Invest Detroit’s CEO Dave Blaszkiewicz writes about the opportunity that recent federal funding gives us to support a long-term growth strategy as well as the immediate needs of COVID-impacted businesses. Invest Detroit and partners are advancing a policy agenda that focuses on sustainable economic growth.
The federal COVID relief bill passed in December 2020 and the recent American Recovery Plan (ARP) provides billions of dollars in funding to our state. Its most important purpose is to help address the impact of a global epidemic that has affected nearly every aspect of our lives and community. Within the community economic development space where Invest Detroit and many of our partners work, the effect that this crisis has had on our small businesses and startups has been devastating. According to recent reports, as many as 25% of small businesses closed in the first half of 2020, and black-owned businesses closed at a disproportionately higher rate of more than 40% compared to all businesses.
When we at Invest Detroit think about small businesses, we are thinking about the full gamut and impact of what “small business” means. It is the contractors, sub-contractors, small developers, and home repair services involved in real estate projects. It is the restaurants, gyms, salons and barbers, and other retailers and service providers in our neighborhoods. It is the small, exciting tech startups trying to scale. Collectively, these businesses are Detroit’s engine—providing jobs and resources for residents, ensuring our maintenance and creation of housing, making our neighborhoods safe and supportive places for existing and new residents, helping our city strengthen and grow. Our support of this community is vital to our city’s future. And while this federal funding is critical for short-term support that will help keep our businesses open until some degree of normalcy returns, this is also an incredible opportunity to consider support of programs that can offer long-term resources so this engine can run for years to come.
The past six months have seen an unprecedented level of federal support come in to our state and local community. December’s bill provided funding to support programs like the SBA Paycheck Protection Program, New Market Tax Credit program, Community Development Financial Institution (CDFI) funding, emergency rental assistance, an eviction moratorium, and affordable housing tax credit. With the passage of the ARP bill, Michigan is expecting to receive $5.7 billion in additional federal funding, plus $4.4 billion directed to local governments, and $3.9 billion to K-12 schools. The local funding includes $330 million in funding for Wayne County and about $880 million in funding for the city of Detroit. The bill also reinstates the State Small Business Credit Initiative (SSBCI) program which will be implemented by the Michigan Economic Development Corporation, and preliminary numbers indicate Michigan will receive at least $175 million for the program, and more if the MEDC program invests in low-income communities. ARP also includes funding and programming to support COVID-19 related investments, families and children, affordable housing and rental assistance, and other small business program support.
In addition to helping with immediate needs, this is an enormous opportunity to leverage local investments to build profound, long-lasting support for our community’s small businesses and total economic growth through policy, programs, and process. Policy that focuses on long-term growth in addition to recovery. Focusing investments to support or modify high-impact programs that provide resources and tools that help make businesses sustainable. Process improvements that eliminate barriers and hurdles for new and existing businesses and businesses-owners.
Invest Detroit and a group of committed partners are focused on a policy agenda that champions long-term growth and economic success for our community. This includes:
- Developing a transformational SSBCI program that includes aid for business support organizations that are providing resources and financial support to small businesses
- Supporting Michigan startups through venture capital investment and programs that support sustainability
- Investing in the redevelopment and revitalization of neighborhoods and communities around our state by increasing funding for the Community Revitalization Program and programs that help fill gaps in projects, including:
- Increase funding to support and invest in urban industrial land assembly and site readiness to grow job opportunities for residents
- Investing in local organizations that support small businesses and redevelopment projects throughout our local communities
As this pandemic has shown us, the care and feeding of our small business engine is vital to our city’s well-being. Yes, it means a strong and sustainable economy, but it also means happy, healthy, employed residents and a strong and sustainable community. With this unprecedented level of funding support, this is the time to think about the needs of the now and the needs of the future.