Among its incubation tasks, the now defunct Maricopa Center for Entrepreneurship (MCE) distributed business loans funded by the City of Maricopa with a U.S. Department of Agriculture Rural Business Development grant.
The loans totaled $116,000 at a 5 percent interest rate. Years later, more than $98,000 remains to be paid on the loans.
Nine fledgling businesses benefited from loan programs since 2015. Loans ranged from $4,500 to $25,000. The last loan was dispensed Dec. 16, 2016, to River Jumpers LLC.
The MCE was launched in 2013 as an incubator for start-up businesses and a resource for existing companies. It was seeded by a USDA grant of $50,000. Another $120,000 of city-maintained funds was spent that year on a management agreement with Northern Arizona Center for Entrepreneurship and Technology (NACET).
“It may have been a little bit before it’s time,” Mayor Christian Price said.
City Council fenced with three consecutive executive directors over how MCE reported its progress, its transparency and its accountability, including for business loans.
One qualifier for USDA loan candidates was that they had been turned down by a bank or other lending source. Low-interest business loans were an important part of MCE’s offerings since 2014.
Two businesses paid off their loans. Some businesses that obtained loans no longer exist and the loans remain outstanding. Others say they are pushing forward and working at paying back the loans.
Price said those results are the nature of incubating businesses just trying to get off the ground.
“As for repayment, that’s something we’re handling internally now,” said Cassandra Brown, the city’s grants coordinator.
The federally funded loans are in the City’s name, meant for MCE programs. Now the City and not MCE has the full task of tracking the loans. “We’re supporting these new businesses, and we’re actively working with these partners,” Brown said.
WYS Education and True Reflections Boutique had loans of $5,000 and $6,000 respectively, and both wiped them out in less than two years.
Several of the loan recipients no longer have functioning webpages and have not posted in social media in more than a year. In default or merely delinquent, four owe more than their original loan due to interest and fees.
HobbyScopes LLC was the first business to land an MCE loan, which was from a revolving loan fund (RLF) in 2015. As an RLF loan was paid off, the money went back into the program to fund more small-business loans. HobbyScopes’ loan was for $6,000, but the company struggled and still has a balance to be paid.
The next two recipients, Precious Hands Healthcare ($25,000) and ProX Detailing ($7,500), have had varying success paying down their loans.
In 2016, though still questioning MCE’s accountability for the loans, City Council unanimously approved up to $200,000 for MCE expenditures. Shortly after, NACET fired the executive director, Dan Beach. Last fall, the city council effectively fired NACET, and MCE closed in spring.
Price said that allowed the city to take a step back and find a different use for money it had dedicated to MCE.
“We’ve taken those funds and beefed up our Economic Development Department and reallocated it to other departments,” the mayor said.
Price said an incubator is still a good idea for Maricopa but will probably change the approach for “growing an economic garden.”
“We’ll probably focus more on partnerships and stair-step it up,” he said. “I envision we’ll have one in the future. I just don’t know when that future will be.”
Multiple attempts to reach loan recipients for comment were unsuccessful.
Research-quality microscopes for hobbyists and children
Advertising, apps and analytics
Men’s and women’s clothing and accessories
Precious Hands Healthcare LLC
Home healthcare services
Property cleanup, preservation and house watch
ProX Detailing & Auto Glass
Auto detailing, washing, tinting, windshield repairs and replacement
River Jumpers LLC
Inflatable bouncers, waterslides, rock walls and other party accessories
True Reflections Boutique
Shop-from-home women’s clothing and accessories
WYS Education LLC
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This story appears in the August issue of InMaricopa.