EDC offers financial help to help local businesses expand
August 15, 2010 - 1:00am
What is the EDC? An unneeded extension of government into the private sector, or an effective tool to stimulate the economy?
While a creature of government, the Leelanau County Economic Development Corporation, more commonly referred to as the EDC, has helped several businesses in Leelanau County gain a foothold in a slippery market and spurred employment through investment.
The 11-member committee which is appointed by the county board is an all-volunteer organization that meets every other month to discuss opportunities for economic development in Leelnau County. “We’re interested in making sure we do the right things up here,” said corporation chairman John “Chip” Hoagland. Hoagland held a similar position when he lived downstate and rose to chairman of the Leelanau group after Todd Stachnik stepped down.
Hoagland is joined by 10 others on the board. They are Stachnik, Joan Kalchik, David Rowe, Marie Porter, Jim Bardenhagen, Jose Barrera, Sally Guzowski, James Reynolds, David Shiflett, and Erik Zehender.
Each member of the group tackles specific areas of development. For instance, cherry farmer Jim Bardenhagen covers agriculture, and newest member Eric Zehender keeps tabs on energy and utilities. “(We’re) developing more of a committee structure to be able to address issues more quickly,” related Hoagland. “We only meet once every two months for 2 or 3 hours, but now the committees can hash out issues before the meeting.”
Committees are headed by an EDC board director but are also comprised of other members of the Leelanau County community. Tim Nelson is in the agriculture division.
Operating on a budget of $16,500 last year, the EDC is looking to increase that number to $27,500 for the upcoming fiscal year. Along with that money the EDC also has access to a revolving loan of $25,000 from the U.S. Department of Agriculture to help kick start local businesses like iOmni, which needed a little extra capital.
“We had an opportunity to grow our business, but we needed more money to execute,” related owner Veronica Moyer. The Greilickville- based iOmni, who received the loan in October 2008, designs custom distribution plans and provides supply chain management services for national accounts. It employs 5 people.
EDC funds were used to purchase a computer server needed to expand capacity. “The Leelanau and Traverse City EDC’s were really great. At the time we needed some help, they were there for us... They also helped orchestrate additional loans and organized our cash flow statements,” she added.
Another business that has benefited from the EDC involvement is clothing manufacturer Baa Baa ZuZu. The company, which is located just off M-22 on Schomberg Road, manufactures women’s apparel and accessories out of 100% recycled wool. Workers were cutting material by hand before the EDC became involved.
“The 2009 loan gave us the ability to automate our cutting as we bought 2 clipper presses with the money,” said owner Kevin Burns.
Kevin and his wife, Sue Burns, started the business 17 years ago, and have spent the majority of time developing brand recognition and establishing markets for products.
“Many people have tried to duplicate us, but we’re the real phony. We’ve almost hit our niche, but there’s still work to be done,” he said.
The Burns’ loan was made available because iOmni paid its loan off early, according to Chairman Hoagland. Burns related that he was also on track to pay his loan down before the allotted time so that the corporation could “help someone else.”
“I approached them (the EDC), after Chauncey (David Shiftlett) alerted me to the loan’s availability. Since the loan our business has been grown by about 30 to 40 percent. We’re fortunate that the recession hasn’t hit us” Kevin Burns related.
“We’re a fourth quarter business, and we process nearly 1,500 pounds of recycled wool every two weeks. We’ll go up to almost 3,000 come fall,” he added.
Employing 19 people in Leelanau County, Baa Baa Zuzu’s products are available in over 1,000 stores nationwide. The company is looking to grow, according to Burns.
“We needed to automate our production for our niche market. We did $1.1 million in sales last year and (are) looking to hit $1.6 this year,” Burns said.
The Leelanau County Economic Development Corporation has other functions, including providing a conduit for state and federal funding for fledgling businesses.
“If a developer comes to me and says, ‘I need $20 million. I can raise $19 million.’ Then I can find $1 million more. We’re involved in what you call gap financing,” said Hoagland.
The EDC also works with the United States Department of Agriculture to funnel funds from its rural development program into Leelanau County.
“My opinion is that many taxpayers have already written checks to Lansing and Washington, some of those funds should come back to our community,” he added. “Our goal is to encourage job creation in the county, and my personal bias is full-time rather than seasonal jobs.”
Recognizing that there is not an interest for heavy manufacturing in the county, Hoagland related in a phone interview that the corporation’s target areas are value-added agriculture and “knowledge” work such as provided by One Up Web. The company, which specializes in search engine optimization, was leaving Leelanau County until the EDC helped provide a building in Greilickville.
Working closely with the Traverse City EDC is another one of the corporation’s goals. “We’re looking at putting in high-speed internet throughout the county. That way people that don’t have to be on site to do their work can move their businesses up here,” said Hoagland.
Among other interests and projects on the Leelanau County EDC radar is the Sugarloaf development, which was recently brought to the forefront through a purchase move by Las Vegas businessman Eneliko “Liko” Smith.
“I personally have been trying to track developments or lack thereof with Sugarloaf. The EDC stands ready, if and when any legitimate proposal or developer comes to us,” Hoagland said.
Relating that other areas of the country invest millions into local EDCs, Hoagland feels that Leelanau’s version is doing great things given its limited resources.