EDSR MEMORANDUM 02-12-1996 - Laserfiche WebLink

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EDA Agenda Memo Page 3 February 12, 1996 ip The Columbia Heights incubator is actually the brain child of a quasi- public, non-profit group known as the Anoka County Economic Development Partnership. However, it has no ownership interest in the space. Instead, it has collaborated with a Twin Cities investor who is able to bring new or emerging companies to the space from his many business networks. A third component of the Anoka County model is an equity capital fund that was capitalized by county commissioners (i.e. public funds), banks, and an electric utility company. The capital fund is not a loan or a grant program, but rather,the fund allows the county's ED Partnership to take an equity position in new and emerging companies. Because the fund shares the risk, investments are structured so that the fund will share in the profits that may result. With respect to the business incubator, new or emerging companies barter/trade their stock for discounted rent. A small company receives some capitalization from the county's fund which in turn helps the company preserve scarce capital for other purposes. A publicly-owned incubator is not being advocated here. This is better served as a private sector initiative. However, an opportunity exists for the public sector to assist in a collaborative effort to ensure that new jobs are created and existing ones are retained. In the case of the. privately run incubator in Columbia Heights, the following elements help make it successful: • Privately owned space • Distressed space (discounts already offered) • A networked business person • A county-initiated capital fund The Executive Director of the Anoka County ED Partnership has indicated that its capital fund may be used to help new and emerging companies in Sherburne County. This was done because at least one of the fund's initial investors was a lender that has ties to both Anoka and Sherburne County. A future opportunity may be that of a second incubator located somewhere in Sherburne County. This incubator would likely be owned/developed by the Twin Cities investor. In order to help reinforce the notion of the Anoka County business incubator and its respective players, a video presentation will be aired at the EDA meeting. It is a round table discussion that includes a jek moderator, Anoka Partnership's Executive Director, the business MIF investor, and a company that has benefited from an equity investment.