By : Steve Raabe
Source : http://www.denverpost.com
Category : Small Business Grant
A revamp of Denver's economic development office is designed to change the culture of the city agency from bureaucratic to entrepreneurial.
"We've never really had a sound economic development plan," said Mayor Michael Hancock. "We want a laser-like focus on really building a true economic development program."
Hancock last week announced a restructuring of the Denver Office of Economic Development that creates an emphasis on business development and retention.
A focal point of the JumpStart 2012 plan is creation of a $20 million public-private fund to finance small-business startups and expansions.
Until now, Hancock said, the city agency primarily has served to administer a revolving loan fund backed by grants from the U.S. Department of Housing and Urban Development.
Federal funding for the Community Development Block Grant program has dropped from $10.5 million in 2005 to $6.96 million this year.
That decline in federal funding is one of the reasons for a shift toward an entrepreneurial structure.
The new approach, Hancock said, is akin to "scraping the foam off the top of the beer so that we can get to the real good stuff."
After taking office last year, Hancock commissioned a volunteer team of regional economic development experts led by Tom Clark, chief executive of the Metro Denver Economic Development Corp., to advise the city.
"More than any economic development department in the state, (Denver) OED has all the tools to be an extraordinary force in the city and the region's future," Clark said. "With this new plan it will now be all about execution."
Paul Washington, who was appointed executive director of the Denver Office of Economic Development last year, will oversee implementation of the plan.
Washington said local banks have expressed "substantial interest" in participating in the $20 million investment fund for business development.
Other investors include the city of Denver, the possibly the Colorado Housing and Finance Authority and yet-undesignated corporations and foundations. Denver plans to apply for a U.S. Treasury Department matching grant on the funds raised locally.
The structure of the fund would place relatively greater loan risk on the city, corporations and foundations, while commercial banks would be in the least-risky position.
That would allow banks to participate in lending that otherwise would be impossible because of regulatory underwriting standards.
"It's about creating opportunities in Denver and creating jobs," said Hassan Salem, president of U.S. Bank in Denver. Small-business loan recipients that succeed and grow could then become customers of lower-risk conventional loans from U.S. Bank, Salem said.
Other banks that have expressed initial support for the investment fund include Wells Fargo and FirstBank.
The JumpStart initiatives represent an initial, one-year plan that will evolve into a longer-term overhaul to be released later this year by the Office of Economic Development.
The JumpStart plan "seems very comprehensive, but the devil is in the details of implementation," said Benoy Jacob, director of the Center for Local Government Research and Training at the University of Colorado Denver.
"It's a fairly well-balanced set of objectives," Jacob said. "It will be in the moving forward that really lets us know how good it is."
Source : http://www.denverpost.com/business/ci_19892230
