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MassDevelopment In The News
A Business Lifeline
February 15, 2007: The Boston Globe, by Adrian Walker
You might say that downtown Brockton is close to Ed Byers's heart.
A native of the city, he is the proprietor of a small company, Custom Blends that makes salad dressing. All of his employees are from Brockton. Local churches send prospective employees his way, and there are a lot of them in the perpetually cash-strapped city.
"The politicians won't tell you this, but Brockton has a tremendously high unemployment rate," he said on the phone yesterday. "It would break your heart to see the people who come in here applying."
Byers is fortunate. His business is growing, thanks in part to an obscure state program providing seed money from the Massachusetts Development Finance Agency. He believes his workforce will double from its current 52 in the next several years.
MassDevelopment hopes that Byers's success can be replicated across the state. In collaboration with Citizens Bank and Sovereign Bank, the agency is announcing a $30 million program to help stimulate small businesses in Roxbury and Dorchester.
Of course, lending money is what banks do. But it is noteworthy in this case, because small business owners in places such as Roxbury and Brockton have battled with banks for years, contending that being shut out on loans made it impossible for their businesses to grow.
Under the program, Citizens and Sovereign have put up about $24 million. They will recoup some of that money in the form of state tax credits, and the rest will come from interest on the loans. The state has about $5 million in the deal.
If all goes according to plan, it will create jobs in low-income neighborhoods across the state that need every new job they can get.
"We see a benefit for the economy here," said Bob Smyth, president of Citizens Bank of Massachusetts. "As the state does better and has more jobs, they're potential customers for us."
Otis Gates runs a property management company in Grove Hall that manages approximately 1,300 units of housing, mostly in Roxbury and North Dorchester. With its $1.9 million loan, it is moving into a new building, one that Gates said will make it easier for tenants to deal with the company. Nearly all of the money, he said, will go to other companies in the community and to the residents they employ.
No one is suggesting that this program will solve all the economic problems of the communities that will take advantage of it. But such programs are part of the solution, and not a small part, given the struggle of such communities to attract and support businesses. If the unemployment rate is going to drop in low-income communities, it will be the result of creating jobs there. Politicians love to talk about developing small businesses, but the government is not good at actually doing it.
Byers has big plans for expansion. His natural and organic salad dressings have done better than he ever envisioned when he and his wife started the company 11 years ago. Still, he can't ignore the depressed economy around him. Brockton is a manufacturing city where most of the manufacturing jobs left long ago. He and his wife hope to build affordable housing for their employees down the road.
Now, they are facing a difficult, and pleasant, challenge. They have to figure out how to move into their fancy new digs without too much disruption to the business.
The company is moving only about a mile, but it is still a problem. "It's a problem because we have an existing business moving at warp speed," he said.
He paused to marvel at how far they have come. "We started with one employee and a dream - and got turned down by pretty much every bank out there," Byers said. "Like everyone starting a business, it was really a struggle at the beginning."
The state, along with two of its biggest banks, are betting that if dreams can come true in Brockton, they can in Boston.
© Copyright 2007 The Boston Globe.
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