Chamber proposes boosting spending to foster startup companies

Spending more money to help small businesses grow will be a priority for the Lawrence chamber of commerce in 2016, but it also will mean the organization will spend less on trying to attract big companies to town.

Leaders with The Chamber on Monday unveiled their 2016 budget request for city and county funding. The funding request includes a new $40,000 program called BizFuel that will involve the city, the county, The Chamber, the Economic Development Corporation of Lawrence and Douglas County, the Kansas University Small Business Development Center and the Lawrence Public Library coming together to host seminars and other forums for small businesses or startups.

But the program largely is being funded by cutting in half The Chamber’s budget for recruiting new businesses to town.

“We think we can get the same results with spending less money,” said Brady Pollington, project manager for economic development with The Chamber.

Pollington told members of the Joint Economic Development Council that funding for The Chamber’s “business recruitment” line item would drop to $33,000, down from $66,000 in previous years. Pollington said the drop in funding would mean local economic development officials would be going to fewer conferences designed to meet site selectors and others who guide companies in where to locate projects.

But economic development leaders said The Chamber would continue to be members of networking organizations through the Kansas Department of Commerce and the Kansas City Area Development Council. Large prospects — companies wanting to build a new plant or relocate their headquarters, for example — are increasingly using those two organizations as their primary points of contact instead of local chambers of commerce.

“I am very encouraged by the deal flow that is going on in the region,” said Larry McElwain, president and CEO of The Chamber. “We are getting opportunities almost every week to look at projects.”

Landing larger companies in town is expected to be important in the coming years. The city has invested several million dollars to convert the former Farmland Industries fertilizer plant into a new business park, Lawrence VenturePark, which is seeking its first tenant.

Devoting more money to startups and other small businesses follows through on a theme that The Chamber heard from community members last year when it developed a new strategic plan for economic development, Pollington said.

“We want to provide programming that will help fuel our local businesses and make them stronger,” Pollington said.

The program will involve hosting several forums or workshops each year. Although funding from the city and county wouldn’t begin until 2016, The Chamber hopes to launch the program next month with a workshop about small-business taxes. Other topics in the future could include human resource issues, technology issues and business funding topics.

Pollington said The Chamber also is still interested in creating a scholarship program and a revolving loan fund that could assist small businesses. But he said the 2016 budget doesn’t specifically include a line item for those programs. The Chamber also has talked about the need for a venture capital fund that could be used to help fund expanding businesses. Pollington said he thinks such a fund is more likely to be created by the private sector.

The Joint Economic Development Council — which is a board appointed by the city, the county and The Chamber — unanimously approved the budget request. Now, city and county commissioners will consider the funding request as part of their budget processes this summer.

Details from the request include:

• The Chamber is asking for $220,000 each from the city and the county. The Chamber would provide $250,000 in funding that it has raised through a private capital campaign. The request represents an increase of about $500 in funding over what the city is budgeted to provide in 2015 and about $2,000 more than what the county has budgeted to provide. The $250,000 from The Chamber is equal to 2015, but it is up significantly from 2013 when The Chamber provided only $65,000 in funding for economic development functions.

• Salaries and benefits are the largest line item in the budget at $302,000. That’s unchanged from the 2015 amount.

• Other large line items include: $43,000 for marketing, $35,000 for business retention and expansion programs; $40,000 in funding for the KU Small Business Development Center; and $33,000 used to repay a loan from the Economic Development Corporation that was used to hire a consultant who helped with the capital campaign.