JLDC Eyes Retooling Loan Programs
Micro, working capital, COVID-19 response and remote workers might be new categories of loans the Jamestown Local Development Corp. (JLDC) could be offering to encourage private sector investment.
On Wednesday, the JLDC board met with one of its discussions on loans offered by the organization to foster economic development. The JLDC offers loans ranging from $35,000 to $350,000, with rates varying depending on the loan. The applicant is expected to fund at least 50% of the total project costs, with loans ranging from five-, seven- and 10-year terms. Approved uses vary by loan program, collateral must be project related and personal guarantees are required.
Crystal Surdyk, city development director, said city officials would like to restructure the loans offered to provide more flexibility. She said some of the loans offered haven’t been used in a number of years. The loans offered by the JLDC that have been in use includes small business development; job and private investment; and restaurant development.
Stephanie Wright, city economic development coordinator, said the other loans available through the JLDC have not been applied for during her six years in the department, which includes the energy conservation; technology based business; artisan development; housing stimulus; and fire safety upgrades.
“I don’t know the last time (loan programs have) changed, but it’s been quite a number of years,” Surdyk said.
Surdyk and Wright suggested that one new loan category could be a microloan for $5,000. Wright said since last month’s JLDC meeting, when the board first discussed possibly retooling its loan programs, she has been contacted by several people looking for a loan, but hasn’t been able to help them because applicants aren’t looking for a loan as large as $17,500. She said one person wanted a working capital loan to get started, but that’s not one of the programs offered by the JLDC. She added another example of not being able to provide a loan to someone was for someone looking to start a new business after their previous business had to close because of the economic shutdown following the COVID-19 pandemic.
“There was nothing we could really do to help them,” Wright said.
Jamestown Mayor Eddie Sundquist said he likes the micro and working capital loans idea and suggested that a loan to help businesses establish remote workers might also be a good idea.
He said a state priority following the COVID-19 pandemic is to increase the number of employees in the state through remote workers. He added that he told the Western New York COVID-19 Control Room that Jamestown is a prime spot for remote workers because the high-speed internet infrastructure is in place, low utility costs and it’s an affordable place to live.
Anthony Dolce, council president and JLDC board member, said the development department should draft a plan for the potential new loans so the board can review the proposals by its next meeting.
In other business, the board also discussed the Minority and Women Owned Business Enterprises Certification (MWBE) small business support initiative. The discussion started last month with Tamu Graham-Reinhardt, At-Large councilwoman, Rahsaan Graham, business consultant, Shannon Greenland, business consultant, and Jessica Smith, human resources data strategist and consultant, who have been working on how to help MWBE business in the city. The city currently only has five certified MWBE owned businesses, of which all are women-owned.
Surdyk said because of the state’s MWBE certification initiative, the city is required to contract with a certain percentage of MWBE businesses. She said city officials often have to apply for a wavier from the state because they cannot meet the MWBE contract requirement because of the small number of MWBE businesses. She added there are more than five MWBE businesses in the city, but several don’t have the state certification.
Surdyk proposed that city officials hire a consultant to work closely with non-certified MWBE businesses so they can acquire the necessary insurances and licenses so they can become certified.
“It has been brought to our attention there needs to be more awareness and cultivating of these businesses,” she said.
Surdyk proposed that $35,000 in funding could possibly be used to hire a consultant who can work with the businesses that haven’t received the MWBE certification. Kim Ecklund, At-Large councilwoman and JLDC board member, said she would like to see a detailed plan on how the funding would be used and whether the position would be full- or part-time. She added that following the COVID-19 pandemic, there will be a lot of concern regarding what the city can afford because of the loss of sales tax revenues and state aid.
“I don’t think it’s a bad idea, but I’m concerned with the budget,” she said.
Sundquist said another potential option could be to build into the potential new loan programs is the costs of a consultant’s assistance that way the city wouldn’t be paying all of the cost. Surdyk said in the request for proposals for a consultant, city officials will need to detail how much the consultant will be paid for its services, which could possibly include a retainer.