Kannapolis explores incubator

By Emily Ford

eford@salisburypost.com

KANNAPOLIS — Small biotech companies that can't afford rent at the N.C. Research Campus need help, or they will set up shop in other cities and take dozens of potential jobs with them, Kannapolis officials said.

City staff suggested Friday that Kannapolis launch a business incubator for start-up companies attracted to the $1.5 billion life sciences complex.

"This is the missing link on the campus," City Manager Mike Legg told the city council during a planning retreat. "No one is filling this void."

Already, some deals have fallen through because small businesses interested in the campus couldn't afford the steep rent and had no place else in Kannapolis to go, Legg said.

These businesses might have only a handful of employees now but could grow to become substantial employers, he said.

Although the campus lost high-profile tenants during the recession, including PepsiCo and Pharmaceutical Product Development Inc., developer Castle & Cooke now has "some exciting deals in the pipeline," said Irene Sacks, the city's director of business and community affairs.

However, the campus is designed to house well-established companies, she said. A business incubator would provide an environment for new firms.

"It doesn't appear that anyone else is going to take the lead on this," she said.

A business incubator is a facility that provides shared space for start-up companies and entrepreneurs, including technical support and business guidance.

The goal would be to help young biotechnology companies become self-sufficient so they will stay in the community and create jobs, Sacks said.

"You would be investing in smart people with good ideas," she told city council members.

An incubator's success is measured by how many companies stay in business, how many jobs they provide and how much funding they pull in from sources like the National Institutes of Health, she said.

Tangible results could take up to 15 years, she warned.

Legg urged the city to pursue the business incubator, which could include participation from the school system and universities at the campus, as well as funding from private foundations.

"Overall, it's about maximizing this gift, this Research Campus, that has been plopped in our laps," Legg said. "Rather than sitting back and saying we hope it all works out, we have to get really engaged to pull this off."

The campus has become more than "just a real estate deal," Legg said.

Castle & Cooke is a real estate developer, he said, and for the campus to reach its full potential, "they need community engagement."

Some long-term funding for the business incubator would come from grants. Businesses in the incubator would also pay rent.

Staff recommended conducting a feasibility study, which would cost about $70,000. The city can apply for a grant from the N.C. Biotechnology Center to pay for half of the study.

Operating costs for a business incubator range from $150,000 to $300,000.