By DENNIS GRUBAUGH
Supporters are closing in on the launch of an incubator program to foster new business startups in the Metro East.
Paul Ellis, the director of economic development for Fairview Heights, has spent the last several months pulling together various resources, enlisting the support of state and local governments, local banks, educators and business support groups.
“There are still some things we’re working on, but basically it’s a regional approach to further assist startups and emerging businesses in the Metro East,” Ellis said. “We’ve defined our market for now as business in Fairview, O’Fallon and Swansea. That doesn’t mean we won’t be working more broadly than that, but that’s the target for right now. We’ve had expressions of interest from several communities, but we think we’ll start with a pretty good base.”
The entity will be known as Metro East Business Incubator Inc.
“We have registered as a nonprofit corporation with Illinois, adopted bylaws and formed the initial board of directors, and now we’re pursuing 501 (c) (3) federal tax exemption and anticipating that the City of Fairview Heights will be the fiscal agent,” he said. The city’s approval of that was still awaited at press time.
Ellis has briefed the City Council and other partners in the new project have been involved in discussions that have been under way since late last year.
In the next few weeks, in addition to moving ahead with documentation, supporters hope to get a lease on space at St. Clair Square mall starting in the summer.
“We’ll also have a management contract but don’t know which agency will take that lead. The incubator will be opened at least during the mall hours,” Ellis said. A contract will have to be negotiated between the not for profit and the city to act as fiscal agent.
He says the incubator is “a natural” and came out of a meeting in Springfield attended by Michael Holmes, the senior director of the Urban League in St. Louis; Michael Hagen, general manager of St. Clair Square; and Tom Tyler from the Metro-East Regional Chamber of Commerce. Holmes has been involved in establishing other incubators, including the one at the T-Rex operation in St. Louis.
The incubator program would specific target groups that are historically less advantaged — minorities and women-owned businesses, older entrepreneurs, small retailers and veteran-owned businesses.
“There are a lot of them around here and they’ve been under the radar for a long time,” Ellis said. “Since word’s gotten out about this project, I have people call me every day who want to have some service or add a piece to it. For instance, I had a banker come in today and say we’re ready to go, we want to give you some money and get some businesses started.”
Ellis recounted a recent meeting with representatives of Scott Air Force Base about their program to transition people who are mustering out of the military.
“They have a great skill set and rather than go to work for somebody, they want to start a business,” he said. An incubator could help in that mission. “They are looking forward to working with us.”
Various discussions have taken place with many of “the typical agencies, he said, among them the Illinois Metro East Small Business Development Center, both Southern Illinois University Edwardsville and Lindenwood University and their business schools, and the Urban League.
The U.S. Small Business Administration has also expressed interest.
“SBA has a veteran-owned business Veterans Business Outreach Center. They have been looking for a way to serve this area and haven’t found a place to plug into. We met with them and they are interested in being part of this effort.”
Ellis also gives credit to Rep. Jay Hoffman, D-Swansea, who he says has been remarkably supportive in helping the fledgling effort gain state support.
The incubator’s operations would be paid for by clients (businesses) who will come and lease space in the incubator and would receive services. There would also be sponsors and underwriters, banks and governments who will be putting money.
“I’ve had a parade of bankers through my office in the last two weeks. This is a great opportunity for them to get their Community Reinvestment Act Credit, by investing in the community and helping to create jobs. Bank regulators look at that and there are pluses and minuses for banks, who are supposed to be investing in underserved communities.”
Grants could also be sought as a means of funding. Ellis cited the grant funding available from the Illinois Office of Economic Empowerment.
Ellis this year will appear at a national conference where he’ll be sharing best practices with several large city representative, including from New York and Los Angeles. He’s gotten helpful information regarding incubators from that network.
“The Manhattan people have been wonderful,” he said. “They’ve done so much to help us, it’s been great, very generous with their time and information.”
So why an incubator and why now?
“I look at my profession and it used to be all business recruitment. In the last couple of decades, we’ve become much more focused on retention. Just the last decade, we’ve come to see the value in starting businesses. Growing them locally,” he said.
Ellis previously ran an angel investment network while working in the Northwest. He’s worked with entrepreneurs the last 15-20 years.
In the Metro East there are at least two other incubators. One is at America’s Central Port, which is more oriented toward manufacturer space. There is also a privately run incubator, Pier 51, in Belleville.
“There is some other stuff out there but there’s really nothing in the space that we’re intending to serve,” Ellis said.