SUBJECT/RECOMMENDATION:
Title
Amend the Loan to Grant Agreement with 949 Cleveland Street, LLC for the property at 943 Cleveland Street, to extend the agreement through July 15, 2025, for building improvements to implement the CRA Food and Drink Grant Program and authorize the appropriate officials to execute same.
Body
SUMMARY:
At the October 29, 2018, Community Redevelopment Agency (CRA) meeting, the trustees approved a time-limited grant program for property owners to support the establishment of new food and drink businesses that are open on nights and weekends in the Downtown Core and Prospect Lake districts of the CRA.
On February 18, 2020, the CRA Trustees approved the applicant’s proposal for a loan to grant in the amount of $187,632.50 for 949 Cleveland Street, LLC to build out a vacant storefront and establish a coffee and dessert shop that will serve hot and cold drinks along with a wide selection of desserts. The total project cost is $375,265.00.
On January 19, 2021, the CRA Trustees approved an amendment to the grant agreement for an extension to March 1, 2022, due to construction delays and the COVID-19 Pandemic.
On February 14, 2022, the CRA Trustees approved a second extension to March 1, 2023, due to the continued effects of the COVID-19 pandemic delaying progress as well as the applicant not being able to secure a general contractor until late 2021.
On February 13, 2023, the CRA Trustees approved a third extension to December 31, 2023, due to requirements with replacing the roof including structural engineered drawings, permitting, procurement, and a subsequent installation.
On December 4, 2023, the CRA Trustees approved a fourth extension to January 31, 2024 due to unexpected conditions, specifically the necessity for a roof replacement before the build-out work can begin. There was also a complication with the previous prospective tenant for the café space who withdrew their lease. The applicant has since acquired a new leaseholder.
On April 15, 2024, the CRA Trustees approved a fifth extension; the previous request for an extension was motivated by the necessity to provide the applicant’s newest tenant with the opportunity to design the space according to their vision and needs. However, during the work, the applicant encountered unexpected challenges regarding the electrical infrastructure. Upon further examination, it has come to the applicant’s attention that the electrical feed to the space is undersized, necessitating a complete update to the electrical feed to the main breaker to support the required power for the establishment. Addressing this issue has prolonged the applicant's timeline for completion, and they are currently working diligently to rectify the situation.
On November 14, 2024, the applicant requested a sixth extension; after securing a sushi and raw bar operator earlier this year, they unfortunately lost that tenant due to unforeseen financial constraints. However, they found and secured a new tenant who is committed to launching their business in the café space. The new tenant has signed the lease and paid the deposit. One of the key delays is electrical power to the café space, which is essential for the tenant to begin their preparations. Electrical work in the space has now been completed and been assigned a Duke Energy Designer. They were provided with a time of 2-10 weeks to have power on at the café and estimate being fully operational by March 2025. While Cleveland Street Market did not sustain direct physical damage from either Hurricane Helene or Hurricane Milton, the dual impact of these storms has significantly delayed their project’s timeline due to resource shortages and infrastructure challenges.
Given the unforeseen delays caused by the hurricanes, power restoration challenges, and tenant transition, Staff recommends amending this grant for six months to allow for the final completion date to be July 15, 2025. CRA staff has reached out to the business owner; Roy Harris and he feels confident he can be open prior to the deadline. Staff will be working directly with the Regional Manager of Cleveland Street Market to make sure they follow their timeline.
APPROPRIATION CODE AND AMOUNT:
Funding for this grant has been encumbered in 3887552-R2003 Economic Development- City
STRATEGIC PRIORITY:
2.1 Strengthen public-private initiatives that attract, develop, and retain diversified business sectors.
2.2 Cultivate a business climate that welcomes entrepreneurship, inspires local investment, supports Eco-friendly enterprises, and encourages high-quality and high-quality job growth
