Fountain Valley adopts two new programs to help revive city’s economy

The Fountain Valley City Council adopted two programs Tuesday to attract and retain businesses as it struggles with financial problems.

One initiative is intended to get hotel companies to build in the city and the other to keep existing businesses in the community by providing low-interest loans

Both programs were adopted on a 4-1 vote, with Councilman Mark McCurdy dissenting.

The Hotel Incentive Program aims to attract reputable 3-to-5-star hotel companies to build in the area by offering financial support if needed. Maggie Li, assistant city manager, said the program would generate extra transient occupancy tax revenue and provide employment opportunities.

For example, if a new hotel company is interested in building in Fountain Valley but needed financial help to close the deal, it could apply for participation in the Hotel Incentive Program. The company would need to meet certain criteria, such as having a minimum of 10 years experience in building hotels and providing full-time jobs paying a living wage.

Then, if the hotel, which should have a minimum of 100 rooms, generates above $200,000 in transient occupancy tax revenue in 15 years, the city could share up to 50% of the earnings.

Funding for the program would come from the newly generated transient occupancy tax revenue, Li said. The program was fashioned on similar ones in Anaheim and Santa Ana.

Li added that Fountain Valley has very few hotels and that the ones located there can fill up during certain events. Some targeted areas would be near Magnolia Avenue and Warner Avenue; Edinger Avenue and Harbor Boulevard; Brookhurst Street and Garfield Avenue; and Brookhurst Street and Heil Avenue.

Meanwhile, the Commercial Property and Business Improvement Loan Program would allow the city to provide loans at an interest rate of 3% to owners or tenants to help refurbish commercial buildings, so long as city requirements are met.

For instance, the city would look at the location of the business, the condition of the property and its ownership.

Property owners must provide a minimum of 50% of needed funds, and then the city would match that amount, according to city documents. City loans would not exceed $500,000.

Properties with blatant deterioration or code violations will have priority.

The city will adjust its fiscal 2016-17 fiscal budget to come up with $1 million for economic development, according to the staff report.