On Thursday, September 21, the Blueprint Intergovernmental Agency (IA) will consider two requests for funds to promote local economic development projects.
The available funding is the result of a new penny sales-tax program which was approved by voters and began on Jan. 1, 2020. Of the sales tax generated, 12% is earmarked to fund economic development projects, while 88% is directed to traditional infrastructure projects.
The first request, by Cascades Gardens, LLC / DBA South Monroe Walls and Walls Distilling Company (SOMO Walls), seeks $1,759,289 to fund construction of the SOMO Walls project.
The funding request amounts to a one-time expense of $1,759,289 for FY 2023. The request proposes that $1,00,000 of the requested funds would be a recoverable grant and $759,289 would be a construction grant. The recoverable grant would be repaid in 2027 when the project is refinanced.
The SOMO Walls development consists of two buildings totaling 30,587 square-feet of indoor and outdoor commercial space, including restaurant and retail options with rotating walls of artistic expression. The project is located on South Monroe – near Cascades Park.
According to the analysis, the “developer’s goal is that SOMO Walls becomes a place where creativity and commerce can blend harmoniously, becoming a South Tallahassee landmark.”
Originally budgeted as a $4.7 million adaptive reuse project, the design team encountered numerous challenges in retrofitting the existing buildings to meet updated building codes, ADA, and life safety requirements. In 2021, the group decided to switch to new construction of industrial buildings, aligning the design with the characteristics of the commercial area where it is located.
As a result of this change, the project budget increased to $5.6 million while retaining essential aspects such as the art walls. Construction began in 2022, and the project started to see cost overruns due to labor issues as a result of the COVID-19 pandemic and construction material cost increases due to supply-chain disruptions and record-breaking inflation.
The current situation indicates that the original project budget of $5.6 has grown to $11.0 million and the construction costs have increased from $3.5 million to $6.3 million. The item notes these increases are due to “increased construction and furniture, fixtures and equipment costs, additional permitting costs, and the addition of Walls Distilling Company to the project scope.”
The item notes that the proposed project could lead to an estimated $17.8 million increase in economic impact on the community and support MWSBE goals.
The agenda item provides three options for the IA Board to consider – provide direction to staff, grant request or do not grant request.
The staff is recommending that the IA Board vote to fund the request.
The second request, by Foodies, seeks $100,000 to purchase equipment, market Foodies Takeout and Deliveries, and onboard each of the new 100 clients. The onboarding includes a tablet with a stand and charger, client-specific software modifications to upload their respective menus, and materials for the client to promote the program to local restaurants.
Launched in January of 2022, Foodies Takeout and Delivery had the primary objective to help the 713 local restaurants and ghost kitchens retain a portion of the revenues currently being directed toward commissions for third-party delivery companies, none of which are based in Florida.
To do this, Foodies launched an innovative website on which participating restaurants’ menus and websites are posted and linked, allowing consumers to order directly from the source. Once the order is placed, Foodies will bid the “job” to all the food delivery services (Uber Eats, Bite Squad, Doordash, etc.), selecting the best price. The order is then completed and delivered to the consumer. Typically, the 3rd party food delivery service charges a 20-30% commission to the restaurant. Foodies do not.
Foodies bills the consumer $1 for every $25 ordered, which is added to the delivery price already being charged. With this process, the restaurant retains 100% of the sales.
Since launching the website, Foodies has recruited almost 50 local restaurants to join their program. According to the owners of Foodies, the amount of revenue being saved by each restaurant each month is approximately $1,000. They indicate that the savings can then be reinvested to fund additional employees, growth, or an expanded menu.
The agenda item provides three options for the IA Board to consider – approve funding, do not approve funding, or provide direction to staff.
The staff is recommending that the IA Board vote not fund the request due to the staff’s assessment of a “low degree of demonstrated economic impact.”
The IA Board meeting begins at 3:00 P.M. in City Hall, 2nd Floor, City Commission Chambers.