City approves $1.4 million to GFDA for revolving loan fund
City Commissioners unanimously approved $1.4 million CARES Act funds to the Great Falls Development Authority for their revolving loan fund, which goes to local businesses as gap or bridge loans.
During the Sept. 6 meeting, Jolene Schalper of GFDA said that those projects won’t happen without the gap loans to help their financing.
She said over the last 26 years, GFDA has closed $51 million in loans, leveraging more than $255 million of investment.
In the last two years, Schalper said they made $12 million in loans and in the first two months of this fiscal year, which began July 1, they’ve made $708,000 in loans. That has made possible $55 million in investment in the community, she said.
She said the developers get gap financing loans from GFDA and when they pay the loans back, those dollars go back into the fund to be loaned to other projects.
Schalper said they’ve identified $14 million of gaps for housing, small business and community development projects.
Sherrie Arey of NeighborWorks Great Falls said that the funds will help more projects get done in the community since GFDA can “move at the speed of business.”
Tom Hazen, the city’s grant manager said that the city prioritized discussion of their ARPA funds since those are more restricted in eligibility and deadlines.
City Manager Greg Doyon said that GFDA made the request and the only mechanism for the city to fund it is through the CARES funds. Doyon said staff had communicated that to the commission.
Doyon said that city staff believes funding GFDA for the economic development revolving loan fund at the requested $1.4 million would be most effective at this time.
Doyon said the city hadn’t directly allocated funds to GFDA in several years and since commissioners and officials had been discussing economic development, “this proposal makes the most sense to us.”
Mayor Bob Kelly said the allocation is a “great investment in our community and utilizing the skillset that GFDA has.”
The city planning department presented several proposals for housing development and infrastructure expansion during the July 5 commission meeting. Those included creating a fund to subsidize permit costs on a project by project basis; expanding water treatment facilities on the north side; and expanding infrastructure to the imminent NeighborWorks Great Falls development on the southern end of the city.
Those proposals emphasize areas of “identified need, benefit low and moderate income developments and are compliant with ARPA requirements,” according to the city staff report.
The city has already used $1.14 million of CARES funds to replenish several city funds that suffered losses due to COVID; as well as $1.67 million to offset this year’s budget shortfall.
“While the emergency of the global pandemic has begun to wane in recent months, new factors have developed that continue to negatively impact economies on a municipal, national, and global scale. Workforce shortages, inflation, shipping interruptions, and a potential recession have prevented countrywide operations from returning to pre-COVID norms. Locally, developments such as the Calumet assessment protest makes prediction of short-term financial prospects extremely difficult. Overall, evaluating the future need for CARES funded budgetary subsidies is challenging at this time,” according to the city staff report.
If the commission approves the $1.4 million allocation to GFDA, the city will have a remaining CARES balance of $5.94 million.