Language in CHEDA’s B3 grant program for local businesses likely to be changed early in the new year

    With some recent applications for Building Better Business (B3) grants from the initiative launched last year by the Crookston Housing and Economic Development Authority raising a few eyebrows among CHEDA Board members, it’s likely that with the arrival of 2020 will be some changes in the eligibility criteria in the B3 language.

    Board members, with CHEDA Executive Director Craig Hoiseth in agreement, are questioning if the original intent and/or spirit of the program was to fund things like the purchase of a new furnace, or to reimburse another business for plumbing repairs after a recent water leak. A B3 grant was awarded earlier this year for the furnace purchase, but when Hoiseth recommended this week that his board reject the B3 grant request for the plumbing repairs, board members and Hoiseth said it’s probably time to make some changes to the program.

    “To me, if you have a business and you spring a leak, that’s part of your business and you have to get it fixed,” said Board member and At Large Crookston City Council Member Tom Vedbraaten. “I thought (the B3 program) was more for things like advertising and moving your business along, not for paying for repairs or maintenance.”

    Initial language in the program does allow for a certain level of building maintenance, Hoiseth clarified. But the grant for the furnace, he said, “spurred a conversation” about what B3 should really be about. “Should we be doing general maintenance with these grants?” he wondered.
What B3’s about

    The Building Better Business initiative was launched to, in part:

    ‒ Encourage entrepreneurship and new business ventures

    ‒ Provide new and enhanced job opportunities for local residents

    ‒ Increase the commercial tax base in Crookston

    ‒ Advocate community vitality and presentation

    ‒ Occupy vacant buildings, strengthening landlord return on investment

    Funding through the program was meant to assist with start-up, improvement or expansion expenses. Dollars awarded after an application process could potentially help with signage, start-up costs like building, capital and inventory, business development and workforce, storefront or building/visibility, purchase of supplies, equipment or inventory, renovations or minor repairs, advertising and marketing expenses, increasing operating hours, increasing community vitality, down payments toward the lease or purchase of a commercial location, and job training.

    Whether in actual dollars or other forms of investment, B3 grants require a one-to-one match from the applicant. The maximum grant is $3,000, but if an applicant is a Crookston High School or University of Minnesota Crookston graduate, they can receive up to $5,000.

Change the process?

    Hoiseth said one of the primary focuses of B3 was for businesses to raise their profile and enhance their visibility through expanded marketing and advertising. But in talking with the local media, he said they aren’t really seeing any added advertising revenue in connection with any awarded B3 grants.

    That concern is likely to lead to not just changes in the B3 grant eligibility language, but also in the way grant dollars are dispersed. Instead of simply giving grant dollars to a successful applicant, some CHEDA Board members think it would be better for grant recipients to simply submit their invoices for reimbursement, once the expenses/investments are deemed to be appropriate within the B3 parameters.

    “Most grants involve reimbursement anyway; you typically don’t get the money straight up,” board member Betty Arvidson said. “You submit invoices and it makes you accountable.”

    “I’m not picking on anyone in particular, but some of the dollars we’re giving out, we don’t think we’re getting to what the general purpose (of B3) was,” Hoiseth noted. “Businesses want to get a marketing edge and more vitality and you do that through things like enhanced signage or better software. I think buying furnaces and fixing plumbing, maybe that was in the original scope of the program, but maybe we should think about pulling that from the program. It isn’t really a great use of the funds.”

    Board member Craig Morgan asked Hoiseth to come to the board when it next meets in January with some suggested language changes to the B3 program. Then, Morgan said, the board could potentially vote on the changes in February.