Dependency on government ... and government competing with local banks. That's what's going on here . . . NOT economic development.Mohawk Valley EDGE presented Jodi-Lynn Patla, owner of Joe’s Jerky and Nonnie’s Country Store, a check for $32,500 last week to assist in the manufacturing expansion and retail relocation of her businesses.
Tuesday, September 11, 2012
Handouts!
Local jerky, country store to expand, relocate
8 comments:
I don't think you read that correctly. According to the article, it's a loan that is in partnership with a local bank.
How do I get an EDGE check???
There's a nice pic of EDGE handing out the check here: http://wibx950.com/mohawk-valley-edge-loan-assists-area-business/
I did not say that the loan was the handout. You have to answer the question "What have the proprietors received from EDGE that they would have been unable to receive on their own?"
Actually, you called it a handout in the headline.
It looks like it was a loan in partnership with Oneida Savings Bank, based on the OD article and this link: http://mvedge.org/pdf/Rural%20Development%20&%20Agri-Business.pdf
How is this government competing with a local bank? It appears to me that government helped a local business finance a project they otherwise couldn't and helped a local bank get some more business they otherwise would not have gotten.
Ha ha ha! I'll concede the point that gov't helped a local bank get some more business (Is there a connection between the bank and EDGE? -- Isn't this gov't involvement in competition with other banks?) but. . .
". . . government helped a local business finance a project they otherwise couldn't . . ."
Why could they not finance the project directly thru a bank? Why did EDGE have to be involved? Who is taking the risk here?
Its a nice sounding story -- and it's always nice to see a local business expanding -- but why does the government have to be involved in what should be a private transaction?
It looks like there's a connection between EDGE and OSB... in that they partnered on this loan. As for government/other banks - I'm pretty sure you'd find dozens and dozens of these deal (in partnership with likely all the area banks) over the last decade or so. I don't think this is some new or nefarious undertaking.
"The ability to finance" statement is purely a guess on my part. I have no inside knowledge of the deal, but rather have a pretty strong working knowledge of financing project such as these. The company may very well have been able to finance this without the "government" assistance but (again my assumption) they likely found EDGE's involvement or terms more favorable than bank alone.
As far as risk, I'd say EDGE and OSB are both taking risks. EDGE has a number of loan pools they administer that have varying degrees of program standards and risks. I saw these all on EDGE's website.
The article is not at all clear about the details of the financing including its mix and rates. If the EDGE is providing gap financing, that is not unusual. The bank takes both a major lending and major collateral position. But, again, the article provides no details.
It also does not provide employment projections. The type of business alone which does appear to be more retail is questionable, much like the casket maker award of a few years ago.
The real message of the story is the failure of the Picente/EDGE development team. That team spends millions every year and produces little. What next a new soda fountain project? Where are the large projects? Where are the succeses of an airport and nano technology/chip plant type project? How long are we to wait and how much money are we to spend? We cannot do much about Picente; he was recently re elected. But, the EDGE should be reduced in scope and staff to just help oversee Griffiss and do small business projects. Major project responsibility should be shifted to the State, Center State Development or the MDA. The EDGE staff cannot produce the level of success so necessary to grow our economy. And, please, no one comment on Griffiss, a project that cost taxpayer hundreds of millions to checker board existing business and to relocate high schools. We need dramatic growth and the EDGE is not delivering. Our politicians ought to sacrifice control for success.
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