Article by:
Ed Sealover – Senior Reporter, Denver Business Journal
Colorado is offering $1.5 million in grants to economic development organizations such as chambers of commerce and small-business accelerators, targeting especially those that lost revenues and had to cut employees due to the coronavirus pandemic.
The Economic Development Organization Recovery Grant program began accepting applications Thursday and will continue doing so through Oct. 1. A selection committee will evaluate the submissions and then dole out grants of $25,000 and $50,000 to groups in November. Sean Gould, deputy director of financial analysis for the business funding and incentives division of the Colorado Office of Economic Development and International Trade, said he expects the state to issue about 40 such grants.
The money is part of a $15 million supplemental allocation that the Legislature voted to give OEDIT’s strategic fund, which typically is used to attract company expansions and relocations through incentives, in March. The bill specified that $1.5 million must be set aside for economic development groups that has lost members, lost public funding and lost the ability to attract, retain and grow businesses as companies struggled to stay afloat in 2020.
Colorado Economic Development Commission members, who heard about the design of the program Thursday just before it launched officially, questioned exactly how meaningful $25,000 or $50,000 might be to such groups. But Jeff Kraft, OEDIT director of business funding and incentives, noted that many local groups may have only one or two staffers and may have budgets where such grants could equate to a quarter or even half of what they have been operating with over the past two years.
“Think of this as operating money. Their budgets were cut, so we’re injecting operating capital into the EDO,” said Kraft, noting that many members of local organizations stopped paying dues to ensure they could pay their rent and their employees. “There’s an implicit design here to help smaller EDOs rather than large EDOs because they have a smaller contribution base.”
OEDIT officials estimate there are about 300 economic development organizations throughout the state, ranging from major organizations such as the Denver Metro Chamber of Commerce to groups that stump for communities of only a few hundred people. And the size of the grants will be correlated to the size of the groups — those serving populations over 25,000 people will be eligible for the $50,000 grants and those working with smaller areas can get $25,000.
OEDIT will work the Economic Development Council of Colorado to publicize the program and try to bring in applications, but state officials emphasized that the grants only are for groups that can demonstrate negative impacts from the pandemic. Also, those organizations that received previous state grants, such as from the Energize Colorado Gap Fund, will be scored lower as the selection committee considers these awards, Gould said.
According to an EDCC study publicized by OEDIT, 60% of economic development organizations throughout the state suffered operating-budget revenue losses of 40% or greater due to the pandemic. About one-quarter of those groups had to cut staff to offset those losses, and 59% of the organizations with smaller budgets reduced activities ranging from business-retention efforts to broadband installation to marketing of their areas to employers.
Gov. Jared Polis and legislative leaders created several new economic development programs this year to bolster job-creation and hiring efforts, including $10 million in grants for event organizers, a sales-tax-break for restaurants and a $30 million program to help seed renewable-energy companies. The EDO grant program is meant to help local groups return to promoting their areas and shoring up their businesses, particularly as competition from out-of-state organizations becomes more intense.
“This is a further evolution and strengthening of the ecosystem in Colorado,” EDC member Wendell Pryor said. “So, I think this is a worthy cause.”