The Villages of Carthage and West Carthage propose a $600,000 Small Cities funded commercial revitalization effort that supports economic growth through additional employment opportunities created by addressing severe slums and economic blight along the contiguous "Main Street" area. The proposed project area runs along State Street in Carthage and down Bridge Street in West Carthage to its intersection with Broad Street, which runs perpendicular to Bridge Street. In addition, "like function" microenterprise applications that conform to the goals specified herein, are located within the corporation limits of the Villages of Carthage and West Carthage, but may not be located within the primary target area of our "Main Streets" are also eligible through the program. The proposed program will leverage an additional $80,000 in local investment for technical service and support to small business owners and follows a four-pronged approach to address the identified needs:

1. Providing grant funding to downtown property owners for façade and commercial space improvements leading to increased occupancy and job opportunities as well as the retention of jobs to low and moderate income persons;
2. Provide needed financing to microenterprises for business expansion leading to job retention and increased job opportunities for low and moderate-income persons;
3. Provide new and existing low-to-moderate income owned businesses with access to technical assistance in developing and implementing a business plan as well as developing approaches to marketing existing goods and services while expanding opportunities in response to consumer need;
4. Public improvements to streetscape. 71% of the microenterprise grant is directed to small businesses along the "Main Street" corridor with 29% of the grant funding used by the joint municipalities for public improvements within the same area.

The Small Cities Program would provide funding for interior and exterior improvements to microenterprise business property owners ($260,000), public improvements ($170,000), revolving loan fund ($110,000), administration ($20,000), and program delivery ($40,000). An additional $80,000 in local investment will support a technical assistance program to small businesses ($30,000), on going technical assistance for the implementation of long-range planning ($50,000).

Based on focus group discussion, and business/building owner surveys, it is anticipated that the villages proposed activities would assist 6 low-to-moderate income owned businesses, 11 commercial building owners renting/leasing businesses to low-to-moderate income persons, and the retention of 20 full-time and 19 part-time jobs of low-to-moderate income employees. In addition, business owner surveys indicate additional opportunities for low-to-moderate income persons, based upon the economic growth of existing businesses.

The Villages of Carthage, incorporated on May 26, 1841, and West Carthage, incorporated on March 11, 1889, are located in the northeast portion of Jefferson County, New York and are joined by a bridge that spans the Black River. Early economic development of these communities centered on the importance of the papermaking industry along the Black River corridor. Additional industrial growth centered on the provision of raw materials and chemicals for the refinement of paper products as well as the development of a strong retail economy to service local residents. While Carthage housed much of the industry and supporting businesses between the two municipalities, residents from West Carthage provided much of the labor force and consumer spending, thereby complementing and supporting the needs of one another.

In 1998 two major employers of the Village of Carthage ceased operations and closed their doors permanently, raising the local unemployment rate within the Villages of Carthage and West Carthage to approximately 30%. In response, the villages retained the services of DMG-MAXIMUS to complete a management study that would develop a range of alternatives to consider in providing more efficient and effective services to residents. The New York State Comptrollers Office, Jefferson County Planning, Jefferson County Job Development Association, Development Authority of the North Country, and Tug Hill Commission provided staff assistance for the study and continue to provide ongoing technical service and support (See Appendix A: Management Study Summary).

As recommended by the management study, the River Area Council of Governments (RACOG) was formed through an intermunicipal agreement between the Towns of Wilna and Champion and Villages of Carthage and West Carthage on February 29, 2000 and signed into effect on June 20, 2000. RACOG was approved for a Quality Communities Grant in late October of 2000 and contracted with a circuit rider to manage projects initiated by RACOG (See Appendix B: Intermunicipal Agreement).

Funding from the Quality Communities Grant provides financial resources to implement a two pronged approach to a community development action plan. Currently, Jefferson County Planning and Tug Hill Commission Planners are assisting local Planning Boards with a comprehensive review of all land use controls and administrative procedures that will outline recommendations for standardization, cooperation, and/or consolidation that increases the capacity and effectiveness of the municipalities of RACOG.

In conjunction with the comprehensive review of land use controls and administrative procedures and under the direction of RACOG, an ad hoc advisory committee is working on revitalization initiatives along the "Main Street" areas of Carthage and West Carthage. An intermunicipal revitalization and neighborhood redevelopment plan for the twin Villages of Carthage and West Carthage from which specific development initiatives will be guided and/or supported is currently being designed through direct community input and contracted services with a consultant.

In preparation for the development of long-range community planning associated with the Quality Communities Grant, RACOG formed an ad hoc advisory committee in January 2001 with combined representation from Carthage and West Carthage reflecting local officials, business and property owners and interested parties. The purpose of the ad hoc advisory committee is to gather information and make recommendations to RACOG regarding community revitalization. A comprehensive list of short & long-term goals has been identified by the committee through informal focus group discussions and a door-to-door canvas of commercial building owners along the "Main Street" corridor (See Appendix C: Short & Long Term Goals List). In addition, property owners of existing businesses along the target area have completed 20 business/building owner surveys (See Appendix D: Surveys). The committee is currently inventorying existing structures along the "Main Street" area to identify community assets and needs to address in the long-range plan.

In preparation for the Small Cities Microenterprise Application, a "Business Owner Survey" along the target area through door-to-door canvassing was implemented to gain specific information relevant to the application. Also, included in the data gathering and analysis are focus group and individual discussions with relevant representatives from 3 local lending institutions, realtors, government officials, and the Carthage Area Chamber of Commerce.

Multiple structures along the designated downtown historic district of State Street have been vacated and condemned due to years of neglect and disrepair, with several of the structures crumbling to the degree of posing a danger to surrounding residents. Empty storefronts, boarded up windows, vacant upper level floor space, and the lack of commercial business are visual reminders of days gone past. Left remaining are the slums and economic blight that challenge remaining business and property owners in the downtown area with the day-to-day struggle of operating at a margin of profit that threatens their existence.

Three prominent structures in the designated downtown historic district along State Street face uncertain futures due to ongoing neglect and disrepair. Also facing uncertain futures are three prime commercial sites owned by aging business/property owners attempting to sell their property in a downtown commercial real estate market that no longer exists due

to the continued decline of the local retail economy. The following are examples of prominent buildings in the downtown historic district of Carthage along State Street.

Pictured above is the Stately Old Buckley Building, a prominent historic building registered on the State and National Historic Preservation List in the designated downtown historic district of the Village of Carthage. Recently condemned and windows boarded up due to the threat to public safety. (See Appendix G: Media Reports)

Pictured on the previous page is the partially collapsed, boarded storefront, and prime commercial site of the Condello Building for the bargain price of $10,000, which greets visitors entering

Carthage and detracts from the Black River as a natural resource to attract economic development around tourism.

The unoccupied prominent "Old Levis House" is covered in a façade that completely covers its historic features. Located along State Street in Carthage, it is unoccupied and recently faced foreclosure, facing an uncertain future as the state of disrepair and partial collapse of its back exterior walls demand an assessment of its architectural stability.

The property and business owner of the Carthage Furniture Store has announced the June 1, 2001 closing of the business following the failed attempt to sell the expansive prime commercial property for over 3 years. Pictured on the right, and adding to the list of vacant prime commercial boarded up space is the "Old Jubilee Building," located on Bridge Street and a constant reminder to residents of the plight along the "Main Street" area. A total of 7 prominent commercial buildings along "Main Street" are vacant with more than half-facing uncertain futures.

Scattered small business owners along Bridge Street providing retail service to community residents struggle to survive in a local economy that continues to decline. Needed small business repair to interior and exterior commercial structures detracts from business expansion through the promotion and marketing of available service and product lines to prospective customers. Several small business owners in both Carthage and West

Carthage has expressed concern over the sustainability of small business along the "Main Street" areas if the decline in economic conditions continue to persist.

In contrast, West Carthage is experiencing economic growth in the retail service industry

along Broad Street (Route 126), a main thoroughfare to and from multiple destination

points reflecting a strip type development of nationally recognized retail chain stores. However, the rapid economic development that has taken place over recent years along Broad Street lacked long-range local community planning for complementary streetscape improvements to facilitate the flow of pedestrian traffic.

Based on multiple focus group discussions, and business and building owner surveys of residents and business owners in Carthage and West Carthage, the visual appearance of the respective "Main Street" area is a focal point for attracting business into the downtown area. Therefore, the target areas for the proposed activities are microenterprise businesses along the "Main Street" area encompassing Bridge and State Street. The strip type development of nationally recognized retail chain stores currently taking place along Broad Street generally excludes it from qualifying for the CDBG microenterprise program. However, the importance of Broad Street as a main thoroughfare and its relevance to directing traffic to the downtown area of Bridge and State Street with appropriate signage and streetscape improvements is a crucial element for economic revitalization. Also to be considered would be "like function" microenterprise applications that conform to the goals specified herein, are located within the corporation limits of the Villages of Carthage and West Carthage, but may not be located within the primary target area of our "Main Streets." (See Appendix E: Respective "Main Street" Map)

1. Declining Employment

The Jefferson County economic indicators for the year 2000 report the decline of jobs in manufacturing from a quarterly average of 4,300 in 1999 to 4,100 in 2000. During the same time period jobs related to service industry increased from 9,600 in 1999 to 10,300 during 2000 and jobs in the mining and construction industry increased from 1,200 in 1999 to 1,500 in 2000. In comparison, employment associated with manufacturing is generally full-time and offers a higher pay scale with benefit packages that include medical coverage, vacation pay, as well as a retirement plan. While jobs in the service and construction industry are often seasonal, pay minimum wage or slightly above, and lack additional benefit packages. (See Appendix F: Jeff. Co. Economic Indicator Report)

In addition to the loss of manufacturing jobs that paid relatively high wages in comparison to lower wages associated with service industry jobs, multiple supply and service companies serving the paper industry have also reduced the number of workers to reflect the downward spiral effect to the local economy. According to Jefferson County Job Development Association an estimated 1000 jobs have been lost in Jefferson County, further increasing the first quarter unemployment rate for 2001. Projections would

therefore indicate the median family and per capita income would reflect a decline from the 1990 census figures and further increasing poverty levels to higher percentages.

The county’s quarterly average unemployment rate rose to 9.2% in 1999 and declined to 8.3% during the year 2000. The rate of unemployment continues to average twice as high as the nation as a whole and substantially above New York State’s average rate. The disparity is amplified during seasonally high unemployment periods. For example, Jefferson County’s unemployment rate soared to 12.2% in February 2000, compared to 5.3% for New York State as a whole during the same period. Compelling evidence of the continuing economic disparity between the county and the rest of the state (See Appendix F: Jeff. Co. Economic Indicators).

The Villages of Carthage and West Carthage have been especially hard hit in recent years, beginning in 1998 with the closure of the Fort James Paper Mill and the loss of 350 jobs, and the loss of another 134 jobs during peak operations with the closure of Carthage Machine. Although a new company has since moved into the Fort James site, the new business only created 40 jobs and projects additional 35 jobs, based on the growth of the business. In addition, Carthage Machine has also reopened its doors for business under new management and employs 24.

In March 2001, the Deferiet Paper Company permanently closed its doors and eliminated 525 manufacturing jobs. A significant portion of those employees had come from nearby Carthage/West Carthage. Also this year, the Johnson Lumber Company in West Carthage laid off 35 of its 50 employees and Climax Manufacturing in neighboring Castorland laid off approximately 60 workers during a temporary shutdown. Furthermore, the West End Dam Hydro Associates and Tannery Island Power Company are currently being reassessed through a nationwide program to reduce property tax assessments to power producers, reducing the overall tax base for the Village of Carthage. Over the next three years the village is expected to lose $7,000,000 in property tax assessments, resulting in the possible loss of 5 full-time village positions or a significant tax increase to residents (See Appendix G: Media Reports).

2. Demographics

According to the 1990 census information 4,344 residents live in the Village of Carthage with (16.64%) or 723 persons living below the poverty level, compared to (11.84%) for the rest of Jefferson County. The median household income of $21,964, is about $10,000 below the national poverty level. The per capita income is only $10,039. (See Appendix H: 1990 Census Info.)

The Village of West Carthage has 2,166 residents with (11.18%) of its residents or 243 persons living below the poverty level. The median household income of $24,674 is

$7,000 below the national poverty levels with a per capita income of $11,263. (See Appendix H: 1990 Census Info.)

Both Villages rank below the $25,929 median family income and the $11,160 per capita income for Jefferson County as a whole. (See Appendix H: 1990 Census Info.)

Absent from the 1990 census information is the shift in population that has taken place over the past 10 years as a result of the economic downturn and permanent plant closures as well as the loss of higher-wage jobs related to factory operations. More recent figures from the 2000 census report reflects an estimated (14.34%) loss of population to the Village of Carthage or 623 residents, while West Carthage is down (2.9%) of its population or 64 residents. The combined loss of population between the two Villages is (10.55%) or 687 residents.

3. Carthage/West Carthage Building Assessment Surveys

In preparation for the development of long range community planning for existing commercial property along the "Main Street" area, data was gathered from the "Building Assessment Survey" to inventory property owners of small businesses along the target area to identify commercially leased, rented, and owner operated businesses. The survey was also used to determine utilized and vacant commercial space as well as identify the status of upper level floor space for purposes of identifying the needs of commercial property owners and their willingness to invest in their property. In addition, data was incorporated with previously gathered information from focus group discussions to formulate a comprehensive list of short & long-term goals. Reoccurring issues and concerns of business owners were also identified and documented with attention drawn to consistent themes over a larger sample group for purposes of prioritizing a comprehensive list of business needs and priorities.

The survey was designed and administered by the RACOG Circuit Rider through a door-to-door canvassing of small commercial business owners along Bridge and State Street, ensuring a high response rate within the target area. 21 building assessment surveys were disseminated through door-to-door canvassing with 20 surveys (95%) completed. The gathered information was then recorded into a database and queried. Copies of the original survey responses are included in the appendix with the originals kept on file at the Village of Carthage Municipal Building office of the Circuit Rider located at 120 South Mechanic Street, Carthage, New York 13619. Following is a summary of the "Building Assessment Surveys:"

• 21 Building Assessment Surveys were disseminated through door-to-door

canvassing;

• 20 Building owners responded to the survey;
• 20 Building owners also operated a business on the property site;
• 3 Building owners are jointly owned and operated;
• 10 Building owners are male owned;
• 1 Building owner is multiple family owned and operated;
• 3 Building owners are currently in the process of selling the business;
• 1 Building owner opted not to complete survey as final sale arrangements are in

place;

• 4 Building owners responded their property is for sale for the right price;

3. Business Owner Survey

In preparation of this Small Cities CDBG Microenterprise/Public Improvement Application, a business owner survey was conducted to identify small business owner needs and determine their willingness to build on existing assets. The survey was designed and administered by the RACOG Circuit Rider through a door-to-door canvassing of small commercial businesses along the target area of Bridge and State Street to ensure a high rate of response. The "Business Owner Survey" was designed to elicit specific information relevant to the application guidelines.

24 "Business Owner Surveys" were disseminated through door-to-door canvassing with 21 surveys (87.5%) complete or partially completed and returned. The gathered information was then recorded into a database and queried. The original survey responses are on file at the office of the Circuit Rider, located at the Village of Carthage Municipal Building, 120 South Mechanic Street, Carthage, New York 13619. Business owners identified the following use of needed financing:

• 24 Business Owner Surveys disseminated to businesses along the target area;
• 21 Business Owner Surveys responded to the survey;
• 7 Business Owner returned incomplete surveys;
• 10 Business Owners along the target area stated they would direct available funds to

• 6 of the completed survey responses responded business owners are low-to-

moderate income persons;

• 3 Business Owners responded their intent to access available funding is dependent

upon consumer demand;

• 6 Business owners responded their intent to hire additional employees;

• 11 Business owners responded their intent to retain jobs;
• 2 Business Owners responded that available funding would be used to expand the

• 4 Business Owner responded available funding would be used for working capital;
• 4 Business Owner responded available funding might be used to replace equipment;
• 1 Business Owner stated available funding would be directed towards

• 1 Organization stated their interest in attaining grant funding for interior/exterior

improvements to the structure.

Businesses identified the following technical assistance needs:

• 8 Business owners did not respond to this question;
• 3 Business owners responded they are not interested in accessing technical

assistance;

• 2 General Technical Assistance;
• 1 Finance packaging;
• 3 Business Promotion and Marketing;
• 3 Business Plan;
• 2 Responded Other.

Business needs and priorities have been identified through information gathered at multiple focus group discussions and Building Assessment Surveys. Focus groups were open sessions with approximately 20 downtown Carthage and West Carthage business and property owners and interested community residents regularly attending the RACOG ad hoc advisory committee meetings, facilitated by representatives from the New York State Tug Hill Commission and assisted by Jefferson County Planning. The purpose of the meetings was to discuss community issues/concerns regarding community enhancement and revitalization and next steps in planning for the implementation of the Quality Communities Grant (See Appendix I: Quality Communities …).

In addition, door-to-door canvassing for the assessment of commercial buildings within the target area incorporated short & long-term goals identified by respondents. Focus group discussion and individual interviews with 3 local bank managers representing lending institutions identified business needs as it relates to attaining local funding for small business and property owners.

The data was compiled, assessed, and prioritized according to the number of times the response was repeated and is listed as follows:

• Downtown Image – The number one concern for business and property owners was the negative image projected by vacant storefronts, poorly maintained structures, boarded up windows, lack of aesthetically pleasing visual appearances to businesses that welcome and draw visitors by creating curiosity and interest.
• Parking Issues – The second major concern for business owners challenging the development of downtown was the lack of on street parking due to violations of

• Concern regarding competition from large retail stores – another major concern for existing business owners is identifying a business niche that does not have to compete with large retail chains for business (small local businesses cannot compete at this level). Creating small specialty shops that offer a unique service or product that entices shoppers into the area and build on natural attractions of the area such as historic district and future recreational development along the Black River.
• Public Improvements – Business owners identified the need for streetscape improvements along "Main Street" that would enhance vehicle and pedestrian traffic into the business district as well as visual aesthetics that create interest and provide shopper/tourist information.
• Technical Assistance – Interviews with representatives from local lending institutions stated the number one reason loans are denied to small businesses is the lack of a documented business plan and/or lack of adequate owner collateral to support the loan. Business owners also expressed concern about the development of competing enterprises relating to existing services within the target area.

Typically, small businesses experience a tighter margin of profit and loss ratio than larger firms and tend to require carefully structured financial assistance to establish stability during cyclical periods of limited cash flow. In cases where appropriate funding is available, these businesses lack access to credit and capital due to their modest size, lack of collateral, and insufficient equity and management expertise. According to information gathered through interviews with local lending institution representatives, many small business loan requests are often denied because of "high risk."

5. Public Improvements (Incidentals)

Public improvements in the project corridor are critical to leveraging private investment in "Main Street" properties and are essential if this project is to be truly comprehensive. This is the element of the revitalization effort that will create the aesthetic and functional linkages between the two villages and the developing Broad Street area. To that end, 29% of the Small Cities grant ($170,000) will be invested in public improvements.

The timing of a Small Cities award would tie in perfectly with the Quality Communities project currently under way. A RACOG committee representing business owners, local officials, and the general public has already identified a list of needed public improvements and is now in the process of selecting a landscape architect to develop a downtown revitalization plan that would incorporate this list. This plan will be completed in the fall of 2001. The public improvement’s portion of this project will likely include streetlights, sidewalks, and removal of blight, parking, and improvements to the waterfront. It may even include work on Broad Street designed to improve the connection to the "Main Street" corridor. However, the community wants to

be very deliberate about the process and will use the completed plan to determine specifically which improvements will be funded by the Small Cities grant. The goal from the beginning has been to match all of the "pieces to the puzzle" and to do it right.

The Villages of Carthage and West Carthage propose establishing a microenterprise interior/exterior building improvement activity, low-interest working capital revolving loan fund, and technical assistance program to work towards the elimination of slums and blight to microenterprise commercial businesses and property within the previously identified target area. Identified needs through multiple focus group discussion with business owners, local officials, commercial property owners, and interested parties from Carthage and West Carthage were reiterated through subsequent surveys and discussions with business and commercial property owners. In addition, personal interviews with bank managers from local lending institutions assisted in identifying financial needs of the microenterprise owners. The poor condition of existing commercial space, a lack of access by businesses to general technical assistance to develop business plans and marketing strategies, and public improvements to streetscape have been identified as needs.

As stated previously, the purpose of the proposed activities is to work towards the elimination of slums and blight of commercial property along the previously identified target area by retaining and creating jobs to low-to-moderate income persons. To maximize employment opportunities, Microenterprise activities will be used to leverage entrepreneurs into vacant commercial space for low-to-moderate income persons. Each activity meets the national objective of working towards the elimination of slums and blight and the primary objective of benefiting low-to-moderate income persons. In addition, the microenterprise activity will also be used to leverage future funding of public and private resources to improve upper level floor space through available income tax credit.

The timing of a Small Cities award would tie in perfectly with the Quality Communities project currently under way. A RACOG committee representing business owners, local officials, and the general public has already identified a list of needed public improvements and is now in the process of selecting a landscape architect to assist the community in designing a downtown revitalization plan that would incorporate this list (See Appendix I: Quality Communities Grant Application).

This plan will be completed in the fall of 2001. The proposed program will be established with a $600,000 Small Cities Community Development Block Grant that will include:

• Marketing and outreach of the microenterprise interior/exterior building improvement, low-interest working capital revolving loan, and technical assistance program;
• Application intake and assessment on a case-by-case basis for each program;
• Processing of microenterprise interior/exterior building improvement, low-interest working capital revolving loan, and technical assistance applications;
• Conduct low-interest working capital revolving loan closings;
• Follow-up and support for each program.

Small Cities CDBG $600,000

Jefferson County Small $30,000

Business Development Center

Economic Development $50,000

Microenterprise $260,000

Interior/Exterior Improvements

Microenterprise $100,000

Operational & Equipment

Public Improvement $180,000

Administration $20,000

Total CDBG Funds $600,000

Focus group discussion and individual meetings with bank managers from local lending institutions secured the support and commitment of ($370,000) in financial resources for qualified applicants of the Microenterprise program activities. In addition, the Economic Development Corporation of Carthage committed ($50,000) for funding to the Village of Carthage to provide technical assistance relevant to maximizing opportunities associated with public/private investment associated with long-range planning. In addition, the Jefferson County Small Business Development Center has agreed to provide up to ($30,000) of in-kind service to microenterprise businesses for the development of business and marketing plans. The applicant and sub-recipient are currently drafting a "Memorandum of Understanding" and "Cooperative Agreement" for review (See Appendix J: Memorandum & Cooperative Agreement).

Typically, microenterprise business owners experience difficulty in attaining adequate financing through traditional sources due to their modest size, lack of collateral, and insufficient equity and management expertise. The Small Cities $600,000 Microenterprise CDBG funding would assist business and property owners within the target area to leverage traditional funding sources to make needed improvements to buildings by providing 50% grant funding with a 0% interest and 0 terms to qualified applicants. The proposed program activities will serve as an impetus in the retention and creation of jobs for low-to-moderate income persons in an economic environment that is spiraling downward by creating new opportunities to entrepreneurs along the identified target area.

Small business owners experiencing financial difficulty may utilize low interest working capital loans to enable continued operations. As previously stated in the need description, 6 business owners are low-to-moderate income persons or (29%) of the survey respondents. In addition, the survey identified 28 part-time jobs earning low-to-moderate incomes based on the hourly pay scale of $5.15-8.62 can be expected to be retained with assistance with Microenterprise funding. In addition, 6 business owners stated their intention to the Circuit Rider to create new low-to-moderate income jobs based on consumer demand. However, given the recent plant closures and lay-off they have put their plans to expand on hold. Furthermore, the visual enhancement created through the elimination of slums and blight along the "Main Street" area will also serve as a stimulus in creating consumer interest to the retail industry along the identified target area.

The method used to determine an appropriate cost-effective solution to the problem was identified through multiple multi-disciplinary discussions with representatives from Jefferson County Planning, Tug Hill Commission, Jefferson County Job Development Association, Neighbors of Watertown and the direct input of business and property

owners, local lending institutions, interested parties, and local officials. Door-to-door surveys identified qualified applicants interested in accessing available funds through the Small Cities Microenterprise $600,000 CDBG.

Based on available funding, the development of community long-range planning through initiatives associated with the Quality Communities Grant, and the identified needs and priorities of business and property owners, funding was divided between the activities. The number of qualified interested microenterprise business and property owners interested in specific program activity was then divided into the available funding to determine the average funding amount that will be available to qualified applicants. The proposed Microenterprise Program Activities will also be used to leverage future public and private funding through available tax credits for purposes of addressing long-range planning to work towards the elimination of slums and blight and create jobs for low-to-moderate income persons.

Regulatory requirements associated with program design will be the responsibility of the RACOG Circuit Rider and RACOG through a Sub-recipient Agreement to oversee program delivery. To assist in the implementation of program design RACOG has the flexibility to contract all or part of the design with a qualified service provider. Each qualified microenterprise applicant owning property within the designated downtown historic district along State Street in Carthage will receive information about the availability of funding associated with the National and State Historic Preservation Organization. In addition, interested owners of historic properties will then be guided by SHIPO regulations and receive technical assistance from a qualified service provider to maximize opportunities to leverage public and private investment.

As the majority of the commercial structures targeted for interior/exterior-building improvements are within the designated section of the downtown historic district in the Village of Carthage, it is assumed lead-based paint will be present. Standard treatments will be used to address the requirements associated with the request for funds. As the Village of Carthage anticipates an average request under $25,000, a disclosure statement to business and property owners will follow an evaluation to test painted surfaces that will be disturbed through the proposed activity and complete a risk assessment. Based on the amount of the request for funds work requirements will follow safe work practices and include interim controls where required. Clearance of any hazard work sites and/or units will be required of business property owners.

Program delivery will be provided by RACOG through a Sub-recipient Agreement currently being drafted and approved by the joint applicants and RACOG (See Appendix K: Sub-recipient Agreement). An agreement is currently being drafted between the Small Business Development Center (SBDC), the administering agent, and RACOG and will be

implemented upon grant approval. The SBDC will provide program delivery as it relates to technical assistance to microenterprise business owners.

The Microenterprise/Public Improvement Grant/Loan Fund represents a critical component in the physical appearance and economic revitalization of the Villages of Carthage and West Carthage. The proposed program will leverage an additional ($260,000) through traditional lending institutions for activities associated with improving the interior and exterior to commercial buildings along the previously identified target area with a 100% of the benefit directed to low-to-moderate income persons. In addition, low interest working capital loans will leverage an additional ($110,000) to benefit 100% of low-to-moderate income business owners.

The 24 businesses in the core project area translate into approximately 50 full-time equivalent jobs. Given the deteriorating economic conditions of the community created by a recent significant job loss in Carthage/West Carthage area, and the out-migration of several businesses along the downtown area to the strip type development along Broad Street, we conservatively estimate this project will help in retaining at least 20 existing low-to-moderate income jobs.

The microenterprise investments and technical assistance to small businesses will support the development of a more viable business community that we project will create a minimum of 10 new jobs at existing businesses. The financial and technical assistance provided by this project should also encourage the establishment of new businesses at 6 of the 7 vacant storefront properties – resulting in additional 12 jobs to low-to-moderate income persons. The total of 42 jobs retained or created average at a maximum cost of $14,285 per job, in Small Cities funding. This is below the $15,000 per job target figure used in by economic development associations for purposes of justifying the expenditure. In addition, these costs would be further reduced by the creation of additional jobs over our projections.

Based on focus group discussion, door-to-door canvassing, building assessment surveys and reflected in the needs description of Part I under section 3, business and property owners in both villages are concerned about the negative image of the downtown area and the influence it has on the declining economy. The combination of program activities will maximize the impact to low-to-moderate income persons through physical improvements to commercial property by serving as an impetus to stimulate the creation of new jobs and retention of others.

1. Microenterprise Interior/Exterior Structural Improvement Grant – According to the analysis of small business and property owner surveys, structural improvements will work towards the elimination of slums and blight while retaining low-to-moderate income jobs to (29%) of the respondents and creating additional job opportunities based on economic growth stimulated through the Microenterprise Program. The commercial building improvements will provide property owners with 50% of improvement costs through a matching grant with 0% and 0 terms (not to exceed $15,000 in total assistance). Based on survey results and available program funding budgeted, the ($260,000) of CDBG funding would leverage an additional ($260,000) through owner equity and traditional lending sources for the improvement of 21 commercial buildings. In addition, the program will improve the physical appearance along the respective "Main Street" area and serve as an impetus to decrease commercial vacancy rates in the designated historic downtown area. Furthermore, the improvement to commercial space will lead to increased income to property owners and higher property tax assessments which in turn will increase the local declining tax base for the Village of Carthage.
2. Low Interest Working Capital Loan – According to the property and business owner survey 6 small business owners will access working capital to purchase new equipment, 2 business owners will expand the size of existing business and 1 business owner will use available funding for operational expenses to continue operations. While business owners would not commit to a specific number of jobs created due to the declining economic environment created from additional industry closings; business owners remained optimistic that additional low-to-moderate jobs would be created based on consumer demand.
3. Public Improvements – Based on data gathered through focus group discussion and door-to-door surveys, public improvements are critical to leveraging private investment in "Main Street" properties and essential for a comprehensive approach to the project.

In addition, commercial property owners within the designated historic district of Carthage have an opportunity to maximize private and public funding for the long-range planning to eliminate slums and blight. Technical assistance provided by the Economic Development Corporation of Carthage (EDCC) for the purpose of contracting services with a consultant to guide the overall revitalization initiative in the downtown historic district of Carthage to ensure maximum funding opportunities remain available. Furthermore, Data gathered from surveys of the business owners along the previously identified target area emphasize the need to provide businesses with technical assistance in developing business plans and marketing strategies. One representative from a local lending institution stated that approximately 90% of small business loans are declined due to a poorly designed business plan.

The proposed CDBG activities are designed to address microenterprise needs not currently being met by other programs and to leverage and complement future development of upper level floor space of existing structures through long-range community planning. The primary area in which the activities are to occur runs along State Street in Carthage and down Bridge Street in West Carthage to its intersection with Broad Street, which runs perpendicular to Bridge Street. As previously stated in the needs description, program activities will include public improvements to create the aesthetic and functional linkages between the two villages and the developing Broad Street area. In addition, "like function" microenterprise applications that conform to the goals specified herein and located within the corporation limits of the Villages of Carthage and West Carthage, but may not be located within the primary target area of our "Main Streets," are also eligible through the program.

Activity 1: Development of the Microenterprise Interior/Exterior Commercial Building Improvement Program – will result in the development of a 50/50 matching grant fund for interior/exterior building improvements.

• The 50% grant will assist qualified low-to-moderate income business and property owners in leveraging loans through lending institutions for needed building improvements;
• A database of target area business and property owners has been created through activities associated with door-to-door canvassing along the respective "Main Street" areas. The RACOG Circuit Rider will market each program component through direct mailings and personal visits to respective microenterprise business and property owners;
• Public announcements of available programs in the local newspaper and the RACOG web site address www.racog.org to increase program awareness in the hopes of attracting entrepreneurs and small specialty shops to vacant commercial space in downtown locations;
• Each applicant owner will require an examination of the financial condition, market and growth potential of the on-going business;
• This program will primarily target existing microenterprises with the defined downtown revitalization area (employing five or fewer employees one or more whom owns the business);

• Jobs created as a result of the program’s activity will be made available to low and moderate-income persons based upon the HUD Section 8 Income Limits.
• Three local commercial banks have stated their support and commitment for the Microenterprise Program in Carthage and West Carthage and have written letters of commitment (See Appendix L: Letters of Commitment).
• Based on discussions with representatives from local lending institutions regarding the lack of business planning by small business owners as the reason 90% of the requests for loans are denied, applicants will be required submit a business plan. SBDC has made their services available through an in-kind service to businesses requesting assistance.
• Program delivery will be provided by RACOG through a Sub-recipient Agreement who will enter into a sub-contract with qualified service providers on a case-by-case basis for application and processing, support and follow-up program.

Program guidelines for the joint applicants and RACOG are currently discussing this activity through a sub-recipient agreement and can be summarized as follows:

1. Eligibility – The program will support the development of jobs that employ low/moderate income persons with first priority for grants directed to existing microenterprise owners.
2. Uses – the 50/50 matching grant program will be used for interior and exterior commercial improvements to qualified property and business owners.
3. Grant Formula – minimum required owner equity is ten percent (10%) with forty percent (40%) lending institution to match the fifty- percent (50%) grant.
4. Disbursement – will be determined on a case by case request.
5. Job Creation – low-to-moderate job creation and microenterprise development are the central goals of this endeavor. Microenterprise participants will be required to submit documentation that fifty one percent (51%) of all jobs are low-to-moderate eligible.

The Microenterprise Grant Program will be established with ($260,000) in CDBG funds for structural improvements to interior/exterior commercial buildings along the previously stated target area. In addition, $260,000 in additional matching funds through owner equity and traditional lending sources will maximize the national and primary objectives of the grant. The villages anticipate providing an average of $12,000 in CDBG funds with 0% interest and 0 terms to approximately 21 microenterprise qualified business/property owners. It is expected that some participants will require less than the average funds while other may require more.

The village will contract with RACOG for program delivery through a Sub-recipient Agreement currently being drafted. To implement the program, RACOG has the latitude to contract with qualified service providers for partial or all of the tasks associated with program delivery and include application and processing, presentation to the respective board, developing and closing grant funding, management of grant funding, job retention and/or creation monitoring. It is expected the needs for some applicants may vary from the average and reflect less/more. Program delivery costs associated with this activity are $19,400 with a total activity cost of $279,400.

Activity 2: Microenterprise Working Capital Loan – The proposed activity allows for qualified small businesses to access low interest loans on a case by case application and

will provide financing of appropriate investment and in conjunction with the proposed program guidelines.

• A database of existing business and property owners has been created and will be used to market the program through direct mailings and personal visits by the RACOG Circuit Rider. In addition, public announcements of available programs in the local newspaper and the RACOG web site address www.racog.org to increase program awareness in the hopes of attracting entrepreneurs and small specialty shops to vacant commercial space in downtown locations.
• Each applicant owner will require an examination of the financial condition, market and growth potential of the on-going business.
• This program will primarily target existing microenterprises with the defined downtown revitalization area (employing five or fewer employees one or more whom owns the business). Jobs created as a result of the program’s activity will be made available to low and moderate-income persons based upon the HUD Section 8 Income Limits.

• Three local commercial banks have stated their support for the Microenterprise Program in Carthage and West Carthage and have written letters of support and commitment.
• Based on discussions with representatives from local lending institutions regarding the lack of business planning by small business owners as the reason 90% of the requests for loans are denied, applicants will be required submit a business plan. SBDC has made their services available through an in-kind service to businesses requesting assistance.
• It is expected that program delivery will be contracted out and will include underwriting, loan processing and management, outreach, marketing, support and follow-up program.
• Data indicates a minimal demand for working capital; however, in recognition of recent layoffs in the papermaking industry and the potential demand of working capital for new business owners a limited amount of funding is being made available for the first nine months of the program.
• Funding not utilized in the first nine months of the activity will be redirected to meet the need for interior and exterior structural improvements based on gathered data.

Program guidelines for this activity are currently being discussed by the joint applicants with RACOG through a sub-recipient agreement and can be summarized as follows:

1. Eligibility – The program will support the development of jobs that employ low/moderate income persons with first priority for grants directed to existing microenterprise owners.
2. Uses – the low interest loan program will primarily fund working capital to enable continued operations and to assist in the purchase of equipment. Entrepreneurs may access loan funds for inventory financing, working capital, etc., to finance start up costs.
3. Security - The assets of the business and/or the owner will secure the loan, in most cases, or equipment purchased with loan proceeds.
4. Rates/Terms – will be flexible based upon the individual needs of the proposed business activity.
5. Disbursement – will be determined on a case by case basis and contingent upon their request.

Part II: Program Description

Villages of Carthage & West Carthage: Microenterprise Program

 

 

6. Loan Decisions – a loan committee will make lending decisions based on established criteria.
7. Job Creation – low-to-moderate job creation and microenterprise development are the central goals of this endeavor. Participants will be required to submit documentation that fifty one percent (51%) of all jobs are low-to-moderate eligible.

Activity 2 Budget: The Microenterprise Working Capital Low Interest Loan Program will be established with ($110,000) in CDBG Funds for new and existing businesses for the purchase of equipment, supplies, and operational expenses. In addition, ($110,000) in additional matching funds through owner equity and traditional lending sources maximizes the local, national, and primary objectives of the grant. Based on gathered data, 6 business owners were interested in low-interest working capital loans for the purchase of equipment and/or operational expenses. The villages anticipate providing an average of $18,000 for low interest working capital to qualified applicants with an interest rate below prime and determined on a case-by-case basis. It is expected that some participants may need less while others may require more than the $18,000 average.

The village of Carthage will contract with RACOG to provide program delivery through a Sub-recipient Agreement currently being drafted. To implement the program RACOG has the latitude to sub-contract with a qualified third party service provider on a case-by-case basis for application and processing, presentation to the respective board, developing and closing the loan, loan management, job creation monitoring, and security management and monitoring. Program delivery costs associated with this activity are $8,200 and a total activity cost of $118,200.

Activity 3: Technical Assistance Program (Cost $30,000) – Based on door-to-door canvassing, focus group discussion, and representatives from local lending institutions respondents stated their concern regarding additional businesses that compete for the same market. In addition, face-to-face interviews with potential entrepreneurs and local lending institutions the need for a general technical assistance program to assist in the development of a business plan and financial positioning for loans was identified. Therefore, general technical, promotion & marketing, and business plan development assistance will be provided by the Small Business Development Center (SBDC) to low-and-moderate income business owners. The strategy will be developed by the SBDC.

Activity 3 Budget ($30,000): this activity will result in the availability of in-kind service for general technical and marketing assistance to business owners applying for interior/exterior building improvements and low interest working capital loans at an

average cost of $35 per hour with an average of 30 hours of assistance per business. Representatives from local banks stated approximately 90% of small business loans are rejected due to a lack of a business plan. Therefore, business owners applying for funding are required to complete a business plan through the SBDC. Approximately 30 business owners are expected to apply for grants/loans the demand for technical assistance will be greater than the surveys indicate. (Face-to-face interviews with 2 entrepreneurs intending to open new businesses along the primary target area have also stated their need for general technical assistance.)

As part of a comprehensive approach to addressing the identified needs of commercial business owners, needed public improvements along the previously identified target area will be implemented through the Microenterprise Program and represent 29% of the grant funding ($170,000). The funds will be directed to the two villages for purposes of streetscape improvements with each Village receiving $85,000 for the purpose of implementing improvements identified through long-range planning associated with the Quality Communities Grant. As stated previously, public improvements will most likely include streetlights, sidewalks, and removal of slums and blight, parking, and improvements to the waterfront.

In addition to the proposed CDBG activities, other downtown efforts currently underway or proposed includes:

• The RACOG ad hoc executive advisory committee is currently reviewing the qualifications of Landscape Architect & Design firms for purposes of employing a consultant to assist the communities envision a long-range plan through traditional renderings and computer simulation through the Quality Communities Grant.