Bend advisory board weighs narrower façade grants, explores revolving loan fund for core-area investment

Jonathan Taylor, urban renewal project manager for the City of Bend, presented proposed reforms to the core-area business assistance program and asked CAB whether staff should pursue a revolving loan fund to fill financing gaps for development in the core area.

Taylor said staff's preliminary proposal would reformat the existing program to fund only exterior façade and frontage improvements, eliminate interior and non-primary-frontage projects, and limit the urban-renewal grant to a 50% match up to $10,000 (meaning a maximum project cost of around $20,000). "The proposed purpose is we need to begin establishing the program criteria and parameters for the administration of this beautification grant program and recommend that to Burra for their consideration in the future," Taylor said.

Staff described the 2023 program as budgeted at $100,000 but disbursing roughly $64,250 to four businesses, with 83% of that prior round going to interior work and 17% to exterior work. Staff recommended focusing grants on rapid visual improvements (facades, doors, windows, lighting, signage, awnings, murals and frontage landscaping) and using reimbursement payments rather than progressive invoicing after the 2023 round proved administratively difficult.

CAB members and outside participants raised multiple timing, design and equity questions. Several board members urged inclusion of soft costs (design, permits, climate-resilient planting selection) either as part of the grant or through on-call design resources; other members argued that an upfront reimbursement requirement creates a barrier for small businesses that lack capital. One member suggested a preapproved vendor list or lender outreach so businesses could obtain short-term financing and expect municipal reimbursement.

A local banker, who asked to be identified in the transcript as Baker, said lenders can often structure short-term covenants to anticipate reimbursement: "We do loans all the time from very small to very large, and we do take into consideration, when a client has gotten some sort of grant from the city, and that we know that's coming back for reimbursement, we can put covenants in there ... there's definitely ways we can ... work around things like that," Baker said.

CAB members debated the correct scale for the program. Several said a $10,000 cap (reimbursed at 50% so the city's portion is $10,000) would limit impact and suggested alternatives including raising the cap, reducing the match, or pairing the grant program with a larger catalytic or revolving loan fund for projects above the grant threshold. Taylor said the city is also studying a revolving loan fund as a gap-financing instrument and asked CAB whether staff should pursue further research; the proposed RLF would be TIF-funded and must comply with state rules for capital improvement in urban renewal (staff referenced ORS 457),