E.L. seeks to 'incubate' new businesses

City officials will announce next week their latest plan to help foster economic growth in downtown East Lansing.

In coming months, the city will discuss and eventually implement a “high-tech incubator” on the third floor of the building that contains Barnes & Noble, 333 E. Grand River Ave.

The city hopes the incubator will serve as a nurturing environment for small business as they struggle to mature and grow into full-fledged establishments, City Manager Ted Staton said.

“You know the notion of an incubator,” Staton said. “The immature baby is sort of coddled in this nurturing environment until the baby gets healthy enough. Well, it’s the same thing. Immature companies will come over here and be given a chance to grow and become mature.”

The first set of businesses, which will be selected by the city in the coming months, will settle within a 7,000-square-foot region in the building, said Tim Dempsey, East Lansing’s community and economic development administrator.

Initially, the city will let up to five businesses settle in the incubator, but as interest peaks, the city will consider expanding the area and opening it for the simultaneous use of more businesses, he added.

Incubated businesses will reap the benefits of below market rent rates, discounted utilities, high-speed Internet and common space, Staton said.

Rent in the incubator will cost approximately $11 or $12 per square foot, which is about $7 per square foot cheaper than the going market rate for property in that area, Dempsey said.

In addition to the relatively cheap rent, incubated businesses will benefit from PublicCom, a public relations firm that will be relocated from the University Place office building to the incubator, Staton said.

“Lots of people have good ideas but don’t know how to sell them — don’t know how to present them,” he said. “So this will be pretty advantageous for the people who locate there.”

East Lansing officials hope that when the companies graduate, they will give back to the city by settling in the area and contributing to the local economy, Staton said.

“In the perfect world, they will locate in downtown East Lansing,” he said. “But if they can’t locate in East Lansing, (we hope they’ll settle in) Meridian Township, Lansing or Grand Ledge.”

This endeavor by the city will give local entrepreneurs a chance to get their feet wet, Mayor Sam Singh said.

“There are a number of entrepreneurs on campus that have good ideas,” he said.

“This is an opportunity for the city to incubate those good ideas, and eventually as those companies grow, we will help (facilitate) that transformation from the incubator into other spaces.”

Published on Monday, October 29, 2007