San José Development Corporation:
Gear for promoting economic development in the community
October 4, 1989
Story by Yolanda Reynolds
Community development is the purpose of the San Jose Development Corporation. Its primary focus is to promote and improve socioeconomic conditions for Santa Clara County’s minorities and low income residents by developing employment and business opportunities here.
The San Jose Development Corporation is the only Hispanic economic development organization north of Los Angeles.
Two examples were women owned and operated small restaurants. One of the owners started a business, was successful and recently sold out at a handsome profit. Some entrepreneurs concentrate on start-ups and sell when the business shows a profit, and then move on to the next star-up. The other start-up recently expanded. Both companies began as taquerías. Tony Chacon stated that a success comes to the small business operator because of… hard work. In addition the small business operator must clearly set goals, develop realistic standards, carefully assess the market, make quick and timely decisions and seize opportunities as they arise.
The San Jose Development Corporation (SJDC) has been in existence since 1981. In recent years its loan portfolio has greatly increased.
One of the first programs was a Small Business Assistance Program which began in 1985. This program, now called the Small Business Counseling and Consulting Service offers help and advice to anyone seriously thinking of starting a business. If the Corporation staff finds the business proposal is viable, help is given in preparing a loan application including the preparation of a financial statement. The Corporation provides help; preparing a resume, developing cash flow and projection statements, reviewing a lease, identifying sources of funding. Finally assistance is offered in dealing with financial institutions.
In 1985, the SJDC was designated the City of San Jose’s official overall Economic Development planning Committee (EDPC). The purpose of these committee is to focus on small businesses, an to that end, the SJDC has worked in concert with the San Jose Redevelopment Agency to gather data on the status and needs of downtown businesses.
As a consequence of the data gathered, the City of San Jose has funded the Downtown Business Association (a mutual support organization), a Small Business Retention Program and a Small Business Marketing Program.
To help stimulate and support small business, the Corporation also has an Entrepreneurship Center. Through the Center a person interested in starting its own business can take a twelve week intensive classroom training program on strategies for marketing whatever it is they wish to sell. It could be either services or goods. The instructional curriculum includes the major aspects of managing a business operation, by learning how to develop a business plan, secure financing, how to maintain proper records, and how to manage and work with personnel.
The Center also has a number of bankers, lawyers, and successful business persons available for support and a assistance. Classmates, and former classmates provide mutual support.
The Corporation currently has a staff of six full time employees. The President is Richard Rios, who before returning to the Bay Area held positions in national and state government. In 1980-81 he was Director of the U.S. Community Services Administration under President Carter and from 1981-83 was Deputy Secretary of the State of California, Health and Welfare Agency. He has bee President of the San Jose Development Corporation since 1983.
Tony Chacon is Administrator of CDBG funds. Tony has extensive experience in economic development. His work in community economic development has taken him throughout the United States; from Northern New Mexico and the Southwest to Florida. In Florida, he assisted in establishing a Limited Partnership Venture Capitalist Fund a source for financial loans, for aspiring Black entrepreneurs. The Venture Funds helped people establish small businesses that were needed in that community such as; Laundromats, a flower shop and other small businesses. These beginning business people were unable to borrow money from any of the established loan institutions such as banks or credit unions in the community.
At the Corporation, Tony Chacon along with Gina Gonzales serve as counselors to beginning business persons. Most of the staff is bilingual.
An important part of the Corporation’s program is to provide access to loan funds. There is the Revolving Loan Fund which is primarily targeted to a business person who is located within, or plans to locate within what is described as a Title IX area. The Title IX area in San Jose includes properties fronting East Santa Clara Street and Alum Rock Avenue between Fourth Street and King Road and Interstate (680) or more precisely encompassing 15 census tracks within this area. Loan funds are not only provided for start-up companies but monies are also available for companies that wish to expand.
The Corporation is also intermediary for the City of San Jose Enterprise Zone Loan Program (EXLP). This program was formed as the result of a estate wide program developed to stimulate business in economically depressed areas. The city of San Jose then established a ten square mile “Enterprise Zone”.
Through the Enterprise Zone Loan Program, the SJDC has $50,000.000,00 available for loans.
One of the major goals of the SJDC is to assist small businesses located within, or planning to locate within, these areas. The Corporation provides support, help or both in obtaining loans either through local banks, the revolving Loan Fund or the Small Business Administration (SBA) Loan Program.
En Enterprise Loan Funds do have restrictions. To qualify for a loan a business must be located within the Enterprise Zone, be a t least three years old and have been profitable for the previous two years. If the business does not qualify for E7LP funds the Corporation can turn to the Revolving Loan Funds (RFL) and SBA for funds because these two programs do consider loans to start up a business.
The San Jose Development Corporation is currently developing a number of of programs to further assist and stimulate economic development within the target communities. In various stages of development are the Women’s Development Center, the Mexican Heritage Gardens, Plaza Center, a Small Incubator Program and Affordable Housing Program.
Throughout the year, the Corporation will be scheduling a series of topic specific mini seminars related to small business star-ups.
The Corporation has an active Board of Directors that meets monthly. The Corporation has received grants to cover administrative costs from: the Ford Foundation and the William and Flora Hewlett Foundation, LISC and the City of San Jose Community Development Block Grant (CDBG).
The Corporation is on the second floor of the Mexican Consulate building, located at 380 N. First Street.