Some of the nearly 100 small businesses the City has supported through its rent subsidy and façade improvement programs over the last few years …
Award recognizes The Cov’s success, innovation, and creativity
COVINGTON, Ky. – City officials from Louisiana to Ohio have reached out to Covington over the last few years with hopes of emulating a program that since 2017 has supported almost 100 small businesses with first-year rent or exterior improvements.
Now, Covington’s reputation for helping its small businesses is going global.
The world’s largest council of development professionals – with over 5,000 members – has saluted Covington with one of its prestigious awards. The International Economic Development Council’s (IEDC) Bronze Award in the Neighborhood and Retail Development category recognizes the Covington program’s success, innovation, and creativity.
“The winners of IEDC’s Excellence in Economic Development awards represent the best of economic development and exemplify leadership that our profession strives for every day,” IEDC board chair Tom Kucharski said in a statement. “Each of this year’s recipients represents the best of the economic development profession and exemplifies the ingenuity for fellow economic developers to aspire to in the years to come.”
Covington’s Economic Development director, Tom West, said that while he and his staff are accustomed to fielding phone calls and emails about the program, the international nod is particularly meaningful.
“To have this program recognized by an international association like IEDC demonstrates the vision and commitment of our elected officials and staff to investing in small, locally owned businesses as the backbone of our community,” West said. “It puts Covington on the map in a much broader setting.”
The Small Business Program was designed to award funding for projects that support small business growth, create jobs, leverage private investment, and become transformational for the community.
“While big projects grab headlines, small neighborhood projects often mean the most to residents and businesses,” said Ross Patten, who administers the program as the City’s assistant economic development director.
It was no surprise then that the program was put to full use right from the beginning.
“We started with a $36,000 budget to help six businesses, and we ran out of money in six months,” Patten said. “We doubled it the next year and, again, ran out of money in six months. We now have an annual budget of $150,000 to help approximately 25 businesses and properties.”
With increased resources has come increased impact. Since its inception, Covington’s Small Business Program has:
- Assisted 96 businesses or projects.
- Leveraged over $4.3 million of private investment, or more than $8 of private investment for every $1 of public funding.
- Created or retained 361 jobs.
- Filled or improved almost 95,000 square feet of vacant commercial space.
- Supported 33 minority, women, or veteran-owned businesses.
And those numbers continue to grow.
Tonight, the Covington Board of Commissioners will hear proposals to help four more businesses, two with first-year rent and two with money for exterior improvements. Those four applicants come from four different neighborhoods, a not-uncommon fact since the program’s eligibility was expanded to citywide.
The program’s success is evident in bricks and mortar, sound business growth, and a vital community aesthetic. Its assistance during a pandemic, when new businesses felt particularly vulnerable, was critical.
Here are some examples:
For 10 years, the building at 4 W. Pike Street stood vacant. Then along came husband and wife Matt and Kathleen Haws, who with help from the City opened Ripple Wine Bar in 2019. The venue’s palpable success can be measured in the opening of the Haws’ second business, a neighboring wine shop called The Bottle Shop, located doors down from Ripple.
“We really appreciate the Small Business Program” said Matt Haws. “It’s one that you can take advantage of to give you that extra boost that you need in the first year of opening up a small business. We’ve taken advantage of it with Ripple and The Bottle Shop, and it really helped.”
During the pandemic, Rachel Hiraldo’s Vivify Counseling and Wellness practice saw an increasing demand for the mental health services she provides. Thanks to a façade improvement grant, she and her husband made timely improvements on their 613 Main St. property that created a welcoming space for more patients.
“The façade grant was really helpful because we were able to speed up the process and have this space now for the people who are in need of health services,” Hiraldo said, adding that she received essential help with the application process.
“I’ve never had a commercial building, so it was all a new process,” Hiraldo said. “I worked with Ross, and he was really helpful and made it easy to do.”
Meanwhile, the transformation of an empty lot at 401 Greenup St. that resembled a worn, cratered patch of asphalt into a popular outdoor food court featuring shipping containers also benefitted from the program. Two of the small food establishments at Covington Yard – the Korean BBQ place Mr. Bulgogi and Hangry Omar’s, which serves sliders and fries – both received rent subsidies to tide them over in their first year of operation.
The parameters of the Small Business Program aren’t random: Underneath the program’s incentives lies a thoughtful strategy aimed at addressing many of Covington’s historic weaknesses.
When downturns hit small communities, Patten said, it’s not unusual to see once-thriving business districts lose their energy and become blighted. With a population of just over 40,000, the City’s business centers – and especially its neighborhood business districts – have periodically struggled with vacancies, run-down appearances, and disinvestment made worse by periodic national recessions and economic slowdowns.
Patten said City economic development staff fashioned the small business program to come at those challenges from two angles.
- First, a rent subsidy program was created to attract new businesses into vacant spaces and help existing businesses expand. It offers a grant of up to $500 a month for first-year rent, if the business signs a two-year lease, helping to keep operating costs low during the critical start-up period.
- Then, to enhance a property (and surrounding district’s) appearance, a façade improvement incentive was launched, providing commercial property owners a forgivable loan of up to $6,000 to match investment dollar-for-dollar any exterior improvements to a commercial building.
The program is designed to support the needs of small businesses that are not traditionally supported and to create the product to land new, unique users to the City, Patten said.
“For small business and property owners, a $6,000 incentive – whether for rent or improvements – went a long way and made a huge difference to their bottom line,” he said. “It has also paved the way for creating move-in-ready commercial spaces. In this way, it became both a business expansion and a product development incentive.”
Policy goals were written into the application process, and a rating sheet attached to the application made clear to applicants what was expected and how to be competitive. For instance, applicants for the façade loan are awarded points if they hire Covington contractors or residents, and if they maximize private investment. Applicants for both programs earn points if they are located in a target neighborhood or are a member of a community that has been historically unrepresented, such as minorities, women, and veterans.
A partnership with the Covington-based business coach from the Kentucky Small Business Development Center, Lisa Brann, provides a valuable resource to applicants.
“We encourage applicants to use their no-cost services to put together business plans and financial projections, and then stay connected for business coaching throughout the owner’s journey,” Patten said.
Applicants also receive extra points if they connect to neighborhood business associations and receive a support letter, which helps them establish relationships with the surrounding community from the start.
Supporting what’s considered secondary businesses -- retail, restaurants, and neighborhood services – became one of the four largest sectors of the City’s economic development strategy, Patten said, largely because those businesses are consistently singled out as one of the reasons the City lands new primary businesses, talent, and residents.
“Our small business program concentrated on building out our experiential and entrepreneurial economy and quality-of-life businesses – such as local or boutique retail, breweries, entertainment, and other businesses – that emphasized the character and identify of Covington,” Patten said.
That nod to authenticity pays off.
“We now have communities from Louisiana to Ohio that reach out to us,” he said. “As economic development professionals, we shouldn’t have to recreate the wheel each time. We are more than happy to share our model, and you can be sure that we don’t hesitate to reach out to other communities to model their best practices.”
Businesses who are interested in applying for either the façade or rent assistance should contact Ross Patten at (859) 292-2144 or firstname.lastname@example.org. Applications and guidelines for the programs can be found HERE.
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