In neighborhoods across Philadelphia, the Commerce Department administers a small program that helps business owners on commercial corridors make improvements to their storefronts—painting, brickwork, new signs and awnings and other small changes that brighten up the city’s shopping districts.
The Storefront Improvement Program, which reimburses business owners for half the cost of storefront renovations, has been paid for in the past with federal Community Development Block Grant funds. It’s a relatively cheap program, at around $500,000 a year, but one that proponents say has a big impact in neighborhoods through the city.
But recent changes to federal guidelines for CDBG-funded projects have brought the program to a standstill. Now, any project that uses the funds and costs more than a certain amount is required to comply with prevailing wage standards for the area, and to document expenditures meticulously. The amount that triggers those requirements is $2,000. It hasn’t changed in decades.
On Wednesday, City Council’s Committee on Commerce and Economic Development held a hearing to discuss ways to salvage the program. The consensus among proponents is that the program could be paid for through the city’s general fund, which would allow users to avoid the federal prevailing wage and documentation requirements. The CDBG funds could then be diverted to other projects or programs.
“Through no fault of the [Commerce] Department’s and entirely due to federal restrictions, the new guidelines make [the Storefront Improvement Program] less accessible to small businesses, more expensive, and could lead to fewer dramatic transformations and far smaller projects,” said Beth McConnell, policy director for PACDC, in a statement at Wednesday’s hearing. “… It’s estimated that this will increase the cost of SIP projects by two to four times. Fewer businesses will be able to benefit from the program if the limited funds become spread much thinner.”
Alex Balloon, director of the Tacony CDC, said that 15 storefront improvements funded partly through the program have helped to transform the Torresdale Avenue commercial corridor in the last few years. Balloon said the CDC is in the process of improving 11 more storefronts, which will become “exponentially more difficult” with the new federal requirements.
“The toughest part of a program like this one is getting that first storefront completed on a commercial corridor, building that trust and taking that leap together,” Balloon told the committee. “That first storefront is an advertisement for what’s possible, and that things are changing for the better.”
Councilman Wilson Goode, Jr., who managed an earlier version of the program in the 1990s while working for the now-defunct Philadelphia Commercial Development Program, said conversations will continue about how to structure a more flexible and effective program funded by the city.
“Today’s hearing was a good public discussion on the value of the Storefront Improvement Program to the city,” said Councilman Bobby Henon, who introduced the resolution calling for hearings. “SIP is one tool among many that produces a multiplier effect, encouraging further investment, job creation and business activity in our commercial corridors.”
Council members will work with the Nutter administration to set aside general fund money for the program in the coming months.