City Proposes Spending $3.2M in ARP Aid to Businesses
YOUNGSTOWN, Ohio – City officials are considering proposals to spend nearly $3.2 million in American Rescue Plan funds to provide direct aid to businesses or assist companies with finding sites.
The proposals, presented to city council’s community planning and economic development committee Tuesday evening, include allocating $2 million for a new revolving loan fund managed by Valley Partners and $1 million for a citywide façade grant program, according to Nikki Posterli, chief of staff to Mayor Jamael Tito Brown and director of the city’s department of community planning and economic development.
The city and Valley Partners representatives are finalizing the details for the loan fund, Posterli said.
The fund would target for-profit businesses with annual sales of less than $1 million or otherwise meet the U.S. Small Business Administration’s definition of a small business, according to a draft proposal for the program.
“A lot of the problems [businesses] are having is access to capital right now,” Posterli said.
Over a two-year period, Valley Partners disbursed about $10 million in COVID-19 pandemic relief funds, estimated Teresa Miller, executive director of Valley Partners in Liberty Township.
“It showed there was a great need for flexible, low-interest financing to be available to small businesses. Financial institutions tightened their regulations after the pandemic and so a lot of businesses are having a hard time getting the additional funding that they needed,” Miller said. Also, many businesses had to close during the pandemic, resulting in a decline in sales that banks see as “a detrimental thing on our financials.”
Loan funds could be used for fixed assets or working capital under the program as its being proposed, Miller said. The average loan about would be between $50,000 and $75,000, for a maximum of $150,000. The target goal is to create one job for each $50,000 lent.
The proposed façade grant would provide funds covering 50% of all exterior renovations up to $20,000, according to a draft document. They can be used to “update or refresh the exterior” of any city business. Typical uses include painting, siding, fencing, landscaping, parking lots and signage.
Upon approval by the city’s Board of Control, the business would enter into a five-year agreement with the city, under which 20% of the grant will be forgiven each year, If the business closes or moves within that five-year period, the grant would default as a loan. The façade applications must be approved by the city’s design review and Youngstown Initiative committees.
Additionally, the administration is proposing entering into a partnership with the Youngstown/Warren Regional Chamber to work with the city on a site readiness program. The chamber would be paid $187,500 under the proposal.
“They’re going to help us identify sites and buildings, and coordinate community meetings and organizations so that we could position ourselves better” when businesses are looking for locations, Posterli said.
The chamber’s proposal is in response to the situation affecting northeastern Ohio and the Midwest more broadly “where we do not have an inventory of properties, sites or buildings to respond to the massive influx of leads that we’ve been receiving, and the steps that need to be taken,” said Shea MacMillan, chamber vice president, economic development.
The chamber, which vets about 70 inquiries annually, is seeing increased opportunity because of reshoring taking place in emerging markets involving semiconductors and the electric vehicle supply chain, he said.
“We’re always finding ourselves kind of behind the eight ball when it comes to being site-ready,” Posterli said. Oftentimes the city will receive a blanket email describing the proposed project and detailing site needs, and the city only has a couple of days to respond, Posterli said. That leaves city officials scrambling to identify sites, determine who owns the property and how the city can obtain it, she said.
The chamber would collaborate with consultants in addition to bringing on additional capacity internally, MacMillan said.
Copyright 2022 The Business Journal, Youngstown, Ohio.