In order to level the playing field somewhat, city officials are trying to help the vendors in three designated redevelopment areas through two programs designed to revitalize those areas economically and aesthetically. The designated areas are the First Street Specific Plan district, the El Camino Real "Old Town" area and the Newport Avenue corridor sector, between First Street and El Camino Real.

One of these programs, the Commercial Rehabilitation Program, provides financial incentives to business property owners through Federal Housing and Community Development Block Grant funds to make facade and sign improvements. The other, the Main Street program, is a national program administered by the California Trade and Commerce Agency, but is locally based.

"Businesses are going to the newer centers in outlying areas so the Downtown areas are being overlooked," says Jim Draughon, senior redevelopment project manager for the city. "They have a marketing disadvantage with other centers typically newer and more strategically located," he adds. "In Tustin, our whole town is characterized by smaller buildings, but we have a lot of infill vacant lots. Our objective is to develop those lots to create a critical mass to make this district competitive with surrounding shopping centers and malls."

At the City Council's Jan. 16 meeting, staff recommended approval of the Tustin Old Town Association's application to the California Trade and Commerce Agency designating the city as the first in Orange County to become a Main Street community. The Ccty is backing the application and offering financial assistance in the amount of $15,000 to help revitalization efforts for the Downtown district.

"The primary import of the Main Street program is to the nonprofits and local business organizations to give them more technical assistance in marketing outreach," Draughon adds.

In reality, the rehabilitation program has not attracted a lot of business property owners to date. The reason, Draughon says, is the limited amount of funds involved that are useful more for architectural and design services than for construction. Under the program, the city can provide a grant of no more than 50% of eligible construction costs, up to $10,000 in the Old Town area and $5,000 in the other redevelopment areas. Eligible architectural and engineering design costs may be reimbursed by the city.

Another major reason why property owners opt not to use the rehabilitation program for construction purposes is that any dollar spent on construction triggers the Davis-Bacon Act, which requires prevailing wages for construction workers and carries with it some onerous reporting requirements for contractors and developers, Draughon says.

The city is also in the process of forming a redevelopment area for the Tustin Marine Corps Air Station, where contamination mitigation will be complete before the city takes ownership of the base from the military.

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City Redevelopment Agency Helping Downtown Business District to Compete

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