Port considers incubator effort
Staff seeks input of business community
Monday, August 2, 2010
The Port of Vancouver says it’s open to the idea of starting a small-business incubator in a portion of its empty industrial space.
Talk of an incubator project has circulated among public and private organizations in recent months as a potential tool for job creation in Clark County. But so far, the location of such a project has been undetermined.
“Of anybody in the community, the port is in the best situation to move on an incubator facility,” said Curtis Shuck, the port’s director of economic development and facilities. “That really fits with the port’s economic development mission.”
With some 350,000 square feet of vacant space not currently generating income, the port has plenty of room to spare for start-up companies. But many small ventures, which require cheap space to get off the ground, are priced out of the port’s standard monthly rent of 35 cents to 45 cents per square foot. And the port’s leasing policy doesn’t allow tenants to pay below-market rates.
Setting up a formal incubator program would create a way for the port to offer reduced rent to startups that would help build and nurture the region’s manufacturing industry cluster, including metals fabrication, wood products or plastics manufacturing, Shuck said.
Such a program would first require approval from the three-member Port Commission, however.
Port staff are looking for more feedback from the business community and its other constituents about the need for an incubator before they draft a proposal for the commissioners to consider, Shuck said.
A model incubator
The port’s project would likely be modeled on the Port of Walla Walla’s four-year-old wine incubator. With $1.5 million in state grants and another $500,000 from the port, Walla Walla built five 1,600-square-foot buildings to help develop the county’s nascent wine industry. The port takes applications from startup companies that wish to rent the space, and incubates five companies at a time.
Rent starts at $1,200 per month in the first year, then increases each year to reach $2,200 per month at the end of six years. The companies have a maximum of six years to turn a profit and move out, preferably into leased private-sector space near Walla Walla. Then the port fills the space with a new venture.
The space comes with basic amenities, but the port doesn’t provide the wine-making equipment, such as forklifts, tanks, pumps and barrels. Tenants must find their startup funding, said Jim Kuntz, executive director of the Port of Walla Walla.
“So while it’s an incubator program, it’s really shared risk between the port and the tenant,” he said. “You’ll find these tenants become very resourceful and they might borrow equipment from other tenants. It (also) encourages them to work with the wine industry.”
The key to Walla Walla’s incubator, however, is its tie-in with local economic development efforts. Many of the incubator’s tenants are graduates of the community college’s viticulture program. The region’s wineries have gained a reputation for excellent wine, which fuels tourism and sales.
The Port of Vancouver’s incubator would focus on manufacturing. Metal fabrication, in particular, is an emerging cluster for the port following a deal in July with Farwest Steel, Shuck said.
That focus is echoed throughout Clark County, and the Portland-metro region as a whole. The county is home to large fabrication and metalworking companies such as Thompson Metals and Columbia Machine. They’re supported by work force training such as Clark College’s machining technology program.
“We’ve got a real strong metals cluster here already,” said Bart Phillips, chief executive and operating officer of the Columbia River Economic Development Council. “That’s why incubator space focused at that might be a good idea, because when you’ve got a strong cluster you’ve got spin-offs.”
The metals fabrication industry is still relatively small, however, accounting for 1,200 workers in Clark County as of June 30, or just under 1 percent of total employment here, unchanged from a year ago, according to the Washington Employment Security Department.
Any jobs gained through an incubator would come a handful at a time — a change in strategy for the region’s economic development officials, who have traditionally focused on attracting the next Hewlett-Packard.
“We’re looking at some of these smaller business opportunities as opposed to the big HP’s,” Shuck said, “and asking, ‘What can we do with five, 10, or 15 people, right now?’”