06 12 2006 EDA MIN - Laserfiche WebLink

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Econorrilc Development ~uthonty Minu[es June 12,2006 Page 4 Ms. Steinmetz stated that in Pebruan~ ?006, the EDA directed staff to complete an analysis of the Business Incubator program, and also explore options for a new incubator model, ox, investing the program's fund balance (generated from the Tescom loan fund originating from a state program) into some other npe of program, such as an incentive program for energy-related companies. Ms. Steinmetz noted that the analysis was completed using cost-benefit analysis, prospect histore-, and current access to capital. Staff then reviewed details of the analysis and provided a list of four options fox the future of the program. Commissioner Dwyer stated that he felt it was die financial incentives that brought people into the incubator program, not the incubator space. President Gongoll stated that it is frustrating teldng to compete with areas that offer hundreds of thousands of dollars in incentives such as Fargo, and tliexe is no funding available here. He noted that ~C%isconsin uses a portion of the pension fund to invest in new businesses. Ms. Mehelich stated that the most recent research indicates the most successful incubator programs are directly connected to a university system. She stated that it seems to be more about the service, and less about the building. Convnissioner Klinzing stated that she felt it was important to focus on Energy CitS~ for providing incentives to new businesses coming into Elk River using renewable energy and resources, green products, etc. She noted that the proposed Energy City Conference will be very important in bringing in cutting edge technology companies. Commissioner Motin stated he was not sure about using the EDA's limited funding for Energy City-related businesses. He stated that he would consider support for low interest loans, but not grants. He stated that the EDA's focus has always been to expand the Ciry's tax base and create jobs. Commissioner Klinzing stated that energy efficiency helps businesses save on energy costs, and that a loan could be offered as an incentive to help a company save money as an incentive to make the building improvements. President Gongoll asked what the legal implications are regarding use of the Tescom loan funds. Ms. Mehelich stated that they must be spent on economic development. If the EDA decides to do nothing at this time, the funds will continue as part of the EDA's revolving loan fund. Commissioner Tveite stated that more discussion is needed, and that he did not want to see the concept of a business incubator eliminated completely. President Gongoll concurred. Commissioner Dwyer stated that he would support the funds remaining in the revolving loan fund for the time being, and the EDA could pursue Option 3, the "incubator without walls" concept, if a prospect were to come along. Ms. Mehelich stated that this issue will be discussed further next month, and that the topic will go to the Finance Committee this week fox input.