Work continues on local economic development office

IRONWOOD — Work has stalled but the idea continues to re-establish a county economic development office, according to a report at the Ironwood Economic Development Corporation meeting Wednesday.

EDC member Gary Burnett asked for an update on the work to establish a regional EDC office.

The cities of Ironwood and Bessemer are behind the effort to hire an emergency economic development coordinator who would implement the strategic plan process that was established by the Michigan Economic Development Corporation, said Tom Bergman, director of community development for the city of Ironwood. The plan is to apply for a disaster relief grant from the MEDC to hire the coordinator, he said.

The cities were working with Gogebic County to use $70,000 from the county’s former EDC office to use toward the 20% matching dollars requirement for the MEDC grant to fund the approximately $500,000 project, he said. The work started last fall but has since stalled because of complications with acquiring the county funds.

It’s still a high-priority project and would be a great fit right now, Bergman said. The office would connect more people to opportunities with the MEDC.

The Small Business Development Center for the Upper Peninsula is working to have a dedicated person to help out with the SBDC services for Gogebic County, he said.

“That is definitely a positive thing and I think that is going to come online here very soon,” Bergman said.

The long term goal, however, is still to have a regional EDC office in the county, he said.

In other business, Bergman said the city is attempting to remove unpaid outstanding debt from former revolving fund loans from the city books. The city no longer facilitates a revolving loan fund as there was a regionalization of city programs that now go through Northern Initiatives.

There are six loans with outstanding debt totaling $183,434 to businesses that are still outstanding from when the city ran the fund, he said. The businesses are now either bankrupt or no longer in operation.

It’s no longer possible to recoup these losses and the city is working with the state of Michigan to have the outstanding debt forgiven, Bergman said. There has been progress but this is a long process, he said.

Answering questions from the EDC members, Bergman said that if the businesses were still making payments to the city the funds would then be sent to Northern Initiatives to continue as revolving loan funds as the facilitating agent.

The assumption is that the state is holding the debt, he said. If the city had a revolving loan fund the funds could be lent out again but it does not.

In his COVID-19 update, Bergman said the city should find out June 10 if it will be awarded up to $50,000 from an MMEC Match on Main program. The dollars would be distributed to the seven qualified small businesses in the U.P. that applied for and are eligible for the program, he said.

“I’m hoping that we have a pretty good shot at it,” Bergman said.

The office is also spending a lot of time helping small business owners understand the general requirements and restrictions that are specific to their industry regarding reopening under the new state orders. There is concern about actual risks regarding health and safety and also about exposure to risk legally should someone who gets sick and the exposure is traced back to a business, he said.

“Right now, there is not a lot of clarity on what is expected of businesses in terms of the minimum requirements,” Bergman said. “Some of that is up to the individual business owners and so we are trying to guide this as best we can in terms of what those rules are.”

There are also a lot of weekly meetings with various economic development agencies and organizations to discuss relief and opportunities, he said. There is a lot of good information but people are frustrated that it doesn’t always lead to the types of support that business owners need, qualify for, or compete to receive, he said.

“Sometimes it’s been a little bit discouraging in that we’ve struggled to get money into pockets of people that really need it,” Bergman said.

The next Ironwood EDC meeting will be held Wednesday, July 1.