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Agenda 05/13/2014 Item # 11A 5/13/2014 11 .A. EXECUTIVE SUMMARY Recommendation to approve the proposed Collier County Innovation Accelerators Business Plan and authorize the County Manager to execute the Plan. OBJECTIVE: To obtain Board approval of the proposed Collier County Innovation Accelerators Business Plan included in the backup materials in this executive summary. CONSIDERATIONS: On September 10, 2013, (agenda item 11.C.), the Board approved the Office of Business and Economic Development's FY 2014 Business Plan. One of the work program objectives identified in the plan articulated the need to evaluate the potential for developing a local business incubator/accelerator as a tool to foster growth and development of emerging businesses in our community. Business accelerators are seen as having a positive economic impact on the community through the creation of jobs and the recruitment and mentoring of innovation companies. They will help to bring high value employment opportunities for citizens, attract new foreign direct investment, improve export opportunities for Florida companies, extend and expand the brand recognition the region currently enjoys, build new future opportunities for our young citizens who seek to stay in the region and build their own businesses, and create a synergy with the region's educational institutions. This project will be the first of its kind in the Southwest Florida region and will include community partners such as Florida Gulf Coast University, the Chamber of Commerce,venture capitalists and local business leaders. In pursuit of this objective,the County's state lobbyist firm, Fowler, White, &Boggs, was commissioned to provide a feasibility analysis and in turn subcontracted with Dr. Marshall Goodman on behalf of the County to assess the feasibility of creating a business incubator in Collier County. On December 10, 2013, (agenda item 10.C.) Dr. Goodman presented his Collier County Business Accelerator Feasibility Report to the County Commission. The Board voted unanimously to accept the report and further authorized staff to work with Dr. Goodman to develop a detailed Business Plan for the development of the business accelerators, as well as assist with efforts to secure an appropriation from the State Legislature to help advance the project. The proposed Innovation Accelerators Business Plan calls for the development of two business accelerators with distinctively different missions. One to be located in the western area of the county will focus on becoming one of 13 certified soft-landing Accelerators in the U.S. and will focus on recruiting companies primarily in the smart health, information technology and other knowledge-based industries. The second accelerator will be targeted towards the eastern part of the County centered around the community of Immokalee and will focus on culinary innovation and emerging food technologies within the agribusiness sector. The proposed business plan contains a 10 year projected pro-forma that outlines revenue and costs analyses for the project. The pro-forma has been developed with the assumption that after a two year phased start-up and infrastructure building period,the Collier Accelerators will be largely self sustaining. A key revenue assumption in the start-up phase of the project is the Packet Page -48- 5/13/2014 11 .A. receipt of a$2.5 million budget appropriation from the State of Florida to provide seed capital for initial expenses such as leasehold improvements, equipment, initial lease payments and staff support. On May 2,2014,the Florida Legislature passed the 2014 State Budget that contains $2.5 million for this venture. The budget is awaiting signature by the Governor. This State funding must be matched with local investments by the public and private/not for profit sectors. Specifically the business plan calls for an initial investment by the Board of County Commissioners of$250,000 a year in FY 2014 and FY 2015, and a sustaining pledge based on performance of$100,000 per year through 2023. Matching contributions from the private and/or non-profit sectors in the same amounts and duration will also be required. Contributions may include cash and in-kind contributions, such as subsidized space, equipment, supplies, and professional services. Fund-raising has informally commenced with very good progress towards achieving that goal. This approach insures that County investment along with private sector match will be effectively leveraged with state economic development funds, with future federal and private philanthropic grant opportunities aggressively pursued. The proposed Business Plan further recommends that CareerSource Southwest Florida(also known as the Southwest Florida Workforce Development Board)be contracted to serve as the administrative agent of the Accelerator project per county guidelines. This organization brings many advantages to this project from their expertise in employment and training,to the management of multiple facilities spread across the five county southwest Florida region, to their 501(c)(3) status that allows them to accept private sector contributions. CareerSource would have the responsibility to oversee and manage the facilities and administrative support functions associated with the Innovation Accelerators. The County Commission would serve as the policy board and fiscal agent for the project. The proposed Business Plan also recommends that the Commission appoint an Accelerator Advisory Committee composed of approximately 11 public and private representatives to provide guidance, support, and expertise to the Accelerator project and provide a semi-annual report to the County Commission regarding Accelerator performance. FISCAL IMPACT: Funding in an amount not to exceed $250,000 in FY 2014 is budgeted in a dedicated economic development fund (007) for this project. Source of funding is the County's annual share of gaming receipts derived from the State's Gaming Compact with the Seminole Indian Tribe. The current fund balance before this proposed expenditure is $1,022,267. LEGAL CONSIDERATIONS: This item is approved as to form and legality and requires majority vote for approval. -JAK GROWTH MANAGEMENT IMPACT: The recommended action supports the goals and objectives of the Economic Element of the adopted Collier County Growth Management Plan. RECOMMENDATION: That the Board of County Commissioners: 1. Approve the proposed Collier County Innovation Accelerators Business Plan 2. Authorize the County Manager to spend up to $250,000 in FY 2014 to begin operations as outlined in the Plan. Packet Page-49- 5/13/2014 11 .A. 3. Authorize the County Manager to develop a contract proposal with CareerSource Southwest Florida for Board consideration to serve as the administrative agent for the accelerator project. 4. Authorize the County Manager to bring back recommendations for appointments to the Business Accelerator Advisory Committee composed of 11 public and private sector representatives to provide guidance, support, and expertise to the Accelerator project, per County guidelines. 5. Approve necessary budget amendments. Prepared by: Bruce Register, Director, Office of Business & Economic Development Attachments: A Business Plan for Collier County Innovation Accelerators Packet Page-50- 5/13/2014 11.A. COLLIER COUNTY Board of County Commissioners Item Number: 11.11.A. Item Summary: Recommendation to approve the proposed Collier County Innovation Accelerators Business Plan and authorize the County Manager to execute the Plan. (Bruce Register, Office of Business and Economic Development Director) Meeting Date: 5/13/2014 Prepared By Name: BrockMaryJo Title: Executive Secretary to County Manager, County Managers Office 5/7/2014 8:55:40 AM Submitted by Title: Executive Secretary to County Manager, County Managers Office Name: BrockMaryJo 5/7/2014 8:55:41 AM Approved By Name: OchsLeo Title: County Manager, County Managers Office Date: 5/7/2014 3:29:24 PM Packet Page-51- 5/13/2014 11 .A. A Business Plan for Collier County innovation Accelerators Prepared by: Marshall R. Goodman, Ph.D W3 Consultants March 31, 2014 Collier County Accelerator Business Plan 1 Packet Page-52- 5/13/2014 11.A. A Business Plan for Collier County innovation Accelerators Introduction Collier County has a unique opportunity to develop in partnership with the private sector and the state of Florida, two focused and distinctive business accelerators targeted at entrepreneurs looking to expand their high growth companies through the development of new markets, new joint venture partners, investment resources, and synergistic spaces that allow them to efficiently and cost effectively grow their companies. In a previous "Accelerator Feasibility White Paper" prepared for Collier County, and in a study conducted by the Regional Economic Research Institute at Florida Gulf Coast University, it was found that more than sufficient demand exists for the establishment of incubators/ accelerators, and that they would bring forth a number of positives such as a stronger competitive region, increased access to expertise, resources, entrepreneurial education, greater foreign direct investment, increased attractiveness to venture capital, and the expansion of economic development efforts. Indeed, Collier County is very well suited to emerge as an established state staging portal for attracting entrepreneurs and international business development, as evidenced by the strong relationships the region has been building over the past year with the French government Collier County Accelerator Business Plan 2 Packet Page-53- 5/13/2014 11 .A. and French innovation firms interested in business development in Florida. In addition, Collier County offers a strong overall environment in terms of resources, expertise, and a high quality trained workforce for the establishment of the Accelerators: * Naples is currently ranked as the third wealthiest city in the U.S., and has emerged as one of the primary wealth management centers in North America. * The greater Naples community has a very high concentration of investment, legal, and international finance professionals. * Naples is home to the state of Florida's only Angel Investment Fund (Tamiami)which has demonstrated great success. * Collier County is home to the highest concentration of current and former Fortune 500 executives in the nation - one of whom is currently serving as Governor of the state. * Collier County is home to key industries such as hospital health care management, medical manufacturing, informational technology and enterprise software, and major agribusiness commercial operations. * Collier County and SW Florida have established themselves as a premier tourist, restaurant and entertainment destination, with a thriving hospitality marketplace. * The region is exceptionally well served with distinguished accredited institutions of Higher Education with multiple campuses, tens of thousands of enrolled students, professional and graduate degree Collier County Accelerator Business Plan 3 Packet Page -54- 5/13/2014 11.A. programs, and specialized medical and healthcare programs such as University of Miami's Bascom Palmer Eye Institute, and the University of Florida NCEF Pediatric Dental Center. * Collier County also enjoys being a leader in the agribusiness research field and is home to the the University of Florida's Southwest Florida Research and Education Center, as well as a branch of their Institute of Food and Agricultural Sciences. Collier County Accelerator Business Plan 4 Packet Page -55- 5/13/2014 11 .A. Goals and First Steps: Creating an Innovation EcoSystem In a succession of milestone decisions in 2013, the Collier County Commission passed by unanimous vote a series of new powerful and innovative economic development initiatives and strategies that would enable the county to launch a number of economic programs. Theses efforts are all aimed at greatly enhancing the employment opportunities and careers for Collier citizens. A recent Commission decision to support the conclusions of the "Collier County Accelerator Feasibility White Paper", led the County to endorsed three recommendations: (1) to aggressively pursue a wide variety of sources of funding to build the long-term innovative infrastructure necessary to support start-up and soft-landing companies in the county and region; (2) work to develop a plan that would provide initial funding to begin operations; and (3) strategically pursue international linkage opportunities and partnerships in identified focal sector where Collier County has a clear and substantive comparative advantage. Following from the White Paper analysis, this business plan was commissioned to articulate a plan for the development of two distinctively different business accelerators in the County. One Accelerator to be located in Naples Florida, so that it could close to the heart of the business district. This Accelerator would be highly unique in that is would seek to be designated by the National Business incubator Association as one of only 13 certified soft-landing Accelerators in the nation. This would require having a core mission that focused on the delivery of services to international companies seeking to enter the Florida and U.S. marketplace. Additionally, this Accelerator would seek to develop core competencies in key industry verticals where Collier County already has strength in terms of numbers Collier County Accelerator Business Plan 5 Packet Page -56- 5/13/2014 11 .A. of companies, entrepreneurs, and expertise. Two such areas would be in health technology and tourism and hospitality. The second accelerator would be targeted towards the eastern part of the County centered around the city of lmmokalee, and built upon the world-class agribusiness that surrounds that area. This Accelerator would focus on culinary innovation and emerging food technologies within the agribusiness sector, devoted to the development of innovative and new food and beverage products, packaging and delivery. Having a positive economic impact on the communities being served is the primary goal of both Accelerators. Economic development and the creation of jobs must be their core mission through the recruitment and mentoring of innovation companies. In the end, the mission should be to create an innovation ecosystem for high growth companies so that they can develop relationships, partnerships, find venture capital, and take root in Collier County and Florida. The Accelerators would have a number of exceptionally positive outcomes and impacts on the local economy and the region in general including: * recruiting companies into Florida that create high value employment opportunities for its citizens * attracting foreign direct investment * improving export opportunities for Florida companies * extending and expanding the superb brand recognition the region currently enjoys * building new futures for young citizens who desire to stay in the region and build their own business Collier County Accelerator Business Plan 6 Packet Page -57- 5/13/2014 11.A. * creating a synergy with the region's educational institutions, and serving as an important feeder into Florida Gulf Coast University's Innovation-Hub Research Park Collier County Accelerator Business Plan 7 Packet Page -58- 5/13/2014 11 .A. Getting Started - First Steps Important first steps for the Accelerators would be to establish the following: 1 . Strategic Plan A strategic plan that contains quantifiable objectives to achieve the program mission and measures the projected impacts and outcomes that include the following: A. A mission for each accelerator that defines the accelerators role in the community and that contains quantifiable objectives to achieve the program mission. B. Recruitment of Accelerator staff capable of achieving the mission of the accelerator and expertise in helping companies grow, with specific knowledge in soft-landing specialty services. C. Build an effective board of directors committed to the accelerators mission and to maximizing management's role in developing successful companies. D. Prioritize management time to place the greatest emphasis on client assistance, including proactive advising and guidance that results in company success and wealth creation. E. Develop accelerator facility, resources, methods and tools that contribute to the effective delivery of business assistance to client firms and that address the developmental needs of each company. Collier County Accelerator Business Plan 8 Packet Page-59- 5/13/2014 11 .A. F. Seek to integrate the accelerator program and activities into the fabric of the community and its broader economic development goals and strategies. G. Develop stakeholder support, including a resource network, that helps the accelerators program's client companies and supports the incubator's mission and operations. H. Maintain a management information system and collect statistics and other information necessary for ongoing program evaluation, thus improving the Accelerators effectiveness and allowing it to evolve with the needs of the clients. 2. Governance It is recommended that Collier County serve as the fiscal agent for the Accelerator project. All state, federal, and grant funds received for this project should be received by the Collier Board of County Commission and processed by the County Clerk's office. It is further recommended that a contract be negotiated for execution with CareerSource Southwest Florida to serve as the administrative agent for this project, with a proposed administrative fee not to exceed 5% of the proposed annual budget for the project. CareerSource Southwest Florida brings many advantages to this project from their expertise in employment and training, to the management of multiple facilities spread throughout the five county Southwest Florida area, to their 501 (c)(3) status that allows them to accept private sector contributions. As administrative agent, CareerSource would have the Collier County Accelerator Business Plan 9 Packet Page-60- 5/13/2014 11 .A. responsibility to oversee and manage the day to day operations of the Accelerators, including but not limited to: the hiring and oversight of the Accelerator management and staff and all associated human resource functions, management of leases and related real estate issues, as well as oversight for all leasehold improvements and installations, the purchase of equipment and supplies, and the disbursement of resources and collection of rents and fees for service. It is recommended that the County Commission appoints an Ad Hoc Accelerator Advisory Committee composed of public and private representative to provide guidance, support, and expertise to the Accelerator project, and provide a semi-annual report to the Commission regarding Accelerator performance. It is recommended that 6 representatives of the public sector and 5 from the private sector and or non-profit sector make up this 11 person Committee. Suggested public sector representatives may include: County Commission Economic Development Chair Director of CareerSource Southwest Florida or designee University System Representative Collier County Public School System Representative Municipal Representative Regional Business Alliance Representative Suggested citizen representatives should include: An individual from the banking venture capital industry An individual from the development community An attorney familiar with international business law and/or trade A business representative from the greater Naples area A business representative from the lmmokalee area Collier County Accelerator Business Plan 10 Packet Page-61- 5/13/2014 11 .A. 3. Services & Locational Needs of the Accelerators A. Naples Soft-landing Accelerator The Naples Accelerator should be built on one core philosophy: to provide an innovation ecosystem of professional support that helps businesses surpass their goals by providing a "soft-landing" of coordinated services and referrals. As noted previously, there are presently only 13 certified designated soft-landing accelerators in the nation, none of which are in Florida, so the Naples Accelerator can play not only a major role for the County, but for the State of Florida as well, serving as a "port of entry" for companies that can be later referred to the portion of the state that best suites their particular business model and needs. To achieve soft- landing certification by the National Business Incubator Association - which can be a two-year process with documented proof of provision of soft-landing expertise and services - it is imperative that the Accelerator has a well trained and experienced staff that maintains a global outlook and offers a wide-range of resources to its clientele. Services that may be provided would include, enterprise and business plan evaluation and diagnosis, commercialization feasibility studies, market channel analysis, pricing policies, integration of supply chains, cost analysis, and other business services that a global high growth clientele will need. As an accelerator geared towards high growth companies, the accelerator needs to be within a synergistic location, with premium information technology support services provided through a network of Collier County Accelerator Business Plan 11 Packet Page -62- 5/13/2014 11 .A. vendors that ensures that companies information technology needs are met. Rents need to reflect a full service model, that provides companies access not simply to space in which to operate, but to a range of services that makes it is easy for them to quickly and efficiently set-up operations and build their businesses. Rental agreements should range from 3 month contracts to a maximum of two years. No companies should be allowed to be incubated beyond the 2 year period without approval of the Accelerator Board, since the overall goal is for companies to use the Accelerator as a place to take root, not to become rooted, so that space can be freed up for the next company that needs support. A-1 : Basic services to be provided should include: * Core office and standard office equipment, including furnishing. * A common reception area and message forwarding system. * A common conference room with state of the art conferencing capability that is at a Cisco telepresence level with robot or mobility capability. * A shared kitchen and full service break area with stocked refreshments and snacks, so as to invite 24/7 usage. * Professional support staff, including in-house web developer informational technology professional, and a soft-landing expert. Given the focus on high growth companies, world-class technology in the Accelerator is not just a desire, it needs to be a must have. The following type of informational technology services need to be supported: Collier County Accelerator Business Plan 12 Packet Page-63- 5/13/2014 11.A. * Access to cloud services. * Access to a data center network. * Access to 3-D Printing * Business continuity and disaster recovery * Access to 24/7 Information Technology Help Desk * Access to an Ecommerce website, shopping cart, and hosting services included as part of an Accelerator service bundle Perhaps most importantly, given its soft-landing designation the Accelerator needs to be able to provide either directly or indirectly (through referral at additional cost to the company) a host of soft- landing services including the following: * Translation services * Language training * Domestic market research and entry assistance * Introductions to financial capital and potential funders * Intellectual property protection assistance * Government regulation information and assistance * Import/Export laws and regulation assistance * Patent legal assistance * Facilitation is obtaining business and driver's licenses * Cultural training * Immigration and visa assistance * Housing assistance * Assistance with employment by assisting with the placement of trailing spouses or partners * Assistance with school selection and enrollment schedules A-2: Suggested Locational Needs for Naples Soft-Landing Accelerator Collier County Accelerator Business Plan 13 Packet Page -64- 5/13/2014 11 .A. The suggested location and space needs for the Naples Soft-landing Accelerator include the following: 1 . The location should have excellent access via major roadways and be close to the major business hubs within the region. 2. The location should have a "high tech" modern feel that will attract companies and have an overall "Silicon Valley" campus feel. 3. The location should be close to amenities such as restaurants, hotels, apartments, and shopping centers. 4. The location should have excellent access to high speed internet and cable networks. 5. The location and space must meet all ADA requirements. 6. The location must have an excellent security system and plan installed. 7. The space should be at least 3000 square feet expandable to 6000 square feet as demand requires. 8. The building and space must be accessible 24/7 to users. 9. The space should be in move-in ready condition, so that the Accelerator can get started as quickly as possible once funding has been approved and a staff hired. It is recommended that during any interim period, that the Accelerator staff be allowed to use space within the County's Economic Development offices. Collier County Accelerator Business Plan 14 Packet Page-65- 5/13/2014 11.A. 10. The space should be prewired for high speed data connections among a wide variety of users, and data closets. 11 . The space should have from 6-8 hard wall offices, space for kiosks that have the capability of accommodating multiple users, a conference room suitable for high tech presentations and a small reception area. 12. The space should meet a price-point for at least the first 2 years of operation of no more than $10.00 per square foot. 13. The building or location should be able to provide additional attractive amenities such as recreation facilities. B-1 : Immokalee Culinary Accelerator Services & Locational Needs The Immokalee Accelerator needs to provide production and assembly space for culinary related businesses and provide shared office space in an FDA approved and state licensed facility. The Accelerator space should consist of a commercial kitchen with state-of-the art equipment divided into different work stations with adjoining flexible office space that allows for shared and co-working environments. The goal of the culinary kitchen is to meet the needs of: * Start-up food businesses in need of a licensed first facility * Home-based businesses that wish to legalize and grow their operation * Established businesses needing specialized kitchen equipment * Established businesses looking to grow or reach a new market Collier County Accelerator Business Plan 15 Packet Page-66- 5/13/2014 11.A. * Food-Preneurs looking to experiment with new food products processes and test items * Food-Preneurs looking for a synergistic gathering place to meet other like minded individuals The Culinary Kitchen would utilize a large shared-use processing area that enables a wide range of food products to be produced such as vegetables, fruits, jams, jellies, soups, sauces, beverages, pies, cakes, breads, seasoning blends, entrees side dishes, and candies. The shared use area should be divided into 5 areas: The "cold-process" area which would be designated for the preparation and processing of produce in its raw state. Typical activities in this area would include post harvest preparation, cleaning, peeling, size reduction, and packaging all in a temperature controlled environment. The "hot process" area that would provide a range of process capabilities including blanching, steaming, cooking, roasting, and baking. The "dry process" area that would be devoted to equipment used for producing items such as fruit pies, breads, cookies and other baked goods, as well as seasoning blends, dehydrated fruits, vegetables, and herbs. A "cold assembly" area that would allow for limited packaging of refrigerated, frozen or ambient products, with sealing, labeling and shank wrapping equipment. Collier County Accelerator Business Plan 16 Packet Page -67- 5/13/2014 11.A. A "Kosher" section that would be certified for certain types of food preparation that meet strict dietary requirements. Florida has the third largest Jewish population in the nation, with the vast majority of that population living within a radius of 125 miles of the Immokalee facility, yet there are a very limited number of facilities catering to this populations culinary needs. As a result, this could become an important niche market for Accelerator producers. B-2: Locational Needs of Immokalee Culinary Accelerator 1 . A warehouse style facility suitable and adaptable for the development of a culinary kitchen and capable of housing large pieces of equipment in at least 5,000 sq. ft expandable over-time to 8,000 sq. feet. A minimum of 1 ,000 sq. ft. should be shared office space. It is estimated that a warehouse space that meets basic requirements on power, sewer, and HVAC systems, would require an investment of $1 ,300,000 to make necessary improvements, purchase and install equipment, and receive licensing approvals. 2. A facility in close proximity to major roadways, airports and convenient access to urban areas, that is strategically situated to serve businesses throughout the SW Florida region. 3. A loading dock or level access doors and the ability for small and medium vans and trucks to enter and exit the facility with ease. 4. A facility that has excellent security. 5. A facility where state-of-the-art fire safety equipment and systems can easily be installed. Collier County Accelerator Business Plan 17 Packet Page-68- 5/13/2014 11 .A. 6. A facility that is ADA accessible. Collier County Accelerator Business Plan 18 Packet Page -69- 5/13/2014 11.A. Accelerator Revenue and Cost Analysis In Attachment A is a 10 year Pro Forma that articulates a revenue and cost analysis for the Accelerator Project. Typically business accelerators require start-up funds and time - time to recruit member companies, develop services, and establish critical feeder linkages and relationships. This period can typically take anywhere from 18-24 months before incubators/accelerators achieve a form of sustainability, although most incubators/accelerators even after this period require some form of public and private support. Indeed, more than 90% of the nation's current incubators according to the National Business Incubator Association receive some form of ongoing local government/community financial support. The Accelerator Project Pro Forma has been developed with the assumption that after a two year phased start-up and infrastructure building period, the Collier Accelerator's must be largely self- sustaining, with positive cash flow, and positive end of the year fund balances. These balances can serve both as reserves and for future matching funds for additional public and private grant programs that likely will present themselves in the future. The Pro Forma has been built based on the following assumptions: 1 . That Collier County would make an initial investment of $250,000 a year in Fiscal Year 2014 and Fiscal Year 2015, and a sustaining pledge based on performance of$100,000 per year for FY 2016-2023, with the understanding that the current Commission cannot authorize funds beyond the current fiscal year. 2. That Collier County and regional SW Florida private and non- profit sectors would be asked to match the County's contribution Collier County Accelerator Business Plan 19 Packet Page-70- 5/13/2014 11 .A. of $250,000 in cash or in-kind contribution for the first two years, $150,000 in FY 2016, and a sustaining contribution of$100,000 per year for FY 2016-FY 2023. 3. There is a clear expectation that the Accelerator staff would participate and help to lead fund-raising efforts and write and annually submit competitive grant applications for additional financial resources and support. Over a ten year period it is expected that fund-raising through grants, sponsorships, and endorsements would contribute $1 ,600,000 to the operation of the Accelerators. 4. That the State of Florida would match the contributions of Collier County and the private and non-profit sectors with a $2.5 million grant in FY 2014. These funds would be allocated with $2,000,000 going towards leasehold improvements, equipment, initial lease payments, and costs associated with meeting all applicable federal, state and local standards and licenses. The remaining$500,000 will be used as seed funds for recruiting and hiring a professional Accelerator staff in the first two years of operation. Hired staff would need to recognize that after the 2 year period of seed money is utilized that their employment tenure is dependent on the Accelerators meeting their financial milestones. It is expected that of the $2,000,000, the lmmokalee Accelerator would be allocated $1 ,300,000 for construction and equipment, and the Naples Accelerator would be allocated $700,000 for equipment and furnishings. Collier County Accelerator Business Plan 20 Packet Page-71- 5/13/2014 11 .A. 5. That the Naples IT Accelerator would seek to begin operation as soon as June 2014, and therefore would have 6 months of lease income in FY 2014. It is recommended that the Collier County Commission and County Manager release 50% of the requested $250,000 allocation immediately so that a contract with CareerSource acting as the Administrative unit can be negotiated and the process of hiring staff, securing a lease, and marketing the incubator can begin in earnest. 6. It is estimated that the Immokalee Accelerator would require an estimated 6 months of remodeling and equipment installation and that it would not be operational until January 2015 at the earliest, and therefore would contribute no income towards operations in FY 2014. 7. That the staff for the Accelerator project would be phased in over a two-year period, and would reach a compliment of 8 full-time staff members assisted by various part-time and student intern employees. These individuals would serve both Accelerator facilities and be available to regional partners. Several staff would have their permanent offices at one or the other facilities, and would move freely between both facilities as the work dictated. It is recommended that the first hires be the Executive Director, the Director of Soft-Landing Services, a Web Developer, and a Information Technology Support Specialist who would primarily be based out of the Naples Accelerator. Given industry standards and the competitive nature of several of these positions, it is expected that these position will be funded with a mixture of public, private, and income generated dollars. Collier County Accelerator Business Plan 21 Packet Page-72- 5/13/2014 11.A. A second phase of hiring commencing in early FY 2015 would seek to fill 3 position at the Immokalee Accelerator: Manager Immokalee Accelerator, Director of Facilities & Compliance, and Maintenance Specialist. The final hire in FY 2015 will be a Regional Global Soft Landing expert with strong international experience in market areas important to the region and the state. 8. All personnel salaries in the pro forma were matched with current Collier County classification rates of pay, and benefits were calculated to align themselves with best practice. All salaries in the pro forma are adjusted for inflation over the 10 year period. 9. All operating costs are based on normal industry standards, and factor in subcontracting out on a competitive base the cost of providing 24/7 information technology backup, security, help desk and maintenance for member companies. All operating costs in the pro forma are adjusted for inflation over the 10 year period. 10. Rental rates are subject to meeting requirements where the Naples Accelerator lease costs do not exceed a projected $10 sq. foot in FY14-15, and in Immokalee do not exceed $2 sq. foot in FY 15-16. 11 . Member rates for space at the Naples Accelerator are dependent on the cost of the lease and maintenance. Lease rates include use of space and all services of the accelerator, except for virtual members who will only be charged for use of services. It is expected that a range of membership plans will be proffered to companies based on their desire for a single office, shared office kiosk, or shared kiosk. Rates for use of space and Collier County Accelerator Business Plan 22 Packet Page -73- 5/13/2014 11 .A. equipment at the Immokalee Accelerator will be based on an hourly charge of use set annually. Individuals may select among several pay plans or purchase blocks of time at a reduced rate. It is recommended that market competitive rates be used which currently are between $15-$20 per hour dependent on the type of equipment being utilized. For purposes of this Pro Forma, an average rate of $10 per hour was used in the calculation. 12. An assumed interest rate on end fund balances was used that ranged from .5%-2% over the 10 year period and an inflation rate on all personnel and operating costs ranged from 2%-3% over the 10 year period. 13. Lease income for the Accelerators increases steadily over the years as the Accelerators fill-up with clients and attract more users and take on additional space with corresponding increases in operating costs. In its fifth year of full operation it is projected that the Accelerators will apply for and receive a Federal award of $3,000,000 to move into a permanent Accelerator building as part of a larger innovation project within the County. The Accelerator would use $1 ,000,000 from its fund balance as a match to complete this $4 million project, that greatly increases the number and variety of companies it can serve. Analysis The pro forma revenue and cost analysis shows that with the help of the seed funding from the County, the State, and the private and non-profit sectors, that after the second year of operation, the Accelerators will be generating a net positive cash flow. The Accelerators starts out with a positive end fund balance (FY14: $767,886) and sustains and increases Collier County Accelerator Business Plan 23 Packet Page-74- 5/13/2014 11 .A. these strong levels with the only dip in FY19 ($207,267) due to a $1 ,000,000 contribution towards the construction of a new facility, but quickly recoups those strong balances in subsequent years. Over the 10 year period, personnel costs will average $793,033 per year with operating costs averaging $458,151 per year for a total of $1 ,251 ,184 in combined expense. Projected income from leases over this period averages $953,237, with an additional average of$161 ,500 being generated from fees for services that the Accelerator would earn from additional services provided to area companies for an average annual revenue total of$1 ,114,737. This would mean an annual deficit of $136,447 that would need to be raised, which underscores the continuing importance of public, private, and non-profit fund-raising to the Accelerator. This type of sustained investment by the community offers a superb Return on Investment (ROI) based on an econometric analysis performed by the Southwest Florida Regional Planning Council (SWFRPC) utilizing a standard Regional Economic Analysis Program known as a REMI analysis. SWFRPC was asked by Collier County's Business and Economic Development Office to analyze sets of projected employment, equipment purchases, and construction data over a 10 year period for both the Naples Soft-Landing Accelerator and the Immokalee Culinary Incubator. The REMI results are shown in Appendix Number B and C. The Culinary Incubator would generate 63 new direct jobs, would create 48 indirect jobs and induced jobs for a total of 174 new jobs in Collier County. The soft-landing Accelerator would create 149 new direct jobs, plus an addition 54 indirect and induced jobs for a total of 203 new jobs. Together, the two Accelerators create 377 total jobs. These jobs Collier County Accelerator Business Plan 24 Packet Page-75- 5/13/2014 11 .A. generate a total of $22.97 million in new personal income during this 10 year period. In addition, the REMI analysis shows that the Culinary Incubator would generate after a 10 year period $17.7 million to the Gross County Product (GCP) which is a measure analogous to the national Gross Domestic Product. The Soft-landing Accelerator would contribute an additional $18.37 million during this period for a total of $36.07 million generated in Gross County Product. Given these REMI numbers one can calculate an ROI based on a total county investment of$1 ,300,000 over the 10 year period of$27.74 to $1 dollar invested in terms of GCP, and $17.66 to $1 dollar invested in personal income. As for the state investment of$2,500,000, the Accelerators ROI in terms of GCP is $14.42 to every $1 dollar of state investment and is $9.1 for every $1 invested in terms of personal income. These rates of return on Incubator/Accelerator investments are highly consistent with national standards. Marketing and Linkage Plan A number of strategies should be utilized to market the Accelerator, locally, state-wide and internationally and link it a number of regional organizations. 1 . Develop national and international linkages and networks between incubators and accelerators that create a "conveyer belt" of prospective companies into the Accelerators. Work in that regard, has already begun with great success by connecting the region to the French Innovation Network (RETIS), and Collier County Accelerator Business Plan 25 Packet Page-76- 5/13/2014 11 .A. development of a joint marketing and programming with a mirror region (ex: South of France). Future countries should include Florida's major trading partners (Canada, United Kingdom, Germany Brazil) as well as strategic partners of the future such as India and China. 2. Hire an in-house Web Developer whose responsibilities include the development of web pages, and the development of a social media strategy and implementation. Both the Accelerator and its member companies would be aggressively marketed through these avenues. Local high school and college interns would also be employed in this regard. 3. Participate in the national and state organizations dedicated to the promotion and linking of incubators and accelerators with one another. Organizations such as the National Business Incubator Association, the Florida Business Incubation Association, and Enterprise Florida. In addition, participation in key trade meetings such as the annual Consumer Electronics Show are wonderful opportunities to highlight the Accelerators and their member companies. 4. Management staff of the incubator would be expected to routinely speak before local and regional groups and organizations, and become active in state-wide incubator/accelerator associations. Additionally, some of the best marketing can occur through linking the Accelerator with other organizations that have similar interests and goals. The following strategies should be utilized: Collier County Accelerator Business Plan 26 Packet Page-77- 5/13/2014 11 .A. 1 . Through coordination with the Collier County Economic Development Office, the Accelerator staff should be in contact with all of the Economic Development directors and their staff throughout the region, and semi-annually give a presentation to these directors regarding progress made and important updates. 2. Designation of educational institutions within the region as a Strategic Partner. As a strategic partner, higher education institutions to the degree possible, would assist member companies with their research questions and needs, link companies with faculty, staff, and students, support the promotion and marketing of the accelerator, and participate in joint grant project opportunities. 3. The Accelerators should work in close contact with organizations such as the Greater Naples Chamber of Commerce, the Southwest Regional Planning Council, and the emerging regional partnership organizations to coordinate their activities and market their services Collier County Accelerator Business Plan 27 Packet Page-78- 5/13/2014 11.A. Suggested Milestone Timeline A suggested milestone timeline for the development and start-up of the two Accelerators is presented below. 5/2014 Collier County Votes on FY2014 Accelerator Business Plan and Funding Request 6/2014 Collier County Receives Notification of State Funding 6/2014 Collier County Approves Accelerator Administrative Contract 6/2014 Administrative Agent Hires Accelerator Executive Director 6/2014 Private and Non-Profit Sector Fund-Raising Campaign Commenced 7/2014 Collier County Creates Accelerator Advisory Board Committee and Make Initial Appointments 7/2014 Acquisition of Naples and Immokalee Leased Space Commenced 8/2014 Lease Contracts For Naples and Immokalee Space Finalized 8/2014 Naples Accelerator Soft Opening 8/2014 Phase 1 Accelerator Staff Hired 9/2014 Immokalee Engineering Construction Plan Completed 10/2014 Naples Accelerator Grand Opening 12/2014 Phase 2 Accelerator Staff Hired 1/2015 Immokalee Accelerator Soft-Opening 4/2015 Immokalee Grand Opening Collier County Accelerator Business Plan 28 Packet Page -79- 5/13/2014 11 .A. t r) co o 0 a v O O 0 O 0 M C' M Q M O T O O O O O T 0• O O O ° T O (O an 0 • 3- M In O CO m O O O C o co O ' C ow N W(•O')0 0 o ' 0 0 0 o 0 o m m COO N LL Mp 0 tD o 0 0 0 O 0 U. a N o 0 O O CL)N N O O O 0 N C O-:O V V 10 n M O O o co- t0 v CO•`, N M O l0 O O N ° O O O ° CV 0 l0 LD co N N u. 0 Q)0 O N .- a S.(O 0 .- C) N W O --10 M M 0 0 O O )2 0 0 O 10 O N a 'a' C. 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