County-wide revolving loan fund to be discussed
BRATTLEBORO -- On Thursday, July 10, the Vermont Agency of Commerce and Community Development and the Vermont Economic Development Authority will hold a hearing to take public comments on utilizing a portion of the $10 million made available by Entergy for economic development in Windham County.
The $10 million will be paid over the course of five years in $2 million installments and is part of an agreement reached between the state and Entergy, which owns and operates Vermont Yankee nuclear power plant in Vernon.
In late August 2013, Entergy announced it would be closing Yankee at the end of 2014 because it was no longer financially viable due to the fact that natural gas has driven down the costs of producing electricity.
The state has already received the first $2 million installment and is considering establishing a revolving loan fund, managed by VEDA, to make funds available to businesses that have viable plans in place that would increase employment in Windham County.
"Our first and top priority is to replace the jobs lost," said Patricia Moulton, the secretary of ACCD, during a June 30 visit to the Reformer.
According to a fact sheet issued by ACCD, entities eligible for funds are not limited to businesses, but also include grants available to municipalities in Windham County, non-profit organizations and public and quasi-public organizations. While businesses are eligible for loans, individuals are not.
Applications for funding will be due 60 days after the notice of funding availability is issued, sometime in mid-July. According to the fact sheet, applications must be for a minimum of $25,000 but no more than $2 million.
Moulton told the Reformer there will be strict limitations on who can receive loans or grants.
"Does it have a potential to create jobs and is it related to the Comprehensive Economic Development Strategy produced by the Southeastern Vermont Economic Development Strategies? If not, this fund is not for you."
According to the fact sheet, "Only projects that meet a goal or objective of the CEDS will be eligible for funding."
But because the CEDS was created by SeVEDS prior to the agreement between Entergy and the state, said Moulton, Windham County is very well prepared to receive the funding from Entergy.
"The state is committed to providing support to projects that demonstrate strong likelihood of job growth and economic impact for the region, but no specific project or type of project has been predetermined for funding," states the fact sheet.
But because the state does not have any in-place grant programs for businesses, ACCD and VEDA hope to offer flexible and favorable loan terms while seeking to ensure that borrowed funds are repaid and revolve in perpetuity to assist with long-term economic recovery and job creation.
Thus, the revolving loan fund, which is a source of money from which loans are made at low interest rates. The fund is replenished as the loans are paid back, creating the opportunity to issue other loans to other projects.
In a column published in the Reformer on July 1, Jeff Lewis, the former executive director of the Brattleboro Development Credit Corporation and a founder of SeVEDS, wrote that a revolving loan fund might not be the best way for disbursal of the funds.
While its intent is to create jobs, wrote Lewis, a revolving loan fund won't solve the problem of finding workers for those jobs.
"Our local businesses that need high quality workers of all kinds have a terrible time hiring and the higher the level of skill or education required the harder the recruitment and retention. So why set out on an explicit course of job creation when what is desperately needed is workers to take the jobs that exist now?"
Lewis wrote that funds can be best spent by developing methods that create "an entire new set of businesses and jobs to strengthen the local economy, and building and recruiting a new set of workers to staff those and the existing businesses."
Moulton told the Reformer that "capacity building" projects referred to by Lewis will be considered in the grant and loan approval process.
"If the community is not interested in a revolving loan fund, then OK," said Moulton. But some other program will need to be put in place to get funds to eligible businesses, she said. "We need to get the systems in place to avoid being back in this place 20 years from now."
Because the funds are specifically designated for Windham County, she said, any community in the county can apply for them, and not just municipalities in the Emergency Planning Zone around Vermont Yankee.
"This is a rare opportunity. We need to do it right."
Moulton added that the state will not "skim" from the fund fees to administer the program.
"We are doing it with existing staff," she said.
The fact sheet and a list of all public comments received through June 20 can be found at accd.vermont.gov.business/WCPG.
Bob Audette can be reached at email@example.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.
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