The bulk of the Anne Arundel Economic Development Corporation’s work involves lending money to local businesses and helping them flourish. But, when the pandemic hit and federal and state money started funneling into the county, the quasi-governmental organization had an added mission: distributing funding to businesses most in need.
AAEDC’s work delivering nearly $33 million in grants to businesses was critical in getting the county economy through the recession brought on by COVID-19 and keeping unemployment rates from skyrocketing, Anne Arundel County Executive Steuart Pittman said.
“In Anne Arundel County we are resilient,” Pittman said. “Our pandemic recovery has been faster than the state as a whole.”
Anne Arundel County saw a weekly wage increase of 13% from the third quarter of 2019 to the third quarter of 2021 compared to a 1% increase for Maryland as a whole, according to the AAEDC. Throughout the pandemic, the county also saw a drop in the percentage of new unemployment claims from 10.5% in March of 2020 to 7.1% in March of 2022.
But AAEDC staff say this transformation wasn’t easy. It required them to figure out how best to leverage the organization’s resources to keep struggling businesses alive and thriving.
Administrative Officer Jill Seamon, who has worked at the agency for about 30 years, said the pandemic was an unprecedented challenge.
“Every single team member in this office worked on [the grants],” Seamon said. “They worked late nights. They worked weekends.”
Economic development used to be a function of county government, along with workforce development and community development, but when Robert Neall became county executive, he spun off these three functions into nonprofits in the early 1990s, Seamon said.
“Before the pandemic, we gave out, oh here’s the number, zero dollars in grants,” said Ben Birge, CEO and president of the AAEDC. “It’s just not something economic development agencies did.”
But, after regular meetings between the organization and Pittman, it became clear businesses needed a lifeline.
“It was, I think for our team, a very tense time because we were there for businesses that wanted to email us and call us and just tell us what was happening with them — good and bad. A lot of it is emotional. You’re sitting there listening to the business that may be really challenged at that point and you’re trying to find a way to assist them,” said Rosa Cruz, vice president of Communications at AAEDC. “We’re on that emotional roller coaster with them.”
The AAEDC staff asked businesses what they needed. The answer was the same two things: rent and payroll, Birge said.
Being partly separated from county government was critical to quickly distributing that quantity of grant money, which mostly came from the CARES Act, the American Rescue Plan,and the state’s rainy day fund.
“The $33 million worth of grants could not have been done by a government agency as quickly and effectively,” Birge said. “There are too many regulatory hurdles.”
So, when the staff learned what kind of funding they were getting, they were able to devise a grant program and get it up and running right away. Their first program was for personal protective equipment in the spring of 2020.
“Remember the old days of plexiglass shields and finding hand sanitizer somewhere in some remote store and everyone storming in? It was a lot of those expenses because we heard that’s what businesses needed to feel safe coming in and employees would feel safe going to work,” Birge said. That grant resulted in more than $5 million being distributed to 803 county businesses.
After that initial grant, the focus shifted to specific industries that were suffering — child care, restaurants and hotels. It designed grant programs for each.
“We kept pumping them out. One after another,” Birge said.
Some staff members said creating the grant programs was some of the most rewarding work of their careers.
“[Small business owners] are invested in your community. They’re the ones who typically sponsor the youth athletics. They’re the ones that help out with community fundraisers,” Cruz said. “The small businesses are really the heartbeat of the community.”
Dr. Candace Pruett, a business consultant with the Small Business Development Center, who works mostly with Anne Arundel County business owners, said some of her clients were nervous about participating in loan programs like the Paycheck Protection Program because the future of the pandemic was so uncertain. But they did feel comfortable with grants.
“It was a lot of unknowns. They didn’t know what their businesses would look like post-COVID, whether they would still be open,” Pruett said. “A lot of business owners know what grant [funding] means and that encouraged them to apply.”
Pruett estimates about 25% of her clients only applied for the grants.
“Those grants helped them with marketing and helped them stay in good standing with their landlords. It helped them with some working capital to get back on their feet again,” Pruett said.
Just when the economy started recovering from the pandemic, another set of disasters hit — a tornado coming out of Tropical Depression Ida in early September and flooding in Annapolis and around the county soon after. By that time, the AAEDC staff had already pumped out so many grants that they had their system perfected and were able to process more grants for businesses affected by the storm damage. Staff say they think they’re done with giving out grants for now.
Looking ahead, the AAEDC is continuing its loan programs and training classes for business owners. It also wants to see how it can best meet the needs of the county and state’s agriculture community.
Birge said he was inspired to take another look at ways to help the farmers after a failed attempt between the AAEDC and four other counties to develop a meat processing plant and other facilities for farmers in Southern Maryland. He said that, though the plan didn’t work out, he thought the ideas were “too good to just let go of.”
“There is a huge demand for meat processing in this region. The closest USDA facility is in Virginia and farmers have to book months and months and months in advance to get a spot there,” Birge said. “That was going to be the main crux of it, that and some commercial kitchen opportunities so that other food products could be processed and get to market easier.”
Birge said the AAEDC will be looking into resurrecting that project in some way and seeing how else the organization can meet the needs of the agriculture community.
“It’s going to be a big picture look at all this,” Birge said.
