A new fund designed to spur economic development in Akron is having trouble attracting donations and hasn’t yet gotten off the ground.
The Development Finance Authority of Summit County, (DFA) a quasi-government agency, announced the creation of the fund last year, saying it would provide small loans to help launch projects — everything from rehabbing buildings to opening new businesses — in distressed census tracts.
The fund quickly picked up $500,000 grants from the GAR Foundation and Medical Mutual Community Investment Fund. It also has received additional grants from Summit County, FirstEnergy Corp. and the Akron Community Foundation, and a $1 million, low-interest loan offer from the Greater Akron Chamber’s Akron Development Fund.
But the DFA has only $2.25 million of the $4.5 million that’s needed to start the Targeted Loan Fund, said Chris Burnham, president of the DFA.
“We’ve plateaued,” he said about the fundraising effort.
He doesn’t know why there isn’t more interest, saying it could be related to the failure of the community-focused University Park Alliance and skepticism about investing in a new effort.
“We have a lot of need,” Burnham said. “I thought the community would rally around this idea more than it has, to be honest with you.”
Richard Rebadow, executive vice president at the chamber, said he believes the fund will be successful, but leaders first need to educate the community on the innovative program. Many people likely aren’t familiar with the effort, he said.
“We are kind of like a Lewis and Clark expedition here,” he said. “We are looking at new partners in uncharted territories. ... It’s a new paradigm. It’s a new mindset.”
Akron Mayor Dan Horrigan said he hopes the community steps up knowing that the fund can be used to improve downtown. He and others last week announced a downtown development plan.
“We think it’s an important tool in the toolbox,” Horrigan said of the fund. “Anytime you have an additional tool it can be significant.”
The Targeted Loan Fund, which ultimately would be a revolving loan fund, is geared to help finance revitalization projects in Akron census tracts deemed economically distressed because of high unemployment, high poverty rates and other factors. The vast majority of the city qualifies.
The corporate sectors in Cleveland and Cincinnati stepped up to back similar funds in those communities and have helped redevelop parts of their downtowns, Burnham said.
The DFA agreed to create the fund after receiving $45 million in New Markets Tax Credits last year. Congress created the New Markets Tax Credit Program in 2000, allowing entities such as the DFA’s Development Fund of the Western Reserve to provide taxpayers with financial incentives for local economic development.
Burnham said he’s worried about how future DFA applications will be viewed if it cannot fulfill its promise to launch the Targeted Loan Fund.
“It’s frustrating to me,” he said. “I want our applications to succeed next year.”
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com. Follow him on Twitter at @armonrickABJ .