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III.2. Overview of 2024 Grants and Loans; Howard, Larson, and Needham CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Kurt Howard, Planner; Mikala Larson, Sustainability Specialist; Revée Needham, Community Development Manager Date: May 7, 2024 Subject: Overview of 2024 Grants and Loans _____________________________________________________________________ PURPOSE Staff will share information and program changes on three funding opportunities for Hopkins businesses and residents. This is for information only; no action is needed. INFORMATION To better promote three City programs, staff have worked together to create a joint application and share information on three funding opportunities: Hopkins Climate Solutions Fund, Façade Improvement Program, and Hopkins Small Business Loans. More information on the programs can be found on the City website at: https://www.hopkinsmn.com/1181/Grant-and-Loan-Opportunities. Hopkins Climate Solutions Fund (HCSF) The Hopkins Climate Solutions Fund (HCSF) was established in 2023, driven by inquiries from residents and businesses regarding incentive opportunities for sustainable improvements such as solar, electric vehicle infrastructure and energy system improvements, and direction from City Council to develop a green cost share program for sustainable property improvements. Staff worked with local consultant, Local Climate Solutions, to develop an equity-centered program that focuses on providing incentives for items which are likely to have the greatest impact on resiliency. The program takes into consideration existing rebates from utility providers Xcel Energy and CenterPoint Energy, and planned State and Federal rebates and tax credits as part of the IRA legislation passed in 2022. In 2023, $150,000 of American Rescue Plan Act (ARPA) funds were allocated to fund the Hopkins Climate Solutions Fund program. In the first year of the program, solar energy system installations and electric bicycle purchases were the two most popular projects. HCSF will be available to the community for its second year in 2024. $200,000 of franchise fees are budgeted for the program. The program structure will remain the same, with three separate buckets of funding for income-qualified residential, residential, and commercial projects. The program follows the Federal Justice 40 initiative by allocating 40% of the funding for the program to underserved communities. Ten technologies are available for income-qualified residential and residential applicants, including a Home Energy Squad Planner visit, insulation and air sealing, electric panel upgrade, cold climate air source heat pump system, heat pump or Engineering; Planning & Economic Development tankless water heater, solar energy system, and electric bikes. Renters are eligible to apply for the program, but need property owner approval on all project applications, except for electric bicycles. There are six eligible technologies available for commercial projects including LED lighting upgrades, solar energy system, Level 2 electric vehicle charging equipment, and electric bikes. After receiving feedback from applicants, staff increased the LED lighting rebate from a maximum rebate of $1,500, to a maximum rebate of $10,000. Using findings from the Heat Vulnerability Study, staff established the Green Infrastructure Bonus, that makes a bonus rebate available to eligible multifamily or commercial properties that are in the urban heat island area of concern along either the Blake Road or Excelsior Boulevard corridors. To access the Green Infrastructure Bonus, eligible properties would need to complete site improvements that increase shade, and/or convert 10% or more of dark impervious surfaces to cool pavement, provide shade trees, or replace rooftops with white membranes or green roofs. Staff anticipate receiving more applications than funds are available, therefore a randomized lottery will select the winners. Projects must begin following the application closing on June 28. Projects must be completed by December 31, 2024. Complete Hopkins Climate Solutions Fund program guidelines are available online: https://www.hopkinsmn.com/1149/Hopkins-Climate-Solutions-Fund Façade Improvement Program The Façade Improvement Program was originally established in 2015 and has been offered approximately every other year, in 2015, 2017, 2019, and 2022. The purpose of the program is to strengthen the vitality of Mainstreet by improving the pedestrian experience, increasing building transparency, and beautifying buildings through façade revitalization efforts which will have a lasting impact on downtown Hopkins. The program offers technical and a total of $100,000 financial assistance (up to $25,000 per project) to property and business owners to help improve commercial building façades. The Façade Improvement Program structures its financial assistance as forgivable loans which are structured as 10-year loans with no payments, and 10% of the original loan amount is forgiven each year over the 10-year term. If the building is sold before 10 years, the remaining balance of the loan must be repaid by the property owner. To date, the City has invested $285,000 into 16 façade improvement projects to leverage over $1,000,000 in façade improvements in downtown Hopkins. To continue its momentum and expand the impact of this program, the area of eligibility has been expanded for the 2024 round of funding to include all commercial properties between 7th Avenue and Shady Oak Road and between 1st Street N and 1st Street S. Complete program guidelines are available online: https://www.hopkinsmn.com/1009/Facade- Improvement-Program Hopkins Small Business Loans In 2022, City Council discussed and approved the American Rescue Plan Act (ARPA) spending plan, which included $75,000 in mini grants to small businesses to support economic development. The city has until the end of 2024 to allocate the ARPA funds. The Small Business Loan program is a onetime program funded by ARPA. The program will be structured with no-interest forgivable loans, capped at $5,000. The program will be open to small businesses and nonprofit organizations within the city. Eligible expenses in the program include exterior publicly visible physical improvements such as awnings, lighting, painting, landscaping, fencing, outdoor seating, public art, and improvements that remove barriers for accessibility. Staff anticipate more applications than funds are available, in which case a randomized lottery will select the winners. Recipients will enter into a loan agreement with the city and will receive their loan disbursement. After recipients report their approved expenses with recipients, the loan will be forgiven. Complete program guidelines are available online: https://www.hopkinsmn.com/1185/Small-Business-Loan-Program. Promotion of the Programs Staff are promoting the programs to the public via multiple measures. The programs have been or will be shared via the city’s communication channels including Hopkins Highlights (May-June), Hopkins Connections, a press release, social media, and the city website. Staff are also targeting specific individuals and groups including Hopkins Apartment Managers Association (HAMA), Hopkins Business and Civic Association (HBCA), contractors, and Access Hopkins. In addition, staff will be mailing information about the HCSF to properties within the Green Infrastructure Bonus Zone and mailing information about the Façade Improvement Program to properties within the boundaries of the program. Staff have presented at the Hennepin County Library and will be presenting at an Energy Incentives Program Breakfast and HAMA meeting on May 7th, and tabling at the June 15th Farmers Market. Staff are preparing flyers to be distributed within the community. Staff welcome feedback on the selected promotional opportunities and any additional outreach ideas. Application and Timeline To streamline the programs and make it easier for folks to apply, staff created one application that covers all three programs. The application will be available online from June 3 – June 28, 2024 at: https://www.hopkinsmn.com/1181/Grant-and-Loan-Opportunities. After the application deadline has passed, staff will review the submissions for completeness and contact the selected recipients for next steps. FUTURE ACTION Staff will share progress of the programs with City Council.