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

The City of Flagstaff and NACET wish to extend the terms of the existing Agreement for Services, Incubator Master Lease Agreement, and Accelerator Master Lease Agreement (collectively "the Agreements") in order to allow the parties to complete negotiations and prepare revisions to the Agreements.  The proposed amendments extend the current arrangement for a period of six months.  There have been a number of variables related to the buildings and programs that have impacted the decisions related to the Agreements and required exploration over the last six months.  General agreement has been reached, however, the detailed revision of the legal documents to reflect the proposed changes and the review of the procedures involved will take additional time to complete.  Staff's intention is to bring the revised Agreements back to Council for consideration after the Council Break which ends August 20, 2018.

There is no change to the City's finances based on the extension.  It will allow for 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 Agreements.  There were subsequent amendments to the Agreements on January 13, 2015; September 1, 2015; April 4, 2017; and November 7, 2017.

1. Approve the Third Amendment to the Agreement for Services to extend the term for six months, and approve the Fourth Amendments to the Master Leases for the Business Incubator and Accelerator to extend the terms for six months.

2. Do not approve the amendments to the Agreement for Services and/or the Master Leases and provide direction regarding the term and/or direction 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 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 NACET.  The Business Accelerator also serves as the Gemini Emergency Operations Center (EOC) for first responders to efficiently deliver vital services to communities and tribal nations during emergent incidents.

The Incubator is currently approximately 80% occupied with business tenants and the Accelerator is approximately 70% occupied.  Job creation and business support goals have been met.

The current Agreements will expire on June 30, 2018.  Approval of these Amendments will allow staff additional time to finalize the lease extension terms with our provider, NACET, who offers expertise and business development services to tenants as well as manages the properties.

None

NACET provides business development, attraction, and retention to start-up companies and entrepreneurs using both the Business Incubator and Business Accelerator.  These successful companies enhance the prosperity of the community and generate jobs and a culture of entrepreneurship and science.

 1. Inform