Grant program praised for sprucing up Escondido

By: DAVID GARRICK - Staff Writer
Merchants, city have spent $10 million on remodeling | Saturday, February 2, 2008 10:12 PM PST ∞

ESCONDIDO ---- City officials were dreaming of shiny and sleek storefronts that would attract more shoppers to Escondido when they launched a program nearly two decades ago that doles out money to businesses that spruce up their appearances.

Since then, nearly 150 businesses have received more than $830,000 in matching grants for a variety of remodeling projects.

The businesses themselves have spent an additional $9.2 million on the projects, pushing the total amount of renovations under the program past $10 million.

While no one would mistake the business districts of Escondido for Prospect Street in La Jolla or Rodeo Drive in Beverly Hills, city officials and merchants said last week that the program has made a huge difference since it was launched in 1989.

There are still areas of blight, but much of Grand Avenue looks dramatically better, many dilapidated buildings on East Valley Parkway have undergone remarkable renovations, and there have been several innovative remodeling projects on South Escondido Boulevard.

The lion's share of the money has been spent on businesses in those three areas, and the sales tax revenue generated in those districts has surged simultaneously.

Some complain that city officials haven't made the program enough of a priority and haven't worked hard enough to get entire plazas to remodel. But even those critics acknowledge that the program has been a success.

"It'd be nice if the city put more cash into it, but it's been good for everybody," said developer Jim Crone, whose 1991 remodel of the Fireside and Filippi's building downtown was one of the first projects under the program. "When a business or an area is more attractive, people are drawn to it."

Debra Rosen, chief executive of the downtown business association, said the program has had a domino effect.

"Once one business does a face-lift, it's kind of a trigger for others nearby," said Rosen. "Even if they don't go for a grant, businesses nearby will usually do something to improve their appearance."

Pushing the envelope
Recent projects under the program, which is called the Facade and Property Improvement Program, include Sushi Yama restaurant just north of the performing arts center and Italian Kitchen Designs at Fifth Avenue and Escondido Boulevard.

The merchants responsible for those projects said the $10,000 grants they received, the maximum under the program, prompted them to make their remodeling work more elaborate.

"I probably would have done this anyway, but the city money was a push to do even more," said Harry Assi, whose transformation of an old Foster's Freeze into Sushi Yama has been acclaimed by city officials. "It was only a small part of the $90,000 I spent fixing up the outside, but it was nice."

Daniel Krstovski, who recently used stucco and new windows to transform three beat-up businesses into Italian Kitchen Designs, agreed with Assi.

"I would not have done so much without the city money," he said. "They helped me make the difference like 'night and day.' "

Councilman Dick Daniels said the two projects are exactly what the program aims for.

"They have taken properties that were in a state of obsolescence and made them look fantastic," said Daniels.

Supporters of the program point to the revival of downtown, especially Grand Avenue, as another shining example of success.

The city has given $504,000 in grants for 88 downtown projects, and merchants have spent another $4.9 million on those projects.

"A lot of the downtown success is due to greater curb appeal," said Daniels.

Most of the businesses on Grand, including virtually every restaurant and art gallery, have received some money from the program.

The approach seems to be working, because annual sales tax revenue generated by downtown merchants has increased from $366,000 in 1998 to $1.3 million in 2006.

A new approach
Downtown businesses have received so much of the grant money partly because the program was not open to other merchants when it was first established, said Jo Ann Case, the city's economic development manager.

In 2000, the city decided to broaden the program to businesses throughout the city and add some new elements. The maximum grant was increased from $5,000 to $10,000, with businesses in prominent locations eligible for the larger grants. And grants were discontinued for projects such as new fencing or parking lot resurfacing.

"We decided we were going to expect more for the money," said Case.

Councilman Sam Abed said the changes were appropriate.

"It definitely should be just about improving appearances," said Abed. "Creating a better appearance encourages pride of ownership."

Abed, former chairman of the East Valley business association, said broadening the facade program helped bolster that corridor of the city.

The city has distributed $42,000 in grants for eight projects on East Valley Parkway, and merchants have spent an additional $986,000 on those projects. Meanwhile, annual sales tax revenue generated by merchants on East Valley has jumped from $847,000 in 1998 to $1.9 million in 2006.

Broadening the program has also helped businesses along the southern portion of Escondido Boulevard, where the city has given $118,000 in grants for 28 projects, and merchants have spent an additional $1.3 million. Annual sales tax revenue has increased from $42,000 in 1998 to $134,000 in 2006.

Plaza problems
Critics say one problem with the broader approach is that sprucing up an isolated business, as opposed to a group of adjacent businesses such as those in downtown, can be risky.

"Drawing people to one business is OK, but it really needs to be an area," said Crone, who owns commercial properties throughout the city.

Harvey Mitchell, chief executive of the Escondido Chamber of Commerce, said the city has struggled to persuade entire plazas to remodel because they often have multiple owners.

"It's pretty difficult to get all the owners to work together and agree on what they want to do," said Mitchell.

Other cities that offer business remodeling grants sometimes create special rules for plazas that give them a lump sum of city money to spruce up an entire shopping center all at once.

Case said she is familiar with such an approach, but that it is not necessary.

"Generally, people who own entire plazas have the wherewithal to make their own improvements," she said.

Surviving budget cuts
There is $154,000 remaining in the facade fund, enough for at least 15 more projects.

But Mayor Lori Holt Pfeiler, along with Councilmen Daniels and Abed, said looming budget cuts at City Hall caused by the slowing economy might make it difficult to add more money to the facade fund in the next few years.

"It's a fine line using taxpayer funds for the private sector when we are making budget cuts in other areas," said Abed. "But the increases in sales tax revenue come year after year, so you can make a case."

Daniels said he'd like the facade program to remain a priority, but that it obviously can't be as high a priority as firefighters and police officers.

Pfeiler said the program has seen such an amazing return on investment that city officials must find a way to provide at least some funding, as they did when the state suffered a huge recession in 1993 and 1994.

"You've got to keep the pipe flowing a little bit," she said.

Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.

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