BURLINGTON — Schurz Communications announced Tuesday that the company will be investing $3 million over the next 10 years to bolster entrepreneurs in Burlington, fulfilling its obligation for community investment negotiated in the sale of Burlington Telecom.
Schurz’s purchase of BT from the city was finalized earlier this year, and Mike Loucy, Burlington Telecom’s general manager and president, joined Burlington Mayor Miro Weinberger to announce the creation of the two new funds Tuesday.
The Burlington Telecom Innovation Fund will make direct business investments of up to $250,000 a year for the next 10 years into Burlington companies while prioritizing companies led by women, people of color and people with disabilities.
A STEM & Technical Skill Fund will provide grants to nonprofit and entrepreneurial support organizations in Burlington that teach STEM and technical skills to members of Burlington’s workforce and youth.
Weinberger said the investment ensured that BT would continue to advance the interests of the community as it becomes part of a private corporation.
“Even though Burlington Telecom is not a city department anymore, it is continuing to move the community forward in numerous ways,” Weinberger said.
The funds are set up in a way that will ensure the companies are committed to staying in Burlington, Weinberger said. The investment and grant funding will aid both organizations that play a “key role” in fostering the entrepreneurial economy and entrepreneurs who want a future in Burlington, Weinberger said.
“There are all sorts of reports and studies that show that women entrepreneurs, people of color face additional barriers to getting traction here in Vermont,” Weinberger said. “We’re trying to set this up in a way where this isn’t just the usual suspects getting funded, that these are really expands who can succeed in moving forward entrepreneurial efforts here in Burlington.”
The funds will be managed by BTV Ignite, a nonprofit focused on using technology to stir economic growth in Burlington. The announcement of the funds was part of the kickoff event for Innovation Week 2019, a week of innovation-centric events around the city.
The dispersal decisions for the innovation fund will be made by an investment committee following an application process.
Schurz’s retention of any equity in the companies will be determined in a transaction-by-transaction process, Weinberger said.
Loucy said the company hoped to have the application process for the STEM fund open by the start of December. The details on the start of the application process for the innovation fund is still being determined, he said.
Loucy said the company is hoping for a mix of established companies and startups to apply for the investments and grants.
“That’s really the goal of both of these funds, to have a nice diverse group, established [and] startup groups,” he said. “It really helps the whole system.”
The city agreed to sell BT as part of a lawsuit settlement with Citibank, which sued the city after the municipal-owned BT defaulted on a loan. Then-mayor Bob Kiss’ administration diverted $16.9 million in taxpayer funds to keep BT afloat, which led the city’s credit rating to crater.
The city’s credit rating has rebounded, partly because of the elimination of risks associated with the Citibank litigation. In the sale, the city recovered about $7 million of the misspent $17 million.
The city is currently weighing whether it should invest in Champlain Broadband, the entity that Schurz created to manage BT. Weinberger told VTDigger last week he is considering a $2.4 million investment which would give the city 7.5% interest in the company.
Loucy said Schurz’s investment in the community reflects the company’s commitment to Burlington.
“We’re here, that’s our model,” he said. “All our staff is here, our management is here, decision making is local. We live here and work here.”
