The Kansas Department of Commerce (Department) is the cabinet agency concerned with economic development. Under the Office of the Secretary of Commerce, there are seven program groups: Business Incentives and Services, Community Development Assistance, Exporting and International Business, Commerce University Partnerships, Minority and Women Business and Development, Investor Programs and Services, and Workforce Services. The Athletic Commission and the Creative Arts Industries Commission also are organized within the Department.
During fiscal year (FY) 2020 and FY 2021, the Department has been tasked with assisting Kansas businesses and individuals in recovering from the economic stress of the COVID-19 pandemic. Following is a list of recovery programs that are managed by the Department.
Community Development Block Grant
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated additional funding to the Community Development Block Grant (CDBG)-CV program in Kansas in three rounds, totaling $22.1 million. The purpose of the funds were to provide working capital for businesses and meal program support for communities.
To be eligible to receive a CDBG-CV Economic Development grant, the recipient business must be a for-profit business and retain jobs for low-to-moderate income people.
Fifty-one percent or more of the full-time equivalent (FTE) jobs retained must be for persons from low-to-moderate income households as defined by the U.S. Department of Housing and Urban Development (HUD).
- CDBG-CV Economic Development grants can be used to pay for the following expenses:
- Working capital such as wages, utilities, and rent; and
- The purchase of 60 days worth of inventory needed to reopen (60 days beginning on the day the business could reopen).
Funding Limits and Conditions
CDBG-CV Economic Development grants are awarded based on the following conditions:
- Businesses with five or fewer employees (including the owner) are eligible to receive up to $25,000 per FTE job in CDBG-CV Economic Development grant funding (with a maximum of $30,000 per company);
- Businesses with between 6 and 50 employees are eligible to receive up to $35,000 for each FTE job in CDBG-CV Economic Development grant funding (with a maximum of $50,000 per company);
- The maximum amount a community may apply for is $300,000; and
- To be eligible to receive a CDBG-CV Meal Program grant, the applicant must be able to demonstrate at least 51 percent of the community meets the low -to-moderate income household criteria as defined by HUD. CDBG-CV Meal Program grant funds can be directed toward organizations, such as Meals on Wheels, for the replenishment of local food banks or to support organizations that provide meal programs for children impacted by the loss of school meal programs. The maximum amount a community may request was $100,000.
Kansas Creative Arts Industries Commission Grants
Kansas received $440,600 through CARES Act arts funding. Applicants were asked to provide an annual operating budget and a one-month breakdown. Awards were then determined based on three months of operational expenses. Funds could be spent on recurring operational expenses like payroll and facility costs. The program was coordinated with other concurrent CARES Act programs to maximize the number of cultural organizations that would receive aid. CARES Act funds were supplemented with regular partnership funds to include more organizations due to the number of events and projects canceled in the last quarter of FY 2020. Individual awards were capped at $20,000.
Connectivity Emergency Response Grants
The Connectivity Emergency Response Grant (CERG) program was created to address the increased need for Internet connectivity in Kansas in response to the COVID-19 pandemic. The goal of the program is to improve connectivity to underserved and unserved areas to address needs related to the pandemic; $50.0 million in federal CARES Act funds was allocated for the program.
A 20.0-percent match is required for total project cost, and the maximum grant amount is $10.0 million. Minimally adequate internet connectivity was defined as residential speeds greater than or equal to 25 megabits per second (download) and 3 megabits per second (upload). The project must be completed by December 30, 2020, to comply with the law.
Eighty-four applications for projects were received, and 67 were approved. The distribution of funds by region is:
- Northeast Kansas – $9.7 million;
- Kansas City region – $8.3 million;
- Southeast Kansas – $5.2 million;
- South central Kansas – $14.1 million;
- North central Kansas – $590,515;
- Northwest Kansas – $402,811; and
- Southwest Kansas – $10.9 million.
Economic Development Grants
Business Retention and Expansion
In addition, $61.5 million was appropriated from federal CARES Act funds for business retention and expansion; including:
- Small business grants, in which 1,982 grants were approved for an average award of $18,954—19.0 percent was awarded to agriculture, automotive, oil and gas, and real estate businesses; 18.0 percent was awarded to the restaurant and hospitality industry; 15.0 percent was for business and professional services businesses; 12.0 percent was for personal services businesses; and 36.0 percent for other services;
- Personal protective equipment procurement and manufacturing;
- Domestic supply chain support;
- The COVID-19 Bioscience Product Development Accelerator Grant; and
- The University SARS-CoV-2/COVID Research and Diagnostic Capacity Support Grant.
Securing Local Food Systems
Also from federal CARES Act funding, $9.0 million was appropriated to secure local food systems for meat processing, food banks, and producers. While the program was housed in the Department, the lead technical review was handled by the Department of Agriculture.
Workforce Training and Retraining
Additionally, $8.1 million was appropriated from federal CARES Act funding for workforce training, including:
- Information Technology (IT) Cybersecurity & IT Project Management Certification Training;
- Higher Education Advanced Manufacturing and IT Equipment; and
- The Kansas Cybersecurity Consortium.
Hospitality Industry Relief Emergency (HIRE) Fund
From the Job Creation Program Fund, $5.0 million was appropriated to provide no-interest bridge loans of up to $20,000 to sustain operations in the Kansas hospitality industry; 344 Kansas hospitality businesses received HIRE Fund loans. In the Kansas City metro area, $2.0 million was distributed amongst 136 businesses; $1.0 million was distributed to 68 companies in Sedgwick County; and $2.0 million was distributed to 140 businesses across the rest of the state. The Job Creation Program Fund was later backfilled with $5.0 million from the Coronavirus Relief Fund by the Kansas State Finance Council.
Dylan Dear, Managing Fiscal Analyst
Edward Penner, Senior Economist