HomeMy WebLinkAboutMINUTES - 06171997 - D5 D
Contra
Costa
TO: BOARD OF SUPERVISORS
County
FROM: Harvey E. Bragdon
Director of Community Development
DATE: June 17, 1997
SUBJECT FY 1997/98 CDBG Project Agreement and Loan Documents- Contra Costa
Software Incubator
SPECIFIC REQUEST(S) OR RECOMMENDATIONS("S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1 . Approve the allocation of $50, 000 in FY 1997/98 Community
Development Block Grant Funds (CDBG) , with conditions as specified in
Exhibit A, to Contra Costa Software Incubator, Inc. , or its parent
organization The Contra Costa Economic Partnership, for the Contra
Costa Software Incubator to provide high value sustainable employment
to and held by low- and moderate-income persons; and
2 . Authorize the Deputy _Director - Redevelopment or his designee to
execute a CDBG Project Agreement, and required legal documents for
this purpose.
FISCAL IMPACT
No General Fund impact with the recommended conditions . CDBG funds
are allocated by formula, through the U. S . Department of Housing and
Urban Development (HUD) to the County. Failure of the sponsor to
adhere to the recommended conditions could create an obligation of the
County and/or the sponsor to reimburse HUD wit General u c� monies .
CONTINUED ON ATTACHMENT: XX YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RE OM ENDATIO F BOARDCOM TEE
APPROVE OTHER
SIGNATURE(S) :
ACTION OF BOARD ON June 17, 1997 APPROVED AS RECOMMENDED X OTHER
The following persons addressed the Board in support of the above recommendations: Greg Lemler,
Contra Costa Economic Partnership; Gary Craft, Contra Costa Economic Partnership; and Ron Wetter,
Contra Costa County Private Industry Council.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
X UNANIMOUS (ABSENT ---------- ) TRUE AND CORRECT COPY OF AN
AYES : NOES : ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact: Belinda Smith
335-1260
Original : Community Development ATTESTED June 17, 1997
cc : CAO PHIL BATCHELOR, CLE OF
County CounselOARD OF SUPE ISORS
Auditor (c/o Nona) COUNTY STRAT
Cities of Concord and
Walnut Creek B
Christine Wampler
BACKGROUND/REASON FOR RECOMMENDATIONS
r On April 8, 1997 the Board of Supervisors approved an allocation of
$20,550 to the FY 1997/98 CDBG Economic Development Assistance Fund
(EDAF) . Including carryover and recovered funds from prior year
allocations, the current balance of the EDAF is $283,631 . The EDAF
is for use in funding economic development projects as they develop'
during the program year.
On June 4, 1997, the Economic Development Committee voted to
recommend that the Board of Supervisors approve an allocation of
$50,000 in EDAF funds to the Contra Costa Software Incubator, Inc.
for the development of an incubator project.
The Contra Costa Software Incubator, Inc. proposes to operate an
incubator for 20 to 25 software related businesses with the intent
of expanding those businesses which in turn will generate 25 to 30
new jobs . Fifty-one percent of the jobs created are intended to be
available to and held by low- and moderate-income persons . The
incubator will be located in the City of Concord.
Urban County CDBG funds will be used in conjunction with City of
Concord and Walnut Creek CDBG funds, private sector sponsorships ,
and rental income. The total cost of the project is $465,000 . The
development budget and sources of funds for this project are:
Contra Costa EDAF $ 50,000
CDBG Concord $100, 000* secured
CDBG Walnut Creek $ 16 , 000* secured
Rental Income/misc. fees $175, 000 anticipated
Private Sector Sponsors $ 70,000 secured
Private Sector Sponsors $ 54,000 unsecured
In-Kind services $ ???
Total $465,000
* updated from figures in staff report dated 6-4-97 Exhibit B
Five of the jobs created in the incubator will be held by low- and
moderate-income residents of the Urban County. CDBG funds will be
used for eligible costs related to the provision of technical
assistance, advice, and business support services . All CDBG funds
provided to the Contra Costa Incubator, Inc. , or its parent
organization Contra Costa Economic Partnership, will be in the form
of a forgivable loan based on job creation, ie. if the low- and
moderate-income jobs are created the loan is forgiven.
This is a collaborative project between the Cities of Concord,
Walnut Creek, and the County (Exhibit C) . The City of Concord will
act as the lead agency and be responsible for project monitoring,
reporting, and other regulatory requirements .
As stated above the project is located in the City of Concord at
1855 Gateway. Federal regulation requires grantees to make the
following determinations prior to the providing CDBG funds for any
project located outside a grantees jurisdiction:
♦ The project is necessary to further the purpose of the Act;
♦ The project furthers the County's community development
objectives; and
♦ The project provides reasonable benefits to the residents of
the Urban County.
CDBG staff has reviewed the project (see Exhibit B) and has
determined that the project meets the national objective and is an
eligible activity as described by CDBG regulation. The project
meets the community development needs of the County as described in
the Consolidated Plan and annual Action Plan.
It can be determined that the project benefits Urban County
residents provided that jobs are available to and held by low- and
moderate- income residents of the Urban County. The conditions
(Exhibit A) as recommended by the Economic Development Committee,
will ensure compliance with Federal regulation and the intent of
the Act.
EXHIBIT A
CONDITIONS
CONDITIONS OF FUNDING APPROVAL TO ENSURE COMPLIANCE WITH
FEDERAL REGULATIONS .
1 . Assistance in the form of a forgivable loan contingent on
five jobs created and made available to and held by low-
and moderate-income persons residing in the Urban County,
and on securing additional funds to close gap.
2 . Review and approval of sublease agreement to ensure
eligible services, training, etc. are incorporated into
sublease with micro-enterprises .
3 . Review and approval of First Source Hiring Agreement.
4 . Assurance of repayment clause by micro-enterprise if jobs
created are not held by low- and moderate-income persons.
5 . Completion of Bylaws and representation on the Board of
Directors from the Urban County.
6 . A line item budget that includes eligible areas of
reimbursement.
7 . Quarterly presentations from the Contra Costa Incubator,
in order to assess progress, to the Economic Development
Committee.
EXHIBIT B
CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
HOUSING AND REDEVELOPMENT DIVISION
Date: June 4, 1997
TO: Economic Development Committee
FROM: Belinda Smith, CDBG Program Manager
SUBJECT: STAFF ANALYSIS AND RECOMMENDATION ON THE APPLICATION
SUBMITTED BY THE CONTRA COSTA SOFTWARE INCUBATOR FOR
COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
Staff has reviewed the application submitted on May 22, 1997 by
the Contra Costa Software Incubator. The application from the
Contra Costa Software Incubator, Inc. is for $50,000 from the
Economic Development Assistance Fund, which is a set-aside from
the annual allocation of Community Development Block Grant
(CDBG) funds, for viable economic development project that arise
during the program year. Upon review of the application, staff
has determined that it meets the criteria of the Economic
Development Assistance Fund purpose statement, as developed by
the Economic Development Committee and approved by the Board of ,
Supervisors .
Staff has conferred with Steve Sachs, Director - Community
Planning and Development Division, U.S. Department of Housing and
Urban Development (HUD) on project eligibilty.
Provided below is a summary of funds available in the Economic
Development Assistance Fund and potential porjects , the staff
analysis and recommendation on the proposed project.
ECONOMIC DEVELOPMENT ASSISTANCE FUND
FY 92/93 $ 31,000 recovered funds
FY 94/95 $ 18,700 carryover
FY 96/97 $213,381 allocation
FY 97/98 $ 20,550 allocation
Total funds available $283 , 631
Potential Projects
Contra Costa Software Incubator $ 50,000
North Richmond Business Incubator $260,000
Total Potential Demand $310,000
1
Staff Analysis and Recommendation - Contra Costa Software
Incubator
SPONSOR: Contra Costa Software Business Incubator, Inc
PROJECT PURPOSE: To create high value sustainable employment
available to and held by low-and moderate-income persons through
the provision of business support services to microenterprises
for the purpose of business expansion.
LOCATION: 1855 Gateway, 7th Floor, Concord
BUDGET: , CDBG/EDAF Requested $ 50, 00*
CDBG/Concord $110,000 pending
CDBG/Walnut Creek $ 20,000 pending
Rental Income/Misc Fees $175,000 anticipated
Private Sector Sponsors $ 70, 000 secured
Private Sector Sponsors $ 40,000 unsecured
In-kind services $ ??????
Total $465,000
* The application request is $50,000 each year for three years .
The County on behalf of the Urban County currently certifies that
CDBG funds as detailed in the annual Action Plan are for a one
year period. In addition it has been the practice of the County
to allocate CDBG funds annually on a competitive basis .
MATCH: $5, 000 is required to match the $50, 000 in County CDBG
funds, match cannot be met by other jurisdiction CDBG funds, and
match must be used to benefit Urban County residents . The City
of Concord requires a 20% match ($22 , 000) , and the City of Walnut
Creek does not require matching funds .
In kind-services are eligible as match under the County CDBG
program. The application provides little information on the in-
kind services available to microenterprise tenants or to what
extent in-kind services are related to the Business Assistance
Program.
ISSUES/PROJECT SUMMARY: The Contra Costa Software Incubator
( Incubator) proposes to operate an incubator for 20 to 25
software related small businesses with the intent of expanding
those businesses which in turn will generate 25 to 30 new jobs .
Fifty-one percent of the jobs created are intended to be
available to and held by low-and moderate-income persons .
The Software Incubator needs to secure $220,000 in additional
2
funds in order to enter into a lease agreement for space in the
Gateway Building by July 1, 1997 . The Software Incubator has
requested funding from the County, and the Cities of Concord and
Walnut Creek to assist in closing this funding gap. The City of
Concord has committed funding of up to $300,000 over three years,
and has identified Community Development Block Grant as a
potential source of funds . The City of Walnut Creek has approved
the use. of $50,000 ($20, 000 in first year) in CDBG funds over a
three year period, provided it meets CDBG regulations . The
County is considering providing $50,000 in CDBG funds for a one
year period, providing the project meets CDBG regulations . A
funding gap of $40, 000 remains that the Incubator hopes to fill
with private sector sponsorship.
This is the first incubator project to apply for CDBG funds and
the basis for funding could set precedence for other incubator
applications and other CDBG applications . The primary concern is
the eligibility of the project and whether the majority of CDBG
funds can be used specifically to pay rent as requested. The
payment of rent would be a direct subsidy to for-profit
businesses some of which could be low-and moderate-income owners
of microenterprises . Another concern would be the availability
of jobs to low- and moderate-income persons and the actuality of
those jobs being held by low- and moderate- income persons .
Additional concerns are:
Commitment of microenterprises to hire low- and moderate-income
persons and leverage to ensure hiring.
County liability to the U.S . Department of Housing and Urban
Development (HUD) if low-and moderate-income persons do not
obtain jobs.
Funding a newly formed non-profit with no track record of
operating incubators or creating jobs . In addition the non-
profit does not have Bylaws which indicate their commitment to
serving low-and moderate-income persons, nor representation from
the Urban County on the Board of Directors .
Funding a non-profit who has identified another non-profit as the
fiscal agent.
Analysis of the budget indicates the project is feasible provided
all funding can be obtained. However, the budget does not
provide sufficient information to determine eligible costs equal
to the request of $50, 000 . It is even more difficult to
determine if there are sufficient eligible costs for the entire
$180,000 in combined CDBG funds .
The project would be a joint project between the Cities of
Concord and Walnut Creek and the County. The City of Concord
3
would act as lead agency since the incubator will be located in
Concord and the City has committed more funds . As lead agency
the City would be responsible for monitoring and reporting
requirements related to the project. This would limit the
County's oversight on this project. The County would need to be
in agreement with Concord methodology.
RECOMMENDATION CDBG/EDAF FUNDING: Staff recommends a $50, 000
allocation for one year subject to the following requirements :
1 . Assistance in the form of a forgivable loan contingent
on five jobs created and made available to and held by
low-and moderate-income persons residing in the Urban
County, and on securing additional funds to close gap.
2 . Review and approval of sublease agreement to ensure
eligible services, training, etc. are incorporated into
sublease with microenterprises .
3 . Review and approval of First Source Hiring Agreement.
4 . Assurance of repayment clause by microenterprise if
jobs created are not held by low- and moderate-income
persons .
5 . Completion of Bylaws and representation on the Board of
Directors from the Urban County.
6 . A line item budget that includes eligible areas of
reimbursement.
RATIONALE: The Incubator project provides an overall benefit in
stimulating economic development within the County. The creation
of high-value sustainable employment for low-and moderate-income
persons meets County objectives . Providing funding in the form
of loan would be consistent with traditional high-risk funding of
for-profit business, and also protects the County from liability.
The persons associated with the Incubator are highly skilled and
success of other incubators leads to the conclusion that the
Incubator should be able to meet job creation objectives .
EVALUATION CRITERIA:
1 . CONSISTENCY WITH. PROGRAM PRIORITIES .
Project is consistent with the County's Consolidated Plan
short term goals "to provide incentives for business
expansion and stabilization in order to expand employment
opportunities for lower income persons".
2 . ELIGIBILITY.
4
Eligible Activity: In consultation with HUD staff it was
determined that eligibility under the regulation was limited
to the following: Providing technical assistance, advice,
and business support services to owners of microenterprises
and persons developing microenterprises . [570.201(o) (ii) ) .
The Incubator proposes to provide management, business,
financial, and technical assistance to microenterprises .
National Objective: Job creation meets a national objective
if at least 51% of the jobs, computed on a full time basis,
involve the employment of low-and moderate-income persons .
The incubator propose to create 25 to 30 new jobs . Fifty-
one percent of those jobs will be available to and held by
low-and moderate-income persons .
3 . ALLEVIATION OF NEEDS AND TARGET POPULATION
The Software Incubator proposed to create 25 to 30 high
value, sustainable new jobs within a 12 month period.
Fifty-one percent of those jobs are proposed to be available
to and held by low-and moderate income persons .
4 . FEASIBILITY AND COST EFFECTIVENESS
The budget as submitted does not provide enough information
to determine eligible rent costs . The payment of rent in
and of itself is not considered to be technical assistance,
advice, or support services . A pro-rated portion of the
rent could be eligible for reimbursement for the following
areas; reception area, conference room, supply/work room,
library. The proration would be based on square footage of
each space.
For example: -
Conference, supply/work room x cost per square foot
1, 000 sq ft. x $1.50 sq. ft (per lease agreement) _ $1,500
The application does not provide information on the rent to
be charged to microenterprises or the subsidy required for
each tenant. The subsidy may be an eligible cost for
reimbursement as businesses enter the incubator. This would
need to be explored further once more information is
provided.
Other eligible costs could be business accounting and
database software, file server and Internet access,
equipment costs and servicing for copier, fax machine, and
other miscellaneous equipment and supplies . A portion of
5
salaries and benefits for the incubator manager and
reception could also be eligible if they provide a direct
services to the microenterprise.
Other direct services could be eligible provided there is a
cost for the service (ie. mentoring, training) and the
initial cost is borne by the incubator and not the
microenterprise.
Non eligible expenses would be seminars, internship
program', costs paid directly by the microenterprise for
business support services such as secretarial, clerical,
telephone answering, etc. would also not be eligible for
reimbursement. However, eligible microenterprises could
apply directly for CDBG to assist with rent and other
services .
The submitted budget does not include eligible items in
amount equal to or greater than the $50,000 in CDBG funds
requested. Staff in cooperation with the Cities of Concord,
Walnut Creek will continue to work with the applicant to
identify $180,000 if eligible expenses .
5 . EXPERIENCE AND CAPACITY TO CARRY OUT PROJECT.
The Contra Costa Software Incubator, Inc. is a newly formed
non-profit agency. The non-profit is a subsidiary of the
Contra Costa Economic Partnership, and has designated the
Partnership as the Fiscal Agent of the Software Incubator.
The non-profit is in the process of developing bylaws and
currently has no representation on its Board from the Urban
County.
The non-profit has no experience in operating incubators or
in job creation.
The current Board of the non-profit does have a considerable
amount of expertise in business, and the interim Manager of
the incubator appears to have the necessary qualifications
to manage the incubator.
It is not clear from the application what types or to what
extent in-kind services will be used to provide business
support, training, counseling or technical assistance or the
capacity of in-kind services .
6 . PROPOSED MATCH AND LEVERAGING OF FUNDS .
'Costs associated for the internship program other than intern salaries
may be eligible for CDBG assistance under the public service category.
6
The project needs $5, 000 to match County CDBG funds . Match
source could be from rental income, and private
sponsorships . Project leveraging: Provided the applicant
secure all other funds , and excluding the required match
for the City of Concord, every dollar of County CDBG funds
provided to this project leverages another $5 . 10 in other
resource
7 . PROJECT READINESS AND TIMELINESS
The project is still in the development stage. Not all
funds have been secured nor have all aspects of the
incubator operation been fully defined. The Incubator does
not expect full lease-up until the 10th to 12th month of
operation. No tenants have been secured for occupancy.
The Incubator has an opportunity to receive three full
months of free rent provided they sign a three-year lease
agreement by July 1, 1997 .
7
Jull- wtu CITY CONCORD HCS FAX No, 6713496 EXHIBIT C
Crr\"OCCONCuno CITY CuoNCII,
111;10 Parkside Drive Bill McKmigal, Mayor
Omcmd,California 94519-2578 Mark A. PvwrWm,Vice him-ur
t.tr Hticn ht. Allyn
(510)671-3496 Michael A. i'astrick
MS/27
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Cone---g—c-311"Ld
om F -un City(actsTelephone, (510)671.3364Thomas N'cntliut;, Cit).Trcasurrr
COMMUNITY DEVELOPMENT
community Services Edward R.•Janitm.City Malla8er
June 11, 1997
Gary W. Craft
Contra Costa Economic Partnership
Incubator Project
1001 Galaxy Way, Suite 102
Concord, CA 94520
RE: Contra Costa Software Business Incubator
CDBG Funding Application
Dear Gary:
Staffhas reviewed the application package submitted to the City of Concord on May 22, 1997. I am
pleased to say that the project is an eligible activity. The Incubator qualifies for Community
Development Block Grant (CDBG) funding because it proposes to provide technical assistance,
advice and business support services to owners of micro enterprises. [24CFR 570.201(o)(ii)).
Funding can be provided for the technical assistance, advice and identified support services, however,
the submitted budget cannot be funded and must be revised.
A micro enterprise is a business that has five or fewer employees, one or more of whom owns the
enterprise. Assisted micro enterprises would consist of incubator tenants and any other micro
enterprises who receive services from the incubator which may be funded in any way by the CDBG
grant.
The proposal therefore will be required to meet the National Objective of job creation for low and
moderate income persons. The jobs created must be permanent full time(FTE) positions. At least
51% of all the jobs produced by any of the assisted micro enterprises must be held by or made
available to low and moderate income persons. Jobs that are not held or filled by a low and moderate
income person may be considered to be available to low and moderate income persons for these
purposes only if[24CFR 570.205(a)(2)(iii)]:
A. Special skills that can only be acquired with substantial training or work experience
or education beyond high school are not a prerequisite to fill such jobs, or the
business agrees to hire unqualified persons and provide training;and
M:1cDwwsAvuNcu¢nz-Ewrrstrsr.t�r
JUN-11-97 WED 1 ; 14 CITY CONCORD HCS FAX NO. 6713496 P. 03
Incubator-Required Submissions Page 2
B. The recipient and the assisted business take actions to ensure that low and moderate
income persons receive first consideration for filling such jobs.
It is Concord's understanding that you are still awaiting final confirmation from the Contra Costa
County Board of Supervisor's on their portion of the funding($50,000). The City of Walnut Creek
is also granting funds to the project(16,000). They have submitted their One Year Action Plan to
HUD for approval, and expect their money to be available for contracting after July 10, 1997.
Concord has reserved $50,000 in CDBG funds for an incubator project. Additionally, the City
Manager can authorize allocation of an additional$50,000 in CDBG funds to this project, for a total
of$100,000 in fiscal year 1997/98. Each year's funding is a separate funding cycle and requires a
separate application. All funding sources for the first year, public and private, must be committed
prior to contracting with the City.
The submitted budget will require revision prior to funding. The budget submitted does not provide
sufficient information to determine eligible costs equal to the request of$166,000. For Example:
A. Rent can only be reimbursed based on the floor space (square footage) required to
provide services to the tenants of the incubator, or to the extent that the cost of the
rented floor space(square footage) is higher than the occupancy fee charged to the
micro enterprise tenant.
B. Salaries and benefits can be reimbursed based on the percentage of time specific
employees will be providing specific services to micro enterprises in the incubator.
Time documentation will be required.
C. Floor space can be charged based on the square footage occupied by the copier,
shared conference rooms and other shared equipment, less any fee charged to the
participating micro enterprise.
D. Other eligible costs could include business accounting, database software, file server
and Internet access, equipment costs, servicing for copier, fax machine, and supplies.
E. Non eligible expenses would be seminars, internship prograrns, and other costs paid
directly by the micro enterprise for business support services such as secretarial,
clerical, telephone answering, etc.
Concord will be the lead agency in the collaboration. It does not appear that we can issue one
contract. Contra Costa County will be issuing a forgivable loan, if your request for funding is
approved. The City of Concord will issue a grant contract requiring a minimum of no less than five
jobs be created and held by or made available to low and moderate income persons residing in
Concord. Failure to create the minimum five jobs will require repayment of the grant to the City of
Concord by the Contractor. Additionally, the City of Concord requires a 20% match of private funds
M:\CD\URBAN\INCUDAMAPPRPSP.LET
JUN-11-97 WED 1; 15 CITY CONCORD HCS FAX NO. 6713496 P, 04
on all grants. The City of Walnut Creek will be using a contract which will be comparable to the
Concord contract with the requirement of no less than two jobs be created and held by or made
available to low and moderate income persons residing in Walnut Creek. Overall, the minimum
number of jobs created can be no less than 12, and concurrently no less than 51% of the jobs created
in the incubator must be held by or made available to low and moderate income persons.
The City of Concord will oversee the quarterly reporting and monitoring of the project for all three
jurisdictions. The details will be worked out between the jurisdictions after the county funding is
approved,
Prior to proceeding with a contractual agreement, several things need to be resolved or submitted to
the City of Concord. Please review the following list, prepare and submit the following items:
A. Articles of Incorporation, Audit and Bylaws for the Contra Costa Economic
Partnership. The Contra Costa Business Incubator, Inc. does not currently have
501(c)(3)tax status and cannot receive donations. Their bylaws are not complete and
approved,and they currently have no insurance. Therefore, per the City Attorney, the
contract for the grant should be with the defined agency, the Contra Costa Economic
Partnership, whose 501(c)(3)filing is complete.
B. Revised Sources and Uses of funds for the project. Attach evidence of commitment
of all funds required for the first year of operation. (Note: In the case of rental
income, a projection of the time line with the rent schedule, item #E below, for
incubator tenants would suffice.)
C. Current certificates of insurance, listing the City of Concord as additional insured.
These should include workers compensation, general liability and automobile
insurance. One million dollar combined single limit per occurrence minimum coverage
is required (Walnut Creek and Contra Costa County will contact you regarding their
insurance requirements, however, they may be quite similar).
D. A line item budget, with supporting documentation (refer to previous comments on
budget, page 2), indicating how you propose to spend the funds allocated to you
(attached form). Please note that the grant is on a reimbursement basis. You will
be required to submit documentation of all expenses to receive reimbursement. Please
itemize the breakdown of expenses to be paid for by each jurisdiction.
E. Rent Schedule for tenants of the Incubator.
F. Copy of the Executed Lease for the Incubator Site.
G. Copy of the Tenant Sublease for review and approval. Sublease should outline
services to be provided, costs associated with lease of space and First Source Hiring
Agreement requirements.
M:\CD\URDANVNCUDATL41rrRLSr,LET
JUN-11-97 WED 1: 16 CITY CONCORD HCS FAX N0, .6713496 P, 05
Incubator-Required Submissions Page 4
H. Copy of the finalized Tenant Application and guidelines for entry into the incubator.
1. Criteria for graduation from the incubator.
J. Copy for review and approval of a First Source Hiring agreement.
K. List of Support Services available, provider of support services, and any related fees
to be charged to tenants. The listing should detail what costs the incubator will incur
relative to providing the services. This will serve as a reference for reimbursement
and will demonstrate the participation of your collaborative partners.
L. Tentative list of job types that will be held by and made available to low and moderate
income persons.
M. A breakdown of the staff to be funded with City of Concord funds (attached form).
Similarly, fill out the same form for Walnut Creek and Contra Costa County.
If you have further questions please call me at(510) 671-3283.
Sincerely,
Em Marlene Rojas
Administrative Analyst
Community Services
CC' Edward R. James, City Manager
Mark Boehme, City Attorney
Bill Reeds, Director of Community Development
Liane Zimny, Manager of Economic Development
Belinda Smith, Contra Costa County
Melissa Ayres, City of Walnut Creek
Contra Costa Business Incubator, Inc. Board Members
M:\CD\U R$AN\INCtli3ATE\A PPRES i'.LET
JUN-11-97 WED 1: 17 CITY CONCORD HCS FAX NO. 6713496 P. 06
ANNUAL PROJECT BUDGET
AGENCY NAME:
PROJECT NAME:
BUDGET CATEGORY TOTAL CONCORD WALNUT CONTRA COSTA
ANNUAL ANNUAL CREEK COUNTY
PROJECT BUDGET ANNUAL ANNUAL
BUDGET (B) BUDGET BUDGET
(A) C (D
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4.
5.
2.
3.
4.
INTERN STTPFNDS
CONSULT T FEES
TRAVEL/MELFAGE
TRAMNGM'ORKSHOPS
SUBCONTRACT
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INSURANCE
UTILITIES
POSTAGE
PRINTING
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JLN-11-97 WED 1:18 CITY CONCORD HOS FAX NO, 6713496 .,P. 07
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to awwder:
Request to Speak Form D. 5
( THREE (3) MINUTE LIMIT) 0
Complete this form and place It In the box near the speakers' nostrum
before addressing the Board.
Name: %?o,y W,! i i-R— Phone; 6?V-6 c19.�
Address:-_L_.30 1) ' O,--f— Acx — `
1 am speaking for myself_ or Org+allizabon: o COCo �r�v� Fe JA S y 6—':
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CHECK ONE:
� 1 wish to speak on Agenda Item Date; h-I 7 '7 �
My col will be: general _tor_#gWnst._.___.
1 wish to speak on the abject of .
1 do not wish to speak but leave these comments for the Board
to consider:
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JUN 171997
IT
CLERK BOARD OF SUPERVISORS
CONTRA COSTA CO. 1
CONTRA COSTA SOFTWARE BUSINESS INCUBAtOX
Who is involved?
The Contra Costa Economic Partnership in conjunction with the Contra Costa Small Business
Development Center,Pacific Gas and Electric Company (PG&E) and local city governments have
embarked on a collaborative effort to develop and operate a Software Business Incubator in order
to stimulate job creation and new business formation in Contra Costa County.
What will the Incubator do?
The Contra Costa Software Business Incubator is designed to facilitate economic Development by
(1) providing assistance to owners of microenterprises, some of which are owned by low and
moderate income individuals, and by(2) stimulating job creation through entrepreneurial training
programs which help small businesses to grow and expand with at least 51% of the new jobs
being available to low and moderate income individuals. The Software Incubator will help
improve the success rate of small young software companies by reducing the barriers to business
growth typically faced by new businesses through business assistance programs and
entrepreneurial training.
According the National Business Incubation Association approximately 80% of the companies
that get their start in well-managed incubators are still in business after five years, compared to a
201/6 success rate for small businesses in general.
Where will it be located?
The Incubator will be located in the downtown Concord redevelopment area at 1855 Gateway
Blvd. The facility is located on a major thoroughfare with immediate freeway and public
transportation access. Of the 485 Software funs we have identified in the County 65% are
located along the I-680 corridor between Concord and San Ramon.
When will it open?
Plans are to open the doors for the first tenants by July 15 pending the approval of our public
agency partners. Space is available for approximately 22 tenants and several companies have
already visited the site and expressed interest in locating in the incubator. A recent study indicates
that there are over 167 businesses in Contra Costa County that are part of this industry and have
five or fewer employees,one of the requirements for entrance into the Incubator.
Why should Contra Costa County support an Incubator?
Job/Housing Balance-According to the Association of Bay Area Governments(ABAG)
Projections `96, Contra Costa County will need to create 99,700 new jobs over the next ten years
to keep pace with the projected population growth. Job growth near population growth relieves
traffic congestion and improves the job/housing balance.
Local;Job Growth-- Incubator companies will create high value, sustainable employment
opportunities for local residents. As incubator companies graduate and exit the incubator they
will tend to locate in Contra Costa County and Tri-Valley communities. The Sar.Jose Software
p
Incubator, a prototype for this Incubator, has been open for 2 1/2 years and has created 300 jobs.
We estimate this incubator will create 938 direct jobs in 10 years.
Maximize existing resources -The Software Incubator will partner with key organization within
the county to provide the following:
• First Source Hiring_Program-first consideration for all job openings will be given to qualified
low and moderate income individuals through a First Source Hiring Program administered by
the Private Industry Council. Jobs for qualified unemployed workers will be advertised
through the Employment Development Department.
• Student Intern 2=ram-economically disadvantaged students at local high schools and
community colleges will be provide"on-the-job"work experience where they can develop job
skills,as well as,be exposed to an actual work environment.
• Scholarship Pro&=am-qualified software entrepreneurs without the financial resources to pay
the low monthly fee to enter the incubator will be provided full or partial scholarships to
cover their monthly rent.
Contra Costa Software Incubator Board of Directors
Gregg Lender, Manager PG&E,and Contra Costa Economic Partnership Board of Directors
Debra Longwood,Manager, Contra Costa Small Business Development Center
Connie Lemen, Union Bank of California, and Contra Costa Economic Partnership Board of
Directors
Bud Lake, Executive Director,Contra Costa Econonuc Partnership
Ila Hornsher,PG&E Project Manager for Business Incubation
Consultants:
Gary Craft, Craft Consulting,Lafayette California
Jim Robbins,President Business Cluster Development and. Manager of The Environmental
Business Cluster in San Jose. (Jim has developed six incubators is California including the
Software Incubator in San Jose.)
Mark Westwind, Interim Director
. Software Business Incubator Project Sponsors
Founding Partners Sponsors
Contra Costa Economic Partnership East County Bank
City of Concord Donahue, Gallegher, Woods&Wood
City of Walnut Creek Arthur Anderson
Contra Costa County(pending)
Pacific Gas and Electric
Cooperating Agencies
Contra Costa Small Business Development Center
Contra Costa Private Industry Council
California State University, Hayward(Contra Costa Campus)
Diablo Valley College
California Employment Development Dept.
ELLEN 0 TAUSCHER
LOTH DISTRICT,CALIFORNIA
�ot�g�e�� o tie tte� 6tato
route of Repregentatibeil
m5tington, -me 20515--0510
June 16, 1997
I
i
The Honor ble Andrew Cuomo
Secretary
Department Of Housing and Urban Development
451 7th St., SW
Washington,, D.C. 20410
Dear SecretCuoma:
I have bee= that Contra Costa Software Business Incubator, Inc. has submitted a
Community, Development Block Grant (CDBG) Application to the Community Development
Departmenof Contra Costa County,the City of Walnut Creek,and the City of Concord. This grant
would prov de funding to assist owners or developers of microenterprises, which, in turn, would
stimulate jo creation through entrepreneurial training programs for low and moderate income
individuals.
I understand that the Contra Costa Software Business Incubator is a.regional collaboration to nurture
and sustain tart-up software funis in the 10th Congressional District and the cost-benefit studies
project that pproximately 938 direct new jobs will be created over the next eight years by incubator
tenants and Vaduate businesses.
Therefore, I urge you to give the Contra Costa Software Business Incubator's CDBG application
your most p ompt and serious consideration. Thank you for your attention to this matter.
Sincerely,
AMUL
Ellen 0.Tauscher
Member of Congress
EOT:jr
Enclosure
cc: Gary W. Craft
C iOL&K LA)11)`5
® ® CONTRA COSTA
C O U N C I L
2694 Bishop Drive, Suite 121
San Ramon, CA 94583
Phone: (510) 866-6666
Fax: (510) 866-8647
President May 13, 1997
Linda Best
Partner
Hassehine Best
Immediate Past President Mr. Phil Batchelor
Pamela J.Reed County Administrator
Managing Partner
Morrison R Foerster Contra Costa County
651 Pine Street
Vice President
Task Forces Martinez, CA 94553
William R.Gray
President
William R.Gray and Company Dear Mr. Batchelor,
Vice President
Task Forces The Contra Costa Council and the Contra Costa Economic Partnership are
Toml Van de Brooke
Manager Community Relations separate organizations with a common goal. That goal is to support efforts which
Shell ManihezRefining Company enhance the economic vitality of Contra Costa County.
Vice President
Finance&Administration
Ian Baird The Contra Costa Council Board of Directors, at their board meeting of March 21,
Senior Vice President 1997, voted to support the concept of establishing an incubator project in
Duffel Financial 8
Construction Company Concord. The Board of Supervisors will soon be considering the provision of
Vice President financial support for this project. The Contra Costa Council Board of Directors
Membership urges you to give this favorable consideration and assist in establishing this
Gary W.Craft,ACP
Crag Consulting Group important project.
Vice President
Events The software incubator will not only provide the potential for substantial benefits
Tom McCracken
General Manager to Contra Costa County, it will also enhance the county's image as a place
Sunvalley Shopping Center favorable to business. A number of the firms that successfully emerge from the
Vice President incubator are expected to establish operations elsewhere in the county. In
Communications
John Leykam addition, the employees of these firms will be from diverse areas in the county.
Major Gifts Officer
Saint Mary's College The Contra Costa Council, while a separate tax exempt organization from the
Executive Director Contra Costa Economic Partnership, we share the view that the software
Jim Jakel
incubator is of great importance to Contra Costa County.
On behalf of the Board of Directors of the Contra Costa Council, I hope that you
will act favorably on the request to establish a software incubator in Contra Costa
County.
cerely,
Y
Jim Jakel
Executive Director
Contra Costa Council
® This letterhead printed on recycled paper
• ��`NDUSTkY O
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tiTRq cosTA GoJ
PRIVATE INDUSTRY COUNCIL April 30, 1997
2425 Bisso Lane,Suite 100
Concord,CA 94520-4891
(510) 646-5239 Mr. Gregg L. Lemler
FAX(510)646-5517 VP Business Incubator Projects
ccpic@pic.co.contra-costa.ca.us
Contra Costa Economic Partnership
EXECUTIVE COMMITTEE 1001 Galaxy Way, Suite 102
RON WETTER Concord, CA 94520
PIC Chair
Pacific Gas&Electric Company Dear Mr. Lemler:
FRANCOISE THIMON
PIC Vice Chair The Contra Costa County Private Industry Council (PIC)
Payless Drug Store
strongly supports the Contra Costa Software Business Incubator
CHUCK WOODS
Chair One Stop Committee and looks forward to working with the Business Incubator to
Committee
Charles H.Woods&Associates target low- and medium-income persons for possible
JOAN KELLEY-WILLIAMS employment.
Chair Workforce Development Committee
BABCO The PIC will take the lead role in developing an outreach
ALAN NEWELL program for low- and medium income persons that focuses on
Chair School to Work Committee
Antioch Unified School District job training programs through, among others, the Contra Costa
RICHARD FOLEY Community College District and the Contra Costa County of
Member at Large Education, as well as the PIC's various service providers. The
Carpet,Linoleum&Soh Tile Workers
Local ltl2 purpose of the am will be to helptrain and recruit low- and
medium income persons for employment with companies in the
Business Incubator.
DIRECTORS
Nancy Atkinson We wish the Business Incubator Project well and are ready to
Myrtle Ballard assist in helping it meet its workforce objectives.
John Cullen
Tula Economou
Stephanie Ferguson Sincerely,
Joe Goglio
Carolyn Graham J
George Hamm ,',
Cara Rubenstein Hoxie
Beth Lee Arthur C. Miner, Executive Director
James Lopeman Contra Costa County Private Industry Council
Susan McCormick
Charles Spence
Cindy Turner ACM:pk
EXECUTIVE DIRECTOR #Y:\picoffice\letter\businc.doc
ARTHUR C. MINER
1�jaW K) V
CONTRA COSTA SOFTWARE BUSINESS INCUBATOR
Representatives in attendance at June 17, 1997 meeting of the Board of Supervisors
1. Gregg Lemler President, Contra Costa Software Business Incubator, Inc.
Board of Directors, Contra Costa Economic Partnership
Division Manager, PG&E
2. Catherine Marshall Economic Development Specialist
Contra Costa Small Business Development Center
3. Ron Wetter President, Contra Costa Private Industry Council
Public& Community Affairs Representative, PG&E
4. Art Miner Executive Director, Contra Costa Private Industry Council
5. Conni Lemen CFO, Contra Costa Software Business Incubator, Inc.
Board of Director, Contra Costa Economic Partnership
Vice President, Union Bank of California
6. Ila Homsher Board of Directors, Contra Costa Software Business Incubator, Inc
Project Manager for Business Incubation, PG&E
7. Bud Lake Executive Director, Contra Costa Economic Partnership
8. Mark Westwind Interim Director, Contra Costa Software Business Incubator
9. Gary W. Craft Business Incubator Project Manager
1