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Planning and Economic Development

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eMacomb - Featured Article, October 2008

Macomb-OU INC lands SmartZone designation!

Michigan Economic Development Corporation (MEDC) CEO James C. Epolito was in Macomb County on October 15 to announce that a new SmartZone designation had been awarded to business incubator partners the Macomb County Department of Planning & Economic Development, the City of Sterling Heights and Oakland University.

With planning and start-up funds made possible through an appropriation orchestrated by U.S. Congressman Sander Levin, the department is working with the city and university to create a place where advances in technology can be explored and researched for the benefit of new and existing businesses in the county.

The “Macomb County – Oakland University Technology Advancement SmartZone and Incubator” will provide comprehensive support to entrepreneurs including business development services, office and shared conference space and access to financing with a goal to create new investment and jobs in the county.  The incubator will also offer laboratory space for researchers exploring ways to create or improve products.

Based on the department’s “Targeted Industries” of 2006, the incubator will focus on industries that hold the greatest potential for growth in the county including defense, homeland security and advanced manufacturing.

The incubator is currently housed in Sterling Heights in an 89,000 square foot facility that previously housed research and development activities.  The city, with its existing Local Development Finance Authority (LDFA), was an ideal partner for its proximity to like industries.   The SmartZone designation enables a special financing mechanism so that the LDFA is able to generate operating funds for the incubator through tax captures.  The designation also allows for the State to then reimburse these captures to the city and schools.

While the captures help to fund operating support, they do not cover the entire expense of a successful technology-based incubator.  The partners will also need to work together to generate additional support so that the accelerator can be fully functional.  These will come through tenant rental fees, additional governmental and foundation support and through corporate sponsorship.

A local technology based business has already aligned itself with the incubator by becoming its first corporate sponsor.  Rave Computer of Sterling Heights is a designer, integrator, and deployer of customized computer solutions for original equipment manufacturers (OEMs), military contractors, software vendors and other computer service providers.

Oakland University currently operates an incubator on its campus in Rochester Hills.  Through the established partnership, OU INCubator will support the Macomb incubator through its management experience, vast research capabilities and entrée to established financing options and venture groups.

The department will provide business development services for incubator clients through department staff and its Michigan Small Business Development Center at the SmartZone.  It is estimated that the new venture will result in the creation of 12 new companies and 130 new jobs by 2010 and as many as 55 new companies and 600 new jobs by 2015.

The department has been fielding inquiries from local companies and entrepreneurs since it opened on September 30.  For information, contact (586) 463-2542.

Distinction between an incubator and SmartZone

A business incubator is a program that supports the acceleration of entrepreneurship.  Offered in a physical location or virtually, it offers start-up and existing companies opportunities to explore business opportunities in a supportive environment.  Services offered in an incubator program include one-on-one consultation with certified business counselors, access to professional service providers such as attorneys and accountants, assistance with business plan development and entrée to both traditional and non-traditional financing options.  Incubators in designated buildings also provide private and shared professional space and administrative support at reasonable rates while fostering collaboration amongst tenants.

A SmartZone designation, enabled through State of Michigan legislation, is especially for business acceleration programs that exist to advance technology- based business through a strong connection to a university or college and its research and commercialization capabilities.

A SmartZone must also be connected to a "Local Development Finance Authority" (LDFA) so that taxes based on property increases can be captured to fund the operating expenses of the incubator.  The SmartZone designation enables a special financing mechanism so that the State can then reimburse these captures to the city and schools.


Macomb OU Incubator Website