A fledgling Akron economic development fund is $200,000 closer to its $4.5 million fundraising goal, with the latest donors challenging Akron-area businesses and organizations to also provide support.
The fund should begin lending money later this year for projects in Akron’s most economically distressed areas as financing slowly continues to come together as deadlines loom.
In the latest development, Akron Children’s Hospital and FirstEnergy Corp. donated $100,000 apiece to the Development Fund of the Western Reserve, which is affiliated with the Development Finance Authority, or DFA, of Summit County.
The money in turn will support the Akron Community Revitalization Loan Fund, which is designed to provide small loans to enable business development in economically distressed neighborhoods in Akron.
The hospital and FirstEnergy are asking others to also give to the fund.
The Akron loan fund now has $2.45 million in commitments out of a goal to raise $4.5 million. That means the fund still needs slightly more than $2 million in order for it to be activated.
The DFA is continuing to raise funds. The Akron fund will be managed by the private, nonprofit Development Fund of the Western Reserve.
“We’re still trying to raise money,” said Chris Burnham, president of the DFA. The Development Finance Authority created the fund in 2015.
But any shortfall will be made up with other borrowed money in upcoming months, he said.
“We have an agreement with a private lender to borrow that [difference],” Burnham said. The goal is to have all of the private lender money in place by Memorial Day weekend, he said.
There’s urgency, he said, because the Akron loan fund needs to become viable this year in order to qualify for special tax credits.
The DFA received a $6.75 million New Markets Tax Credit allocation that will net about $2.25 million in cash equity toward the fund. But the authority said it still needs an additional $2,005,000 to match the tax credit allocation and activate the Akron Community Revitalization Fund.
The hospital and FirstEnergy grants have spurred additional interest from other local funding sources, Burnham said.
“We can’t lend anything yet,” Burnham said.
The fund has drawn interest for projects in downtown Akron and in the city’s East Akron region, he said.
Once the Akron fund is viable, Burnham said it will be able to provide, for example, as many as six $1 million low-interest loans; maximum loan size is $2 million. The loans require interest-only repayments for the first seven years.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.