With about a dozen funding streams available to assist businesses in the lakes area, a proposal seeks to unify those dollars into one pot.
Sheila Haverkamp of the Brainerd Lakes Area Economic Development Corporation explained Tuesday consolidating the funds could streamline marketing and management practices, in turn attracting more businesses to the area.
Haverkamp addressed the county board on the proposal, which required a supportive resolution to establish BLAEDC as the county’s designated economic development organization. Funding streams to be consolidated originate from local, regional, state and federal dollars, Haverkamp said, totaling more than $3 million. The Unified Fund would serve as a revolving loan fund for entrepreneurs, existing businesses and new companies. A revolving loan fund offers gap financing for businesses. The business owners pay back those dollars to the fund, which can in turn be used to fund other businesses.
“The state is excited if we can create a path to get those dollars to businesses,” Haverkamp said.
In a document Haverkamp prepared, she explained spreading the dollars between so many funds meant they were not used as often as they could be.
“Our local revolving loan funds are frequently not tapped by companies due to a variety of reasons including relatively low balances in each pool, complicated or confusing public processes, lack of marketing and unknown outcomes,” Haverkamp wrote. “BLAEDC’s hope is that a program will be created that benefits all of our communities/entities and creates economic development opportunities.”
Since 2002, BLAEDC has had on its books about $80,000 on behalf of the county, which allocated the funds to BLAEDC for the purposes of the Minnesota Community Capital Fund, a nonprofit lending corporation operating in several counties and cities throughout the state. That fund dissolved in 2014, but BLAEDC continues to hold those funds. These would be some of the dollars added into the Unified Fund, Haverkamp said. To complete this process, a public hearing must first be set and hosted by the county.
“We’re not in the business of economic development,” said Chairman Doug Houge. “This would give BLAEDC the authority to do that with those resources we already transferred.”
County Administrator Tim Houle said the county has served as the pass-through for BLAEDC when it receives grant funds for some time. Proceeding with scheduling a public hearing and approving a resolution would give the organization authority to administer funds meant for economic development purposes on the county’s behalf.
“They’d be making loans to new businesses, having those funds revolve to an extent,” Houle said.
Commissioner Paul Koering made a motion to set a public hearing and Commissioner Rosemary Franzen seconded. The board unanimously approved hosting a public hearing Oct. 10.
Those entities, both governmental and private, agreeing to participate in the Unified Fund will each have the opportunity to appoint a member to the fund’s board and will receive an annual report. BLAEDC would manage marketing, project vetting and loan processing.