In spite of all the new federal funding and dozens of new grant programs, city and county officials are still scrambling to launch projects designed to generate revenue.
There are many reasons for this. The primary reason is that the new federal funding has a short lifecycle, and there is no indication that this level of funding will ever occur again.
The short timelines and spending rules restrict the use of federal funding for projects that will require ongoing costs. Another hurdle to overcome for public officials is that the current federal funding requires an application process, specific spending rules, and compliance oversight. Many cities and counties are short staffed and don’t have the necessary resources to pursue the capital and then oversee the compliance.
So, while public officials definitely appreciate and will certainly use the current federal funding, they are seeking ways to ensure other sources of revenue. That objective calls for innovation, creativity, and perseverance. Community leaders throughout the U.S., however, are being supported in this effort by private sector partners, investors, universities, and non-profit organizations.
Elected officials in the city of Mattoon, Illinois, are exploring the concept of a recreational sports complex that could provide various types of ongoing revenue to the city. The proposed plan under consideration includes construction of both indoor and outdoor recreational amenities. As currently outlined, the project has a combined cost estimate of $66 million. Indoor components of the plan include a 140,000-square-foot facility featuring 16 volleyball courts, eight basketball courts, locker rooms, an entertainment center, first aid treatment space, and seating for up to 3,000 spectators. The project is nearing an initial construction launch date of 2023.
The project’s plan establishes 2024 as the timeline for construction of outdoor components. This will include eight ball fields, eight soccer fields, championship fields, training areas, and a multi-use trail. City officials will meet in August to refine the project’s scope, but the development project is being designed to attract between 250,000 to 580,000 annual visitors, $23.8 million in spending, approximately 60,000 new hotel reservations, and an overall economic impact of $111 million. The revenue generation would be ongoing of course.
In much the same way, civic center projects are also being launched to introduce new or expanded sources of revenue for cash-strapped municipalities.
In Connecticut, an abandoned event center in the city of Greenwich will be revitalized as a springboard for additional economic development. Before construction of a new civic center can begin, a demolition project will be launched, and that effort is planned for this summer. Construction of the new $25 million civic center will also begin in 2022.
The new facility has an estimated size of 35,000 square feet and will include a full-size multiuse gymnasium with spectator seating, over 8,000 square feet of space for various types of events, and three activity rooms comprised of approximately 1,000 square feet each. The new building will be designed to accommodate a variety of cultural and athletic events. The revenue generating potential on an annual basis is significant.
City leaders in Chicago have plans to build a new casino designed to transform 30 acres of industrial land into a bustling entertainment district. The objective will be to create a new hub of economic activity and generate an ongoing revenue stream for the city. Construction of the casino complex in Chicago’s River West district has been tagged with a projected cost of $1.74 billion and the entire project has a forecasted completion date in 2026.
Once completed, the new complex will have several revenue generating features – an exhibition hall, a hotel tower with 500 rooms, a theater that seats 3,000, an outdoor music venue, several restaurants, and an expansive gambling floor. The casino project, currently in the advanced planning stage, is expected to bolster Chicago’s economic viability by $200 million in annual tax revenue. The development will be a collaborative initiative with at least one private sector partner. The company that was selected to operate the casino has already provided $40 million.
Officials in Wheeling, West Virginia, recently approved a plan designed to attract private investment in city-owned facilities. Along with the relaxing of municipal fire codes, the project was approved earlier this month. It provides incentives and some funding for developers interested in renovating upper-level floors of city-owned buildings. A new revenue flow to the city will result from lease payments.
On a smaller scale, the rural community of Valdese, North Carolina, will use approximately $1 million from a state American Rescue Plan Act (ARPA) grant to create an ongoing revenue stream of funding from one of its vacant historic buildings. The initial funding will allow city leaders to renovate an iconic, 100-year-old former school building but, with the renovation, attractive office space will be available in a highly desired location. The city anticipates a much-needed, ongoing revenue boost from the effort.
California elected officials continue to support adaptive reuse projects that convert derelict public facilities into lynchpins of economic viability. Between the 2023 and 2025 fiscal years, the state will disburse $600 million in one-time funding as a way to launch adaptive reuse projects. Over the next three years, projects will be launched to convert existing infrastructure, underutilized commercial zones, and vacant buildings into residential units with revenue generating potential.
There’s more – cities are launching park renovations with venue space, upgrades of marina facilities, minor league stadium enhancements, port expansions, new business parks, and regional medical complexes. Asset recycling efforts are common throughout the country. Almost all projects of this type are designed to result in ongoing revenue for cash-strapped government operations. Public officials appear willing to consider multiple types of innovative projects as long as the plans ensure ongoing revenue potential.