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Economic Development : North Central Kansas Rural Business Tax Credit Initiative 2008 Mid-Year Status Report Introduction
While the 2004 Act first set credit value at 50%, follow-up action taken by the Legislature in 2006 increased the value to 75% which enhanced credit marketability. The Legislature has since extended the program out to 2012 and made additional credits available to every region each intervening year, this time in $285,714 allotments. Who We Are The NCRPC has been active for more than 35 years. It was set up in 1972 to foster cooperative planning and the development of innovative solutions for common problems. NCKCN was one of those solutions, arising in December 1995 as a non-profit with its goal being to see that affordable Internet access was made available in North Central Kansas. NCKCN was further given the latitude to address educational issues related to the use and application of information technologies and other related community development problems. Since 1986 these organizations have individually and collectively accessed over $300.0 Million for public works projects; produced over $75.0 Million in private business finance, benefiting more than 300 businesses and 1,400 jobs; directed the investment of $18.0 Million to improve the energy efficiency of over 13,000 income-eligible households; and introduced affordable Internet access to over 4,000 business and residential clients. All but one (1) of the nineteen counties identified as North Central Kansas on the map above have benefited from these activities. Socioeconomic Environment of the Region North Central Kansas is home to approximately 305,000 people or 11% of the state’s population, 70% living in one of three (3) Micropolitan Statistical Areas centered about Emporia, Manhattan or Salina. Per capita personal income (PCPI) in 2006 was $29,359 while average earnings per job equaled $25,867. These numbers were 82% and 65% respectively of the Kansas average. The percentage of regional residents determined to be of low-moderate income (LMI) is 40.5% while 9.3% are below poverty. Only 8.7% are so classified statewide. Fourteen percent (14%) of all residents are age 65 or older as opposed to 13.2% of all Kansas residents. Program Purpose The primary goal of our RBDTC program is to improve the business environment of North Central Kansas by supporting businesses that pay wages equal to or greater than regional averages; by underwriting programs or projects that promise to elevate the capabilities and capacities of an entrepreneur; and by encouraging growth in quality leadership programs. It is our desire that all residents are presented with the opportunity to find improved employment and/or support for their business ideas. This applies most especially to that 40.5% of the region’s population considered to be of LMI status and those young families interested in becoming residents. Efforts Thus Far The flow chart at the right illustrates our success thus far in placing the credits and the subject areas benefited by the targeted investments. We continue to seek projects which hold out the promise of having consequence and impact not only on the lives of individual residents, but on the region and its economy as well.
As for particulars of our approach, the following describes the scope and detail of select investments made thus far. Leadership Development (5.0% of funds raised) There are a number of programs designed to enhance the leadership qualities of an individual, but too few exist that expand the leadership qualities of an organization. We have thus invested in what we hope will be a reoccurring series of seminars and workshops focused on just that. The sessions thus far have been facilitated by Michael Daigneault, Senior Consultant for BoardSource (www.boardsource.org) in Washington, D.C. Well-qualified, Daigneault teaches business ethics and corporate social responsibility at Georgetown University's McDonough School of Business. Those subjects addressed thus far are as follows.
Comparable, high-quality programs will be arranged as stakeholders in the region make their ideas known. The sole limitation is that any program must be accessible to all interested parties and organizations throughout the 19 counties defined as North Central Kansas. Business Services / Technology (15-25% of funds raised) Rural isolation and idea stagnation are issues that must be addressed if our rural economy is expected to grow and be competitive. We are therefore looking to assist development groups who harbor innovative ideas that promise to impact locations beyond their traditional interest areas, focusing on business service and technology issues in so doing. Business Services: Rural economic development requires the creation of an environment offering new market ideas and services businesses need to take advantage of those opportunities. While such an environment is not all that unusual in large urban centers or near research university locations, isolated rural places struggle to access such a dynamic mix. Figure 1 at the right provides some perspective for it shows the outside forces and internal needs entrepreneurs face each and every day. While we believe a number of these issues can be addressed at the local level, others frequently require outside assistance. That is why we have engaged the Advanced Manufacturing Institute (AMI) at KSU (http://www.amisuccess.com/index.asp) in discussion about the services they offer, most particularly the products they vet on behalf of entrepreneurs seeking assistance ranging from engineering design to marketing to product production. We offer to pay a portion of any expense AMI might incur on behalf of a business operating in North Central Kansas if the latter can be helped by their organization. Technology: Technology will play a major role in creating that environment sought. Its presence and application are necessary for any rural resident to improve their economic standing. Examples of investments made thus far are:
Job Creation / Retention (Minimum 60% of funds raised) We will work closely with private sector lenders and local economic development groups, looking to them to identify for-profit businesses that need equity investment or gap financing. Due diligence will be performed on all such requests with proper business plans being required before any investment or loan is made. Terms and conditions of any loan are expected to follow these points. We will only make loans to for-profit enterprise. We will not entertain any request for direct grants to one specific business.
We are looking for businesses that have promise and a real potential for growth. We will not consider those which other lenders have turned down due to questionable credit history or poor business acumen unless extraordinary circumstances warrant otherwise. Equity investments will also be considered in those businesses that show great promise and the potential of expanding the region’s economy. In such cases we will consider making true equity investments in a business as well as investments requiring a royalty payment for either a set period of time or until we have recovered a specific dollar amount that matches our desired rate of return. Grants to non-profit operations will be considered if the proposed project has regional scale and holds out the promise of producing immediate jobs. Terms and conditions in these cases will be determined in accordance to the project being proposed. Commitment The NCRPC/NCKCN team is committed to seeing the offerings of this program are equally accessible to all within the North Central Kansas region, although fund distribution may not be equitable at all times throughout the region. Like all new things, it will take time to establish the social networks necessary to foster communication and success. For additional information, please contact:
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Updated
1/31/11
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