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Scheme development

Initial phase

Machine for wood processing, © Stadtplanungsamt Stadt Frankfurt am Main

The approval and provision of EU subsidies by the State of Hessen not only required participants to informally express their interest in the scheme. Subsequently a formal application had to be made to the City of Frankfurt to prepare a special subsidization directive for the scheme aimed to facilitate the approval and calculation of subsidies vis-à-vis the recipients. Accordingly, a draft directive was formulated in early 2010 and coordinated with the State authorities. By resolution of April 13, 2010 EU funds to the sum of 500,000 were thereupon approved.

As a result of the resolution of the City Council on December 16, 2010 (section 9176) the members of the City Council adopted the directive and regulated the provision of matching funds from the Municipal Treasury totaling 200,000.

Since the beginning of 2011 small and medium-sized enterprises (SME) have thus been in a position to submit funding applications using application forms especially devised for this scheme.

The funding committee comprising of representatives of Wirtschaftsförderung Frankfurt GmbH, the Chamber of Industry and Commerce, the center for business start-ups, Kompass gGmbH, the Jobcenter and the City Planning Department convened as early as in December 2010. The funding committee discussed and decided on all applications received; some straightforward applications were approved by circulation. The funding committee met a total of 17 times during the implementation of the scheme. 

 

Implementation

In the period between early 2011 and late 2013 a total of 44 funding applications were made. The number of companies receiving advice on possible funding from one of the participating institutions in the funding committee was about twice as high.

Only one application was rejected, this low number resulting from the fact that potential applicants received detailed advice prior to making the application, which meant that funding eligibility had in principal already been established.  

To begin with, most of the applications received by the City were incomplete and the companies in question were therefore given a deadline to complete their documentation. Despite considerable leeway granted in handling these deadlines three companies were nonetheless unable to complete their applications, which were rejected accordingly.

A further three companies withdrew their applications before these were scrutinized and decided on by the City, stating that the planned measure or business startup was no longer feasible.

Accordingly, the City granted funding to a total of 37 applicants, a mix of companies and startups. Of these, three measures failed to be realized within the specified period of implementation. The City was ultimately forced to withdraw its approval here despite the fact that it had once again provided ample leeway when defining the period of implementation.

To date, 34 companies and startups have implemented the planned measures fully or partially. Sadly, four of these had to cease operations by the end of 2014. Two of them named financial problems they were unable to resolve which forced them to close their business. Another experienced personal problems in relation to starting the business. Of the four, only one newly established business had to close because sales revenues and customer volume fell short of expectations.

The funding for 30 companies with added support from the EFRE scheme resulted in a total investment volume of approx. 1,053,600.

The 30 companies in question included 19 existing companies wishing to enhance their presence in the area by expanding and modernizing their business or to increase their permanent qualified staff by creating additional apprenticeship places. Strategies included in particular the purchase of additional, more powerful plant and equipment, the modernization of business premises and investments to tap new fields of business. In addition, four companies relocated their headquarters to the development area. Overall, 122 permanent jobs were secured through preservation and relocation. Sectors affected ranged from traditional craft trades (stone masonry, carpentry, car industry, printing, horticulture) to trade (groceries, herbs, car parts) to services (hairdressing, photo studio, tanning studio).

Six applicants used the grant to start up a new business and one opened an additional branch, creating in total an additional 32 permanent jobs. Here, too, there was great variety in the type of sectors, which ranged from hospitality through trade to research.

In addition to preserving and creating permanent jobs 18 additional apprenticeships were brought into being – a huge success of the scheme. 


Consultancy services, advanced training

Eröffnung der Metzgerei, © Stadtplanungsamt Stadt Frankfurt am Main

A number of issues in need of examination and further discussion became apparent as a result of public events held and the ongoing exchange with Fechenheim companies. These were consolidated into specific topics that were subsequently addressed as part of a series of advanced training sessions open to all Fechenheim companies. Topics included e.g. IT Security, the question of “Who is my customer”, Trends and New Markets, Internet Law, Successful Website Design, Getting the Marketing Mix Right, and Social Media Marketing. Topics deliberately focused on the needs of local companies in Fechenheim. An expert external speaker was invited for each of the sessions to give a specialist presentation and engage in debate with the companies. All of the approx. 250 companies received written invitations to the sessions, which were attended by between 10 and 25 companies. Some of the participants suggested it would be beneficial to run an additional seminar with a focus on “What can Fechenheim’s companies do for Fechenheim”. The result of this half-day event was “Vision Fechenheim 2020”. In this document companies outline not only their own situation and development prospects, but also those of the district as a whole over the coming years.

The series of advanced training sessions also resulted in an important ancillary benefit that should not be underestimated, namely the opportunity to make new contacts and network with other companies. Many companies did not know one another or were unaware of their respective offerings and products. To this end, the advanced training sessions provided a welcome opportunity to network.

In 2013 Fechenheim’s “Store Owners Initiative” participated in the competition “Ab in die Mitte – die hessische Innenstadtoffensive” (Place Things Center Stage – Promoting Hessen’s Town Centers) and won a prize. The core project involved hosting a Crafts and Industrial Fair. On September 14 and 15, 2013 the Alt-Fechenheim thoroughfare in Fechenheim’s town center was closed to traffic. More than 75 companies presented their work, transforming the shopping street into a miniature trade fair. For two days, all eyes were on Fechenheim’s enterprises and their showcased wares and services: under the motto of “Quality and Innovation for a Cherished District”. This event likewise received supplementary funding from the EFRE scheme. 


Assessment

The funding scheme was very well received by the Fechenheim companies. Very early on the funding committee decided that the maximum permissible limit of 50 % or 40 % funding was not to be fully exhausted in all cases in a move to achieve the widest possible outcome. As a result individual funding rates were between 20 % and 50 %.

The scheme had an important psychological benefit for the district: By making available an additional source of funding, the authorities were able to demonstrate that the urban development funding scheme is not exclusively geared towards activities in the town center but that it considers a district in its entirety. To this end, the people in Fechenheim’s north, who compared to the south have tended to feel deprived in the past, were shown that they, too, are considered of equal importance. In this regard, the networking activities among traders beyond the reach of their immediate neighborhood and indeed beyond the district were of immense importance.

Last but not least, thanks to the funding scheme vacant premises in the town center and commercial estates were filled with new business. The project managers firmly believe that the funding provided to a sizeable number of existing companies played a decisive role in preventing potential vacancies. In light of the above the scheme is therefore rated positively in relation to the original objective.