Funding requests draw fire
10/4/2010Toledo City Council is considering two requests from Mayor Mike Bell for expenditures totaling $400,000 to fund economic development efforts outside of city government.
The first request, to be discussed today during council's agenda review for its Oct. 12 meeting, is for $200,000 from the city's Community Development Block Grant fund to be paid to the Lucas County Improvement Corp. to hire two employees to focus on business retention and outreach efforts in Toledo.
The second request, also for $200,000, from the federally subsidized block grant fund, is for a budding loan program for minority-owned businesses facilitated by the Toledo-Lucas County Port Authority.
But the nonprofit organizations that typically benefit from block grant dollars are upset that Toledo, which has an economic development department, is considering giving money to outside agencies for economic development functions.
"It's a policy decision," said Terry Glazer, president of the Toledo Community Development Corporation Alliance. "If you have a city of Toledo economic development department that you're funding, why are you also funding the Lucas County Improvement Corp. to do the same work within the city? And secondly, why are programs not being funded when we're told there is no money, while money is being made available to the Lucas County Improvement Corp.?"
Mr. Glazer was referring to programs for Toledo neighborhood businesses to make improvements to their storefronts and for neighborhoods to attract and grow companies.
Specifically, Mr. Glazer was focused on the city's facade program - in which businesses could apply for a matching grant to spruce up their buildings - that city officials said may end because of lack of funds.
Jen Sorgenfrei, a spokesman for Mayor Bell, said the city is re-evaluating its economic development programs to measure which of them provides the greatest return on investment.
Ms. Sorgenfrei said that in the case of sending money to the LCIC - the economic development wing of Lucas County government - local business retention is not a current function within the city's development department.
Last week, The Blade published a three-day series showing that about 140 factories had closed in northwest Ohio since 2000, including about 20 in Toledo. Many of those factory closings resulted in work being shipped to other states or countries.
"It's sexy to say that you've got some new manufacturer that's going to move to town and create 100 new jobs, but that's [the] brass ring in an economy like this," Ms. Sorgenfrei said. "The majority of jobs is going to come from existing businesses. We don't have that piece of the puzzle right now."
Deputy Mayor Dean Monske said paying the LCIC to retain Toledo businesses is in line with campaign promises made by Mayor Bell in 2009 to create partnerships that benefit the city. He said retention and outreach is now LCIC's primary focus.
Ford Weber, president of the LCIC, said he has seven employees under him, and together they have made about 70 calls to existing businesses during the last two months. He said about half of those calls were to Toledo businesses.
Mr. Weber said retention "calls" consist of an LCIC representative and a volunteer from another local business visiting with companies to listen to their concerns and provide them with information or access to financial programs that may benefit them.
Mr. Weber said the $200,000 would cover salaries, benefits, training, office space and supplies, and administrative oversight for the two new hires.
"We've already made 70 calls, but we'd like to make 600 a year," Mr. Weber said. "This is really going to be our bread and butter."
The LCIC is now funded primarily with $500,000 raised through an increase in the county's conveyance fee from $3 to $4 for every $1,000 of real estate sold.
The increase was approved by Lucas County Commissioners Pete Gerken and Tina Skeldon Wozniak in 2009. The LCIC received its final 2010 payment of $125,000 from the conveyance fee increase last month.
Mayor Bell's proposed $200,000 expenditure to the Port Authority is for a revolving fund primarily to help businesses owned by minorities, women, veterans, and other classifications secure public and private construction projects.
Thomas Winston, director of finance and administration for the Port Authority, said the program has so far received commitments of $1.75 million in credit from banks and $600,000 in cash. According to Mr. Winston, the University of Toledo has committed $200,000 for the program, which was first suggested to the Port Authority by local minority business organizations.
The two potential expenditures will be discussed at 2 p.m. on Oct. 12 at city council's neighborhoods committee meeting presided over by Councilman Adam Martinez, who campaigned as a council candidate last year for a bonding program for minority contractors.
Contact Joe Vardon at:
jvardon@theblade.com
or 419-724-6559.