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ITEM / 5. <br />MEMORANDUM <br />TO: Economic Development Authority <br />FROM: Heidi Steinmetz, Assistant Director of Economic Development ~~ <br />DATE: February 13, 2006 <br />SUBJECT: Discuss EDA Business Incubator Program <br />Attachments <br />• Program History and Partnerships summary <br />• Business Incubator summary <br />• Letter from Larry Hickman dated February 7, 2006 <br />• Page 5 of the August 8, 2005 EDA Minutes xe: Incubator budget & program <br />• 2006 Incubator budget <br />• Pxogxam recommendations from Harlan Jacobs dated February 8, 2006 <br />Background <br />More details on the following information axe avaIlable in the attached Pxogxam History & <br />Partnerships and Business Incubator srunmaxies. <br />Program Inception <br />In 1997, the City received a Federal Community Development Block Grant, which was <br />loaned to "I'escom Corporation fox the expansion of their manufacturing facility in Elk River. <br />As the loan was repaid, the City was allowed to use the funds fox other economic <br />development projects within the City so the City &EDA chose to fund a Business <br />Incubator Pxogxam. A transfer from this loan fund to the Incubator account occurs annually <br />to offset the difference between Incubator expenditures (FDA's rent to building owner and <br />Incubator consultant's retainer fee) and Incubator revenues (Incubator tenant rent). <br />Program Components: Lease Space. Access to Capital and Technical Assistance <br />Lease Space <br />Ever since the program's inception, the I~DA has leased space in the former Furniture & <br />Things building on east Hwy 10 from building owner Larry Hickman. Incubator tenants <br />sublease individual suites varying in size from 1,041 to 2,505 SF from the EDA, paying rent <br />through a mixture of cash and stock. <br />