Council directs staff to seek new peer grant activity to allow public building for gateway hub

The Talent City Council on July 2 directed staff to request that the regional peer committee authorize a new activity under the city's CDBG peer grant that would allow use of funds to construct a public building to house a business incubator or gateway hub.

Staff reviewed two alternatives discussed previously: (1) spend existing infrastructure-eligible grant funds on public infrastructure that would support the site, or (2) ask Oregon Housing and Community Services (OHCS) to add an economic-development activity that would authorize construction of a building for a business incubator. Staff said OHCS responded to questions about reporting and eligibility and clarified how low- and moderate-income (LMI) job tests would be applied to incubator tenants.

Staff told the council OHCS's guidance was that businesses whose employees are regularly on-site count toward the LMI job calculation; businesses with employees working entirely off-site would not be counted. Staff also reported OHCS clarified that dedicated on-site building components (foundation, footings, parking specific to the building) generally count as part of the building cost and not eligible as separate infrastructure under the existing activity; public infrastructure off-site and shared parking might be eligible as infrastructure.

Councilors asked whether federalization (using federal CDBG dollars) raises costs due to Davis-Bacon/prevailing-wage and related rules. Staff said federal funding does increase costs in several ways but noted much of the environmental review for the site has already been completed; they also said the commercial construction prevailing-wage differential is generally less severe than on residential projects.

Staff presented simple cost illustrations: a 2,500-square-foot commercial incubator built at $500 per square foot would cost about $1.25 million for the building alone, plus site-prep and other costs, bringing a likely total into the $1.5 million to $2 million range.

After discussion, a councilor moved and the council seconded a motion directing staff to request that OHCS create a new economic development activity under the city's peer grant to allow construction of a public building; the motion passed on a roll-call vote with all members present voting yes.

Councilors and staff agreed that if the peer committee denied the requested amendment, the grant funds would remain in the existing infrastructure activity and staff would pursue infrastructure-level uses that comply with the grant, and that staff would continue feasibility and market studies in parallel as the peer process proceeds.