The Pipestone Economic Development Authority (EDA) during its Nov. 18 meeting approved new business subsidy and revolving loan fund policies and appointed EDA Chair Rodger Smidt and EDA member and Pipestone Mayor Dan Delaney to a subcommittee to review loan applications. The approval followed a public hearing held to take comments on the updated policies, which no one attended.
The business subsidies are intended to stabilize and grow the community by providing resources to increase the tax base, provide basic goods and services, retain or reuse historically significant properties, remediate pollution, revitalize neighborhoods, retain and increase quality jobs, and enhance the economic growth and opportunity in the city, according to the policy. Business subsidies could include loans, grants, tax abatement, tax increment financing, guarantee of payment, contribution of property or infrastructure, preferential use of government facilities, land contributions or others.
The revolving loan fund is intended to increase the city’s tax base, create and retain permanent private sector jobs and improve economic opportunity and living standards for the citizens of the city by promoting local business development and expansion, attracting out-of-state business expansion, leveraging private sector funds and assisting with the development of new technologies, according to that policy. The intent is to accomplish that by filling financing gaps between project costs and private debt financing and private equity by making direct, low-interest rate loans to businesses in the city for certain approved activities.
Smidt asked EDA Director Justin Schroyer about language in the policy that indicates there is a maximum loan amount of $100,000 or 10 percent of the total project cost, whichever is less. Schroyer said he increased that amount from the $20,000 that had been discussed previously in case the EDA received grants or other funding at some point that would allow it do provide larger loans, but that it was not obligated to do so.
“Some day if we did have that, we’d be able to go that high,” Schroyer said.
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