The COVID-19 pandemic adversely affected a lot of businesses, but only a few took it as hard as HB Sound and Light, the Grand Forks event production group.
The company managed to weather the pandemic but only barely, after the virus shut down all kinds of large events and dramatically dropped demand for its sound and light production services. Tricia Lunski, a co-owner, said the company tried to pivot into supporting online events, but they offered dramatically less revenue.
The company had to rely on creditors in the past year. One of them was Grand Forks, which recently offered $150,000 in a low-interest loan program tailored for businesses impacted by COVID.
"It felt like our only option was bankruptcy. When (the pandemic) first started, we just got call after call after call of people canceling,” Lunski said. “We have a lot of equipment, we have a lot of staff. It just didn't look like there were a lot of options for a while.”
The loan has been an important part of the company’s recovery. But it comes from a city program that can be hard to explain — it’s an “arm” of Grand Forks, controlled by the city’s “alter ego.” Or, maybe, it’s operated by the “first cousin” to the City Council.
It’s Grand Forks’ Growth Fund, and it’s controlled by the city’s Jobs Development Authority. And for someone who isn’t constantly inside City Hall, it can be hard to keep track of exactly what it is, and exactly what it does. The metaphors don’t always help.
But the Growth Fund and the JDA have been all over the news lately, with leaders weighing loans to a local drone company, a data processing center, a beer hall and more. Top leaders got closely involved in the push for a new career and tech center, too, which is one of the community’s highest priorities this summer.
It seems that whenever the city is poised to make a big business move, the Growth Fund is involved. So consider this a primer, then, on one of the city’s most essential programs — and, in some ways, its most unique.
The Growth Fund is a stream of money, funded by a portion of the city’s sales tax, that’s aimed at local economic development. The Jobs Development Authority, or JDA, oversees it, with help from the “Growth Fund Committee,” a group of local leaders that review potential business first and pass on their findings to the JDA.
And that’s where some confusion starts: the JDA is a panel of city leaders consisting of the City Council and the mayor, making the distinction between the economic group and City Hall little more than a formality. The JDA really is just the City Council.
“While they’re separate entities, it’s pretty much indistinguishable in the public eye whether it’s the city or the JDA,” said Meredith Richards, a long-time staffer at City Hall who handles economic development issues.
The Growth Fund was founded in the late 1980s. Since then, it’s been one of the city’s most important tools in boosting local economic growth, with loans and grants helping stimulate the local economy.
By the mid-1990s, local leaders saw it as a huge success with funding, helping create more than 1,000 local jobs by 1996, according to Herald archives. At the time, one official involved with the fund said it was a big break from federal funding, which was tailored to meet federal goals, and not necessarily the goals of the business looking for help. And it was a big help fighting the brain drain that would send young job-seekers to the Twin Cities or the West Coast.
The Growth Fund was particularly helpful after the Flood of 1997, when it became a conduit for public money — especially federal money — to save and sustain the private sector. It’s since helped keep local businesses afloat after flood waters receded.
It has remained one of the city’s most important economic development tools, supported both by the sales tax that created it and its own revenues, like from its loans. An example: The city used the growth fund to purchase the downtown Herald building in 2019 for about $2.75 million, chasing plans to use it as a business incubator.
City documents show that it’s projected to maintain a cash balance of about $15 million for the next several years (though millions are often restricted for grant matches, loans and other uses).
Here’s another layer of confusion, though: the JDA and the growth fund shouldn’t be confused with the Grand Forks Region Economic Development Corporation. That’s a completely different entity, which gets funding from the city, the county and local businesses. It pursues a lot of the same goals, and it relies on public funding, but it’s an independent organization that exists outside of City Hall, aimed at recruiting and supporting business interest in the area.
“Fun fact — and maybe you've heard this,” said Keith Lund, the president and CEO of the local Economic Development Corporation. “But I've been told that Grand Forks was the first city in the United States to dedicate a portion of sales tax to economic development.”
Whether that’s true is hard to tell all these years later. But Lund, like everyone else in the growth fund’s orbit, is immensely proud of the work the group does. City Administrator Todd Feland is no exception.
“It’s really, how do we partner with the private sector to drive — no pun intended — the growth of the community?” Feland said.
This year, HB Sound and Light is again providing its services to a host of major community events, including two in the coming week: the four-day Greenway Takeover Festival and the Sept. 11 dedication of Veterans Memorial Park. The company is organizing the former and running production for the latter; both are expected to draw hundreds, probably thousands, of attendees.
And Lunski and the rest of the company say they’re keeping an eye on COVID — which, for now and probably a while longer, is still a threat to business.
"COVID's pretty scary right now. The numbers are going up, but because (the Greenway Takeover Festival) is an outdoor event, we've got that working on our side,” she said. “We read the CDC's guidelines every day.”