Spring Valley receives grant to help prospective businesses

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The Southern Minnesota Initiative Foundation (SMIF) awarded a $10,000 grant to the Spring Valley Economic Development Authority to support a business incubation and acceleration program as well as an activity space downtown on a lot that became vacant due to a massive fire last year.

The award is part of SMIF’s Small Town Grants Program, which seeks to build sustainable and vibrant communities by engaging community members, enhancing existing leadership and creating opportunities for new leadership to emerge. Rather than funding one-time projects, the program seeks to build collaborative efforts and partnerships that will perpetuate collaboration for future work, according to SMIF. The program is targeted to small towns of 5,000 people or fewer in the 20 counties served by SMIF.

“Now, on to the hard work of implementation and results within the next year,” stated Spring Valley economic development director Cathy Enerson, who has already been involved in several other community development projects over the past year.

Community and Economic Development Associates (CEDA), the firm from which Enerson is contracted, was involved in three of the eight grants awarded by SMIF, with the three projects getting $27,500, or 38 percent of the total grant dollars. The Harmony EDA received $10,000 to promote outdoor recreation, music and the arts, and tourism with the creation of a musical instrument themed park at Harmony’s trailhead and Preston received $7,500 to develop resources on the city website to promote housing development opportunities.

In Spring Valley, the grant will fund “both the development of education models to support incubation of entrepreneurs, and the funding of community leaders who have a vision to better the community,” said Enerson.

Incubating businesses

Incubating business in Spring Valley right now is important to help startup businesses in the community, noted Enerson. EDA member Kim Brown helped spur the process after attending a conference during which another CEDA staff member presented information on how to promote business growth by creating an incubator building or fund. A survey of local commercial building owners was done to assess the availability of incubation sites and the range of options, such as reduced rent, they would offer.

“Spring Valley is working hard on developing new and existing entrepreneurs, and if a break in rent can help a new entrepreneur come from a home business into the Spring Valley commercial district, help a new business come to town and/or an existing business expand the temporary break on rent and education, that might be just what they and the building owner need to get started,” said Enerson.  

The grant funds will offer an investment starter for the EDA to make available to potential Spring Valley business owners, including those who might be interested in building a business in the downtown space that was occupied for over a century by the building that most recently housed Johnny Ringo’s Bar and Grill, which burned on Oct. 9, 2017. 

“Each request will be looked at individually — the amount of the request and duration are factors.  The guidelines are being developed,” said Enerson. “To get started, the EDA committed to assist the community project using up to $500 each year for the next two years for lot taxes.  Should an organization like the VFW adopt or take on the liability of rehabbing the vacant parcel that was once Johnny Ringo’s, these funds make that less of a burden for the organization.”

The greatest challenges to Spring Valley’s business community right now vary from business to business, according to the director. 

“Each person would answer that differently.  Some might say ‘health insurance,’ some might say it’s finding qualified labor, some might say it’s access to capital, and some might say it’s time to expand into new markets and train new employees.  Each business has a unique set of challenges,” she said. 

REVing entrepreneurs

Spring Valley is also in the midst of the Rural Entrepreneur Venture (REV) program, a new initiative of SMIF and the University of Minnesota Extension to find and support entrepreneurs already existing in the community. Volunteers are surveying local people and Enerson is available to coach them while online educational modules are also available.

“Those filling out surveys for the Rural Entrepreneur Venture – their feedback drives the education modules which are being created -- will know that the input that they provided was taken very seriously and the education modules will be built to reflect their needs and interest,” she said.  “It is exciting to develop online education for existing and new business owners, a one-stop business tool kit that they can access at their speed as time allows.  The EDA is pleased to support community leaders and our entrepreneurs.” 

Post-fire options

It is also exciting to assist a community group, the Post-Fire Committee, with its ambition to bring the parcel destroyed by the fire to a higher and better use, added Enerson. 

“Projects like this are not budgeted for, and grant funds fill the gap between the EDA funds and EDA labor,” she said.  “The grant helps propel the enhancement of the lot destroyed by fire through community participation and funding the group’s ideas.  The public input and private community group will showcase that community leadership can get things done that benefit the community.”

Partnerships have been made possible through the EDA, such as with the Post-Fire Committee, the Rochester Community and Technical College Workforce Education, the Small Business Development Center (SBDC) and REV.

“One of the benefits of improving the lot destroyed by the fire is that new or existing entrepreneurs can hold a pop-up market or event in the downtown green space.  Pop-up markets and events can lead to long-term involvement in the city of Spring Valley,” said Enerson.  “Again, we want to give the individuals a hand up.”

Investing in entrepreneurs

The incubation is not limited to the downtown, as all building owners were surveyed, and when possible, any building owner or entrepreneur can apply for incubation funds and education, explained Enerson.  

The grant funds make a significant difference for small towns such as Spring Valley because of the specific goals of the grant — to create education models to be used by the entrepreneurs to strengthen business acumen, she added.  If incubation assistance is also a part of the assistance, the entrepreneur will be paired with funding and education to help ensure their success.

“The EDA is investing in entrepreneurs,” said Enerson.

She noted that there have been prospective business owners interested in locating in Spring Valley due to the opportunities that have become available. The EDA recently approved a loan and SBDC coaching to the new buyers who wanted to purchase the Spring Valley Greenhouse. 

“It was exciting to learn that their banker was highly impressed with the materials brought to the bank to seek funding — the entrepreneur was willing to do the work with me that is required by the bank to obtain capital.  Their business plan properly told their story to the bank board,” said Enerson.

She added that another client with whom she worked this past summer used the community garden plots to pilot a business idea and was encouraged by the results. 

“I hope this…leads to people becoming aware that there is new EDA assistance and that with additional tools and assistance, ideas can become reality,” she said.     

Enerson related that quite often, the start of a new business is spurred simply through an individual bringing forward an idea to the EDA. 

“Most people come with an idea, and most need access to capital.  It may be obstacles to them, but is rewarding to me to help them develop a business plan, their startup cost sheet, and a three-year cash flow sheet that they can bring to the bank for funding, and the incubation program will help with site selection,” she explained. 

People need only bring an idea to put before the EDA when asking for help, she said. Through Spring Valley resources and/or regional resources, the EDA can help them get started in Spring Valley. 

If there is an individual or group that can operate a child care center, the EDA has special funding to help them start up their child care center.  With money available through a revolving loan fund and business assistance offered by Enerson, the EDA would like to help two to three more people next year.  

Making it Home

Spring Valley was also one of the first cities chosen last year for Making It Home, an Extension program to help communities attract new residents. Community members met to discuss ideas in separate groups and then came together to choose four community-wide projects. The EDA is also assisting in this project.

One of the outcomes of Making it Home led to developing ideas for the downtown vacant lot, tying together that project with the new grant from SMIF, which will assist in funding those ideas.

“For the past 32 years, we’ve seen people come together to enhance their communities,” said SMIF President and CEO Tim Penny in announcing the newest grant.  “SMIF’s Small Town Grants program is intended to put air under the wings of some of those ideas, whether the community needs help with strategic planning, funds to implement a project or a stipend to support a leadership development program.”