by Mike Sharkey
Staff Writer
Fifteen years before the Jacksonville Economic Development Commission began negotiating multi-million dollar deals to lure new businesses to Jacksonville, the Jacksonville Economic Development Company was doing the same thing — just on a much smaller scale.
Formed in 1980 under then-Mayor Jake Godbold, JEDCO has been helping small businesses all over Jacksonville with virtually every aspect of the business life. Whether it’s the Northside restaurant that wants to expand its dining room or the Southside pest control service that needs two new trucks, JEDCO has been able to help.
When the JEDC was created by Mayor John Delaney in 1995, the new economic development engine in Jacksonville had many moving parts. Within the JEDC was also the Downtown Development Authority, the Sports and Entertainment Board, Cecil Field Development and a host of other entities all designed to lure and keep new businesses in Jacksonville as well as promote massive development projects such as The Adam’s Mark Hotel, Berkman Plaza and The Shipyards development.
While the JEDC and its sometimes controversial projects have grabbed the headlines, JEDCO has quietly gone about its business of helping established businesses improve themselves — all under the shadow of the JEDC. Starting early next year, perhaps no more.
If legislation currently in the works is ultimately approved, sometime in January JEDCO will break away from the JEDC and the City and become its own private entity. Although the legislation is still at the City Council committee level, Joe Whitaker, a senior project manager with the JEDC, said he expects the ordinance to be approved.
Unlike JEDC projects which often require DDA board and City Council approval, JEDCO projects aren’t reviewed by as many people. That doesn’t mean they aren’t as scrutinized, they just don’t involve exorbitant sums of money.
“We utilize a certified loan program sponsored by the United States Small Business Administration to assist small business people with long term, fixed-rate assisted financing,” said Whitaker, who also oversees the Northwest Development Board, the Airport Board and is the coordinator of the Enterprise Zone Program. “We help them with things like machinery and building equipment.”
For a small business looking to expand or add capital assets, partnering with JEDCO is one their best options. With low-interest, fixed-rate loans that max out at 20 years, going through JEDCO to get money from banks and other lending institutions can be the difference between continuing to struggle and turning a real profit with margins on the rise.
“The major benefit is that we are providing up to 90 percent financing for small businesses,” said Whitaker.
JEDCO-sponsored loans break down like this: 50 percent of the loan comes from the private sector; 40 percent is in the form of a JEDCO/SBA 504 loan; the remaining 10 percent is in the form of equity provided by the business owner.
“It’s a good deal if they need that type of leeway,” said Whitaker. “It’s excellent for long term financing.”
Under the current system, potential JEDCO beneficiaries are handled by a small team of JEDC staffers who process the loan from start to finish. Those same staffers also handle JEDC projects, thus they aren’t able to work full-time on the needs of small, but vital, businesses.
Since its inception in 1980, JEDCO has helped 350 local businesses with $183 million in loans that have created approximately 3,400 new jobs. Whitaker said JEDCO handles 10-12 projects a year. If privatized, an idea proposed by the 25-member JEDCO board, Whitaker contends that figure will at least double.
“The JEDCO board believes that a dedicated staff can do 20 to 40 a year,” said Whitaker. “It’s a staff intensive process. We take the borrower by the hand and get them through the process.”
Whitaker said the JEDCO board, which is chaired by Ron Wilkins, a stockbroker and manager with AdVest, believes JEDCO-eligible businesses suffer from a spread-too-thin JEDC staff.
“It would streamline the process with a dedicated staff,” said Whitaker. “The JEDC commissioners have endorsed it and nobody has expressed any opposition.”
Should the privatization of JEDCO become a reality, the spilt from the JEDC will be a three-year process. In order to remain financially afloat and retain its connections to lending institutions, JEDCO will scale back its involvement with the JEDC and the City in increments. The first year, they will receive 50 percent assistance from the JEDC; the second year, one-third; the third year, one-fourth. By the end of the year of privatization, JEDCO will be totally on its own.
In addition to the financial logistics of the split, JEDCO will undergo staffing changes.
“There is legislation in the City Council that should be finalized in January,” said Whitaker. “JEDCO will go through a 90-day transition period in order to move files and set up an administrative office outside the JEDC offices. The staff will consist of an executive director, two loan officers and one loan servicing officer.”
Whitaker may have a decision to make, too. His familiarity with JEDCO, the businesses and the lending institutions make him a logical candidate to serve as JEDCO’s executive director.
“That’s JEDCO’s board’s decision,” said Whitaker. “I’ve made it a point to stay out of that. I am interested in new challenges.”