The Cuyahoga (OH) County Council this week launched the linchpin of its economic development strategy, a $100 million fund designed to build businesses and create jobs.
County Executive Ed FitzGerald told the Cleveland Plain Dealer the fund would award loans to help companies develop technology, revitalize property and grow. County officials also will work with local foundations, banks and nonprofits to secure additional loans for businesses.
The targeted loans represent a new approach to economic development for Cuyahoga County, which in the past concentrated on taxpayer-financed mega-projects, including the $465-million medical mart and convention center being built next door to the County Administration Building.
“What we’re really trying to do is kind of pivot from the strategies of the past, which was sort of the next big thing, betting on a big box,” county Development Director Larry Benders said before Tuesday’s County Council meeting.
The county is offering 11 types of loans. Five types of loans — ones to attract investors for start-ups, to redevelop properties and to lure large companies — will be accepting applications immediately. The others are expected to start over the next four months.
Applications will be judged on the strategic fit of the project, financial feasibility, number of jobs created, location, connection to public transportation and community benefits, Benders said. Points will also be awarded for collaboration, and applicants would gain points for signing an anti-poaching pact that FitzGerald announced last year.
An 11-member panel of business representatives and county appointees will examine the ideas, with final approval from FitzGerald and the County Council. The council on Tuesday unanimously approved the fund.
“We’re excited about it,” FitzGerald said. “People are really going to start seeing the momentum on it.”
FitzGerald carved out $8 million a year for the fund by laying off workers and diverting 10 percent of sales tax revenue. The money is enough to pay interest on $100 million in bonds, but officials plan to borrow money only as they need it. Proceeds from selling county-owned buildings and interest from loans to local municipalities could also contribute to the fund.
As businesses repay their loans, the county will use that money to make new loans. A small percentage of loans could be forgiven, however. Other loans could be made directly from banks, with the county guaranteeing repayment.
“It’s going to show how this county has done something different than any other county in the United States,” said Councilman Jack Schron, who represents the council on the county’s economic development commission. “This is the place to double down.”
The commission created a charter-mandated five-year plan, a general document that urges local governments to standardize business policies and urges disparate economic development groups to collaborate.