Covington city officials hope their tweaks to certain portions of its small business program guidelines will help attract new small businesses to the city and foster a better overall business environment.
The Covington city commission approved multiple changes to the city’s Small Business Program at Tuesday night’s regularly scheduled legislative meeting. The changes will go into effect during Fiscal Year 2022-2023.
The Small Business Incentive Program is designed to help small business owners develop their enterprises within the city. Covington offers financial incentives to businesses that meet qualifying criteria laid out by the city. The incentives could range anywhere from a loan to improve the façade of a building to providing eligible businesses with a payroll tax reimbursement for up to 10 years.
Eligibility for the program is determined by “ratings” scorecards which outline the criteria a business must meet.
Rent Subsidy incentive changes
The language in the rent subsidy incentive qualifications was changed from existing businesses to new businesses. A new business, as defined by the guidelines, is one that has been open for less than 120 days prior to the application deadline and meets all preexisting conditions.
“This was really designed to attract new business into Covington,” Economic Development Director Tom West said.
The language change has already been updated and highlighted on the city’s website.
Another change to the rent subsidy guidelines is to allow legacy business owners to bypass filling out a full business plan with Covington. West describes a legacy business as one that has operated successfully in a different city for an extended period of time. This change applies primarily to business owners who are looking to open a new location within Covington.
While Covington is removing the previous requirement, West said that legacy businesses could still score points on their rent subsidy rating sheet if they meet with the city’s small business development representative.
“If someone has been operating a business in Newport, Lexington, Cincinnati or Blue Ash, and they want to move to Covington and have been in business for two years, five years, ten years, and they’ve established themselves and they just want a new location, making them put together a new business plan is probably not the best use of their time and resources,” West said.
Facade improvement incentive changes
The façade improvement incentive offers eligible businesses a 50 percent matching forgivable loan to update their commercial building façade. The loan can be up to $6,000. The loan can help update exterior building features visible from the streets such as lighting, windows, painting, and signage.
The first change is that materials purchased before an approved contract are eligible for reimbursement, at the owner’s risk.
Essentially, if a business owner puts in a bulk materials order before their agreement with the city has been executed, and no construction work has been done yet, then they will be eligible for a reimbursement if their application has already been funded.
In contrast, if a business has incurred construction expenses prior to their agreement being executed with the City, then they aren’t eligible for reimbursement.
This change was made to combat the unpredictability of the world supply chain for certain building materials. This will give business owners a greater window for potential reimbursement, if they meet the required criteria.
The next change is increasing the facade project completion timeline from six months to 12 months.
“There is an incredible shortage of workers to do this kind of preservation and construction work. It’s not just material delays, but also labor shortages that are leading to the delays in these projects being completed,” West said.
New program: Historic Electric Signage
Covington has a treasure trove of unique electric signs scattered throughout the city. These signs act as iconic ornaments to the historic building they sit upon. The new electric signage restoration program will offer forgivable loans to qualified applicants focused on the refurbishment of rundown electric signs in commercial areas.
Seventy-five percent of the total restoration cost would be funded by the city and 25 percent by the building or business owner. The maximum amount the city would contribute for the forgivable loan would be $7,500.
West said that he consulted with the American Sign Museum which concluded it would cost approximately $10,000 on average to restore many of the signs back to working order.
Mounting hardware, sign installation and sign refurbishment, including wiring and neon or related lighting fixtures, are actions that qualify for the forgivable loan.
“We all saw the impact when Rich’s invested the money to redo their sign,” West said of Rich’s Proper Food, a Madison Avenue restaurant that borrowed its name and original sign from a former jewelry shop that operated there. “It added a lot of life and vibrancy to the streetscape at night.”
