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North Bay Business Journal

Monday, May 28, 2012, 6:00 am

Napa incubator approaches funding goal, nonprofit status

First-ever program could see first clients this year.

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    NAPA COUNTY — Efforts to establish an incubator for startups producing high-tech, high-paying jobs in Napa County have taken a step forward with a combined $25,000 contribution from the county and city of Napa, pushing the project closer to reaching an early funding threshold of $38,000.

    That initial round of funding will help afford a feasibility study, a comprehensive business plan and the establishing of nonprofit status for the “Trellis,” a program known officially as the Napa County Business Incubator and expected to take up residence in the facility that formerly housed a Japan Airlines training program at the Napa County Airport.

    The American Canyon City Council is expected to vote in June on whether or not to match the funding allocated by the city of Napa – an initial $5,000, with $5,000 allocated in the next fiscal year pending positive findings in the feasibility study.

    Napa’s council voted unanimously to approve the funding this month, mirroring universal support seen in the county Board of Supervisors. If American Canyon follows suit, the group spearheading the project will be only $3,000 shy of its initial goal, said incubator board of directors President Paul Hicks.

    “The public investment right now is really important to lay the foundation,” said Mr. Hicks, a member of the Napa Chamber of Commerce’s Executive Committee who has long considered launching an incubator program.

    Funding from the city of Napa came through the city’s Community Development Department, with the county’s $15,000 lump sum sourced through the Napa-Lake Workforce Investment Board.

    Mr. Hicks said that the group will be filing for nonprofit status as soon as the funding is received, a move that he said will help to source further contributions to the project.

    The group will work with Menlo Park’s Business Cluster Development in the creation of a business plan, a consultancy that has helped launch more than 60 incubator programs including the Sonoma Mountain Business Cluster, said Jeri Gill, vice president of the incubator board and CEO of Sustainable Napa County.

    The incubator would be a Napa foray in the state-designated “innovation hub” regional economic development collaboration that includes Sonoma, Napa and Marin Counties.

    Napa Mayor Jill Techel

    “Having an incubator gives us an opportunity to put out a welcome mat,” said Napa city Mayor Jill Techel, noting other business-friendly developments in the region like the adoption of the city’s sweeping Downtown Specific Plan. “Yes we’re ag, yes we love our grapes, we love our wine, but a diverse economy is a good thing.”

    While the final cost of the incubator proposal is pending the result of the feasibility study, a letter presented to the region’s governments notes that similar projects have cost approximately $300,000 over the course of the initial three years of operation. Mr. Hicks said that he expects the project to be self sufficient in its fourth year, deriving income through tenant occupancy and program revenue.

    The final cost of the program could be partially mitigated by a number of factors, including the fact that the building’s landlord — the county of Napa — could agree to offer a reduced rent on the site. Mr. Hicks, said that discussions of a rental arrangement are ongoing, and that further cost reductions could come through the favorable layout that remained after the exit of the building’s previous tenant.

    Mr. Hicks said that he could see the facility hosting its first tenants later this year.

    Goals for the program include fostering 100 startups in the first ten years, companies that ultimately occupy the region’s commercial vacancies and employ 1,500 workers at an average pay of $50 an hour.

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