Though much still remains uncertain with the COVID-19 pandemic, one thing that is certain is that there isn’t a business or industry that hasn’t been affected in some way by it, whether good or bad. This includes the economic development industry. As with any industry, COVID-19 has posed a unique set of challenges for economic developers. After all, how can you grow the economy when business as usual becomes very unusual? 

That’s not to say that everything COVID-19 has been bad news for business. In fact, some businesses, such as PPE manufacturing and e-commerce, are booming in the wake of the pandemic. Still, despite these successes, many communities are struggling to retain businesses and jobs. That’s where economic developers come in.

From rallying together to help small businesses to adjusting how they conduct site visits, economic developers around the country have had to think on their feet to help maintain the elusive “business as usual” under this new normal. We asked economic development leaders what impact COVID-19 has had on the efforts to preserve and grow the economy in their communities. Here’s what they had to say.

Business Retention

Across the country, economic development corporations have been scrambling to minimize the effects of COVID-19 on their communities. One major component of this has been business retention or assisting existing businesses with adapting to the many changes in how they must do business in a post-COVID world. Christina Winn, executive director of the Prince William County Department of Economic Development in Virginia, says at the onset of the pandemic, the county sprung to action, creating an Economic Development Recovery Task Force. The task force was comprised of 42 local business leaders, and it created programs to help businesses navigate the pandemic through initiatives such as grants, microgrants and temporary activity permits for outdoor dining.

Liberal, Kansas, received $132,000 in grant funds to assist businesses with working capital and inventory in case of a shutdown, says Cindy Wallace of the city’s Economic Development Department. Rick Clifton, president and CEO of the Covington County EDC & Business Development Center in Alabama, states that his county quickly established an emergency fund for local businesses.

The Indiana Economic Development Center was able to help Hoosiers secure $3.7 million in funding through the U.S. Small Business Administration and also assist businesses in the state apply for Paycheck Protection Program (PPP) loans, according to Jim Staton, the EDC’s senior vice president and chief business development officer. (Indiana Governor Eric Holcomb recently named Staton to serve as interim secretary of Commerce.)

In total, more than 83,000 Indiana businesses were granted over $9.56 billion in PPP loans. Indiana even launched its own grant program, the Small Business Restart Grant, which has awarded nearly $34 million in funding to nearly 2,000 businesses in the state. Of that, $5 million went to minority and women-owned businesses.

Though these funds and grants have by and large helped businesses remain open and able to pay their workers during forced shutdowns and dwindling customers, they’re not the only way economic developers have rolled up their sleeves to help business owners. In other communities across America, a big focus of economic developers has been getting information to local businesses—especially in the early days of the pandemic. 

According to Lance Hedquist, city administrator of South Sioux City, Nebraska, education through the media and the governor’s office has been paramount to keeping local businesses informed. Chief Executive Officer Ronald E. Tolley, CEcD, of the Liberty County Development Authority in Hinesville, Georgia, cited similar measures, stating that maintaining constant contact with business leaders helped keep them abreast of new guidelines and restrictions while allowing his agency to keep close tabs on the local business climate. 

However, while Liberty County’s businesses were all deemed essential and allowed to stay open, that has not been a universal experience. In Laredo, Texas, for example, the first two months of the pandemic were the hardest for the border city, due to the shutdown of the automotive industry. As the No. 1 ranked land port in the U.S., Laredo rebounded quickly, but many of the small local businesses that rely on cross-border tourism continue to struggle. According to Gene Lindgren, president and CEO of the Laredo Economic Development Corporation, some businesses had no choice but to permanently close, while others have been surviving on business stimulus.

Other cities which rely heavily on tourism have faced their own unique challenges. In Tunica County, Mississippi, Charles Finkley, Jr., president and CEO of the Tunica County Chamber of Commerce and River Park Museum and Aquarium, says that the initial shutdown negatively affected the county across all sectors. Tunica County, which relies heavily on the gaming and tourism industries, acted swiftly and was one of the first counties to mandate mask-wearing. This helped the county’s key industries rebound quickly, and today they have been able to resume concerts and other entertainment that complements casinos and other tourism-adjacent businesses.

The mask mandate was just the beginning for Tunica County, which was already in the process of diversifying its economy at the onset of the pandemic. However, the shutdown really hit home how important this move could be to the county. According to Finkley, the effects of the pandemic only served to reinforce the county’s plans to diversify.

Incentives

While by and large, the pandemic has not affected the incentives offered to incoming businesses in many communities, some reported marginal increases in offerings, and more willingness on the part of local government to offer incentive packages.

Side Effects

As for how the pandemic has changed the field of economic development, those changes have yet to be fully realized, although many experts we spoke to agreed that virtual site visits and meetings are likely here to stay. Says Wallace of the Liberal, Kansas, Economic Development Department: “More and more site selectors are asking for virtual tours of sites and buildings, and economic developers should be ready to learn how to do these.”

Winn of Virginia’s Prince William County Department of Economic Development believes that real estate will be affected, as businesses transfer their workforce to work-from-home. Office spaces will become increasingly vacant, while workers may reevaluate their home location and move somewhere that isn’t necessarily convenient to commuting to an office. Shane Shepard, Economic Development director with the City of Lancaster, Texas, agrees, noting that the industrial and distribution sector of real estate in Lancaster is growing quickly, with a new Walmart distribution center slated for the city that will create 1,300 jobs, and DSV Logistics Regional Headquarters that will bring approximately 450 jobs.

Brad Reams, the director of the Great Plains Industrial Park in Parsons, Kansas, believes that the pandemic will cause “a restraint on international business for a couple of years” due to a heavily disrupted supply chain. He also believes small business growth will be stalled for at least five years, as many small businesses are bearing the brunt of the economic damage in their communities.

Business Status

As Reams alluded to, despite their best efforts, some businesses were still lost to the pandemic, and among those that remain, tough choices had to be made to stay in business. At Great Plains Industrial Park, as with many other places, some manufacturers were forced to lay off or furlough workers. Further complicating matters, travel restrictions have created challenges to attract new business. 

Over in Prince William County, some theaters, malls and retail establishments were forced to close, while Wallace says some oilfields in Liberal, Kansas, shut down due to low oil prices. Still, Liberal has at least one ethanol production facility, Arkalon Energy, that is currently expanding. Furthermore, some businesses in Liberal have shifted focus, including one business that has begun taking steps to manufacture grain neutral spirit, a form of alcohol that can be used in hand sanitizer.

In Elko, Nevada, Sheldon Mudd, executive director of the Northeastern Nevada Regional Development Authority, says that while some small businesses have shuttered, the local mining industry is booming due to extra work they’ve received due to supply chain issues from foreign entities. In fact, the mining industry in Northeastern Nevada has stepped up to the plate to help other businesses. Nevada Gold Mines and the Rural Nevada Development Corporation recently teamed up to create the I-8 Loan Fund, infusing it with $2.5 million to help local businesses by providing them with the opportunity to borrow up to $100,000 at 2 percent interest to assist them during the pandemic. Furthermore, Elko has seen businesses such as sporting goods and firearms retailers increase sales over the past year. 

The Impact of Vaccines

While most communities are not yet seeing any movement due to the widening availability of vaccines, many economic development professionals remain optimistic. 

Will Williams, president and CEO of the Economic Development Partnership in Aiken, South Carolina, says his biggest challenge right now is the workforce because his region has boasted some of the lowest unemployment rates in the state since July of 2020. 

Another community where a shortage of workforce is an issue is South Sioux City where, according to City Administrator Hedquist, hundreds of jobs are available despite the pandemic.

Echoes Ronald E. Tolley of Liberty County: “All of our companies are still in business, and some have increased employment.” These communities may be the exception, not the rule. In the end, only time will tell what vaccines and a hopefully flattening curve will do for economic development.

The Final Word

While each community’s experience with COVID-19 has been as diverse as the communities themselves, there has been an underlying theme of perseverance and grit among economic development professionals, striving to both retain existing businesses and attract new businesses during a major pandemic.

Winn, for her part, feels as though looking ahead, business retention will be a key factor in economic development, and economic developers must work to stay ahead of the trends to help local businesses pivot at a moment’s notice. 

Over in Covington County, Rick Clifton believes that the shutdown was a “total disconnect between government and business,” a disconnect that has caused damage that we may never recover from.

In Liberal, Wallace believes economic developers should brace for a new normal. “I keep hearing ‘when things get back to normal.’ Whatever you describe as normal may never be the same again.” 

Tunica County, Mississippi’s Finkley has a more optimistic perspective, believing businesses will not only rebound but do so better than before the pandemic, thanks to the Herculean effort of economic developers. “I would like to also commend my fellow economic developers and the hard work they are doing to help businesses in their area recover,” he says.

Ultimately, as these economic development professionals agree, the impact the pandemic has had on the industry will likely be felt for months or even years to come. Whether that impact continues to stumble or begins to soar remains to be seen but in the words of Brad Reams, no matter the community “this pandemic has challenged us.”