Although the Great Bend City Council wanted additional details, it was the consensus of the council Monday night to earmark half of the $2 million in COVID-19 American Rescue Plan Act of 2021 funding the city will receive for subsiding sprinkler and fire alarm systems in downtown upstairs lofts and businesses. 

The use of the other half has yet to be determined, however City Administrator Kendal Francis and the council have discussed tapping some of the funding for automated water meters.

The COVID-19 Stimulus Package is a $1.9 trillion economic stimulus bill signed into law by President Joe Biden on March 11 to speed up the COVID-19 pandemic and recession recovery. The first half of the funds should arrive in around 60 days, along with the final stipulations governing use of the money.

“What we are hoping to do is discuss the possibility of investing these funds in a manner that will promote growth and encourage substantial private investment in the community,” said a passionate Great Bend Economic Development Inc. President Sara Hayden, who championed the proposal. “The potential would exist for this investment to recreate recurring revenue to the city and for our community, allowing this gift to continue to grow and continually fund other types of projects.”

The idea is to generate recurring revenues through valuation increases caused by the investment, the growth of sales tax collections as the city attract more visitors, and the retention of local spending, she said.

The discussion came during a work session held following the regular council meeting called to talk about uses for the stimulus money. 

What is the proposal?

Under the proposal, the city would establish a defined area in the downtown corridor in which there would be a cost-sharing fire sprinkler and fire alarm program. It calls for paying 50% outright of the cost up front, and then structuring the other 50% of the cost as a forgivable loan.

That loan would be forgiven if the valuation increased enough over a specified time period. The recommendation would be 15 years for commercial space and 20 years for residential. 

“The reason we structured it this way is that we really felt like doing that second 50% as a forgivable loan really entices the property owner to make sure that they are investing in that property,” Hayden said. “In other words, we want to encourage them not to put a sleeping bag upstairs and call it a loft.”

As an example of what this means, if a property owner were to invest $200,000 into a residential loft, based on the current taxing percent and the mill levy, that investment would generate an extra $4,278 in property tax, with $1,246 of that being the city’s portion. That $1,246 would generate $24,920 in property taxes over a 20 year period. 

On the commercial side, that $200,000 would generate an extra $9,300 and property tax, with $2,712 With that being the city’s portion, and that $2,712 would generate $54,240 in property taxes over a 20 year period.

It’s estimated that fire sprinklers would cost around $3.50 a square feet per floor. So a two-story  building with a basement would cost around $31,725

There could be an extra cost to get the needed underground water line to the building and that would be approximately $10,000 per building.

Is there support?

Hayden met with downtown building owners an all were in favor of the project. Of those, 23 said they would want to move forward if the sprinkler costs were covered, three said that they were in favor but they’re already using their upper floor spaces, and there were a couple who are interested but would want to sell the floor to someone else for development.

“The money has a time line,” she said. It has to be spent by Dec. 31 of 2024.

“With this, we’re able to address two obstacles that we currently face,” Hayden said. First is the shortage in mid- to upper-income housing and the second is the economic shift with businesses looking at rural communities for expansion, bringing families to these rural communities.

“This project is not only going to help with the housing shortage, but also enhance business employee recruiting, drive capital investment and increases the tax basis,” she said.

She assured the council that this endeavor will meet the guidelines of the stimulus funding. It responds to a public health emergency with respect to COVID-19, its negative economic impacts including assistance to households small businesses and non-profits, or aid to impacted industries such as tourism, travel and hospitality.

“Downtown becomes a recruitment tool for local businesses as they make efforts to attract workers,” she said. It helps economic development programs attract new businesses as they realize the lifestyle possibilities for their employees, and ultimately the entire city gains as property values and tax base increase, and it lessens the demand on the budget and the mill levy.

Council support

“When’s the last time we ever take a risk in Great Bend,” Mayor Cody Schmidt said, endorsing the idea. “We could turn around and take the $2 million and spend it in on water meters, you know what you’re getting, there’s no risk. But are we still going to be the same old Great Bend in six years from now?”

He said the governing body needs to think outside the box. 

Some on the council had questions about who would administer the funds, how the application process would work and the breakdown of residential versus commercial in the second-story spaces. Perhaps another work session will be held to delve into the matter more.

But, “who is in charge of making Great Bend better? We as a council are,” said Ward 2 Councilwoman Jolene Biggs. “We need to change our mindset so that we’re doing things that improve Great Bend and bring people in.”

Downtown support

Matt and Mayra Kurtz purchased Identifications in downtown Great Bend in 2019. They have been thinking about converting their second floor into a couple of lofts

“This would be a great step for us,” Matt told the council. “I just appreciate the fact you guys are even thinking about it.”

Chelsea Morris owns the building at Forest and Main where she has a photography study, but is eying upstairs improvements. “I bought the building with the intent of renovating the whole building, so renovating the second floor as loft space is something I’d love to do.”

She urged the council to look at the efforts of downtown business owners and the limitations the city puts on them through fire and other codes. “If we want growth, we have to do things that stimulate growth and we’re not doing that right now. This is an opportunity for that.”

What about water meters?

To totally fund what Hayden wanted and the total cost of the water meter project are about the same – roughly $2 million each. But, Hayden was seeking just half.

It was Francis who argued for the meters. This system would make it possible for city personnel to just drive by homes and get a water-use reading.

The city has over 6,000 meters which have a lifespan of about 20 years each. Such an automated system would reduce the need for meter readers, which are challenging positions to fill, and would pay for itself.