HRA staff outline $1.4M commercial-corridor assistance pilot, propose 17 corridors and $82,000 per corridor

St. Paul HRA staff presented a draft commercial-corridor assistance program that would allocate $1.4 million in Economic Development STAR funds to support organizations working along 17 identified business corridors, with roughly $82,000 per corridor and an emphasis on quick, flexible funding and measurable economic-development outcomes.

Director Newton and Principal Project Manager Daniella Lorenz described the proposed program as a pilot intended to provide district councils and business-support organizations with streamlined, corridor-wide funds for activities such as corridor-wide beautification, public art, planning, marketing, community events and business subgrants. Lorenz said the goal is to make the program “as simple and streamlined of a way as we can to advance economic development projects and programs on those key corridors in Saint Paul.”

Program design and eligibility - Total allocation: $1,400,000 in Economic Development STAR funds reserved by the City Council in 2024. - Proposed geographies: 17 corridors, generally following district council and ward lines; staff estimated approximately $82,000 per corridor. - Eligible applicants: identified organizations with a history of supporting corridor economic development — district councils, business-support organizations and permitted partnerships among groups. Funds would not flow directly to individual businesses; they must flow through an eligible organization. - Eligible uses: corridor beautification and place-making, public art installations, planning work, corridor marketing, community events, business subgrants and other flexible support. Staff proposed allowing up to 10% of each allocation to cover indirect or administrative costs.

Compliance and thresholds Staff discussed compliance issues for construction projects. Ms. Lorenz said projects at or above a construction compliance threshold will trigger additional requirements such as prevailing-wage obligations. She identified the compliance threshold discussed by staff as $24,099.99 for construction-related projects, noting that projects at or above that level require extra administrative work and compliance oversight.

Timing, contracting and reporting Staff proposed a tentative timeline that would open applications on a placeholder date of April 1 and close them on June 1, accepting proposals on a rolling basis so staff can work with applicants and put organizations under contract quickly. Lorenz estimated an end-to-end contract process would take roughly three months for most organizations. The program would also include quarterly check-ins and an annual report from grantees so the city can measure economic-development outcomes and collect materials for public reporting.

Commissioner feedback and concerns Multiple commissioners praised the pilot concept and offered feedback. Commissioners asked staff to: - Consider whether to eliminate or raise proposed project maximums to allow more flexibility while clearly marking the compliance threshold and its implications for construction work. - Clarify whether subgrants could cover operating losses tied to construction mitigation, noting staff cautioned that funding tied specifically to mitigation of transportation construction could raise fairness concerns and the perception of “picking favorites.” - Provide a clear map or spreadsheet of corridor boundaries and prime organizations so commissioners can advise on local adjustments; staff asked for prompt feedback to finalize geographies. - Consider aligning contract periods with calendar-year contracting used by district councils so funding and reporting cycles are simpler for existing partners.

Funding and administration Director Newton clarified the funding is STAR (city) funding and the program’s guidelines will ultimately be finalized and brought to City Council for approval. Staff signaled a preference, where feasible, for providing organizations a budget up front rather than a purely reimbursement-based model, noting existing models such as Cultural STAR that disperse a significant upfront share. The HRA team said staff will weigh legal and compliance considerations when determining the exact disbursement approach.

Next steps Staff will finalize guidelines based on commissioner feedback, finalize corridor geographies, and prepare materials for the City Council. They plan to begin outreach to eligible organizations once guidelines are approved and to start contracting quickly if launch dates can be met.

Why it matters: The pilot is intended to funnel flexible, locally controlled dollars to organizations that can support business districts and small businesses across St. Paul. Commissioners emphasized equity across wards and the need to align contracting timelines so organizations with limited administrative capacity can participate.