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 August 21, 2013 5:30 PM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF June 12, 2013 Special Meeting NEW BUSINESS 1. To approve the Lease Agreement between Amber Global Solutions, and the Local Development Finance Authority (LDFA). 2. To approve the Lease Termination Agreement between Vidorum and the Local Development Financing Authority (LDFA), and authorize the LDFA Chairperson to execute the approved Agreement on behalf of the LDFA. 3. To acknowledge receipt of the Macomb-OU INCubator Annual Fiscal Year 2013 Report OLD BUSINESS BOARD MEMBERS REPORT PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE SPECIAL MEETING June 12, 2013 – 5:30 p.m. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2489 City Council Chambers John Lamerato called the meeting to order at 5:32 p.m. Pledge of Allegiance Members present at roll call: Stephan Cassin, David Corba, Lori Doughty, Stephanie Eagen, Richard Kincaid, John Lamerato, John Lettang,, Casey Sobczak, Jill Tomyn, David Wilson, Orest Zachary Members absent: Victor Martin (excused), Paula Sorrell (excused) Also in attendance: Kasey Green, Economic Development Manager, Jeff Bahorski, City Attorney Motion to Approve the Agenda Moved by Wilson, supported by Zachary, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of April 17, 2013 Regular Meeting Moved by Cassin, supported by Sobczak, to approve the agenda as presented. Ayes: All Nays: None Motion carried. New Business Status report on negotiation for service agreement with Macomb-OU Incubator, presentation by Kasey Green To approve the 2013/2014 Fiscal Year Budget. Discussion and review of the budget line items where discussed. Board members commented on the format and some corrections. Ms. Green stated she would make the corrections and send out an updated report. Moved by Lettang, supported by Zachary to approve lease agreement Ayes: All Nays: None Motion carried. To approve a Master Services Agreement (MSA) between Comcast Cable Communications Management LLC., and the Local Development Financing Authority (LDFA) Discussion ensued regarding Internet, VOIP, and Fiber. Ms. Green stated that we are only getting Fiber for Internet usage at this time. Moved by Zachary, supported by Corba to approve lease agreement Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment None Adjournment Moved by Wilson supported by Kincaid to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 5:50 pm TJ  LDFA Business Sterling Heights, Michigan 8/21/13 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between Amber Global Solutions, and the Local Development Finance Authority (LDFA) Submitted By: Kasey Green, Economic Development Manager 586-884-9327 Executive Summary Attached for LDFA review is a September 1, 2013 to August 31, 2014 lease agreement between Amber Global Solutions, and the LDFA. Amber Global Solutions has signed the standard lease agreement for space #2-K in section 2 of the building containing approximately 470 square feet of space. Monthly rent will be $185.00. Amber Global Solutions will offer translation and localization services to global companies and governments. Featuring a vast network comprised of over one hundred of the language industry’s best translation and localization professionals from all over the world, Amber Global Solutions is able to the combine the expertise of the language industry specialists to provide clients with high quality language services. This will be accomplished through the vast database of subcontractors that have signed contracts with Amber Global Solutions to provide specific language services. Some examples of currently contracted subcontractors are translators, proofreaders, editors, and desktop publishers. By bringing these subcontractors together and working as a virtual team, Amber Global Solutions is able to provide clients with the languages services they need. Macomb OU Incubator has classified them as a "Technology" based company. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement between Amber Global Solutions, and the Local Development Finance Authority (LDFA)  LDFA Business Sterling Heights, Michigan 8/21/13 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Termination Agreement between Vidorum and the Local Development Financing Authority (LDFA), and authorize the LDFA Chairperson to execute the approved Agreement on behalf of the LDFA. Submitted By: Kasey Green, Economic Development Manager 586-884-9327 Executive Summary Vidorum has been a tenant at Velocity and a client of the Incubator since May 1, 2013. Vidorum is a start-up company working on the development of an interactive data base system that can be accessed through an app. Initial development was targeted for the mortgage industry (Brokers and mortgage companies). The owner is Quentin Forgues. At this time, the company's is requesting a termination of the remainder of their lease obligation due to financial hardship that is preventing Mr. Forgues from focusing on the growth of Vidorum at this time. Unfortunately, their situation has resulted in an inability to pay their rent and to avoid further indebtedness and increased hardship, Vidorum is requesting that their lease agreement be terminated as of August 31, 2013. Therefore, approval of the attached Lease Termination Agreement is requested by the Board. The agreement terminates the lease and relieves Vidorum of future rent obligations for the remainder of the term. Mr. Forgues has indicated he intends to pay current incurred obligations totaling $370 in past due rent. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Termination Agreement between Vidorum and the Local Development Financing Authority (LDFA), and authorize the LDFA Chairperson to execute the approved Agreement on behalf of the LDFA.  LEASE TERMINATION AGREEMENT This Lease Termination Agreement (“Agreement”) is made on August 21, 2013, between Vidorum, whose address is 34084 Williamsburg Court, Sterling Heights, MI 48312 and the City of Sterling Heights Local Development Financing Authority, a Michigan local development financing authority (“LDFA”), whose address is 40555 Utica Road, Sterling Heights, MI 48314. RECITALS A. Vidorum and LDFA entered into a Lease Agreement dated April 17, 2013 (the “Lease”) under which Vidorum leased the premises identified as Lab #2K in Section 2 of 6633 18 Mile Road, Sterling Heights, Michigan (the “Premises”) from the LDFA for a term beginning May 1, 2013 and ending April 30, 2014. B. Vidorum has requested that the LDFA terminate the Lease at the earliest possible date, which termination date the LDFA has determined to be August 31, 2013. C. The LDFA is willing to terminate the Lease with Vidorum on the terms and conditions contained in the Agreement. D. The parties wish to set forth their understandings with respect to the termination of the Lease in writing. NOW, THEREFORE, the parties agree as follows: 1. Lease Termination. The LDFA agrees to terminate the Lease with Vidorum effective August 31, 2013 upon the condition that Vidorum vacate the Premises on or before 5:00 p.m. on August 31, 2013. 2. Lease Payments. Except as provided in Paragraph 3 of this Agreement, the LDFA forgives Vidorum with respect to any future rent obligation under the Lease for the balance of the term after August 31, 2013 to pay rent, which amount is mutually agreed to be $1,480.00. This forgiveness of indebtedness shall not be effective if Vidorum fails to vacate the Premises by 5:00 pm on August 31, 2013 and in that event, the forgiveness shall be null and void. 3. Future Lease of Premises at the Velocity Building. If Vidorum or any other corporation, limited liability company, limited partnership or other entity of which Quentin Forgues is a principal wishes to leases any space at the Velocity Building located at 6633 18 Mile Road after August 31, 2013, Vidorum or Quentin Forgues shall be obligated to pay all outstanding delinquent charges owed the LDFA in  the liquidated amount of $370.00 before the LDFA will consider entering into a new Lease Agreement with any such entity. 4. Entire Agreement. The entire agreement of the parties with respect to the termination of the Lease is set forth in this Agreement, and no prior agreements, understandings, whether verbal or in writing, shall be effective. Any modification of the Agreement shall be in a written agreement approved by the respective parties. 5. Governing Law. This Agreement is made in the State of Michigan and shall be governed by its laws. VIDORUM CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCING AUTHORITY By:__________________ a Michigan local development QUENTIN FORGUES financing authority It: President By: ________________________ Its: Chairperson And By: ________________________ Its: Secretary  LDFA Business Sterling Heights, Michigan 8/21/13 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: Macomb-OU INCubator Annual Fiscal Year 2013 Report 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. Attached is the Annual Fiscal Year 2013 Report for LDFA 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 Annual Fiscal Year 2013 Report.  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 ANNUAL Vacancy rate 74% (leased sq. ft./ leasable sq. ft. – does not include common space) Total leads generated* NA Total new client tenants 6 (8-12) Current number of client tenants 9 (9-10) Current number of service providers 6 Current number of accelerator clients 34 Conversion rate of leads to client tenants* NA Average number of leads generated by Macomb-OU NA events and initiatives* Jobs created by client tenants 3 Jobs created by accelerator client 14 (15) Jobs retained by client tenants 11 Jobs retained by accelerator clients 155 Grants applied for/received 2 Number of Event Attendees 1977 *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 Date** Employees Unique low profile, vertical Terra Telesis August 2014 1 *** axis wind turbine Real-Time embedded code and Brar Technology November 2013 1 *** sensors that monitor vehicle  health and provide prognostics, predict failures, report, and collect data Independent Registered Investment Adviser firm Mango Tree May 2014 1 *** offering investment advice and portfolio management Makes it convenient to connect electrical devices to power sports industry vehicles and equipment. The company Coliant August 2014 16 $0 manufactures rugged electrical devices and cables for the cold, wet and high vibration power sport environment Provides a completely digital Coupon Wallet April 2014 2 $0 coupon solution Global management consulting. CFOL International technology, training, and November 2013 1 $0 accounting services firm Golden Products and Continuously variable December 2013 0 *** Services transmission technology based consultation firm which has enhances the Vidorum efficiencies of companies by April 2014 1 $0 integrating modern technology into their everyday operations Engineering firm that serves the motosport, alternative fuel, KTISIS December 2014 1 $0 and innovative technology industries **All leases are renewable *** Funding raised and included in the aggregate total Capital raise activities for accelerator clients in Q2: Total capital raised for all client companies: $5,493,050 This year two tenant companies received grant funding through the Business Accelerator Fund (BAF) program. Terra Telesis received BAF funding to partner with Altair on an initial study of the AWGET Vertical Axis Wind Turbine. Brar Technology received BAF funding to become Defense Contract Audit Agency (DCAA) compliant. 2. Bulleted list of Incubator driven events or initiatives. For each, identify the following: a. Number of leads generated – NA b. Number of any leads converted to tenants. – NA July 2012  SBTDC 5 Keys  Lunch and Launch Do You Really Need Google  PTAC Government Contracting  MMTC August 2012  Capital Raise Meetup  SBIR/STTR DoD/DoE training  SBTDC Fundamentals of Starting a Business  Lunch and Launch with Sola Obayan  SBTDC 8(a) Certification September 2012  Fireside Growth Josh Linkner  Lunch and Launch with Charlie Wollborg  Startup Lean  Savvy Entrepreneur  Capital Raise Meetup  Lunch and Launch with John Carter  Fast Trac Growth New Venture  SBTDC Fast Trac New Growth  MMTC  Commercialization Panel October 2012  Lean Green Belt  Team SBA Financing Roundtable  Five Keys to Achieving Fiscal Fitness  MMTC  Capital Raise Meetup November 2012  Lunch and Launch with Nicole Sunstrum "Social Media: Are You Listening?"  Michigan's Executive Group for Economic Development Road Show  Capital Raise Meetup December 2012  Entrepreneurial Series - Fundamentals of Starting a Business  Lunch & Launch Non-Compete and Trade Secrets  Advicoach 1-Page Strategic Plan 1% Vision 99% Alignement January 2013  SBTDC Starting a Business  Capital Raise Meetup   Lunch & Launch Lori Bianco: "How to Set Up a Bookkeeping System & Effectively Communicate with Your CPA.”  SBTDC How to Report Small Business Income & Expenses  Lunch & Launch : “The Mobile Explosion: How Can Your Business Take Advantage of Mobile Technologies to Increase Productivity and Profitability”  Michigan's Department of Transportation Connected Vehicle  Fireside Jake Sigal: Breaking Rules Is The Path To Success!  SBTDC Taxes and Your Home Office February 2013  Capital Raise Meetup  SBTDC Starting a Business  SBTDC Writing a Business Plan  Advicoach Small Business Forum  Lean Green Belt March 2013  Capital Raise Meetup  SBTDC Starting a Business  Commercialization Panel  Advicoach Small Business Forum  SBTDC Business Legal Issues  Advicoach One Page Strategic Plan: 1% Vision 99% Alignment  Vicki Selve Michigan Defense R & D  Lunch & Launch Karl Siegert: “7 Cool Business Technologies”  GLEQ in Collaboration with the MAC OU INC Crowdfunding Workshop and Ask-the-Investors Roundtable April 2013  Get Out of the Garage: Patent That Idea  Bookkeeping 411 with Lori Bianco, CPA  SBTDC Starting a Business  BBC SBIR/STTR 101  Capital Raise Meetup  SBTDC Writing a Business Plan  Advicoach Small Business Forum  Advicoach Sellability Presentation  Bookkeeping 911 with Lori Bianco, CPA  Social Media Club of Detroit  SBTDC Reading a Balance Sheet and Income Statement May 2013  SBTDC Starting A Business  Strategic Economic Alignment Meeting-Michigan Defense Center   Lunch & Launch Jim Rosenfeld: 10 Things Every Employer Should Know  Capital Raise Meetup  SBTDC Business Legal Issues  Advicoach Small Business Forum  Lunch & Launch Defense Contractors  SBTDC Writing a Business Plan  BBC - Starting a Business for Woman and Minorities  Social Media Club of Detroit  Bookkeeping 411 with Lori Bianco, CPA June 2013  Capital Raise Meetup  SBTDC Starting a Business  Lunch & Launch Legal Aspect of Social Media  Bookkeeping 911 with Lori Bianco, CPA  Advicoach One Page Strategic Plan: 1% Vision 99% Alignment  Team SBA Financing Roundtable  Lunch and Launch Michael Schwartz: "Emotional Intelligence: What is it? Why is it important?”  Social Media Club of Detroit 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. Total event attendees: 1,977 Of the total event attendees 91 were trained in the Lead Diversification program. 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 Meetup  Lunch and Launch Series  Fireside Chats   Idea Hub (I-Hub) o I-Hub Lunch Club  Diversification Series o Lean Black-Belt Certificate Program o Lean Green-Belt Certificate Program  Startup Lean  Executive in Residence  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. Fiscal Year 2013 July 1, 2012 - June 30, 2013 Revenues Program Revenue $ 16,622 Diversification Series (Black Belt, Green Belt and Startup Lean) $ 43,600 Small Business Administration Grant #2 $ 41,089 MEDC Start-up Grant #3 $ 119,616 MEDC Start-up Grant #4 $ 177,668 MEDC DARPA Grant $ 60,117 New Economy Initiative Grant $ 256,175 EDA Start-up Grant $ 155,010 Business Accelerator Funds (BAF - Clients) $ 100,684 Business Accelerator Funds (BAF - Administrative Cost) $ 5,025 Total Revenue: $ 975,606 Expenses - Personnel/Supplies/Services Personnel $ 646,059 Supplies and Services $ 256,837 Utilities $ 32,521 Total Expenses: $ 935,417 Carry Forw ard: $ 8,339 * Net Total: $ 48,528 * * Majority of the cash balance is from the Diversification Series fund and it must be reinvested in the program 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 – John DeFour and David Boni (PT)