PAC getting businesses off the ground
The Panhandle Area Council's headquarters on the edge of the Hayden airport is small, but its reach is enormous. The economic development district's involvement in the local aeronautics and aviation industries has helped every business from the one-person crew of Global Navigation Sciences up to and including Empire Airlines. "To watch this industry here grow here over the years has been incredible," said Wally Jacobson, PAC executive director.
It’s a rainy, overcast January afternoon at Coeur d'Alene Airport - Pappy Boyington Field, a day that usually drives away the air traffic overhead.
But just east of the Hayden tarmac, tucked away on the edge of the airport grounds, business continues to hum inside Wally Jacobson’s office. Here, at the Panhandle Area Council, the pattern is full.
“We’re definitely keeping busy,” the executive director of North Idaho’s economic development hub said. “Our whole focus is job creation. We’re just trying to get finance dollars out to those businesses that are looking to grow.”
Jacobson, executive director for the past six years, was at PAC from the beginning, when the nonprofit opened its doors in 1972. Since then, the economic development district that serves the five northernmost counties in Idaho evolved with the ever-changing market.
“When we started in the '70s and '80s, the communities and cities - they couldn’t afford their own planners," he said. "That was something we did to help with renewal within those areas.”
As North Idaho cities and towns grew enough to eventually maintain their own urban renewal plans and agencies, PAC shifted toward more focused economic development efforts, helping businesses of all sizes grow, whether established local companies looking to expand, or nebulous ideas blossoming into working start-ups, primarily through the facilitation of low-interest loans.
“A lot of our companies have tried to get out of their basements and garages,” Jacobson said. “We try and help get those companies through their start-up phase and into more of an early stage.”
Armed with a variety of tools at its disposal — from internal loans for working capital and inventory to deferment programs and buyback lease options — Jacobson said PAC’s most effective weapon is helping companies through SBA 504 loans, backing companies’ growth through 2.88 percent interest infusions to help them grow.
Those loans, typically reserved for real estate jobs and equipment purchases, come with PAC perks of having the first six months of payments paid off for the borrower. That, among other benefits, have kept PAC’s small staff wildly busy.
“On the SBA 504 building side of things, over the past few months, we’ve been about as busy as we’ve ever been,” he said.
Jacobson’s answer struck as peculiar, considering that businesses are still reeling from a COVID-19 pandemic that shrunk the American economy by as much as 32.9 percent in the second quarter of 2020. With coronavirus cases spiking into all-time highs, and with Wall Street giant JP Morgan warning of continued contraction through the first quarter of 2021, the willingness of North Idaho companies to borrow — and the willingness of banks to loan — comes down to a duality in services provided.
“It’s one of the things that kind of surprised me,” he admitted. “There seems to be a tale of two cities out there: On one end, you have the tourism, restaurants and hospitality, which is really struggling. But on the other end, it’s just booming on the construction end... I think restaurants, they’re figuring it out. It’s always been difficult to be in the restaurant industry anyway, before COVID. There’s obviously been a shake-up in that business. I think the ones that will move forward have figured out how to work in this COVID environment.”
That booming construction side has been what’s kept PAC willing to invest.
“One of the drivers there, we provide the SBA 504 program," he said. "You can get in for a low down payment — 10 percent — and we put in 40 percent. The rate is 2.9 percent fixed for 25 years. The money’s pretty cheap right now, so if you can afford to build, you’re going to build.”
Those builders, however, aren’t just local. One of the key factors in North Idaho’s growing construction industry stems from the area’s business-friendly approach, which is convincing new companies to relocate to the area, particularly in the manufacturing field.
“I’m pretty bullish on manufacturing and other companies moving into the area,” Jacobson said, “which I think will bolster our economy.”
But many companies utilizing PAC’s resources remain home-grown, as evidenced by its in-house start-up bays. Businesses include breweries like North Idaho Cider and light manufacturers like Global Navigation Sciences, which makes special iPad chargers for outlets in airplane cockpits.
Jacobson said he’s wary of the start-up market since the onset of COVID-19, but he added that the uncharted airspace the local economy is navigating will eventually calm.
“Just the uncertainty of where we are now doesn’t bode well for start-ups,” he said. “Everybody’s shrugging their shoulders. Maybe they’re working their current jobs and looking for the right time to start up.”
That uncertainty, however, doesn’t change the amount of resources at businesses' disposal.
“At the start of COVID, PAC was fortunate to secure a grant of nearly $3 million to start a revolving loan fund,” he said. “But that fund can only be used for working capital or inventory or equipment. I can’t use it to build buildings. So it’s been difficult finding folks that are interested in borrowing money for those types of activities.”
The big target remains the same: Getting capital into the hands of those who can create jobs and strengthen the economy.
“We’re always looking at how we can get more loans out," Jacobson said. "With our banking partners, everybody’s got pretty low rates right now...Our whole focus is job creation. Trying to get finance dollars out to those businesses that need it.”
