HomeMy WebLinkAboutUniversity of Central Florida - Business Development Incubator Grant Agreement - 2007 11 27 ECONOMIC DEVELOPMENT GRANT AGREEMENT
1HIS ECONOMIC DEVELOPMENT GRANT AGREEMENT is made and entered into
this 2r day of/1(p✓ ,2007,by and between the CITY OF WINTER SPRINGS,FLORIDA,
a Florida municipal corporation("CITY")and THE UNIVERSITY OF CENTRAL FLORIDA,
on behalf.of its Board of Trustees ("UNIVERSITY").
RECITALS:
WHEREAS,the University desires to establish and create a business development incubator
in Seminole County, Florida; and
WHEREAS,the business incubator will serve as a business development program for new
and growing businesses in Seminole County; and
WHEREAS, the University will locate the Seminole County business incubator facility
within the City of Winter Springs at the Vistawilla Office Center located on State Road 434; and
WHEREAS, in furtherance of locating the Seminole County business incubator program
within the City of Winter Springs,the University has requested a financial contribution from the City
to defray the upfront build out costs associated with establishing the new facility; and
WHEREAS, the City desires to make the financial contribution in furtherance of the
municipal purpose of enhancing and expanding economic activity within its jurisdictional borders
under section 166.021(9), Florida Statutes; and
WHEREAS, the parties recognize, this Agreement is necessary to ensure that the Grant
provided by the City to the University ultimately serves the intended municipal purpose; and
WHEREAS,the parties agree that the Grant provided by the University hereunder is for the
benefit of the public health, safety, welfare, and convenience of the citizens of the City of Winter
Springs and Seminole County, Florida.
NOW THEREFORE, in consideration of the mutual promises and covenants herein, and
other good and valuable consideration which the parties agree has been exchanged and received the
parties agree as follows:
1.0 Recitals. The foregoing recitals are deemed to be true and accurate and are fully
incorporated herein by this reference.
2.0 Definitions. For purposes of this Agreement,the following terms and words shall
Economic Development Grant Agreement
University of Central Florida-Business Incubator Program
Page 1 of 6
have the meaning ascribed to them, unless the context clearly indicates otherwise:
(a) "Effective Date" shall be the date on which the last signatory hereto shall execute this
Agreement,and it shall be the date on which this Agreement shall go into effect. The
Agreement shall not be effective against any party until said date.
(b) "Grant" shall mean the monies paid by the City to the University in accordance with
paragraph 4.0 of this Agreement.
(c) Work" or "Municipal Services" shall be used interchangeably and shall refer to the
performance of the services outlined in paragraph 5.0 of this Agreement.
(d) "Wrongfully Expended Funds" is defined in paragraph 11.0 of this Agreement.
3.0 Engagement. The City hereby engages the University and the University agrees to
perform the Municipal Services outlined in paragraph 5.0 of this Agreement and under the terms and
conditions herein.
4.0 Payment of Grant Funds. Upon execution of this Agreement,the City agrees to pay
to the University Two Hundred Thousand and No/100 Dollars ($200,000.00). The payment shall
be in equal quarterly installments of Fifty Thousand and No/100 Dollars ($50,000.00). The first
installment shall be due upon the Effective Date. The payment provided hereunder shall be used by
the University to defray the upfront build out costs(excluding salary and wages)incurred in initially
locating the Seminole County Business Incubator Program within the City of Winter Springs at the
Vistawilla Office Center.
Payment shall be made payable to the University of Central Florida and remitted to the
attention of Finance and Accounting,University of Central Florida, 12424 Research Parkway,Suite
300, Orlando, Florida 32826-0975.
5.0 Municipal Services.The University agrees to locate and operate a business incubator
program within the City of Winter Springs for a minimum of three(3)years from the Effective Date.
The business incubator program shall be located in a minimum of 10,000 square feet of office space
at the Vistawilla Office Center on State Road 434. The Seminole County business incubator
program shall operate generally under the parameters set forth in proposal attached hereto as
EXHIBIT "A.
6.0 Progress Reports. Upon request by the City, the University shall submit a written
progress report(bi-annual or annual) as to the status of the business incubator program set forth in
this Agreement. The report shall provide sufficient and reasonable detail regarding the expenditure
Economic Development Grant Agreement
University of Central Florida-Business Incubator Program
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` .
of the Grant funds provided by the City hereunder, as well as the status and success of the business
incubator program. If the detail is not sufficient in the City Manager's reasonable discretion to
permit the City to determine compliance with this Agreement, the City may seek more reasonable
detail from the University.
7.0 Compliance with Laws. The University shall be responsible for complying with
all applicable laws,ordinances,rules,regulations,and lawful orders of any public authority regarding
the location and operation of the Seminole County business incubator program.
8.0 Work is a Private Undertaking. With regard to the location and operation of the
Seminole County business incubator program, it is specifically understood and agreed to by and
between the parties hereto that the contractual relationship between the City and the University
Provider is such that the University is an independent contractor and not an agent of the City. The
University,its contractors,partners,agents,and their employees are independent contractors and not
employees of the City. Nothing in this Agreement shall be interpreted to establish any relationship
other than that of an independent contractor, between the City, on one hand,and the University,its
contractors, partners, employees, or agents, under this Agreement.
9.0 Compliance Monitoring. The University agrees that City control and monitoring
of the Grant being provided hereunder is necessary to insure that the University is expending said
Grant in furtherance of the municipal purposes declared by the City in this Agreement.
10.0 Audit and Inspections. The University agrees that any records with respect to the
University's expenditure of the Grant funds provided under this Agreement shall be made available
to the City,at any time during normal business hours, as often as the City deems necessary,to audit,
examine, and make excerpts or transcripts of all relevant data. Any deficiencies noted in audit
reports prepared by the City must be fully cleared by the University within thirty (30) days after
notice of said deficiencies by the University. Failure of the University to comply with the above
audit requirements will constitute a material breach of this Agreement and may result, at the sole
discretion of the City, in the withholding of future grants or funds or immediate return to the City
of the Grant provided by this Agreement.
11.0 Representation and Warranties Regarding Grant. The University represents and
warrants that it shall use the Grant received from the City under this Agreement for the sole purpose
of locating and operating a business incubator program as provided under Paragraph 5.0 herein. In
the event the University fails to expend the Grant for said purpose (Wrongfully Expended Funds),
the University shall fully reimburse the City the Wrongfully Expended Funds,plus interest calculated
at maximum rate allowable under Florida law per annum. If the City must take any legal action to
collect any Wrongfully Expended Funds,the University shall be liable for all costs incurred by the
City to collect such Funds including, but not limited to, reasonable attorneys fees, filing fees, and
other costs.
Economic Development Grant Agreement
University of Central Florida- Business Incubator Program
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12.0 Promotion of Business Incubator. Either party may issue news releases, public
announcements,advertisements,or other forms ofpublicity concerning its efforts in connection with
this Agreement. At the City's request,the University shall post a small placard(8 %x 11 or smaller)
provided by the City for display in the main entrance foyer of the business incubator facility. The
placard will generally state that the Seminole County business incubator was made possible,in part,
by an economic development grant provided by the City of Winter Springs.
13.0 Severability. Should any paragraph or any part of any paragraph of this Agreement
be rendered void,invalid,or unenforceable by any court of law,for any reason,such a determination
shall not render void, invalid,or unenforceable any other paragraph or any part of any paragraph in
this Agreement.
14.0 Choice of Law;Venue. This Agreement has been made and entered into in the State
of Florida,County of Seminole,and the laws of such state shall govern the validity and interpretation
of this Agreement and the performance due hereunder. The parties agree that venue shall be
exclusively in Seminole County,Florida,for all state court actions or disputes which arise out of or
based upon this Agreement, and in Orlando, Florida for all federal court actions or disputes which
arise out of or are based upon this Agreement.
15.0 Integration;Modification. The drafting,execution,and delivery of this Agreement
by the Parties has been induced by no representations, statements, warranties, or agreements other
than those expressed herein. This Agreement embodies the entire understanding of the parties,and
there are no further or other agreements or understandings, written or oral, in effect between the
parties relating to the subject matter hereof unless expressly referred to herein. Modifications of this
Agreement shall only be made in writing signed by both parties.
16.0 Attorney's Fees. Unless otherwise provided herein, each party agrees to bear their
own attorneys fees and costs in furtherance of this Agreement.
17.0 Headings. All headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
18.0 Waiver. Any waiver by City of any breach or violation of the University's
obligations under this Agreement shall not be construed as a continuing waiver or consent to any
subsequent breach or violation.
19.0 Notices. Communication and details concerning this Agreement shall be directed to
the following contact representatives:
Economic Development Grant Agreement
University of Central Florida-Business Incubator Program
Page 4 of 6
Attn: Ronald W. McLemore, City Manager Attn: Mary B. Stanley
City of Winter Springs University of Central Florida
1126 E. State Road 434 Seminole County Business Incubator Program
Winter Springs, Florida 32708 Office of Research and Commercialization
(407) 327-5957 12201 Research parkway, Suite 501
Orlando, Florida 32826-3246
with copy to: (407) 823-2836
Anthony A. Garganese, City Attorney
Brown, Garganese, Weiss & D'Agresta, P.A.
P.O. Box 2873
Orlando, Florida 32802-2873
407-425-9566
The foregoing addresses and representatives may be amended by any party at any time during
the term of this Agreement by providing the other party written notice of said amendment.
20.0 Termination;Termination by Parties. This Agreement shall terminate three years
(3) from the Effective Date, unless sooner terminated by the City or University. The City may
terminate this Agreement if the University fails to locate and operate a business incubator program
as required hereunder. If the City terminates this Agreement under such circumstances, any Grant
funds provided by the City shall be repaid to the City. The University may terminate this Agreement
if the City fails to make the payments required under Paragraph 4.0.
21.0 Indemnification and Hold Harmless. University assumes any and all risks of
personal injury and property damage attributable to the negligent acts or omissions of University and
its officers, employees, servants, and agents thereof while acting within the scope of their
employment by University. The City assumes any and all risks of personal injury and property
damage attributable to the negligent acts or omissions of the City's officers,employees,servants,and
agents,or other persons acting or engaged to act by the City in furtherance of the obligations of the
City under this agreement. University warrants and represents that it is self-funded for liability
insurance, both public and property, with said protection being applicable to officers, employees,
servants, and agents while acting within the scope of their employment by University. University
and the City further agree that nothing contained herein shall be construed or interpreted as (1)
denying to either party any remedy or defense available to such party under the laws of the State of
Florida: (2)the consent of the State of Florida or its agents and agencies to be sued; or(3)a waiver
of sovereign immunity of the State Florida beyond the waiver provided in Section 768.28, Florida
Statutes.
Economic Development Grant Agreement
University of Central Florida-Business Incubator Program
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22.0 Assignment. This Agreement and the Grant provided hereunder shall not be assigned
by the University without the prior written consent of the City.
23.0 No City Obligation for Future Funds. No provision in this Agreement shall be
construed as requiring the City to provide additional funds for business incubator program in the
future, other than as specifically provided herein.
IN WITNESS WHEREOF, this Agreement is entered into as of the day and year the last
party signs this Agreement as stated below.
WITNESS: UNIVERSITY OF CENTRAL
FLORIDA:
Print Name: ryprk..
Olidfah 64c04
Print Name: (Doi;l 12)yot.loc 7.46 BY: MARY B. STANLEY
Its: 841110r-Gentraet-Manager
OffIcoof?esearch&Commercialization
Date: 7.th)3
ATTEST: CITY OF WINTER SPRINGS:
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e/e-
Andrea Lorenzo Luaces, City Clerk By: Ronald W. McLemore
City Manager
Date: /1 - —6
Economic Development Grant Agreement
University of Central Florida- Business Incubator Program
Page 6 of 6
r x � 'O f t FT i t
The UCF-Seminole County Business Incubator
Introduction
We propose to establish a partnership between the University of Central Florida(UCF),Seminole
County,and Winter Springs to establish a business development incubator in Seminole County. The
main thrust of this program is to complement and build upon the award-winning model incubator program
at UCF.
The goal of this program would be to establish a program and facility that would serve as a business
development program for new and growing businesses in Seminole County. The Seminole County based
Incubator will receive additional funding support from the Florida High Tech Corridor Council.
The UCF Technology Incubator(UCFTI),which will serve as the model for the Seminole County
incubator,opened for business in October 1999,with six clients. After 7 years of operation,the UCFTI
has served 90 companies,including 50 current clients and 21 graduates. Of the 21 graduates,two were
purchased by Seminole County based companies—one of which is a Premium Trades. Most of the 21
have located their operations in Metro Orlando.
In addition to the above stats,Rini Technologies,a 2005 graduate of the UCFTI,purchased a 12,500
square foot building in Seminole County(582 S.Econ Circle,Oviedo). While in the incubator,CEO,
Dan Rini,and his team received the most Small Business Innovation Research(SBIR)grants in Florida.
They currently have 18 employees and plan to grow to 50 within two years.
Collectively, UCFTI clients and graduates have created over 750 jobs with an average salary of$59K.
They have received over S 120M of investment capital and generate over S 175M of revenue each year.
Because of its successful client support and strong conununity partnerships,the UCF!'I was named"2004
Incubator of the Year"by the National Business Incubation Association. The success of the Incubator is
due,in large part, to the vital support of community partners.
The total estimated cost of the 8,000 square foot Seminole County Business Incubator program is$1.2M
over three years(see attached budget). Funding for the effort has thus far been secured from Seminole
County, UCF,and the Florida High Tech Corridor Council. We hereby respectfully request$100,000
from the City of Winter Springs to help defray the upfront build out costs for the new Incubator building.
UCF's Role in Partnership
Partnering with the City of Winter Springs, Seminole County,and other appropriate organizations,UCF
will expand its current incubation program to include a new Seminole County facility. This incubator
will be used to stimulate economic growth in Seminole County by attracting new industries and
businesses to Seminole County,or by encouraging the expansion of existing industries and businesses
within Seminole County.
UCF will leverage the resources and infrastructure in place at UCF to aide in the development of
companies located in the Seminole County Business Incubator at Winter Springs. This includes:
• Use the existing client application and screening process and oversee selection process.This
includes using the Excellence in Entrepreneurship Course developed for the UCF Technology
Incubator.
• Utilize UCF service provider network and expand to include additional resources from the Winter
Springs and Seminole County communities.
UCF currently utilizes a solid network of partner organizations that provide services and
advice to UCFt'I clients. Many of the professional service provider partners provide
initial advice and guidance on a pro bono basis. Some of them offer reduced fees for
initial incubator client services. All of them have been vetted so as to ensure the quality
of their services and their understanding of small business needs.
• Utilize educational programs available through the Disney Entrepreneur Center and resident
small business service providers.
The Disney Entrepreneur Center represents a community of small business and
entrepreneurial service providers that already offer a broad array of educational
programs,counseling services,and funding programs. Clients of"The Seminole County
Business Incubator"will be linked to the various service providers and programs at the
Disney Entrepreneur Center for appropriate assistance.
• Provide marketing for the Incubator and its clients.
Developing and carry out a marketing plan for the Incubator. Working with the City of
Winter Springs and Seminole County,UCF and members of the incubator will promote
"The Incubator". In addition,existing UCF marketing channels will be utilized to
promote the program.
• Use existing criteria to graduate companies out of the incubation program.
In addition, UCI7 will:
• Oversee the selection of location and design for the Incubator
UCF management will work with the City of Winter Springs and Seminole County to
secure an appropriate location and functional design for the incubator.
• Provide staffing for Incubator
Hiring of appropriate management and administrative staff is a key element of the
success of the Incubation program. UCF management will develop the job descriptions;
organize the selection committee;and hire the incubator staff.
In summary, UCF will leverage its current award winning incubator program by establishing and
operating an incubator in partnership with Seminole County and the City of Winter Springs. This
includes hiring,training,and managing staff,selecting and managing clients,establishing mentoring and
coaching programs, and establishing criteria for graduating companies into the community.
What is a Business Incubator?
A business incubator is an economic development tool designed to accelerate the growth and success of
entrepreneurial companies through an array of business support resources and services developed or
orchestrated by incubator management and offered both in the incubator and through a network of
contacts.These companies have the potential to create jobs and increase wealth,revitalize neighborhoods,
commercialize new technologies and strengthen local and national economies.
Incubators provide management guidance,technical assistance and consulting tailored to young,growing
companies.They provide access to space,shared equipment,technology support and assistance in
obtaining financing necessary for company growth.Clusters of firms in an incubator derive strength from
working with one another,thus encouraging innovation.The goal is to produce successful firms that will
graduate from the program as financially viable and freestanding companies.
Critical to the definition of an incubator is on-site management,which develops and orchestrates business,
marketing and management resources tailored to a company's needs.Client companies usually have
access to appropriate rental space and flexible leases, shared basic office services and equipment,
technology support services,and assistance in obtaining the financing necessary for company growth.
Nationally,the track record for incubation programs is excellent.Over 37 percent of companies that
graduate from incubator programs remain viable,successful businesses five years after graduation.More
than 85 percent of companies that graduate from an incubator locate within five miles of the incubator,
resulting in a significant and tangible return on investment for the local community.
Industry Best Practices in Incubation
Model business development programs are distinguished by a commitment to incorporate industry best
practices,as defined by the National Business Incubation Association. Successful programs strive to:
• Commit to two core principles that characterize effective business incubation:
I) The incubator aspires to have a positive impact on its community's economic health by
maximizing the success of emerging companies.
2) The incubator itself is a dynamic model of a sustainable,efficient business operation.
• Obtain consensus among partners,economic development organizations and supporters on a
mission that meets market needs(i.e.technology vs. mixed use vs. other)and defines its role in
the community.
• Develop a strategic plan containing quantifiable objectives to achieve the program mission.
• Seek to integrate the program and activities into the fabric of the community and its broader
economic development goals and strategies as a way to strengthen the role of small-to medium-
sized enterprises and reduce dependence on corporate recruitment.
• Structure for financial sustainability by developing and implementing a realistic business plan.
• Recruit and appropriately compensate management capable of achieving the mission of the
program and having the ability to help companies grow.
• Build an effective board of directors committed to the program's mission and to maximizing
management's role in developing successful companies.
• Develop effective screening of applicants,and consistently push companies to pursue activities
necessary to continue strong growth and graduate within a prescribed time.
• Prioritize management time to place the greatest emphasis on client assistance, including
proactive advising and guidance that results in company success and wealth creation.
• Develop a facility,resources,methods and tools that contribute to the effective delivery of
business assistance to client firms and that address the developmental needs of each company.
• Develop stakeholder support,including a resource network that helps the program's client
companies and supports the program's mission and operations.
• Maintain a management information system and collect statistics and other information necessary
for ongoing program evaluation,thus improving a program's effectiveness and allowing it to
evolve with the needs of the clients.
Examples of how UCF and its commercialization and incubation programs are impacting Seminole
County:
1) Applicote(current client)founded by Dr.Nat Quick is housed in the STBIC and Dr.Quick lives in
Seminole Co. The company is experiencing solid growth and is substantially involved in joint
research and development with UCF.
2) ScienceSouth(current client) founded by David Byron partnered with Supreme Cheesecakes in Lake
Mary to develop a new artificial sweetener(Zugar)that is being used in the company's new line of
carb-free and gluten-free cheesecakes. In fact,a High Tech Corridor matching grant was used by
ScienceSouth to partner with USF for some of the development work. This new product being used
by Supreme Cheesecakes has enabled them to expand their business and increase their sales to
Disney, Universal,and many of the major hotels and cruise lines. They also are now able to sell via
the web and ship the cheesecakes which use the sweetener since this sweetener(unlike many others)
can be frozen and will maintain its integrity.
3) Welnia(current client)has already completed beta tests and will soon be going to market with their
innovative health and wellness device and program. Welnia is a spin-out of Central States
headquartered in Heathrow. Part of Welnia's "go to market" strategy includes a partnership with
Florida Hospital which we helped them form as well as a joint project with UCF.
4) Datanautix(current client) is a new company founded by Sanjay Patel. Sanjay was formerly CEO of
one of our graduate companies- il3ack Office-which graduated when they were acquired by a
multinational company based in India. Sanjay is a Seminole County resident.
5) And of course we have already discussed Rini's capital investment in purchasing a 12K sq ft building
in Oviedo and the impact on PremiereTrade when they acquired Software Design Corporation in
2004 which was one of our client companies.
6) Crystal Photonics. Major manufacturer of optical crystals for medical and other applications. CPI's
established a large manufacturing site in Sanford. CPI is a spin out company from UCF's Center for
Research and Commercialization in Optics and Lasers(CREOL).
7) (Rob's Company)Medical Laser company as based on Laser Technology from UCF's Center for
Research and Commercialization in Optics and Lasers.
•
•
•
•
Proposal for 10,000 sq ft
Income Year 1 Year 2 Year 3 Total
Seminole County• $300,000 $300,000 $300,000 $900,000
City of Winter Springs $200,000
FHTCC $10,000 $10,000 5 10,000 $30,000
Total Funding $510,000 $310,000 $310,000 ### ###
Anticipated user fees and rents $45,000 $92,700 $143,222 $280,922
Total Anticipated Income $555,000 $402,700 $453,222 #########
Expenses
Cost of facility
Rent 10,000 sq ft @ 22.50sq ft $225,000 $231,750 $238,703 $695,453
Technology Equip./Maint. $20,000 $5,000 $5,000 $30,000
Regular build out and modification costs $200,000 $20,000 $20,000 $240,000
Staff
Dedicated on-site staff w/benefits $I20,000 $123,600 $127,308 $370,908
Program costs(workshops,curriculum,marketing,etc.) $40,000 $25,000 $20,000 $85,001)
Total Costs $605,000 $405,350 $411,011 #U######
Variance ($50,000) ($2,650) $42,211 ($10.439)
Additional staffing&support from UCF* 540.000 $40,000 $40,000 $120,000
•
RECEIVED
niv r of U 1 e slty o Office of Research & CommeraUter1007
Central CITY OF WINTER SPRINGS
Florida OFFICE OF THE CITY CLERK
November 27, 2007
Kevin L. Smith
General Services Director
City of Winter Springs, Florida
1126 East State Road 434
Winter Springs, FL 32708-2799
407-327-1800
Subject: Economic Development Grant Agreement-Seminole County Business
Incubator Program
Dear Mr. Smith:
Enclosed please find a fully executed copy of the subject agreement.
Thank you and if you have any questions or need additional information, please feel free
to contact me at (407)823-2836 or mstanley@mail.ucf.edu.
Sincerely,
0
Mary B. Stanley
Senior Contract Manager
cc: Dr. T. O'Neal
Ms. E. Vargas-Davis
12201 Research Parkway • Suite 501 • Orlando, FL 32826-3246 • 407-823-3778 • Fax 407-823-3299
An Equal Opportunity and Affirmative Action Institution