Commerce Department Loan and Grant Programs Take Aim at Commercial Corridors

Pictured here: The East Girard commercial corridor. 

Talk to almost anyone working to improve commercial corridors and they will mention two programs from the city’s Commerce Department: the Storefront Improvement Program and the InStore Forgivable Loan Program. Both designed to make physical improvements to the businesses and storefronts that are the building blocks of commercial corridors.

This breakdown of the programs explains how they work, what they have achieved so far, and what their potential is in the future.

Storefront Improvement Program

The Commerce Department has been offering grants to enhance business facades through the Storefront Improvement Program (SIP) since 2009. Since then, the city has issued 310 grants to businesses, according to Jonathan Snyder, senior program manager at the Commerce Department, and the official in charge of SIP.

The grants are provided as reimbursements after the business owner has made investments in their storefront. In the five years since the SIP started, the city has given $2.37 million in grants upon completion of improvements. This allows the city to make sure businesses meet certain conditions before funding.

The maximum grant amounts are $8,000 for a single commercial property, or $12,000 for a multiple address or corner business property. Snyder noted that a lot of businesses have received $2,000 or $3,000 grant reimbursements.

Snyder said that the program has leveraged over $4.06 million in private funding through matching grants.

One of the most obvious financial boons to this program is increased patronage at businesses with exterior improvements, and increased traffic at other businesses along the commercial corridor.

Some of the commercial corridor that have taken advantage of Storefront Improvement grants include:

• The 52nd Street corridor (West Philadelphia) — 20 SIP grants
• Torresdale Avenue in Tacony (Northeast Philadelphia) — 14 grants
• The Lancaster Avenue corridor (West Philadelphia) — around 20 grants.
• The Frankford Avenue corridor in Frankford (Northeast Philadelphia) — around 20 grants
• The Passyunk Avenue corridor (South Philadelphia) — 20 grants.

Tacony in Northeast Philadelphia has especially benefited from SIP grants. Businesses along Torresdale Avenue in Tacony have received an impressive 14 SIP grants in the past year and a half alone, said Alex Balloon, commercial manager at the Tacony CDC.

At the Commerce Department, Snyder is very happy to work with community partners like the Tacony CDC. It “truly is representative of a strong partnership,” Snyder said.

While the City Planning Commission lists 270 commercial corridors throughout Philadelphia, not all of them are eligible for businesses to receive SIP grants.

According to Snyder, the overwhelming majority of corridors that have seen facade improvements are those eligible for Community Development Block Grants (CBDGs) through the federal Department of Housing and Urban Development (HUD). These grants are typically awarded to low and moderate-income communities suffering from urban blight.

With this in mind, there are a few commercial corridors that are ineligible for these federal grants, but have still received city-funded facade improvements. These corridors may have been approved for SIP grants through bond fund initiatives passed by City Council in 2006, back when SIP’s predecessor program, the Small Business Commercial Improvement Program, was in effect.

InStore Forgivable Loan Program

Another financial incentive that the city Commerce Department offers to businesses along eligible commercial corridors is the InStore Program, which offers forgivable loans to businesses looking to make improvements inside their stores. The program was launched in August, 2013.

Given that the InStore Program is still in its infancy, Snyder said that only two businesses have completed work and been reimbursed so far. In Northwest Philly, Rose Petals Cafe and Lounge on Chelten Avenue in Germantown used an InStore forgivable loan to prepare for its opening last summer.

In Southwest Center City, the Igloo, which sells frozen yogurt and gelato, has completed work on the interior of its shop at the Gray’s Ferry Triangle.

Snyder says that he hopes to provide ten to twelve forgivable loans a year once the InStore Program really gets off the ground, projects that the program could add up to 65 jobs a year.

He added that interested businesses must undergo a more rigorous approval process than for the SIP grants, since any commercial corridor improvements gained from InStore loans would go away if the business closed

While the approval process is more difficult for InStore loans, the financial reward is often greater. Whereas SIP grants typically cover no more than $8,000-$12,000, the InStore program covers loans from $15,000-$50,000. Once approved, businesses do not have to make payments on the loan, unless they run afoul of program guidelines, and the loan is fully forgiven after five years, effectively becoming a grant.

The first two projects have so far generated interest. The Germantown United CDC noted that the success of Rose Petals has other local businesses applying to the program.

While a number of other major cities in the U.S. have facade improvement programs, Philadelphia is a pioneer with the InStore Program. The only other city that Snyder is aware of with a similar program is the much smaller Durham, NC. Snyder added that Chicago and Los Angeles might be interested in an interior forgivable loan program, but they are waiting until August to see how Philadelphia’s program fares in its first year.

Further Information

View the InStore Forgivable Loan Program guidelines here and the Storefront Improvement Program guidelines here.