MERIDEN — A $5 million proposal to incentivize the upgrading of vacant commercial space downtown and across the city will head back to the City Council. 

The program, if authorized by the council, would be funded through the city’s share of American Rescue Plan Act COVID-19 relief funds. To date, some $18.28 million, more than half of the city’s total ARPA funding pool of $36.3 million, has been allocated. 

The Economic Development Housing and Zoning Committee voted unanimously Tuesday night to refer the commercial space proposal back to the full council. The vote followed a nearly 90-minute discussion during which some councilors raised concerns about the agency that would administer the program and the program guidelines. Councilors also sought assurances the program would attract a diverse pool of applicants, including minority and women-owned businesses.

Joseph Feest, the city’s economic development director, outlined three main components of the proposal, which was submitted by his department. The first is to provide matching grant assistance to bring existing vacant commercial spaces into compliance with building codes. The second is for similar grants to complete vanilla box renovations that don’t require code compliance. A third component is a set aside of funds to administer the program — including legal fees, marketing, accounting and other costs. 

According to the current application, two pools of funding, each totaling $1.875 million, would be set aside for the code compliance and vanilla box grants, while another $500,000 would be set aside for administration costs. 

Plans to have the program administered by the Meriden Economic Development Corp. have not changed. MEDCO is a nonprofit agency whose members include local business and city leaders. MEDCO’s objective is fueling economic development in the downtown transit-oriented district, or TOD. 

Feest said outreach would be initiated through the Economic Development Department, MEDCO, the Midstate Chamber of Commerce, the Black Business Alliance and other groups. 

Feest suggested ranking applications based on whether businesses meet the city’s needs. Another possible aspect for ranking is which potential businesses would create the most jobs, Feest told the committee.

Restaurants are a type of business that comes with high initial capital expenses, especially in buildings that require new ventilation systems. 

Feest said another factor to consider is an applicants’ financing. 

“We are not using funds to be 100% the backer of a business,” Feest said. 

Applicants should have checking accounts, financial and business plans.

“... ARPA funds should be used for something that has a chance of sticking around,” Feest said. 

Council Majority Leader Sonya Jelks asked Feest for assurances that historically marginalized groups would have the opportunity to participate. 

Feest said a committee will be set up to help marginalized groups. He said one of the benefits of working with MEDCO and his department is the individuals involved all bring certain expertise — legal, banking, business and other skills. 

“There’s a lot of expertise that can be shared with individuals who would be coming to us,” Feest said.

During discussions, Councilor Bruce A. Fontanella grilled Feest about the proposal to have MEDCO administer the program. Fontanella asked Feest if his department had a rough draft of the program’s guidelines.  

Feest said the guidelines were not yet set, but would be based on the Hartford Lift program, which also used  ARPA funds for vacant commercial space improvements. 

Fontanella expressed concerns he previously aired about MEDCO administering the program, adding none of the agency’s members are elected and can be held accountable for their decisions. 

“We can hold the Economic Development Department accountable, by hiring and firing, but we have no control over MEDCO whatsoever,” Fontanella said.

Fontanella made a motion, which ultimately failed, that applications would be reviewed by the City Council. 

“I would like to see the City Council review [those applications] so they’re getting reviewed by a government agency, rather than just being disbursed by a department and a non-profit corporation over which we have no control,” Fontanella said. 

Councilor Michael Rohde, who chairs the EDHZ Committee, said he understood Fontanella’s points but is concerned about the council directly administering the program. 

“We have to be sensitive to the need to move these projects along in an efficient manner,” Rohde said. 

Jelks also said she understood Fontanella’s concerns, but disagreed. She feels additional council oversight would be “micromanaging the ARPA process.”

Mayor Kevin Scarpati concurred. 

“We need to set the framework. We need to delegate to staff, whether it’s the city manager, department heads or other organizations, what the mission and goal for the city is going to be. We set the vision and allow others to make sure that we are going in the right direction,” the mayor said. 

Scarpati said he thinks council oversight would “hamper the process.”

“It’s just going to add another layer, where Meriden is already viewed as somewhat of not being as business friendly as we’d like to pretend we are,” Scarpati said, adding he supports having MEDCO vet and approve each application. 

He noted in Hartford the city’s chamber of commerce handles applications. 

“There is no going back to the City Council, no approval by the mayor, it is strictly up to the Hartford Chamber of Commerce, which is responsible for overseeing the program,” Scarpati said. “… The city of Meriden doesn’t have to be putting up any more roadblocks than we already have.” 

mgagne@record-journal.com203-317-2231Twitter:@MikeGagneRJ