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EDA Grant/SEED Questions & Answers
Questions and Responses regarding the Port’s consideration of accepting a grant award from the US Department of Commerce’s Economic Development Administration (EDA) for construction of a business building in which to house and operate a small business incubator. At their September 23, 2008 meeting, the Port Commission considered the acceptance of a $2.58M EDA grant offer. Action on this agenda item was tabled until October 14, 2008. During the meeting a number of questions came before the Commission to which answers were briefly given and are expanded upon below. Other clarifications are also appropriately provided below. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> What, specifically, is the EDA funding being offered for and how does it relate to the Port’s economic development mission?
This project, an element/part of the overall SEED campus plan, is the construction of a 17,000 sq. ft. business incubator building, located in the Port’s Olympic View Business Park, that is focused on the clean technology industry sector. To learn more about business incubation and how it creates and stimulates jobs in the community, the National Business Incubation Association offers a good resource page at http://www.nbia.org/resource_center/learn.php.
How much money has the Port invested in the SEED project to date?
Since 2004, the Port has invested approximately $490,000 (development of the operation, incubator, and SEED business plans; concept development; and, building design) and the state Department of Community, Trade & Economic Development has contributed over $400,000 (site development—grading and fill).
How much additional money is needed for completion?
As being planned, it is the Port’s intent that the building be developed within the EDA grant budget. Port staff and the building designers are currently researching how to control the projected cost (i.e., revised building plans and/or siting) to come in at or below the EDA funding formula (50% EDA/50% Port, totaling $5.16M).
How soon will there be a return on the Port’s investment?
According to the Business Cluster Development’s ”Clean Technology Commercialization Center Business Plan", a return on the Port’s investment should begin in about 3 years. Construction is estimated to take approximately 2 years to complete, after which, collection of market rate rents from tenants will commence. It is estimated to take 2 to 3 years to fill the building and 3 to 5 years to be self sustaining (M&O).
Where will the EDA matching funds come from and how will it affect property taxes?
The matching funds will come from existing or future Port resources—cash reserves, a bond issue, and/or additional grants. The Port can not increase its collection of property taxes on existing properties beyond the 1% increase allowed by state law.
If the Port accepts the federal grant, how soon does the Port have to allocate matching funds?
For every dollar of documented Port expenditure, EDA will reimburse the Port 50% up to a limit of $2.58M. Professional services to provide bid documents for the incubator building will likely occur this fall and winter.
Is the Berk report the deciding factor as to whether or not the SEED project is viable?
The Berk report provides both the Port and its public a professional, third party, independent review—due diligence—of the SEED project, incubator building and financial plan, and the viability of the clean technology industry focus. A final draft of this report is available on the Kitsap SEED Project Documents page of the Port’s web site.
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