Oreda Montrose Group COVID-19 Economic Recovery Strategy

4/16/2020

• DAVE ROBINSON

• NATE GREEN

• TIM BIGGAM

• JAMIE BEIER GRANT

• MONTROSE GROUP, LLC

OREGON ECONOMIC DEVELOPMENT ASSOCIATION

MONTROSE GROUP COVID 19 ECONOMIC RECOVERY STRATEGY


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Oregon Economic Development Association


MONTROSE GROUP, LLC WROTE THE BOOK ON ECONOMIC DEVELOPMENT

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https://www.palgrave.com/page/detail/economic-development-from-the-state-and-local-perspective-david-j-robinson/?isb=9781137320674


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Assess Economic Damage

Emsi Data dive to measure the before, during and after of the disaster's impact on the region's economy, workforce and employer base• Emsi Job Postings Analytics • Emsi Input-Output Model• Emsi Skill Shape Analysis for Upskilling Opportunities • Emsi Supply Chain Analysis

Business Development

Company Triage & Concierge RolePost-COVID 19 industry target marketing strategy Site Development Plans Build PPPs with local, state & federal funding • Economic Development Planning• Public Infrastructure for Projects• Community Centers• Housing Rehabilitation• Revolving Loan Funds• Workforce Development• Rural Broadband Service

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Assess COVID 19 Economic Impact

• Federal Reserve found manufacturing output decreased 6.3% from the prior month• US restaurants report in March laying off 3 M workers & losing sales of $25 B • St. Louis Federal Reserve estimates COVID 19

• Increase the unemployment rate past 32%• IMF predicts US GDP will shrink 5.9% in 2020• Retail sales plunged 8.7% in March

• Car sales dropped 25.6 %• Clothing sales fell 50.5 %• Grocery sales increased 26% • Non-store retail increased 3.1%

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20,000

40,000

60,000

80,000

100,000

120,000

14-Mar-2020 21-Mar-2020 28-Mar-2020 04-Apr-2020

Oregon Unemployment Claims Filed


Post-COVID 19 Industry Winners

• Logistics• Medical Equipment

Manufacturers• PhRMA• E-Commerce

Post-COVID 19 Industry Losers

• Traditional brick & mortar retail

• Airlines• Events• Hospitality

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Construction Material Sales Tax Exemption

Constructing Financing

Tax Increment Financing

• School Compensation

AgreementsLocal and State

GrantsJoint Economic Development

DistrictsTransportation

Improvement Districts

Infrastructure Finance

Tax Abatements• School

Compensation Agreements

Tax Credits

Tax Incentives

ZoningAnnexationEasements

Land Use Entitlements

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Montrose GroupSite Development Approach


SAMPLE STATE DEMOGRAPHIC DATA IMPACTING SITE DEVELOPMENT

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Fact Missouri Tennessee Oregon OhioPopulation 6,137,428 6,829,174 4,217,737 11,689,100Homeownership Rate 66.80% 66.30% 61.90% 66.00%Median Rent $809 $841 $1,050 $788Bachelor's Degree Rate 28.60% 26.60% 32.90% 27.80%Total Accommodation/Food Services Sales 12,430,310 12,499,013 8,466,788 20,652,777Total Retail Sales Per Capita $15,036 $14,194 $12,690 $13,301Median Household Income $53,560 $50,972 $59,393 $54,533Poverty Rate 13.20% 15.30% 12.60% 13.90%Total Employers 150,882 137,918 117,357 253,001Total Employment 2,517,204 2,650,007 1,596,637 4,815,946


0.0

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State GDP Comparison Impacting Site Development

Ohio GDP Missouri GDP Tennessee GDP Oregon GDP

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0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000 25,000,000,000

Missouri

Ohio

Oregon

Tennessee

Targeted Multi-State Business Tax Comparison Impacting Site Development

Total business Taxes Licenses Individual Income Tax Unemployment Insurance Tax

Corporate Income Tax Excise Tax Sales Tax Property Tax

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Ohio

•Enterprise Zone Program•Real & personal property tax exemptions on substantial improvements with job creation

•Up to 100% with school board approval, awarded by city or county

•retail generally not eligible •Community Reinvestment Area•Real property exemptions on substantial improvements and job creation

•Up to 100% with school board approval, awarded by city or county

•retail generally not eligible but residential is

Tennessee

•Sales and use tax exemptions•Manufacturing machinery and utilities, corporate headquarters, warehouse and distribution facilities, call centers, data centers, and for research and development facilities

•Fasttrack Economic Development Fund•Closing Fund•Grants to local governments and then reimbursed to companies

•Funds retrofitting of buildings, acquiring real property, relocation of equipment, and other expenditures not covered under other Fasttrack programs.

Missouri

•Enhanced Enterprise Zone Program•State income tax credits for 5 years and local real property tax abatement of 50% for 10 years if:

•�Located in approved zone•�Approved business clusters•�New or expanded business creating or maintaining 2 new employees and $100,000 new, or

•Replacement business creating or maintaining 2 new employees and $1,000,000 new investment

•Provides health insurance and pay at least 50% of the premium

•Brownfield Remediation Program•redevelop contaminated commercial/industrial sites

•creating 10 jobs or retaining 25 to clean hands company accepted in 'Voluntary Cleanup Program"

•Remediation Tax Credits may be used for up to 100% of the cost to remediate the project property

Oregon

•Enterprise Zone Program•Exempts businesses from local property taxes on new investments

•Sponsored, created, and managed by a local government in 74 EZ Zones

•100% property tax exemption from normally assess on a new plant and equipment for non-retail businesses' location or expansion for a period of three to five consecutive years

•Qualified property includes new building structures, structural modifications, newly installed machinery but not land or previously used property

•Business must• Increase full-time employment inside the Zone by the greater of one new job or 10%

•Have no concurrent job loss outside the Zone•Maintain minimum employment during the exemption

•Engage in job-training as well as conform to any local conditions

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Samples of State Tax Incentive Programs Supporting Site Development


Missouri

• Data Center Sales Tax Exemption Program• Sales and utility tax exemption on data center

construction• Creates 10 new jobs paying average wages

150% of the county average wage, invests $25 M within 36 months

• 15 years of state and local sales tax exemptions• Existing data centers eligible for a 10-year

exemption if creating at least 5 new jobs within 24 months, paying 150% of the county average way, and investing $5 million within a year

Ohio

• Data Center Sales Tax Exemption• Full or partial abatement from state and local

sales tax on purchases of eligible data center equipment totaling at least $100 million and creating an annual payroll of $1.5 million

• Applies to multi-tenant data-centers allowing multiple customers at one site to aggregate their purchases and payrolls in order to qualify

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Samples of State Data Center Incentives Supporting Site Development


Missouri Local TIF

•Capture local property and sales tax increase for up to 23 years for redevelopment

•Sites blighted, conservation, or economic development

•Funds professional service studies, land surveys, land acquisition, demolition, rehabilitation, and building infrastructure

•State Supplemental TIF•Redevelop blighted areas by providing essential public infrastructure financing

•Located in blighted or CBD•Gap financing with local TIF•Underlying local TIF provides 50% of new, local sales tax revenue and 100% of new real property tax revenue

•15 years for public works improvements

Ohio TIF

•Townships, municipalities, and counties•Finance infrastructure improvements and, limitedly, residential rehabilitation associated with new development

•Pauses the taxable worth of real property within a specified area and redirects tax payments over this amount (derived from increases in real property value) to a separate fund financing the infrastructure project

Tennessee TIF

•Cities and counties•Economic impact plan•Captures future tax revenues to pay for current community improvements

•Supports blighted and deteriorated areas, industrial development, recreation, convention centers and tourism

•Funds public infrastructure, utility service, professional development services, equipment costs

Oregon TIF

•Cities with populations greater than 50,000 to use a portion of property taxes generated within the district to invest in the district's infrastructure, providing further incentive for private investment

•Property value increase invested in TIF district funding

•Might also be used to retain businesses as well as to attract new entities

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Sample State TIF Laws Supporting Site Development


Missouri

• Infrastructure Development Opportunities Commission Program•Provides local political subdivisions, including public sewer and water districts, with long-term, 3% interest rate loans between $25,000 and $150,000

•Help rural communities and districts•Loans fund infrastructure improvements prioritizing water, sewer, and safety issues

Ohio

•Roadwork Development 629 Grants•Reimbursable public infrastructure funding to local governments, port authorities, and companies

•Manufacturing, high-tech, corporate headquarters, and distribution activity

•Cover engineering, design costs, actual construction of roadways and/or utility improvements

Tennessee

•Tennessee Fasttrack Infrastructure Program•Grants for local governing bodies for public infrastructure

•Companies creating jobs or making capital investments and must include a local match based on

•Eligible projects include those affecting rail, public roadways, ports, airports, water, sewer, and gas

•Grants determined by the number of full-time jobs, amount of company investment, location of the project (at-risk counties 35% premium and distressed counties 50% premium), average wage of new jobs, and other factors

Oregon

•Oregon Regional Infrastructure Fund•Local government grants•Eligible project supports growth, addresses a regional priority, supports job creation and retention, does not rely upon continuing subsidies, and is ready for implementation upon approval

•Business Investment Program•“Traded-sector" businesses, such as manufacturing firms

•Project must receive local government incentives or be in a pre-approved Strategic Investment Zone

•15-year exemption is on project property greater than $100 M in metro and $25M elsewhere

•Community service fee of 25% of tax savings is paid each year to local governments

•Projects include capital spending, and technology, research and workforce investments

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State Infrastructure Grants Supporting Site Development


RICKENBACKER

GLOBAL

LOGISTICS

PARK &

BEYOND

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State Loan Programs CDBG Tax Relief Filings Hospitality Funding No State Business Recovery Programs

Current State COVID 19 Business Support Programs Survey

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California $1 B Loan Business Loan Programs

Arizona $50M Coronavirus Relief Fund

JobsOhio $200M Loan Fund, Port Financing, Loan

Guarantees

Arkansas $12M CDBG Program

Oregon• Small Business Loan Modifications

and Forgiveness defers payments and interest

• "Small Business Stabilization Fund" $700,000 as leverage for funding from others

Florida $50 Emergency Bridge Loan Program

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State Government COVID 19 Business Recovery Program Highlights


0 100,000,000,000 200,000,000,000 300,000,000,000 400,000,000,000 500,000,000,000 600,000,000,000

Unemployment Benefits

Taxpayer Checks

SBA

Fed Large Company Loans

Local & State Government

Health Care

Social Safety Net

Disaster Assistance

Education

Transportation Providers

Tax Reductions

Business Tax Cuts

Other Spending

Business Development Project Funding: Federal Stimulus

4/16/2020 20Source: Investment Strategy Group, Committee for a Responsible Federal Budget


$0.00

$50,000,000,000.00

$100,000,000,000.00

$150,000,000,000.00

$200,000,000,000.00

$250,000,000,000.00

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State COVID 19 Stimulus Funding v. State Operating Budget

COVID 19 Federal Stimulus Funding Allocation State Operating Budget

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SMALL BUSINESS ADMINISTRATION (SBA)

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SBA Economic Injury Disaster Loans (EIDL)

• Covid19relief.sba.gov• Up to $2M loan or working capital• $10,000 grant within 3 days of applying• Pay for operational costs like payroll, rent, utilities, debt payments• EIDL Eligibility

• In business since 1/31/2020• 500 or fewer employees• Sole proprietorships with or without employees• Independent contractors• Cooperatives and employee owned businesses• Tribal small businesses


• Apply through local SBA lender (e.g. bank)• Loans of 2.5x Average Monthly Payroll – Max $10 M• 1.0% interest• Loan payments deferred for 6 months• 100% loan guarantee• Funds spent on payroll, interest, rent, & utilities are forgiven• Interim Final Rule sent late April 2, 2020

SBA Paycheck Protection Program (PPP)

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SBA Debt Relief• SBA to make 6 months of loan payments on behalf of

borrowers with existing

• 7(a) loans (including Community Advantage)

• 504 loans

• Microloans

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FEDERAL RESERVE

Primary Market Corporate Credit Facility (PMCCF) Direct Lending Funding

• Allows the Fed to lend directly to corporations by buying new bond issuances and providing loans

• $500B • PMCCF Direct Lending

• $25B for passenger air carriers• $4B for cargo air carriers• $17B for businesses important to maintaining national security.

• $304B to other businesses• $150B to local and state governments through block grants

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FEDERAL RESERVE

• Nonprofit organizations and businesses o Between 500 and 10,000 employeeso Loan must retain at least 90% of the recipient’s workforce through

September 30, 2020o Will not outsource or offshore jobs for the term of the loan plus 2 yearso Cannot increase the compensation of any officer or employee whose

total compensation exceeds $425,000, o Prohibited from having officers or employees making over $3M last year

plus fifty percent of the amount their compensation last year exceeded $3M

PMCCF Direct Lending Targets

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US ECONOMIC DEVELOPMENT ADMINISTRATION (EDA)

Economic Adjustment Assistance (EAA) Program

• $1.5B in supplemental funding for the Economic Adjustment Assistance program

• Funds technical, planning, and public works and infrastructure assistance

• Regions experiencing adverse economic changes that occur suddenly or over time

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EAA Strategy Grants

• Development, updating or refinement of a Comprehensive Economic Development Strategy (CEDS)

• CEDS is a prerequisite for qualifying for EDA funds for projects

• COVID 19 may require a CEDS update• COVID 19 may permit a CEDS creation to craft a disaster

recovery strategy

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EAA Implementation Grants

• Execution of CEDS strategyo Infrastructure

improvementso Site acquisitiono Site preparationo Constructiono Rehabilitation o Equipping of facilities

EAA Implementation Grants

• Market and environmental studies

• Planning or construction grants

• Seed or replenish revolving loan funds

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Greater Portland, Inc. CEDS

• Greater Portland Economic Development District (GPEDD) serving Clackamas, Multnomah, and Washing counties (Oregon) and Clark County (Washington)

• GPEDD primarily funded through EDA grant monies

• CEDS in place to promote efforts to maintain a robust economy in bi-state region

• Areas of Strength – workforce, quality of life, FDI, innovation

• Areas of Improvement – site development, infrastructure development, incentives/policy

• CEDS revisited every 5 years to maintain eligibility for EDA Public Works and EAA project funding opportunities

Port of Newport Public Works

• $1.195M grant funding matched by $1.195M in local funds

• Construction of new fixed pier, gangway and gangway float

• Port of Newport is home to largest commercial fishing fleet & only floating dock access with 80 vessel moorings and floating fuel facility

• CapEx to maintain services of existing fleet, expand local business operations and creates employment opportunities

• Est. $3.95M in future private investment, creation of 17 jobs and retention of 55 jobs

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EAA Case Study

• Midwest Industrial Park Developmento $2.7M EAA grant as part of $3.4M

project; $1.7M funded by communityo Construction of new roads, storm

sewer, water, sewer, lighting conduito Enhances transportation logistics o $900M private CapEx, 22 new jobs

supported EAA request

EAA Case Study

• Revolving Loan Fundo Identification of business access to

capital gapo Corporate organization of revolving

loan fundo Revolving Loan Fund Board of

Directorso Revolving Loan Fund seed capital and

EDA matcho Revolving Loan Fund loan terms and

agreementso Revolving Loan Fund marketing

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COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)

Federal Stimulus & CDBG

• $5B in COVID 19 federal stimulus fundingo$2B distributed by 2020 allocation to large cities and

stateso$1B distributed to states in 45 days to combat COVID

19o$2B distributed to states for longer term economic and

housing disruptions

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CDBG Funds

• Infrastructure• Economic development projects• Public facilities installations• Community centers• Housing rehabilitation• Public services• Microenterprise assistance

CDBG Funds

• Typically funds up to 50% of total project costs, not to exceed $500,000

• Up to $10,000 can be granted or $25k-$35k loaned for every full-time equivalent job created or retained as a result of the project

• Public infrastructure projects (e.g., water, sewer, roads) are eligible for up to 50% CDBG grant funding, not to exceed $500,000, towards project

• Private, for-profit projects can qualify for up to 50% CDBG low-interest loans, not to exceed $500,000 towards project

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CDBG Key Criteria

•Employing at least 51% low- to moderate-income persons•Eliminating slum and blight•Meet an “urgent” need

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Oregon CDBG Program Eligible Groups

• Non-urban cities and counties • Oregon tribes, urban cities

• Albany, Ashland, Beaverton, Bend, Corvallis, Eugene, Grants Pass, Gresham, Hillsboro, Medford, Portland, Redmond, Salem, and Springfield

• Oregon urban counties• Clackamas, Multnomah, Washington

Oregon CDBG Maximum Grants

• Microenterprise: $100,000• Public Works

• Water and Wastewater Improvements: $2,500,000

• Community/Public Facilities: $1,500,000• Community Capacity/Technical

Assistance: no specific per-award-limit but limited overall funds

• Regional Housing Rehabilitation: $400,000

• Emergency Projects $500,000


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City of Albany CDBG Highlights

• Increase Economic Opportunity Priority• Microenterprise and small business

assistance to 40 low-income residents• Small grants awarded to offset startup costs

and add jobs• 25 new LMI jobs added• Public service funds for job skills training to

young adults in partnership with YouthBuild• Economic Opportunities for Homeless

• Coordinator for life skills/job skills coaching, resume building, work experience, employment opportunities

Business Oregon CDBG Highlights

• CCD Business Development Corp. sponsored microenterprise program in three counties (Coos, Curry, Douglas) - $100,000 award• No cost one-on-one counseling and

educational opportunities to LMI entrepreneurs living in designated areas

• Social media, fundamental skills development, business planning and follow up support

• City of Madras Water System “Right Sizing” -$471,735 award• Enhanced water transmission and decreased

% of water loss


• Buildings and improvements• Public facilities, for testing, diagnosis or treatment demands• Rehabilitating a commercial building or closed school building to be converted into

infectious disease facilities• Special Economic Development Assistance• Grants or loans to support new businesses and business expansion that creates jobs

and manufactures medical supplies necessary to the infectious disease response• To avoid job loss caused by business closures related to social distancing by providing

short-term working capital assistance that retains jobs held by low- and moderate-income persons

• Microenterprise assistance for technical assistance, grants, loans and other financial assistance to establish, stabilize, and expand microenterprises that provide medical, food deliver, cleaning, and other services to support home health quarantine

CDBG COVID 19 Recovery Services

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CDBG Case Study

• Local CDBG Revolving Loan Fundo Identification of business access to capital “gap” & CDBG loan

needo State grants money to community to issue loan = seed capitaloCorporate organization of revolving loan fundo Revolving Loan Fund Board of Directorso Revolving Loan Fund loan terms and agreementso Revolving Loan Fund marketing

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USDA RURAL DEVELOPMENT

Federal Stimulus & USDA Rural Development

• $48.9 B to USDA – Close the “digital divide” in America’s rural communities• $145 M USDA’s Rural Development programs • $20.5 M for the Rural Business-Cooperative Service,

adding $1 B in lending authority• $100 M in grants for Rural Broadband Service• $25 M for Distance Learning and Telemedicine Programs

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USDA RURAL DEVELOPMENT Rural Development Broadband ReConnect Loan and Grant Program

• Loans and grants • Construction, improvement, or acquisition of facilities and equipment needed to

provide broadband service in eligible rural areas that do not have access to at least 10 Mbps downstream and 1 Mbps upstream

• 100% Grant – up to $25,000,000 max grant request• 50% Loan / 50% Grant – up to $25,000,000 loan and $25,000,000 grant request

and loan/grant requests will always be equal• 100% Loan – up to $50,000,000 max loan request• Eligible Applicants• Cooperatives, non-profits, or mutual associations, for-profit corporations, state or

local governments, territory or an Indian tribe

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USDA RURAL DEVELOPMENT

USDA DLT Case Studies• Owensboro Health Inc. received $460,820 grant to

install telemedicine equipment at 10 sites in Kentucky and Indiana. The equipment expands health care resources to ~35,000 residents, including ~2,000 patients.

• Lisbon (OH) Exempted Village School District received $323,478 to create distance learning network at 8 sites in Columbiana County. District is offering classes and behavioral health services to 850 students.

USDA Distance Learning and Telemedicine Program

• Education or health care through telecommunications

• State and local government entities, federally-recognized Tribes, non-profits, for-profit businesses, and consortias are eligible

DLT 100% Grants• 15% match from the applicant• Award range: $50,000 - $1,000,000• Eligible uses: acquisition of eligible capital assets

(broadband transmission facilities; audio, video and interactive video equipment; terminal and data equipment; computer hardware, network components and software; inside wiring and similar infrastructure that further DLT services); acquisition of instructional programming for eligible equipment; acquisition of technical assistance and instruction for using eligible equipment

USDA Rural Broadband Case Study•Logan Telephone Cooperative Inc. received a $34.4 M USDA Telecommunications Program loan to upgrade a FTTH system in Butler, Logan and Muhlenberg counties in southwestern Kentucky•Morton County, N.D., USDA is partnering with BEK Communications Cooperative to provide an $844,000 Community Connect Program grant for a 49-mile Fiber-to-the-Home network will bring high-speed broadband to 125 underserved households•SW Virginia, iGo Technology Inc. received a $3 M Community Connect grant to bring enhanced broadband opportunities to 820 homes and businesses giving the Bee Community Center, in the town of Bee in Dickenson County, free broadband for two years

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Conclusions Thoughts

Questions

Contact• [email protected]• [email protected]• [email protected]• [email protected]

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mailto:[email protected]




Oreda Montrose Group COVID-19 Economic Recovery Strategy

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