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MOTION APPROVING COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING TO LOCAL ORGANIZATIONS THAT SUPPORT BUSINESS START-UPS AND ENTREPRENEURS
recommended action
RECOMMENDATION
It is recommended that the City Council by motion:
1. Approve Community Development Block Grant funding to local organizations that provide support to business start-ups and entrepreneurs in Stockton.
2. Authorize the City Manager, or his designee, to take appropriate and necessary actions to carry out the purpose and intent of the motion.
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Summary
Under the guidance of the Council adopted Economic Development Strategic Plan (February 2015), the Economic Development Department created a new Business Entrepreneurship initiative. The initiative was designed to provide financial assistance to organizations that support start-up businesses and entrepreneurs located in Stockton. A competitive process resulted in a total of nine applications received with five organizations being recommended for funding. A combination of Community Development Block Grant dollars and one-time Economic Development Department funding were used to fund this initiative.
DISCUSSION
Background
In April 2014, the City Council conducted a workshop to develop a Strategic Work Plan and, at that time, Economic Development was identified as a priority. The plan was recently reviewed by the Council and Economic Development was once again identified as one of the top strategic priorities.
In February 2015, the City Council adopted a comprehensive Economic Development Strategic Plan to help guide the City in determining where to allocate resources and identify priorities. The Plan outlines several key priorities, goals, and objectives to strengthening the local economy by creating new job opportunities, encouraging entrepreneurship and innovation, enhancing fiscal sustainability, and increasing private investment throughout the Stockton community.
One of the core strategic objectives is the development of an Entrepreneurship-Innovation program (Strategic Plan-Item D, p.19) that addresses the following:
“Statement of opportunity/need: Active entrepreneurial development programs, including initiatives to expand access to capital for growing firms, are essential components of comprehensive employment growth and cluster-development efforts.”
Present Situation
In order to help accomplish the goals and objectives outlined within the Plan, the Economic Development Department created a new Business Entrepreneurship initiative to support new and expanding start-up businesses and entrepreneurs in Stockton. The competitive process began on January 29th of this year with the release of a Notice of Funding Availability, known as a NOFA, which solicited the public to submit applications and concepts that provide support and services to entrepreneurs and start-up business owners. A notice was published in The Record on January 21, 2016 announcing funding availability and applications were due no later than March 7, 2016. In addition, announcements were posted to the City’s website and Facebook page and an article was included in the March issue of the Economic Development Department’s monthly newsletter. The NOFA outlined areas of focus and specific criteria, such as:
• Providing business services and technical assistance to new start-ups and home-based businesses
• Providing outreach and connecting eligible entrepreneurs to capital financing
• Creating new, or enhance existing, programs for targeted industries identified in the City’s Economic Development Strategic Plan
• Linking workforce development programs with start-up businesses and entrepreneurs
A total of nine applications were received, four of which did not meet the criteria outlined within the NOFA and were not recommended for funding.
A Selection Committee met on March 29, 2016 to review and discuss the applicant’s proposals. The Selection Committee was made up of four representatives that included Mark Plovnick with the San Joaquin Angels investment group, Mimi Nguyen, Executive Director of the Miracle Mile Improvement District, Lorinda Forrest, Small Business Deputy Sector Navigator of California Community Colleges-San Joaquin Delta Community College, and Janice Miller, with the City’s Economic Development Department. The Selection Committee made the following recommendations on applicant funding:
|
Applicant |
Amount Requested |
Amount Recommended |
|
Downtown Stockton Alliance |
$62,000 |
$30,000 |
|
Huddle Cowork |
$36,600 |
$36,600 |
|
Goodstock Productions |
$15,520 |
$10,000 |
|
Small Business Development Center |
$15,000 |
$15,000 |
|
Stockton Impact Corps |
$20,000 |
$20,000 |
|
|
$149,120 |
$111,600 |
Following is a brief description of the types of services and activities each applicant proposes to undertake with the awarded grant funds:
• Downtown Stockton Alliance (DSA) - will offer a new retail incubator space for arts, culture, and events at the ground floor of the B&M Building in Downtown Stockton. This space has been named Bricks & Mortar and is being managed by DSA. The DSA operates and manages the Downtown Stockton Business Improvement District representing nearly 1,000 property owners within the Downtown area.
• Stockton Impact Corps - requested funding to enhance its micro loan program by offering workshops, consultations, and working capital to its clients. The organization manages a micro-lending program for small businesses and entrepreneurs in Stockton. Its mission is to redistribute community assets to create financial stability by providing support to those wishing to start a business and that might otherwise find it difficult to obtain start-up funds.
• Huddle Cowork - plans to develop a new initiative for underrepresented and undercapitalized entrepreneurs from the Stockton region called the Entrepreneur-in-Residence Program. The goal of the program is to cultivate, nurture, and grow Stockton’s creative class. Huddle currently operates a small but robust co-working space on San Joaquin Street in Downtown Stockton.
• Goodstock Productions - requested funding to increase and enhance its Stockmarket events through 2016. Stockmarket is an event held in Downtown Stockton featuring small boutique and “makers” retail space, allowing small start-up entrepreneurs a low cost opportunity to showcase new and unique handcrafted and locally sourced products to a growing customer base. It’s expanding the number of events from three held in 2015 to nine events in 2016.
• NEC Small Business Development Center - will use the grant funds to enhance SBDC services, specifically targeting entrepreneurs. The SBDC offers businesses and entrepreneurs free and confidential one-on-one consulting services, business coaching, and classes. They currently work with the City by providing general technical assistance and Small Business Micro Loan support to business owners and individuals planning to open a business in Stockton.
Should Council approve the recommendations of the Selection Committee, formal agreements will be executed with each grant recipient and funding will be provided on a reimbursement basis.
FINANCIAL SUMMARY
The 2015-16 Annual Action Plan for the Community Development Block Grant, Home Investment Partnerships, and Emergency Solutions programs allocated $80,000 for the Business Entrepreneurship initiative in Community/Program Services Account No. 054-8224-640. Sufficient funds for the remaining $31,600 are available in the Economic Development Account No. 010-1760-510.