As Future of Economic Development Administration Hangs in the Balance, Sen. Brown Points to 20+ Hard-Hit Ohio Communities that Received Critical Funds to Create Jobs, Respond to Economic Downturn

Former GM Site in Moraine, DHL Airpark in Wilmington, and “Plant C” in Ashtabula Are Three of More Than 20 Ohio Projects that Have Received Support from EDA; Brown Releases Full List of EDA-Supported Ohio Projects

WASHINGTON, D.C.—With legislation pending to renew funding for the U.S. Economic Development Agency (EDA)—which has helped support more than 20 job-creating Ohio projects over the last five years—U.S. Sen. Sherrod Brown (D-OH) today discussed the need to preserve funding for the EDA and also announced two amendments to strengthen EDA’s ability to revitalize former auto communities and create "business incubators" in hard-hit regions of Ohio and the country. Brown was joined on the call by Mike Davis, Economic Development Director of the City of Moraine, as well as Ashtabula County Commissioner Peggy Carlo, both of whom discussed the importance of EDA funding to support local economic development.

“Just like the federal government responds to natural disasters, the Economic Development Administration is on the frontline of responding to economic disasters in communities,” Brown said. “If we are going to strengthen our competitiveness, we will need to equip businesses with the tools they need to thrive and attract private investment. We must work to create higher-skill, living wage jobs—and that’s what EDA is designed to do. More than 20 Ohio communities have benefited from EDA funding in recent years, including support to redevelop the former GM plant in Moraine as well as the DHL plant in Wilmington.  Ashtabula’s Plant C received EDA investments just a few weeks ago to make vital repairs to their pipe infrastructure.

“The work that the EDA does is highly effective. But Ohio faces some unique challenges, which is why I’m introducing two critical pieces of legislation that will ensure that the EDA’s work is specially targeted for our state. The first bill will help direct more EDA resources to our state’s former auto manufacturing communities and other cities facing sudden and severe economic distress. The second would help create more business incubators in our state—support systems that help small businesses get off their feet and create jobs. Both of these bills will help ensure that EDA’s work is right for Ohio,” Brown continued.

While funding for the EDA has traditionally enjoyed bipartisan support, a recent report outlined the efforts of some conservative senators who may attempt to block the bill from even being considered on the Senate floor. Every $1 in EDA grant funding leverages nearly $7 worth of private investment. On the call, Brown released a full list of Ohio projects that have received support from the EDA through competitive grants. Since 2006, more than 20 Ohio projects have been supported by the EDA, including vital repairs of Ashtabula’s “Plant C” and redevelopment of the former GM site in Moraine and the DHL Airpark in Wilmington.

“The EDA played an instrumental role in our on-going recovery process from the closure of the GM Moraine Assembly Plant by funding a substantial portion of our Comprehensive Economic Development Strategy, which continues to help guide our efforts in redevelopment,” said Mike Davis, Economic Development Director of the City of Moraine.

“Plant C is critical to the industrial community of Ashtabula County, providing raw water to half a dozen manufacturers that employ over 900 workers earning in excess of $60 million annually. Faced with millions of dollars in necessary repairs to Plant C's pumps and electrical system, our community had nowhere else to turn than to the EDA for support. This EDA grant and others like it help cash-strapped counties like ours to maintain present jobs and recruit more jobs,” said Ashtabula County Commissioner Carlo.

Brown also discussed two new amendments he is introducing to the reauthorization bill that will help improve EDA’s ability to assist Ohio communities.

Summary of Amendment One—Revitalizing Auto Manufacturing Communities

 

Brown’s first amendment would benefit Ohio’s many former auto manufacturing communities by ensuring that EDA investments remain ready to help local governments that have been impacted by the closure or downsizing of automotive facilities, and to ensure that EDA takes local needs and considerations into account when selecting communities for investment. The amendment also provides technical assistance to communities facing sudden and severe economic hardship—not unlike the situation Wilmington faced when DHL pulled out of the U.S. market—by streamlining the process for applying for EDA support for communities that have experienced economic hardship.   

The amendment would broaden EDA guidelines so that a wider variety of recipients can apply for and receive EDA funding. Currently, EDA emphasizes regional innovation clusters. While these clusters can promote growth, many hard-hit communities have projects with incredible job-creating potential that currently do not fit with EDA’s guidelines.  The amendment would also require the Government Accountability Office (GAO) to create an action plan to consolidate and streamline existing EDA programs to make them more effective.

Summary of Amendment Two – Business Incubator Promotion Act

 

Brown’s second amendment is the Business Incubator Promotion Act, which would make more communities in Ohio eligible to receive funds that support business incubators through the EDA to promote innovation and entrepreneurship, helping regions to create high-skill, high-wage jobs. The amendment would give the EDA authority to award grants for the development of business incubator feasibility studies and plans for the construction of new or expansion of existing business incubators, as well as the implementation of those studies and plans.  It would also give the EDA the ability to award grants to support existing and new operations of business incubators to assist them in becoming self-sustainable.   Business incubators provide support to existing and start-up companies, helping them to grow and create jobs.

The National Business Incubator Association, based in Athens, OH, says that $18.7 billion in total revenues were created by incubator client firms in 2008, and more than 315,000 full-time workers were employed by incubator firms (resident clients, affiliates and graduates) in 2008. According to an independent report commissioned by the EDA, every $10,000 in EDA funds invested in business incubators generates an estimated 47 to 69 local jobs. In rural areas, business incubator projects are the most effective type of EDA projects.

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