Peoria considers ways to lure high-wage jobs
by Sonu Munshi - Apr. 14, 2011 04:03 PM
The Arizona Republic
Peoria must choose whether to set up a medical-device incubator, launch a virtual accelerator or do nothing.
It's a choice between initially committing $2.6 million or $1.7 million or nothing as Peoria aims to draw high-paying jobs to the bedroom community.
The options, which should go before the Peoria City Council for discussion next month, come with a strong recommendation from the city's Economic Development Advisory Board to pursue the accelerator in partnership with BioAccel, a Phoenix-based non-profit.
Peoria officials in March floated the idea of opening a medical-device incubator in city-rented space at Plaza Del Rio, just west of Loop 101 off Thunderbird Road. The incubator would help budding innovators transform their ideas into commercially viable products or patents.
This month, city staff threw another option into the mix: an accelerator. This would essentially be the same concept, without a physical location to incubate the fledgling startup companies.
Either way, they say, it should attract a targeted five to six high-caliber companies to Peoria with guidance from BioAccel, which has expertise in recruiting bioscience companies. The city would contract with BioAccel to recruit the startups and run the incubator or accelerator.
For an incubator, the city would rent space for a proposed five years to locate individuals or groups that have ideas for medical devices, which could become future companies in Peoria.
In an accelerator, the city would have a three-year commitment with BioAccel to support startups without an actual physical facility.
The city, in either case, would set aside $1.2 million in seed funding to help get companies a space in the city for supplies or other uses.
City staff in a recent presentation to the Economic Development Advisory Board acknowledged neither venture comes with a guarantee of long-term success or a quick timeline for results. In addition to paying BioAccel to manage either proposed venture, the city would share profits from any equity it might earn from potential companies that commercialize. The early idea is for the city to put its share of any profits into a fund to eventually have the venture become self-sustaining.
Advisory-board member Mark Hammons said he sees the accelerator option as advantageous because of the flexibility in not being tied to one location.
MaryAnn Guerra, chief executive of BioAccel, later told The Republic that the challenge of having a physical space would mean "you'd want to get companies there, grow them and get them out."
But to have a seamless pipeline of startups without vacancies isn't easy, she said.
Guerra said to avoid that empty space, there may be a temptation to fill it with other prospects, "not the core elements of biotech," which is the niche Peoria is hoping to conquer in the company-building and -attraction field.
An accelerator would offer the same type of support system, such as access to experts, mentoring and seed money, minus the cost and management-oversight responsibilities of a facility, Guerra said.
Scott Whyte, Peoria's economic-development director, said he wanted to give the council "as many options as possible."
The city has yet to draft performance goals for BioAccel. City staff said generally speaking that BioAccel's annual contract would have to go through the city budget process. The company would have to show a performance report to get the nod for the next year's funding. Peoria would also have a say in the venture with representatives on the management board.
The City Council is expected to discuss the options during the May 3 study session. City staff would then create a detailed plan on the selected concept and commission an outside analysis.