Businesses receive DDA funds to help properties

October 17, 2009
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Julie Lee, who hopes to open a new restaurant, next month on Monroe Center, received a financial boost last week from the Downtown Development Authority. So did longtime downtown resident Design Design, which is starting a new related business in the sector.

At the same time, the DDA enlarged its longstanding incentive package for businesses, with an eye toward helping retailers further develop their spaces.

Lee is planning to open Angel’s Thai Café by the end of next month at 140 Monroe Center NW, once home to Four Friends Coffeehouse. She was visibly pleased when the board approved her grant request of $8,450, money Lee will use to build barrier-free restrooms and install a fire-suppression system.

“I am very humble that I’m in a city where all of the leaders are supporting my business,” she said. “So far everything is moving forward.”

Lee, who owns restaurants in Detroit and Southfield, is spending $160,000 to turn the space into a full-service restaurant. Her grant money comes from the board’s Building Reuse Improvement Program, which has an annual budget of $200,000.

Lion Property Management Inc., which is led by Donald Kallil, who also owns Design Design, was given a $50,000 BRIP grant to help defray the costs of renovating the first and fourth floors of the five-story building at 19 LaGrave Ave. SW. Kallil will invest $534,000 into the project and the DDA funds will go to covering the cost of façade improvements, barrier-free access and a fire-suppression system.

DDA members also approved Kallil’s request for a state industrial tax abatement. He is starting a new business called Verdant Graphics LLC, which will primarily serve his existing entity Design Design.

Kallil is planning to spend $1 million to purchase a new digital offset printing press for Verdant Graphics and will install the chemicals-free press on the first floor of 19 LaGrave, also known as the Design Design building. Verdant Graphics will also have a small retail component.

The abatement would be for 12 years and would exempt half of the company’s taxes over that period. City commissioners will hold a hearing on the request this week, even though the DDA will exempt the taxes because the business is located within the board’s district.

“They are a designer and manufacturer for wholesale sale,” said Jay Fowler, executive director of the DDA. “They definitely are industrial.”

DDA Counsel Dick Wendt estimated the tax would be $11,000 a year, and half of that amount would be exempted each year.

“While we are abating, we’re also capturing 50 percent from something that wasn’t there,” said Mayor George Heartwell, also a DDA board member.

The DDA adopted BRIP incentives aimed at downtown retailers last week, grants for up to $25,000 and $5,000. Businesses and building owners can use the larger grant to build out a ground-floor storefront, while the smaller grant can be spent on exterior signs.

In both cases, the grants can’t exceed 75 percent of the total cost.

“We are starting to get into looking at some improvements to help retail. We think this will be a great resource,” said Eric Pratt, a DDA planner, of the storefront grant, which is good for vacant and occupied spaces.

A storefront upgrade doesn’t have to be LEED certified, as that process could prove to be too costly for entrepreneurs. “The upkeep and maintenance is an issue,” said DDA member Cathy Mueller.

The board also raised the maximum BRIP grant amount that can be awarded from $50,000 to $75,000. But the higher amount is only available if a project includes sustainable features like a green roof, solar panels, wind turbines or stormwater recovery systems.

“These changes don’t change the eligible activities (that the board can fund),” said Fowler of barrier-free access and other useful upgrades. “The only new piece is the signage piece.”

The DDA has awarded more than $2.4 million in BRIP grants since the program’s inception in 1995. Those funds have helped leverage over $109 million in private investments downtown. When the program began, 70 vacant buildings dotted the district; 60 have since been renovated with funding from the program.

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