Item 8 - Business Incubator Program
-- AGENDA REPORT SUMMARY
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TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Man~ _
INITIATED BY: John D. Fitch, Assistant City Manage~ ~'
Warren Shafer, Director of Redevelopme Service GO
DATE: September 19, 1995
SUBJECT: Business Incubator Program
ABSTRACT
At the June 13, 1995 City Council meeting, staff was requested to review the potential
of working with the San Diego Incubator Corporation to create a business incubator
program in Poway. This report explains what we have learned about the incubator
program.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
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FISCAL IMPACT
None.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to Fred Day, Acting Executive Director, Poway
Chamber of Commerce, and Larry Cruse.
RECOMMENDATION
It is recommended that the City Council receive and file this report.
ACTION
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SEP 1 9 1995 ITEM 8
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- AGENDA REPOR'l
CITY OF POW A Y
TO: Honorable Mayor and Members~e City Council
FROM: James L. Bowersox, City Mana
INITIATED BY: John D. Fitch, Assistant City Managerc('?I (s
Warren Shafer, Director of Redevelopment Services L~+~
~
DATE: September 19, 1995
SUBJECT: Business Incubator Program
BACKGROUND
At the June 13, 1995 City Council meeting, staff was requested to review the
potential of working with the San Diego Incubator Corporation to create a
business incubator program in Poway. Staff contacted the San Diego Incubator
Corporation and Contracting Opportunities Center to find out about the City of
San Diego's Program and about incubator programs in general. We received an
explanation of how the Center is funded and operated. We also received some
background information on incubation centers in general and some critical factors
for successful centers.
FINDINGS
Incubator centers are more than a collection of small businesses that share
space. The successful centers appear to have the following as keys to their
success. First, the center provides a wide variety of support services
(marketing, accounting, production planning, etc.) to the businesses. This is
generally provided through the. staff of the center, augmented by other
specialized groups. Second, the operation is subsidized in some manner. These
subsidies vary, but can be from grants provided by pri vate bus i nesses or
governmental entities, or from free or very low rents for the occupied spaces.
Often these spaces are in older buildings that have been given or rented to an
Incubator Program for very nominal sums. With this low rent basis, the center
can generate enough revenue to cover the needed support services.
The San Diego Center is supported primarily by grants from the City of San Diego
and the private sector. They don't have any plans to expand at the current time,
but do provide advice to others thinking about starting their own center.
It doesn't appear that the timing is good for Poway to start an incubator
program. First, funding would be very difficult since neither the City or
Redevelopment Agency has any available funds for new programs. Locating private
funding is an alternative; however, with one center already in the County it
ACTION:
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2 of 3 SEP 1 9 1995 ITEM 8
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Business Incubator Program
September 19, 1995
Page 2
would likely be difficult. Second, it doesn't appear that we have the type of
space available at low enough rates to provide the rental income necessary to
cover the overhead cost for the required support services.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
None.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to Fred Day, Acting Executive Director, Poway
Chamber of Commerce, and Larry Cruse.
RECOMMENDATION
It is recommended that the City Council receive and file this report.
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