City of Saint Paul announces new Job Opportunity Fund
Pilot program will provide low-interest loans to incentivize businesses in areas of concentrated poverty to create jobs
SAINT PAUL, Minn. – The City of Saint Paul today announced a new pilot program that would provide $500,000 in low-interest loans to incentivize businesses to create jobs in areas of concentrated poverty (ACP50). 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 Job Opportunity Fund allows us to target job growth in the areas of our community that needs it most,” said Saint Paul Mayor Melvin Carter. “The fund is aptly named, as we strive to see opportunity exist for everyone in Saint Paul, regardless of their zip code or skin color.”
“This program has a unique opportunity to impact both the lives of expanding business owners and their future potential employers,” said Councilmember Chris Tolbert, who serves as chair of the Housing and Redevelopment Authority. “Saint Paul is growing at a rapid pace, and we aim to provide the benefits of that growth to everyone.”
The incentives on these loans include up to 30 percent principal forgiveness for initial job creation, with additional forgiveness of up to 20 percent for hiring residents who also live in these ACP50 areas. In order to maximize the principal forgiveness, the business must remain in place and retain those jobs for a five-year period.
“The unemployment rate in Saint Paul’s areas of concentrated poverty, or ACP50 areas, is double that of the rest of the city,” said Saint Paul’s Planning and Economic Development Director Dr. Bruce Corrie. “This fund aims to combat that by growing jobs in these neighborhoods.”
“This program is a flexible, innovative tool to spur economic development in a timely manner,” said Saint Paul’s Economic Development Director Martin Schieckel. “This provides another way for the City to help businesses grow and develop.”
Applications for these loans are accepted on a first-come, first-served basis, and will be reviewed by City staff. Businesses can receive a maximum $10,000 loan for each new, full-time equivalent job created, with a maximum total loan of $100,000. The Housing and Redevelopment Authority (HRA) Board will need to approve any loan requests of $50,000 or more.
Once a business has received a Job Opportunity Fund loan, they can use the funds for any business-related purpose connected to job creation, such as:
- Leasehold improvements
- Inventory purchases
- Professional fees in conjunction with the completion of a project
- Exterior or interior building improvements including parking, lighting and landscaping
- Furniture, fixtures and equipment purchases
- Working capital (as appropriate and demonstrated through monthly cash flow projections)
Businesses can visit stpaul.gov/job-opportunity-fund to learn more.