October 20, 2005

S. J. City Council gives go-ahead for new Economic Development Catalyst Fund

On Oct. 18, the San Jose City Council announced that the San Jose City Council has approved a Request for Proposals (RFP) to move ahead in the selection of a Fund Manager to establish and manage an Economic Development Catalyst Fund designed to assist in the support and growth of local small businesses.

District 10 City Councilmember Pyle stated, “Small businesses are a critical part of our local economy and contribute a great deal to the continued prosperity and growth within District 10 and the city. I’m pleased to see that our city is taking the necessary steps to guarantee that these small businesses continue to thrive and succeed within our community.”

With every member of the city council voting to pursue the selection of a Fund Manager, this will benefit new small businesses and existing companies through the objective of supporting job creation and retention, generating increased sales tax revenue, as well as garnering increases in development and construction fee revenue.

Since 1994, the city of San Jose has operated a small business loan program called the Development Enhancement Special Fund. In an effort to align programs supporting local small businesses and to create a resource for the strategic investment in support of the city’s current Economic Development Strategy, the Office of Economic Development is evaluating the option of liquidating the existing portfolio of active and performing DESF loans in order to capitalize a new, expanded capital fund to enhance the economic impact for the city and small business community.

With today’s vote, the Office of Economic Development has been given approval to seek out a Fund Manager to establish and manage an Economic Catalyst Fund. This fund will provide financial services, technical assistance, and information targeted to job-generating companies with high growth potential, including but not limited to tech-based ventures located in the city of San Jose and other areas or Santa Clara County.

In order to support this endeavor, the city of San Jose will provide up to $3 million to assist in capitalizing the Fund. The city council felt that the city’s capital contribution will produce a number of beneficial citywide results, including; (1) the growth of the city’s tax base, (2) creation of new jobs for local residents, (3) facilitation and integration of other programs and services targeted to the small business community, and (4) creation of an opportunity to participate in the financial success of companies receiving investment from the Fund.

For more information about this, please call (408) 535-4910 or visit the City of San Jose’s website at www.sanjoseca.gov/.