City grants helping local business get running
March 10, 2013
Logan Banning didn't waste any time planting the $5,000 in seed money he received last year from the city of Steamboat Springs.
The grant allowed The Lowell Whiteman School senior to purchase a new sewing machine for Parka, his growing custom-sweatshirt business, pay his artist mom to help on the production line and also afford the $250 monthly rent for his office at the Yampa Valley Entrepreneurship Center at Colorado Mountain College.
"I don't look to the money as something I've made," Banning said Wednesday. "It just gives me confidence and all goes toward the business and toward the growth."
The grant also gave him a cushion to expand his product line to stores as far away as Breckenridge.
Banning launched the business in 2011 and said he has sold about 300 sweatshirts.
Today, he's looking to finalize a website for his product. And he's one of the success stories of the city's micro-grant program that allotted $25,000 last year to small businesses and startups in Steamboat.
The grant to Banning also is an example of how the city in recent years has aimed its incentive programs to bolster businesses that already are here.
A $3,358 grant helped Savannah Bongiorno expand Comb Goddess, a salon on South Lincoln Avenue. A $5,000 grant helped Event Medical Solutions, a local startup that provides medical services at sporting events, purchase uniforms.
"Small businesses are the heart of this country," Steamboat City Manager Deb Hinsvark said before she started running through the program's successes as well as the disappointments of the city's micro-grant program. "If we can keep some doors open and some lights on, I think we've made an impact."
But the program isn't without risk.
She said some of the grant recipients, including Sober Guys, a company started to drive intoxicated people, and their vehicles, home, and Chocolate Soup Pastry Cafe couldn't be reached by the city to talk about how the money was being used after they received their grants.
There also were concerns that the incentives would frustrate companies who might be in direct competition with the startups.
"Some of the grant recipients disappointed us, but the vast majority of them didn't," Hinsvark said.
She is proposing the city retool its micro-grant program this year and give $15,000 in prize money to Yampa Valley SCORE, a group that counsels small businesses and puts on an annual business competition.
Hinsvark wants the funds to be awarded to the winners of that competition, a move that would ensure the proposals have education and a foundation behind them through SCORE and the Entrepreneurship Center.
The city's micro-grant program, which was launched in 2011, shines a light on what has become a common economic development strategy: Focus on the assets you already have in your community.
In the future, Hinsvark said economic development dollars in the city could by spent toward filling in and developing the 14-acre TIC campus west of downtown at the intersection of Elk River Road and U.S. Highway 40.
The national contracting firm that was founded in Steamboat Springs in 1974 announced in September that it would move its 124 remaining Steamboat personnel and operations to the Front Range by the end of 2013.
"It's going to be an absolute opportunity for us to revitalize that corner," Hinsvark said. "I do believe that's going to be our next wonderful focus for economic development."
Steamboat's economic incentive war chest is a blip compared to cities such as Ogden, Utah, that have leveraged millions in tax incentives to recruit businesses from across the country.
The city's economic development fund this year totals $104,927, and much of it already has been spoken for. The spending includes $40,000 to reward ACZ Laboratories for the recent expansion of its headquarters on Downhill Drive; $20,000 for a consultant who is working to develop a possible Urban Renewal Authority downtown that would fund improvements on Lincoln Avenue, Yampa and Oak streets with tax incremental funding; and $15,000 for the prize money for the SCORE program.
"I don't think (using incentives) for recruitment would be horribly successful," Hinsvark said. "Who's going to compete with throwing money at things? I think we recruit with our community, with the community spirit, with community values."
She said Steamboat's carrot always will be its quality of life.
"Our model is simply to advertise the quality of life here," Hinsvark said. "We have a great college. We have a great hospital. We have great education for your children. It's not just a beautiful place with wide-open spaces." ■