PRED Item 1
March 19,2012
Worksession
MEMORANDUM
March 15,2012
TO:
FROM:
SUBJECT:
Planning, Housing and Economic Development
C~tt.
ee
Robert H. Drummer, Senior Legislative Attorney
~
W orksession:
Bill 6-12, Economic Development
Small Business Assistance
Expected Attendees:
Steve Silverman, DED Director, Peter Bang, DED, and Katie Knowlin,
DED.
Bill 6-12, Economic Development - Small Business Assistance, sponsored by Council
Vice President Navarro, Councilmembers Ervin, Floreen, Leventhal, Council President Berliner
and Councilmember Riemer, was introduced on February 7,
2012.
A public hearing was held on
February 28.
Background
Bill 6-12 would establish a program to assist small businesses located in either an
enterprise zone' or an urban renewal area
2
of the County who are adversely impacted by a
County redevelopment project or a redevelopment project located on County property. The Bill
would require the Director of the Department of Economic Development (DED Director) to
create and operate the program. SUbject to Council appropriation, the Director may award a
grant or loan from the Economic Development Fund (ED F) to an eligible small business and
provide technical assistance and training to a small business receiving financial assistance under
the program.
An
award that exceeds $100,000 cumulatively must be approved by the Council.
The Bill would also require the Executive to adopt method 2 regulations to implement
this program. The regulations must:
(1) require the Director to compile and maintain a list of approved technical training
courses on the appropriate website;
(2) specify the application procedures and eligibility criteria for a grant or loan to a
small business under the Program;
(3) specify conditions that the Director may impose on a small business in order to
receive financial assistance from the Fund under the Program;
(4) define what constitutes an adverse impact on a small business;
(5) define what constitutes financial health of a small business; and
(6) identify outreach methods and marketing strategies to inform local small
businesses of the program.
An enterprise zone must be designated by the Maryland Department of Business and Economic Development.
2
An urban renewal area must be designated by the Council.
I
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The Department of Economic Development operated the Impact Assistance Program
(lAP) as part of the EDF beginning in FY05. The lAP was established by a Council
appropriation of $100,000 to the EDF in FY05 to assist small businesses adversely impacted by
County development or redevelopment projects. Since inception, the lAP has provided
assistance from the EDF to 26 different small businesses. A list of the recipients is included in
the EDF Annual Report dated March 15,2011 at ©7.
The Council did not appropriate funds for the lAP in FYIO, FYIl, and FY12. The Bill
would establish a similar assistance program in the EDF law with a similar, but not identical,
group of potential eligible businesses. The Bill would also permit the DED Director to require
an applicant for assistance to complete approved technical training as a condition of receiving
financial assistance from the program.
Public Hearing
All 12 speakers at the February 28 public hearing supported the Bill. DED Director
Steve Silverman, speaking on behalf of the Executive, supported the Bill (©14). Sanita Alrey­
Debose, representing the Wheaton Redevelopment Advisory Committee (©15), Ash Kosiewicz,
representing the Coalition for Fair Redevelopment of Wheaton (©16), and Manuel Ochoa,
representing the Latino Economic Development Corporation (©17), each supported the Bill as a
necessary expenditure to assist small businesses during the redevelopment project planned for
Wheaton. Jorge Sactic, representing La Union Mall Tenant Association (©18-19), Maria Zelaya
(©20), Omar Lazo (©21), Alex Compagnet, Sylvia Cezar, Maria Peredo, Carlos Cezar, and
Alejandro Mendoza are small business owners in the County who supported the Bill. We also
received written testimony from Bob Schilke (©22), an owner of a small business in Wheaton,
also supported the Bill.
Issues
1.
What is the fiscal and economic impact of the Bill?
OMB was unable to estimate the complete fiscal impact of the Bill due to uncertainty as
to the number of small businesses that would be eligible for assistance and the amount of funding
for the program. (©8-13) However, OMB estimated that DED would need to hire a new Senior
Business Development Specialist, grade 27, at an estimated total cost of $111 ,490 per year and a
new Office Services Coordinator, grade 16, at an estimated total cost of $50,473 to plan and
administer the program. OMB also estimated an additional expense of $50,000 to $80,000 per
year for occasional contractor support to evaluate loan applications during high-volume periods.
In light of DED's operation of a similar Impact Assistance Program between 2005 and
2010, Council staff questioned the estimate of the need for 2 new staff positions for this program.
Peter Bang ofDED responded by email at©23.Mr. Bang pointed out that DED had between 42
and 54 work years during the active operation of the Impact Assistance Program and currently
has only 27.3 work years. DED believes that they are unable to start and operate a new program
with their current staff levels.
2
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Finance provided an Economic Impact Statement at ©8-13, but was unable to quantify
the impact of the Bill on employment, property values, or other economic activity due to
uncertainty as to the number of eligible businesses and the type of assistance provided. The
purpose of the Bill is to increase or prevent decreases in employment, property values, and other
economic activity in areas impacted by County redevelopment projects. The positive effect
depends on the success of the program.
2. Which businesses would be eligible for assistance under the Bill?
The Bill limits eligibility to a small business as defined in Executive regulations adopted
to implement the County Local Small Business Reserve Program. The size and sales criteria for
different types of small businesses is established in COMCOR §11B.6S.01.03. See ©24-2S. A
business must also be located near a County redevelopment project in either an enterprise zone
or an urban renewal zone. The Maryland Department of Business and Economic Development
has designated 3 areas in Montgomery County as an enterprise zone - 1) Long Branch/Takoma
Park; 2) Wheaton; and 3) Old Towne Gaithersburg. The Silver Spring Central Business District
was designated by the County as an urban renewal area.
The Executive's Recommended FY 13 to FYl8 CIP includes $42 million for the Wheaton
Redevelopment Program over the 6-year period.
Although this Committee recently
recommended significant changes to the scope of the project recommended by the Executive, the
Committee also reaffirmed the County's commitment to undertake a significant redevelopment
project in Wheaton. The Wheaton Redevelopment Project is likely to impact many small
businesses in the immediate area. The owners of some of these businesses testified at the public
hearing. If the Bill is enacted and the program is funded, eligibility for assistance will be further
defined in future Executive regulations.
3. Should the Bill permit an application for assistance up to
24
months before construction
is scheduled to begin?
The purpose of the Bill is to help a small business that is likely to be adversely impacted
by construction related to a County redevelopment project. However, the Bill would permit a
small business to apply for assistance up to 24 months before construction is scheduled to begin.
It
is difficult to predict whether any small business is likely to continue as a viable business in
the same location over the next 24 months. Providing financial assistance that far in advance of
construction can result in the County helping a business that does not survive until construction
actually begins. Using limited resources in this way would frustrate the purpose ofthe Bill. The
Committee may want to consider reducing this period from 24 months to 12 months.
4.
Is
an assistance program for small businesses impacted by a County redevelopment
project a worthwhile expenditure of limited County resources?
The need for impact assistance for small businesses can be illustrated by looking at the
proposed $42 million Wheaton Redevelopment project. Both the Executive's recommended
project and the PHED Committee's recommended amended project would result in significant
adverse impact to existing local small businesses in Wheaton. Both versions of the project
would result in a loss of existing public parking in Lot 33 on Triangle Avenue for several years.
3
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One of the advantages of the PHED Committee's recommended project is that it would reduce
the time period for this temporary loss of parking from 5-6 years to 2-3 years. In addition, both
projects include the construction of office buildings for use by County and M-NCPPC
employees. Mitigation of the adverse impacts of a County redevelopment project in Wheaton is
Absent a successful mitigation program, the
a reasonable use of County resources.
redevelopment project may result in seriously damaging some of the businesses that the project
is designed to enhance.
One of the dangers of providing impact assistance to small businesses is that the
government will expend scarce resources to unsuccessfully keep a small business operating
during a construction project that is not likely to survive without the project or after the
assistance is finished. The Bill contains 2 provisions to help avoid this result. First, the Bill
would require a finding that the potential recipient is financially healthy and likely to continue
operating for the foreseeable future.
3
Second, the Bill would permit the DED Director to
condition assistance on a recipient's completion of technical assistance.
The remaining question is whether an appropriation of funds for this program is merited
when the Council compares it to other potential uses of scarce County resources. Although
funding is necessary in the operating budget, it can be considered a necessary part of each
County redevelopment capital project. The amount of funding for this program in FY13 and
beyond is a budget decision that must be made by the Council on an annual basis. This Bill
would not mandate an appropriation of funds in the FY13 operating budget. The Bill would only
set up the machinery necessary to implement the program subject to annual appropriation by the
Council. However, it appears that the Council would need to appropriate funding for additional
staffing in DED in addition to incremental funding for the Economic Development Fund in order
to implement this program.
This packet contains:
Bill 6-12
Legislative Request Report
Excerpt EDF Annual Report dated March 15,2011
Fiscal and Economic Impact Statement
Testimony
Steven Silverman
Sanita AIrey-Debose
Ash Kosiewicz
Manuel Ochoa
Jorge Sactic
Maria Zelaya
OmarLazo
Bob Schilke
March 14 email from Peter Bang
COMCOR §11B.65.01.03
Circle
#
1
5
6
8
14
15
16
17
18
20
21
22
23
24
3
Council staff suggests that the Committee further reduce the possibility of assisting a business that would not
survive until construction by reducing the time period for applying for assistance before construction is planned to
begin.
4
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Bill No.
6-12
Concerning: Economic Development ­
Small Business Assistance
Revised: January 25, 2012 Draft No.
L
Introduced:
February 7,2012
Expires:
August 7,2013
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--:-:--_ _ _ _ _ __
Sunset Date:
.....:N!.!;o~n~e~
__: - - -_ _-
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council Vice President Navarro and Councilmembers Ervin, Floreen, Leventhal, and Council
President Berliner
AN
ACT to:
(1)
establish a program to assist certain small businesses located in the County who are
adversely impacted by a County redevelopment project or a redevelopment project
located on County property;
provide technical assistance and training to a small business who receives financial
assistance from the Economic Development Fund;
authorize fmancial assistance to certain small businesses from the Economic
Development Fund; and
generally amend the economic development laws,
(2)
(3)
(4)
By adding
Montgomery County Code
Chapter 20. Finance
Section
20-76B
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 6-12
1
2
Sec.
1.
Sections 20-76B is added as follows:
20-76B.
Small Business Assistance Program.
3
4
5
6
W
Definitions.
As used in this Section:
Adverse impact
means
f!
loss of revenue resulting from
f!
redevelopment
project.
Director
means the Director of the Department of Economic
7
8
9
Development.
Enterprise zone
means an area designated under Maryland Code,
Economic Development Article, Section 5-704 or any successor
prOVISIOn.
Fund
means the Economic Development Fund established in Section
10
11
12
13
20-73.
Program
means the Small Business Assistance Program.
Redevelopment project
14
15
16
means
any
construction,
alteration,
or
improvement in an urban renewal area or enterprise zone where the
existing land use is commercial or industrial and is:
17
18
19
20
21
22
ill
ill
located on property owned
.Qy
the County; or
financed in whole or part
.Qy
the County.
Small business
means
f!
privately owned business that meets the
requirements of Section IlB-65(a).
Technical assistance
means training directly related to operating
f!
small
business provided
.Qy
an educational institution or
f!
non-profit
organization approved
.Qy
the Director.
Urban renewal area
means an area of the County as defined in Section
23
24
25
26
56-9CD.
(Q}
Establishment
Qj
Program.
Subject to appropriation, the Director must
27
create and administer
f!
Small Business Assistance Program to assist
6)
f:\law\bills\1206 ed-small business assistance\bill5,doc
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BILL
No. 6-12
28
29
small businesses who are adversely impacted
by
project.
l£)
Eligibility.
~
redevelopment
30
31
32
The Director, based upon information submitted
by
the
applicant for assistance, must find that:
ill
the applicant is the owner of an existing small business located
near an ongoing or future redevelopment project that is planned
to begin construction in less than 24 months after the application;
33
34
35
36
37
ill
ill
@
the applicant's small business is currently or is likely to be
adversely impacted
by
the redevelopment project; and
the applicant's small business is financially healthy and likely to
continue operating for the foreseeable future.
38
39
Conditions.
The Director may impose reasonable conditions on
~
small
40
41
42
43
44
business, including the successful completion of approved technical
assistance training, in order to receive financial assistance from the
Fund under the Program.
ill
Financial assistance.
The Director may award
~
grant or loan from the
Fund to an eligible small business under the Program. A loan or grant
to
~
45
46
47
48
49
small business that exceeds $100,000 cumulatively must be
approved
by
the Council.
ill
Regulations.
The Executive must adopt method
~
regulations to
implement this Section. The regulations must:
ill
require the Director to compile and maintain
~
list of approved
50
51
52
technical training courses on the appropriate website;
ill
specify the application procedures and eligibility criteria for
grant or loan to
~
small business under the Program;
~
-0
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BILL
No. 6-12
53
54
55
56
57
58
59
60
61
62
ill
specify conditions that the Director may impose on
~
small
business in order to receive financial assistance from the Fund
under the Program;
ill
ill
@
define what constitutes an adverse impact on
~
small business;
define what constitutes financial health of
~
small business; and
identify outreach methods and marketing strategies to inform
local small businesses ofthe program.
(g)
Reports.
On or before March
n
of each year, the Executive must report
The report must
to the Council on the activities of the Program.
include:
63
64
65
66
ill
ill
ill
the number of small businesses participating in the Program;
the number and dollar amount of grants and loans made; and
an evaluation of the impact of each grant or loan on the operation
ofthe small business.
67
68
Approved:
69
Roger Berliner, President, County Council
Date
70
71
Approved:
Isiah Leggett, County Executive
Date
72
This is a correct copy ofCouncil action.
73
Linda M. Lauer, Clerk ofthe Council
Date
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LEGISLATIVE REQUEST REPORT
Bill 6-12
Economic Development Small Business Assistance
DESCRIPTION:
This bill would establish a program to assist small businesses located
in an enterprise zone or urban renewal area of the County who are
adversely impacted by a County redevelopment project or a
redevelopment project located on County property. The Bill would
permit the DED Director to require a recipient to complete approved
technical training as a condition of receiving financial assistance
from the Economic Development Fund.
A County redevelopment project may adversely affect small
businesses located near the project. With appropriate assistance,
many small businesses may be able to operate successfully during the
project.
To assist small businesses who are adversely impacted by a
redevelopment project.
DED Director, DGS Director
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney, 240-777-7895
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Not applicable.
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,
I
I
i
'\
,
Montgomery
County
March 15,2011
Economic Development Fund
Annual Report
Isiah Leggett
County Executive
.
[
,
Timothy Firestine
Chief Administrative Officer
Valerie Ervin
Council President
Prepared
by
the
Department of Economic Development
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D.
Impact Assistance Program
In
FY05, the Impact Assistance Program was approved by the County Council and
. $100,000 was appropriated for seed funding. The purpose of this Program is to mitigate, as
much as possible, any adverse impact that small businesses might be experiencing due to
County-initiated development, re-development, or renovation projects. The County Council
appropriated a total of$650,000 to support increasing activities under this Program.
Since the inception of the Program, the following businesses have received impact
assistance funding totaling $477,521:
~~~~~--~~~~~~
i
2
3
4
!
5
6
7
8 .
9
10
11
12
13
14
15
16
l7
!
18
19
i
ITB Eight, LLC
DIBIA
Black's Bar and Kitchen
Moren Inc.
Vicky Snead
T/A
Eurokids Fashion
Olympic Carpet & Rug, Inc (Carpet Bazaar)
Interior Accents,Inc.·
Bach Hue Nguyen T
I
A Bethesda Nail Spa by On
BH&R Associates (Quarry House Tavern)
Kefa Cafe
ITB Eight
Universal Artificial Limb Co.
KO. Inc. T/APresence
Italia Gourmet
Mayorga Coffee
The Finkhauser Group,
Inc.
TI
A The French
Quarter
Care
KCDNguyen, LLC
T/A
Passion Nail Spa
Yamo, LLC
Grand Crew Enterprises
Barry's Magic Shop
Sacred Mountain LLC
T/A
Moorenko's Ice Cream Cafe
$ 20,000
$8,000
$15,000
$4,000
$3,700
$4,000
$10,000
$2,800
$3,000
$10,000
$15,000
$20,000
$20,000
$15,000
$20,000
$20,000
$63,100
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
i
i
!
'
.
.
I
Silver Spring
Silver spririg
Silv.er Spring
Silver Spring
Bethesda
Silver Spring
Silver Spring
Bethesda
Silver Spring
Bethesda
Silver Spring
Silver Spring
Germantov.-n
GermantoVvn
GermantoVvn
GermantoVvn
Wheaton
i
.
$5,000 •
$8,000
i
E.
Export Montgomery Program
The Export Montgomery Grant Program was established in 2001 under the Economic
Development Fund. The purpose of this Program was to assist Montgomery County exporteers
that contribute to the economic strength and stability of the local economy, and to provide
indirect marketing for the County. This Program operated with a $30,000 set-aside from the
Economic Development Fund and provided grants of up to $5,000 to qualified companies with
export related projects. Receipt of an Export Montgomery grant was contingent upon
participation in the State's Export Maryland Program. Due to lack ofactivities, this Program was
20
(j)
7
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ROCKVILLE, MARYLAND
MEMORANDUM
March 8, 2012
TO:
FROM:
SUBJECT:
Roger
Ber]iner~
President, County Council
Jennifer
A.
Hughes, Director, Office ofManagement and
Joseph F. Beach, Director, Departoient
ofFinan~
Budg~
0.
Bill 6-12 Economic Development - Small Business Assistance
Attached please find the fiscal and economic impact statements for the above­
referenced legislation.
JAH:nm
c: Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices
of
the County Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Alex Espinosa, Office ofManagement and Budget
Angela Dizelos, Office of Management and Budget
Mary Oneda-Brown, Office of Management and Budget
Naeem Mia, Office ofManagement and Budget
Peter Bang, Department of Economic Development
®
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Fiscal
Impact
Statement
Bill 6-12 - Economic Development - SmaU Business Assista:oce
1.
Legislative Summary.
Bi116-12 would establish
a
program, to be created and operated by the Department ofEconomic
Development
(DED), to
assist small businesses located in either
an
enterprise zone or
an
urban
renewal area of
the
County who are adversely impacted
by
a County redevelopment project or a
redevelopment project located on County property. The Bill requires the County Executive to adopt
method
2
regulations
to
implement this program.
This program
is
envisioned
to
consist of.
analyzing
the economic health and needs of small
businesses; administering
a
grant/loan program (including all operational and legal aspects);
maintaining
an
up-to-date compilation ofapproved technical training courses; and marketing the
program.
2. An
estimate of changes in County revenues and expenditures regardless of whether the
revenues or
expenditures
are assumed in the recommended or approved budget. Includes
soun-:e
of informanoD, assumptions, aDd methodologies
used.
Changes
in
County revenues and expenditures cannot
be
determined at this time due to the unknown
variables as outlined below:
• The number ofCounty projects and/or projects on Couoty-owned property
that
have either
been
approved, are in the pipeline, or are in the planning stages;
• The deftnition
of
the term "near
n
in the Executive ReguJations, which will determine the
number
of
businesses eligible for assistance;'
• The Bill requires the mode ofbusiness assistance to
be
either in the form of a loan or a grant;
depending on which type ofassistance is given, this will affect expenditures significantly (i.e .•
loans will
be
paid back with interest, whereas grants
wiJ1
not).
3. Revenue and expenditure estimates covering at least tbe next 6
fIScal
years.
Not available at this time due
to
the unknown variables listed in question 2.
4. An actuarial aaalysis through the
entire
amortization period for each
bill that would
affect
retiree pension or group insurance costs.
Not applicable.
S.
Later actions that may
affect
future RYeDUe and expenditures
if
the bill authorizes future
spending.
Modification to the program criteria (either through Executive Regulations or
future
bills) and
definitions
of
criteria, such as the size ofthe small business, could affect future expenditures. A
broader definition or criteria can increase the pool of eligible applicants, thereby increasing
expenditures (in the absence of a spending cap for the program).
I
The Bill requires the County to "assist
small
businesses located near on ongoing or future redevelopment project. .. "
1
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Conversely, the use of interest-bearing loans may increase revenues for the County
if
the pool of
applicants is expanded.
6.
An
estimate
of
the staff time needed to implement the
biD.
The
Bill
allows the applicant small businesses to submit
an
application
as
early
as
24 months prior to
any redevelopment project scheduled to go
into
construction.
As
such, assigned
staff
for
this
program can begin application review
as
soon
as
any redevelopment plan is
made
public (rather than
wait until construction begins).
To
carry
out the duties
as
required by this bill, the following functions
are
anticipated:
• Coordination
with
the Department ofGeneral Services (DGS) on redevelopment project and its
impact on business conditions in the redevelopment
area;
• Assess the
types
ofbusinesses that could be impacted, and the nature and extent ofthe impact;
• Market the program and conduct business visitations;
• Assist in the application process, review applications, audit/monitor the business for fmancial
health, and underwrite the loan package;
• Conduct performance monitoring and loan servicing; and
• Gather, evaluate and monitor various technical training programs that
can
assist the businesses.
It
is anticipated that at least one additional full-time professional staff (Senior Business Development
Specialist,
grade
27), and one additional
fu11~time
administrative aide staff (Office Services
Coordinator, grade
16)
will be required to manage the program.
Considering that the work volume will come
in
peaks and surges (depending on the level of
redevelopment activity), some operating budget increase
($50~OOO-$80.000/year)will
be necessary
for staff capacity at periods ofhigh-volume with contractor support to evaluate loan applications.
7. An explanation of how the addition of new staff responsibiJities would affect other duties.
As OED does not have the current staff levels to plan or administer this progra.m. new staff will be
necessary. Duringtimes oflow activity,
the
additional
staff
can assist with other EDF duties such as
the Small Business Revolving Loan program and other small business-related work programs.
8. An estimate of costs when
an
additional appropriation
is
needed.
DED would need 1.0 FfE for a new Senior Business Development Specialist position, grade 27" to
administer.a loan program. Assuming mid-point ofpay
grade
and mid-range health insurance coverage,
the cost
of
salaries and benefits would
be
approximately $111,490 per year.
DED would also need 1.0 FIE for a new Office Services Coordinator, grade 16, to help manage the
program. Assuming the minimum point of pay grade and mid-range health insurance coverage. the
cost of salaries and benefits would be approximately $50,473
per
year.
An operating budget increase of$SO,OOO-$80,OOO
per
year
will
be necessary for
staff
capacity at
periods ofhigh-vollime with contractor support to evaluate loan applications.
2
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The costs for the actual assistance to businesses through either a loan or grant program
wil1
be
detennined
by
how the program is structured.
This
is
a significant fiscal
impact
of
Bill 6-12.
the
structure ofthe program is not specified
in
the Bill and therefore the costs cannot be estimated.
9. A description ofany variable that could affect revenue and cost estimates.
The use ofloans or grants to provide assistance
will
determine the level of cost estimates.
Broadening the pool ofapplicants by adopting looser eligibility criteria may increase expenditures
(in the absence of any caps).
10.
Ranges of revenne
or
expenditures tbat are uncertain
or
difficult to project.
All revenue or expenditures are difficult to project
at
this time due to the variables
described
in
question
2.
11. Ha bill
is
likely
to
have
no
&seal
impact,
why
that
is
tbe ease.
Not
applicable.
12.
Otber fiscal impacts or comments.
None.
13. The foDowing contributed to and concurred with this analysis:
Peter Bang, Chief Operating Officer, Department of Economic Development
Mary
Oneda-Brown. Office ofManagement and Budget
Naeem
Mia,
Office of Management and Budget
Angela Dize10s. Office ofManagement and Budget
~flllifel'jfughes,
Director
ffice
ofManagement and Budget
3
@)
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Economic Impact Statement
Bill 6-12 - Economic Development - Small Business Assistance
Background:
Bill 6-12 would establish a program, to be created and operated by the Department of
Economic Development (DED), to assist
small
businesses located
in
either an enterprise
zone or an urban renewal
area
ofthe County who
are
adversely impacted
by
a County
redevelopment project or a redevelopment project located on County property. The Bill
requires
the
County/Executive to adopt method
2
regulations
to
implement
this
program.
This
program is envisioned to consist of: analyzing the economic health
and
needs of
small businesses; administering
a
grantlloan program (including all operational and legal
aspects); maintaining an up-to-date compilation ofapproved technical
tr8.ining
courses; ,
and marketing the program.
1.
The sources of information, assumptions,
and
methodologies used.
Montgomery County Economic Development Fund Annual Report (2011)
2. A
description of
any
variable that could affect the economic impact estimates.
A.
The size, scope and location of County-funded redevelopment projects.
B.
The size, scope and location ofredevelopment projects on County-owned
property.
C. T.he number,
type
and
financial Ylherewithal of
small
businesses that are near the
redevelopment projects
in
A
and
B.
D.
The total amount of economic assistance provided to affected small businesses.
3. The Bill's
positive or negative effect,
if
any
on
employment, spending,
saving,
investment, incomes, and property values in the County. ,
Since
the legislation seeks to mitigate the adverse impact of. future County fostered
redevelopment projects on nearby small businesses. that
are
otherwise
finan~ially
stable,
it
is
not possible to quantify the impact on employment, property values, or
other economic activity
as
a result ofthis bill since
it
would be dependent on the
number ofbusinesses affected
and
receiving
aid,
the total amount of aid deployed,
and
the number
ofemployees affected and the type ofindustry
that
they work
in.
The
analysis would also have
to
consider whether the aid
was
necessary to retain the
entire
business or would address revenue shortfalls during implementation ofthe
redevelopment project.
@
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4.
If
a Bill is likely
to
have no economic impact, why is that the case?
Not applicable.
5. The
following contributed to
and concurred
with this analysis: David Platt
and
Mike
Coveyou, Finance
Department
of
Finance
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DEPARTMENT OF ECONOMIC DEVELOPMENT
Isiah Leggett
County Executive
Steven
A.
Silverman
Director
Bill 6-12
Economic Development - Small Business Assistance
Public Hearing
­
February 28,2012
Testimony of Steven A. Silverman, Director,
Department of Economic Development
On
behalf of County Executive Isiah Leggett
For the record, my name is Steve Silverman, and I am the Director of the
Montgomery County Department of Economic Development. I am here tonight to speak
on behalf ofthe County Executive in support of Bill 6-12 - Economic Development­
Small Business Assistance.
This bill would direct our Department to establish a program to assist small
businesses that are located in either an enterprise zone or an urban renewal area of the
County, and who are adversely impacted by a County redevelopment project or a
redevelopment project located on County property.
Bill 6-12 reflects the County's responsibility to help mitigate any unintended
consequences that may occur due to our desire to see progress in geographic areas of the
County or on specific parcels that are in need of redevelopment. Bill 6-12 and the
program that will ensue from this piece of legislation are critical to maintaining the
ongoing health of our small business community, a goal clearly shared by the County
Executive and the County CounciL
The program being recommended in Bill 6-12 is very similar to the Department of
Economic Development's Impact Assistance Program. Established in FY05, the Impact
Assistance Program was designed to mitigate, as much as possible, any adverse impact
that small businesses might experience due to County-initiated development,
redevelopment or renovation projects. Some 27 businesses have received grants totaling
approximately $475,000 since the program's inception. Bill 6-12 takes this financial
assistance component one step further by also addressing the technical assistance needs
of the small businesses that are being impacted, a programmatic component that we
applaud.
On behalf of County Executive Leggett, I encourage the County Council to
support Bill 6-12, legislation that will aid an important component of the County's
economy - our small business community.
III Rockville Pike, Suite 800 • Rockville, Maryland 20850 • 240-777-2000 • 240-777-2046 TTY' 240-777-2001 FAX
www.montgomerycountymd.gov
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WHEA TON REDEVELOPMENT ADVISORY COMMITTEE
February 28, 2012
Councilmember Nancy Navarro
100 Maryland Avenue
Rockville, MD 20850
Dear Councilmember Navarro,
I am writing to you as Chair of the \\!heaton Redevelopment Advisory Committee
(WRAC). We have reviewed Bill (6-12) to support small businesses in Montgomery
County. We believe this bill will assist small businesses in surviving the negative effects
of the proposed \\!heaton Redevelopment by B.F. Saul. Because small business
assistance is crucial to the redevelopment for all of \\!heaton, the WRAC supports the
small business assistance bill.
Many businesses are concerned and excited about the potential changes and
improvements to \\!heaton. \\!hile there are many healthy and viable businesses, others
will require assistance to make the transition perhaps to new locations. Change can be
positive for a commercial district but some of the effects of construction can have a short­
term negative effect. Small business assistance can make a real difference to businesses
that may need technical advice in marketing, operations, and business expansion.
WRAC members are interested in small business issues and unanimously support this
bill. Additionally, we will continue to work with small businesses and interested
members of the public to gather comments and advice that we can pass to you and your
staff. We believe this bill will have a positive impact on \\!heaton businesses that are
directly affected by the redevelopment. Therefore, the WRAC encourages passage of the
Small Business Assistance Act. Thank you for your consideration in this matter.
Sincerely,
<\-s"'~·~
Jonathan Fink
Chair, \\!heaton Redevelopment Advisory
Committee
Department of General Services
2424 Reedit: Drive' Wheaton. Maryland 20902-4669
240-777-8123,
TIY
2401777-8112,
FAX
240-777-8130
www.montgomerycountymd.gov/midcounty midcty.citizen@montgomerycountymd.gov
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7
February 28, 2012
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Re: Bill 6-12 Economic Development - Small Business Assistance
Testimony: Ash Kosiewicz
Lead Organizer, Coalition for the Fair Redevelopment of Wheaton
Good evening. My name is Ash Kosiewicz, lead organizer of the Coalition for the Fair Redevelopment of Wheaton. The
Coalition is made up of County residents, Wheaton small businesses, and non profits that want the existing community
to benefit from the Wheaton redevelopment project. I am here to express our Coalition's support for Bill 6-12 as a
critical step in the right direction as the County demonstrates its commitment to small businesses that are adversely
impacted by publicly subsidized redevelopment projects.
For over a year, the Coalition has fought for shared prosperity and redevelopment in Wheaton. Aware of challenges that
faced small businesses during the redevelopment of Silver Spring, we outlined - what would it take - to position small
businesses so that they would be part of a revitalized Wheaton. Business owners recognized the potential of a day time
crowd in new offices, more people living in the Central Business District to patronize their businesses, and an attractive
new downtown where families could spend time together on the weekends. That vision and promise, however,
contrasted with the concerns about the transition period that has many of our members wondering - will they
eventually suffer the same fate as their peers in Silver Spring? A 2005 University of Maryland study found that many
small business owners during the redevelopment of Silver Spring said County assistance programs, including Impact
Assistance funds, were inaccessible and insufficient to meet their needs.
Thankfully, Bill 6-12 is an important piece of legislation that gives our Coalition hope that we can work with the County
to realize our mutual goals of creating opportunities to help retain and grow small businesses in Wheaton. If adequately
funded and supported by regulations that allow for broad participation, this new program would playa critical role in
helping small business owners tackle the challenging transition of Wheaton's redevelopment. By removing the $20,000
cap under the County's existing programs and marrying financial resources with technical assistance, this bill should be
one piece of a comprehensive approach to help small businesses in Wheaton benefit from the redevelopment project.
I want to end my three minutes by encouraging this Council to read the testimony I am submitting today on behalf of
small business owner Bob Schilke of Wheaton's beloved Little Bitts Shop, a one-of-a-kind business in Montgomery
County. For more than three decades, Bob has opened his small business three nights a week to students who want to
learn how to make and decorate cakes and candy. Tonight, he's doing just that. Though he really wanted to be here
tonight, he wants to join me in thanking Council Vice President Nancy Navarro for introducing this bill and Council
members Ervin, Floreen, Leventhal, and Council President Berliner for co-sponsoring.
Thank you.
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February 28,2012
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Re: Bill 6-12 Economic Development - Small Business Assistance
Testimony: Manuel Ochoa
Latino Economic Development Corporation (LEDC)
Good evening. My name is Manuel Ochoa, regional director of Homeownership for the Latino Economic Development
Corporation and a member of the Wheaton Redevelopment Advisory Committee. LEDC equips Latinos and other DC­
area residents with the skills and financial tools to create a better future for their families and communities. Participants
in our programs learn how to buy and stay in their homes, take control of the decisions affecting their apartment
buildings, and start or expand small businesses. I am here tonight to express LEDC's support for Bill 6-12 as an important
protection for small businesses impacted by redevelopment.
In 2006, Montgomery County asked LEDC to come to Wheaton to help prevent the displacement of Latino small
businesses due to redevelopment. LEDC has supported small businesses with microloans, technical assistance, and
training. Today, we are more active than ever! From July to December 2011 we have assisted 131 business owners
with 234 sessions of technical assistance related to record keeping, marketing, personal finance, and business planning.
In the Central Business District and in neighboring Census tracts, we have closed 21 loans to help small business owners
expand and strengthen their businesses.
Unfortunately, the very potential we see in small businesses is put to the ultimate test during redevelopment. For a
small business owner, the prospect of years of construction, partial and/or complete loss of parking, and a drop in sales
can create confusion and anxiety. Small business owners know they will need adequate financial and technical
assistance to cope with the challenging transition to ultimately position themselves for the changing markets and
opportunities that come with redevelopment.
For this reason, we strongly support Bill 6-12 given it recognizes the County's responsibility in helping small businesses
to weather the transition phase of publicly subsidized redevelopment projects. Small businesses need security and
concrete protections in place to benefit from redevelopment in areas like Wheaton and beyond. By removing the
$20,000 cap and allowing small businesses to apply for this assistance well in advance of redevelopment, this bill
improves upon the County's existing programs and represents one important piece of a comprehensive approach to
help small businesses benefit from redevelopment.
We implore this Council to support this legislation and ensure that related regulations allow for broad participation of
businesses that will make wise use of County funds. We are ready and willing to be the County's partner in the
challenging times ahead, and we want to do everything we can to help realize the County's goals of retaining and
creating new opportunities for small businesses within our revitalized communities.
Thank you for the opportunity.
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Testimony of Jorge Sactic
For Montgomery County Council Public Hearing on Bill 5-12 and Bill 6-12
February 28, 2012
I am Jorge Sactic; I live in Germantown, Montgomery County, Maryland. I am the owner of
Chapina Bakery at La Union Mall and a leader of the Asosiacion Guatemalteca Unida (AGUA) an
umbrella entity the unified the Guatemalan groups of the Washington DC Area. Also, a Board member
of the Crossroads Farmer's Market in Takoma Park in addition to be the president of the La Union Mall
Tenants Association and the organizer ofthe Langley Park Small Business Association a board
composed of many small business from the whole International corridor.
I am her to ask the Council for the approval of:
Bill 5-12:
Small Business Navigator:
This bill creates a new position. The Navigator will be the
contact person between a small business and the County. Helps small business comply with County
requirements and regulations.
Bill 6-12: Small Business Assistance:
This bill establishes program to assist small businesses that are
located in an area of redevelopment (like the Purple Line). The small businesses can be awarded a grant
or loan and it will receive technical assistance and training. The small business can apply 2 years prior
to construction.
We the Small Business owners ofthe Langley Park area respectfully ask the Council the approval
of these provisions due to the fact that we feel and according to our projections the sales and revenues
of our business will be affected tremendously by two events:
• Being the first one, the inconvenience and the laps that the construction of the Purple Metro
Line will create
• The second one, the modernization stage of the areas (especially around the metro stations) that
will increase the cost of living.
Langley Park has become the biggest concentration of Latinos in the whole Washington
Metropolitan Area and the home of many other minority groups from Asia, Africa and Middle East as
well. Consequently, this international corridor has created a cluster of business that renders products
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and services to serve not only minority groups who live and the area, but also to those who live far
away and can find those sentimental products that have special meaning for them where they live. For
instance, my company sale bread and anyone can go to the Giant or Safeway to buy these products but
the difference is that those products in there have no meaning for minority groups.
In contrast, our business have create products both in shape and taste that remain them special
moments back home, also, has reassemble the little comer store where they use to hang out and talk
about the crops, children, loves and many other things from the life the used to have. Therefore, a high
percentage of our clientele living far away always come to the area to get those especial products they
want.
However, during construction many of them will hesitate to come due to the inconvenience that
this type ofprojects creates and an important flow of our income will be lost in the process.
On the other hand, the proposal for development of the Purple Line, commercial rents
in
the
area are already rising. Landlords do not want to enter into the customary long-term leases that give
small businesses security. The threat to the diverse culture of the International Corridor is obvious.
Commercial interest in the areas around Purple Line stops will drive up rents and prices.
Unless government steps in with concrete protections for current residents and existing local
small businesses, such as the approval of Bill 5-12 and Bill 6-12, national chains will be pushing us out
of the market. The loss of small businesses catering to the ethnic communities will accelerate
displacement of those communities altogether.
To me,
it
is important that Council allow this Law Project to pass that in turn will help to retain
the existing small businesses or help them being relocated without the lost of their investment.
Creating new opportunities is good, but retaining the current diversity of small businesses is essential to
preserve the unique character of the International Corridor. Please approve Bill 5-12: Small Business
Navigator and Bill 6-12: Small Business Assistance.
Thank you.
Jorge Sactic
(202) 702-4416
i
sactic@hotmaiLcom
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(0
February 28,2012
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Re: Bill 6-12 Economic Development - Small Business Assistance
Testimony: Maria Zelaya
Los Taxes
Good Evening. My name is Maria Zelaya and I am the owner of small business Los Taxes in Wheaton on
Triangle Lane. I am here tonight as a member of the Coalition for the Fair Redevelopment of Wheaton to
express my support for Bill 6-12 as an important protection for small business owners like myself in
Wheaton.
I have been a small business owner in Wheaton since 2008. I started my business on Georgia Avenue and
my business has thrived and expanded in the five years that I've been here, due primarily to the diverse
population in Wheaton and the valuable service we provide. At Los Taxes, we help people understand the
tax system and assist them in paying their income taxes. We also help small businesses with their
accounting and we also do corporate income taxes.
I moved to my current location on Triangle Lane after deciding that I wanted to stay in Wheaton because
of its culture and because of the Latino population which is my primary clientele. Given my location,
where I just signed a new 5-year lease, I'm concerned about how to prepare for the changes that will take
place due to redevelopment. My business will face significant challenges due to loss of parking and
customers having reduced access to my business, and I'm also concerned that many of my fellow small
business owners will also be affected. We all are committed to the Wheaton community and offering
assistance to its members.
For this reason, I am here today to ask the Council to support Bill 6-12 as a member of the Wheaton small
business community who hopes to expand as a result of the redevelopment project. This bill will provide
much needed financial assistance to small business owners in Wheaton and will help us to stay in
business through construction in order to benefit from redevelopment and the new clientele it will bring
to Wheaton. I also support the Bill because business owners would be able to apply for assistance before
redevelopment starts, which is key for allowing us to plan and prepare for any decrease in business and
to help us cover our monthly fixed costs.
While I'm worried about being able to stay open during the redevelopment process, I'm also excited
about the economic prospects that redevelopment could bring to Wheaton and hope that my business
will flourish as a result. We hope to expand our business to introduce health, life, auto insurance and also
offer small business development trainings. This bill provides an important protection to help us to
weather the difficult transition during the redevelopment.
Thank you.
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Omar Lazo, Owner
Los Chorros Restaurant
2420
Blueridge Ave
Wheaton, MD
20902
(301) 933-1066
www.LosChorrosRestaurant.com
Chorros~~;
Restllllrant
Los
Testimony for
Small Business Assistance Program Bill 6-12
I would like to first start off by introducing myself. My name is Omar Lazo. I am one of the owners of Los Chorros
Restaurant in Wheaton, MD and currently the Co-Chair of the Wheaton Jewish/Latino Small Business Alliance. I am the
son of two immigrants from EI Salvador; my father Pedro, and my mother Reina. My parents left their town in EI Salvador
and came to this country in the early 70's in search of the American dream. Through hard work and dedication, their
dream came to full fruition on February 1st, 1989. That was the day that my parents put every single penny that they had
saved and opened Los Chorros Restaurant in Wheaton, Maryland. My brother Jason and I helped out my parents in the
family business doing anything that was asked of us. We washed dishes, served up soft drinks, bussed tables, etc. My
father waited tables while my mother cooked food in the kitchen. At the time we were the only Latino restaurant in the
entire Wheaton area. My mother prided herself on the home cooked Salvadoran and Mexican food that we were
providing to the community. The community responded well and after 6 years we decided to expand our business into the
adjacent space. Again, my parents took a gamble and invested over $100,000.00 dollars into the restaurant. We went
from a 1,600 sq.lft. 60 person carryoutlrestaurant, to a full fledge 4,600 sq.lft 167 person restaurant. We have become a
staple in the Wheaton community and have been gratefully serving Wheaton for over 23 years now. We have seen
generations of customers coming to our establishment. The kids that used to come with their parents to eat at Los
Chorros are now grown up and bringing their own children. My brother and I have taken over the day to day management
of the business for over 7 years now and plan on continuing this great tradition in the Wheaton community.
That being said, I come before you to give my testimony regarding the Business Assistance Program Bill 6-12 sponsored
by Council Vice President Nancy Navarro and Council members Roger Berliner, Valerie Ervin, Nancy Floreen, George
Leventhal and Hans Riemer. The economy as we all know has affected us all greatly. The Wheaton community has not
been spared at all. It saddens me to see so many businesses in the Wheaton community that have been forced to close
their doors due to the economy and other factors. I have witnessed the closing of Ferdinands, The Royal Mile Pub, the
Long and Foster offices (which had been there for at over 25 years), Dejabel Cafe, Mama Lucia's, Two Mattress stores,
Wheaton Flowers, Wheaton Shopping Center Jewelers, Island Hut, Sandry's Hair Salon, EI Boqueron, and several others
that have changed ownership in order to avoid closing. Aside from the economy, small business owners have to also
contend with the uncertainty that the planned redevelopment will add to their stress. We have seen what has happened
to small business in Downtown Silver Spring and most of us feel that this redevelopment will drive a lot of us out, as it has
done in Downtown Silver Spring. I personally feel that I will need to spruce up my business and make it more
aesthetically appealing to compete with some of the newer businesses that redevelopment will attract to the area. My
neighbors and I are concerned that once redevelopment occurs, we will see a hike in all of our rents. Currently, our
average per square foot price for Wheaton area is in the $24 range which a lot of us already feel is too high. We have all
witnessed what happened in the downtown Silver Spring redevelopment that now has hiked the price per square foot to
around $33. If the redevelopment increases to these levels, my rent would see an increase of about $3,450 per month.
Bill 6-12 would give the small business owners in Wheaton the resources to prepare for the changes that we know are on
the way. I am for the most part optimistic about the redevelopment as something good for our community, but am
cautious about our ability to remain competitive and financially sound through all of these changes.
My restaurant has been greatly affected by the redevelopment even before it had begun because of the sale of the BB &
T building at the corner of Georgia Ave and Blueridge Ave. This building was sold to Avalon with the plan to move the
Safeway over to this location along with residential housing. In preparation, the leases were no longer being renewed
past June 2012. As part of the planned redevelopment, three adjacent buildings have already been vacated. The 8B&T
building has only a handful of tenants still occupying the building. My business is directly across the street at 2420
Blueridge Ave. I have lost all of that lunch revenue that was once our bread and butter in the early days due to that
building being stuck in limbo during this redevelopment. Wheaton Shopping Center, which I am a part of, has lost a lot of
revenue due to the lack of development of the B8&T site. We lost Baskin Robbins, a jewelry store, a mattress store, a
flower shop, Tailor John's, and Chicken Basket was close to clOSing before selling. As of today, the building is no longer
taking long term leases and has no plans in the works. I believe that the small business owners of Wheaton would benefit
greatly from the direct technical assistance, training, and capital from the County's Economic Development Fund to help
us through this transition.
Omar Lazo
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February 28,2012
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Re: Bill 6-12 Economic Development - Small Business Assistance
Testimony: Bob Schilke
The Little Bitts Shop
Good Evening. My name is Robert Schilke and my wife and I own the Little Bitts Shop on Triangle Lane in
Wheaton. I am here tonight as a member of the Coalition for the Fair Redevelopment of Wheaton to
express my support for Bill 6-12 as an encouraging step to help small businesses benefit from the
proposed redevelopment of Wheaton.
Our shop sells cake decorating and candy making supplies. We have been in business at this location
since 1976 - 36 years. We are the only business like this in Montgomery County. Many people consider
us a destination business for Wheaton, and we are very proud of this since the small business
community is such an important part of what Wheaton is all about.
I have talked to many of the small business owners in the Wheaton Triangle Area. Our greatest concern
is the construction proposed for Parking Lot 13 and the partial loss of parking that will take place during
the construction of the bus bays area. There are approximately 55 small businesses in this area that will
be adversely affected by these phases of the redevelopment, and our livelihoods are at stake. All we
want to do is to continue to operate our businesses as we have been doing for many years and be part
of a revitalized Wheaton.
Given these concerns, I am encouraged by the introduction of Bill 6-12 that creates a new Small Business
Assistance Program. We know how many small businesses struggled and went out of business in Silver
Spring, and we know the County Executive has said that adequate resources were not invested to help
small businesses survive redevelopment. If adequately funded and accessible, this new program could
play an important role in helping small business owners tackle the challenging transition of
redevelopment. We want to thank Council Vice President Nancy Navarro for introducing this bill and
Council members Ervin, Floreen, Leventhal, and Council President Berliner for co-sponsoring this bill. We
applaud you.
I would like to invite you to come to Wheaton to see what this small business community means to
Montgomery County. The residential and business communities are important and essential to the
make-up of the County, and we hope to continue working with this Council to make sure small
businesses have adequate protections during the proposed redevelopment of Wheaton.
Thank you.
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Page lof2
Drummer, Bob
From:
Sent:
To:
Subject:
Bang, Peter
Wednesday, March 14, 2012 8:39 AM
Drummer, Bob
RE: B;1I6-12, Economic Development - Small Business Assistance, BiIIS-12, Small Business
Navigator
Importance: High
Peter Bang, Katie Knowlin (Division Chief of Business Empowerment), and Steve (unless other
conflict arises) from DED will attend.
Bob, the Impact Assistance Program (lAP) processed
26
transactions over 5 years. The lAP did not
require the full gamut of loan underwriting and monitoring like other programs within the EDF. By
the manadate and the usage of the lAP, the lAP was created as very simple program to
administer. We notified the Regional Sevice Centers (RSC) of the availability of the
program, visited the impacted business site (when notified by the RSC staff) to visually verify that
the County initiated project(s) indeed adversely impacted the business, compared the
company's revenue before the County project and during the County project, and reimbursed the
loss of income up to
$20,000.
That was the end of trasaction for a typical lAP. In terms of staff
capacity, during the period when lAP was active, DED had anywhere from
42 - 54
workyears and
had at least two full time professional and one OSC (adm.) positions fully devoted to the EDF
program.
DED now has
27.3
workyears, with only one full time position responsible for the EDF program.
With increased number of companies in EDF portfolio compared to when lAP was administered, we
barely have the capacity to monitor the performance of the portfolio companies on time. Taking on
a new program is virtually impossible with the current staff capacity of DED.
The new program will require that we market the program, we evaluate the County project for the
number and type of the businesses that it might disturb and the extent of the impact, we review
the business plans (probably have to assist on completing some of the loan applications), we
underwrite the full loan package, we monitor the loan, we engage in collection and workout of the
bad/delinquent loans, we provide business counseling and identify possible areas for relocation,
we identify and recommend training programs, etc.
Most importantly, the case load will not come in at a steady manageable pace. For instance, if the
program is announced, and if the Wheaton Revitalization Project is made public, we will be easily
dealing with
60-80
businesses applying/inquiring for loan/assistance in a span of
1-2
months.
Hope this answers your question and let me know if you need additional info.
Peter Bang
Chief Operating Officer
Montgomery County
Department of Economic Development
111
Rockville Pike, Suite
800
Rockville, MD
20850,
USA
(0) 240-777-2008
(f)
240-777-2001
-----Original Message----­
From: Drummer, Bob
Sent:
Tuesday, March 13,
2012 4:26
PM
To: Silverman, Steve
Cc: Hughes, Jennifer; Bang, Peter; Boucher, Kathleen
3114/2012
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COMCOR - Code of Montgomery County Regulations
118.65.01.03 Size and Sales Criteria
To qualify as a "Local Small Business," a business must meet the definition in Section 2* above
and the following size or gross sales criteria:
*Editor's note--see llB.65.0l.02
(a)
The wholesale operations (sale of goods in large quantities usually for
resale) of the business, if any, did not employ more than 30 persons, or the gross sales of these
business operations did not exceed an average of $5,000,000 in its most recently completed 3
fiscal years.
The retail (sale of goods in small quantities directly to the ultimate
(b)
consumer) operations of the business, if any, did not employ more than 30 persons, or the gross
sales of these business operations did not exceed an average of $5,000,000 in its most recently
completed 3 fiscal years.
The manufacturing (producing goods from raw materials by hand or by
(c)·
machinery) operations of the business, if any, did not employ more than 40 persons, or the gross
sales of these business operations did not exceed an average of $14,000,000 in its most recently
completed 3 fiscal years.
(d)
The services operations of the business, if any, did not employ more than
50 persons, or the gross sales of these business operations did not exceed an average of
$5,000,000 in its most recently completed 3 fiscal years.
(e)
The construction operations of the business, if any, did not employ more
than 50 persons, or the gross sales of these business operations did not exceed an average of
$14,000,000 in its most recently completed 3 fiscal years.
(f)
Gross sales for a business that has been in operation long enough to file a
Federal income tax statement, shall be determined by the average of gross sales amounts
contained on the tax formes) for the most recently completed 3 fiscal years. In the absence of a
federal income tax statement, the business must provide verification that it meets the definition
of a Local Small Business, including the above size and sales criteria, through audited financial
statements.
If
a business has not existed for three years, the employment and gross sales
average(s) shall be the average for each year or part of a year during which the business has been
in existence. For a newly formed business, the determinations regarding size and sales criteria
will be based upon then-current employment levels as of the time of the Local Small Business
Reserve application, and projected gross sales for that fiscal year.
(g)
If
a business operates in more than one of the above-noted business
operations classifications (i.e., wholesale, retail, manufacturing, service, and construction), its
combined business operations must meet the above-stated limitation of the more liberal size and
sales criteria. For instance, the gross annual sales limit for wholesale businesses is $5 million;
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for retail goods, and non-construction services the limit is $5 million; and for construction
services and manufacturing the limit is $14 million. Therefore, the combined operation cannot
exceed $5 million annually in average gross sales. Further, regarding size, the employment limit
for wholesale and retail business operations is 30 persons versus 50 for a service operation.
Accordingly, a business with both wholesale and service classifications can have up to 50
employees.
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