DCEDC May Merge Funds With Nearby Counties

When businesses get grant help from Door County Economic Development Corporation, the funds and the red tape on those funds comes all the way from the top.

Eight counties in Northeast Wisconsin are getting together to try and break away from those loan restrictions. By creating a regional economic development group, the counties will be able to pool their resources and write rules that make more sense for the local economy.

“We’re working on a plan to regionalize [our loan program],” said Bill Chaudoir, executive director of the Door County Economic Development Corporation. “We can get rid of some federal red tape and rules for the program we currently operate. It’s going to make our program much more easy to work with and give us a lot more flexibility.”

Sturgeon Bay and Door County both have revolving loan fund programs that were originally funded by the U.S. Department of Housing and Urban Development (HUD), funneled through the Wisconsin Department of Commerce. Door County Economic Development Corporation (DCEDC) helps the county administer those revolving loan funds.

In July the HUD audited the Wisconsin Economic Development Corporation (WEDC) and said some of its rules weren’t being followed. The WEDC re-interpreted those rules, which made it more difficult to loan money to many projects in Door County. The new rules said money couldn’t go to construction projects, limited the amount of money DCEDC could loan per job created and prioritize creating jobs for low- to moderate-income people.

Chaudoir said many of the projects DCEDC considers are construction-based, and many companies don’t want to hire based on applicants’ family incomes instead of their skills and experience. Plus, some of the small mom-and-pop businesses don’t create many jobs and are less eligible for the federal funds.

“They’re still good projects, good for the economy, providing an important business service to the community, but because they weren’t providing a lot of jobs we couldn’t help them that much,” Chaudoir said.

Getting rid of that federal red tape is now a priority.

“They’ve now made the funds almost unlendable. For a business to have to hire people who are limited to be low- to moderate-income folks makes the funds harder to lend out,” Chaudoir said. “That’s when we got serious – we’ve got to find a way to get rid of some of these rules. There always was this way of doing that, but it wasn’t as important.”

The regional economic development group will have representatives from each county and city. Counties and cities will have local approval authority on loans up to $250,000, meaning they don’t have to ask for approval from the whole region until project costs tick past that limit. Projects more than $500,000 must have approval by a committee of representatives from four counties, and loans up to $1 million have to be approved by representatives from all eight communities.

The new group will also have four programs instead of just one: a microenterprise business program for small businesses, a façade improvement program, a technology fund to help technology businesses and a revolving loan fund.

Chaudoir said other regional groups have piloted similar programs and never run out of funds to lend.

“The deals are out there, the loans are out there and every month they are making loan payments,” Chaudoir said. “The fund is growing every month, so if you’re doing deals you’re also getting payments from loans that are already out there working.”

The plan to participate in a regional economic development group has to be approved by the Door County Board of Supervisors and the City of Sturgeon Bay’s city council. If everything is approved, Chaudoir expects the new group will be in place in two or three months.