Posted on: July 21, 2022 Posted by: AKDSEO Comments: 0

FAIRMONT–On Monday afternoon, the Fairmont Economic Development Authority discussed the future of the Business Development Center (incubator building).

FEDA has owned and operated the incubator building, located at 426 Winnebago Ave., since 1993. The building provides office suites and work areas for up to seven businesses and there are currently five tenants in the building.

Of the five tenants, one has been in the building less than a year and the others have been in there at least five years with the longest for 25 years. Typically, incubator office space is leased to new businesses below market value to allow them a successful start.

Jennifer Howard, the interim Economic Development Coordinator, said that they’re at the point where they need to review numbers, come up with policies and procedures or see whether they even want to keep the building.

City Administrator Cathy Reynolds added that as the city recently completed several facility assessments, the incubator building was one of them. The assessment showed a number of issues that would need to be addressed in the next six to 10 years.

“This isn’t a right now, but we need to be looking at how we’re budgeting for this… for the future,” Reynolds said.

Board Member Andy Noll said they’ve never had a set plan as to when they raise rents or have businesses graduate out of the incubator building. He said he thought former Economic Development Coordinator, Linsey Preuss, had done a good job of getting some of the tenants closer to market rent.

Noll questioned whether the offices were comparable to the Victoria State Crossing quality of office space, to which Reynolds said no. Howard said they don’t have a lot to compare it to, but they could look into it.

“Do we need it? I think that’s the question that should rise to the top of the discussion,” said Bruce Peters.

He suggested that, if they keep it, they raise rent annually until it’s near or above market rate.

Noll said that when the idea of an incubator building started years ago, it made sense, but now with a lack of definition, it’s become complacent for the tenants. Reynolds said a lot of incubator buildings go hand in hand with entrepreneur programs, which Fairmont doesn’t have.

“We’ve talked about trying to build up an entrepreneur program here to help take people from a business idea… to moving them into the incubator building and then moving them out. But we don’t have that progression train in place and what we have is a building we’re renting that people are inhabiting as long-term tenants,” Reynolds said.

She noted that they also don’t have new businesses knocking on the door seeking a space. She questioned if it was serving as a value to the community for taxpayer augmentation of the building as they’re generally not getting enough in rent each year to cover expenses.

Reynolds asked the board if it wanted to put out a request for bids to see if someone is interested in purchasing the building. The board agreed it wasn’t keen on the idea of the cost of maintenance that would be required in the next couple of years.

“With the cost of these repairs coming up, it’s going to be a money drain for sure,” said Board Member Sarah Gerhard.

Peters said he think an incubator building is a good idea, but that it’s not really being used like that right now. He said he thinks they should pursue selling the building, to which other board members agreed.

Reynolds said they’ll look into putting together either a Request for Proposal or closed bids.

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