Raleigh looks to restart business incubator

07/03/2014 2:48 PM

07/03/2014 2:50 PM

A year after city leaders pulled funding from the Raleigh Business and Technology Center following a scathing audit, the City Council moved ahead Tuesday with plans to relaunch the incubator.

Raleigh leaders will seek proposals from nonprofits and other organizations interested in fostering startups at the center’s two-story building.

“This is a new organization and a new project,” City Manager Ruffin Hall said.

At the corner of Wilmington Street and Martin Luther King Jr. Boulevard near downtown, the office building has sat mostly vacant since last fall, when the troubled incubator organization was evicted.

The eviction took place after city auditors found unexplained cashier’s checks and payments to tenants as well as $65,000 in missing cash. Records showed the agency’s nonprofit status had been revoked. Police are still investigating possible fraud involving ousted Director Bob Robinson; no charges have been filed.

Since the nonprofit moved out last fall, a few startup businesses have kept offices in the building after the city parks department took over. No new tenants were allowed in.

On Tuesday, the City Council heard initial recommendations from a 17-member “visioning team” tasked with developing a new model for the incubator. Gail Roper, the city’s chief information officer, said the group doesn’t want to limit the program to “any one sole type of occupant.”

That would mark a big change from the incubator’s earlier incarnation. Since it opened in 2000, the agency’s tenants had to be minority-owned businesses – an effort to jump-start economic development in Southeast Raleigh.

Community leaders in Southeast Raleigh say the center should still focus on their neighborhood.

“This is another example of government pivoting from their original mandate without the community buying into it,” said Danny Coleman, who chairs the South Central Citizens Advisory Council. Coleman said neighborhood leaders weren’t informed about Tuesday’s presentation.

And Octavia Rainey, of the North Central CAC, said the city should reestablish the old program with new leaders. “Their problem was their administration,” she said of the old nonprofit. “The issue was there was no accountability for the money. ... The black businesses are really being punished.”

Roper said the new program will aim to remember the past focus of minority incubation. “We all felt that we had a level playing field and there were quite a few possibilities for that space,” she said.

Among the possibilities: a partnership with nearby Shaw University bringing student volunteers to work with startups; a crowd-funding program to help new businesses raise money; and the construction of a more open floor plan in the incubator building to foster collaboration.

Roper said the building will soon have AT&T’s high-speed fiber broadband, making it the only incubator in Raleigh with the sought-after amenity.

Roper’s report didn’t address how a new program would be funded. Under the old model, the nonprofit Raleigh Business and Technology Center received $162,000 from the city annually, plus free rent.

City Council members said they’re excited by the possibilities.

“If anything, the problem is that there are so many opportunities out there,” Councilman Russ Stephenson said. “You can’t do everything for everybody.”

In the coming months, Raleigh will issue a request for information from groups interested in running the incubator. “That would be the best way for us to get ideas – and the best ideas,” Councilwoman Mary-Ann Baldwin said.

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