Small Business Relief Fund Lotto

[XLFD]

In late March, the Michigan Economic Development Corporation (MEDC) announced that small businesses impacted by the state's coronavirus lockdown could apply for the Michigan Small Business Relief Program’s (MSBRP) grants and loans and potentially receive a portion of the $20 million being offered.

This last week, the recipients of $10 million in grant money was revealed by the MEDC.  "The Michigan Small Business Relief Program grants were intended to provide critical capital to support the health and sustainability of the state's small businesses, communities and workforce," MEDC CEO Mark Burton said in a statement. "By collaborating with our local economic development partners, we were able to deliver vital resources to small businesses all across Michigan."

Grant applications were reviewed and selected by15 local economic development organizations, including "The Right Place", covering Barry, Ionia, Kent, Lake, Mason, Mecosta, Montcalm, Newaygo, Oceana, and Osceola and Muskegon counties (aka Region 4).  More than 175 small businesses received between $539 and $10,000 each in this region.  

To be eligible a business needed to have less than 50 employees, demonstrate an income loss due to the state lockdown, show a need for working capital, and is directly affected or adversely impacted by Executive Order 2020-9 (which shut down 'non-essential' businesses).

You will notice that among the 11 counties, Mason is the only county that has no local committee or official accepting, reviewing, and approving applications.  About 3,300 West Michigan businesses that have been hurt by the coronavirus pandemic sought $71 million in grants and loans, however, there was only $1 million to share, and only 195 businesses (6% of those seeking) received grants.

In Mason County, ten businesses out of 87 applications received just under $27,000 in relief fund grants.  The incomplete list includes seven of those (listed as line number, business, amount of grant, and retained jobs):

48) Lamplighter Bed & Breakfast, $2500, 1

49) Mason County Historical Society, $2500, 5

69) Paradise Island Tanning Salon, $2500, 2

78) Todd & Brad Reed Photography, $2948, 4

104) Purple Monkey/ABC Kidz, $3000, 4

118) Charlie's Bar, $2500, 2

139) Blu Moon Bistro, $4000, 16

Others not on the list, but verified through the chamber of commerce (Brandy Henderson):

Starving Artist Brewery, $2500

Red Rooster, $3750

Humani-tea, $750

Congratulations to these companies, however, how were these business chosen over others that may have applied?  The MEDC states that it uses objective criteria, guidance provided by the state & MEDC have all applications scored on a 100-point scale weighed around the following factors:

Business located on major business corridor
Percentage of lost revenue
Age of business
Profitability over the last 3 years
Total Number of employees during the last 3 years

Let's look at some of this objective criteria applied to a couple of Mason County businesses selected.  Starving Artist Brewery is located in a barn out in the middle of nowhere on South Stiles Road.  It hasn't had a lot of lost revenue, due to it's location, the time of year, and the fact that they can still (and do) sell their craft beers on-line and by mail order, as seen in this post at the end of March:

The business is less than five years old, the profitability is in question (especially since they are starving), and they only have a couple of employees I could find.  It's hard to gauge how this could score high on an objective scale.  

The Mason County Historical Society is a private, non-profit, educational organization dedicated to preserving the local history of Mason County, Michigan.  Located out-of-the-way at White Pine Village, the MCHS 'earns' money from donations, endowments, and through running the maritime museum and White Pine, both of which are closed in the off-season and not generating any income.  

While they have been around since 1937, their profitability in March and April is normally negative barring some other endowment, and employee work is minimal as tourists are not around in any number.  

Don't even try to understand that somebody looked at Blu Moon's list of 16 employees being retained in the off-season as a reasonable number and gave them the largest figure ($4000) to help meet payroll.  If the workers were getting minimum wage and no benefits, the $4000 would cover about three days of that.  Or how a photography business ran by the needy Reed family with plenty of on-line presence and few in-store customers this time of year needs a shot in the arm.

What one should see is that several businesses that have been completely shut down by the EO aren't receiving anything, and from what I have learned, several had applied; ones that seem more qualified on an objective scale than the ones selected.  Lending credence to the presumption that there were subjective standards in place in whoever figured out how to dole this money out in Mason County.  

Is it an equitable process when nearly 89% of the applicants in Mason County got nothing, many of them totally shut down by the state in conducting their business, when many of these questionable winners faired a lot better?

[Willy]

I agree, there needed to be a better way to recognize and choose what businesses received handouts. I can't blame any of them for applying if the "Whitmer" put them out of business. The only problem is the bill for this will be paid by our children and grand children. I say to the businesses, Open up. All of you. They can't put all of you in jail and if they try I'm sure the whole town will be blocking the jail door. I'll be there.

[shinblind]

Was the Mason County Growth Alliance too embarrassed to be associated with this?

Mason County would have been better served by putting the 87 applicants names on  pieces of paper and placing them in a hat and drawing out the 10 winners.

Would have made for a  good internet drama.

Instead we get another round of crony socialism where an organization too embarrassed to be acknowledged picks the winners  who will be receiving taxpayers money. 

[XLFD]

I think the MCGA is a thing of the past since Spence Riggs evacuated from the area back in June 2018 after a slew of ethically-questionable activities.  There is no indication that the MCGA has done anything since, and if you go to their website, you find nothing in their learn about us section and the most recent work appears to be demographics of Mason County in 2016.  

It's easy to not miss an economic development agency's departure, it really did very little more than have Riggs visit local government agencies speaking  about why some business deserved corporate welfare and yours didn't.  A lot of these ten businesses receiving awards have a lot in common with the probable people (who remain nameless and blameless) that decided the fate of the $27K, and are likely receiving some form of quid pro quo.  MEDC stands for Michigan Encourages Decadent Cronyism, it's not about economic development at all.  Definitely should have been a more inclusive and transparent process.