Affordable Commercial Tenanting (ACT) Grant

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Affordable Commercial Tenanting (ACT) Grant2024-02-20T10:56:08-08:00

Affordable Commercial Tenanting (ACT) Grant

Contact: ACT@prosperportland.us
Coffee Shop owner

The Affordable Commercial Tenanting (ACT) Grant provides funding to property owners and small business owners to facilitate access to commercial space and support inclusive business growth. Grant funds may be used for tenant improvements, space-related soft costs, and permitting support to ready space to open for business. Technical assistance may also be available for business support.

Prosper Portland will provide funds for real property improvements in ground floor commercial properties, and opportunities for local business owners to connect to technical assistance to foster business growth and wealth creation. Grant awards will take into account the rent discount the property owner provides and tenant improvement subsidy needed. Awards will not exceed $300,000.

Eligibility

Eligible Property Owner: a private entity or a community based organization that leases to a qualified small business (see Eligible Business Owner, below)

Property:

  1. Property must be located within the Interstate Corridor Tax Increment Financing district
  2. Property owner must own a commercial space that shall be delivered in warm shell standard to support move-in readiness. Warm shell standard shall include elements such as: finished HVAC system, drywall, flooring, ceiling, basic plumbing, electrical with outlets, lighting, and approved according to City of Portland building code requirements. A portion of the grant funds may be used to cover expenses to bring the space to this standard, but the majority of funds must be used for tenant specific improvements. If additional funding is needed to bring space to a warm shell standard, Prosper Portland may have other grant or loan programs available, pending eligibility.
  3. Property must be at ground floor level.
  4. Property must be zoned for commercial/mixed use.
  5. Property owner must have a maintenance plan in place for the duration of the lease.
  6. All financial obligations related to the property must be current, including taxes and debt payments.

Lease Terms:

  1. Lessor must agree to provide a lease agreement for a minimum of three years to qualified business owners who fulfill the eligibility criteria.
  2. Lease agreement(s) must provide for at least one of the following: a lease rate that is 10-25% below market rate of a comparable property, a period of rent abatement, and/or capped rent escalations during the affordable rate period with the intent of stepping up towards a market rate.

Business owner must identify with one or more of the following criteria:

  1. Has been or is at risk of displacement due to gentrification;
  2. Has limited access to employment opportunities, limited access to capital, and/or has not benefited from generational wealth;
  3. First generation business owner and/or first-generation college graduate; and/or
  4. Provides a product or service that benefits a historically underserved population.

Applicant must demonstrate business experience of two or more years in one or more of the following ways:

  1. Previous experience in their industry through pop-up shops, markets, trade shows, etc.;
  2. Experience with a mobile business, such as a food truck
  3. Local business owner who previously had a business in the area but closed due to displacement or lack of access to capital; or
  4. Local business owner with a proven concept who is looking to expand into a second location.

Eligible Property:

Applicant must have or be in the process of securing a lease that meets the criteria under Eligible Property and Lease Terms, above.

Business License:

Applicant must have business registered with the State of Oregon Business Registry and have a current City of Portland business license by the time of the lease and grant agreement.

The purpose of this program is to support the growth of local small businesses while improving commercial properties; therefore, certain persons or entities are not eligible applicants:

  1. Property management company working on behalf of a property owner
  2. Food cart pod owners or food truck owners and operators, unless they’re opening a brick-and-mortar location for which grant funds could be dedicated
  3. Mobile businesses that intend to stay mobile
  4. E-commerce businesses

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Grant Funds

Grant funds are available for tenant improvement hard and soft costs, including achieving the warm shell standard articulated in the Eligible Property Owner section, above.

  1. Grant amounts shall not exceed $300,000
  2. Grant amounts will generally be equal to the rent discount and tenant improvement subsidy provided to the benefit of tenants over the term of the lease; the majority of funds is for tenant specific improvements
  3. Funds must be directed to warm shell or business specific tenant improvements for the business owner who is entering into a lease agreement with the property owner
  4.  Grant funds are subject to budget availability

Expenses

Grant funds will be issued on a reimbursement basis to pay for:

  1. Hard costs to ready the space for leasing (referred to in the Property section, above) and other tenant improvement-related costs including but not limited to signage, landscaping, lighting, security upgrades
  2. Up to $25,000 can be used for soft costs including design, architectural and engineering services, permitting fees, and project management
  3. Up to $25,000 can be directed toward predevelopment work, including architectural services, structural engineering, and environmental, market, or financial analysis associated with physical construction

Ineligible Expenses

  1. Inventory purchase or replacement
  2. Non-permanent fixtures (e.g., unsecured shelving, furniture, etc.)
  3. Operating expenses (owners or employee wages, marketing, equipment, research and development, rent, etc.)
  4. General small business technical assistance (e.g., business planning or other support to strengthen business operations)

Selection

Applications will be scored based on the following:

  • Alignment with program goals
  • Business viability
  • Level of rent discount provided (a percentage below market rate, rent abatement period or limited rent escalations)
  • Lease length
  • Activation of vacant spaces and business corridors within the Interstate TIF district

Selection Process

  1. Applications are screened for eligibility
  2. Grant amount is determined based on the discounted rate, lease length, and level of tenant improvements needed
  3. Applications are scored based on the selection criteria

When a grant is approved, awardees will have to submit the following documents. Please do not send any documents until you receive instructions to upload them:

  • W-9 and ACH form for grant payment
  • Oregon secretary of State business registry number
  • City of Portland Business license
  • Profit & Loss Statements for 2021-2023
  • Estimated costs of tenant improvements (space improvements)
  • Letter of Intent – a preliminary agreement that demonstrates that a lease is being negotiated between the property owner (landlord) and the business owner (tenant)

Frequently Asked Questions

Who can apply for this program?2024-02-13T10:14:59-08:00

Both small business owners and property owners are eligible to apply. Property owners can be non-profit or private entities if they lease to a qualified small business.

Can I apply before having a property or tenant identified?2024-02-13T09:57:10-08:00

You need to have a property or tenant identified prior to applying.

Why am I not eligible to apply if I don’t have a letter of intent?2024-02-13T09:57:53-08:00

Finding a commercial space or a tenant can take multiple months. We cannot withhold funds for your project while you find a space/tenant, because we wouldn’t be able to assess a project’s cost and this would prevent us from committing funds to a project that is ready to go. A letter of intent allows us to know you are committed to a space/tenant and allows us to assess the project costs.

My business is just starting and I have no revenue, can I apply for this program?2024-02-13T09:58:14-08:00

No. This program is for small businesses that are expanding; you must have enough revenue to sustain your business operations and grow into a market rate lease by the end of your lease agreement.

Is this program available citywide?2024-02-13T09:58:34-08:00

This program will open applications in the Interstate Corridor TIF district in Spring 2024 and will open in other districts as funds become available.

Can I use this program to pay for work that has already been done?2024-02-13T09:58:51-08:00

No, this program only covers work done after the grant agreement is signed.

If I have received funding from the Property Investment Program (PIP) grant, am I eligible to apply?2024-02-13T09:59:10-08:00

Yes, you are eligible to apply for this program.

Will I receive $300,000 if I apply for this program?2024-02-13T09:59:34-08:00

The maximum grant amount is $300,000, but that is not a guaranteed amount. Grant amounts are determined based on the lease terms, cost of the project, community benefit, and other factors articulated in the Eligibility section of the program guidelines.

I’m a nonprofit looking for space, am I eligible to apply?2024-02-13T09:59:55-08:00

You are eligible to apply if your non-profit owns a commercial property that will be leased to small business owners. If you are a non-profit looking for space to run your own operations, you are not eligible to apply for this program.

I’m a franchise owner, am I eligible to apply?2024-02-13T10:16:19-08:00

No, unless you are part of a local franchise with fewer than 3 locations, in which case you may apply. National franchises are not eligible for this program.

Can I use funds to pay rent?2024-02-13T10:00:31-08:00

No, funds are for space improvements only, including pre-development, buildout, and professional services related to it. Please refer to the eligible and ineligible expenses section of this page.

I’m purchasing a property to operate my business in. Am I eligible for this grant?2024-02-13T10:01:08-08:00

This program is to incentivize affordable lease rates, so if you are not planning to rent to a qualified small business, you are not eligible to apply.

Are cannabis businesses eligible to apply for this program?2024-02-13T10:01:44-08:00

No, given the requirements for Tax Increment Financing, cannabis businesses are not eligible to apply for this program.

If you have additional questions, please contact ACT@prosperportland.us.

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