City economic development fund expands
Innovative program generates $20.2M to spur business projects
An innovative city program that’s funded by “clawback” payments has generated $20.22 million in capital raised for economic development projects, according to a report released Tuesday.
The Economic Development Action Account, created in 2013, has supported 20 programs, including four business incubators, and has helped more than 1,000 companies and entrepreneurs, said the report, issued by Mayor Richard Berry’s office.
The fund was created in 2013 with $5.52 million worth of “clawbacks,” or termination payments from companies that had received city incentives to locate in Albuquerque but shut down before the terms of their agreements with the city were met. The City Council, which approved the program proposed by Berry, added another $1 million last year.
“Previously the city lacked a closing fund, and now EDAct has enabled us to fund programs that were generally never considered in the past, and the impact on our community is beyond anything any of us could have imagined four years ago,” Berry said in a news release.
For example, the fund launched ABQid accelerator with $1.8 million and the Creative Startups accelerator with $250,000. One of the wildly successful operations that got its start with the Creative
accelerator was Meow Wolf, the immersive art installation in Santa Fe.
Businesses helped by those programs — and others funded by EDAct — in turn were able to raise $20.22 million from outside Albuquerque to grow their operations locally, said Deirdre Firth, the city deputy economic development director.
Funding goes to programs in four areas: marketing, retention/expansion and entrepreneurship, a closing fund, and workforce development. Among the recipients:
National marketing campaign: $1 million “to position Albuquerque as a vibrant center for entrepreneurship.”
Albuquerque Economic Development: $300,000 for business retention and expansion.
TEAM Accelerator: $275,000 to help manufacturing companies develop viable products.
Small Business Resource Collaborative, started with $250,000. It provides locally owned Central Avenue businesses with marketing and assistance in bookkeeping and financial practices.
“This has really been an engaging process for the community in many different ways,” City Council President Isaac Benton said. “We’ve been able to support a wide range of programs — from teenage entrepreneurs to folks making their first actual product to take to market.”
The ABQid business accelerator in Downtown Albuquerque is one of several groups to benefit from a city economic development fund.