The Forum - 05/31/2003
Study Supports Incubator
A consultant’s report says the North Dakota State University Research and Technology Park should proceed with plans to build a technology business incubator.
A summary of the report by California-based Claggett Wolfe Associates recommends the park collaborate with local governments and agencies to develop a 40,000-square-foot incubator.
“It’s going to happen,” Tony Grindberg, the park’s executive director, said this week. “It’s just a matter of some of the particulars.”
The incubator, estimated to cost $6 million, would provide space and resources for startup tech companies and help university researchers commercialize their products.
Grindberg said a tentative site has been selected along 19th Avenue North, just north of the Center for Nanoscale Science and Engineering now under construction in the tech park.
Compiled by consultant Chuck Wolfe, the report says an incubator is consistent with both the region’s and NDSU’s economic development goals for nurturing high-technology ventures.
It also cites strong community and investor support for an incubator, although “issues over fund-raising may arise,” it said.
If the necessary funding falls into place, construction would start in April or May 2004, Grindberg said.
Earlier this month, Gov. John Hoeven signed a Department of Commerce funding bill that provides $1.25 million for the incubator, referred to as the NDSU Center for Technology Enterprise.
Grindberg was in Washington, D.C., last week lobbying for federal funding for the project from the U.S. Department of Commerce. The park will submit a $1.5 million grant proposal in mid-June, he said.
“The funding from the federal perspective is almost a perfect match for what we’re doing in the research park,” he said.
Although it still must be approved by the park’s board of directors, Wolfe has recommended the remainder of the funding come from a “syndicated offering,” where investors would buy shares of the incubator, Grindberg said. The return on investment would come as the real estate increases in value, and from a percentage ownership in companies that use the incubator.
“What I like about that is that if we have 15 or 20 investors … they have a vested interest in the operation and want to be more involved than just from a passive standpoint,” he said.
Successful incubators across the country operate with no debt, and NDSU’s would be no different, Grindberg said.
Rent and fees for services would pay the operating bills, he said.
Wolfe’s report says that while the amount of financing available for the incubator is adequate, the presence of so-called “angel” investors and venture capital firms may be inadequate to support tech firms from forming as a result of the incubator.
Grindberg said this year’s Legislature took several steps to address that problem, most notably the “centers for excellence” funding for NDSU and the University of North Dakota, which will receive $800,000 to expand its Center for Innovation.
Lawmakers also broadened the eligibility rules for Renaissance Zone funding; provided partial funding for a North Dakota Design Center at UND to commercialize university research; and spent $200,000 to market the Red River Valley Research Corridor between NDSU and UND, he said.
John Campbell, president of the Chamber of Commerce of Fargo-Moorhead, said he’s not surprised at the report’s positive recommendation.
“We’re excited about the prospects of the incubator and the good things that can come out of that,” he said.
The Chamber is one of several partners Wolfe suggested for the incubator project. Among the others: UND’s Center for Innovation, the Lake Agassiz Regional Development Council and the Fargo-Cass County Economic Development Corp.
Brian Walters, president of the Fargo-Cass County EDC, said the incubator is in line with NDSU’s emphasis on encouraging entrepreneurs in the region.
“That’s another approach to job creation that we support,” he said.
Mike Nowatzki, mnowatzki@forumcomm.com, (701) 241-5528
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