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FEATURED ARTICLE
The Seacoast business partner
Economic development group helps create local jobs
By Susan Morse
Published: June 2007
Coastal Economic Development Corporation executive director Dan Gray, left, and loan administrator Sheila Cragg.
Don Clark photo
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Now into its ninth year, the Coastal Economic Development Corporation works quietly behind the scenes to bring employment to the Seacoast.
The CEDC has helped large businesses such as Foss Manufacturing stay in Hampton; made it possible for a smaller circuit board company to move from Massachusetts to Seabrook; helped develop a Pease Tradeport aviation business, and enabled a Portsmouth-based maker of jams and jellies to grow.
The nonprofit corporation also helps individuals start a business.
"We don't only try to work with the large guys," said CEDC Executive Director Dan Gray. "We recognize the person who wants to open up a business in Hampton has a hard time trying to attract money into the deal. For any new business anywhere, it's always a challenge."
A critical element for companies to get a loan from the CEDC is there has to be other money at risk.
"We always ask them, have you met with your bank?" said Gray. "If our role isn't critical and isn't needed, we don't want to have a role. It doesn't mean we can help everybody. There has to be other money in the deal."
The CEDC can fill in the gap between the bank loan and what is needed. Its financing makes it easier for a bank to approve the remainder of the loan amount.
The development corporation looks for businesses that will create jobs for low- to moderate-income workers, that pay better than a minimum wage.
"We're trying to help companies that have a long-term plan to increase their employment," said Gray. "That's really our role."
The Coastal Economic Development Corporation is among 10 regional development corporations in New Hampshire. The local corporation encompasses the communities of Portsmouth, Newington, New Castle, Greenland, Rye, North Hampton, Hampton, Hampton Falls, Seabrook, Kensington and South Hampton.
It accesses loans from Housing and Urban Development and the federal Department of Agriculture Rural Development. It is the intermediary between the government and private enterprise.
"We have a working relationship with lenders," said Gray. "Our role is not to compete in any way with the banks, it is to enhance what is happening with the banks on projects the lender isn't able to (completely cover)."
The corporation currently has an in-house loaning pool of about $2.2 million. Its loan portfolio is $5 million in active accounts, with a goal to keep increasing the amount.
The CEDC offer loans of $25,000 to more than $1 million, said Gray.
It also receives money through partners and recently received a donation of $25,000 grant from The Provident Bank, which has an office in Seabrook.
"This recent Provident award was particularly critical. It was actually used to help with operations," said Gray, who is the only full-time staffer.
The office is on Merrill Industrial Drive in Hampton. The CEDC also owns another Merrill Industrial Drive property, which has become a large element in helping companies start-up, grow and hire. The 35,000 square foot property includes lab and office space.
"Over the years, we've been able to turn it into an incubator," said Gray. "We encourage companies coming in, they come in here and rent an area, a lab to help incubate their operations. We presently have 14 or 15 tenants. They employ up to 80 people."
The rent is in the lower end of fair market value, said Gray, and the leases are relatively short, from a half-year to a year. The property is not a money maker for the CEDC, and for a couple of years represented a loss to the corporation. It now operates on a break-even basis, said Gray, but meets the goals of economic development.
"We have a lot of people here who were working out of their homes and they needed more than that," said Gray. "They needed an office address."
Businesses financed by the CEDC include:
Foss Manufacturing Company Inc. in Hampton. The CEDC was a lender under the original owners, said Gray, putting a HUD loan in place to create employment. When the company declared Chapter 11, the CEDC was wrapped up in the sale of the business, said Gray, creating a legal challenge for eight or nine months. The outcome was the CEDC was able to keep its loans in place with the new owners, who have added workers to the company's 400 employees. "We didn't lose any money in the deal and in essence, we've-upped our loans with new owners," said Gray.
Prodev Inc. of Seabrook. The former Newburyport, Mass., company wanted to move to New Hampshire, said Gray. The CEDC helped the company purchase a condo unit three or four years ago when the company had four employees. Prodev planned to at least double the number of staff.
Port City Aircraft Inc. at Pease International Tradeport in Portsmouth asked the CEDC for help in 2003, said Gray. The business needed $4 million. The CEDC accessed $375,000 in HUD funding. The aviation business said it would create more than 20 employment opportunities within a year and a half. Gray met with company officials last week and learned Port City Aircraft employed 25 to 30 people. The company does maintenance and electronics work, provides hangars and fuel for private airplane traffic, including private corporate jets.
Lollipop Tree Inc. of Portsmouth. The CEDC stepped in when the 20-year maker of jams, jellies and baking mixes, needed capital to accommodate rapid national sales growth.
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