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Friday, Aug 12, 2022
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Vedc

WADE DANIELS Staff Reporter The Valley Economic Development Center may want to think about changing its name. The official mission of the Van Nuys-based non-profit organization remains the same: to help businesses grow and prosper in the San Fernando Valley. But recently it has expanded its business-development activities to an ever-broader geographic area. Over the hill in Hollywood, the VEDC is working under a contract with the city of L.A. to set up the Hollywood Economic Alliance, a coalition of businesses aiming to revitalize the neighborhood. In South Central L.A., the agency has entered into a partnership with the non-profit economic development group FAME Renaissance to provide U.S. Small Business Administration loans to inner-city businesses. And in Huntington Park, Santa Clarita and Ventura County, the VEDC has set up field offices to administer SBA loan programs and assist business owners there. So is the VEDC considering leaving the Valley behind? Don’t count on it, said John Rooney, the group’s president. Despite its recent activity elsewhere in the region, the agency’s primary focus will continue to be in the San Fernando Valley. “There is so much that we want to do in the Valley,” he said. Despite that assertion, the VEDC has lately become as fast-growing and entrepreneurial as many of the companies it aims to assist. The group, which started out in 1978 as a city-funded program called “Vitalize Van Nuys” to beautify local community storefronts, changed its name and began broadening its focus in 1987. It sought to address more fundamental Valley-wide business issues especially long-term planning and access to capital. But the VEDC truly reached maturity after the 1994 Northridge earthquake, when it began working with more than 7,500 Valley businesses seeking to obtain federal loans for quake-related repairs. Many of these companies later returned to take advantage of the VEDC’s other services. Its success in mobilizing quake-relief efforts led to requests from municipalities throughout the country, as well as foreign governments, seeking assistance with setting up similar economic-development programs of their own. The VEDC at that time declined such requests; it had more than it could handle just dealing with the Valley’s post-quake devastation. But now that quake-rebuilding efforts are winding down, it is branching out. From top executives to scrappy entrepreneurs, people from some 10,000 companies have sought aid from the VEDC in the past two years alone applying for funds from any of its seven loan programs or seeking technical assistance from the center’s management consulting and training programs. The VEDC offers three primary services: making and arranging loans, providing business training programs, and consulting. The agency is funded by city, state and federal governments for which it administers loan and other assistance programs. The VEDC also earns money from companies that pay for its business training and consulting services. It has an annual operating budget of $2 million and a full-time staff of 45. One effort that has garnered the center considerable positive attention in recent years was its formation in 1994 of the Economic Alliance of the San Fernando Valley, a group that brings together the Valley’s various chambers of commerce and economic development groups to develop common goals, raise funds and devise strategies for achieving those goals. The alliance has succeeded in raising $4.1 million in private funds, which are being spent on such initiatives as business retention and improving public schools in the area. The success of the alliance was cited as a primary factor in the decision by the city of L.A. to hire the VEDC to set up a similar alliance in Hollywood. “They were a natural partner for the project because they had done such an excellent job in setting up the Valley’s economic alliance,” said Rocky Delgadillo, deputy mayor of economic development for the city of Los Angeles. “They are excellent in helping a company figure out what loan programs it is eligible for and helping them apply.” Shortly after the Northridge quake, the federal Small Business Administration contracted with the VEDC to set up temporary centers where Valley businesses could apply for SBA disaster-relief loans. In both 1994 and 1995, it helped thousands of companies obtain about $100 million worth of loans, mostly in the form of SBA disaster-relief loans. “The VEDC acted like champs and with incredible efficiency in helping businesses get loans after the earthquake,” said SBA spokesman John Tumpak. “All the programs I have seen them run have had excellent results.” As the number of earthquake-related loans have subsided, so too have the center’s lending activities. It participated in the granting of about $60 million in loans last year, down from $86 million in 1996. The VEDC’s newest loan program which it is running in partnership with FAME Renaissance of South Central L.A. was announced in late April. Under the program, the VEDC and FAME will borrow up to $750,000 a year from the SBA and loan that money out to small businesses, with a cap of $25,000 per loan. The VEDC also has expanded its business training programs. Particularly popular is the agency’s Entrepreneur’s Series a 10-week workshop that helps business owners formulate expansion plans. Funded by the city of Los Angeles, the program requires an up-front payment of $50 per participant, which is refunded upon completion of the course. About 1,000 new jobs have been created because of the Entrepreneur’s Series, Rooney estimates. Another program offers small groups of business owners from similar-sized companies the opportunity to meet monthly and swap experiences and advice. About a dozen executives participate in each so-called “Breakthrough” seminar at a cost of $190 each. Pacoima-based KDL Precision Molding Corp. is one company that has grown as a direct result of the Entrepreneur’s Series and other VEDC programs, said Lee Brown, chief financial officer of the company, which manufactures rubber moldings for use in aerospace, medical and other products. “The VEDC has helped us maintain a 15 to 20 percent growth rate for the past three years,” said Brown. “We’ve practically doubled in that time, and a lot of it is because of the VEDC’s help.” He said the company has grown from 38 to 60 employees since it began participating in VEDC programs three years ago. To help more businesses like KDL Precision Molding, the VEDC has opened three new field offices for a total of eight to offer business owners access to computers and business software, reference books and other training materials, as well as local loan and consulting offices. Since the Los Angeles SBA district office’s territory extends through Ventura County and Santa Clarita, the SBA helped finance the establishment of field offices in those areas. Also, the city of Huntington Park offered funding for the VEDC to set up a field office there. Rooney said the VEDC may open more field offices as more funding becomes available, but the future offices will all be in the general Valley area. Like many of the VEDC’s other executives and consultants, Rooney who holds an MBA from USC and has been an entrepreneur himself knows he could earn far more in the private sector than he does at the VEDC. “The lure of working for a non-profit is, we get to sometimes ride in on a white horse and save the day,” said Rooney, adding that he may one day return to being an entrepreneur. “I like to see people’s businesses that are wiped out make the turnaround.”

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