TO: Urban Renewal Agency Board
THROUGH: Steve Powers, Executive Director
FROM: Kristin Retherford, Urban Development Director
SUBJECT:
title
Exception to the North Gateway Urban Renewal Area Grant Program for Ochoa’s Queseria
Ward(s): 5
Board Member(s): Ausec
Neighborhood(s): Northgate
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ISSUE:
Shall the Agency Board authorize an exception to the North Gateway Urban Renewal Area (URA) Grant Program to permit the use of $150,000 in committed grant funds for Ochoa Queseria’s purchase of approximately 1.3 acres at 3350 Portland Road NE?
RECOMMENDATION:
recommendation
Authorize the use of $150,000 in committed North Gateway URA grant funds for Ochoa Queseria’s purchase of approximately 1.3 acres at 3350 Portland Road NE.
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SUMMARY AND BACKGROUND:
Mr. Francisco Ochoa, owner of Ochoa’s Queseria, is interested in relocating his cheese factory from Albany to Salem. Mr. Ochoa is purchasing a vacant lot in front of the Cornerstone Apartments to develop as a manufacturing and retail space. Since Mr. Ochoa began working with the City in 2017, building construction cost estimates have been escalating. To complete the purchase and development of the site, Mr. Ochoa requests an exception to the North Gateway URA Grant policy.
Mr. Ochoa received a grant commitment from the Urban Renewal Agency on July 12, 2018, for $300,000. The requested exception is to apply $150,000 of the committed $300,000 towards his down payment for the purchase of the property. Program guidelines do not allow grant funds to be used for acquisition, only construction and capital improvements.
Construction and development of Ochoa’s Queseria is estimated at approximately $2.5 million. The U.S. Small Business Administration (SBA) requires that 10 percent of funding be available at the time of loan closing. Mr. Ochoa has $100,000 in cash available to match $150,000 in grant funding to meet SBA’s requirement. The bank and SBA have indicated the project will not move forward without this policy exception.
Mr. Ochoa’s project will bring activity to this long vacant site, provide jobs, and help meet retail and restaurant needs in the area. Mr. Ochoa’s business manufactures and distributes food products. He intends to continue these business lines while adding retail offerings that will include salsa, cheese, yogurt, and dairy products, with other food items to be added in the future. The project is consistent with the goals and objectives of the Portland Road Action Plan and the City’s Strategic Plan, including support for small and startup businesses, job creation, and new construction.
FACTS AND FINDINGS:
The Agency Board has approved policy exceptions to the grant programs in the Riverfront Downtown and North Gateway URA for other purposes, including grant amount and eligibility. Mr. Ochoa’s request conforms to the North Gateway URA Grant Program with the exception of how a portion of the funds will be used. The recommended exception is consistent with the overall intent and policy goals for the North Gateway Grant Program.
The North Gateway URA Grant Program grant criteria and the project’s compliance:
Section 1: Award Terms
Policy: Grant awards are limited to $300,000 for interior and exterior improvements. A 50% match is required by the applicant.
Finding: The $300,000 request is within the guidelines. Mr. Ochoa will be contributing a 50% match to grant funds.
Section 2: Eligible Recipient
Policy: Grant awards are limited to property owners or tenants with an executed lease and written consent of the property owner. Non-profit entities are ineligible for grants.
Finding: Mr. Ochoa will be the property owner upon closing making him an eligible recipient of the funds.
Section 3: Eligible Property
Policy: Properties eligible for grant awards must be located within the North Gateway URA, and must be “industrial, commercial, or mixed-use”.
Finding: Ochoa’s Queseria will be located at 3350 Portland Road NE, within the North Gateway URA, and the parcel currently meets zoning requirements.
Section 4: Eligible Grant Activities
Policy: Grant Program Policies eligible grant activities:
● Restoration or rehabilitation to face of a building in public view
● HVAC, electrical, plumbing repair or replacement
● ADA accessibility improvements
● Environmental remediation
● Building permit and design review fees
● New construction
Finding: Mr. Ochoa proposes to use half of the committed grant funds, $150,000, for site acquisition and the remainder will go towards new construction. Under the terms of Section 4, Mr. Ochoa requires an exception to grant policies to use funds for acquisition.
If the Agency approves the exception, Mr. Ochoa will proceed with acquiring the Portland Road property by September 15, 2018 and begin site work this fall.
Sara Long
Project Manager
Attachments: None