7. EDSR 06-12-2006 - Laserfiche WebLink

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Discuss IiUA Business Inenbator Pmg~am t\nalpsis June 12, ?006 Page 4 of 4 Without sufficient access to local/area seed capital investments the attractiveness of an incubator program would be very little, as the program has recently experienced the past few years. Options to Consider The attached xepoxt completed by the MN Dept. of Trade & Economic Development, now known as the Dept. of Employment & Economic Development, provides research findings based on a 2001 survey of twenty-eight Minnesota incubators. The xepoxt includes information on different organizational structures and payment mechanisms of Minnesota incubators. The attached article authored by the President and CEO of the National Business Incubation Association offers "10 Keys to Incubation Success," which is also important information fox the EDA to consider. Number two of the "10 Keys" is "Business Incubators axe service programs, not buildings." Based on the analysis of the previous program model, staff suggests the following options fox EDA discussion, with details to be refined upon the EDA's direction: Option 1 Own and operate an Incubator building Option 2 Sublease space within a building and operate pxogxam Option 3 Operate an "Incubator without walls" (subsidize tenant rent at various available locations within the City based on EDA policy parameters to be developed) Option 4 Do nothing Staff Recommendation Based on staff's analysis of the previous model and issues associated with operating an incubator program it appears that the EDA may want to consider discontinuing the incubator model and explore an alternative program. A shared goal of the EDA and Energy City Commission is to encourage businesses to incorporate energy efficient technologies into their buildings. Staff recommends the EDA consider investing the balance of the Tescom loan funds ($133,095) that would have been dedicated to the incubator program into an incentive program fox businesses to incorporate energy efficient design and/or materials in the construction of their facility. The pxogxam could be developed as a new pxogxam within the EDA Micro Loan Fund. The pxogxam could also capitalize off of existing environmental assistance low-interest loan programs offered by the state to finance capital equipment upgrades that meet ox exceed environmental regulations.