HomeMy WebLinkAbout04. Commercial_Rental_Relief_080420 (1)
To: Mayor and Town Council
From: Economic Development Department
Date: August 4, 2020
Subject: Vail Economic Recovery Efforts in response to the Public Health
Crisis:
Commercial Rent Relief Program
PURPOSE
The purpose of this memo is to summarize the recommended program to support Vail’s
economic recovery with a commercial rent relief program for local storefront businesses.
BACKGROUND
The Vail business community has requested the Town develop a rent relief program for
commercial business owners. The program would be funded and facilitated by
the Town. While the Payroll Protection Program, CARES and other relief programs have
provided short term relief, businesses are still struggling to ensure their continued
viability throughout 2020 and beyond. Rents in Vail are high: commercial rents in Vail
range from an average of $70 per square foot in Lionhead, $90 per square foot on
Meadow Drive, to $110 per square foot in the core area which includes Bridge Street
and Gore Creek Drive, plus Common Area Maintenance (CAM) costs. Town staff has
been working with a committee formed from members of the Vail Economic Advisory
Council to develop a plan. The group has reviewed similar programs in Breckenridge
and Aspen, and has taken the best elements of those program to create a unique model
to support commercial rent for small businesses in Vail.
COMMERCIAL RENT RELIEF PROGRAM
The model strives to achieve four key objectives to support and sustain local
businesses:
1. Share the rent burden among landlord, town and tenant.
2. Provide a timeframe that addresses business challenges to meet rent requirements
from August 1 through November 30, 2020.
3. Tie the rent abatement amount to the percentage of actual revenue shortfall versus
same month last year in order to align relief with actual reduction in revenue
performance.
Town of Vail Page 2
4. Identify and approve the maximum relief funding per business and corresponding
total funding from the Town of Vail for the program.
REQUIREMENTS OF ELIGIBLE BUSINESSES
• Business was open in Vail on March 1, 2020 and was in business for the 2019-20
winter season. Startup businesses in more recent months will be considered on a
case-by-case-basis.
• Business is open and will be open at least six days a week between August 1 and
November 30, 2020, with the exception of the month of October where business will
be open at least five days per week, barring any public health orders that would
preclude this. Businesses should typically be open at least 44 weeks per calendar
year.
• Business employs 50 or fewer full time equivalent (FTE) employees.
• Business has a physical storefront location in the Town of Vail, holds a valid Vail
business license, pays rent to a landlord and is current on all payment owed to the
Town.
o Deferred sales tax payments are due to the town by August 20th. Businesses
with outstanding deferred sales tax beyond that date will be ineligible for
rental relief until payment is made.
• Business must have a rent payment due to a landlord for the time period
of August 1, 2020 - November 30, 2020. The business may not have any ownership
interest in the property being leased.
• Business must pay monthly sales tax. Businesses that are service oriented and
traditionally office in nature, such as accounting, law firms, property management,
real estate, etc. do not qualify.
• Businesses with outlets outside Colorado are not eligible to apply, except for those
businesses with a primary owner whose primary residence is in Eagle County.
• Landlord must participate in the program for business to be eligible. Town agrees to
match the landlord abatement by month up to the maximum of $15,000 per business
within the confines of this program.
• Required documentation includes:
o Current lease and Common Area Maintenance (CAM) charges to verify monthly
rent burden. This includes any rent abatement effective for rent due for the period
August1 – November 30, 2020.
o Colorado Secretary of State confirmation of certificate of good standing.
o Landlord affidavit confirming the amount of the rent + CAM that was abated by
month; the Town will match this amount and pay the landlord directly up to the
per business maximum of $15,000.
APPLICATION PROCESS
1. Business will apply via an online application for relief one month at a time in arrears.
2. Business will provide data to and obtain a signature from landlord verifying the
reduction in revenue versus same month last year.
Town of Vail Page 3
3. Landlord will abate rent plus CAM for each month by 50% of the % of shortfall in
revenue, and Town will abate and pay to landlord an amount equal to the landlord
abatement by month.
Example: Business normally does $100,000 in revenue and pays $10,000 a
month in rent. Business revenue is $60,000 or 60% of last year’s revenue for
a month within the confines of the program. The revenue reflects a shortfall of
40%. Landlord provides an abatement equal to 20% or $2,000 of the monthly
lease and Town matches the $2,000 payment for given month and pays the
landlord directly.
4. Application is due five business days after month end for the month prior.
5. Town will make every effort to pay landlord match within ten days of the receipt of
the application and rent reduction documentation from landlord.
6. Maximum relief per business during the period August 1 – November 30 is $15,000.
7. If the revenue gap is larger than the monthly rent plus CAM per lease, relief funds
will max out at the monthly rent + CAM for that month.
8. TOV Finance will “audit” several randomly selected applications to verify revenue
and rent + CAM information.
ACTION REQUESTED OF TOWN COUNCIL
Staff requests that Town Council approves the Commercial Rent Relief Program as
described here with funding up to $1,000,000 as included in the first supplemental
budget presented to town council on July 21. Final approval of Ordinance No. 8, Series
of 2020 will allow for the immediate implementation of this economic relief program for
Vail businesses who quality