Creating jobs and increasing business opportunities in southeast Colorado Springs is one goal of a bill that is also designed to reduce crime in the area of the city that seems left behind in the current economic renaissance.

House Bill 17-1326, which goes into effect Aug. 9, will potentially offer $5.8 million over a three- year period for small business loans and grants in southeast Colorado Springs and north Aurora near Denver. Money will be divided equally between the two economically challenged areas.

“The loans will be for someone who wants to start a new business or has an existing business they want to grow,” said state Sen. Bob Gardner, who represents District 12, which includes southeast Colorado Springs. “A grant would be for a community investment, a nonprofit or government entity that has a vision for creating jobs or improving conditions in the southeast corridor to help reduce crime.”

The bill, named the “Justice Reinvestment Crime Prevention Initiative,” is the brainchild of Christie Donner, who is founder and executive director of the Colorado Criminal Justice Reform Coalition.

“I think this model can be incredibly successful,” Donner said. “I’ve talked to business leaders and politicians, and people are jazzed.”

Prime sponsors in the Senate were Gardner and Dan Kagan of Aurora while Rep. Pete Lee of Colorado Springs sponsored it in the House. Other legislative sponsors included Sen. Mike Merrifield and Rep. Tony Exum, both of Colorado Springs.

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The bill allocates $4 million, with another $1.8 million to be added if a review in January determines  the program is beneficial. The Colorado Department of Local Affairs will oversee the small business loan program and the crime prevention grant program.

Funding is scheduled for three years, with a sunset review by the legislature in 2020.

The money was shifted from the Department of Corrections, as the DOC’s budget was reduced thanks to a series of parole reforms, which included decreasing prison time for technical parole violators from up to 180 days to between 30 and 90 days.

Donner said it costs about $35,000 a year to incarcerate one prisoner, roughly $96 a day.

“Every bill has a fiscal note, and this one said it will affect approximately 1,200 people a year — all of them from non-violent crimes,” Donner said.

The idea, said both Gardner and Donner, is that by providing more jobs and economic opportunity, there will be a reduction in crime.

“We’re attacking the problem at the root by going into that community and trying to create thriving small businesses and employment opportunities,” Gardner said. “We’ll be interested to see if we can make a difference; we believe we can. We know that thriving communities help hold crime at bay.”

Taj Stokes, co-founder and executive director of Thrive! Colorado Springs, which promotes and trains entrepreneurs to benefit the southeast sector, called the bill “brilliant and groundbreaking.”

“Economic development is a crucial component in reducing recidivism,” said Stokes, who rose from poverty and made positive choices with help from mentors. “I do believe the bill will work.”

Small business, big dream

Donner asked Stokes to testify before the state House and Senate before legislators voted on the bill. Stokes told them stories that brought a human element to economics and talked about how to change neighborhoods for the better.

One of those success stories involves Melissa Chapman, the inaugural winner of the Southeast Business Plan Competition, a project sponsored by the Colorado Springs Business Journal, the Colorado Springs Independent and Thrive! Colorado Springs.

She won a $50,000 prize package that enabled her to open Melissa’s Hair Therapy at 1726 S. Academy Blvd. earlier this year.

The competition’s intent was to provide an entrepreneur with resources to start a business, with the stipulation that it be located in the southeast sector of the city.

Chapman, a hairdresser for 22 years, said her business is doing well and she’s learning to deal with added responsibility.

“I’m steering the ship now,” she said, “and I’m anxious to try new ideas.”

She recently hired a new employee, and has another ready to start. She said the southeast area is ripe for new businesses.

“We’ve got all this new buildout down here and on the other side of Union [Boulevard],” she said. “We’ve got old meeting new. Little shopping centers like this are going to become a hub for the neighborhoods. It feels like it’s primed for growth — maybe not new, but revitalized.”

The southeast sector — especially along South Academy Boulevard — needs a facelift. According to data compiled for the city of Colorado Springs by Turner Commercial Research, vacancy rates in 2016 for shopping center and office space in the Academy corridor (16 percent) were more than twice the rates for the greater metro area (7.6 percent).

According to the city’s South Academy Economic Opportunity Zone Action Plan, crime rates (measured on a per capita basis) were 30 to 50 percent higher than the city average.

Stokes, a self-professed “straight-up idealist” who lives in the southeast part of the Springs, thinks the area can improve.

“I think this bill will help business tremendously,” Stokes said. “It’s a good connection point for CDFIs [Community Development Financial Institutions] to work with existing businesses, and that could make a huge impact.”

Of the initial $2 million targeted by HB-1326 for the southeast, $1.5 million is set aside for grants and $500,000 for small business loans.

The loans, maxed at $50,000 with a five-year payback, will offer fixed and reasonable interest rates and no penalty for early payback.

The bill asks for input from the private sector and wants communities to identify priorities and solutions.

By Sept. 10, DOLA [Department of Local Affairs] will hire a CDFI to disperse loans and a community foundation to manage grant proposals. A local planning team will determine geographical boundaries affected by the bill.

Nonprofits, local governments and schools are eligible to apply for grant funds.

“There is a lot of excitement around the country and people are watching to see how this works,” Donner said.

“The business development side of this is of particular interest to a lot of folks.”