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July 18, 2018

11/10/2017 7:22:00 AM
Vilas County considering opening revolving loan fund

Evan J. Pretzer
Lakeland Times reporter

Businesses and prospective business owners in Vilas County will have another source for investment in the future if the county economic development and tourism committee gets its way.

During a meeting Tuesday, group members discussed the formation of a revolving loan fund with Vilas County Economic Development Corporation Executive director Bob Egan, who is putting together a report on the viability of the venture.

Under a revolving loan system, Vilas County would have a loan account for economic development in the area which uses interest on its deposited money to self replenish.

According to committee chairman Steve Doyen, officials in Vilas County decided to consider the proposal due to frustrations with an existing multi-county account.

"The one which is going right now tends to cater more to counties in the southern portion of the state," he said. "In addition, it has a lot more stipulations on who can obtain funding and for what. It is a lot more red tape so this is why we're looking at our own."

Right now, county officials are eyeing an account being opened with $500,000 of seed money from the county general fund and an interest rate of either 3 or 4 percent for ongoing stability.

After Doyen explained the concept to his fellow committee members, vice chairman Art Kunde chimed in with a personal story.

In the past, he'd been a beneficiary of such a system and strongly urged the group to lend their support to the concept.

"Thirty years ago in Washington County I worked with a small manufacturing company which received one of these grants for development," Kunde said. "We grew it from just myself and another person to more than 30 workers. A lot of people are seeing their businesses die on the vine because they have nowhere to get cash from, this would be a great asset for the county."

Though many were in support of the measure from the start of the presentation, committee member Carolyn Ritter indicated her reluctance to back the project.

In her view, it wasn't proper for the county to be loaning money to area businesses at the expense of other services for region residents.

"What I am hung up on is this; Why should we take tax dollars which are appropriated for residents?" Ritter asked. "I can see the arguments in favor, but when there are losses, losses will occur for the taxpayer. At this point, I'm like a caboose, following along, but behind."

Indeed, an example of the scenario Ritter outlined occurred a few years ago in Rhode Island, but on a larger scale.

In 2010, the state economic development corporation loaned former Boston Red Sox pitcher Curt Schilling's video game development company 38 studios $75 million to relocate to the state and create 400 jobs. Their first game - "Kingdoms of Amalur: Reckoning" - did not succeed and the business went bankrupt in 2012, costing the Ocean State millions of dollars.

After Ritter voiced her concerns, Egan promised to bring back detailed reporting in December and assured the committee any projects under a revolving loan system would be extensively examined to ensure maximum safety.

"We will create a set up so loans are based on merit and return on investment," Egan said. "We won't base it on anything else and will watch for risk."

Evan J. Pretzer may be reached via email at evan@lakelandtimes.com.

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