***** Click here to sing along with Johnny Cash’s This Side of the Law******

Grant programs are one of the many tools we use to keep our downtowns healthy and vibrant. There are, however, specific legal requirements by which a municipality may make and authorize grants for downtown improvements. With so many grant programs out there and so many tools to choose from it can be hard to know “Who is right? Who is wrong? Who is for and who’s against the law?”

Remember, anytime a municipality makes a grant, the issue of whether an unconstitutional gift has been made can arise. To avoid this problem, it is important that the municipality receives, in return for issuing the grant, something proportional to that which it gave. Grants must reflect the municipality’s direct efforts to serve the community’s interest and improve overall economic welfare.

How do you know if your grant programs are legally compliant? Or if you’re making the appropriate findings required by statute when approving grants?

Municipalities are authorized by NCGS 160A-536 to establish a Downtown Revitalization area and issue grants to finance projects within that area that will “promote business investment.” These grants must meet certain legal criteria, including specifically outlining how each grant will facilitate economic development within the community and provide adequate safeguards to project against abuse.

Not only do you have to follow certain statutory guidelines when making grants for downtown improvements, but you also have to follow the rules and procedures you’ve put in your own program guidelines.  It is critical to make sure that your grant guidelines are all in alignment with the stated goals of the respective grant program.  This includes the program description, application form, evaluation rubric, and approving resolution.

A municipality may also choose to establish commissions or advisory boards to assist with administering downtown grant programs. To do this on the right side of the law, the municipality must specifically give the entity the power to implement and facilitate grant programs. Appearance, historic preservation, and economic development commissions are commonly used to implement grant programs.  Have you given your commissions the specific authority to administer grants?

We’ve helped communities streamline their grant process by consolidating grant programs into a single common application form. To better assure compliance, we’ve helped communities re-write their grant program documents (including approving resolutions) to better align with the program’s stated goals.

In addition to the requirements for municipal grant programs discussed in this post, there are also more practical things that must also be taken into consideration. For more practical considerations, see our previous blog post here.

At Sanford Holshouser, we work with communities and grant programs of all shapes and sizes. We routinely preform comprehensive reviews of multifaceted downtown grant programs for legal compliance with state and local ordinances and the state constitution. We evaluate grant approval processes for efficiency. We help streamline the grant approval process and can help you identify or create an entity to help with grant administration. During the pandemic, we helped several communities structure legally compliant COVID grants tailored to their specific needs and goals.

We’d love to help you figure out which side of the law your grant programs are on. We “won’t give you the run around.” Whether you have an existing program that you’d like to evaluate, you’re considering establish a new grant program, or you’d like to improve your grant approval process, we’d love to help.

Contact Ashley : ashley@shlawgroup.com to make sure your grants are on this side of the law.