11 Dec Cuyahoga County loans $1.5M to support manufacturing, other development in low-income areas
CLEVELAND, Ohio – Cuyahoga County Council on Tuesday approved a $1.5 million loan to a newly formed investment fund designed to assist businesses and development projects in the county’s low-income neighborhoods.
Arctaris, a Boston-based fund manager that will oversee the program, hopes the county’s money, as well as $500,000 pledged by the George Gund Foundation, will help grow the fund to up to $20 million.
Arctaris will tap the fund for loans or investments in projects proposed for low-income areas, including 64 “opportunity zones,” areas where the federal government offers tax breaks to encourage private investment.
Projects will be chosen based on criteria such as their likelihood of creating or maintaining jobs that pay livable wages or bringing affordable housing to the areas, Chief Economic Development and Business Officer Ted Carter said during committee hearings.
Arctaris, which has done similar investments in Michigan and Maine, intends to focus on manufacturing in Cuyahoga County, Arctaris Principal Uche Osuji told cleveland.com.
Osuji noted 300 manufacturing companies already are located in opportunity zones.
Paul Herdeg, the county’s deputy chief economic development officer, said possible recipients of loans or investments could include real estate projects, companies moving into opportunity zones, companies that don’t have access to other investment options, or family-owned companies where an owner is about to retire and is in need of succession planning.
The county’s loan to the fund is for 10 years, at 2 percent interest.
Once the fund closes, investors would share in any profits or losses produced by the projects. The money loaned to the fund by the county would be partially guaranteed by The Kresge Foundation, a Michigan-based philanthropic agency.