Revolving portion of jobs fund should impact downtown development

ALBANY — Albany City Manager Sharon Subadan is a traveler. And as such, she has a good feel for what visitors are looking for when they stay at hotels and motels in a community.

“I don’t want to disparage the dining options at hotels like the (downtown Albany) Hilton Garden Inn, but hotel dining is usually a last resort for guests,” Subadan said. “Unless they’re under time constraints, people want to see part of the community they’re staying in.”

But, Subadan notes, that’s not the case with the Hilton Garden Inn because there is a paucity of dining options in close proximity to the hotel. That’s one of the things the city manager hopes to change with plans to redevelop Albany’s downtown.

That process will move forward quickly if, as expected, the Albany City Commission approves an intergovernmental agreement today that will complete city purchase of downtown property at 115-133 Front Street and 100-112 Pine Avenue. The transaction, already approved by the Albany-Dougherty Inner City Authority, would be the first in which a revolving $5 million portion of the city’s lauded Job-Enhancement Fund is used for downtown development.

The city’s Long-Term Financial Planning Committee and the City Commission previously approved use of up to $5 million of an $18 million-plus fund that is a one-third share of credits returned to the city’s Utility Board by the Municipal Electric Authority of Georgia.

“If we get approval on Tuesday, we’ll move quickly,” Subadan said. “We’ll finalize the process through which we’ll market the property and start taking applications on specific properties. We’ve had a lot of conversation about downtown development, but we’re ready to move beyond conversation. It’s about to get real.”

The City Commission’s approval of use of the Job-Enhancement Fund has not been without controversy, but the Long-Term Financial Planning Committee — comprising members of the City Commission and the Albany Utility Board — told the commission that specific safeguards drawn into the plan diminish any risk of needing the fund and not having it available.

“If that money (from the Job-Enhancement Fund) is needed to help us bring a large industry here that will bring needed high-paying jobs to the community, the portion being used for downtown development will be repaid immediately,” LTFPC Chairman and City Commissioner Tommie Postell said. “This is a way for us to spur downtown development without jeopardizing the funding we have in place to try and bring industry here.

“I would not support anything like this if I felt this funding was in jeopardy.”

When city leaders discovered that MEAG, an authority comprising Georgia cities and counties that use their collective bargaining and purchasing power to negotiate less expensive energy for authority members, planned to return funding it had collected from its member utility authorities as a hedge against deregulation that never came, they faced a problem many governments would love to have. With its Water, Gas & Light Commission (now Utility Board) serving as the second-largest user of MEAG services — and, thus, having paid the second-most in deregulation funds — the city was due a significant windfall.

An almost $100 million windfall.

Department managers who’d done without in lean years leading up to the influx of MEAG funding suddenly saw an opportunity to get some of the things they coveted. City officials were inundated with ideas on how to spend the MEAG windfall.

After meeting some of the demands for the “new” money — including development of a Gang Task Force and making improvements on the then-WG&L offices — the Albany City Commission decided they needed to find a means of utilizing the return so that it had a lasting impact on the community. A plan, championed by LTFPC member and City Commissioner Bob Langstaff, called for dividing the credits into thirds.

One third of the funding went into the city’s general fund for operations, another into WG&L’s operating budget and the other third was placed into a trust that would be used to help lure businesses to the community. Economic developers statewide lauded the city’s decision, noting that it now had a leg up on other communities seeking to lure businesses.

With then-Albany-Dougherty Economic Development Commission President Ted Clem and Vice President Justin Strickland helping devise a plan for use of what came to be known as a Job-Enhancement or Deal-Closing fund, the city started placing one-third of MEAG returns into a trust that could be used as grants to incentivize job enhancement.

Albany-based Thrush Aircraft has so far been the only recipient of a Job-Enhancement grant, its plan to bring 100 new jobs to the community earning it eligibility for a $200,00 award. With no other takers so far, the Job-Enhancement Fund’s balance has soared past $18 million.

“We’ve heard from all over the state that this fund really sets us apart when it comes to economic development,” Strickland, who has replaced Clem as president of the EDC, said. “When we were developing the thresholds, we relied on input from state developers.”

Elgibility for the fund is based on a sliding scale of jobs created and total economic impact. Minimum thresholds are 100 new jobs or a total community investment of $10 million. Some have suggested — including candidates for the City Commission — that those thresholds be lowered to give smaller businesses or industries an opportunity to qualify.

“What makes this fund unique is that, first, it has built-in flexibility,” Strickland said. “And second, it has multiple layers of control. Any application (for a grant) is reviewed by the EDC, which will run an economic impact analysis. It then goes to the Long-Term Financail Planning Committee for approval and to the City Commission for approval. Plus, before any funds are disbursed, it must be approved by the (joint city/county) Payroll Development Authority.

“Frankly, I haven’t heard an overwhelming concensus that the thresholds that are in place need to be changed. I’m afriad if you lower them too much, you’re going to have a grant pool that’s cumbersome to manage.”

Subadan, meanwhile, said equal scrutiny will be applied to applicants who want to use the revolving portion of the Job-Enhancement Fund to incentivize downtown business development.

“There will be criteria in place,” she said. “We’re looking for businesses with sufficient working capital, with a solid business plan and with a track record of operating a successful business. And we want businesses that fit. It’s like that old saying, ‘You can have anything, but you can’t have everything.’ We want businesses that can be successful downtown, like restaurants and eating establishments that will show guests at the Hilton Garden Inn what our community is about.

“One thing we really want to stress is that we don’t want turnover. I know a lot of potential business owners are well-intentioned, but a wish and a prayer will not be enough for what we’re trying to do downtown.”

Strickland said that while the city has an opportunity to spur downtown development with the revolving portion of the Job-Enhancement Fund, he cautions those who are getting antsy about the lack of use of the larger fund.

“Look, the original intent of this fund was large-scale industrial investment,” the EDC chief said. “We don’t need to lose sight of that. Economic development usually moves slowly. This fund is a long-term investment, and I have no doubt that it’s going to end up paying dividends for this community at some point in the future.”