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Tools for business

May 9, 2010
The Alpena News

Attracting a new business to Alpena and making sure it is sustainable takes the consolidated effort of the area's government, developmental groups and local property owners. It takes a high level of cohesiveness between the parties to help a new business owner acquire funding, locate affordable retail space and make sure the business plan is viable.

Target Alpena is normally the first contacted by business owners who seek information about whether opening up shop in Alpena is feasible. Executive Director Lee Shirey said his organization helps take the idea, grades it and then begins to help make it a reality.

"A new business that comes to our area usually comes to me first," he said. "We make sure they have a sound plan and then we will try to navigate them through the hurdles involved in opening a new business locally. It is a very time consuming task, but we don't want to get a store up and running, only to see it fail."

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The largest hurdle and the first that must be cleared is having enough capital to begin operations. Many potential entrepreneurs lack the initial investment needed to move forward with the plan and the idea dies on the spot. Shirey said Target helps work with them to help get the needed funds to move forward.

"Finance is huge. Getting the startup capital to get them going is probably the hardest part of the entire process," Shirey said. "I've constantly got applications on my desk looking for help with startup funds. I sort of navigate between the state and federal levels to see if there are any incentives and funding. In some cases if we are confident in the plan we can offer low interest loans to them."

The City of Alpena also has measures it can take to help businesses. The Alpena Municipal Council can grant tax abatements to new businesses, to relieve some of the burden of paying taxes until it has become established. Mayor Carol Shafto said abatements are a good tool, and if utilized properly they can be very beneficial for the city as well as the business owner.

"The whole purpose of a tax abatement is to help attract a business that is having difficulty starting out," Shafto said. "People think that the abatements are bad, but they have to remember they don't last forever. If we can attract a business and give them a hand for eight years to become entrenched, then after the agreed length they have to pay the full amount. We give up something for a relative short period of time that becomes something very beneficial in the long term. It helps grow the region and that is good for everyone."

The Downtown Development Authority has a variety of programs that are geared to help startup businesses. Perhaps the biggest helps local property owners lease or rent vacant retail space, while providing the new business owner an affordable location. Paul Sabourin, chairman of the economic development commission and member of the DDA, said the retail rental incentive program helps a store open its doors and get stable before having to pay large chunks of money for the location.

"It is a two year program and it was designed to get empty buildings downtown filled," Sabourin said. "Landlords provide discounted rates for as much as 50 percent for the first year, with the business owner paying half and the DDA picking up the difference. The next year the rent rate and the contribution decreases a bit and hopefully by the end of the second year the store is on solid enough ground to pay the full value of the rent."

Working together is a key to making the process as quick as possible. Shirey said the joint partnerships between the city, the county, Target and the DDA works well because they all have the same goal.

"It is critical we work in partnership with one another," Shirey said. "We can make sure the proper people and the proper channels are taken. Overall the process is very slow and by us all working together we make it as seamless as possible, even if it is just sharing information from one to another."

Currently there are two businesses in the downtown that have utilized the DDA incentives. Sabourin said there is room for more and he hopes some of the empty locations can become stores soon.

"We have had a few more building owners express interest in participating, but we need the business to put in them," Sabourin said. "We're here to help those who want it."

Steve Schulwitz can be reached via e-mail at sschulwitz@thealpenanews.com or by phone at 358-5689.

 
 

 

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