Scott administration begins awarding capital investment grants to nonprofits and businesses – vtdigger.org

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Jun 16 2022June 17, 2022
Owen Milne plans to use a nearly $187,000 Capital Investment Grant to leverage more donations so the Lake Champlain Community Sailing Center can finally get working on its dock, a wheelchair-accessible path to the dock and a hoist for big boats.
“We’re very excited about the program,” said Milne, executive director of the sailing center in Burlington. 
Milne said the center had asked for $500,000 from the Agency of Commerce and Community Development, which administers the grants. He estimates the project will cost $2 million. He said he hopes to break ground this fall. 
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The grant is part of the first $3 million in capital investment grants awarded by the state government, with tens of millions expected to go out over the coming four years. Joan Goldstein, commissioner of economic development, said the state has to obligate funds by 2024 and the money must be spent by 2026. 
These first grants are part of $10.5 million appropriated by the Legislature last year. An additional $40 million in community recovery and revitalization grants, as they have been renamed, was appropriated for the fiscal year that begins July 1. In addition to businesses and nonprofits, municipalities will be able to apply for that money.
The Scott administration billed these projects as transformational when it first asked for the funds last year. But Goldstein said that when the U.S. Treasury Department, which disburses the funds, issued the final rules in January, it required that aid be tied to the pandemic and proportional to the loss suffered by the business or nonprofit. 
Still, the state auditor expressed concern about the awards, contending there are no requirements to demonstrate that taxpayer money is being spent to best effect. 
“It wasn’t intended to be transformative from the federal perspective,” State Auditor Doug Hoffer said. “This is for recovery from Covid. That’s what the money is for, all of it.”
Goldstein defended the projects’ transformational nature in that, she said, they transform the organizations that receive them. 
Sen. Alison Clarkson, D-Windsor, served as vice chair on the Committee on Economic Development, Housing and General Affairs, which wrote the grants into legislation; she also defended the grants as transformative for Vermont’s regions. Clarkson said she trusts the Agency of Commerce and Community Development to administer the grants.
“They have learned enormous amounts in the last two years and I think they’re in position now to design this program and make it work,” Clarkson said. “We have to trust each other.”
The grants are funded by the American Rescue Plan Act, signed into law by President Biden last year. Rules governing the grants require that they go to compensate businesses and nonprofit organizations for damages suffered during the pandemic.
The sailing center suffered plenty, Milne said.
In 2020, when the pandemic hit, Milne said, the organization had to cancel its classes. To keep staff employed, the center opened a child care program. It raised $50,000 by staging a concert that the audience could attend by boat, thereby maintaining safe distances. 
But the grant program has its critics, including Hoffer.
“It does not require job creation,” Hoffer said. “If you don’t get a lot of new jobs and new payroll, then it’s pretty hard to justify stuff like this if what you’re looking for is a return on investment.”
The sailing center predicted in its grant application that its project would create 12 permanent  jobs over the next five years. 
Northern Stage, the White River Junction theater company, plans to put its nearly $418,000 toward a new building.
Irene Green, the theater company’s managing director, said the new building will include 24 apartments, rehearsal space and a lab education space.
Green said Northern Stage now rents homes for staff and visiting artists. She said the new building would allow the company to let go of 14 or 15 apartments it rents in downtown White River Junction, freeing them for other people to rent in a tight housing market. (The theater company faced criticism last year over ousting tenants in other buildings.)
Green said the project is still being planned. She expects it to cost $7.5 million and she hopes the building will be completed in about two years.
Green said Northern Stage, too, was buffeted by the pandemic. She said the pandemic has shrunk the theater company, forcing it to cut its budget by about 35%. At the same time, it built an outdoor theater with some chairs and a small stage. 
Ryan Klink, the organization’s director of sales and marketing, said the company plans to put on about a third of its productions outdoors from now on.
Green said the company is back to putting on almost as many plays as it did before the pandemic. Audiences are coming back to the theater, Green said, but Covid remains an issue. This spring, she said, the company had to cancel a week’s performances of “Spamalot” because of Covid. 
“Which was really heartbreaking for all of us and had a lot of consequences, both qualitative and quantitative,” she said.
One problem the theater faces, said Klink, is that because of Covid, theater-goers are reluctant to book in advance or to buy season tickets, something he said is affecting theater companies generally.
“People don’t have the same confidence that they had before Covid, that there won’t be disruptions to the programming or their own ability to come to the theater,” Green said.
Unlike the two nonprofits, Bob Clark has already spent the money on his project. The $18,000 grant he received will reimburse him for part of the $151,000 he said he spent on machinery he’s installing to make dry ice at Fisher Brothers Farm in Shelburne, which he and his wife own. He said he is about halfway done installing the machinery.
The farm specializes in ice cream. Clark said the pandemic forced him to focus on mail order, and dry ice is essential for shipping ice cream directly to consumers across the country. 
“It has to be at quite low temperature, basically zero degrees Fahrenheit,” Clark said. “And it has to maintain that consistently throughout the entire shipping process until our customers are taking it out of the box, and the only really good way to do that is with dry ice.”
In addition, he said, dry ice allows the farm to freeze the fruit and peppermint it grows and uses in its ice cream and sells to distillers, brewers and jam makers.
Clark said dry ice is not produced in Vermont, so he generally has had to pick it up in New Hampshire or buy it from a local vendor who he said charged high prices. 
Without being critical of any particular project, Hoffer wonders whether the grants are funding projects that would have gone ahead anyway without taxpayer support.
“If you can’t be certain that that company wasn’t going to do that, absolutely, without the money, then you’re wasting the money,” Hoffer said. “Whatever happened to the free market?” 
Tom Kavet, principal economic adviser to the Legislature, said it is important that the program be focused.
“And we’re hopeful that guidelines will be developed that will focus the money in the places that can be the most impactful and most beneficial and that the process is as fair as possible and does not give some in-state firms an unfair competitive advantage over other in-state firms,” Kavet said.
Corrections: An earlier version of this story misstated the name of the play Northern Stage had to cancel due to Covid and the location of Fisher Brothers Farm.
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Fred Thys covers business and the economy for VTDigger. He is originally from Bethesda, Maryland, and graduated from Williams College with a degree in political science. He is the recipient of the Radio, Television, and Digital News Association’s Edward R. Murrow Award for Investigative Reporting and for Enterprise Reporting. Fred has worked at The Journal of Commerce, ABC News, CBS News, CNN, NBC News, and WBUR, and has written for Le Matin, The Dallas Morning News, and The American Homefront Project.
Email: [email protected]
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