on brownfields and incubators in ypsilanti

“Crain’s Detroit Business” today has a piece on the proposed Ypsilanti incubator. Here’s a clip:

Eastern Michigan University is scouting for federal grants or other aid in funding, as well as a location, for a new business incubator program in Ypsilanti that would be in cooperation with Ann Arbor Spark.

The incubator site, currently dubbed Spark East, would become part of a network of three Spark incubator programs in Washtenaw County and could be operational during the first quarter of next year, said David Mielke, dean of the EMU College of Business.

Spark East would resemble the Spark Central incubator in downtown Ann Arbor with a focus on “innovation-driven” business start-ups in any sector except for biotechnology and pharmaceuticals, said Spark President and CEO Michael Finney. Those businesses would be directed to the Spark wet lab incubator site in the Traverwood Business Park on Ann Arbor’s northeast side.

Eastern would be responsible for directing businesses to the Ypsilanti site by using its own campus Center for Entrepreneurship and student internship programs. Ann Arbor Spark would govern the Ypsilanti program and provide an on-site administrator.

“In this (Ypsilanti) case, it’s also an attempt to help answer the question of what is needed to fill in the gaps left by the loss of a major manufacturer,” Mielke said. “The incubator can and should be a part of a larger regional economic redevelopment initiative”…

Ann Arbor Spark has found funding for some of the Ypsilanti site’s proposed operating budget, Finney said. Another hurdle to be cleared in the coming weeks is pinning down a location.

“A number of sites have been at least considered,” Finney said. “We are trying to settle on a site somewhere in the downtown area along the Michigan Avenue corridor. Visibility would be an important asset for the incubator businesses.”

Finney said Spark is likely to pursue leasing space from a private landlord and host the incubators as sub-tenants, who would pay below-market rent to help fund building and operating costs. He hopes refitting a building would account for only $100,000 or so of the project’s total budget.

I’m not an expert on incubators, but I have some knowledge of how they work, and I’d hate to see people placing too much hope in this. The fact is that most incubators fail to launch a significant number of successful businesses. Most also sit half empty, unable to find tenants. Whoever runs this one is going to have an uphill battle on their hands trying to recruit good companies with high growth potential. The important thing in my eyes is that this seems to represent a change in attitude on the part of our local economic development group, SPARK. It may be a small gesture in the whole scheme of things, but it’s a step in the right direction. Clearly Ann Arbor is our regional hub for technology and entrepreneurship, and I don’t fault SPARK for investing a majority of resources there, but the outlying areas, like Ypsi, deserve some attention too. Hopefully, with all of us pitching in, we can actually get something to take root here.

Now, if only SPARK would put some muscle into the marketing of Water Street.

Speaking of Water Street… and not getting our hopes up…. our friend Murph is back from a trip to Chicago, where he pitched the Water Street “opportunity” to experienced brownfield developers. He’s just posted something about the experience on his site. Here’s a clip:

… Aside from that, though, I quite enjoyed this process. I’m historically somewhat leery of large-scale, monolithic redevelopment projects, both from the Jane Jacobsian bias towards fine-grained, incremental construction, and from a sort of “redevelopment roulette” point of view: while every city in the country is undertaking large-scale brownfield redevelopments, and it almost always turns out very well, you always have to wonder whether your project is the one with the bullet in the chamber… Seeing the various projects being undertaken around the country helped shift that general opinion, though, and the reaction of the various developer types to my pitch (and what sounded like envy from some of the other towns showing off property) did a lot to alleviate the background fear in the particular case – I had one developer almost visibly salivating, and another has already e-mailed expressing an interest in visiting. Score…

Developers don’t seem overly worried about Michigan’s economy at the moment – because the real estate market in the rest of the country has gone to exactly the same place. Michigan is apparently no longer even in the top five states for mortgage delinquency and foreclosure rates (the honor goes to Nevada, California, Florida, Georgia, and Ohio). And developers don’t even seem that scared of the overall real estate market – concerned, but not scared. Experienced brownfield developers know that it will often be a year or three before they’re ready to start building, let along selling, and so look at the market years from now, not the market now, so starting projects still makes sense to most of them. Starting projects in the commute-shed of Ann Arbor, in particular, seemed to appeal to a lot of the people I spoke to individually….

So, is it time for cautious optimism in Ypsi? I don’t know. It does seem, however, that at least a few folks still see promise here.

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  1. egpenet
    Posted October 19, 2007 at 12:05 am | Permalink

    I posted on the Conan Smith III regarding Murph’s blog. I think this is great.

    Of course, there’s room for optimism!

    Everyone who works for the city should be in some way out there marketing the empty industrial sites and brownfields … like they do all the time at the DDA, right? Sell, sell, sell!

    As I wrote on the Conan III thread, however … for now the city has all we have to give … we have NEVER said no until now … not even another measly 1%.

    Gratias, pero, no mas.

  2. k
    Posted October 19, 2007 at 8:40 am | Permalink

    Those SPARK people are pretty smart. If they really throw their resources into an incubator it might be successful.

  3. Neil
    Posted October 19, 2007 at 2:33 pm | Permalink

    Was that sarcasm, K?

    It doesn’t take a lot of smarts to hand out tax abatements to big companies.

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