by Mike Sharkey
Staff Writer
The privatization of the Jacksonville Economic Development Company may take a little longer than originally expected, but things still look good for the small business-based economic engine to break away from the Jacksonville Economic Development Commission.
In December, legislation was proposed for JEDCO, which was formed 15 years before the JEDC, to become its own, self-sufficient entity. Although it is going to actually be a three-year process, JEDCO will eventually function with its own staff, offices and funding. Rather than seeing the break come to fruition during January as originally planned, it now appears the legislation will pass some time in March.
The resolution privatizing JEDCO is expected to make it through the various City Council committees early next month after two things happen: City auditors complete an audit of JEDCO and the JEDCO board goes before the Council finance committee.
“The Council auditor’s office has asked for information about JEDCO,” said Joe Whitaker, a senior project manager with the JEDC. “They requested the previous year’s financial statements and they want to get a better understanding of the assets being taken [when the spilt occurs] and how much is staying [within the JEDC].”
Whitaker said the real estate currently held by JEDCO-based projects will stay with the City and the JEDC, as will about $1 million in current loans. He also said the audit was expected and JEDCO has absolutely nothing to hide financially.
“We were anticipating a review by the Council auditor’s office, so it’s not a surprise,” said Whitaker. “Nobody has tried to rush anything through. Once the City Council committees have had the opportunity to hear the presentation by the JEDCO board, it [the split] will not be a problem.”
If and when the split does occur, JEDCO won’t be entirely on its own immediately. The JEDC will transfer all existing Small Business Administration-504 loans to JEDCO and will also set up a $500,000 account to help the fledging company rent office space and hire staff.
Whitaker said the $500,000 should be sufficient to operate JEDCO until the company can start generating its own revenue.
“The agreement calls for a three-year window to be self-sufficient,” said Whitaker. “The first year we get $125,000; the second, $100,000, and the third, $75,000. As JEDCO generates more 504 loans, it will wean itself off City funding.”
Once the legislation gets through Council committees and two meetings of the full Council, JEDCO will have a 90-day transition period in which to find and and set up its offices. Whitaker said he figures JEDCO will stay as close to downtown as possible and open its doors as a private company with three or four employees.
JEDCO was created in 1980 under former mayor Jake Godbold. In 20-plus years, JEDCO has helped 350 local businesses attain approximately $183 million in small business loans. Those investments have helped create about 3,400 new jobs. According to Whitaker, once privatized, JEDCO will be able to double the number of projects it handles each from about 10-12 to 25.