Stimulus Boots County's Business Loan Program

01/04/2010

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Job creation is at the heart of a new multimillion dollar county business loan program backed by the federal stimulus program.

That should be good news for one of the hardest hit counties in the state for job loss during this economic recession.

In October, the Washington County Board declared the county a Recovery Zone and authorized the
nonprofit Economic Development/Washington County to act as the clearinghouse and coordinator for the $7.09 million Recovery Zone Facility Bond (RZF) program, designed to stimulate local business growth.

“We want to be putting people to work. That’s our number one goal,” said Christian Tscheschlok, the newly appointed executive director of the ED/WC, either with projects that create new jobs or help a business “bring back jobs that were lost.”

High unemployment, especially in West Bend, as well as a rising number of foreclosure court cases were used to justify the county’s Recovery Zone designation under the American Recover and Reinvestment Act of 2009, commonly called the federal stimulus package.
The RZF program offers federal subsidies that allow qualified businesses to receive the same low interest rates bonds that counties and municipalities get.

It offers local businesses “access to a new source of reduced rate, long-term, fixed rate financing for substantive private development or business expansion projects,” explained Tscheschlok, who started work with the ED/WC this month.

Previously, he was vice president of the Fond du Lac County Economic Development Corp.
RZF bonding can provide tax-exempt financing for projects that would not have qualify for such funding in the past, he said, including manufacturing plants, distribution centers, hotels and research parks.

And county businesses are lining up to ask about the possibilities, he said. “We’ve had a lot of inquiries, companies expressing interest, in the neighborhood of 10 to 20 (before the holidays). I’ll have a better understanding of how many when I get back to the office (Monday).”

Businesses have until Feb. 28 to submit applications for RZF bonds.

While the county had the authority to establish a local RZF program, it could not administer it. That’s why the ED/WC was called in. And while the ED/WC can help businesses line up to apply for RZF bonds, the ultimate responsibility to authorize issuing those bonds rests in the hands of the county’s municipalities, the towns, villages and cities, Tscheschlok said.
That’s the way laws regulating such matters in this state are structured, he explained.
All RZF bond applicants must obtain municipal support to be eligible.

The ED/WC’s role is to solicit, evaluate and prioritize proposed projects for greatest economic benefit, Tscheschlok said, then offer the projects in the order of judged benefit for their home towns to apply for the bonds.

“We’re going to do this very quickly,” Tscheschlok said.

Within 30 days following the Feb. 26 application deadline, he said, the ED/WC should have its priority list of projects ready for bonding consideration.

The bonds need to be issued before Jan. 1, 2011.

RZF bond applications will go through the same vetting process as do local firms applying to the ED/WC’s revolving loan program, Tscheschlok said. The same Revolving Loan Committee will have the task of evaluating the RZF bond applications.

While just over $7 million in RZF bonds is available to county businesses, Tscheschlok said, in reality only a small handful of projects will be able to access them.

It will take a project valued at $1.2 million at minimum to recover the cost of applying for the discounted bonds, he explained, and projects in the $2 million to $3 million range are the most likely to be viable.

“This is an economic development tool best fitting larger scale projects looking for longterm financing,” Tscheschlok said. That could mean plant expansions or the purchase of new manufacturing equipment.

That doesn’t mean smaller businesses or start-up proposals should winnow themselves out of at least pitching a proposal to the ED/WC, Tscheschlok said.

He called the RZF bonds program “extremely flexible” and offering some discretionary options in its implementation.

“This is one of many tools we in economic development in Washington County have to use.”
If a company’s project does not quite fit the RZF bond program, he said, “We may be able to identify other tools to help.”

In fact, Tscheschlok said, he sees the RZF bond program as a good way to identify as many businesses as possible that the ED/WC can assist.

Information on the RZF bond program has been distributed to local businesses through the municipalities and local economic development corporations, Tscheschlok said. It can also be found on the ED/WC’s Web site.

For more information or an RZF bond program application contact Economic Development/Washington County, 335-5769. The ED/WC Web site is http://businessreadywi.org

David Rank, Daily News Staff