The approach is twofold: a stronger partnership between the city and the Powell Economic Partnership, and a new sustainable fund to foster future economic growth.
Powell city councilmen unanimously approved $33,000 for the Powell Economic Partnership (PEP) out of the city’s economic development fund on March 18, along with giving their “wholehearted support” for the program.
Mayor Don Hillman called it “a win-win situation.”
“In every election cycle, the question comes up: ‘What are you going to do about economic development?’ It’s really nice and refreshing to have some answers,” said Councilman John Wetzel. “I think this is probably one of the best answers I’ve seen in the 20 years I’ve lived here.”
PEP Chairman Rick LaPlante emphasized that economic development encompasses a lot of different things.
“Economic development is a process, it’s not an event — it’s not a single thing. We don’t recruit one business and then claim economic development,” LaPlante said. “It’s a process of focusing on the quality of life, workforce and workforce training, infrastructure, working with existing businesses and entrepreneurial development, and finally ... ending with new business development.”
The new Powell Economic Growth Fund is being established with those goals in mind.
The fund will not only encourage business growth — it will be built upon it.
When a new business begins or an existing business expands, its owner(s) can seek a grant through the Wyoming Business Council to fund a new building. Under the model, the city will serve as a sponsor for the grant, which is essentially a loan, with the city owning the new structure and then leasing it back to the business.
All of the money the business pays on that loan then returns to the Powell Economic Growth Fund through a revenue recapture plan.
City and PEP leaders can then determine how that money is reallocated. Under the proposed model, 70 percent of the revenue would go toward other economic development projects; 22.5 percent toward an infrastructure fund for the city of Powell; and the remaining 7.5 percent to the Powell Economic Partnership to cover costs of program administration and create the self-funding model.
The city could use its portion of funds toward streets, water or sewer lines or other infrastructure projects.
The model allows self-funding economic development.
“While creation of the Powell Economic Growth and Powell infrastructure funds are important, the real primary driver is an expansion of our economic base and new living wage jobs in our community,” LaPlante wrote in a letter submitted to the council. “If we can work with the city to accomplish all of this in a sustainable way that provides revenue to the city, we think it’s a path well worth analyzing in much more depth.”
The model forecasts three business projects over the next five years, with the average construction project estimated at $1.25 million in grant funding.
An existing business is considering funding a project through the Powell Economic Growth Fund, said Anna Sapp, PEP interim director.
Gluten Free Oats used a similar funding model when building its facility in 2011, leasing the facility from the city and paying an estimated $758,701 to the city for future economic development. However, that loan term was more than 30 years, while the new model assumes only a six-year ownership by the city, followed by an asset sale to the business.
Based on the projection of three business projects, “By 2025 Powell Economic Growth Fund could reasonably have over $2.5 million in funding available for projects,” LaPlante said.
“It’s a fund that we have a lot of control over as a community, and it’s significant,” he added. “When you’re getting into $2.5 million, you’re getting into funds that can move the dial.”
Councilman Myron Heny asked how stable state funding is for the Wyoming Business Council grants that allow communities to recapture revenue from local business projects.
Leah Bruscino, northwest regional director for the council, said that’s the million dollar question.
“As long as we can show success and need, we’re pretty confident that it will be there. But I guess I would put some onus on the communities to talk to your legislators and let them know how important it is,” Bruscino said.
Councilman Eric Paul said that’s “a reason to do it now instead of later.”
Forward Cody has worked with the city of Cody on a similar economic development fund in recent years, and was very supportive of Powell’s plan, LaPlante said. Cody also is providing copies of legal documents to help Powell with its contracts.
In a letter to the council, LaPlante said PEP and the city would draft plans that worked best for Powell.
“It is, however, important to note that we are not ‘starting from scratch’ or navigating unchartered waters,” he wrote, adding that other Wyoming cities have similar models in place.
City partners with Powell Economic Partnership
The Powell Economic Partnership and city will work together in other ways as well. PEP will assist in administering grants through the Powell Economic Growth fund and also will help the city with grant-writing for local projects. Previously, those tasks fell solely on city staff, in addition to their day-to-day responsibilities.
“To have someone who’s totally focused on the grants and grant-writing and reporting and finalization — those are all easy words, but they’re big tasks,” City Administrator Zane Logan said. “If we could have an organization and an executive director focused on it, not only would that help the city, it would help the community.”
PEP also requested that the city contribute 30 percent of the economic development group’s operating budget — $33,000 this year — and increase that amount by about 2 percent over the next six years. At year seven, the city’s contribution would drop to $10,000 a year.
Future funding decisions must be made by future city council members, so the council committed only to this year’s funding, but councilmen voiced their strong support for Powell Economic Partnership.
The city’s $33,000 contribution toward PEP’s operating budget comes from the city’s economic development fund. Currently, that fund has roughly $110,000 in it, earmarked for economic projects.
In recent years, the money has helped fund local business projects involving Gluten Free Oats, Catheze and Polecat Printery. When those businesses pay back their grants from the city, the money goes back in the city’s economic development fund for future projects. For example, Gluten Free Oats pays more than $1,900 to the fund in monthly lease payments.
Councilman Jim Hillberry noted that the city’s fund was generated through previous programs and Wyoming Business Council grants.
While the city has honored those grant requirements and could now spend the money elsewhere, Logan said it’s been dedicated to economic development.
“You’ve done what you’ve agreed to do with those monies, so they don’t have any strings attached. I commend you for actually taking care of that and having it as a chunk of money you can work with,” Bruscino said. “Some of the other communities haven’t been as frugal and focused.”
By requesting money from the city’s economic development fund, PEP is not competing with entities, such as the Powell Senior Center or Boys and Girls Club, that seek money from the general fund.
“We want to drive more business in our community so those organizations are healthier to start with,” Sapp said. “We don’t want it to affect others who ask for assistance in special requests.”
Councilman Hillberry also noted that Powell Economic Partnership is largely supported by private donations from businesses, organizations and individuals.
“It’s not just the city participating in this. It’s the whole community,” Hillberry said.
In a separate matter, the city voted earlier this year to sponsor a $50,000 grant through the state to fund an economic development plan. If the grant is approved by the Wyoming Business Council this spring, Powell Economic Partnership would provide the required $16,666 in local match money.
Powell Economic Partnership is currently searching for an executive director, and Logan will represent the city on the selection committee.