Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 40555 UTICA ROAD 586-884-9322 CITY COUNCIL CHAMBERS January 16, 2013 5:30 PM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF December 19, 2012 Regular Meeting NEW BUSINESS 1. To acknowledge receipt of the Macomb-OU INCubator Quarterly Report – January 2013 OLD BUSINESS BOARD MEMBERS REPORT PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE REGULAR MEETING December 19, 2012– 5:30 p.m. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2489 City Council Chambers Victor Martin called the meeting to order at 6:05 p.m. Pledge of Allegiance Members present at roll call: Stephan Cassin, Lori Doughty, Richard Kincaid, John Lettang, Victor Martin, Casey Sobczak, Members absent: David Corba (excused), John Lamerato (excused) David Wilson (excused), Orest Zachary (excused), Also in attendance: Kasey Green, Economic Development Manager, Julie Gustafson, Director Macomb OUIncubator Motion to Approve the Agenda Moved by Lettang, supported by Sobczak, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of November 14, 2012 Special Meeting Moved by Sobczak, supported by Doughty, to approve the agenda as presented. Ayes: All Nays: None Motion carried. New Business Motion to approve the Lease Agreement between the Michigan Small Business and Technology Development Center, and the Local Development Finance Authority (LDFA) Moved by Lettang, supported by Doughty to approve the motion Ayes: All Nays: None Motion carried. Motion to approve the Lease Agreement between Golden Products and Services LLC, and the Local Development Finance Authority (LDFA) Moved by Sobczak, supported by Cassin to approve the motion Ayes: All Nays: None Motion carried. Motion to approve the Lease Agreement between KTISIS LLC, and the Local Development Finance Authority (LDFA) Moved by Cassin, supported by Sobczak to approve the motion Ayes: All Nays: None Motion carried. Ms. Green briefed the board on the Velocity Vacancy Rate Report. Ms. Green gave a brief overview of the work group for the development of a Services Contract and asked for voluntees. Move to form a work group comprised of Kasey Green, Jeff Bahorski, David Corba, John Lettang and Victor Martin for the purpose of developing a Services Contract between the LDFA and Oakland University for the Macomb OUIncubator. Moved by Sobczak, supported by Cassin to approve the motion Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment None Adjournment Moved by Sobczak supported by Lettang to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 6:10 pm TJ Minutes Approved 01/16/2013 John Lettang Secretary  LDFA Business Sterling Heights, Michigan 10/17/12 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: Macomb-OU INCubator Quarterly- Report – January 2013 Submitted By: Kasey Green, Economic Development Manager Executive Summary In 2009, an Affiliated Party Agreement was executed between the City of Sterling Heights, City of Sterling Heights Local Development Financing Authority (LDFA) and Oakland University to promote the development of high technology businesses through a business incubator. In the Affiliated Party Agreement, the University agreed to consult with and seek guidance from the LDFA with regards to the operation. The Agreement requires the University to provide, at a minimum, a bi-annual report to the LDFA and MEDC. At a July 17, 2012 meeting of the LDFA Board, the Board requested that Oakland University staff provide them with a quarterly report. Attached is the second Quarterly Report for LDFA review. An addendum is expected to provide financial details not available at the time of initial submission, as the University “books” had not yet closed. This detail is expected in time for the meeting for review. Oakland University staff will also be available for questions related to the details contained in the report. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to acknowledge receipt of the Macomb-OU INCubator Quarterly Report – January 2013  INCUBATOR REPORT Metrics Please complete the following chart for each quarterly report. Each line should be in the following format: List the actual number first followed by your goal in parentheses after for each quarter. Each quarter and year should have a specified goal, but the actual is added per quarter. Please color-code each cell such that red indicates below goal performance, yellow at goal performance and green above goal performance. Quarters run with the fiscal year starting on July 1- June 30. (Example: If the goal is to recruit 3-4 tenants each quarter and 12 per year, and 5 were recruited between July 1 and Sept 30, the report would read as 5/(3-4) in Q1 and would be shaded in green. Q2-Q4 would have (3-4) indicated, and annual would list (12)). METRIC Q1 Q2 Q3 Q4 ANNUAL Vacancy rate 49% 56% (leased sq. ft./ leasable sq. ft. – does not include common space) Total leads generated* NA NA Total new client tenants 2 (2 - 3) 0 (2-3) Current number of client tenants 6 (9-10) 4 (9-10) NA Current number of service providers -- 4 Current number of accelerator clients 15 26 Conversion rate of leads to client tenants* NA NA Average number of leads generated by Macomb-OU NA NA events and initiatives* Jobs created by client tenants 2 (5) 0 (5) Jobs created by accelerator client 9 1 Jobs retained by client tenants 0 (1) 0 (1) Jobs retained by accelerator clients 0 0 Grants applied for/received (Q2 - Grant has not been 1 (0) 1 (0) received yet) Number of Event Attendees 492 297 Important Metrics for Velocity Building: In December, the Macomb-OU INCubator launched a new initiative to assist its client companies called, Executive-In-Residence Program. The Executive in Residence (EIR) program professionals provide a set amount of free consultation to Macomb-OU INC clients in exchange for one year of free office space in a high-tech exciting business environment, two professional EIR companies joined the program, Bianco & Co. and AdviCoach of Michigan. Macomb-OU INC expects two additional professional companies to join the program in the next quarter. In addition, two new tenant companies joined the incubator this quarter; Metiss Group and CFO Leasing. Both companies are considered services providers; however, they will be paying rent. Please note that CFO Leasing will be sharing an office with Brar Technology. *Process for capturing is being developed  Additional Information 1. Include a list of current tenants at the Incubator with a brief (1 or 2 line) description of each. Complete the following chart for each tenant. Also, as applicable, list the number of any patents secured or research projects completed through Incubator support. Number of Lease Expiration Tenant Client Company Description FT Capital Raised – Q2 Date** Employees Unique low profile, vertical Terra Telesis May 2013 1 $0 axis wind turbine Real-Time embedded code and sensors that monitor vehicle Brar Technology health and provide prognostics, March 2013 1 $0 predict failures, report, and collect data Independent Registered Investment Adviser firm Mango Tree June 2013 1 $0 offering investment advice and portfolio management Makes it convenient to connect electrical devices to power sports industry vehicles and equipment. The company Coliant September 2013 16 $0 manufactures rugged electrical devices and cables for the cold, wet and high vibration power sport environment **All leases are renewable Capital raise activities for accelerator clients in Q2: Total Capital Raised for all clients: $510,000 2. Bulleted list of Incubator driven events or initiatives. For each, identify the following: a. Number of leads generated b. Number of any leads converted to tenants. • Fast Trac Growth New Venture • Lean Green Belt – Green Belt • Team SBA Financing Roundtable • Five Keys to Achieving Fiscal Fitness • Capital Raise Meetup • Lunch and Launch with Nicole Sunstrum "Social Media: Are You Listening?" • Michigan's Executive Group for Economic Development Road Show • Capital Raise Meetup  • Entrepreneurial Series - Fundamentals of Starting a Business • Lunch & Launch Non-Compete and Trade Secrets • Advicoach 1-Page Strategic Plan 1% Vision 99% Alignment • Accelerate Michigan Innovation Competition Mac-OU INC is working with Force by Design to develop and implement Salesforce, customer relationship management software. This new software will allow the Incubator to track the leads generated and converted. The goal is to launch Salesforce in the next quarter. Accelerate Michigan Innovation Competition The Accelerate Michigan Innovation Competition is an international business competition designed to bring together later stage entrepreneurial companies with local, national and international investors. It showcases the best and brightest new business concepts to investment capital to help foster their growth within Michigan. Targeting entrepreneurs with mid-to-late seed-entrepreneurial businesses — the competition has an immediate and positive impact on Michigan’s economy. The competition was founded through the New Economy Initiative Grant Fund for the Business Accelerator Network of Southeast Michigan which includes Ann Arbor Spark, Automation Alley, Macomb-OU INCubator, TechTown. 3. Bulleted list of current service offerings through the Incubator. Note any changes, additions or deletions since the last report. • Business Advisory Board • Capital Raise Activities • Capital Raise Meet up • Lunch and Launch Series • Fireside Growth Series • Idea Hub (I-Hub) • Diversification Series o Lean Black-Belt Certificate Program o Lean Green-Belt Certificate Program • Startup Lean • Executive in Residence (launched) 3a. New Program Created: • Adopt-a-Biz 4. Provide a current budget summary of the sources and uses of funds in general (i.e. personnel***, not specific salaries). Note any newly received grant funds. The Macomb-OU INCubator can provide a budget summary for Q2 after Oakland University releases the December numbers. The report will be forwarded as an addendum soon as possible. 5. Provide a current updated staffing list with name, title, and FT/PT. Executive Director – Julie Gustafson (FT) Assistant Director – Larry Herriman (FT) Grant Research and Compliance Officer – Rachel Louzon (FT) Marketing and Communication Manager – Joan Carleton (FT) Executive in Residence – Commercialization Advisor – Wayne Blizman (PT) Senior Capital Advisor and Commercialization Specialist – Mike Brennan (PT) Market Development Manager – Stacey Frankovich (PT) Student Interns – Matthew Fruth and Kathleen Buchanan (PT)