CRA proposes $5M disaster relief loan program after Main Street fire; board schedules Oct. 14 hearing on budget amendment

Salt Lake City’s Community Reinvestment Agency (CRA) on Sept. 9, 2025, presented a proposed disaster relief loan program intended to help property owners in CRA project areas rebuild after the August Main Street fire and to accelerate recovery from future qualifying disasters.

Kate (city council staff) and CRA staff member Danny outlined the program and a related budget amendment that would reallocate existing CRA commercial loan funds. Danny said staff’s intent was to create an expedited financing tool that could be used in response to significant, verifiable damage from qualifying events (for example, fire, flood or earthquake) and be available again in future incidents.

Under the proposed disaster relief loan program (DRLP), eligible applicants would be existing property owners or long‑term lessees with direct, verifiable damage from a qualifying event. Eligible uses include demolition and site clearance, securing the site, design and engineering, construction and related rebuilding costs. The program is limited to properties within CRA project areas. Danny said the program is intended to provide “gap” financing and to be an “add-on, not a complete substitution” for insurance and other financing.

Staff proposed initial terms that include a three-year loan term (with an option to extend to five years), a 10-year amortization schedule, draws based on submitted documentation, no required payments for the first two years, 0% interest for the first two years, 2% interest in year three and 5% interest in years four and five if extended. Staff noted loans may be less secured than standard commercial development loans because of emergency circumstances; all loans would come back to the CRA board for approval.

To seed the program, staff proposed reallocating $5,000,000 to the DRLP, sourced from the CRA’s existing revolving loan and CBD funds (roughly $1.6 million from the CBD fund and about $3.5 million from the revolving loan fund), with an additional $9.425 million proposed for the commercial development loan program (CDLP) and a remainder held in reserves. Danny said $181,000 would be reallocated to the CDLP as part of the amendment.

Board members discussed several policy questions: whether the fund should exist in perpetuity or instead be allocated case‑by‑case; whether the loan should require rebuilding in the same location or permit relocation; what “time is of the essence” means in practice for quick reactivation; and the public‑benefit tests that usually accompany CRA financing.

Board member Pietro (also referenced as Petru in the record) asked whether the fund could remain available “in perpetuity”; Danny responded yes, but staff recommended the board specify an appropriate reserve level and deployment rules. Board member Mano confirmed the CRA loan discussion was intended to be property‑focused (the council is considering separate business-support funds), and staff said the loan’s primary purpose is to facilitate rebuilding of the damaged structure so it can be reoccupied.

On procedural matters the board approved the meeting’s consent agenda motion to set a public hearing and potential action on CRA Budget Amendment No. 1 for fiscal year 2025–26 (which includes the proposed DRLP allocation) for Tuesday, Oct. 14, at 2 p.m. The motion to approve the consent agenda passed 6–0 with Board member Lopez Chavez absent.

Staff repeatedly emphasized timing considerations: the DRLP policy would generally require application within one year of a qualifying event, staff said, and staff recommended adding clearer language about how quickly reconstruction must begin in order to meet the program’s intent of rapid reactivation. Board members said speed of reactivation was a priority and asked staff to consider time limits and conditional terms in underwriting recommendations.

Several board members proposed that the board retain oversight of loan approvals and public‑benefit determinations and asked staff to present clearer public‑benefit criteria for the DRLP; staff said the DRLP would not carry the same level of public‑benefit requirements as some other CRA programs because the overriding objective is fast rebuilding and reactivation.

Staff also noted one practical constraint: because the proposed DRLP funds are drawn from project‑area tax increment and revolving funds, the funds can only be disbursed within CRA project areas. That means property owners outside project boundaries would not be eligible under the proposed structure unless the board later chooses a different funding source.

Next steps: staff will finalize the DRLP policy language, return with loan applications for board approval as loans are requested, and present the Oct. 14 public hearing and potential action on the budget amendment and DRLP.