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Redevelopment Toolkit Update City of Mesa City Council Study Session January 15, 2025 Jeff McVay Manager of Urban Transformation Jeff Robbins Redevelopment Administrator Angelica Guevara Code Compliance Director Jaye O'Donnell Economic Development Director Nana Appiah Development Services Director BACKGROUND & INTRODUCTION 2 3 BACKGROUND City Council Study Session June 26, 2025 • Arizona precedents • Nationally recognized programs • Interviews with neighboring cities 4 TOOLKIT DEVELOPMENT PROCESS Comparative Research • City’s unique needs • Feasibility • Impact Short Listing • Develop 30% framework for each tool • Initial legal discussions • Initial budget discussions Framework & Vetting Strategic and sustained reinvestment Businesses and jobs leave Disinvestment spreads Economic shock Property owners hesitate to invest Lenders pull back Initial Investment attracts additional private investment New jobs emerge Tax base grows 5 WHY REDEVELOPMENT TOOLS? Decline Phase Disinvestment Phase Intervention Phase Revitalization Phase PUBLIC FINANCIAL BURDEN 6 • Inspection Time • Case Management • Hearings • Liens • Follow Up Visits Code Compliance & Legal Process • Increased Calls for Service • Higher Arson Risk • Increased Nuisance Activity Police & Fire Service Demand • Lower Assessed Values • Lost Sales Tax Revenue • Delinquent Taxes • Harder to Market Parcels • Surrounding Value Decline Lost Tax Base Public Impact: Lower Investment Distressed Properties Increased Public Financial Burden PUBLIC FINANCIAL BURDEN • 2017 - Car Wash Closed • 2017+ 50 Code & Building Inspections Weeds, trespassing, graffiti, dumping, squatters • 2022 - Building Caught Fire • 2023 - Emergency Abatement Costs exceed $30,000 to date and will continue 245 S Power Rd – Indy Car Wash 7 COMPREHENSIVE REDEVELOPMENT COMPREHENSIVE REDEVELOPMENT SMALL BUSINESS PROPERTY OWNERS DEVELOPERS 8 RECOMMENDED REDEVELOPMENT TOOLKIT 9 10 VACANT PROPERTY REGISTRATION What Commercial property owners proactively register their vacant properties Why • Accelerates response times to code enforcement, safety, and nuisance issues Reduces administrative burden • Helps City staff connect owners to resources • Supports Mesa’s Trespass Enforcement Program 11 CODE COMPLIANCE ASSISTANCE PROGRAM What Assistance for publicly visible code compliance issues Why • Visible signs of distress attract crime and disorder • Supports maintenance, safety and health of commercial and residential areas • Accelerates compliance in some situations • Minimizes displacement and disruption to small businesses 12 REVOLVING LOAN FUND What Flexible, low-interest Federal financing that is continuously reinvested back into the community Why • May facilitate critical building improvements • Bridges the “financing gap” for smaller commercial lending needs • May leverage 4:1 additional SBA financing 13 COMMERCIAL SPACE ACTIVATION PROGRAM What • Addresses life safety issues, accessibility and conditions of blight in commercial properties Why • Helps small businesses adaptively reuse older buildings • Supports jobs and sales tax revenue • Improves safety and accessibility for the public • Activates long standing vacant storefronts 14 PUBLIC INFRASTRUCTURE What Creation of a public infrastructure improvement fund for public utility upgrades need to support redevelopment Why • Supports a wide range of businesses • Undersized or aging infrastructure is common in aging areas • Citywide application 15 DEMOLITION AND REMEDIATION ASSISTANCE What Removal of unsafe, blighted, and obsolete commercial structures and environmental remediation assistance Why • Encourages private reinvestment • Lenders avoid funding demolition • Prepares sites for re-investment 16 SUPPORT PLACEMAKING STRATEGIES What Strategic public placemaking Why • Supports entryway improvements • Increases desirability of business districts • Funds strategic property acquisition OTHER CONSIDERATIONS Redevelopment Areas (RDAs) “Every municipality may use its funds for the purposes of aiding in the planning, undertaking or carrying out of a redevelopment project in its area of operation.” A.R.S. 36-1488 Federal Funding Budgetary Legal Ease of Use and Administration 17 RECOMMENDED RESOURCES 18 Strategic and sustained reinvestment Businesses and jobs leave Disinvestment spreads Economic shock Property owners hesitate to invest Lenders pull back Initial Investment attracts additional private investment New jobs emerge Tax base grows 19 WHY REDEVELOPMENT TOOLS? Decline Phase Disinvestment Phase Intervention Phase Revitalization Phase OTHER CITIES IN THE NEWS “Baltimore is launching a $6 billion community reinvestment program” Courtesy: Colorado Politics, 12/10/2024; Multi-Housing News, Gail Kalinoski, September 25, 2025; AZFamily.com, August 4, 2025; NPR, Celisa Calacal, March 7, 2025; KGOU, Gracen Wheeler, Abigail Siatkowski, Robby Korth, OPMX, October 15, 2025 20 Federal Funding Sources Funding provided through Federal programs. Redevelopment Activity Revenue Variable. Requires another revenue source. One-Time Set Asides Variable, non-recurring. RECOMMENDED FUNDING SOURCES 21 • Pilot the Redevelopment Programs for 5 years • Establish KPIs and impact metrics • Annual reports to City Council • City Council evaluation of a permanent program in 2031 Program Evaluation • $3,000,000 annually • Funding per program is driven by demand • $2,000,000 one-time (EDA Grant) revolving loan seed funding Funding Recommendation 22 COUNCIL RECOMMENDATION • Demolition and remediation • Code Compliance Assistance Program • Retail Tenant Assistance • Vacant Property Registration • Revolving Loan Fund • Public Infrastructure Redevelopment Programs 23 NEXT STEPS Focus group with stakeholders 01 Program development (based on Council Direction) 02 Return to City Council with detailed programs early 2026 03 Formalize budget requests in annual budget process 04 Begin launching programs mid 2026 05 QUESTIONS? 24