Rhode Island Commerce Corporation FY 23 Annual Report

July 1, 2022-June 30, 2023

03 OUR MISSION

Helping businesses launch, grow and thrive in the Ocean State

05 SMALL BUSINESS SUPPORT

Helping businesses access the tools and expertise they need to succeed

16 INVESTING IN RHODE ISLAND’S ECONOMY

Attracting new companies, creating jobs and building our leadership in target sectors

Showcasing the Ocean State and attracting visitors

Building a

A message from RHODE ISLAND SECRETARY OF COMMERCE

ELIZABETH M. TANNER

In FY 23, Rhode Island Commerce maximized the impact of our economic development tools to support employers of all sizes, create new longterm job opportunities, and position our state’s economy for continued growth. Our business community continued to face challenges, from the impacts of inflation to supply chain constraints, and we listened to and collaborated with chambers of commerce, merchant associations, and business leaders from across the state to meet their needs. At the same time, we utilized our incentives to grow our innovation and technology sectors, preparing our state to continue competing in innovative industries.

At Rhode Island Commerce, our mission is to be a resource to everyone invested in making Rhode Island a premier place to live and do business, and we lived up to that mission in FY 23. From providing tax relief to small businesses, to expanding the Wavemaker Fellowship Program to include healthcare workers, increasing small business grants, and eliminating unnecessary red tape, we took proactive and impactful steps to make it easier to start or grow a business in our state and to help businesses attract and retain the talent they need.

As we look to the future, we know the investments we are making now in key industries will yield

dividends down the road. Our programs have helped make Rhode Island a national player in the blue economy, technology, and life sciences fields, and we continue to grow these sectors every day. We are doubling down on offshore wind and building a robust statewide supply chain; leveraging generational federal funding to strengthen our broadband infrastructure across Rhode Island; and beginning the planning process for growing our region’s marine industries as the nation’s only Ocean Technology Hub - a federal Economic Development Agency (EDA) designation that brings with it the potential for up to $70 million in federal grants.

Through partnerships with our small businesses and targeted investments in our proven assets, Rhode Island’s economy is poised for success, and we are ready to continue building on our momentum in FY 24 and beyond.

Sincerely,

Elizabeth M. Tanner, Esq. Rhode Island Secretary of Commerce

Year in review: Small Business Support

Supporting Small Businesses

Making up 98.9% of active businesses in Rhode Island, our locally owned and staffed small business community serves as the backbone for our statewide economy. From tax incentive and innovative lending solutions, to workforce development initiatives and accelerator programs, our team at Rhode Island Commerce works every day to provide small business owners with the tools, resources and connections they need to grow, thrive and create jobs here in the Ocean State. In FY 23*, Rhode Island was home to:

105,320

228,107

69.6%

*Source: U.S. Small Business Administration Office of Advocacy. https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-RI.pdf

RI Rebounds

Leveraging Federal Funds to Continue Economic Recovery

Proposed by Governor McKee and unanimously approved by the General Assembly in early 2022, the Rhode Island Rebounds initiative was funded through American Rescue Plan State Fiscal Recovery Funds and assisted small businesses and hard-hit tourism, hospitality and event industries impacted by the COVID-19 pandemic.

Programs supported through Rhode Island Rebounds in FY 23 included:

Small Business Grant Program

2,477 businesses supported

The RI Rebounds Small Business Grant Program provided direct financial assistance to small businesses financially impacted by the COVID-19 pandemic. Grants were available for either $2,500 or $5,000. In January 2023, $800 supplemental awards were made available to businesses operating in the following impacted industries: food services; personal care services; and arts, entertainment and recreation.

Technical Assistance

Application Opened in FY 23

Offering technical assistance services worth up to $10,000, this program was designed to help small businesses impacted by the COVID-19 pandemic invest in a wide array of areas, including accounting & bookkeeping; legal services; marketing; customer data & user experience analytics; strategic & business planning; backoffice services such as human resources and payroll; IT; website development support; grant writing, supply chain & procurement; and e-commerce.

Take It Outside

401 businesses served

A continuation of the successful program launched in 2020, Take It Outside grants helped businesses increase outdoor activity and capacity in an effort to reduce the transmission rate of COVID-19.

Placemaking Initiative

30 projects funded

Placemaking, event programming and outdoor and public space capital improvements funded under this initiative are designed to draw visitors to impacted districts and support businesses in the tourism and hospitality industries that have been negatively impacted by the COVID-19 pandemic. Examples of projects include public art installations, public or co-shared outdoor space and maintenance/improvements to public outdoor performances/event venues.

Ventilation Program

165 businesses served

Announced in December of 2022 and launched in March of 2023, the Ventilation Program provides eligible small businesses with up to $10,000 to use toward recently completed or proposed indoor ventilation projects.

RI Rebounds Spotlight: Placemaking Grant Program

Success Story

Itri Park Gazebo, Cranston

Standing as the focal point of the newly established outdoor gathering space in Cranston’s Knightsville neighborhood, the Itri Park gazebo was one of many qualityof-life improvements supported through our Placemaking Grant Program in FY 23.

“The City of Cranston is immensely grateful to RI Commerce for their placemaking grant funding for the Itri Park gazebo. The gazebo has quickly become the main attraction and has taken center-stage, quite literally, during free festivals, concerts, and movie nights that have attracted hundreds of Cranston families and visitors.”

— Mayor Ken Hopkins, City of Cranston

RI Rebounds Spotlight: Ventilation Grant Program

The critically important role ventilation systems play on public health was underlined during the COVID-19 pandemic—but so was the fact that adding or enhancing ventilation systems is a difficult expense for many small business owners. As such, Rhode Island Commerce offered up to $10,000 in reimbursement funding through its Rhode Island Rebounds program to help businesses invest in improved air quality.

“The grant money I was awarded was put toward the purchase and installation of heating/cooling units in my classrooms and common areas. What a difference these units have made for our preschool environment! I was extremely grateful and blessed to have received this grant! Thank you, RI Commerce, for making this possible!”

— Tara B. Rego, Owner of Little Scholars Preschool

“Smug Brewing Company experienced improved air circulation and enhanced comfort for patrons and staff alike with high-quality fans that were purchased thanks to the RI Rebounds Ventilation Grant Program.”

— Dianna David, Smug Brewing Company

Loan Programs

Innovative Lending Solutions

Especially during periods of economic volatility, the ability to access capital is an invaluable asset for a growing small business. Rhode Island Commerce is proud to offer several unique lending programs that help small businesses quickly and simply access the funds they need to accomplish their goals.

Loan programs include:

Small Business Assistance Program (SBAP)

Originally capitalized with $5.45 million made available from debt restructuring, the SBAP is designed to support businesses with 200 employees or fewer that are experiencing difficulty obtaining financing from traditional lenders.

Total results for FY 23 include:

Small Business Loan Fund (SBLF)

The SBLF provides up to $500,000 in working capital to existing manufacturing, processing and selected service businesses operating in Rhode Island. With fixed interest rates and flexible repayment terms, the SBLF is a proven job-creator for small- and mid-sized businesses.

Program results through the end of FY 23 include:

Tax Stabilization Incentive

Designed to encourage municipalities to enter into tax stabilization agreements (TSAs) for qualifying development projects, this program allows municipalities to receive an award of up to 10% of the tax revenue relinquished as a result of the TSA. The development project for which the TSA is granted must meet certain requirements in order for the municipality to qualify for an incentive.

No TSIs were approved in FY 23.

Small Business Development Fund (SBDF)

The SBDF Investment Fund Tax Credit was created by statute in 2019. The program authorized state tax credits for investment funds and their investors.

Program results in FY 23 include:

SBLF Spotlight: Track 15

Track 15, Rhode Island’s local food hall, will be a 19,000-square-foot indoor venue in downtown Providence. Once open, it will provide seven local merchants the opportunity to showcase some of the state’s best culinary offerings for residents and visitors alike.

“The $1 million loan we received through the Small Business Loan Fund is one of several ways the team at Rhode Island Commerce helped bring the concept of Track 15 closer to reality. We look forward to sharing this unique destination with Rhode Islanders and tourists alike.”

— Chris Marsella, president, Marsella Development Corporation

Strengthening Connections Strengthening Our Ecosystem through Connections

Beyond lending programs, Rhode Island Commerce also works every day to help local small businesses forge connections and partnerships with organizations who need their products and services. Programs include:

SupplyRI

Rhode Island Commerce, the Heron Foundation and the Rhode Island Foundation. Supply RI connects Rhode Island suppliers with opportunities to help them grow and expand. SupplyRI acts as a conduit between its database of more than 2,200 suppliers and 14 large Rhode Island institutions (Anchors*) across a variety of sectors.

Program results as of the end of FY 23 include:

14

2,296

Program results during FY 23 include:

12

added as a new Anchor company

* Active Anchor companies in FY 23 included: Amica, Blue Cross Blue Shield of Rhode Island, Brown University, CVS Health, Care New England, Citizens Bank, Delta Dental of Rhode Island, General Dynamics Electric Boat, Gilbane, Lifespan, SouthCoast Wind, Orsted, Roger Williams University and Rhode Island School of Design.

RI APEX Accelerator

Formerly known as the Rhode Island Procurement Technical Assistance Center, RI APEX offers free supports and services to eligible, locally based businesses interested in learning more about how they can secure contracts with federal agencies.

Program results as of the end of FY 23 include:

Minority Business Accelerator

By partnering with a variety of Rhode Island intermediaries*, the Minority Business Accelerator provides a network of comprehensive technical assistance to ensure that women- and minority-owned businesses and entrepreneurs have the tools and support they need to thrive in Rhode Island’s diverse and dynamic economy.

The MBA was created with $6 million in funding in FY 23 and officially launched operations in September of 2023 (FY 24).

* Intermediaries include: CIC Venture Café Global Institute, EForAll – RI, Innovation Studio, Inc. (Biz Bodega), New England Medical Innovation Center, Rhode Island Black Business Association, Rhode Island Builders Association, Rhode Island Hispanic Chamber of Commerce, Rhode Island Small Business Development Center, Roger Williams University Business Law Collaborative, SCORE RI, Skills for Rhode Island’s Future, Social Enterprise Greenhouse, Branchfood, Fuerza Laboral, Hope & Main, and Urban Ventures.

RI APex Accelerator Spotlight: Kassumay

Bacary Diatta, a hardworking entrepreneur who followed his dream of introducing the flavors from West African produce to American consumers, runs Kassumay LLC. Kassumay is a Warren-based business focused on selling nutritional, unique jams and sparkling water.

Bacary worked alongside RI APEX Accelerator

advisors to navigate the complex process of government contracting. Since beginning with RI APEX, Kassumay has secured several contracts with the Federal Prison System, giving Bacary an opportunity to grow his Rhode Island business and ensure every Kassumay customer receives top-notch products and services.

build on Momentum:

Business Attraction & Development

Incentive Programs

Attracting investment in Rhode Island’s Economy

Rhode Island Commerce continued its commitment to offering innovative, performancebased, tax credit programs to spur development and

Qualified Jobs Incentive Tax Credit

By offering annual, redeemable tax credits of up to $7,500 per job per year, the Qualified Jobs Incentive Tax Credit Program helps Rhode Island businesses land in Rhode Island or expand their workforces.

Cumulative program results as of the end of FY 23 include:

investment across the state, and help businesses launch, grow and create jobs.

Programs include:

Tax Increment Financing

Tax increment financing provides capital for eligible projects by rebating a portion of the new state tax revenue generated by the project. An eligible project must demonstrate need through a “financing gap.” The tax revenue rebate may not exceed 30% of total project costs (there’s an exemption for public infrastructure/utilities) or 75% of incremental revenue generated.

Cumulative program results as of the end of FY 23 include:

Rebuild Rhode Island Tax Credit

The Rebuild Rhode Island Tax Credit Program aims to fill financing gaps with tax credits of up to 30% of eligible project costs. Since its creation in 2015, this program has helped jumpstart more than $3 billion in construction projects.

Cumulative program results as of the end of FY 23 include:

Main Street / Site Readiness Spurring Development & Improving Infrastructure

From our culturally diverse downtown commercial districts to our iconic coastline, Rhode Island is an ideal place to live, work and raise a family. We’re proud to offer a wide range of innovative programs that encourage developers, municipalities and businesses to make impactful investments in the state we call home.

Programs and FY 23 highlights include:

Main Street RI Streetscape Improvement Fund

The Main Street RI Streetscape Improvement Fund awards grants on a competitive basis to municipalities and/or economic development agencies for improvements to commercial districts, such as enhanced sidewalks, new street furniture, new way-finding signage, upgraded building facades, and improved street lighting. Eligible projects must be located in an area that is walkable and attracts residents and visitors.

Program results in FY 23 include:

Site Readiness Grant Program

The Site Readiness Program partners with municipalities and/or developers to fund municipal technical assistance and site-specific planning and improvements. Eligible projects include but are not limited to: property surveys, engineering surveys, environmental studies, site clearing or demolition, infrastructure improvements and/or assistance writing zoning ordinances.

$650,000

* Site Readiness Program and Main Street RI Streetscape Improvement awards listed above were selected during FY 23 and ultimately funded through FY 23 resources. The awards were officially approved by the Board of Directors in FY 24 (August of 2023).

Innovation Grants Innovation Incentives at Rhode Island Commerce

Since our “lively experiment” began in 1636, Rhode Island has been a place where great, big, brand-new ideas come to life. We’re committed to ensuring innovation continues to drive our future.

Innovation Vouchers

Designed to help Rhode Island small businesses unlock research & development capacity, the Innovation Voucher Program offers funding of up to $50,000* for eligible companies with 500 employees or fewer.

$749,530

Our Innovation Incentives at Rhode Island Commerce offers locally based businesses of all sizes, operating in a wide range of industries, a diverse lineup of incentives, grants and flexible funding options designed to expand access to much-needed resources, encourage collaboration across the state’s economic ecosystem and ultimately support the creation of jobs and the long-term, sustainable growth of our statewide economy.

Program results in FY 23 include:

Innovation Network Matching Grants

Innovation Network Matching Grants are provided to organizations to support existing efforts to offer technical assistance, space on flexible terms, and/or access to capital to Rhode Island small businesses in key industries. These grants require at least a 50% match from the applicant.

Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR) Matching Grants

Overseen by the Rhode Island Science and Technology Advisory Council (STAC), these funding opportunities help small businesses and startup companies with research and development funding as they innovate and expand in Rhode Island.

In

Strengthening Rhode Island’s Talent Pipeline

We know workforce is the #1 challenge for virtually every business operating in every sector in Rhode Island’s economy. We are always striving to ensure we are investing in our people in a way that strengthens the state’s pipeline of workforce-ready talent.

Wavemaker Fellowship

Administered by Rhode Island Commerce, the Wavemaker Fellowship program provides student loan debt relief to qualified candidates working in STEM (science, technology, engineering, and mathematics), design, and –NEW in FY 23 – healthcare fields in Rhode Island.

The program offers qualifying individuals a refundable tax credit certificate up to the value of their annual student loan burden, subject to a cap, for up to four years.

Program results in FY 23 include:

719 Fellows supported

116 new Fellows

277 institutes of higher education

$242,817 credits certified

$867,344 funds obligated

Wavemaker Fellowship spotlight: Steve Barnes

One of hundreds of Wavemaker Fellows who has leveraged the initiative to earn student loan relief, Steve Barnes is quickly building his career as a rising leader at Johnson & Wales University. Steve joined JWU in 2018 as an Instructional Technologist and now serves as a Senior Instructional Designer and an adjunct member of the university’s faculty.

“The Wavemaker Fellowship has been a huge help for me and a great incentive to stay and work in Rhode Island. Over the last few years, this program has mitigated my significant student loan burden, helping to give me and my wife the financial flexibility to buy a house and start a family.”

— Steve Barnes

Renewable Energy Fund (REF)

The REF helps expand the role of renewable energy throughout Rhode Island, so the state and its residents can reap the full benefits of costeffective renewable energy from diverse sources.

Among other initiatives, the REF supports the state’s Clean Energy Internship program, a paid 12-week internship program managed by the Office of Energy Resources and RI Commerce. It is designed to help provide internship opportunities in clean energy careers, ranging across marketing, engineering, research, solar, direct construction, energy efficiency and more.

Program results in FY 23 include:

703 projects launched

510 projects completed

657 homes impacted

17 MW of solar capacity generated

44 interns placed

Marketing: Tourism & Marketing

Sharing Rhode Island’s Success Stories

In FY 23, Commerce’s tourism efforts continued building upon the successes of previous years while reaching new heights. There was continued promotion of flights into T.F. Green International Airport, including attention-grabbing presence in key airports, and campaigns for Get Gilded and promoting

Investments summary

Hotel Month throughout the state. These efforts enhanced visibility and awareness of the state to support Commerce's unwavering commitment to fostering economic development and securing Rhode Island's position as a premier destination for visitors and residents alike.

Tourism & Marketing

A Focus on International Marketing International Trade

Through a combination of virtual webinars and in-person events, Rhode Island Commerce stayed in touch with tourism leaders across Europe and Asia throughout the fiscal year.

701 frontline sales staff trainings

13 international trade shows

International Media

Brand USA named Rhode Island one of “Five U.S. destinations that should be on your radar for 2023,” generating 70 feature articles in 10 international markets.

177 pitches 251 articles

Group Tour

Rhode Island’s group tour industry – which, preCOVID, drove $250 million in economic input – is continuing to recover, as tour operators showed strong interest in our state at the American Bus Association Marketplace held in Grapevine, Texas.

Attractions are reporting that group attendance has returned to approximately 75% of pre-COVID

18 newsletters throughtout Europe

122 sales appointments

35 international tour operators hosted in state

$7m estimated media value

687m reach

12 media fams

2 Italian mega fam with Brand USA

levels. The shortfall can be attributed to slow growth in international visitation primarily from Asia.

Commerce staff conducted 75 group tour sales appointments.

Tourism & Marketing awards Award-Winning Travel Marketing

Rhode Island Commerce was recognized by the Hospitality Sales & Marketing Association (HSMAI), winning a Bronze Adrian Award for our air service marketing campaign. The Adrian Awards, now in their 66th year, are the largest and most prestigious competition in global travel marketing.

At the midpoint of 2022, after a nearly two-year hiatus promoting air travel to Rhode Island in key origin markets, Rhode Island Commerce launched a creative, digital-focused airport campaign, including digital display ads, paid social and streaming audio in promotion of returning flights and new airlines offering service to the state.

121 million impressions

217,000 clicks to the Visit Rhode Island Website

Looking ahead to FY 24:

Keeping the momentum

Building on Momentum & Finishing What We Started

As we wrote in Ocean State Accelerates*, our Comprehensive Economic Development Strategy, our vision is to work toward creating a more prosperous, equitable and resilient economy that works for all Rhode Islanders – one that supports more economic opportunities and family-sustaining jobs, and one in which businesses, both big and small, can thrive and meet the many challenges of the 21st century.

Looking ahead to FY 24 and beyond, we have several projects in the works that will help us move the needle toward making this vision a reality. A few include:

ConnectRI: We know that in a modern economy, access to reliable high-speed internet is no longer a luxury; it’s a necessity. Leveraging generational federal funding from the Biden Administration’s Broadband Equity, Access and Deployment (BEAD) program and the Capital Projects Fund (CPF), we are committed to executing our long-term strategic

plan** to strengthen Rhode Island’s broadband infrastructure. Our goal is to ensure every residence, place of business and public building has access to affordable high-speed internet by 2027.

Ocean Technology Hub: One of just 31 federally designated technology hubs (and the only one in the country focused solely on the ocean), we at Rhode Island Commerce are proud to lead the Ocean Technology Hub of Southeastern New England – a consortium of business, academic and government leaders committed to unleashing the full economic and environmental potential of ocean technology. Over the next decade, this sector is poised to grow by $300 billion, and we are committed to ensuring Rhode Island is well-positioned to leverage our expertise, talented workforce and physical assets to play a leading role in this exciting industry.

*Ocean State Accelerates. https://commerceri.com/wpcontent/uploads/2023/12/00_OceanStateAccelerates_ Strategy_FINAL.APPROVED_optimized.pdf

**ConnectRI Broadband and Digital Equity Strategic Plan. https://connectri-ricom.hub.arcgis.com

Appendices

Legal, board of directors and financial information

FY 23 Board of directors

The Honorable Daniel J. McKee Chair, Governor, State of RI

Mary Jo Kaplan Founder, Kaplan Consulting

William C. Stone TDP Advisors LLC

Bernard V. Buonanno III Managing Director, Nautic Partners

Elizabeth Catucci Vice Chair President & CEO, Northern RI Chamber of Commerce

George Nee President, AFL-CIO of Rhode Island

Karl Wadensten Treasurer President, Vibco, Inc.

Vanessa Toledo-Vickers Vice President/Community Development Market Manager, Citizens Bank

David M. Chenevert Executive Director of RIMA

Donna Sams Partner/Principal, AWS Partner/Principal, Spencer Consulting Group

An T. Le Vice President & Senior Commercial Loan Officer, Bristol County Savings Bank

Michael F. McNally former President & CEO, Skanska USA

Dr. Brenda Dann-Messier Senior Advisor for the Education Strategy Group

Michael A. Solomon Partner, Providence Coal Fired Pizza Partner, Cozy Caterers

Carol O'Donnell President, Emerald Re-Construction LLC Emmy LLC CRM Modular Homes

Governance

FY 2023 BOARD MEETINGS

July 25, 2022

October 5, 2022

October 24, 2022

December 12, 2022

January 30, 2023

February 27, 2023

April 24, 2023

May 22, 2023

June 26, 2023

BOARD TRAINING

Elizabeth Catucci and Michael Solomon: July 12, 2022

An Lee: May 12, 2023

*Carol O'Donnell was trained on 10.24.23 so will be reflected in the next year’s annual report

ACTIVE BOARD MEMBERS DURING FULL FY 23

Governor Daniel McKee

Elizabeth Catucci

David Chenevert

Dr. Brenda Dann-Messier

Mary Jo Kaplan

George Nee

Donna Sams

Michael Solomon

William Stone

Karl Wadensten

APPOINTMENTS MID-YEAR

Elizabeth Catucci (appointed Vice Chair on 2/21/2023)

An Le (appointed 2/27/2023)

Carol O’Donnell (appointed 5/4/2023)

RESIGNATIONS/REPLACEMENTS

MID-YEAR

Bernie Buonanno (resigned 9/30/2022)

Vanessa Toledo-Vickers (resigned 12/31/2022)

Michael McNally (resigned 5/3/2023)

FY 2023 RULES & REGULATIONS

Commerce Corporation rules and regulations can be found at: https://rules.sos.ri.gov/organizations/ agency/170

Financial Reports

FINANCIAL REPORTS

Rhode Island Commerce Corporation submitted board-approved, audited financial statements for the year ending June 30, 2022, to the Governor, Senate president, Speaker of the House, and Secretary of State before May 31, 2023, as required by Title 42 Section 64-28, State Affairs and Government. These statements can be found at:

https://commerceri.com/wp-content/ uploads/2023/11/RI-Commerce-Corporationfinalized-FS-FY23.pdf

Rhode Island Commerce Corporation submitted an Annual Incentives Report for the year ending June 30, 2022 to the Governor, the Senate President, and the Speaker of the House on September 30, 2022, as required by R.I. Gen. Laws § 42-64-36(a) and (b).

This report can be found at: https://commerceri. com/wp-content/uploads/2023/09/AnnualIncentive-Report-2023-9-29-23.pdf

FY 23 LEGAL MATTERS

During the relevant time frame, there were no hearings, complaints, suspensions, or other legal matters related to the authority of the board or corporation.

PROGRAM PRINCIPLES

The Board of the Commerce Corporation has adopted Principles for each of its program to further program integrity. These principles establish accountability standards, risk analysis standards, and outcome measurement procedures and reporting standards by which the Commerce Corporation’s staff and committees undertake the review and granting of awards. The Board of the Corporation recommends continuation of all Commerce Corporation programs at this time.

Rules and Regulations promulgated by the Commerce Corporation detail application guidelines and agreement procedures to be followed to further ensure program integrity and transparency. These can be found on the Secretary of State’s and Rhode Island Commerce’s websites. Information on each program can be found in the Annual Incentives Report and on Commerce’s website.

OPEN MEETINGS

All board meeting agendas, minutes, decisions rendered and actions considered are available at:

https://commerceri.com/about-us/opengovernment-transparency/ and

http://sos.ri.gov/openmeetings/?page=view_ entity&id=742