Consideration and Approval of Amendments:  Amendments to the Business Incubator and Accelerator Service Agreement and Leases with Northern Arizona Center for Entrepreneurship and Technology (NACET), extending the term of these agreements by six months.

The City of Flagstaff and NACET wish to extend the term of the existing Master Leases and Agreement for Services in order to allow the parties to negotiate revised terms and execute amended agreements. The proposed amendments extend for a period of six months the Agreement for Services and Master Leases for both the Business Incubator and Accelerator.  

There is no change to the financial impact for the City of Flagstaff to extend the contract term to June 30, 2018. It will allow the continued receipt of revenue and services under the existing agreements.

The City of Flagstaff received funding through the Economic Development Administration (EDA), Arizona Commerce Authority (ACA), and Northern Arizona University (NAU) for the design and construction of the Business Incubator and Accelerator.

Council Goal
Economic Development: Grow and Strengthen a more equitable and resilient economy.

Strategic Plan
Strategic Priority 3.2: Deliver outstanding services through a healthy environment, resources and
infrastructure.
Strategic Priority 3.3: Support sustainable economic development and its practices.

Yes, in September 2008, Flagstaff City Council authorized the master leases for both the Business Incubator and Accelerator and the Service Agreement, as well as subsequent amendments to the master leases and the service agreement in January 13, 2015, September 1, 2015, and April 4, 2017. 

The Flagstaff City Council has also previously approved the EDA grant application, grant award, and the design and construction contracts for the Business Accelerator.

1. Approve the Second Amendment to the Agreement for Services to extend the Agreement term for six months, and approve the Third Amendments to the Master Leases for the Business Incubator and Accelerator to extend the Lease terms for six months. 
2. Do not approve amendments to the Agreement for Services and/or the Master Leases and provide direction regarding the term of these agreements.

The Science and Technology Park was conceived in 2003. In 2004, bonds in the amount of $61.2 million were approved by the voters to advance the project. The debt is to be paid with lease revenue and not secondary property taxes. McMillan Mesa was chosen as an ideal site due to the existing United States Geological Survey (USGS) campus. A Science Park Master Plan was developed around 2005 and determined the need for a Business Incubator for entrepreneurs and business start-ups.

The Business Incubator was constructed in 2008 and the Business Accelerator followed in 2014. Both facilities are currently operated by Northern Arizona Center for Entrepreneurship and Technology (NACET). The Business Accelerator also serves as an alternate emergency operations center for first responders to efficiently deliver vital services to communities and tribal nations during emergent incidents.

The current Agreements will expire on December 31, 2017.  Approval of these Amendments will allow additional staff time to negotiate lease extension terms with our provider, NACET, who offers expertise to the Business Incubator and Accelerator services for the City.

NACET provides business development, attraction, and retention to start-up companies and entrepreneurs using both the Business Incubator and Accelerator.

1. Inform