Vermont Economic Development Authority outlines loan programs, SSBCI deployment and statutory limits on housing

Cassie Polinas, chief executive officer of the Vermont Economic Development Authority, told the Commerce & Economic Development committee that VEDA operates like a lender for economic development, manages a portfolio of loans across the state and is the implementing entity for recently allocated federal SSBCI funds.

Polinas said VEDA borrows from capital markets and relends to businesses and nonprofits, using the state instrumentality status as a credit enhancement. "We are like a bank for economic development," she said, adding that VEDA does not take deposits and instead borrows to relend. She also said, "We cover the whole state of Vermont."

The presentation matters because VEDA channels public and private capital into projects that support tourism, manufacturing, clean energy, health care and agriculture; the authority also administers several state and federal revolving funds and emergency lending programs that leaders cited as important for community resilience.

Polinas described VEDA's size and activity: total assets of about $340,000,000, a roughly 41-person core staff, and more than $2.8 billion lent across Vermont's 14 counties over VEDA's roughly 50-year history. She said agriculture accounts for about one-third of the authority's overall portfolio, and that the remainder funds sectors commonly discussed by the committee such as travel and tourism, manufacturing and renewable energy. "A third of VEDA ... is agriculture," she said.

She outlined how VEDA is funded and how it structures deals. VEDA borrows in the capital markets (with the treasurer's moral obligation providing credit enhancement) and relends; by statute VEDA typically may finance up to 40% of a project under its basic loan programs. Polinas said that VEDA's loans are often intended to fill gaps that commercial banks will not, leveraging private lending so that each dollar of VEDA financing attracts several dollars of other capital.

Polinas reviewed other programs VEDA administers or services: conduit bond issuance for tax-exempt projects, Small Business Administration lending (including SBA 504 debentures and a Community Advantage program), USDA Intermediary Relending Program (IRP) loans in roughly $1 million increments, and five state revolving or targeted funds including the Drinking Water State Revolving Loan Fund, the Clean Energy Development Fund (in wind-down), the State Infrastructure Bank (for highways and EV charging), the Brownfields Revitalization Fund and the Clean Water State Revolving Loan Fund.

On the new State Small Business Credit Initiative (SSBCI) funding, Polinas said Vermont received the small-state minimum (just under $60 million). She said roughly half of that allocation will be retained by VEDA to provide interest-rate subsidies on direct loans and the other half will be directed toward venture-capital investments via selected fund managers. Polinas described the federal intent to leverage SSBCI dollars (the program aims at roughly 10:1 leverage) and said VEDA's prior SSBCI-era results achieved about 13:1 leverage on the debt side.

Polinas also described VEDA's disaster and emergency lending history: during Tropical Storm Irene VEDA deployed about $18 million to roughly 350 businesses with state support for interest-rate buy-downs; during the COVID-19 pandemic VEDA provided more than $45 million in SBA Paycheck Protection/Emergency lending through its certified development corporation structure and later administered a state-funded $18.5 million forgivable loan program.

Committee members pressed Polinas about housing. She said VEDA's statute excludes general housing and investment real estate from eligibility except for specific carve-outs (long-term care facilities, mixed-use projects with less than 50% housing and certain regional development corporations under Subchapter 3). Polinas said VEDA can and does finance farmworker housing under a separate agricultural chapter of law and that the authority is exploring whether it could support "employer-sponsored housing" in nonagriculture sectors, but any broader authority to finance housing would require a statutory change. "Right now, we can't do anything about it," she said, describing ongoing conversations with housing agencies and stakeholders.

Polinas named staff who participate in program work: Renee Brankowski (chief operations officer), Thad Richardson (chief financial officer) and Jennifer Emmons Butler (general counsel and director of closings). In response to a question on loan performance, she and the finance staff said delinquency rates fluctuate but loss rates are low and most loans are collateralized; the transcript records the CFO identifying himself for the record.

The committee concluded the session by scheduling follow-up discussion with regional development corporations and regional planning commissions. Polinas left committee members links to VEDA's annual reports, borrower stories and a short documentary on the authority's 50-year history.

Polinas and committee members emphasized statutory limits and the need for legislative changes before VEDA could broaden its role in housing finance; they also flagged SSBCI deployment, revolving funds and emergency lending as near-term priorities for committee attention.