ELY - The city of Ely was one of 12 northeastern Minnesota communities that received grants from the Department of Iron Range Resources and Rehabilitation to address economic hardships created by the coronavirus pandemic.
The Taconite Area Community Relief Grant was established in July by the IRRR, and all 12 applicants were funded.
Ely matched a $125,000 grant with $30,000 of its own, and six businesses that have been hurt by the COVID-19 business shutdowns have received $77,000 in forgivable loans thus far.
Additional forgivable loans could be provided to other Ely businesses in the coming weeks, according to Ely Clerk-Treasurer Harold Langowski.
“Like all communities in northeastern Minnesota, Ely’s businesses experienced detrimental effects from the global pandemic,” he said. “The businesses’ largest struggles were the lack of operating capital, difficulty finding and retaining employees, and profitably operating at reduced capacities mandated by state restrictions.”
When considering how to structure the loans for the COVID relief, Ely officials conferred with local lenders and business owners. All parties agreed that businesses did not want to take on debt in a time of economic uncertainty, Langowski noted.
“Many of them were poised for expansion due to the different ways they needed to operate in a new economic climate amidst a global pandemic,” he said.
“We structured the loan program with a forgivable element that still encouraged investment and expansion through hiring new employees,” said John Fedo of the Ely Economic Development Authority. “Based on feedback from our partners we were encouraged that we had the right balance. Supporting new jobs in Ely is a very good thing.”
Pebble Spa Company, Land O’Lakes Insurance Co., Voltz Technologies, and Dirty Dog Manufacturing LLC (Hand Done T-Shirts) received forgivable loans last month of up to $22,000 each at one-percent interest. They are required to hire up to two new full-time employees at a minimum of $15 per hour and maintain those employees for two years in order for the loans to be forgiven. The funds can be used for a variety of purposes, from equipment to operating capital as long as there is a net increase in employees.
“Since that approval ,there have been additional applications for loans that will be awarded to Treehouse Broadband and Wintergreen Northern Wear,” Langowski said. “These six forgivable loans represent ten new jobs and $110,000 in forgivable loans.
There was $45,000 remaining in the program as of Dec. 23, he added.
Wendy Lindsay founded Pebble Spa 18 years ago and they now have three locations including Ely, Virginia and Duluth. She used the loan to hire an employee to launch a new website and online store: www.camppebble.com. Website guests can purchase spa boxes, learn about massage techniques and take wellness challenges.
“It is designed to increase sales revenue as we continue our recovery from the two-month closure last spring at the onset of the pandemic,” she said. “The financial impact was great, and the COVID Relief loan from the city of Ely allowed me to hire an employee who is solely dedicated to that new sales initiative.”
Pebble Spa also hired a second employee dedicated to training staff at the three locations in new techniques such as reflexology and safety protocols.
Land of Lakes Insurance Co. founder and CEO Shauna Vega has been in business for nine years as an independent agent and insurance broker. Prior to the pandemic, she was considering an expansion of her offerings to include MNsure and UCare, which are both health insurance marketplaces for Minnesota where individuals and families can shop, compare and choose health insurance coverage.
“I received many customer requests over the past couple of years for Land of Lakes to be a broker for health insurance, in addition to the insurance types I was already brokering such as auto, home, life, commercial and recreation,” said Vega. “The pandemic hit, and it did not seem like the appropriate time to expand my services. However, the loan from Ely enabled me to hire the two additional employees I needed to accomplish the expansion.”
“The COVID Relief program enabled Ely to develop a community lending program tailored specifically to its local businesses,” said Commissioner Mark Phillips, Iron Range Resources & Rehabilitation. “Ely can retain the loan repayments for future economic development purposes, and new jobs were created. The program embodies our agency’s ongoing mission of investing into northeastern Minnesota communities and businesses.”
The Department of Iron Range Resources and Rehabilitation contributed to this report.