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BizCast 09: La Crosse County’s Sam Bachmeier on Programs to Help Tear Down Buildings, Help Businesses

Episode 09
La Crosse County’s Sam Bachmeier on Programs to Help Tear Down Buildings, Help Businesses

About BizCast Greater La Crosse

We bring you news from the business community. From startups to experienced problem solvers, you’ll get in-depth insight on the challenges and opportunities of doing business in Greater La Crosse. Our show is a collaboration between WIZMNews.com and BizNews Greater La Crosse ( GreaterLaCrosse.media ).

Summary

The following was transcribed by artificial intelligence: www.otter.ai. Let us know your thoughts. 

Vicki Markussen introduces Sambachmeier.
0:01

What are some of the financial resources programs they have?
1:33

Where does this type of funding come from?
2:59

What types of loans are available for businesses?
5:09

What is a business owner’s stack of financing?
7:41

What is the Housing Assistance Grant?
10:16

Why are these funds needed? How do you measure success?
12:23

Success for the Innovation Diversification Grant program.
14:09

What’s not factored in? The ripple effect.

Full Transcript

The following was transcribed by artificial intelligence: www.otter.ai. Let us know your thoughts. 

Sam Bachmeier 0:01
We really like to see success looks like you know our businesses, accomplishing their projects, accomplishing their missions and creating a long lasting impact in the community, hopefully a long lasting business.

Vicki Markussen 0:14
Welcome to BizCast Greater La Crosse. I’m your host, Vicki Markussen. And joining me today is Sam Bachmeier. He is new with La Crosse County. He is the community development specialist. And Sam, tell me what does that mean? What do you do?

Sam Bachmeier 0:28
All right. Well, thanks for having me, Vicki. Yeah, in short community development specialist, I’m working with our local business community or our municipalities in the cross county, and community development and economic development projects and initiatives and making sure that our current businesses here in the community and have access to, you know, resources, whether that be financial or educational, a lot of the focus tends to be on entrepreneurial support. So making sure that they have access to the educational programming and access to capital, financial resources, my job is really focused at one providing those resources directly from the cross county in ways that we can and when we can’t connecting businesses, young professionals, etc. With the resources that are here in our community, and also at the state and federal levels as well.

Vicki Markussen 1:20
What kind of tools does the county have for that spectrum? And you know, you’re helping that person that’s a solopreneur, solo entrepreneur, all the way up to large employers.

Sam Bachmeier 1:32
Sure, yeah. So a few of the financial resources programs that we have, we have a couple of loan funds and a couple of grant opportunities for businesses to grow. We have a microloan fund that is that is a loan that will provide up between 1020 $1,000 in loan funds, so those do have to be paid back. But our terms are very, our terms are very flexible. And as our our interest rates and specifically for the micro loan program, that is for entrepreneurial businesses, startup businesses eligible uses for those programs, it really is a wide, wide gamut, but um, new working capital, inventory, supplies, purchasing of inventory, your supplies, things like that purchasing equipment, furniture, even purchasing of a business itself, we also have a participation loan fund that is, loans can be much larger than $20,000. That is all focused around job creation, for every job that you project to create, you’re eligible for up to $20,000. So if you project to create five jobs, you’d be eligible for up to $100,000 loan and that loan, again, can be used for things like purchasing machinery and equipment, working capital, real estate acquisition, a number of opportunities for that loan program, but also aimed at small to medium sized businesses for for growth, for growth reasons.

Vicki Markussen 2:59
So a lot of people hear this and say, Are those my tax dollars at work my county tax dollars at work? Where does this type of funding come from? It is

Sam Bachmeier 3:08
from a largely from the county tax dollars at work. Some of the loan funds were created from sale of county properties as well proceeds from the sales of those county properties were put into a revolving loan fund as seed money. And as we continue to get payments back on the loans that we received, that loan fund continues to grow.

Vicki Markussen 3:31
And that’s the revolving part of it. So you got money, you’re paying back the loan so that someone else can take out more money. And again, that interest that’s being paid to the county as opposed to a bank or someone else who’s lending it is what’s growing that fund? Is that the best way to describe that

Sam Bachmeier 3:46
correct? Yep, yep, all of your payments, all of your interest payments continued to will will remain in that specific fund and will remain an asset for businesses in the cross county. It’s there, those proceeds will not be used for other purposes at all, except for replenishing the revolving loan fund.

Vicki Markussen 4:06
So a lot of times that’s helpful in those cash strapped if you will, businesses. So they are in some cases, they’re successful. They’re they’re making it but if they need to just take that next step. There’s also I you know, it’s we have a new products that we want to launch, is that would they use the microloan with a youth participation loan? Are there other loans out there that they can have?

Sam Bachmeier 4:31
Yeah, yeah. So typically, we see when, when, when clients of ours take out loans. They’re typically matched with another form of capital, whether that be a loan from a private lender, or, you know, organizations like WIC, or some other organizations that provide revolving loan funds as well. But they’re typically matched with in some fashion or another. So if you’ve got a $50,000 project, and you come and get a $20,000 loan from the cross county, you know, Whether you match that with your own personal private funds or whether you match that with, you know, another loan from another institution, that’s typically how that works. Say you’re a local restaurant and you’re looking to expand. Maybe that’s expansion of physical space, or expansion of your menu, or what you’re offering for your products and services. These loans can be used to purchase a new space, rent a new space, or it can be used for purchasing of a new equipment. Again, I’ll go back to the restaurant idea. If you’re a restaurant, and you’re looking to offer a new food product, for example, but you need to purchase an oven or a stove, or a new hood for your kitchen or something like that, this loan is perfectly set up for those types of opportunities, and they could be coupled together. You know, if you’re a restaurant and you’re your otter, offering new products or new services, maybe you’re going to dabble into the delivery service as a restaurant. If you need to hire a couple of delivery drivers, then that participation loan would be the correct loan for you. Because you’re adding new jobs.

Vicki Markussen 6:07
A lot of times these business owners say I’m starting a new business, what free money is available? What so there are so there’s difference between loans and grants. Right? Are there any grants available for businesses,

Sam Bachmeier 6:19
the the grant that we offer for businesses itself is the innovation diversification grants. So that grant is a grant up to $10,000. And so you’re innovating something, you’re innovating a new product, you’re diversifying your product or market portfolio, and you need some extra seed money to help you get started. That is a grant, they don’t have to be repaid, we generally what we’d like to see with those applications is how the grant will or how the project that you’re working on will help you make your business more sustainable, more competitive.

Vicki Markussen 6:52
And then also it’s the businesses that are saying, I’m going to come to your community, but there is a building that needs to be taken down, if you will, how can the county help a business like that, so that they can develop the land the way that they need to for their property?

Sam Bachmeier 7:12
Sure. Yeah, I mean, either the loan or the grant the innovation and diversification grant can can be used for those, if you’re looking at whether it be a building renovation or complete tear down and rebuild for the purchase of the real estate for the building, the construction of the building, for the remodeling of the building, for purchasing of new equipment.

Vicki Markussen 7:34
So it’s really a combination, right, like, you see what the needs are of that business, and then you try to plug in the right tool.

Sam Bachmeier 7:41
That’s correct. A lot of businesses, developers, real estate developers, whatnot will look at as stacking pancakes, so you’re stacking different layers of financing, you know, it can be a wide array of county financing, private lending, your own personal equity, from the state, from the federal government itself, there are a lot of different opportunities. So generally, you know, you look at a different project expense. So you’re looking at a million dollar investment, and, you know, a new building and new equipment and, and overhead costs and all the things that go into starting a business or running a business, we’d like to work with you to I guess, in for lack of a better term stack that pancakes, to make sure that you have the adequate financing to get your project going and running. With those different loans, you know, you do have to take into consideration that those will have to be paid back. So we want to make sure that your anticipated revenues are are being generated in a way that those loans and those different stacks of financing can be can be paid back while you’re still able to maintain and make a profit.

Vicki Markussen 8:51
So just like going to a bank, it’s making sure you have a business plan so that you as the lender, because you’re a lender in this case are saying, yes, you can not only take on this debt, but the interest payments that come along with this and make sure that they have a viable business. There’s there’s a degree of risk to this, though, too, isn’t there?

Sam Bachmeier 9:10
There is Yep, absolutely both on on the county side and on the business owners side. So the county has to assess that risk, and make sure that we feel comfortable lending the funds or giving them the grant funds depending on which program you apply for. And then there’s also a risk as as if, as any business assumes when they start. When you’re taking on that financing. You need to make sure that you have collateral in place to in the case that you’re not able to repay those loans. What other way can we can can the lenders and in this case, the cross county get our investment in the in the project back typically we we vet the process very thoroughly to make sure that we feel very comfortable that the loan clients are are able to pay back those loans. And one of the ways that We’d like to do that is by making sure like you mentioned, Vicki that businesses have an adequate business plan, which includes a financial financial plan finance model projections for the future.

Vicki Markussen 10:10
There’s one other piece that I know you’ve been talking about frequently lately, the acquisition and demolition. That’s a grant, is that alone? What is that?

Sam Bachmeier 10:18
Yep, yep. So that is a grant. So it’s a grant focused on housing, residential housing. So you’ll find it on our website under housing assistance, actually not under business assistance. It’s in a very similar location, but it is under the housing assistance tab on the Community Development page of La Crosse County. And the whole idea behind it is is to replace a home that is been dilapidated. That’s that’s very lowly assessed property values. And replace that with a newer, nicer home. And one of the things that we’ve noticed over time is that housing developers, builders, will not take on those teardown and reconstruction of homes because the cost to purchase and demolish those homes is, is too much for to handle. So we’d like to alleviate some of those financial burdens pertaining to the acquisition, and thus the demolition of the homes in our community by providing loans or grants for that program. Any project that is going to result in a single family home is eligible for up to $50,000. And that can be used for the actual purchase of the home and site, it can be used for the demolition costs associated with it hauling off debris to the landfill, and whatnot. And also can be used for some site prep work to like hooking up to utilities, again, $50,000 for single family projects. And if you’re taking down an existing structure and building a multifamily project, like apartments or condos or something like that duplexes, you’re eligible for up to $100,000. So again, single family, but there does need to be a residential component tied to the future project. This is not to take down a house and build a convenience store or a grocery store, it can be mixed use. So if you build an apartment complex, you certainly can have a commercial space on the first floor, so long as there is residential space, somewhere tied to the project.

Vicki Markussen 12:23
So you’ve put these taxpayer dollars out there. Why are these funds needed? And how do you measure if it’s successful or not,

Sam Bachmeier 12:31
we recognize that there are certainly gaps in financing opportunities for businesses that you’ve got $100,000 project, but you can only get $50,000 from a traditional lender, because that’s the that’s the rate that they’re comfortable at issuing. So we want to provide some gap financing for those kinds of opportunities. Specifically for the acquisition and demolition for housing, we recognize that housing is a need all over the country, but particularly in the cross county, and affordable market rate housing in particular, we want to make sure that, you know, we have a tremendous a tremendous representation of businesses here that are looking to employ people in the community. But one of the levels of employment is is housing and making sure that the employees have adequate places to live by providing funds through the acquisition and demolition grant we can we can hopefully ensure that that our employees in the community, our fellow neighbors have adequate places to live. And that houses that are that are dilapidated, quite frankly, that are places that nobody really wants to live are mitigated to do as much as possible success is different for each program. So for the micro loan fund, again, that’s, you know, a loan between one and 1020 $1,000, you know, are businesses, accomplishing their projects, accomplishing their missions and creating a long lasting impact in the community, hopefully a long lasting business and ultimately for the county, we’d like to see those funds be repaid back because that means that the business is successful enough to they’ve made enough money to in order to repay those funds for the participation loan fund. That’s all about job creation. So success for that as if we give you a loan for $20,000. Success for that as one new job was created a full time position at adequate living wages based on the requirements for the position of success for the innovation diversification grant is is really based on was the company that we granted those funds for able to accomplish the objectives that they wanted to accomplish. We’d like to check in every six months on how the business is doing, how the project that they proposed is going have you been able to accomplish it if not come and talk to us. So let’s let’s figure out how we how we address the barriers that are still existing and figure out how we can how we can get you to accomplish that goal. And then lastly for the acquisition and demolition success for that really is based on a Um, the increase in property values at the specific sites that the projects took place at for a single family house, we want the new home the new, the new project to be assessed at a minimum of $150,000. Hopefully greater than that, but that is our minimum threshold. And for multiple multifamily projects, we our goal is to have a assessed value of $80,000 per unit. So far through the acquisition and demolition grant program. The the funds that have been invested so far upwards, a little over a million dollars. And that’s resulted in a, I believe, a $14 million tax base increase. So we’re seeing a 14 to one rate,

Vicki Markussen 15:45
and probably what’s not factored in that is the ripple effect, right. So we know from a home improvement from a facade improvement that when someone sees look how bright and shiny that place is, there’s a ripple effect because they want to improve their property. So there’s that factor as well. So in terms of accountability to the use of taxpayer dollars, you have that increased property value with the acquisition and demolition grant the innovation is that company is now that much more competitive, more likely to be successful, which of course, is much better than having a vacant property out there. So it’s always great to have success in business, the participation loan, we’re talking about job creation, which who doesn’t like creating jobs, and then that microloan is just helping a startup that could be the next big business in town and there’s a board that oversees all this, they’re helping you review the applications and whatnot.

Sam Bachmeier 16:40
Many municipalities within the cross county itself have some different programs as well, whether it be revolving loan funds or different grant programs or, you know, Tax Incremental Financing, which I won’t dig into right now, but are all forms of incentives for businesses and community members to engage in to make them more financially stable and make them make their projects more financially achievable?

Vicki Markussen 17:06
Sam Bachmeier he is the new Community Development Specialist with La Crosse County. You’ve been listening to BizCast – news from the business community with your host Vicki Markussen. Get more business news on the BizNews Greater La Crosse website at www.greaterlacrosse.media. Thanks for listening

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