The Hudson Valley Center for Innovation, a not-for-profit business incubator located in the town of Ulster, may close by the end of this year if it doesn”™t receive the $250,000 in funding it has requested from Ulster County. Managing director Les Neumann spoke in front of the Ulster County Legislature earlier this month pitching the center”™s accomplishments and answering questions, but it”™s not certain the funds will be forthcoming.
Neumann said his group has also approached other funding sources. “We have been trying to solicit funds from state, federal and local agencies to try to keep the doors open but haven”™t gotten a response.”
A minimum of $250,000 is needed to continue operations, although Neumann said $500,000 would be ideal, enabling the group to “accelerate the growth of technology companies.”
The organization was launched in January 2006 after receiving $450,000 from the county in seed money. Its five-year business plan was designed around a budget of $5 million. Neumann said his group has established a track record, with the creation of 17 full-time, high-paying jobs.
“There are emerging technology companies that we”™re helping to develop and grow in an accelerated time frame, so that they can get products to and from the market,” Neumann said, noting that two software development companies, Tyramm International and Infobrella, “are on the edge of success.” The center had “already been able to solicit equity investment and help them with product launches and data testing in our facility.”
David Donaldson, chairman of the Ulster County Legislature, noted that “(The Hudson Valley Center for Innovation ”“ HVCFI) seems to be doing a decent job” but said “the seed money was given with the understanding they”™d be self-sufficient.” He said the county”™s waiting to see if the state will step up to the plate. “Normally, incubators tend to be funded by the state, not the county. The other side of it is, you only have so much money to go around.” And he suggested there might be some redundancy, since SUNY Ulster also has a business incubator. “We may consider doing something creative, like combining them.”
Donaldson said money is tight, thanks to the debacle of the new jail, which is $40 million above budget. A shortfall in sales-tax revenue is further squeezing the county”™s coffers. In addition, the Legislature will be renegotiating four major contracts for labor as part of the upcoming budget cycle ”“ fluke timing that”™s unprecedented, Donaldson said.
The county recently put in $1 million for new water and sewer infrastructure on King”™s Highway in Saugerties, which the county hopes to turn into an industrial zone. But overall, it has little money for economic development. Donaldson noted that the Ulster County Development Corp. itself, which put a priority on the King”™s Highway project, received only $200,000 of county funds in the last budget. The Legislature hoped to double the amount this time around, given UCDC”™s “new leadership and new energy.”
Neuman said his group currently has 10 partners, located in the 5,000 square feet of office space that HVCFI leases in a facility near TechCity. These were selected from 50 applicants, which shows “the real need” for the incubator. “The typical time for incubation for a company in the U.S. is four to six years,” he said. In contrast, “we”™ve been able to do this in a matter of months.”
“Everyone was a bit skeptical at the outset, including me,” he added. “We didn”™t know if it would work. But this has been very successful.”
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“Higher echelon” positions, such as CEOs and sales executives, have been created, which is consistent with the county”™s vision to bring in more high-paying jobs, said Neuman, who is participating in the county”™s Ulster Tomorrow future planning initiative.
The HVCFI”™s costs include two salaries ”“ Neuman”™s and his assistant”™s ”“ and rent for the office space. The largest single expense is “mentoring all the companies,” Neuman said.
One HVCFI partner is Calleveryone.com, a voice-over Internet protocol telecommunications company that has been renting space at the center for more than a year. Company President Robb Kinnin said he moved to the center last year from his office in Kingston partly to avoid the city”™s onerous business taxes, which aren”™t levied in the town of Ulster. But he said he”™d found “the real benefit I have is being able to collaborate with tech businesses and mentors. My previous office was in a building with a drug-rehabilitation center and a psychologist. There weren”™t any people I could chew on about technology.”
Kinnin said the center uses his phone system. Employees of companies at the center who need phone service while traveling abroad have also signed on for the service, expanding his business. “The incubator creates new business,” he said. “As we incubate and move out, we create more jobs for our community and hopefully keep young people here.” Furthermore, “The surrounding counties are looking to lure the same business. We need to be competitive and assertive.”
Another tenant is Rosenbaum Media Group, a digital communications company that was started out of President Roger Rosenbaum”™s Saugerties home. “This has been a phenomenal space. It”™s very comfortable and there”™s a great deal of synergies with other businesses,” said Rosenbaum. “This is an under-the-microscope experiment that deserves to have more time to grow its legs.”
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