COLE/CLAYTON NEIGHBORHOOD COMMERCIAL REVITALIZATION STUDY
James Travis Busby 7 August 1980
ARCHIVES LD 1190 A78 1980 B864
TABLE OF CONTENTS
INTRODUCTION Page 1
ASPECTS OF THE PROBLEM Economic, Physical, and Social Decline Page 5
Employment and the Subeconomy Page 7
Alternatives and Objectives Page 8
THE PLAN Site Analysis Page 10
Principles for Revitalization Page 13
Anticipated Impact Page 18
Future of 34th Avenue Page 19
IMPLEMENTATION POSSIBILITIES Appropriate Programs Page 22
Case Studies Page 35
Survey Analysis Page 40
RECOMMENDATIONS AND CONCLUSION Page 43
BIBLIOGRAPHY Page 47
CONTACTS APPENDICES Page 48
The purpose of this study is to develop a plan and program for revitalization of a particular commercial strip along 34th Avenue in the Cole and Clayton neighborhoods. The plan would include refacing old building facades and other capital improvements. The revitalization will bring existing commercial structures up-to-date with other communities in the Denver area, as well as attract shoppers to the various businesses along this one-mile strip.
The Cole and Clayton neighborhoods are two of Denver's oldest neighborhoods. The decline of residential structures and activity has been accompanied by the decline of the commercial areas of the two communities. Revitalization of this commercial area along 34th Avenue would play a positive role in bringing new life to the Cole and Clayton neighborhoods.
The combined neighborhoods are census tract 36:01 for the Cole neighborhood and 36:02 for Clayton. Both areas have experienced a decrease in population due to some demolition of homes and consequent out-migration to other low-income housing in Montbello and Aurora. Between 1970 and 1978, there was a 7.4 percent population decrease in the Cole neighborhood and a 12.6 percent decrease in the Clayton area.
Median family income for the Cole neighborhood has decreased from $6,252 per year in 1970 to $5,770 per year in 1977. On the other hand, for the Clayton neighborhood, income has risen from $8,128 per year in 1970 to $9,059 per year in 1977. The difference in the median incomes of the two neighborhoods is accounted for in that the Clayton area is more of a lower-middle income community with a lower percentage of families on public income maintenance. There is no existing data on how much disposable income is available for these income levels. Only 43.1 percent of the homes in the Cole area are owner-occupied, making it a more transient area than Clayton, where 57.9 percent of the homes are owner-occupied.*
This report will look at the problems of the shopping areas, neighborhood characteristics, and transportation issues affecting business. An analysis of the location will include amounts and types of transportation on the streets affecting the sites, parking availability, and a rating of the commercial structures themselves.
The final section of this report will examine the cost of revitalization and the sources available.
* Source: Denver Planning Office
This will include a survey of what sources the business community has in loans and other assistance, the retailers' knowledge of these sources, and their willingness to get involved in a Local Development Corporation.
Support of a revitalization effort from both the private sector as well as the public sector is important to achieving various economic goals, some of which include:
To recapture a percentage of the Denver sales tax dollar;
To encourage and provide for a better employment base;
To attract a land use that is presently deficient and would ensure a balance to the area;
To use the theory of cumulative attraction to attract business consistent with the overall theme of revitalization;
To attract future land use that is compatible with the overall scheme;
To encourage and support a policy of 100 percent land utilization;
To use existing physical and cultural facilities to increase the economic base;
ASPECTS OF THE PROBLEM
ECONOMIC, PHYSICAL, AND SOCIAL DECLINE
The Cole and Clayton neighborhoods are typical of some of Denver's oldest poor communities in which the residential communities decline and the commercial communities subsequently falter. 34th Avenue has become a victim of this blight as a result of flight by retailers who have followed their steady clients to the affluent suburbs. They have left a void that is not being filled by marginal profit retailers who cannot afford to maintain the abandoned premises. As a result, 34th Avenue has become a languishing strip occupied by bars, liquor stores, ana very unsound and marginal food and retail businesses, which would only interfere with any above-marginal businesses' chances for success along 34th Avenue. The merchants only provide those who shop at their stores with the basic need items, such as food, soap, medicines, and this is because the people who shop at these stores have only enough money for these essentials of life.
Another aspect of the problem along 34th Avenue is the two bars, Glen's Grill and Duke's Bar. These two bars are gathering places for people in the communities. The most unfortunate thing is that fights break out, people are robbed, and intoxicated people roam the street. These
activities created by the the type of clientele patronizing the two bars give the impression that one is not safe to shop in the area, and thus people and retailers seek safer places to spend and make their money.
Another factor contributing to the overall negative conditions along 34th Avenue is that the strip lacks attractiveness. The starkness along the street is accentuated by paint on storefronts which has oxidized and has started to peel and fall off. Trim around the buildings is unmaintained. Windows are cracked and, in some cases, broken out and replaced with plywood. In the cases of Glen's Grill and Duke's Bar, there are no windows at all just brick. In most cases, the brick fronts on the stores are losing mortar.
The sidewalks and curbs in some places are in disrepair. The sidewalks are basically filthy from gum and people spitting. Trash, cans, paper, and broken glass are everywhere along curbs and sidewalks. Aoandoned cars towards the western end of the site detract from the already grim view, as do the broken signs and billboards located in unmaintained vacant lots. These commerical slum conditions along 34th Avenue present an environment that is not conducive to economic growth and development.
These conditions have caused the loss of two
major supermarkets in the neighborhoods Colorado Soopers at 34th and Clayton Street, and Safeway at 34th and Downing Street. Since the closures, the buildings have been vacant (the one at 34th and Downing has been vacant since 1976). For lack of a major food chain, a lot of potential customers are drawn anywhere from two or three miles away from home. Because of the income levels in these neighborhoods, some people don't have transportation and have to take taxis, thus expending money for transportation which could be used for food.
EMPLOYMENT AND THE SUBECONOMY
Employment is a problem in the area, especially among youth between 14 and 30 years of age. Most of the businesspeople in the area can barely employ members of their own families, let alone frustrated residents who seek employment from them. These unemployed youth are supported by participating in a "subterranean economy," which does not exist as a retail or industrial base, but is a source of income to the community. This illegal activity in some cases takes the burden off state employment offices and puts the strain on law enforcement, correctional institutions, and neighborhood residents.
The bulk of this activity is confined between Gilpin and Franklin Streets on the western edge of the site, where rents are lowest.
Where this activity will go if it is displaced due to commerical revitalization is uncertain. But it is certain that areas with low rents will be attractive to the activities of such a subeconomy. Other areas that could support such activity are Larimer Street between 28th and 40th Avenues, and the Holley Street and Dahlia Street shopping centers. The areas are somewhat blighted, and rents are low and would be attractive to bars, gambling, prostitution, and drugs, unless met with stiff opposition by neighborhood residents and communtiy organizations.
ALTERNATIVES AND OBJECTIVES
These conditions, however, are reversible if assistance is made available for planning of commercial revitalization. Loans and grants are needed for redevelopment, new construction, landscaping, and lighting. The establishment of a Local Development Corporation would be helpful. The Corporation would supervise construction over the project and also make the determinations on the needs and types of commercial shops to be located along the site.
In pursuing the economic and physical goals of revitalization, the following objectives should be considered in any plan developed for the area to effectively deal with the various aspects of the problem:
1. To make more commercial services available to the community.
2. To enhance the employment opportunities in
3. To revitalize the physical environment to reflect the natural beauty of housing and commercial structures in the area.
4. To preserve/restore the area's identity through accomplishment of the above.
5. To enhance property values through revitalization .
Location and Access
1. 34th Avenue is a minor collector street which runs east and west through northeast Denver.
2. The businesses being considered in this plan are located along 34th Avenue beginning at Clayton Street and terminating at Humboldt Street. Businesses are located on both sides of the street on 34th Avenue. The planned area of revitalization runs east and west one mile.
3. York Street, a north-south arterial, is a boundary street between the Clayton and Cole neighborhoods.
4. The physical location of businesses provides an easy access for vehicular traffic. On the street, parking is adequate, and parking lots are located at Clayton and 34th Avenue and at a shopping center on York Street.
The traffic arteries passing through the site are fairly heavily travelled. In 1979, the average daily traffic count along 34th Avenue, a collector street, was 6,950 and in 1971 it was 7,250 a decrease of 4.13 percent. *
* Source: Colorado Department of Highways
On York Street, a major arterial, the average daily traffic count in 1979 was 11,600, and in 1971 it was 13,300 a decrease of 12.7 percent.
Commercial Structures and General Area
There are 34 shops along the site. Seven, or 20.4 percent, are vacant. An evaluation of the commercial structures rates them from fair to poor.
In examining these stores, one finds that maintenance of the general area as been neglected. Paint in many cases has peeled away or faded. Trim around windows needs touching up. Windows have been broken and replaced with plywood, taped, or enclosed in brick, denying natural light altogether.
The fronts of the commercial structures show extreme age. In some places the bricks are losing mortar. Signs are in need of repair or replacement because of being broken and out-dated.
Conditions around these structures can also be rated fair to poor. Sidewalks and curbs around some of the stores are in need of repair. Sidewalks around the stores are filthy, creating a health problem. Broken glass, paper, and cans are scattered throughout the area.
In areas where there is space for grass or trees, the grass has died and weeds exist instead. The same exists in vacant lots along the site. Billboards in some of the lots are eyesores.
Rezoning will not be necessary along the site. Zoning along the strip is intermittently B-2 on either side of the street. The B-2 zoning is intended to provide locations for convenience shopping and service and office establishments to meet the daily or weekly "convenience"
needs of residents from adjoining residential areas. Building heights are controlled by bulk standards and open space requirements. Building floor area cannot exceed the site area.
The project area along 34th Avenue (Clayton to Humooldt) zoning is as follows:
1. R-2: Humboldt to alley between Humboldt
and Franklin (southside).
2. B-2: Humboldt to alley between Franklin
and Gilpin (northside).
3. B-2: Gilpin to alley between Gilpin and
*Source: Denver Planning Office
PUD; Williams to alley between Williams and
5. R-2: Gilpin to alley between Gaylord and
York (both sides, excepting B-2 #3).
6. B-2: Alley between Gaylord and York to alley between York and Josephine (both sides).
7. B-2: Alley between Josephine and Columbine
to Clayton (northside).
8. R-2: Alley between York and Josephine to
9. R-2; Alley between York and Josephine to alley between Josephine and Columbine (northside).
(See Appendix A)
PRINCIPLES FOR REVITALIZATION
The basic elements for the commercial revitalization of 34th Avenue include:
1. Refacing old facades on existing commercial buildings to bring up to code and streetscaping sidewalks.
2. Reviewing signage and sign codes for buildings and billboards in the area.
3. Repairing and improving sidewalks, streets, curbs, and alleys; improving lighting; putting in benches, and trash receptacles.
4. Obtaining funds for installation and maintenance of above-listed capital items.
5. Providing ongoing direction and policy for the revitalization to make it more functional and efficient (organizing and informing merchants of available assistance sources).
6. Providing zoning changes where necessary to ensure the most effective and efficient use of land.
7. Enforcing ordinances which deal with rubbish, abandoned cars and other factors which effect the appearance of the area.
The plan should be an official policy statement concerning the future development of 34th Avenue. It should be presented to and accepted by the Denver Planning Commission (including in presentation maps of proposed development drawn up by the planning staff or a private source). Finally, the plan should be adopted by the Denver City Council as a part of Denver's comprehensive plan for development.
A blueprint for revitalization is needed to guide the planning of the site and to maintain a cost-conscious budget.
For the economy of the design, inexpensive materials and the use of existing structural and mechanical items need to be considered, as well as cutting back on specialized labor to avoid high construction costs. One support program to be considered actually demands some saving in labor by requiring merchants to use volunteers for the needed work.
The appearance of 34th Avenue should remain consistent with the fabric of the neighborhood with respect to color, detail, scale, and content. The exteriors of the shops should use durable and easily-cleaned material which clearly reflects the neighborhood in a defined concept. Landscaping should create an attractive environment interfacing the neighborhood. Open spaces for pedestrian circulation should be developed or preserved as much as possible, with an effort to minimize hazardous traffic conditions in the area. Exterior lighting should exist through the main traffic areas. Crime prevention lighting should be incorporated. Storefront lighting should reflect taste and not disrupt visual aesthetics.
Security is also needed to protect all parties from theft and other destruction. The use of existing city services should be utilized, as well as store alarms and the above-mentioned crime lighting. All structures should be made to conform to a uniform building code.
Estimated Costs of Material and Labor*
The materials listed below were used for a commercial building similar in design and age to the buildings along 34the Avenue. The costs are an estimate of what it would cost per building. The same criteria applies
Material Amount Cost/Unit Total
Stucco lath (3-1/2 lb) 22175 sq. ft. $ 2.25 $ 500.00
Stucco 250 sq.yd 15.50 3875.00
25 sq. yd I. 20.00 500.00
Roughsawn cedar planks 200 ft. $4.75 mfbd $ 95.00
Brick paint salmon 1105 sq.ft. .26 287.00
ext. primer burgundy 450 sq.ft. .26 117.00
+ 2 coats -- turquois 10 sq.ft. .26 3.00
Stucco paint salmon 1890 sq.ft. .25 473.00
Metal paint yellow 120 sq.ft. .26 32.00
turquois 120 sq.ft. .26 32.00
burgundy 120 sq.ft. .26 32.00
Wood paint red
Primer + 2 coats 100 sq.ft. .22 22.00
Stain sealer + 2 coats
Walkway 60 sq.ft. .30 18.00
Brick Building 240 sq.ft. .30 72.00
(1) 10x10x12' 1 2 ft. 850 mfbd 10.00
(2) 8x8x10' 36 ft. 850 mfbd 31 .00
(12) 4x4x10' 120 ft. 400 mfbd 48.00
Walkway trellis 218 ft. 900 196.00
*Source: Linda Stansen, Planner/Architect
Material Amount Cost/Unit Total
Plywood (window modifications) 1 20 sq.ft. .39 47.00
Sills 2x4 205 ft. 348 mfbd 72.00
Storefront brick bldg. 370 sq.ft. 4.70 1739.00
stucco bldg. 550 sq.ft. 4.70 2585.00
Windows stucco bldg
(275 sq.ft. ) 12 150.00 1800.00
Doors brick bldg. 2 81.00 162.00
Frame 3x7x1-3/4 2 55.00 110.00
Tiles 550 8.00 4400.00
TOTAL $16 ,808.00
GENERAL LINE ITEMS UNIT COST LABOR MATERIALS TOTAL
Sod Sq. Yd 1 .80 5.00 6.80
Trees Each 1 .50 3.50 5.00
(does not include purchase price of tree $125 - 130)
Patterned concrete Sq. Ft 4.00 2.60 6.60
Finishing Sq. Ft .40 .10 .50
Concrete curb planters Each 1 ,000 600 1 ,600.00
Brick planters Each 600 300 900.00
Timber planters Each 400 200 600.00
GENERAL LINE ITEMS UNIT COST LABOR MATERIALS TOTAL
Flagstone Sq. Ft. 4.00 4.50 8.50
Concrete Sq. Ft. 2.75 1 .75 4.50
Presumably, such a revitalization project would have a positive effect on the communities because the resultant increase of business taxes would improve the overall tax base for continued maintenance of present capital structures as well as providing new sources for planned projects.
As a result of increased business in the area, more employees would be required, thus creating a larger job market in the retail sector for the Cole and Clayton neighborhood residents.
Construction jobs for minority contractors would open up during the life of the project.
Overall revitalization could result from money coming into the neighborhood from private sources for investment in housing, thus improving the quality of life for the area residents.
The overall negative aspect would be an increase
in property taxes for merchants and homeowners. In many revitalization projects, small and marginal businesses cannot afford to participate, especially if they are renters where property owners must raise rents to repay rehabilitation cost.
Another consequence of such a project would be the shifting of criminal elements to other parts of northeast Denver due to increased security and community pressure to reform the bars and related activities.
FUTURE OF 34TH AVENUE
34th Avenue has remained an ethnic center for blacks for at least 25 years. Conditions in the area have declined over the years at a somewhat steady pace to its present state today.
Today though, commercial strips are organizing and taking advantage of starting relationships with the community, the city, federal and private investors. Using the resources made available, the commercial strips are drawing income from the neighborhood as well as attracting outside income through advertising their revitalization.
With support from the community and city officials, 34th Avenue could become a viable commercial com-
munity in an area which could benefit greatly from its existence. The neighborhoods to the east and south are changing because of the gentry's flight from the suburbs back to Denver's northeast urban community. This reverse flight is bringing stability to an otherwise unstable area. The 1980 census will probably reflect more stability in population trends and family size as well as personal income in the Cole and Clayton neighborhoods.
The project would be consistent with Denver's policy toward economic growth and development, which is reflected in its development of downtown Denver, South Broadway, and other commerical areas within a three-mile radius from the center of town. 34th Avenue is only five minutes from the CBD of Denver and should reflect the same positive direction toward a healthy tax base.
There are also industries nearby which generate traffic through the area. As the area becomes more attractive, people on their way through would become more likely to spend their disposable income for food, gas, gifts, etc.
The growing stability in income, the traffic resulting from industry, together with the cooperative effort on behalf of the city and community, the private
sector, the merchants, and the federal government are all elements which could work together to re-create an economically healthy commercial strip along 34th Avenue.
The following are sources which would be important to the success of implementing and maintaining the revitalization plan. The particular sources considered and described for this project were chosen because of their design and policies toward helping small marginal businesses. In this instance, some of these programs can provide the necessary assistance for the success of the project by strengthening the merchants' skills and abilities. The agencies seem to be able to provide the necessary lines of communication to community businesspersons who may not be able to establish themselves by any other means. The policies and goals of these various agencies are designed so that impacted areas are given some priority in the types of services delivered to minority concerns.
Because most businesses are operating at marginal
levels within the project area, these programs are valuable
in enabling the commercialA to get on its feet and provide needed services to the Cole and Clayton as well as surrounding neighborhoods. It is important to try to boost the project area's businesses above a merely marginal level to succeed in overall revitalization.
Colorado Economic Development Association
The Colorado Economic Development Association (CEDA) is a private nonprofit business development center
which serves northeastern Colorado. CEDA is funded by the Minority Business Development Association/U.S. Department of Commerce. CEDA provides its services at no cost to minority ousinesses with net sales of more than $100,000 and who employ five or more people.
The service that CEDA offers which will be most beneficial to merchants along 34th Avenue is business planning. This department assists businesspersons to secure commercial or SBA loans to start up, buy out, or expand a business. The business planning specialist helps in preparing formal loan packages.
Another CEDA program germane to the mercnants on 34th Avenue is the management and technical assistance staff. This staff schedules visits with clients and prospective clients to determine their needs, capabilities, and how CEDA can be helpful in providing services. CEDA provides information on business and community resources and business problems and opportunities. A referral service is available to locate professional assistance in accounting, legal problems, marketing and other business needs.
Urban Development Action Grant Program
Community Development Block Grant Program
Since the project is designed to revitalize the local economic base along 34th Avenue, the area should
qualify for funding for materials and labor through Urban Development Action Grant program (UDAG). Action grants are designed to assist severely distressed cities that have neighborhoods with distressed economies.
In addition to the action grant program, there is the Community Development Block Grant program (CDBG). The CDBG program is a funding program for neighborhood facilities, open-space land, water and sewage facilities. The cities are left to their own discretion on how to use the funds.
The above two programs are suitable for this commercial revitalization project because they are able to provide grants, loans, and loan guarantees for such activities as rehabilitation of commercial, industrial, or residential structures.
In an effort to bring these two publically funded programs into what could be a profitable union, one major requirement is that the plan project must have some private commitment of loans and/or other assistance from a bank or investor.
For selection, certain HUD project crieteria are considered:
1. The impact of the community's proposed project on low and moderate income persons and minorities.
2. The nature and extent of financial participation by the private sector in the project.
3. The extent of financial assistance made available by the State.
4. The nature and extent of financial participation of other public entities (such as city government or other federal agencies) in the project.
5. The extent to which the project creates new jobs or to which current permanent jobs are retained.
6. The impact of the project on the physical, fiscal or economic deterioration of the community.
7. The extent to which the project represents a special or unique opportunity to meet local priority needs that are consistent with economic revitalization or reclamation of neighborhoods.
8. The feasibility of accomplishing the project in a timely manner -- generally three or four years --within the total resources, both public and private, which will be provided.
9. The applicant's demonstrated performance in carrying out housing and community development programs.*
* Source: HUD
Small Neighborhood Projects Program
Within the project area are conditions of blight and a virtual commercial slum, thus qualifying for the Small Neighborhood Projects program. CDBG provides the funding source for the program. The monies for the program are administered by the city of Denver's Community Development Agency.
The Mayor's Advisory Council has requested that these funds try to create neighborhood self-help efforts, e.g., by providing grants from $500 to $10,000 to be used on the public right-of-ways. The possible uses include tree planting, tree trimming, sod and landscaping in residential and neighborhood commercial areas, materials for attractive sidewalk containers, miniparks, etc.
The program could be significant in solving one aspect of the problem of the site. The public right-of-way area along 34th Avenue is in need of curb repairs, and the sidewalks, because of their condition, could use brick paving, sodding, and landscaping such as that offered under the Small Neighborhood Projects Program. Trash is another problem along the strip, and under the program it is feasible to request sidewalk trash containers to alleviate some of the litter problems.
The community and in this case, the commercial
community along 34th Avenue must show its sincerity by a commitment of tools or supplies or cash contributions in order to match any monies being offered by CDA (or form a special improvement district).
In order to submit an application, the merchants of the Cole and Clayton neighborhoods must form an active association or commercial revitalization corporation (Local Development Corporation) to be funded. This group would be accountable for all expenditures of funds and completion of contracted projects. The groups must document actual cash and in-kind community commitments made by individuals, businesses, or service groups used to implement projects. Documentation must be kept as simple as possible. The application procedure simply requires that the merchants organize and meet with a CDA staff member. The application should be as short as possible, one or two pages. (See Appendices B and C).
The Small Neighborhood Projects Program would be a positive program for the Cole/Clayton commercial revital-iztion effort. The program's most important element is that it can possibly unify the merchants along 34th Avenue, which in turn should serve to strengthen the development of the community altogether.
One thing the communities need is a program that
is not complex or time-consuming as far as red tape is concerned -- this program only requires that all parties be committed. The impact of the program would be positive because it would involve the commitment of all involved. It also would take a burden off a lot of businesses which might have a cash flow problem and would be unable to come up with the hard cash needed to make improvements. Such a project could also provide a psychological boost for merchants as well as the two communities by creating an opportunity to work at increasing the economic base of the commercial area through cooperative effort.
Small Business Administration
The main goal of the Small Business Administration (SBA) is the preservation of free, competititve enterprise in order to strengthen the United States economy. Their objectives are to stimulate small business in deprived areas, promote minority enterprise opportunity, and promote small businesses' contribution to economic growth.
The Small Business Administration is available to small manufacturers, wholesalers, retailers, service concerns, and farmers. Other businesses may borrow from the SBA to construct, expand, or convert facilities or to purchase buildings, equipment, materials, or to obtain working capital.
SBA's definition of a small business is one that is "independently owned and operated, not dominant in its field and meets employment or sales standards developed by the agency."
Loan requirements of SBA are somewhat general. SBA asks that the business be of good character and show the ability to operate successfully. The business must have enough capital to provide a sound foundation. It must be able to assure reasonable repayment and show a past earning record with future projections. The last criteria reads, "Be able to provide from his own resources sufficient funds to have a reasonable amount at stake to withstand possible losses, particularly during the early stages, if the venture is a new business."
SBA asks that a business exhaust all possible sources before approaching them. If loans are not available on reasonable terms, the SBA will guarantee up to 90 percent of $350,000 (or in special cases, $500,000).
In addition to granting loans, SBA has a technical assistance component built in. Service corps of retired executives and individuals from SBA jointly hold workshops for owners and managers in areas of business planning, marketing, financial factors, sources of capital,
recordkeeping, insurance, and legal entity. SBA publishes educational aids which are used to help the inexperienced management of a business. These aid manufacturing, service firms, and retailers in planning, organization, personnel, financial data analysis, etc. (See Appendices D and E).
The specific loan programs which SBA offers for this type of revitalization project fall into three variation packages:
First, the 7(a) Loan makes direct loans and guaranteed insured loans available to small businesses which are unable to obtain financing in the private sector.
Second, the Economic Opportunity Loan is made available directly to businesses owned by low-income or socially or economically disadvantaged persons.
Third, the 502 Loan is made in association with local lending institutions which make SBA-guaranteed, low-downpayment, long-term loans at reasonable rates. The 502 Loans require a small amount of capital to qualify, and monthly payments are lower than conventional loans. Under the revitalization program, the SBA 502 Loans may be used to purchase and/or expand and renovate a building, construct new facilities, renovate exteriors, and modernize structures.
Economic Development Administration
The Economic Development Administration (EDA) gets its authority from the Public Works and Economic Development Act of 1965.
EDA's mandate is to assist in the financing or refinancing of business development projects. Assistance comes in the form of direct loans or purchase of evidences of indebtedness to finance the cost of fixed assets. The direct loans provide working capital for businesses and guarantee loans to private lending institutions to provide working capital. EDA also provides loans for employee stock option programs.
Business development assistance is offered to businesses which are eligible as determined by EDA. The type of businesses that may apply are business enterprises which include sole ownership; partnerships; cooperatives; nonprofit organizations or associations (not excluding cooperatives); state and political subdivisions, including instrumentalities and quasi-public corporations; Indian tribes; and private lending institutions not necessarily banks but not limiting banks, savings and loan associations, insurance companies, factoring companies, investmnet bankers, and venture capital investment companies (exclud-
ing speculators). In order to receive assistance, the business must be approved by an agency of the state concerned with economic development.
Financial assistance is limited to $10,000 of EDA investment per job created or job saved in a targeted area.
Another area where EDA is concerned is in the field of operations or management. They believe capable and experienced management is vital to the success of a business. EDA rquires that participants submit information on age, education, technical training and buisness experience for management personnel. If necessary, EDA will provide technical assistance. This technical assistance is general in regard to the specific need of the business. EDA will also provide assistance in areas that have been identified by either party. (See Appendix D).
National Consumer Cooperative Bank
Cooperatives are cost-conscious operations which enlist the cooperation of members by buying bulk and passing the savings on. The members also volunteer to work at the cooperative stores, thus cutting the cost of labor.
One possibility for the project area is to start a cooperative grocery store at one of the vacant building
locations mentioned previously. Should the Commercial Development Corporation consider such an idea, there is funding available which is uniquely designed for cooperatives .
The National Consumer Cooperative Bank Act (P.L. 95-351) was signed into law by President Carter on August 20, 1978. The bank will be a mixed ownership government corporation.
It is designed to provide financial and technical assistance to organizations chartered or operated on a not-for-profit basis to produce or furnish goods, services, or facilities for its members as consumers.
National Consumer Cooperative Bank's goal is to promote comparable growth of consumer cooperatives through the American economy, hopeful.ly reducing inflation and increasing people-oriented economic development. To accomplish this, legislation was passed establishing a bank to make loans at market interest rates to cooperatives in a variety of fields. Title II creates a self-help development fund and technical assistance capability to assist low-income cooperatives or cooperatives with special needs.
The Self Help Development Fund (Title II) objective are to promote the development and growth of existing and new cooperatives, mainly low-income cooperatives. The
fund will provide assistance in the operational and financial needs of particularly low-income cooperatives. The goals will be implemented through capital advance policies designed to maximize the long-term operational and financial health of cooperative being served.
The fund will be used as an advocate for consumer cooperatives which will maximize the use of its resources by initiating participation and working with the cooperative bank, other financial institutions, cooperatives, organizations, governmental agencies in loans, guarantees, insurance and subsidies.
The priorities are to concentrate lending activities on cooperatives which demonstrate the capacity and ability to benefit low-income persons substantially. They wish to stabilize troubled cooperatives and promote the growth of stable cooperatives in areas of the numbers of people served, variety of services offered, quality of services offered, quality of services delivered, and savings to members.
The definition used to determine low income is "an individual whose family income is less that 50 percent of the median income for a family of four in the states, territory, possession or standard metropolitan statistical area." In order for a cooperative to qualify for funds
they must have a membership consisting of low-income persons or have a majority of low-income persons (in which 50 percent of its members are low-income persons). A cooperative may use the loan to finance a facility, activity, or it can be used predominantly by low-income persons who are located in a census tract or subsection.
In considering an approach to the implementation of a revitalization project, it is important to examine similar efforts which have been successful. Two such projects will be described below.
Broadway Neighborhood Business Revitalization Program
An effective model for commercial revitalization projects is the Neighborhood Business Revitalization Program. This was a combined effort of HUD, SBA, EDA, and the Denver Community Development Agency (CDA).
The program's objectives were to upgrade, preserve, and strengthen commercial areas showing signs of physical and economic decline. The area that was designated for the project runs from 2nd and Broadway south to Bayaud Street in the Baker neighborhood.
A Local Development Corporation was formed,
consisting of merchants and area residents, who named themselves the Metropolitan Denver Local Development Corporation (MDLDC).
To achieve a plan of many elements, MDLDC had to be responsible for the following:
1. Maintaining open communications with city officials and affected merchants concerning future public works projects in the area, zoning changes, and other
matters that require municipal adjustments.
2. Group advertising and promotion for special events and sales in the revitalization district.
3. Recruitment of new businesses into the area to assure the proper economic mix of business products and services.
4. Implementation of special management responsibilities such as certain recordkeeping, general maintenance of the revitalization district, and special security measures.
5. Establishing of exterior design standards.
6. Election of corporate officers.
7. Reviewing and authorizing applications for the special SBA 502 business expansion and renovation loans.
The funds that were used for this project came from SBA, particularly their 502 Loan program. Under the revitalization program, the SBA 502 Loan could be used to purchase and/or expand and renovate a building, construct new facilities, renovate exteriors, and modernize structures. Merchants interested in acquiring such funds applied through MDLDC, which acted as lender of community development "injection money" or "seed money." The amount of money might have ranged from 2-1/2 percent to 10 percent of the total SBA guaranteed loans. With seed money availablity, the merchants could make an application to borrow money through a bank. In turn, the injection money was lent to MDLDC, which then loaned the money to a business at low interest rates. The loan to the merchants made it possible to qualify for an SBA 502 Loan.
In the spirit of cooperation desired by HUD, the city of Denver -- through the Local Development Agency committed itself by providing the following resources to this particular neighborhood (Baker neighborhood) and its tax base:
1. Noting that some small businesses did not have cash to hire an architect, one was made available through CDA.
2. The injection money required by the SBA 502 Loan program was made available through CDA.
3. A local development coordinator was made
available through CDA as a laison between MDLDC, the city, and SBA.
4. A public works project to improve the visual character of the area would be determined by the city and MDLDC.
5. CDA would finance a marketing revitalization
6. Promotion and general advertising would be provided by the city until MDLDC had the funds.
7. CDA would provide a professional loan packager to bring together government financing programs and the private sector.
Colorado City is one example of a successful commercial revitalization project in Colorado. The project is located in Colorado Springs, about 60 miles from Denver. Colorado Avenue is the street on which the businesses are located, just west of Colorado Springs' CBD. The project, before being annexed into Colorado Springs, was originally called Colorado City because its has a rich history in gold mining and Civil War participation.
was an area of
Colorado City, prior to 1975, rundown buildings with businesses that had experienced steadily declining sales. Sidewalks were in disrepair, as were streets and homes surrounding the commercial area. The area had acquired a bad reputation because of a cowboy bar which is located in the middle of the project site and was the scene of violence on many ocassions.
The revitalization project was begun in 1975, and its prospects were perceived as grim. The project started with inquiries to the city of Colorado Spring's Community Development Department, which then organized the business community to form the Westside Commercial Club, which has the responsibility to oversee loans granted and other merchant concerns. The Commercial Club has involved the community in the project through organizing a maintenance and security advisory committee, local neighborhood organizations, and a local neighborhood housing service which is responsible for home improvement loans.
The sources that were the keys to the success of the Colorado City project were HUD (UDAG, CDBG) SBA (502 loans), and EDA. Using these to complement each other, the impact has been an overall improvement in Colorado City's commercial strip. In 1975, 45 percent of 98 commercial structures were empty. Today there is 100
percent occupancy. There were 62 businesses in 1975, and by 1979 the total number of businesses had increased to 107. Gross sales rose from $2.5 million in 1975 to $6.4 million in 1979. In 1975 only 372 people were employed on the strip compared to the 733 who were employed in 1979 Rents increased from $1.00 per square foot in 1975 to $4.75 per square foot in 1979 The 1979 assessed valuation of the commercial property was 124 percent greater than in 1975. Finally, Colorado City's sales tax has increased by $100,000 per year.
With the revitalization 98 percent complete, the area has become a very attractive part of the community. Through good planning and design, Colorado City has been able to maintain its natural beauty as well as preserve buildings and community elements such as a pawn shop and the bar mentioned earlier. Both of these businesses have remained as community gatnering places without the violence of the past because of community pressure for reform. The prospects for the project are very favorable.
To further study implementation possibilities, a survey was conducted. The purpose of the survey was:
1 ) to determine the receptivity of the merchants to a revitalization program; 2) to find out what the merchants knew about funding programs; and 3) to determine what types of assistance the merchants are receiving, if any, from any of the available funding programs.
Responses to the following questions were: % YES % NO
1. Do you have any Small Business Aamin-
istration loans? 0 100
Do you have any Economic Development Administration assistance? 0 100
3. In general, do you know about any of these programs: Economic Development Administration, Urban Development Ac-
tion program, or the Local Development Blocks Grants program? 30 70
4. Are you a member of a Local Development Corporation? 0 100
5. Do you feel there is a need for a Local Development Corporation? 100 0
6. Would you participate in a Local Development Corporation? 70 30
7. Would economic revitalization benefit the community, i.e., a minimall or new fronts and landscaping for stores? 100 0
8. Would you want your business to participate in any effort for a Local Development Corporation revitalization? 80 20
9. Would you accept low interest assistance? 70 30
In terms of the polled merchants and businesses that would get involved, the response was overwhelmingly favorable, which suggests that the merchants are
willing to commit themselves to such a project.
There would have been more businesses (a total of 10 were contacted), but many were not do not keep regular hours.
surveyed open and
Based on the experiences of the Broadway redevel-
opment project and the Colorado City project, the most adequate and relevant sources available seem to be HUD's UDAG program, S BA programs, and EDA programs. These programs have been praised by the participants because of the lack of red tape and, most importantly, their emphasis on letting the grass root community organizations decide their own destinies when it comes to the distribution of monies and, in some cases, labor (i.e., in the case of Small Neighborhood Projects Program).
The programs recommended for the project have demonstrated an ability to work together and make make up for the shortcomings in an overall revitalization project. This ability to complement each other has been evident in the success of Colorado City's use of HUD's Block Grant and Action Grant program to provide public capital improvements and still use SBA's 502 monies for capital improvements on refacing their stores and repairing other items without a conflict in uses of government monies.
The SBA, HUD, and EDA programs are designed to bring all parties together for the common good of a project and are not limited to just economic revitalization of a commercial strip, but are concerned with housing,
recreation, education, etc. For this reason, these programs would be highly recommended for the Cole/Clayton neighborhoods since not only the commerical site is in need of a boost, but housing and recreation is as well. These programs are tailored to community input and will let the community decide what is best for them -- and give them the responsibility.
The following recommendations are meant to be a guide to help the merchants along the site get off to a good start with the revitalization project. Most of the information contained herein would be necessary in dealing with HUD and/or city officials.
1. Organize into a Local Development Corporation and get in touch with city councilpersons to start gathering support. Include the neighborhood planner and possibly get in touch with the Center for Community Development and Design to help with the initial planning.
2. Coordinate with Colorado Economic Development Association a timetable for putting together a loan package if this is to be an alternative to receiving grants and other federal assistance.
3. Start recording the corporation's goals and
objectives, i.e., five-year forecast, ten-year forecast, etc.
4. Get individual books ready as well as individual personal finances for the purpose of acquiring loans and grants.
5. Start to consider design standards (what the storefront is to look like) for the neighborhood. Use the design criteria.
6. To show a commitment to the project, get in touch with a city councilperson and demand that the area receive street cleaning services as do the more affluent commercial areas in Denver.
7. Start to clean up individual areas, especially the backs of shops get in touch with the zoning inspector for the area and demand that he/she start to enforce the codes.
8. For the Small Neighborhood Projects Program, start talking to neighborhood churches, construction companies, and service organizations to acquire labor, tools, etc. for the streetscaping project. This should be good for the project are visually, as well as gaining the necessary community support and giving the participants a sense of ownership.
9. Work with the planning office to get zoning to have large billboards removed from the site. (Under the Denver sign code passed in 1976, these signs have to be removed witin five years.)
10. Consider attracting a supermarket to the area to occupy the 34th and Clayton location. There are smaller grocery stores in the area which might want to expand, or a cooperative venture could be considered. Funding for such projects could be sought from the sources listed earlier.
These recommendations, when used by the merchants or Local Development Corporation, should help to start a dialogue with the necessary parties. Merchants in the area are willing to commit themselves to improving their neighborhood and their plight -- and the resources are there to aid them in this attempt. The merchants must take the first step.
City and County of Denver, Overview of Urban Economic Development, Volume One Denver, Colorado May, 1979
City and County of Denver, Summary of Denver's Economic Condition, Volume Two Denver, Colorado April, 1978
City and County of Denver, Economic Development in Denver, Agenda for Action, Denver, Colorado December, 1977
Colorado D.O.L. E/Division of Employment and Training, Colorado Employment Projected 1974-1985 Occupation and Industry Denver, Colorado September, 1977
Fernsterom, John R. Bringing in the Sheaves Oregon State University, Corvallis, Oregon June, 1977
Weistart, John C., Community Economic Development Oceana Publications, Inc., Dobbs Ferry, New York 1972
John Harris, Planner Denver Planning Office
Harriet Hogue, Planner Denver Planning Office
Center for Community Development and Design 629-2816
Colorado Springs Commercial Club 2504 West Colorado Avenue Colorado Springs, CO 471-7823
Director of Business Planning
Colorado Economic Development Association
Linda Stansen Planner/Architect
Dianne Truwe or Bill Lysaught Denver Community Development Agency
SMALL NEIGHBORHOOD PROJECTS PROGRAM Summary of Proposal Package
1. Neignborhood(s) or Neighborhood Group(s):
2. General Boundaries:
3. Description of overall neighborhood need(s) this proposal package is addressing
4. List projects:
Please describe each individual project or activity on the following pages.
SMALL NEIGHBORHOOD PROJECT
Name of Organization:____________________________
Meeting Dates: __________________________________
Neighborhood^) which will benefit from project:
Approximate Cost of Project:
How will this project benefit your neighborhood(s)?:
No. of Peopia Involved:__________________________________________
Amount or Community funds and/or participation available for project:
EDA DESIGNATED AREA ^ SITE