City interested in business incubator plan
And last summer's floods could provide the waves to make it happen.
The city will apply for federal grant to pay 75 percent of the $1.5 million cost of the building, which if approved will go up in one of the city's tax increment finance districts.
Funding for the project would come from the Economic Development Administration, which has set aside stimulus money to help communities deal with the economic impacts of flooding and the hardships caused by distress in the U.S. auto industry.
While communities are competing for the EDA funds, Janesville would appear to qualify on both accounts.
Doug Venable, the city's economic development director, said the city would apply for the funding with the hope of starting construction next spring.
The city currently has 162 industrial and warehouse buildings that total 15 million square feet. Only 19 are smaller than 5,000 square feet, and none of them are available.
"While the economic slowdown has created 1.5 million square feet of vacant industrial buildings, none of the vacant buildings are designed or available to meet the needs of a start-up manufacturer that only needs 2,500 square feet of space," Venable said.
Typically, he said, small start-ups don't need much manufacturing space. The hope is that they will start in an incubator building and eventually grow into a larger building.
The new incubator wouldn't be the first in Janesville. Forward Janesville leased about 15,000 square feet from Hufcor in the 1990s to incubate small companies.
The effort was successful, Venable said, but the small businesses eventually needed more space that wasn't readily available. One business in the incubator bought a 20,000-square-foot building and took a couple of the other incubator businesses with it to the new location.
The incubator at Hufcor then became under-utilized, and Forward Janesville relinquished its lease.
Venable said a small business incubator is probably best located in a public building.
"Private companies that would lease the space are looking for continuous cash flow in the form of rent," he said. "A 25 percent vacancy rate is a bad thing.
"But in the public sector, it's an opportunity to get a small business off the ground."
Venable also said that existing buildings are geared toward previous users.
"The whole concept would be that the building would be flexible enough to carve out the space needed for several start-up companies," he said. "There would likely be shared areas, such as a conference room, rest rooms and lunch areas."
The EDA grant would cover $1.125 million of the project, while the city plans to cover the $375,000 match from monies generated in the TIF district.
Venable said he's not sure where the building will be built, if it's approved. In all likelihood, it would be near United Alloy on the city's north side, the Capitol Circle area on the east side, or the Venture Drive neighborhood on the south side.