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It appears the Red River Region Region Business Incubator gets to keep its funding from Paris Economic Development Corp. for at least another year.
Although the budget has not been adopted yet, a split PEDC board voted Thursday to keep $90,000 for R3bi while trying to find a way to help the incubator stand on its own. The board also decided to seek an attorney general’s opinion about whether PEDC can legally fund a mixed use incubator.
“The incubator is helping to create companies and create jobs,” PEDC Director Steve Gilbert said. “That’s what we do.”
R3bi currently has 10 clients that include graphic design, hydroseeding, commercial piping, web design and agribusiness. Two others have graduated. In all, the incubator has added about 50 jobs.
Board Chair Rebecca Clifford said she does not have a problem with the incubator as an entity. The issue, she said, is that the businesses housed there don’t appear to be the type of industrial and manufacturing companies a 4A corporation like PEDC can fund.
“I have a problem with it because I don’t think we’re getting the bang for our buck,” board member David Turner said. “I don’t see that it does what our mission is – bring industrial-type jobs to Paris.”
“I think he’s wrong,” Vice-Chair Toni Clem said. “There are scores of A organizations that support incubators throughout the state.”
Two examples Gilbert mentioned are Athens and Marshall. Athens is home to the Biotech Manufacturing Center. Marshall has two incubators. One is the Center for Applied Technology with 15 tenants that include law firms, land management, home medical supply and general contractors. The other is called the Business Development Center, which houses 17 companies, including lawyers, diabetes education, a photography and web design firm, and an electric company.
Some comments from board members have drawn the ire of those at the incubator. John Lee, a volunteer business mentor, said he appreciates Clem’s support. He took issue with Turner’s statement Wednesday that if someone “doesn’t know how to run a business, they don’t need to be doing it.”
“It’s an insult to hard-working American entrepreneurs,” he said. “I am profoundly disappointed that otherwise educated people could reach that kind of uninformed conclusion.”
Lee also said such comments completely dismiss volunteer efforts, not only at the incubator, but across the city.
Clifford asked Gilbert and board members Bruce Carr and Vicki Ballard to work with the R3bi board of directors to develop a plan to transition the incubator away from PEDC’s budget.
“I don’t think we can fund them. I think it’s prohibited by the statute,” Turner said. “I don’t see how that is a reasonable, prudent use of PEDC money when we are strapped for cash.”
R3bi has received all of its money from PEDC for this fiscal year, which ends Sept. 31. Turner suggested axing all R3bi funding from next year’s budget.
“They’ve got the funding through the first of October,” he said. “Give them that time to seek other funds.”
Clem made a motion to keep the incubator in the budget and move forward with plans to make R3bi self-sufficient. Carr seconded the motion, but the vote stalled at 2-2. Clifford and Turner voted against.
Ballard paused, saying she was not sure about continued funding for the business incubator, but cutting it off after 90 days was “too harsh.” She ultimately voted to keep R3bi in the budget, breaking the deadlock.
“I hate being in the middle,” she said. “I hate freaking politics.”
R3bi has an operating budget with $151,400 in revenue and $84,400 in payroll and $51,400 in facility costs. Shannon Barrentine, assistant executive director of the PEDC, said the incubator’s lease is up early next year, and another site could be found to save a large portion of the building costs.
Even so, no incubator is completely self-sufficient, Gilbert said. Most partner with a college that offers office space, payroll or similar funding.
Dr. Pam Anglin, Paris Junior College president, said PJC might be able to take it in. The college already houses the Small Business Development Center.
“I could try to pick it up with the SBDC and get it on the college somehow,” she said. “It’d be a year out. It’d be September 2014 before the college could pick it up.”
By Jeff Parish, eParisExtra