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04 Feb 23 104 0 0

EDA pledges $50,000 to the business group for 2023

Cool Story - EDA pledges $50,000 to the business group for 2023

The Economic Development Authority (EDA) has decided to sponsor the New Ulm Business Resource & Innovation Center with $50,000 for the next year while the group evaluates future funding alternatives.

NUBRIC selected Paul Wessel as its new executive director in March of this year. NUBRIC has spent the last year working to rebrand the organization and prepare a strategic strategy. The New Ulm Economic Development Corporation was the previous name for NUBRIC.

NUBRIC has launched several economic projects in the months since its rebranding. This includes introducing Project Lead the Way, a STEM program, to schools in New Ulm. Project Spark was founded as a business incubator. Project Spark was recently granted non-profit status.

NUBRIC is also looking for new economic grants and partnerships with other organizations but has asked the EDA for a $50,000 annual payment to assist build the effort.

"All of this has to be organized just to submit a grant application," Wessel explained. "I'm going to require some administrative assistance."

The EDA board was more comfortable awarding financing one year at a time, despite NUBRIC's specific request for $50,000 each year for the next three years.

Andrea Boettger, a board member, said it was rare to make a three-year commitment, especially given the EDA board would be changing next month. In January, three new members will be appointed, including a new mayor. The board was hesitant to commit new members to a multi-year contract.

The board was also looking for more transparency in NUBRIC's operations. EDA Chairman Daniel Braam praised NUBRIC's development over the last year, although he wished for greater transparency between the organizations.

Boettger acknowledged that NUBRIC was doing outstanding work, but he needed to see a plan before supporting them for numerous years. She especially inquired as to how NUBRIC intends to fund facility rent and employee compensation.

Wessel stated that the EDA is willing to send a representative to monthly NUBRIC meetings.

Les Schultz, a board member, proposed a compromise. He proposed putting an EDA representative on the NUBRIC board next month and giving NUBRIC $50,000 for 2023. As part of the motion, city personnel would collaborate with NUBRIC to create a strategic plan for 2024 and 2025.

The Small Business Incentive Grant program will mostly remain unaltered in 2023.

Since 2019, the EDA has provided a small business incentive award. The incentive is designed to repay fledgling enterprises up to $10,000 in qualified expenses. To be eligible for a grant, a business must be open for at least three months and present receipts for up to $10,000 in expenses.

The EDA would typically pay $50,000 per year for this grant, with the option of sponsoring five new small enterprises at $10,000 apiece. The show has been immensely popular since its inception. Every year, more than five qualified small businesses apply for the program, resulting in a waiting list.

The EDA experienced a large surge in applications in 2022, resulting in a lengthy waiting list. It was suggested that additional funding be allocated to the program to minimize the waiting lists. The program received an additional $50,000, for a total of $100,000.

Even with the increased grant awards, EDA Coordinator Heather Bregel stated that the program still had nine businesses on the waiting list as of 2023.

Bregel proposed to the EDA board a few measures that could help with the waiting list issue.

The first idea was to make it a requirement that a business is open before applying for the grant. Grants are not given out until a business has been operational for at least three months, according to Bregel, but some enterprises apply before they open.

The second suggestion was to cut the stipend from $10,000 to $7,500. This would allow the board to make more grants from the $50,000 investment each year.

The board of directors was hesitant to make any changes to the program. Some fears modifying the show might harm its appeal.

Jessica Janni, a board member, suggested that the initiative would be successful because it is only $10,000.

Since 2019, almost 20 enterprises have won this grant, with only two closings, indicating that the program has a success record of more than 90%.

Bregel stated that five of the nine enterprises on the waiting list have already opened. Even with the recommended improvements, if the EDA continues to fund at $50,000, all funds for 2023 would be spoken up.

The board approved a $150-per-month leasing deal with B. Concessions to operate a food truck at 326 N. Broadway between May and October 2023.

Bregel stated that Ted Bergstrom of B. Concessions had leased the space since 2020. Last year, two additional food trucks worked on the property, each paying $150 per month.

Bergstrom wanted a two-year lease, but the city preferred a one-year lease since utility bills could rise dramatically in a year.

Bregel stated that the current month's price covers the utility costs. The EDA earns $450 per month with a little utility fee from three trucks renting space in the lot.

There was some debate about raising the rent because utility bills may rise in the coming year, but Bregel did not want the rent to be so high that it made it impossible for the businesses to operate a food truck. Food prices are anticipated to rise as well.

Braam considered this rental agreement as a community benefit. Many guests appreciated the presence of multiple food trucks in this area. The program was not profitable, but it also did not cost the EDA money.

The board voted to keep the monthly rent at $150, although the lease was only for a year.

Bregel stated that committing to a one-year commitment was acceptable because the future is unknown and long-term agreements could bring complications.

The above article is selected by CoolDeeds.org. The information and the assets belong to their respective owners (original link).


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