County learns about new development tool
CHILLICOTHE – “Another arrow in the (economic development) quiver” is how the creation of the new Appalachian Growth Capital was presented to the Ross County Commissioners Monday afternoon.
Slated to start lending around July 31, the new organization is a Community Development Financial Institution (CDFI) designed to work with banks and other lenders to fill holes that may exist now in helping meet the financial needs of entrepreneurs and small business owners looking to get started or expand. It will serve the 32 counties designated as Appalachian in Ohio, with an initial outreach going to the 25 counties, including Ross and Pike, that are served by the Appalachian Partnership for Economic Growth in partnership with JobsOhio.
“It’s all about investment and job creation in the end,” summarized Katy Farber, project manager for APEG.
Bringing a CDFI to Appalachian Ohio was an idea APEG President and CEO John Molinaro brought with him from his previous position.
“He did rural economic development for over 20 years in Minnesota and he transformed the region into a profitable manufacturing center that has investment in jobs,” Farber said. “That’s why he was asked to come here. Not only do we need the economic development piece that we can come to with JobsOhio that APEG represents, but he also ran a very successful CDFI.”
Brad Blair is joining APEG to play a key role in establishing Appalachian Growth Capital. He and Farber stressed that a CDFI is not designed to compete with commercial banks or local lenders, but to work in conjunction with them to meet as many financial needs as possible.
As an example, Blair offered up a small business owner who wants to purchase a piece of equipment and the commercial bank’s credit policy is to lend 80 percent loan-to-value. If the customer had a demonstrated need to go to a higher ration, the CDFI could add as much as an additional 15 percent to help support the purchase.
“The reason for that is to keep cash in the company, in the small business,” Blair said. “If they get a higher loan-to-value ratio, then they’re keeping cash in the company and we can help promote the small businesses.”
Blair said a CDFI’s lending terms can often be more flexible than may be available on the commercial market, making them a nice source for “bridge funding” of projects that otherwise may face a hole in their funding plans.
At first, the largest loan available from AGC will be $100,000, with the amount to grow over time as the loan fund grows. Through partnerships with banks, local loan funds and other CDFIs, however, the possibility exists to meet credit needs of up to $1 million.
During the AGC’s startup period, interested business owners and entrepreneurs can connect with it through the Appalachian Partnership for Economic Growth at 740-753-5359 or via email at firstname.lastname@example.org.
In another action by the county commissioners Monday, the board approved advertising for bids on a pair of activities that make up the 2017 Ross County Shoemaker Airport project.
Jeff Kramer, from Stantec Consulting, said the project would definitely involve crack sealing the runway pavement and, with commissioners’ approval, could also include installation of new LED runway lights. To give commissioners the option to do one or both pieces of work, they will be taken out to bid separately.
The crack sealing will make up the cheaper portion of the total overall cost, at an estimated $50,000. The estimated runway light replacement would run about $292,733, with the potential for an additional $24,147 if the decision is made to include installation of Precision Approach Path Indicator cables in the same trench as the runway light cables.
With other financial considerations factored in, Kramer estimated the total project cost if all three options were included to be around $447,405, which includes about $402,664 paid by the Federal Aviation Administration, a $22,370 local match and the remainder potentially coming from additional funds the FAA could possibly uncover.
If only the crack sealing is done, the airport would have to be closed about four or five days. If the lighting project is included, Kramer said the closure could extend to around 40 days because of how close the lighting work would be done to the runway itself. During that stretch, the runway could be opened evenings and weekends to plane traffic, with the exception of around 10 days when it would have to be shut down day and night.