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Stimulus money is a big deal for small businesses

MYAKKA CITY — Here in eastern Manatee County, you can drive for miles and see nothing but orange trees and tomato farms. The nearest supermarket is half an hour away. Myakka Mall is a prefab building on a dead-end road.

So it was big news last summer when Myakka Technologies, the area's tiny Internet provider, announced it had landed nearly $8 million in federal stimulus money to dramatically upgrade Internet access in its huge service area. Dollar-wise, the award ranked in the top 10 percent of all those made in Florida so far.

First came the congratulatory messages from customers, thrilled to learn they would be able to surf the Web at speeds as fast as those in major cities.

Then, "in a day or two, the phone was ringing from contractors," says Charley Matson, Myakka Technologies' co-founder. "We had people calling from as far away as Oregon. Things are tough out there.''

This month, the company chose its first two subcontractors for the project, which involves laying 150 miles of fiber-optic cable that can transmit live lectures, government meetings and other streaming video to an area 30 miles from the county seat.

One of the contractors is Zhone Technologies in Largo, which will supply electronics. The other is Southeastern Site Development in Sarasota, which will install underground conduits for the cable.

From 30 or so employees during the construction boom, Southeastern is down to 15. The stimulus money will help save those jobs and could add 10 or 12 more, says company president Scot Findlay.

Lots of political rhetoric has been spent assailing and defending the stimulus, but the money is important to the many small businesses that stand to benefit. Their only complaint: It isn't coming in fast enough.

"We're waiting for somebody in government to say everything is good to go,'' Findlay says. "Tomorrow would be just fine."

Some help, some hype

Officially called the American Recovery and Reinvestment Act of 2009, the $787 billion stimulus program has suffered its share of slings and arrows.

Most Republicans, including Florida Gov.-elect Rick Scott, have condemned it as a waste of taxpayer money that will drive up the federal deficit.

But as Gov. Charlie Crist foresaw — evidenced by his infamous hug of President Obama — the program eased the pressure on states hard hit by the housing bust. Florida was allocated $26 billion, half of which had been spent through September.

"Without the stimulus money, the recession's impact on Florida would have been a lot greater, especially in the education sector where thousands of teacher jobs were saved,'' says Chris Land, deputy director of the Florida Office of Economic Recovery.

Money will be used, too, for unemployment compensation, the Medicaid program for the needy and major projects like a high-speed rail line between Tampa and Orlando. Three of Florida's biggest infrastructure grants — totalling nearly $27 million — have gone to the Tampa Bay area for dozens of new public buses and improvements to Tampa International Airport.

Some of Florida's 2,000 stimulus awards have been far more modest.

Michael Biskie, an executive with Monterey Boats in Levy County, got $1,800 for serving on a committee that reviewed stimulus grant applications.

"I used it to pay some bills and treated myself to a weekend away,'' he says.

As to the broader impact of the stimulus, "I have some reservations, mostly because I don't know that it's really creating the jobs it was intended to create,'' Biskie says. "In Citrus, Levy and Marion counties, lots of jobs have been lost and unfortunately there's just not a lot of job creation and growth.''

Sean Snaith, a University of Central Florida economist, agrees that the stimulus hasn't lived up to its hype.

"Perhaps it could have been more rapid in terms of its design,'' he says. "We had these allegedly shovel-ready projects being funded, but in reality it took years for money to get down to the economy and circulate where the stimulus actually takes place.''

The federal government says 675,179 jobs had been funded nationwide with stimulus money as of October. But Florida's unemployment rate is still high at 11.6 percent. It's a bit higher in Manatee County, where the crew at Myakka Technologies hopes to show that faster Internet access can help rural areas better compete for good jobs in the future.

"As it stands now, very few businesses would want to come out here,'' Matson says.

Broadband in 'boonies'

Myakka City (pop. 4,200) is part of an area so vast and sparsely settled that it's not economically feasible for big companies like Verizon to provide broadband service. Until a decade ago, the only way to get on the Internet was by sluggish dial-up.

That's what prompted Mark Ackaway, a computer programmer, to think about starting a wireless company when he and his wife moved to rural Manatee because she wanted room for a horse. In 2001, Ackaway turned to Matson, his father-in-law, for help.

"He needed my time and my financial backing,'' says Matson, who had taken early retirement from a Texas company. "I told him we would come for Christmas and I would give him three months and then I was heading back to Houston.''

But Matson stayed on, recruiting his son John to join the new Myakka Technologies. (Slogan: "Broadband to the Boonies.'') Located in the lightning capital of the world, the company suffered from strikes that knocked out expensive equipment installed on the metal wireless towers.

"The first couple of years were really bad,'' Matson says, "but about the time we were at our lowest and ready to throw in the towel, one of our customers would call or e-mail us and tell us how much they appreciated our service.''

Surge protection improved, and Myakka Technologies had grown to 1,200 subscribers over 400 square miles by the time Congress passed the Recovery Act early last year.

Among the goals of the stimulus was expanding broadband service in rural America, where kids hoping to go to college are at a disadvantage with urban students who can do Internet-based research for homework much more quickly. Better Internet access also helps attract businesses that rely on high-speed communications and data transfers.

Working from home, without an experienced grant writer, Myakka Technologies' tiny staff prepared a 100-plus-page application.

"The government did an expert job of setting the criteria,'' Matson says. "When we filled out all the information, we ended up with a business plan that you could probably take to any business school to critique and come out with flying colors.''

On Aug. 4, the federal Rural Utilities Service announced that Myakka Technologies had been awarded $7.85 million — $6 million as a grant, the rest as a loan to be repaid over 21 years.

"It was surreal,'' Matson says. "It was the biggest thing that happened to Myakka City in 10 years.''

The project will be handled by a sister company, Myakka Communications, which has three years to get the fiber optic cable installed. Once the work is done, most customers will have speeds of up 20 megabits per second — 50 times faster than now.

And minus the problem of lightning strikes.

"Sometimes when you hear about these stimulus grants, you go, 'Oh brother,' '' says Donna King, principal of Florida's only one-room public school, in the tiny Manatee community of Duette. "But this is a really good thing. There are still people around here with dial-up.''

For now, Matson and the others are operating out of a cavernous, largely empty room in Myakka Mall, whose only other tenants are a hair salon and a Tae Kwon Do studio. The sole hire thus far is a former Verizon employee who became one of Myakka Technologies' first customers years ago because he couldn't get Internet service from his own company.

Eventually, the project will create 40 jobs, Matson predicts. But the federal government isn't expected to approve contracts or release money until early next year — at least five months after the award was announced.

Nationwide, the flow of stimulus funds "has been incredibly slow,'' says Snaith of the University of Central Florida. "The problem, quite frankly, was the infrastructure to administer and distribute these funds. You had billions of dollars dumped on agencies responsible for awarding these grants and everyone is in fear that if they moved too quickly there would be tales of corruption or fraud.''

But Findlay, whose Sarasota company is one of the first subcontractors signed up for the Myakka project, praises the way Matson and his team have worked so far.

"It may be stimulus money, but he's guarding it as if it's all his,'' Findlay says. "They're shopping the materials, they're shopping the best prices. They're not buying $5,000 hammers.''

Susan Taylor Martin can be contacted at susan@sptimes.com

Top 10 Florida grant recipients

(Feb. 17, 2009-Sept. 30, 2010)

Florida Department of Transportation: $513,453,920

Florida Department of Environmental Protection: $122,069,725

Aviation Authority of Greater Orlando: $18,298,377

City Of Marathon: $18,126,280

Hillsborough Transit Authority: $9,756,752

Central Florida Regional Transportation Authority Inc.: $8,770,162

Pinellas Suncoast Transit Authority Inc.: $8,624,450

Hillsborough County Aviation Authority: $8,343,189

Volusia Transit Management Inc.: $6,612,945

City of Key West: $6,419,771

To see all projects awarded in Florida, including those in your own ZIP code, go to recovery.gov.

Stimulus money is a big deal for small businesses 12/10/10 [Last modified: Sunday, December 12, 2010 2:27pm]

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