City offers grant to small startup company

Residents attended City Council meeting on Tuesday to register their opinions of the economic development grant for SheFly Apparel.

In a 3-2 vote, Gunnison City Council on Tuesday authorized the mayor to sign a contract for a $75,000 grant to the company SheFly Apparel. In return for funding, the small startup will move their principal headquarters to Gunnison with the intent of creating 12 primary jobs with a minimum wage of $50,000 per year by 2025.

In accordance with the contract, SheFly must keep its headquarters in Gunnison until the fifth anniversary of their operative date. If the company maintains this provision it will terminate the grant agreement, no longer requiring SheFly to repay the $75,000 to the city. 

SheFly recently completed ICELab’s Moosejaw Outdoor Accelerator, a competitive national program designed to grow and connect entrepreneurs with the outdoor recreation industry.   

The city’s $75,000 will also be matched by the state through the Colorado Office of Economic Development and International Trade grant process.

The grant includes penalties if the company fails to create the number of jobs outlined or moves its primary office out of Gunnison. The contract also requests that SheFly make an effort to pay back the grant after it stabilizes, to support other startups, as well as offering internships to students at Western Colorado University. 

ICELab Manager Tanner Whiteford backed SheFly by emphasizing the competitive vetting process the company had gone through as well as the $40,000 the city provides to the ICELab each year. 

“As the ICELab, this is the task that we've been dealt with, which is to create more high paying jobs in Gunnison County,” Whiteford said. 

He reminded council of the first line of the city’s vision statement — “increasing prosperity through an abundance of entrepreneurs creating and bringing jobs and investments into our community.”

“And I believe that that in itself states exactly what we're trying to do here today,”  Whiteford said. “It's the mission of the ICELab, but it's also one of your missions as well. And I think it's important to note that we're setting a tone right now and a lot of people are watching.” 

Eyes soon turned to the local business owners who filled the room for a chance to share their opinions before a final decision was made by council.

Andris Zobs came forward, one of the principal owners at ID Sculpture, a local manufacturing business. He said since 2005 the business has grown from two employees to 32, with an annual payroll of around $1.2 million. 

“All of our businesses are being courted to relocate, the folks from Montrose came over and tried and offered us very nice incentives,” Zobs said. “We said this is home, Gunnison Valley is home. It feels like a lot of businesses that were homegrown, we haven't been to pitch contests, we've done it all right here.”

All of his employees live in Gunnison, with 75% making more than $50,000 a year. Sobs said he agreed with the city’s mission to diversify the economy and build commerce but called attention to the lack of fairness. 

“We know what it takes to get those 12 jobs,” Zobs said. “If there is a process to allocate resources I think all the local businesses should have an opportunity to compete.”  

Other small business owners offered their support. Veronica Wilde, the founder of GunniBags, encouraged the community to welcome SheFly like she was. 

“You asked for economic development, it was made an initiative and this is exactly what it looks like,” she said. “I'm very happy to call Gunnison my home and I'm happy for it to be the home of GunniBags and I would love that same opportunity for the SheFly ladies.”

City leaders shared their final views on the grant as council prepared to vote. Council Member Mallory Logan expressed worry about rushing to develop a contract to meet SheFly’s deadlines for the state grant, despite the need for economic development in the city. 

“I don't believe that is a cause to quickly invent a process whereby the city is using taxpayer money to invest in a private company,” Logan said. “I don't think that that is being good stewards of taxpayer money and this hasn't felt like an equitable opportunity.” 

Council member Boe Freeburn said he worried about the timing and the message the grant would send to voters as the city prepares to enter fall elections with a major initiative on the ballot to fund a new fire station and street repairs. 

“We need their votes, and there's a lot of people that are on the fence about this,” Freeburn said. “I think I know what my priorities are. I want to take care of our people through infrastructure and housing.”

Council Members Jim Miles and Diego Plata stated their support for SheFly in an effort to create jobs with living wages and to strengthen economic diversity in Gunnison as other mountain town economies like Montrose and Delta have begun to pull ahead. Mayor Jim Gelwicks cast the deciding vote in favor of signing the ShyFly contract. 

City Manager Russ Forrest shared ideas about how future requests similar to SheFly should be handled by council. Forrest outlined three alternatives for supporting the growth of primary jobs with varied amounts of city involvement in the vetting and decision making process. 

Council showed interest in option three which would pair an accelerator program with an angel investment group to collect funding for entrepreneurs. The basic purpose is to create a fair and equitable way to evaluate and vet entrepreneurial ideas and a way to connect them to investment, Forrest said. 

“The policy question is — should there be public dollars in play or not?” said Forrest. 

(Bella Biondini can be contacted at 970.641.1414 or bella@gunnisontimes.com)