Regionalization of EDC's Could Hurt Local Businesses
IRONWOOD, MI - Tuesday, August 18, 2009 - The Ironwood Economic Development Corporation held its regular monthly meeting on Monday afternoon in the Community Development Conference Room at 213 South Marquette Street, Ironwood, MI 49938.
Chairman Jim Huss called the meeting to order at 1:00 PM. Community Development Director Dan Petersen recorded the roll. The following board members were present: Jim Huss; Joe Cayer, Sr.; Jim Lorenson; Tom Schneller; John Wyssling; Bob Schonberg; Mark Ruppe; and Scott Erickson. Dave Ramme was excused. Also present at the meeting were City Commissioner Gemma Lamb and two representatives of Old World Meats, LLC, Matt Weber and Don Moore. Representing the press at yesterday's meeting were: Ralph Ansami, Ironwood Daily Globe; Lou Bonagura & Arvo Toolanen IronwoodInfo.com; and yours truly.
Following the role call, the board approved of the June 19, 2009 meeting minutes; and the docket
Citizens wishing to address the Corporation on Agenda Items were then given the opportunity to do so. There were none.
According to Dan Petersen, the MEDC is aggressively seeking to regionalize EDC's throughout the state. The City of Ironwood Revolving Loan Fund is in jeopardy of being regionalized with up to five other counties. The was even talk about making the entire Upper Peninsula a regional district. This plan would essentially take the decision-making process away on a local level. Federal funds would be funneled through a regional facility. In other words, Revolving Loans like the IEDC has been able to provide to local businesses would no longer be available. If a business or industry wished to receive a Revolving Loan, it would have to be done through a regional EDC, and would have to compete for limited funds with other businesses and industries throughout the region.
All of the board members weighed in on the concept, and none appeared to favor it. The general consensus was that Ironwood knows best how to serve the needs of Ironwood's businesses. Many of the loans the IEDC has been able to provide for local businesses would never be granted on a regional level.
Jim Lorenson said he had no faith in the plan. He suggested since Federal funds would now be available, that Ironwood (in fact all of Gogebic County) should partner up with Iron County, Wisconsin. He pointed out how spread out the Upper Peninsula was, and he said creating jobs in Houghton or Marquette would have little if any impact on our community. On the other hand, he said if Hurley were to attract new industry, it could greatly impact Ironwood's economy. He said we are more closely tied economically to Iron County, Wisconsin than we are most of the U.P. The board agreed to send off letters to area representatives and to surrounding areas.
Dan Petersen then explained why a revolving loan request from Old World Meats, LLC, was once again on the agenda. He explained that the new meat market made applications to both the County and to the City's EDC for revolving loans. Originally Old World Meats, LLC, applied for $15,000 from Gogebic County and $10,000 from Ironwood. Petersen explained that the State preferred to have one entity take the risk on the loan. The board unanimously agreed to grant the loan request to Old World Meats in the amount of $30,000.
Another Revolving Loan Request from Paul Blatz, New Jersey, was then briefly discussed. Mr. Blatz purchased the former Rat's Nest building on Aurora Street on a tax-sale auction back in 2007. His application request was for $10,000 to help him ready his building for a pasta manufacturing and restaurant facility. According to Dan Petersen, Blatz has been unable to borrow funds from conventional lenders due to the fact that the building was not up to electrical code. Blatz was requesting assistance from the IEDC to help him upgrade plumbing and electrical service throughout the building. The board voted to table the matter until they could obtain more information and possibly meet with Blatz either face-to-face or via conference call.
The board decided to change the terms of the Black River Dental Loan from 5-year line-of-credit loan at an interest rate of 4.0% to a 3-year direct loan with an interest rate of 5.5%. According to Dan Petersen, the State said the IEDC interest rates were too low, and they suggested that a higher rate be negotiated. Petersen noted that the borrower was alerted of the increase, and he was in agreement. The board voted unanimously for the change.
Because of the possibility of regionalization of the EDC, Dan Petersen and Scott Erickson suggested that the IEDC use available funds to finance City projects. One of the projects mentioned was to acquire the Ironwood Theatre entrance. Currently the City does not own the building that houses the entrance to the City. Bob Schonberg questioned the use of "Economic Development" funds for City projects. Several of the board members suggested that businesses in good standing with the IEDC be given an opportunity to borrow more funds from the Corporation. This reporter suggested creating an incubator program in Ironwood. This could attract new business to the area. Petersen and Erickson suggested that board members submit ideas for the possible use of the $130,000+ IEDC fund. The issue will be discussed at future meetings.
Before the meeting adjourned, Dan Petersen informed the board that the City Website improvements have been put up for bids, and that the bids are due back on August 27th.
