The City of Ely and their EDA have a history of successful, creative, economic development and job creation. Partnerships with the private sector, non-profits and other public entities have made Ely a community to both watch and emulate as the challenges across the Iron Range continue to present themselves to community leaders.
The current challenge presented by Covid-19 and the effect of statewide and local closures and unsure conditions for a reopening economy. Ely relies on a combination of tourism, mining, office, medical and manufacturing and that mix is one Ely is approaching both aggressively and with a level of experience that is behind its newest business incentive program.
We have spoken to a variety local partners, including lenders with PPP experience, business owners and successful developers. Their consistent comment about the structure of our proposed program is that businesses are not anxious to take on debt at this time. That being the case the alternative we’ve proposed to debt is a forgivable element that still encourages investment and employment expansion but rewards new hiring.
Based on that feedback from our partners we are encouraged that we have the right balance. We have received a $125,000 grant from the IRRRB which will be matched with a $30,000 Ely contribution to form a $155,000 total program.
We anticipate a maximum of 7 forgivable loans of up to $22,100 per business at 1% interest. The business would be required to hire 2 new FTE (2080 hours annually) employees at a minimum of $15.00 / hour and maintain that new employee for 2 calendar years for the loan to move to forgivable status. The result would be 14 new employees in local Ely businesses.
The program could be combined with other City of Ely, IRRR, and private lender programs as a total package of acceptable risk. The funds may be used for a wide variety of purposes from equipment to operating capital as long as there is net increase in new employees.
The application would be reviewed and recommended by City staff and presented to the EEDA, (which is a mirror image of the Ely City Council) for approval.
Collateral would be a personal guarantee and /or personal property based on individual applicant credit worthiness. Prospective business loan applicants must reside in the City of Ely.