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Tenants’ moves cut incubator funds
City takes over management for the time being
Sunday, February 16, 2014
By MICKEY POWELL - Bulletin Staff Writer
The loss of two major tenants caused a large drop in revenue at the West Piedmont Business Development Center (WPBDC), which contributed to a management change, according to local leaders involved with the facility.
Solid Stone Fabrics and the Integrative Centers for Science and Medicine (ICSM) had leased the largest spaces in the small business incubator on East Church Street uptown, said Martinsville Community Planner Susan McCulloch.
Both entities remain uptown. Solid Stone, which digitally prints fabrics, now operates from buildings on Fayette and East Church streets. The ICSM is establishing a medical school in a building at the corner of Fayette and Moss streets.
The city owns and maintains the incubator building at 22 East Church St. Recently, the Martinsville Department of Community Development started managing the facility after the WPBDC’s Board of Directors recently voted to transfer operations to the city.
Tenants at the incubator share resources such as clerical assistance, office equipment and utilities to help them initially reduce their operating costs so they can put more money toward growth and development.
City Manager Leon Towarnicki has said the incubator basically had been a self-supporting entity.
The incubator’s budget this fiscal year is $169,255, McCulloch said. About 35 percent of its funds come from Henry County and the city, with the rest coming from tenants’ leases, she said.
McCulloch did not have full financial details on the WPBDC or the history of its tenants. She said, however, that in terms of revenue, the incubator has been “a few thousand (dollars) short every month” since October.
If the spaces that Solid Stone and the ICSM occupied still were being used, “the incubator would be in much better shape” financially, McCulloch said.
Solid Stone leased 2,988 square feet at the incubator for $1,750 monthly. The ICSM leased 1,920 square feet for about $2,000 a month, she said.
The larger space rented for less, she surmised, because it is “more of a rough environment” — warehouse space, basically — so it is “not as nice as” the space used by the ICSM. For instance, it was not carpeted.
Revenues are “not enough to sustain the incubator as it was organized ... so something had to change,” said WPBDC board Vice Chairman Lance Heater.
He said the board’s decision to transfer the operations to the city was “strictly financial.”
Heater referred further questions about the incubator’s finances to Richard Stanfield, Henry County’s deputy finance director who is the WPBDC board’s secretary/treasurer. Stanfield referred inquiries to Towarnicki, who could not be reached for comment.
Now that the city is managing the incubator, the board “for all practical purposes ... is inactive” and has no plans to meet again, Heater noted.
Fifteen businesses now occupy the incubator, which is about 65 percent full, McCulloch said.
Twenty-two firms have “graduated” — left to make it on their own — since the incubator opened in 2002, creating a total of about 240 jobs, according to its website.
At times, the incubator has been fully occupied, McCulloch said.
She said she has heard that some local property owners have been giving businesses discounts on rent and utilities. Yet why the incubator is not full now is a matter of speculation, she indicated.
The Martinsville-Henry County Chamber of Commerce is talking with the city about assuming management of the incubator. (See related story.)
Since the incubator was established, the chamber has participated in it and has a seat on its board. Heater, who also is vice president of the Chamber’s Partnership for Economic Growth (C-PEG), now holds the seat.
No tenants will be evicted due to management changes there, Towarnicki has said.
Asked if she thinks the incubator will survive in the long term, McCulloch said, “I hope it will ... in one form or another.”
Businesses “really need” help that the incubator provides them, and it is an asset in helping Martinsville grow its economy, she said.