The Annapolis City Council approved funding Monday for an economic development pilot program that offers free consulting services to help five maritime businesses grow their sales and hire more workers.
The council unanimously approved $21,000 that will go toward a contract with the Colorado-based National Center for Economic Gardening to offer consulting, market research and other services.
“It’s a small bet to try to grow our local economy,” said Alderman Brooks Schandelmeier, a Ward 5 Democrat, who championed the program during his reelection campaign last year. “I said, ‘Hey we can really grow our small businesses organically to build a more diverse economy in Annapolis.'”
In October, Schandelmeier met with Chris Gibbons, the founder of the National Center for Economic Gardening, to discuss a pilot program that deploys a strategy called economic gardening in which money is funneled into existing local businesses from outside the area.
Gibbons, an economic development manager and urban planner, had implemented an economic gardening program in Littleton, Colorado in the late 1980s. Gibbons got the idea from Phil Burgess, an educator and businessman who runs a nonprofit organization in Annapolis and previously wrote a column for the Capital Gazette.
Burgess observed that cities like Annapolis should seek to grow local companies rather than recruit outside companies to come to town, a practice called economic hunting, Gibbons said.
“Instead of going out to Amazon or to Google … you go to 50 local entrepreneurs and ask, what do you need to create one job each?” Schandelmeier said. “So, you don’t get the big sexy ribbon-cutting, but you’ve created 50 jobs and that’s so much more sustainable because they’re part of the community.
“These are businesses that are in Annapolis and they’re not going to pull up and leave you high and dry because another city across the Potomac decided to offer even better incentives.”
Through the pilot program, the Annapolis Office of Economic Development will identify five businesses that have between 10 and 100 employees and $1 million to $50 million in sales. These businesses account for about 15% of all businesses but create about 40% of the jobs, Gibbons said.
“They punch way above their weight, typically,” Gibbons said. “That group of companies is really important in terms of the economic health of a community.”
Businesses in the maritime industry were chosen to piggyback off the reforms made to the city’s maritime zoning code last fall, Schandelmeier said.
The council passed sweeping changes to three of the four maritime zones to help keep property owners economically viable by allowing non-maritime uses such as restaurants, gyms and dry good stores. They were the first changes made to the city’s waterfront code since it was first implemented in the late 1980s.
“I am really chomping at the bit to expand it to other [industries], too, but we are just doing a pilot to see if it works,” he said. “Why not go on something that’s fresh in our minds and something we’re all passionate about in Annapolis?”
The National Center for Economic Gardening subscribes to more than 100 specialized commercial databases that enable market research that can help fine-tune a business’s strategy. It also offers geographic information systems that map and integrate data, search engine optimization, and other digital marketing tools to grow a company’s online footprint.
The company currently has contracts in Sacramento, California; Rochester, New York and in Texas and Virginia.
“I love what we do – finding interesting companies,” Gibbons said, “We’ll see what happens with this. Hopefully, we can make good things happen.”
While all of Schandelmeier’s colleagues supported the idea of the program – and all eventually voted in favor of the fund transfer – some raised concerns about how equitable the pilot would be in ensuring that businesses owned by people of color also benefited.
“I am generally in favor of this, but I’m hesitant voting for this unless we have some diversity within these businesses,” said Alderwoman Rhonda Pindell-Charles, a Ward 3 Democrat. “As your public safety chair, we’re looking at young people and families and steering them towards success versus violence; we must look at that component [of diversity].”
Alderwoman Sheila Finlayson, a Democrat from Ward 4, requested that at least one of the five companies selected have minority ownership.
Economic Development Manager Stephen Rice is compiling the list of businesses that would be eligible for the program and will take diversity and equity into consideration, City Manager David Jarrell said.
“Mr. Rice is very savvy on diversity and we will make every attempt to find a qualifying firm to be one of the five companies. He will be very aware of the diversity aspects of this,” Jarrell said.
