City Council - Community and Economic Development Committee

all right we uh up next our committee meetings we have community and economic development and that is chaired by council member cotton thank you council president proem uh today on this committee I'm joined by council members Huffman and stone and we have just one agenda Bill item before us that's bill number 24092 and it'll be a presentation by Western Washington University Small Business Development Center and through an interlocal agreement uh with the Port of Bellingham and wam County the city supports a collaborative commitment to fund the port of bellingham's regional economic partnership fund Western's Small Business Development Center and maintain the choose watom website and over various contracts with economic development focused activities uh the executive director of the sbdc uh will provide an overview of its 2023 activities and accomplishments and with that I'll recognize uh Tera sandine Tera sine and economic development manager thank you for having us today I'm just going to turn this over to the director CJ sites and also we have uh another guest Dr Liliana deck presented to you last year and she's joining CJ this afternoon as well thank you for coming it's always a pleasure to be here thank you um so today we're going to I'm going to provide a little bit of background on the sbdc because there's some new members to talk about our activities and impacts um share some client stories Lil Liliana is going to talk about the work that she's leading up and

underserved and then we'll wrap it up with some trends that we're seeing um so the the sbdc is a is a program of the SBA the small business administration and it was originally set up so that the F the feds wanted to get money into rural communities to help with small business assistance so they made this program that requires um local match was what you all come in and it requires a host institution of higher education and that's Western Washington University so we all pull together to get these resources into the small business community that it allows us to have a local flavor so you'll you'll probably hear that no sbdc is the same because we want to increase capacity and do what's best in these communities our the bread and butter of what we do is one-on-one confidential business counseling that's the majority of the work that we do we also sit on boards and um throughout the community where we can lend our expertise um as necessary which we enjoy doing here's your spdc team these are certified business advisors every CER every certified business adviser has a robust business education they're required to have had owned around a small business we work together as a team so we all have this General bucket of um NBA but of course we have special team so we work together pretty closely as a team oh I should add that we also have um some support staff and NBA students that work with us also these are our 2023 accomplishments um so we helped 466 businesses last year the

capital formation is either debt or Equity that's come into this community as a result of the work that we've been doing and the total salve and job supported is a number for total of all the clients we work with in order for us to uh report these impacts up to the small business administration the the client has to sign off in writing and verify that yes in fact we did do this work that helped them get these accomplishments you'll notice we have 31 business starts that's pretty big for us we've um we've had a trajectory sorry I'm having notes issues so these are actual business starts and we help a lot of businesses with with their ideas when they're in ideation and one of our things that we do that we're really proud of is we help people make data driven decisions so a lot of times people will come to us with an idea and we'll work through the data and pencil it out and it it's not a great idea we don't count those successes but there's a lot of work behind the scenes there and we're attributing this business starts that really started with covid people wanted to change their lives people you needed more money perhaps you know and so the there's this huge Innovation spurt and so but it's continuing it's our number one requested service so beyond the one-on-one confidential business counseling we do other things in the community one of the things we worked on the grant for um the flood so that continued we have a partnership with Apex that's Government Contracting and of

course liliana's work I'm just going to highlight really quick because there wasn't a lot of work done in the city of Belling H for the flood but this work continued because there was funds from the legislature that were earmarked for This Disaster and getting that those those funds out to businesses was a pretty good chunk of change of our work that we did Government Contracting is is also something that we really um are leaning into this year if this is um called Apex it was formerly called the pro the procurement and technical assistance center of Washington and what she does is just help people get government contracts and so we host her in in our office the it's really important to me and everybody here we want to bring as much money home locally as humanly possible and so Western AL Western has a new program that they've been working on to increase Local Buy and we've helped them add 21 vendors this year so we're hoping to bring that work and in the minutia of that work of helping a vendor helping a vendor get ready working working and being lenient on insurance requirements that sort of stuff in order to get somebody verified so we're hoping to get some best practices and bring that more in throughout the community we get the word out by going out into the community and also by digital marketing and one of the things that it's so hard for us to hear and that we hear all too often is gosh I wish we would have known about you sooner so we keep trying to tell um tell that

story as much as we can and lot a lot of times we tell that story by telling our client story this is holly from meat pies and of course if we're telling our client stories they have given us written Cent because confidentiality is so important the other way we get the word out um is through our newsletter so we are the technical assistance lead for the community so the so this is purely like here's our opportunities here's what's changing in codes and all that great stuff so this goes out to 700 people monthly I'm just going to skip over um Liliana deck community business development director at Western Washington University A Small Business Development Center um thank you for the opportunity to share our work with the Small Business Development Center with the uner population of our city in my position I get to bring my personal and professional experience supporting communities farther from Opportunity by removing barriers and closing gaps one of those barriers for newcomer is language we have modified our services uh our service model to accommodate English language Learners here we have one of the examples of providing our technical assistance and Advising services in Spanish for Latino business owners we started bilingual art we start with bilingual Outreach and having all of our Promotional and Technical materials in Spanish here we have some of the events that our team has attended as the sbdc and we have our director here in one of them celebrating the Hispanic

Heritage Month last fall these are just examples of our effort and connections of our Outreach strategy in our community um this strategy has deployed that we have deployed has resulted in an increasing advising sessions in Spanish for our clients our team has a strong ties to our community that goes with Partnerships that go back decades such as the Bellingham Regional Chamber Of Commerce multiple non nonprofits and Foundations in 2023 however we have expanded to more than 20 Partnerships of local organizations in our community that are serving the same population that we're trying to reach these Partnerships another traditional organizations that focus on economic development instead these Partnerships reflect the spaces when the underserved communities are congregating so we can reach the and connect new ties with them with the business owner ERS so we're thinking of meeting the client where they are in their Journey either as a startup a growing business or a mature business these targeted efforts have resulted in an increase of clients of Latino business owners in our community that has more than double in our Center that means 133% of our clients are Latino Or Hispanic for context in 2022 the census numbers 10% of our population ident identifies as Hispanic or Latino in this slide we can also see that the demographic profile of the clients were're surveying actually mimics the profile of the CL of the population in wam County thank you these are the areas of counseling

that we served last year you'll see that startup startup assistance was by far the number one last year it was by sell so we're we're attributing this to you know the market conditions cost of money has gone up exponentially we also um marketing was also a bigger Topic in 2002 I think just coming out of the pandemic and a a shift in environment and consumer behavior these are the industries we served last year so over the past three years health care and social assistance has overtaken service establishments and accommodation Food Services our biggest industry so some of these examples would be massage physical therapy medical offices and and Retail is also risen to Second Place oops the sbdc visors work with bipo business owners across a wide range of Industries contrary to stereotype the distribution of our bipack own business Industries largely mirrors that of our overall client base a few stories here this is zazen spa and this is Derek Watson and he bought this business since um 2002 we've been working with him since Ash Ryder is his advisor and you can see here by the mix of stuff that she does that we councel on a a host of different things so she's doing a lot of data data work with him financial analysis even un employe culture gastro Northwest gastro has been our client since 2016 I think they employ over 50 people here this work was done by Eric grimstead this is again Financial case Lo when they're looking at Buy sell doing valuations looking at lease versus rent

here we have one of my clients who came to us after one of our reach events it has been a joy to work with this client and watch her dream of becoming a caterer um in our community become a reality this client is an example of how technical advising and support in Spanish can be leveraged to minority owned businesses while contributing to a sense of belonging not just for the client but also for the community that they serve um examples like this keep me inspiring to do my work with a strong conviction that we can make our community stronger one business at a time so we're going to wrap it up here with some Trends I often get asked by decision maker decision makers like yourselves what do you got what are you seeing what are the trends and what you're hearing so of course there's you know the restrictions on Capital which we are hoping that the cost of money gets lowered we're very hopeful of that a lot of times commercial loans they they have to refinance after five or 10 years right so what when they might have made this loan the cost of money was a lot cheaper so clients have been scrambling a little bit to get that cost of money lower I also uh funding a startup is so challenging right now in The Lending environment um and also we're helping a lot more people through Liliana liliana's work that might not have the credit that they need to to access money so with that in mind I'm working with the wam Community Foundation and a couple different banks in town to set up a

microloan fund that's targeting bip entrepreneurs of course we have um we have hiring challenges I don't I think that conversation we've heard a lot about that most of our clients you know with a W with wage increases we we saw this coming for so long so they're planning in advance right so that they can remain competitive and and Al and have um a good profit margin we're still seeing supply chain issues it's it's a it's a bummer and it's starting to clear up a bit you know people hoarded during covid so that they they couldn't get products in right so then they hoarded what they got and now it's aging and sitting there and it's expensive to have inventory sitting there so we're working through that of course real estate and Associated Industries are slow it goes without saying we're also keeping our eye on um artificial intelligence as it started to present some options for employers like where where they can't find staff can we can we fill in with um different Ai and it's also posing challenges for people that are in the creative Industries right so maybe maybe they're not getting as much work so we're keeping an eye on um the trends in general that wraps up our um our formal presentation we'd love to take any questions if you have them sorry commun members any questions uh council member huffin thank you council member cotton well I always look forward to this presentation every year um no reason uh and I have lots of questions but um the the the number of startups

increasing so significantly was really surprising and exciting um what what sectors within that group are are you seeing more of um there was a slide in there of sectors in Industry that you serve is it reflective of that distribution or is there particular industries that are just excited about getting started up right now I I should have come armed with that question we got it on on Friday from a different from a different body so we I'll follow up with you Council council member husband on on that one is is interesting one to look at great thank you also could we get your slide deck sent to council as well that would be great to have oh I know Tera tera's reminding me to to mention um one of those numbers what could be so we're having a lot of refugees comeing to our community right now so people that are seeking Asylum and they are legally here and but their court date is till 2030 so they don't have green cards they're not working their option is to start a business there's no second choice for them so you can get a taxpayer ID and start a business Liliana is doing incredible work in that Arena so it could be part of it I'm I'm not sure if it's all of it um we're also on the lookout just constantly about what are some of these low barrier startups that folks can do in that situation you want to add anything to that okay cover it out thank you very much much for the presentation similarly always excited to um yeah to hear the report out about how things have grown and

changed and sort of what's happening on the ground um similarly you know having received assistance from um sbdc many many years ago now but still remember that quite quite clearly it's a great asset for the community um and about I guess it was over was last week um but being at a clinic that I was working to support at the Goodwill um and seeing Iana there and the table for the spdc was really exciting just to have that opportunity which you shared about the number of places where you're going um and I feel like there's a lot that um maybe as a city as well right that we can learn through that approach where you're talking about you know sort of meeting people where they're at and trying to ensure that those services and resources are are available so that list of you know Partnerships is really representative of just how diverse the community is and the different right Avenues and um places where people go for for that support so it is really exciting and to see um locally here the number of you know small businesses that we have I always say locally we don't have you know very many large employers and so we are really dependent upon small businesses so this is a great resource that um yeah I'm always surprised when there aren't when people haven't heard about sbdc or aren't aware of the services and resources that are available so I'm hopeful that you're ility to come and present to council is another way to help spread the word um about the amazing work that you all are

doing so really just want to express appreciation for all of that and having really seen the impact um really it feels like tenfold since Lana came you know on staff and I'm grateful you know individually and as a council member just um for that commitment and investment by by your organization so thank you thank you for saying that thank you for your kind words and I also wanted to say that you know while we're so so pleased that l deck is working for us at the sbdc and creating new relationships in the community and building an immense amount of trust Liliana works for our community so if there's if there's ever an opportunity where you could ask her you know to extend those relationships and help out and Trust building has been a huge component of the success of the work that we're doing and we just frankly could not do it without Liliana and so I'm proud of the work and she's here for all of us thank you uh the um your report speaks to this a bit your quarter report here um in our packet but can you talk a little bit about some of the layers of challenges that small businesses are experiencing right now that are unique um to our times just a kind of a a layering of of different kinds of challenges at the moment um can you speak to those challenges and how you're seeing businesses adapt to those challenges like wage increases um cost of goods supply chain issues and maybe others as well yeah um well first I'll talk to that operating environment I think because I mean it is

super challenging everything you said right there's only so many levers that you can pull to be profitable right you can raise your prices you can't not have so many employees either your expens it's only so many levers and there and so what I want to say is that the sdc's clients are set apart there right so they're already having a relationship with the counselor they're already getting these newsletters all the time you know we were jumping up and down on affected industries that were low margin that we were really sure you need to come in and talk to us it's all about good planning you know it's all about forecasting what if if this then what how are we going to remain profitable and you know some people they'll you know I hear all the time it's $17 for a sandwich you bet the $17 for a sandwich because these businesses need to remain profitable that's how much it costs to employ people to get the goods to get them to you so I mean I don't think there's any magic bullet because there's like a little bit here a little bit there but I think it's good planning and getting good advice is one of them um the biggest it's so amazing that we have startups because there's virtually almost very very challenging Avenues to get money right now I mean there's always money right it's how much do you want to pay for that money right you can go get hard money if you're capable and pay 23% you get there's credit cards which we see all too often you know um of people starting she has a

story that is heartbreaking of that people starting up on credit cards and then the cost of that money get so expensive so you so they're doing that friends and family they're they're do people are doing that to to start up um there's also cdfis commercial oh gosh I'm going to mess it up yeah they're funded in part in part by in part by uh federal government I'm going to mess up what it stands for I can't remember now some Community Development lending institution and so we have a couple cdfis here again that cost of capital is expensive which is why this work that we're doing with the wam Community Foundation and several Banks to get microloans set up that are there's a low low low um interest rate on those loans we're also asking for partial of full standby on interest to get so so a company can get started um you know there's several banks in this community whose heart is really in this work too it's just we're we're so close working through regulations it's not if it was easy I think we would have had it done really quickly but we're so close to that work um also I have to give a shout out for the walkom Community Foundation they're they fund they have funded several businesses that we can't get funding for that have will have impact in our community so that's super powerful too anything else and I would say another challenge is access to information so navigating the system is really hard even for English learner for non-english Learners so we provide that service we

connect with Labor and Industry Department of Commerce IRS so we're all constantly communicating with our clients all the information and make them available or new news that come from any of those agencies so access to information and access to Capital is huge and as us advocating for those clients and we do it here at the city too I work with Tera pretty closely so if somebody's coming in if there's a project that we can see might that there might be some issues we want to get started she'll check on projects for us and help talk us through some issues so we do collaborate a lot with our Community Partners to to make sure PE an advocate to make sure that businesses are getting what they need counc uh quick question but first of all thank you very much CJ always good to hear this report um I have a question you mentioned that you're working the foundation to set up a a microloan program for some of the patients that Dr deck is patients clients at Dr deck is working with uh you you mentioned uh smaller loans again and it didn't seem to be connected necessarily to to bipo entrepreneurs um my question is what do you mean by a micr loan what kind of size are we talking about and what sort of needs are there that are met with that small amount of capital well we're looking at I mean we there's a wide range and so I mean um I I can't tell you Liliana client liliana's but there's there's a high a high need of capital there this is a person that has way more education than I do is

way more successful than I am in other country but the certifications don't work here in the US in the mean time they're working and so I think there's some flexibility there having said that some clients I mean $1,000 would be amazing setting up a website um we hopefully won't be that small with the loans because of just C cost of doing that but we're looking at Pro probably the majority of the loans being anywhere from 5,000 to 25,000 and um you know hopefully with the pilot project up to 500,000 of fully collateralized loans that would be um that's the hope that we're looking that we're looking at so it varies you know it varies where people where people are coming into the mix do you want to add to that because you're seeing a lot of it yeah for most of our clients who are not bankable yet so this is a bridge to help them get there so this is like a first step into the banking industry that they just don't can access because they haven't been here long enough or they've been financing everything with their savings so um so it's a different kind of model so it's kind of a startup a seed money if you will does that help yeah that gives me um it gives you as much as I need to know thank you yeah and just one last comment um I I'm so excited to see the work that that Liliana has been doing with the organization it's um it's been so needed and uh and last year I think you first presented um and I I think I probably s then I can't wait to see the outcomes of the work that

you're doing I look forward to the continued updates um it's if that's true that a good portion of of the businesses that are started being started up uh our our businesses um that are that are started by refugees that's really exciting too a div A diversity in our our small business World in Bellingham um is is really fun to think about what what people are bringing from out of the country to our our community so um and then the the continued support and and hopefully success of those businesses because I know it's really really difficult to keep a business going once you start it starting it's one thing but you know making it past that three years where your odds are going to you know drop um that you can keep it going I I think is is it's really encouraging that that this resources in our community so I look forward to the outcomes uh as the years go go by so thank you and I don't have the zoom open but did council member Anderson have their hand up at all no okay great um well thank you um both for the wonderful presentation and were there any other comments questions to the committee I think council member hman mentioned it but I don't know if it was heard or not but um if we can get copies of the slide deck that you shared that would be wonderful thank you right see none other um thank you all and end of committee thank you council member cotton and we will take a short break before our next committee