The Unified Government currently is considering giving grants to small businesses in Kansas City, Kan.
According to George Brajkovic, UG director of economic development, who spoke at Monday night’s UG Economic Development and Finance Standing Committee meeting, the pilot program under discussion would take some of the money generated by the cost of incentives for projects in the community, using a portion of it for small businesses.
He said the idea had been under discussion for some time in the UG administrator’s office.
“This is something we’re looking at as a start-up,” Brajkovic said. “What we’re also wanting to do is to reach out to our other community partners or agencies that are in pursuit of development projects or redevelopment. We’re hoping as they see us leading the way on a program like this, that they’re also willing to offer or leverage any incentive dollars they might have to attract new businesses into their coverage area.”
The new city-wide pilot program for start-up and existing businesses could come before the full UG Commission for approval at a future meeting.
The grants would range from $2,500 to $10,000. The program as proposed would have discretion to go over the $10,000, but not over $25,000 per project.
Charles Brockman of the economic development department said there are some challenges, such as unproven markets, and structures whose condition discourages investment. Other than the Neighborhood Revitalization program, the UG currently doesn’t have a program to help small businesses, he said.
The program’s goals are to provide a city-wide incentive for small businesses through incentive tools used on larger-scale projects; to help stimulate growth and new investment; improve small business-neighborhood vitality; “economic gardening”; urban innovation; and coordination with other public and private groups.
Only $25,000 is proposed to be budgeted for the program for the 2015 UG amended budget and $50,000 for the 2016 proposed budget, Brockman said. The program would get its funds through the larger project fees going through.
As an example of how it works, $125,000 in industrial revenue bond issuance fees would fund $50,000 annually for this program, he said. It would take one $63 million larger project funded by the UG to generate the necessary funds for the project.
Brockman listed possible uses of the funds for inventory as part of expansion, and building façade improvements.
Also, the funds might be used for commercial lease rate subsidy for operating.
“This is really to compete with something Kansas City, Mo., has to offer,” Brajkovic said. If a business is ready to expand, Kansas City, Mo., offers a program that can subsidize up to three months of its lease payment provided they move to a certain target area, he said.
“It happens we’re competing with Kansas City, Mo., right now on a couple of businesses that are in that expansion mode,” Brajkovic said. “If we had a similar tool, I think we could attract them to certain corridors within our community as well.”
Brockman said target areas would be existing business districts, traffic corridors, and older and urban areas of the city. Also, the UG wants to build on existing partnerships with agencies, such as Downtown Shareholders and the Wyandotte Economic Development Corp.
“It is part of our goal is to truly leverage these grant monies in partnership with these other partners,” Brajkovic said.
Under the proposed program, which has limited funds, applications would be processed on a first-come, first-served basis, according to UG officials. The UG economic development staff would evaluate the applications. After reviewing the applications, it would be a 30-day process. An advisory board would be involved in the process. Home-based businesses would not qualify.
Applications would be submitted to www.wycokck.org/economic, once the program is approved by the full commission.
Commissioner Hal Walker said he would prefer a definition of the corridors where the grants could be given.
In earlier discussion, the commission had decided not to limit this program to just one part of the city.
“We’re expecting a lot of competition for these funds,” Brajkovic said. Probably from five to 10 grants of varying sizes could be awarded, he added.
Brajkovic said by the end of the year, those working with the program should report its effectiveness to the UG Commission, and look for trends.
Commissioner Brian McKiernan called for a wide marketing of this plan.
Commissioner Gayle Townsend said she would like to see marketing not only to existing businesses, but also to neighborhood groups to reach individuals who could be interested in starting businesses that may not be in existence yet. She also would like to see a reason given if a business is turned down.
If a lot of competition is expected, she said any grant of $25,000 would take half of the entire amount, so she would like to see smaller awards to give more entities the opportunity to receive a grant.
Elnora Jefferson, president of the Historic Northeast Midtown Association, a neighborhood business revitalization group, said she was in favor of the program, and requested that HNMA and other NBRs have a seat on the advisory board.
She also asked if nonprofits were included in this program, and asked for a definition of what the applicant is asked. For example, there should be a definition of what a business summary is.
Brajkovic said nonprofits were not intentionally excluded. The base is existing business, growth opportunity and job creation.
“If this is as popular as you seem to think, the reason you’re going to be denied in many cases is there simply isn’t enough money to fund it,” Commissioner Walker said.
Chuck Schlitter of Downtown Shareholders said the organization may already have some leveraged monies in process for its programs. He said he was grateful for this UG effort. There might be a preference that the new pilot program should be for profit businesses.
While there is currently no restriction on where the monies would go, Commissioner Walker said he would be “extremely unhappy” if these monies were directed toward geographic areas that are already thriving.
“It is not my intention to fund Village West,” Commissioner Walker said. “There are other vital areas that are doing quite well by themselves right now and do not need a supplement for a small business.”
If this program is going to survive, it must benefit areas that are in need of small businesses, he said.
The plan was approved by the standing committee and may go before the full UG Commission at a future meeting.