Downtown Merced business incentive program off to slow start

tmiller@mercedsunstar.comJanuary 1, 2014 

— A business incentive program that would pay qualified business owners $1,000 to open up shop in Merced’s downtown is starting to generate inquiries, and city leaders are optimistic it will boom this year.

The Merced City Council in May adopted the program, which pays anyone who opens or expands a business in Merced’s downtown. The targeted locations include 16th, Main and 18th streets between G and V streets.

Regional leaders and experts are projecting that the coming year will continue to see improvement in the jobless rate and the amount of development in Merced. The program could benefit from a higher level of confidence in the economy.

“Generally, at the beginning of the year – the first quarter – people want a fresh start,” said Frank Quintero, Merced’s economic development director. “Entrepreneurs start looking for opportunities.”

Quintero said the targeted locations were picked because they have a rate of vacancy that is slightly higher than other parts of the city. The downtown is where officials want to see entrepreneurs develop, he said.

How to qualify

To qualify for the incentive, small businesses owners would have to prepare a business plan in conjunction with the Small Business Alliance Center. The owner would then have to meet with city staff to review codes and licensing requirements prior to the issuance of permits.

Quintero said the program is just now ramping up and will likely be popular in time.

Maria Mendoza, development associate with the city, said she’s heard about 20 inquiries related to the program, although no one has taken advantage of it. She said two potential businesses have qualified for the program but would still need to meet with the small business center.

Councilman Mike Murphy, who championed the program, said the city’s limited advertising budget is a challenge the program has to overcome. “I think it’s still the best-kept secret in town,” he said.

The incentive program was adapted from a similar one in Turlock. In its first fiscal year, the Turlock project funded 10 businesses that, combined, hired more than 30 employees.

In its last budget, Merced earmarked $25,000 of general fund money for the program here. Of that, $15,000 can be distributed to the qualified owners.

Under the incentive program, new retail businesses that charge sales tax would also be eligible for the funding if they occupied space downtown.

Existing businesses

Existing retail businesses downtown would be eligible if they expanded by a minimum of 300 square feet. A local retail business relocating downtown and expanding its product line also would be eligible.

John Cardenas, president of Merced County’s Multi-Cultural Chamber of Commerce, said $1,000 won’t make or break a small business, but it is a good start.

“It’s a nice little token, an appreciation that you’ve got the determination to open a business,” he said.

To get the incentive, the business owner also would have to agree to quarterly record keeping for one year.

Mayor Stan Thurston said there seems to be a growing optimism about Merced’s future, and that could manifest itself in increased popularity for the incentive program. He said $1,000 can make a difference for some small businesses.

Those businesses have to have employees, and that’s the most important part, Thurston said. “It all comes down to jobs. Open a business, you create some jobs.”

Sun-Star staff writer Thaddeus Miller can be reached at (209) 385-2453 or

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