations that apply to these grants.”
The Council considered a resolution of support, but ultimately tabled discussion so staff could look further into the grant application and developing a policy to deal with such job creation-based grant applications in the future.
The grant would be part of the Rural Center’s Building Reuse initiative, designed to spur economic activity and job creation in municipalities while improving the availability and quality of services in communities. As part of the process, city manager John Connet would execute and file an application on behalf of the city and the business. The city would pay 5 percent of the grant amount for the building project if the application is approved.
Wall Street and Main Inc. will administer, operate and maintain the businesses, creating the jobs as stipulated by the grant; the city manager is directed to furnish information and other documents associated with the grant application and project as requested by the Rural Center.
Rose said there will be staff time involved to monitor the progress of the the way the grant is written. Aside from the obligations of the city manager, as laid out in the resolution, Rose said the planning department would likely be the go-between.
The Rural Center would require the property owner to sign a promissory note for the $152,000 and city staff has recommended that a lien be placed on the building to secure the city’s interest. The property is currently valued at $122,000.
Connet noted that the city match of $8,000 will be met with the work being undertaken as part of the Wall Street Alley project behind the restaurant. “That meets the Rural Center’s requirement for the match, and will not cost us any more,” said Rose.
Mayor Lew Starling said staff would be checking with other towns to see how they handle similar situations, to include the responsibilities they had to shoulder in money, staff time and resources, as well as their general experience. “So we know exactly what we’re getting into,” the mayor noted.
Councilman Steve Stefanovich expressed apprehension with the grant application, saying while the city wants to help businesses, he was “a little uncomfortable” with an application that proposed to create 20 jobs for a smaller operation.
“I wonder if it’s a little aggressive,” he asked. “I also really feel uncomfortable putting a lien on something that is for more money than we value the property. Those are two issues I have.”
Rose said the town of Roseboro has awarded two Building Reuse grants, but have also declined to participate in at least one application. “They have taken the stance that they would like to see detailed information, business plans, financial records and review that in depth prior to signing up for this particular project,” she said.
In regards to the number of jobs created, Rose said she checked with another restaurant in town that is similar to the bakery that would be established at West and Main. Currently, that business has 10 employees year-round.
“So, 20 is an aggressive — as you might say — number for a business that is not yet tested in our community,” said Rose. “Mr. Connet and I have discussed lowering the number of jobs from 20 to possibly 10, if Council felt more comfortable with that.”
Rose said there is another application deadline next month, as there is every month.
“This is each month,” she remarked. “There is another opportunity if the Council would like us to look further into this and get more information from the applicant prior to your approval.”
Connet said, based on the concerns, it would be appropriate to do “due diligence,” including developing a policy on how to deal with such Rural Center grants.
“We have had other applicants in the past and we’ve chosen not to move forward. There may be applicants in the future that we want to help and we should be consistent,” Connet said. “If we have a policy that has been approved by this Council, then when these folks approach us we can say ‘yes, this may be something we approve if you can meet this threshold or provide us with this information.’ If you have a formal policy you know you would not be setting a precedent. You could adopt a policy and be able to evaluate (an application) as it may be evaluated against other applications.”
Rose said there are two other businesses that wish to take advantage of the Rural Center Building Reuse grants.
“We want to try to assist businesses as much as we can with grant monies, and we probably will have other applicants coming before us,” Rose said. “It would be a good idea to set a policy and obtain more information. I think some financial information and a business plan would provide you with some added information.”
“I don’t think that’s asking too much,” Stefanovich said, “because I think it’s a great deal for those that qualify.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at sicrime@heartlandpublications.com.
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