July 2, 2008



Economic Development Corporations


By: John Rappa, Principal Analyst



You asked what economic development corporations (EDCs) are, how they are established, the legal authority for establishing and operating these entities, and whether that authority includes issuing bonds. You also wanted to know how many EDCs operate in Connecticut.  


As the title suggests, EDCs are private organizations formed to promote economic development. Consequently, they cannot issue bonds or other government debt.


As Attachment 1 shows, at least 19 EDCs are operating in Connecticut. All but one are nonprofit, federal tax-exempt organizations. Consequently, they must comply with the appropriate provisions of the federal tax code to maintain their tax-exempt status. Most were organized as charitable organizations under section 501(c) (3) of the code.  Others were organized as civic organizations (i.e., 501(c) (4)) or professional and trade associations (i.e., 501 (c) (6)).  


The exceptions are the Community Economic Development Fund and the Housatonic Industrial Development Corporation.  The former operates as a 501(c) (3), but the legislature also created it to increase the flow of credit to small businesses in inner city neighborhoods.  Attachment 2 is a 2006 OLR report describing the fund’s organizational structure and statutory authority (2006-R-0610). The Housatonic Industrial Development Corporation was organized as a nonstock corporation and consequently operates under the state rules governing this type of business organization.


EDCs serve similar purposes, but different types of geographic areas. Seven operate regionally, four serve a specific municipality, three operate statewide, and three serve specific neighborhoods.  All may do so with their own funds, but the law recognizes them as tools for addressing public economic development needs.  It allows municipalities to designate an EDC to plan and implement physical development project on their behalf (CGS § 8-188).  It also makes EDCs eligible for state economic development dollars, which Table 1 summarizes.   


Table 1: Economic Development Programs Open to EDCs



Administering Agency



Financial and Technical

Assistance to Municipal and Regional Economic Development Agencies

Department of Economic and Community Development (DECD)


Funds for developing technical capacity to plan and implement economic development projects

Loans to Nonprofit State and Local Development Corporations



Working capital, start-up, and fixed asset loans

Connecticut Growth Fund

Connecticut Development Authority (CDA)


Capital for business loan funds

Comprehensive Business Assistance Fund



Capital for making loans to businesses that cannot obtain from banks and other conventional sources

Manufacturing Assistance Act



Matching funds for developing land and capitalizing business loan funds

Grants to Regional Corporations for Regional Revolving Loan Funds



Grants for capitalizing regional revolving business loan funds



Attachment 1: Connecticut Economic Development Corporations



IRS Code



Geographic Area Served


Municipal Only

Neighborhood Only

Bradley Development League Inc.


Market airport and region for economic growth

East Granby, Suffield, Windsor, and Windsor Locks



Bridgeport Economic Resource Center


Accelerate economic development




Broad-Park Development Corporation


Upgrade physical housing and economic development in specific Hartford neighborhoods

57 Hartford-area municipalities


Frog Hollow and South Green

Community Economic Development Fund Foundation


Revitalize distressed neighborhoods by providing access to capital, technical assistance to small businesses, and supporting economic development 

Low- and moderate-income people statewide

All small businesses in designated municipalities


Connecticut Community Investment Corporation


Promote economic growth and community development statewide

All regions



Greater Hartford Business Development Center, Inc.


Stimulate economic development in the Hartford metropolitan area by collaborating with public and private organizations to help start, finance, retain, and recruit small businesses within region

Hartford region



Hockanum Industrial Development and Venture Capital Corporation


Aid in the redevelopment of distressed nonresidential property and restore them to productive economic use




Housatonic Industrial Development Corporation

Nonstock Corporation

Help Connecticut businesses grow, create, or retain jobs and achieve economic development goals




Orange Economic Development Corporation


Encourage economic growth in Orange’s retail, commercial, industrial zones




Mansfield Downtown Partnership, Inc.


Direct the rehabilitation and enhancement of  specific areas



Storrs Center, King Hill Road, and Four Corners Areas

MetorHartford Alliance


Provide visible leadership enabling region to fulfill opportunities related to sustainable economic growth




Naugatuck Economic Development Corporation


Promote and facilitate professional, systematic approach to economic development in Naugatuck 




New London Main Street


Preserve, develop, and enhance economic, social, and cultural quality of life in downtown New London



Downtown New London

Attachment 1: -Continued-



IRS Code



Geographic Area Served


Municipal Only

Neighborhood Only

Northeast Connecticut Economic Alliance


Promote, stimulate, and expand Northeast CT economic base by providing resources, consulting, and business networking

Ashford, Brooklyn, Canterbury, Chaplin, Columbia, Coventry, Eastford, Hampton, Killingly, Lebanon, Mansfield, Plainfield, Pomfret, Scotland, Sterling, Thompson, Union, Willington, Windham, and Woodstock



Northwest Connecticut Economic Development Corporation


Public and private collaboration for creating jobs, strengthening tax base and improving the economic well being in region

Barkhamsted, Canaan, Colebrook, Cornwall, Goshen, Hartland, Harwinton, Kent, Litchfield, Morris, North Canaan, New Hartford, Norfolk, Roxbury, Salisbury, Sharon, Thomaston, Torrington, Warren, Washington, and Winsted/Winchester



Stamford Partnership, Inc.


Plan, promote, and implement orderly economic development




South Central Connecticut Regional Economic Development Corporation


Promote regional economic development

Bethany, Branford, East Haven, Guilford, Hamden, Madison, Meriden, Milford, New Haven, North Branford, North Haven, Orange, Wallingford, West Haven, and Woodbridge



Southeastern Connecticut Enterprise Region Corporation


Stimulate and support economic development and diversification of southeast region by fostering climate favorable for development, supporting business retention and expansion, recruiting new businesses, coordinating municipal economic development efforts, and defining and updating region’s goals

Bozrah, Colchester, East Lyme, Franklin, Griswold, Groton, Groton City, Ledyard, Lisbon, Lyme, Montville, New London, North Stonington, Norwich, Preston, Salem, Sprague, Stonington, Stonington Borough, Waterford



Soutthside Institutions Neighborhood Alliance, Inc.


Work cooperatively with community to develop leadership and improve economic, physical, and social characteristics in specific Hartford neighborhoods



Frog Hollow, Barry Square, and South Green

Source: Guidestar and organization websites