Baker Cites Progress for Prince George's $50 Million Business Fund Plan
Steve Monroe | 9/28/2011, 12:37 p.m.
Robert E. Craft, a vice president of small business banking with Bank of America in Kettering, said, "I think the fund can be that kind of loan that will be seed money for a business and provide capital so that they can become bankable and then attract capital from private sector lenders."
Focus on "small, local minority businesses"
A key point of the fund, said David S. Iannucci, assistant deputy chief administrative officer for economic development and infrastructure, is that "most of the dollars will go out in loans with the profits from it churned back into helping businesses with facade improvement, equipment" and other uses "to keep the money churning within the county."
He added, "the program overall ... has a special focus on small, local minority businesses...the uses [of the funds for approved projects] will be for financing, land acquisition, construction, improvement acquisition ... in some cases working capital. The county has certain investments in mind ... we want to see projects that give us measurable economic impact...where we will see our tax dollars increase ... we want to see more jobs, how many jobs are we retaining, how many are we adding ... we are looking [at projects in] inner beltway, gateway communities as opposed to more rural areas."
Iannucci said the 'but-for" test will applied as a criteria, that if not for the county's assistance the project would not go forward, "because frankly if the private sector is going to meet the lending needs, we're not going to compete with the private sector ... we want to add to the dollars that are out there."
Aubrey D. Thagard, also an assistant deputy chief administrative officer, said, "For the first year the plan [hopefully beginning by early 2012, he said) is to provide $7 million in loans or grants," with the focus both on helping existing businesses with projects as well as using funds to provide incentives to attract businesses to the county. In succeeding years the economic development team will go back to the County Council for approval to use more money from the one-time $50 million fund amount, as needed.
A county government fact sheet said as part of ensuring that the recipients of funds live up to their promises as far as creating jobs, to get loans, "The legislation has been written to have procedures to recoup funds, accelerate repayment or renegotiate any agreement that is not fulfilling the pledges made in exchange for aid." Iannucci said there will be a "massive" level of auditing and compliance review by the county.
Working toward a "passable" bill
Iannucci said of the fund plan's prospects, "the legislation was introduced in the spring, negotiations and committee meetings occurred ... but we had a situation where amendments were offered that were going to make the program unworkable and the county executive pulled the bill at that point and we saw it as literally the program would not have succeeded."
Baker said Monday, "...they [council members] want to make sure there are checks and balances ... I do too ... but the things we put in place can't be big boulders. If we make it too complicated, if it takes too long [it won't succeed in getting people to apply] ... what we want to do is make sure we streamline the process ..."
Iannucci said, "There have been a lot of very productive conversations with the council since then ... we've had major, major progress and come very close to a meeting of the minds. We're getting there. I hope by October, November we'll have a full compromise and agreement by the council ... and a passable bill."
A spokesperson for the County Council could not be immediately reached for comment.