What do economic development corporations do?
I'm talking about non-profits like the NYCEDC. Where do these companies get their capital from? do they lend, take equity positions, own/operate, provide financial incentives, some mixture?
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Economic Development Corporations are non-profit organizations that are sort of like an arm of the local government, but they work to promote the long-term growth of business in a community. They aim to attract new businesses, retain existing businesses, and may even provide loans or assistance with financing (derived from Sales Tax Revenue in Texas), provided the business agrees to certain stipulations (i.e. number of jobs created, total private capital invested).
The above is correct. My firm partners with the NYEDC and we help first time borrowers/developers obtain financing. The EDC will contribute some cash to a project while we contribute some as well, with the borrower throwing about 15-20%. The program is strictly for first time borrowers and developers, especially those who may have been slighted from more well-known lending institutions.
The way I see it, NY EDC is there to spur economic growth in areas that are in need of revitalization.
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