Stow -- The city is looking at possibly revamping an important economic development tool.
Joe Bica, managing partner of Ravenna-based consulting firm Edgewood Solutions, spoke at City Council's Sept. 8 finance committee meeting concerning recommendations his firm is making for the Stow Community Investment Corp., which presents grants to businesses seeking to locate or expand in Stow.
Bica said the CIC is effective, but there is room for improvement.
"You are making progress," said Bica, adding that, "We thought it was good to investigate some next steps so we don't just leave things hanging."
According to information accompanying the CIC's eight-page assistance application, the CIC oversees the city's Relocation Assistance Grant Program, which awards grants of at least $2,000 to help for-profit businesses with the costs of moving either into or within the city. The CIC's 19-member board of trustees has the power to accept or reject an application and can award less than the requested amount. Eligible projects include office/headquarters, manufacturing/industrial, and retail if the business is moving into a commercial district with vacancies above 50 percent. Some projects, including those involving restaurants and food service, startups and purely residential developments, are not eligible for grants.
Finance Director John Baranek said that since 2008, when the first grant was given, through the end of 2015, a total of $311,000 in grants was given.
Bica said the study included looking at "a number, a fair number, of other CICs [around the region]."
In addition, said Bica, research conducted by Edgewood Solutions included talking with CIC and Council members and with grant recipients about such matters as the impact of grants on their businesses.
Input offered by CIC business members included:
A desire for less government and bureaucratic involvement in the CIC and greater funding for the CIC.
"There was definitely an impression of bureaucracy within the CIC," said Bica.
From City Council members, more involvement by the CIC in development and redevelopment, as Upper Arlington's CIC does in Franklin County.
From the administration, an increase in marketing of the city and greater accountability for awarded grant funds.
And from both Council and the administration, identifying new and innovative funding sources, rather than just relying upon the $50,000 that Council approves annually.
Recommendations coming out of the process, said Bica, include:
Working with realtors to help market the city to businesses.
Creating a land bank through land acquisitions, even by seeking donations.
"People do donate their land to the city, but you have to ask," said Bica.
Create term limits on CIC members in order to bring in new members and ideas.
Reduce government involvement in the CIC, which has eight of its voting members coming from local government. These include the mayor, the finance, law, and planning directors and the school district treasurer, all of whom serve as long as they hold their positions. In addition, the City Council president appoints three Council members annually.
Increase funding, including a to-be-determined higher percentage of funds raised by the city's bed tax on hotels and motels.
"The bed tax was originally feeding the CIC and this was changed at some point," said Bica.
Baranek told the Stow Sentry Sept. 15 that the CIC's current $50,000 appropriation comes from the 3 percent bed tax, which generates about $245,000 annually. Baranek said the rest of this money goes to other economic development costs, including helping pay for the positions of the economic development coordinator, who is a non-voting CIC staff member, and the planning director.
Eliminate or reduce grants in favor of providing revolving loans as a way of increasing funding, as Avon Lake's CIC does.
"You are asking businesses to have some skin in the game," said Bica, adding that, "if you are loaning the money out, you are anticipating getting some of the money back to feed the CIC."
He said another possibility is if a business meets certain conditions, "it's a forgivable loan, so there are different hybrids you can talk about."
Increase marketing and networking through both increasing the number of private sector CIC business members, as well as working with groups, such as the Stow-Munroe Falls Chamber of Commerce.
Finally, said Bica, the next step is for the CIC, Council and the administration to evaluate all of the proposals and come to a consensus.
Council President Mike Rasor said, "I like the loan idea," but added that some businesses may not be able to accept loans because of conditions imposed by other lenders.
"The loan isn't going to be for everyone," said Rasor.
Councilor Brian Lowdermilk said that for many businesses locating in Stow, receiving a grant from the CIC was a "cherry on top."
"They didn't come here because of the CIC," he said.
Bica said he agreed, but the CIC helped.
"It does make a difference in getting the deal done," he said.
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