Midtown Raleigh News

Plans for Southeast Raleigh business incubator delayed

It’s been two years since the city pulled its support for the Raleigh Business and Technology Center and promised to find a new way to guide businesses in Southeast Raleigh.

After a special committee recently denied two proposals from outside groups to restart the business incubator, the process is further delayed.

The committee, made up of Raleigh staff members, decided the proposals did not align with the city’s vision.

Assistant City Manager Marchelle Adams David, who oversaw the process, said the primary concern was that neither group that submitted proposals had direct experience managing an incubator.

“We’re very passionate about this project,” Adams David said. “We just want to make sure we set the facility up to succeed.”

Now the city will seek more proposals, said James Sauls, Raleigh’s economic development manager. There is no set timeline, but the process should restart some time early next year, he said.

Private organizations created the business incubator in 2000 in an effort to spur economic development in Southeast Raleigh. The city funded the project and allowed it to operate rent-free in a building on South Wilmington Street.

In 2013, a city audit found evidence of mismanagement and fraud at the Raleigh Business and Technology Center. The city evicted the group and retracted its funding, which topped out at $162,000 a year.

Lawrence Wray, a former assistant city manager and board member of the incubator, was arrested last year on charges of embezzlement and obtaining property by false pretense.

City leaders vowed to find a new way to offer the same services to businesses, including low rent and training. They sought proposals from outside groups to take over the incubator, but both proposals the city received were denied.

Larry Shaw, a former state senator from Fayetteville, submitted a proposal under his business, Geometric Solutions. Shaw suggested a new model for the incubator, with a large focus on training and mentoring.

“We submit that there is a different, and more successful, way to achieve the mission,” Shaw wrote in the proposal. “It is proven that in business, as in other competitive endeavors, one must be taught how to succeed.”

The proposal said improvements to the building and programming would be in place for the incubator to reopen by February.

The other proposal came from a joint effort of the Raleigh Area Development Authority, Shaw University, HQ Raleigh, The Support Center, American Underground, Triangle Family Services and Venture Management.

The group suggested it could offer a wide range of services to future incubator tenants, including education, training and financial assistance. The space could also be used by outside community groups to participate in certification courses and other events, the proposal said.

HQ Raleigh, also a business center, would take the lead in advising best practices for the incubator. Each organization would have a member on the board and specialize in a specific role related to the incubator, according to the proposal.

By 2021, the group proposed, the center could operate without city support.

Mechelle Hankerson: 919-829-4802, @mechelleh