Coon Rapids starts a business incubator
by Peter Bodley
Managing Editor
The city of Coon Rapids has launched a study to see if it’s feasible to start a business incubator in the city.
The Coon Rapids Economic Development Authority (EDA), which comprises the seven members of the Coon Rapids City Council, has authorized a preliminary feasibility study for the project.
And the EDA has approved spending $7,500 to be taken from the city’s economic development account to hire Harlan Jacobs of Genesis Business Centers Ltd. to conduct the study.
The feasibility study is expected to begin this month and take two months to complete.
The concept for a business incubator in Coon Rapids was first discussed at the council’s annual council/management retreat in early March, then was talked about further at a late April work session, which was attended by community members interested in the concept.
At the work session, the consensus of the council was for staff to further develop the concept and that has resulted in the recommendation from Community Development Director Marc Nevinski to have a feasibility study done.
According to Nevinski, a business incubator is an opportunity to grow very young, generally high technology or innovative, early stage (embryonic) businesses by providing various resources at low or no cost to the tenants.
Such resources might include office or lab space, technical business assistance, business advice or common administrative functions, Nevinski said.
“Early stage companies generally do not have much revenue and may be living off investor or personal dollars to start the company,” he said.
“Often, incubator landlords take shares of stock as payment in lieu of rent, while companies focus on refining their product, identifying investors and growing their business.”
The feasibility study to be done by Jacobs will determine if there is support and resources to start a business incubator project in Coon Rapids, Nevinski said.
Specifically, the study will include:
• Identify viable space for an incubator, including landlord interest.
• Determine the level of community financial support that exists to finance a program.
• Determine the potential to revive the Anoka/Sherburne County Capital Fund and/or the Anoka County Investment Club.
According to Nevinski, if the conclusions of the preliminary feasibility report are positive, the study will provide documentation to seek support from larger corporations and foundations for an incubator.
“Support could include funding for further incubator start-up assistance, operations, equity investments and in-kind contributions such as business advising or legal services,” Nevinski said.
The only financial role that the city would likely play in a business incubator program would be helping to pay for improvements needed for a building identified to house the program, he said.
Otherwise, the city’s role would be to provide a network where start-up businesses seeking help and private investors could come together, Nevinski said.
“This would involve private venture capital, not public dollars,” he said.
Some years ago there were business incubators in both Columbia Heights and Elk River, in which Jacobs was involved, Nevinski said.
Businesses in those incubators received financial assistance from the capital fund and investment club, he said.
But both the capital fund and investment club have become dormant, Nevinski said.
According to Nevinski, a Coon Rapids business incubator, if implemented, would target emerging life science and medical technology companies.
But it might also be a good fit for other high tech firms or a more traditional company that has drawn investor interest, Nevinski said.
There is currently a successful business incubator operating in the city of Worthington, the council was told at the April work session.
According to Mayor Tim Howe, the feasibility study would keep the ball rolling on the business incubator concept and determine if there is interest in the community.
Councilmember Scott Schulte is “excited” by the concept and would like to see it happen, he said.
Jacobs is founder and president of Genesis Business Centers Ltd., which is located in Hopkins.
According to its website, Genesis is an incubator/consulting firm that helps select high tech start-ups gain access to capital and business development services.
Jacobs has been involved in business incubator projects since 1986, including several start-up high tech companies which were eventually sold to larger firms and others which have thrived on their own, the website states.
