Wednesday, July 24, 2024

EDA discusses small business grant program changes

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Samantha Perala (holding her daughter Miranda Mae), Kristi Briese, Mya Kube, Jeanne Grabow, Jen Guza [holding son August Guza], Hayle Ince, and Anesa Fluegge stand in front of Stay and Play Child care. Child care was identified as a major potential focus for the small business development grants.

NEW ULM – With the opening period for New Ulm’s small business grant program getting closer, an EDA work session was held to discuss potential changes.

In the beginning the EDA had gave out five grants for $10,000 each, but expanded due to the program’s popularity. This year 14 businesses received $7,500 each. Two other businesses were approved but then dropped out due to failed requirements.

Economic Development Director Heather Bregel said several potential changes had been raised. This includes narrowing the grant program to focus on restaurants, retail, and childcare while limiting the possibility of certain service businesses like insurance agencies and spas receiving the money.

Bregel said a point system had been discussed in the past, favoring more desired businesses while pushing less necessary applicants down the ladder.

“This should be a more competitive program where our limit is our limit,” she said. “Certain criteria bump you up on the likelihood of receiving a grant. Maybe having them come in here and provide a two-minute video pitch on why they should receive it over the next person.”

A sign in this empty store shows Xfinity was a prior user before closing. Board members debated what businesses they should target to fill spaces like this.

Bregel said she wants to make sure everything is solid and clear when she breaks bad news to those who don’t get grants.

“I need clear guidelines,” she said. “I [need to be] able to explain it to people and justify why this one’s eligible and this one isn’t “The ones that aren’t eligible, aren’t going to be happy and I’m going to have to be able to stand behind why they’re not eligible.”

Board member Char Kalk said she liked the points system but wasn’t in favor of leaving services completely out of the picture.

“If there’s somebody who’s going to open a daycare, they are going to get a higher priority,” she said. “If someone wants to open another spa, who are we to say ‘I don’t think you’re going to be successful.’”

Board member Lindsay Henn said they are already being inundated with businesses like that.

Kalk said other downtowns she’s seen in Minnesota have a mix of businesses. She said service types could help fill New Ulm’s space and be a part of their mix.

Henn said that would not be an ideal reality.

“Speaking as someone who owns businesses downtown, keeping retailers and restaurants is not going to happen if we keep plugging in hair salons and insurance agencies,” she said. “It doesn’t help our business climate.”

Bregel said the EDA initially only funded five grants, then decided to fund more when they received an overflow of applications. She said the number of grants could be lowered again, and Henn was in favor of this.

“People have gotten used to coming in and getting their money,” she said. “I think at some point, we have to be the bad guy and say no to some people.”

EDA Commissioner Michelle Markgraf asked if the funds would be better invested in a business incubation center instead.

Schultz said no, because of how popular and successful the program has been.

“I think it’s the best program we have,” he said. “Think of all the businesses that have started and employees in our community and downtown. They might have opened anyway, but they certainly got some extra push. I really do not want to see us get rid of it.”

Henn said the work Bregel has done to get this program going has been excellent, and there are far worse problems they could be grappling with.

“These are really good problems to have right now where we have too many applicants and never [enough money],” she said “Now it’s taking what we’ve learned and what’s worked or hasn’t worked, and how do we make it even better and work off of what Heather’s done so far?”

Bregel said she would take the feedback she received and return a first draft of new program guidelines at a later date.

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