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Recovery from the June 2008 flood helped launch one local company toward its new market, an advantage now available to businesses in six counties.
“These kinds of innovation-fueled companies are what's going to produce jobs for our people,” Assistant U.S. Secretary of Commerce John Fernandez said this morning at the downtown Cedar Rapids headquarters of Ovation Networks.
Fernandez and Acting Secretary of Commerce Rebecca Blank joined representatives from local government, business, and foundations to celebrate a new $2.9 million revolving loan fund administered by the East Central Iowa Council of Governments (ECICOG). The new fund is built off a $1.6 million pool established in the wake of the flood to assist business recovery.
“The ECICOG loan was very instrumental,” said Larry Selensky, Ovation's CEO and president.
The fund's expansion came with an offer this summer from the Department of Commerce's Economic Development Administration to ECICOG: Come up with a $195,000 local match, and EDA will provide $2.9 million, boosting ECICOG's loan fund to nearly $5 million. ECICOG Executive Director Douglas Elliott had two weeks to raise the money.
“So many people rose to the challenge,” said Elliott. “I think that's a testimony to us as a region.”
Linn County supervisors approved $20,000 from the county's economic development fund. There were similar grants from Washington, Benton, Jones, and Johnson counties, the Greater Cedar Rapids Area Chamber of Commerce, the Greater Cedar Rapids Community Foundation, and other agencies.
ECICOG will loan the money at 4 percent interest for terms of 5 to 10 years. The agency's guidelines call for private lenders to provide two-thirds of the financing for any particular project, said Tracy DeKoter, ECICOG's economic development coordinator.
Elliott said loans from the initial fund helped save or create 600 jobs since the flood.
Ovation received a $150,000 loan to repair and eventually expand its offices on the second floor of the Armstrong Centre building at 222 Third Ave. SE. The company, which installs and administers wi-fi networks for 1,400 hotels and other facilities across the country, operated out of Selensky's home immediately after the flood.
Selensky said the ECICOG-backed work will provide workspace for new employees supporting Ovation's new EcoManage energy-management system. He said he expects to add 60 workers this year to Ovation's current 40, and the payroll should hit 200 by the end of 2012.
“We knew we were going to be hiring more people,” Selensky said. “But where was I going to be putting them?”
EcoManage will use hotels' current wireless networks to monitor and manage heating and cooling in individual rooms, saving at least 45 percent in energy costs, Selensky said. A device retrofitted to existing climate-control units will monitor carbon dioxide levels to determine if a room is occupied, then adjust heating or cooling to suit.
EcoManage is scheduled to hit the market in October.