City of St. Paul announces Job Opportunity Fund

Pilot program to provide low-interest loans for job creation in poverty-stricken areas


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The City of St. Paul has announced a new pilot program providing $500,000 in low-interest loans and incentives to encourage businesses to create jobs in areas of concentrated poverty (ACP50).

Businesses can apply for a maximum $10,000 loan through the Job Opportunity Fund for each new, full-time equivalent job created, with a maximum loan total of $100,000. Loan requests of $50,000 or more will need to be approved by the Housing and Redevelopment Authority (HRA) Board.

Applying businesses must be located within an ACP50 area or across the street from eligible businesses. ACP50 areas are defined as neighborhoods where 50 percent or more of the residents are people of color and 40 percent or more have family or individual incomes that are less than 185 percent of the federal poverty threshold.

“The unemployment rate in St. Paul’s areas of concentrated poverty, or ACP50 areas, is double that of the rest of the city,” said St. Paul’s Planning and Economic Development Director Dr. Bruce Corrie. “This fund aims to combat that by growing jobs in these neighborhoods.”

Loan incentives include up to 30 percent principal forgiveness for initial job creation, with up to 20 percent additional loan forgiveness for hiring residents who also live in these ACP50 areas. To maximize the principal forgiveness, the business must remain in place and retain those jobs for a five-year period. Start-ups can also apply, but must have a business plan and monthly income and cash flow projections for at least three years.

“The Job Opportunity Fund allows us to target job growth in the areas of our community that needs it most,” said St. Paul Mayor Melvin Carter. “The fund is aptly named, as we strive to see opportunity exist for everyone in St. Paul, regardless of their zip code or skin color.”

Funds must be matched with private debt or equity of at least 30 percent for existing businesses and of at least 60 percent for start-ups. Depending on the loan amount, City subsidy requirements, such as affirmative action hiring and construction wage rates, may be required.

“This program is a flexible, innovative tool to spur economic development in a timely manner,” said St. Paul’s Economic Development Director Martin Schieckel. “This provides another way for the City to help businesses grow and develop.”

Businesses can use the Job Opportunity Fund loan for any business-related expense connected to job creation, such as inventory purchases, professional fees, furniture and equipment, leasehold improvements, and interior and exterior building improvements.

Loan applications are being accepted on a first-come, first served basis, and will be reviewed by City staff. A $75 application fee is due at the time an application is submitted.

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—Information provided by the City of St. Paul.