Consideration and Approval of Contract Amendments:  Innovation Mesa Business Accelerator and Secondary Emergency Operations Center, Business Incubator and Service Agreement.  (Amendments to leases and service agreements with NACET).

Authorize the city to amend the existing master leases and service agreement with NACET for the service provided to the Business Incubator and Accelerator;  both city owned facilities on McMillan Mesa. 

The following changes are administrative changes for the Agreement for Services:
• Updated insurance language to be compliant with current city policy.

The following changes are administrative changes for the Accelerator Master Lease:
• The address for the accelerator should read 2201 N. Gemini.
• Updated leasable square feet now that the building is built.
• Updated leasable rates based on square footage and compliance with pro forma. Rates will be approved annually by the Management Service or Finance Director in order to meet the pro-forma required.
• Updated the cleaning of the common space from weekly cleanings to customary janitorial services schedule. 
• Updated insurance language to be compliant with current city policy.

The following changes are administrative changes for the Incubator Master Lease:
• Tenant agrees to submit monthly instead of quarterly invoices to the City based upon actual expenses incurred during the term of this Agreement.  Tenant will also submit with its invoices a balance sheet and profit and loss statement for each such month.
• Updated insurance language to be compliant with current city policy.
 

 

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.  The City of Flagstaff will issue bonds which will be repaid through lease proceeds. 

The financial obligation of the city of Flagstaff remains the same.  The Business Incubator will be compensated for services performed and costs incurred not to exceed $220,000 per fiscal year.  The Business Accelerator will receive $45,000 in year 1 and increases annually by $5,000 per year until year four.  These costs as well as the additional operational costs are anticipated to be fully supported through lease revenues by year five.  Financial commitments are budgeted in the Economic Development Fund. 

Yes, in September 2008, as well as January 2015 subsequent amendments were approved by City Council authorizing the service agreement and master lease for the Business Incubator and Accelerator.  City Council approved the EDA grant application, grant award and the design and construction contracts for the Business Accelerator over the last two years.

1. Approve amendments to the Service Agreement and both Master Leases and continue existing operational services with NACET.
2. Do not approve amendments to the Service Agreement and both Master Leases and continue existing operational services with NACET. 

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 revenues and not secondary property taxes.  McMillan Mesa was chosen as an ideal site due to the existing USGS campus. A Science Park Master plan was developed around 2005 and determined the need for a Business Incubator for entrepreneurs and business starts-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 secondary emergency operations center for first responders to efficiently deliver vital services to communities and tribal nations during disasters.

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