Regional Economic Development Roundtable: Capital, Talent, and the Next “Don Weber”

Leaders from across the La Crosse region came together for a Development Dialogue hosted by the La Crosse Area Development Corporation (LADCO) to welcome Majel Hein, the new WEDC Regional Director for Region 3.

Regional Director for Region 3. The open-forum conversation centered on the theme:

How do we strengthen our regional economy – especially small business, innovation, and downtown vitality – in a challenging capital and labor environment?

What followed was a fast-paced, highly candid conversation touching on access to capital, entrepreneurship, housing and downtowns, infrastructure, and the future of high‑tech manufacturing and aviation in our region.  

Welcoming WEDC’s New Region 3 Director 

Majel Hein, 41 days into her new role as WEDC Regional Director for Region 3 (Pepin to Juneau, down through Vernon County), posed two core questions to the room: 

1. How are you partnering with WEDC today? 

2. How would you like to partner – where can WEDC better support you? 

Capital: The Single Biggest Barrier for Small Business 

A recurring theme was clear: it’s not a lack of entrepreneurial interest – it’s a lack of capital at the right stage and on the right terms. 

Anne Hlavacka, Director of the Small Business Development Center (SBDC) at UW–La Crosse, noted:  Yet even with strong ideas and support systems (SBDC, SCORE, WIBIC, etc.), new ventures struggle to get the “first money in”. 

Many small business owners report they still haven’t been able to pay themselves, signaling that current capital structures are not sustainable for them. 

Testing value before big capital 

Greg Clarke (Western Wisconsin SCORE) emphasized the need to test the value proposition early. Use a minimum viable product (MVP) and small-scale launch to see if customers will actually pay. His message: you don’t need millions to start – but you do need a clear, staged capital funnel from $15K experiments up through bank and equity funding. 

Banking, Cost of Capital, and Why Deals No Longer “Pencil” 

From the lending side, Joe Moua (Altra Federal Credit Union) and Joe Zoellner (State Bank Financial) from local banks and credit unions painted a stark picture: 

• Cost of funds is up: deposit competition and money exiting the traditional banking system (into investment products, fintech, etc.) are driving up the cost of capital for banks. 

• Loan economics are tougher: 

  • What used to require 20% equity might now demand 30–45% to make a project financeable. 

  • Many projects simply don’t “size out” under today’s interest rates and construction costs. 

• Loan-to-deposit ratios are high, limiting how aggressively banks can lend. 

As one banker put it, “Everything is getting compressed all the way down to banking margins.” 

What lenders say they need to move projects forward.

Lenders were quite specific about what would help: 

• Cheaper, subordinate debt: 

  • Government or quasi-public capital at below-market rates (e.g., 4% instead of 7%) 

  • Structured as subordinate debt behind the bank 

  • Flexible repayment terms (e.g., cash-flow contingent or standby – bank gets paid first) 

• More capital stack tools: 

  • Revolving loan funds 

  • Program-related investments 

  • Gap financing, especially for workforce housing and mixed-use projects  

Entrepreneurship, Innovation, and “Finding the Next Downtown Anchor” 

Several speakers focused on a strategic question: 

Where will the next locally-owned, large employer come from, and how do we make sure they grow here? 

Key ideas: 

• Intrapreneurs inside large firms: Many major companies house engineers and innovators who could spin out the next high-growth business – similar to how: 

  • Multi-Stack emerged from Trane connections 

  • Other high-tech manufacturers spun out of established players 

• We need to identify and support: 

  • People leaving large firms with specialized knowledge (R&D, engineering, product development) 

  • Those who can build exportable, scalable products, not just local services 

LADCO’s strategy of focusing on “intrapreneurs” was cited as an important path to the region’s next anchor employers. 

WEDC Tools: Entrepreneurship, Innovation, and Workforce Housing 

Majel outlined some WEDC directions and tools that can help fill gaps: Entrepreneurship & innovation at WEDC 

• WEDC’s Entrepreneurship and Innovation team has shifted part of its focus toward: 

  • High-tech, high-growth companies 

  • Supporting angel investor networks and incentivizing angel investment. 

While high-tech startups are a major priority, several around the table stressed the region also needs support for: 

• Service and main street businesses 

• Business transitions (helping new owners buy quality existing businesses instead of closing them) 

New flexibility in Business Tax Credits (Act 78) 

A timely opportunity was highlighted: recent changes under Act 78 to the Business Development Tax Credit program. 

Key change: 

• Qualifying businesses can now receive refundable tax credits for: 

  • Investments in workforce housing 

  • Investments in childcare slots 

• Employees don’t have to live in the housing or use the childcare directly. 

• Businesses can count investments made through: 

  • For-profit developers 

  • Nonprofits 

  • Revolving loan funds focused on housing or childcare. 

This opens a pathway for: 

• Large employers to co‑invest in housing and childcare, working with developers like 360 Real Estate Solutions. 

• Projects to close their capital stack while still serving broader community needs. 

A forthcoming webinar on these updated credits will be shared with local partners. 

Mary Ganley, from Congressman Derrick Van Orden’s office, highlighted: 

• The Congressman has helped bring ~$20M per year back into the district for: 

  • Infrastructure 

  • Public safety 

  • Local projects 

• Their office has a full-time grants specialist who: 

  • Helps communities and organizations find and interpret federal grant opportunities 

  • Cannot write grants, but can navigate the federal grants landscape (USDA, SBA, DOE, etc.) 

Several attendees were encouraged to connect with Mary to explore seed money, SBA programs, and project-specific federal funding. 

Where This Conversation Leads Next 

The meeting closed with Majel stating her goal is to listen, connect, and build programs that not only drive economic development but also respect community development, environment, and quality of life. 

This Development Dialog made clear: the ideas, talent, and will are here. The work ahead is about aligning tools, capital, and policy so that more of our entrepreneurs can not only start – but grow, scale, and stay in the La Crosse region.