YOUNGSTOWN, Ohio – The city’s Youngstown Initiative program should be under way in about a month, following City Council’s approval of $1 million for the program, city economic development director T. Sharon Woodberry said.
Council members approved the funding as part of the 2012 budget they passed Wednesday. When the program initially operated, from 2001 to 2008, the $3 million the city invested leveraged $35 million in private investment and helped create about 800 jobs, Woodberry said.
“It was hugely successful,” she remarked.
The program, which operated in partnership with the U.S. Small Business Administration, received awards at the state and district level, Woodberry noted. “I think it’s something that will be highly impactful for the city and something that our businesses are looking for.” In fact, the city has a backlog of businesses that are interested in participating, she said.
Under the program, businesses are required to seek and receive funding from a bank for a project, and the city will provide 10% to 15% of the project cost. The city loan converts to a performance grant if job creation and investment benchmarks are met.
Among those pleased to learn about the relaunch of the program – which had been suspended due to lack of city funding -- is Gil Goldberg, district director of SBA’s Cleveland District office.
“We ran the program in three cities and Youngstown was the most successful, from the standpoint that it created the most jobs, helped the most businesses and did it with a very low default rate of 2% per year,” Goldberg said. Program participants’ loans were backed by SBA and were required to receive planning assistance, which he said contributed to the low default rate.
Youngstown also was easy to work with in terms of eliminating bureaucracy and creating a single point of contact for the program, he said.
In addition to the funds authorized by City Council this week, Woodberry said the city will also seek state matching funds for the program.
Copyright 2012 The Business Journal, Youngstown, Ohio.