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Partnership update: Greater Huron Development Corporation - South Dakota Rural Enterprise, Inc. 2007 Winter Report

South Dakota Rural Enterprise talked with Jim Borszich, executive director of the Greater Huron Development Corporation, about the organization’s economic development work.

Rural Enterprise: How have you successfully adapted your economic and community development strategies to the cultural diversity of the Huron area?

Jim Borszich of the Greater Huron Development CorporationJim Borszich: Since GHDC’s emergence into the Revolving Loan Fund business, we have prided ourselves on being Equal Opportunity lenders. If a person presents us a business model that is viable, then that plan will be forwarded to our Community Development Fund Management Board for consideration. If an applicant is successful in achieving a loan with us, it’s not because of his or her gender, ethnicity or nationality, it is because they’ve clearly taken the steps necessary to present a strong case for making a loan to them.

For decades, Huron has been home to one of the more diversified populations in the state. Today, Huron’s population is just as diverse, and just as productive as it has ever been. Race, religion, gender or nationality have never proven to be insurmountable challenges for this community. As we move forward into our future, we hope to rely on all of our people to help the Huron area become an even stronger economic force in our state.

Why is access to capital important to the Greater Huron Development Corporation?

GHDC is not like a traditional lending institution that loans money back to its customers from what seems like an unlimited source of money. We are constantly seeking out new ways to provide capital for economic development projects. We have to be very creative when it comes to raising funds for our projects. Creating new jobs is an expensive process and without innovative funding mechanisms we can easily find ourselves in a non-competitive environment.

Why did you add the South Dakota Community Capital Fund to your economic development toolbox?

The ability to leverage an investment at a 10 to 1 ratio is a very rare and unique opportunity. When the chance was offered for us to invest dollars in a new capital fund that in turn gave us access to a national secondary-market that was capable of providing millions of dollars for project spending, it was very clear to us what needed to be done. Investing in the South Dakota Community Capital Fund made all the sense in the world. Banks utilize a secondary market to sell off loans and revitalize funds many times during the course of their history. However, organizations such as GHDC rarely have the occasion to recapitalize their loan funds other than through the repayment of their loans or by seeking out new sources. The Community Capital Fund is a hybrid that offers economic development organizations access to a pool of funds where every qualified loan application could potentially be for up to a million dollars. Those options just aren’t available anywhere else in the state other than this capital fund. GHDC’s risk is limited and the underwriting is done by the Fund Manager; you can’t get much easier than that.

In what ways have you found South Dakota Rural Enterprise to be an effective partner in your community efforts?

Working with SD Rural Enterprise and our other partners such as the Governor’s Office of Economic Development, and other lenders allowed us to be competitive when we were bidding for the Dakota Provisions Turkey plant that was recently built here in Huron. This project was in excess of $50 million and will create nearly 1,000 new jobs when fully operational. Estimated payroll alone will be around $30 million per year.

When we designed the incentive plan to bid for the company, South Dakota Rural Enterprise was called upon to provide a significant portion of that financial package. Today, not only is Huron the home of the nation’s newest turkey processing plant, but subsequently other new businesses have opened in Huron. As a result, in 2006, Huron’s taxable sales jumped by 27%. This was the largest increase over the prior year for any of the ten largest cities in the state. These types of projects position a community for decades of growth, and that is what economic development is really all about.

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