[vc_row][vc_column][vc_column_text]By Marissa Higdon / NM News Port
When one door closes, another opens. That old saying is particularly true for local businesses that have benefitted from the 2013 closure of Schott Solar, which manufactured solar panels and other components here.
When the company left, it paid the city about $5.5 million in what is known as clawback funding into an account that is being used to help new and existing Albuquerque businesses.
Of that, the city has spent about $3 million on 10 different programs meant to support innovation and create a vibrant economic community in the city of Albuquerque.
The money went into the Economic Development Action Account, or EDAct, a one-time account used to promote economic growth in Albuquerque. EDAct promotes growth by contributing funds to a variety of programs that encourage entrepreneurship and innovation, among other things, and it now has a little more than $2 million left.
The source of the clawback funding
In the summer of 2012, Schott Solar, a manufacturer of solar panels and other solar power components, ended operations in Albuquerque. The plant, located in the southern section of the city, had began in 2009 and, according to The Albuquerque Journal, had taken millions of dollars in government incentives.
After the shutdown, Schott owed the City about $5.5 million, a portion of the money it had originally accepted as government incentives.
That money now is going toward funding entrepreneurship and innovation, which is one of the city’s main goals, according to Gary Oppedahl, director of Albuquerque’s Economic Development Department.
“The word entrepreneur is French and it literally means to take action, that’s it. So we want people to take action instead of whining about how things are now, or sitting on the couch watching American Idol,” Oppedahl said. “My goal is to make this the most entrepreneurial city in the country.”
EDAct Programs
The City Council resolution that establishes the account states that EDAct focuses on four major areas of development:
- Promoting the city as a place for businesses and entrepreneurs
- Funding local economic development projects
- Supporting existing businesses and technology-based entrepreneurship
- Workforce development
To promote the city, the EDAct account contributed $20,000 to support the hiring of Development Counselors International, a marketing firm that specializes in tourism and economic development marketing. The firm ran a three-month media campaign and audience study to help the city reach out and market itself to individuals and businesses around the country.
Local economic development is supported by a number of programs, one of which is Creative Startups, a business accelerator that received $225,000 in EDAct funds. Businesses accelerators help launch startups by providing a number of useful tools and resources like mentorship, marketing support and initial investments, and Creative Startups specifically focuses on helping creative entrepreneurs succeed in Albuquerque
The city’s goal of supporting local businesses and encouraging tech based entrepreneurship is realized in programs like thrive!ABQ, an online database of all of Albuquerque’s current businesses meant to connect local producers to consumers.
According to EDAct council minutes, of the almost $5.5 million in the account, $350,000 also went to the Economic Development Department to cover administration costs.
EDAct Spending
The majority of the $3 million spent, about $ 2.7 million, went to local economic development projects, followed by investment in marketing, supporting existing businesses and tech entrepreneurship and finally workforce development has zero investments.
New Mexico News Port analyzed each program funded by the EDAct account by researching each project’s goals and mission statements. Based on this information, all 10 programs were sorted into one of EDAct’s four focus areas: city promotion, local economic development projects, support for existing businesses and tech startups, and workforce development.
The amount of programs in each section mirrors funding levels with six projects focused on local economic development, two in both marketing and development of existing businesses and tech entrepreneurship and zero workforce development programs.
Programs and levels of funding can be found here in the EDAct Council’s minutes from the group’s February meeting.
The $2 million in the account is essential to economic growth, said UNM distinguished professor of management Sulieman Kassicieh.
“For the economy to really thrive, especially the U.S., we have depended a lot on the ability to start, new innovative businesses,” Kassicieh said, adding that these new startups often need outside help in order to be successful.
“Small businesses in their early days are really under a lot of pressure,” Kassicieh said. “A perfect environment is really an environment that helps companies in growing.”
The EDAct account supplements Albuquerque’s Economic Development Department’s annual budget, which, for fiscal year 2015, was $4.7 million — $910,000 of which was specifically set aside for economic development.
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