HomeMy WebLinkAbout09-15-2009 Council Economic Development Committee
AGENDA
City of Iowa City
City Council Economic Development Committee
Tuesday, September 15, 2009
8:00 a.m.
Lobby Conference Room
City Hall
1. Call to Order
2. Consider approval of July 30,2009 minutes
3. Discussion of a CDBG Economic Development Fund Application for
Lorenz 2.0
4. Discussion of funding request from Entrepreneurial Development
Center, Inc.
5. City Council Economic Development Committee Strategies and Policies
a. review of 2007-2008 Final Report
b. consider updates for 2009-2010
6. Committee time
7. Adjournment
MINUTES
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
JULY 30, 2009
LOBBY CONFERENCE ROOM, 8:00 A.M.
PRELIMINARY
Members Present:
Staff Present:
Others Present:
Regenia Bailey, Connie Champion, Matt Hayek
Jeff Davidson, Tracy Hightshoe
Dan and Mary Buol, Corridor Drywall, LLC
RECOMMENDATIONS TO CITY COUNCIL:
Recommend approval of $35,000 from CDBG Economic Development fund for
working capital with maximum term of seven years at 1% interest. Condition of the
award is that the business is evaluated by the Small Business Development
Center.
1. CALL MEETING TO ORDER:
Chairperson Regenia Bailey called the meeting to order at 8:00 A.M.
2. CONSIDER APPROVAL OF THE MINUTES OF THE JULY 21.2009 ECONOMIC
DEVELOPMENT COMMITTEE MEETING:
It was moved by Champion and seconded by Hayek to approve the meeting minutes of
July 21, 2009. The motion carried 2-0-1 with Bailey abstaining because she was absent
from the meeting.
3. DISCUSSION OF A CDBG ECONOMIC DEVELOPMENT FUND APPLICATION
FOR CORRIDOR DRYWALL. LLC:
Hightshoe presented the proposal from Corridor Drywall, LLC for funding from the CDBG
Economic Development fund. Hightshoe stated the proposal was for $35,000 for working
capital. Hightshoe explained that the proposed business was eligible for CDBG funding
because over 51% of the jobs being created would be held by low/moderate income
persons. Hightshoe stated that First American Bank would be taking the first security
position. Champion stated she felt it was a good application.
Hayek asked if the business owners had jobs lined up. Dan Buol replied that he had
been in contact with area contractors and had jobs lined up for fall. Hayek stated that
Corridor Drywall, LLC had documented good financial management principles.
Champion stated she felt it was a strong application for funding.
Bailey asked if Corridor Drywall, LLC provided health benefits for its employees. Dan
Buol replied that his current employees had their own health insurance. He stated
Corridor Drywall, LLC was not in a financial position to provide health insurance at the
present time but that he would like to do so in the future.
It was moved by Hayek to approve a CDBG Economic Development fund grant in the
amount of $35,000 for Corridor Drywall, LLC according to the staff recommendation as
Economic Development Committee Meeting
July 30, 2009
follows: $35,000 for working capital with a maximum term of seven years at 1% interest.
Staff recommends as a condition of the award the business is evaluated by the Small
Business Development Center. Any technical assistance necessary would be based on
an evaluation by the Small Business Development Center. For partial security staff
recommends a UCC statement for all business assets. The commercial lender will have
the first lien on all personal business assets.
Champion seconded the motion. Hightshoe clarified that as a condition of grant
approval, the business must remain in Iowa City for at least seven years. Bailey called
for a vote and the motion carried unanimously. Hightshoe stated the proposal would now
go to the full City Council for action.
4. COMMITTEE TIME:
Hightshoe stated that some businesses the EDC has funded have been having difficulty
making their repayment schedule. Hightshoe said staff has been giving three month
deferrals of payments and working on individual repayment plans with some grant
recipients. Hightshoe states she has not changed the seven year payback provisions for
any of the grants. Hightshoe stated it is a difficult situation without a financially secured
position with the grant recipient. Champion stated that the City really had no choice but
to try and work with individual grant recipients. Hayek stated that the City was in a weak
position, but that this was typical of the grants they approved.
Bailey asked Hightshoe if staff works with individual grant recipients and Hightshoe
replied yes. Hightshoe stated the City does not want to put the grant recipients out of
business. Bailey asked if interest rates had been changed and Hightshoe replied no.
Hayek asked if the interest rate was tied to when the money was borrowed and
Hightshoe replied the money was not borrowed, but came from a CDBG grant. The
committee concurred that staff should continue to work with individual grant recipients
who are encountering financial difficulties. Bailey added that the recipients should work
with the SBA to address larger business management plan issues.
5. ADJOURNMENT:
It was moved by Champion and seconded by Hayek to adjourn. Bailey declared the
meeting adjourned at 8:15 a.m.
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INITIAL REVIEW OF LORENZ 2.0
WORKING CAPITAL
Business Proposed:
Ann Ashby proposes to create a new business, Lorenz 2.0 at 132 S. Clinton. The
business will be a new version of Lorentz Boot Shop, a family owned store that was
originally founded in 1919 and closed in 2006 at this same location. The new business
will specialize in fashionable women's footwear at low prices. The target market for the
shoes will be young, price conscious shoppers with the store's marketing efforts
concentrating on social media venues such as Facebook and Twitter. The requested
funds will be used for start up expenses such as inventory and working capital.
The business qualifies as a micro-enterprise under the CDBG program. The owner
qualifies as low-to-moderate income. A micro-enterprise is a commercial enterprise that
has five or fewer employees, one or more whom owns the enterprise. At least 51 % of
the employees must qualify as low-to-moderate income.
Budget & Private Financial Contribution
The applicant requests a $38,900 Iowa City CDBG loan. Applicant does not indicate an
owner contribution except the ownership of the trade name "Lorenz" valued at $15,000
in 1999. Due to the nature of the proposed business and their target market of young,
female consumers, the value of the name may not be as critical for future success.
The owner has applied for a loan at First American Bank. The Bank will provide a
$7,500 loan, fully secured by a $7,500 deposit from someone other than the applicant, at
the bank. First American Bank will not provide additional financing.
Comprehensive Plan/CITY STEPS Plan
The project does not require public infrastructure and is located in a CB-10 zone (central
business). CITY STEPS notes a high priority for the establishment and support of micro-
businesses.
Quality of Jobs
The business is a woman owned business and qualifies as a micro-enterprise. Owner
will hire two part time sales positions at $9.50/hour.
Economic Impact
The proposed CDBG funds will provide a woman owned business access to low interest
working capital. The store front and business will be maintained as retail in the
downtown pedestrian mall, helping meet the City's economic development goal of
maintaining a diverse mix of businesses in the area.
Environmental/Community Involvement
Applicant states the business would be involved with the Downtown Association and
participate in activities that support the downtown.
September 2009
September 15, 2009 Council Economic Development Committee
Lorenz 2.0
Lorenz 2.0 is a new business; however the owner has previous experience
operating a shoe store. She was the manager/owner of Lorenz Boot Shop from
1992 to 2006. While the created jobs will be retail in nature with no benefits, the
City is encouraging the development of the retail sector in the downtown area
and it appears there will be a strong customer base for this type of product.
Maureen Collins, UNI Small Business Development Center, reviewed applicant's
application and business model. She did not review the financial projections but
believes the applicant's projected yearly sales are realistic. She stated the model
proposed has been successful on the coasts and at another store in downtown
Iowa City.
Providing start up capital for a new business is inherently more risky than funding
an existing business. The bank approached for financing is only willing to loan
funds that are fully secured by a deposit provided by someone other than the
applicant kept at the bank.
Staff recommendation: The City is typically not the sole or principal funder for
business start ups. Due to the risk involved and the lack of owner contribution,
staff recommends a partial loan subject to the applicant securing the other
necessary funds to start the business. If applicant is able to secure additional
funding, staff recommends up to a $15,000 loan for working capital with a
maximum term of 7 years at 1 % interest.
As with all loans through the City's Economic Development fund, if funds are
awarded, a condition of the award is that the owner receives additional business
assistance. The specific training required would be based on an evaluation by
the Small Business Development Center. A UCC statement would be filed on all
business assets to partially secure the loan.
September 2009
Iowa City CDBG Economic Development Funds
Application for Business Financial
Assistance
Business Requesting Financial Assistance:
Individual
Ann Ashby
Home Address
1212 E. Court #2
Iowa City, IA 52240
Name of Applicant Business
Lorenz 2.0
Full Street Address of Business
132 S. Clinton
Iowa City, IA 52240
Phone Number & Email Address
319-330-4914
ann@annsads.com
DUNS Number (If awarded funds, applicant must obtain a DUNS number):
Will obtain
Type of Business
Retail! Shoes
Date Business Established
Revised 11/15106
September 2009
Bank of Business Account and Address (if applicable):
First American Bank
Carrie Wagner
641 Highway 1 West
Iowa City, IA 52246-4218
319-688-9300
NOTE:
The City will not provide assistance in situations where it is determined that any repre-
sentation, warranty or statement made in connection with this application is incorrect,
false, misleading or erroneous in any material respect. If assistance has already been
provided by the City prior to discovery of the incorrect, false or misleading
representation, the City may initiate legal action to recover City funds.
Revised 11/15/06
2
Section 1: Description of Business and Proposed Project
1.1. Describe the proposed "project" (for example, company relocation, building expansion,
remodeling, new product line, number of new jobs, amount of investment in machinery and
equipment) and the expected benefits it will receive from the financial assistance requested:
The expected benefits from the financial assistance requested will allow Lorenz 2.0 to re-
model the space at 132 S. Clinton, buy inventory, create 1 full time job and 2 part-time
jobs and pay for other start-up costs such as legal fees, supplies, etc.
1.2. Provide a brief history of your company:
Lorenz 2.0 will be the new version of Lorenz Boot Shop, a family owned shoe store. Lorenz
Boot Shop was originally founded by the Lorenz Brothers, Robert, Frank, Lou and AI in 1919
in Downtown Iowa City. Edwin "Corky" Collins was a partner from 1955 through 1976 and
Jack Ashby purchased the business in 1976. In 19991 purchased the business from my
Dad, Jack Ashby. I closed the business in June of 2006 for various reasons. Lorenz Boot
Shop has had 3 Downtown locations and a location at Sycamore Mall. The new Lorenz will
re-open in the same place it was before at 132 South Clinton St.
1.3. Describe the organizational structure of the business:
Lorenz 2.0 will be set up as an S Corporation.
1.4. Management
(Proprietor, partners, officers, directors, all holders of outstanding stock, 100% of
ownership must be shown)
Name & Positionmtle Complete Address %
Owned
1212 E. Court St. #2 100
Ann Ashby Iowa City, IA 52240
Attach a brief description similar to a resume of the education, technical and business
background for all the people listed under Management.
Revised 11/15/06
3
1.5. Will the project involve a transfer of operations or jobs from any other Iowa City or
Johnson County facility or replace operations or jobs currently being provided by another
Iowa City or Johnson County company? If yes, please indicate the facility(s) and/or
company(s) affected.
No
Section 2: Financial Contributions to the Proposed Project
2.1. Use of Proceeds
USE OF Proceeds
Loan Requested
(Enter gross dollar
amount rounded to
Activity the nearest hundreds)
Land acquisition $ N/A
New Construction/Expansion Repair/ $5000
Remodel
Acquisition and/or Repair of Machinery $N/A
and Equipment
Inventory Purchase $20,000
Working Capital (including accounts $21 ,400
payable)
Acquisition of Existing Business $N/A
All Other (provide description) $
Total Loan Requested (All Sources): $46,400
2.2. Terms of Proposed Financing (Sources)
Monthly Type(1)
Proposed Financing Amount Payment Rate Term
Financial Institution: $
Financial Institution : $7500
Other: $
Revised 11/15/06
4
Iowa City CDBG Economic Dev. Fund $38,900
TOTAL: $46,400
.---.
(1)For example: forgivable loan, direct loan, or grant.
2.3. Explain why assistance is needed from the City, and why it cannot be obtained
elsewhere. If the applicant did not apply for a loan through a private financial institution,
please explain why. If denied assistance through a financial institution, please attach
the letter of denial.
I do not have the collateral the bank requires for a larger loan.
Revised 11/15/06
5
2.4. Indicate the owner's contribution (cash, assets for the operation of the business, etc.) to
this project.
The trade name "Lorenz" is owned by Ann Ashby and is valued on the books at
$15,000. This is what I paid for the name when I purchased it from my father in 1999. It
is hard to say exactly what it is worth at this point in time. It is definitely a name
recognized by the local community.
2.5. Identify all agencies or institutions involved in the project (financial, technical assistance,
etc.) and what their involvement is:
First American Bank is involved as a lender and as a referral. Maureen Collins from the
UNI SBDC has reviewed the business plan and is giving me a referral.
2.6. What type of security will the assisted business provide the City? If no security or less
than the dollar amount requested is offered, an explanation must be provided.
Personal guarantee, UCC Financing Statement and Corporate Guaranty.
tJ . Corporate Guaranty
rY' UCC Financing Statement
o Irrevocable Letter of Credit
~ Personal Guarantee
o Surety Bonds
o Mortgage on Real Estate
o Escrow Account
o Other: Inventory ~
Before execution of a CDBG agreement, if the collateral consists of machinery and equipment,
inventory, or other, the applicant must provide an itemized list that contains serial and
identification numbers for all articles that had an original value of greater than $5,000. Include
a legal description of real estate offered as collateral.
2.7 If the City did not provide financial assistance, could the project proceed?
No
Section 3: Jobs to Be Created/Retained
Special Note: The Community Development Block Grant (CDBG) program requires that
at least 51% of the jobs created or retained must be held by or made available to low-
moderate income persons. The business acknowledges that if it fails to create and/or
retain the jobs identified below by the end of the project period and maintain them for a
period of time (usually 12 months from the date of the award); it may be required to
reimburse City funds for the employment shortfall.
Revised 11/15/06
6
3.1 If an existing business, how many employees are currently employed at your Iowa City
location? Please attach a copy of the company's quarterly Iowa "Employer's Contribution
and Payroll Report" for the most recent quarter.
N/A
3.2 Complete the following chart identifying the number of jobs to be created and/or retained
based on this specific project.
Type of Job and Hourly Rate for Created and/or Retained Positions in First 12
Months of Project Award (please see attached Job Categoty Definitions)
# of Jobs # of Jobs No. Hours Hourly Fringe
Created Retained Type of Job Per Week Rate of Pay Benefits*
1 Officials & Managers 40 14.5
Professional
Technicians
2 Sales 20 9.50
Office & Clerical
Craft Wokers (Skilled)
Operatives (semi-skilled)
Laborers (unskilled)
Service Workers
*If fringe benefits are provided, please attach a description of all employee benefits provided
by and paid for (in full or in part) by the business.
3.3 What is the estimated annual payroll for the new employees resulting from this project?
$54,000
3.4 If an existing business, will any of the current employees lose their jobs if the project does
not proceed? If yes, how many? Explain why:
N/A
Revised 11/15/06
7
Section 4: Economic & Environmental Impact
4.1. What other Johnson County companies could be considered to be your competitors?
Currently there is not anyone in Johnson County that could be considered a competitor. However,
Famous Footwear and Payless may have similar product and price points. Both of these stores
are located several miles from Downtown Iowa City and do not have the "chic" appeal that Lorenz
2.0 will have.
4.2. Please describe the energy and resource efficiency programs, waste reduction, waste
exchange, and recycling programs at your Iowa City operation.
We wiil recycle our cardboard and paper and use energy efficient light bulbs.
Section 5: Community Involvement, Compliance with Law
5.1 In addition to your normal business activities, does your business contribute or have plans to
contribute to the community through volunteer work, financial contributions, or through other
means? Please describe.
We would be involved with the Downtown Association would support Downtown events
such as Summer of the Arts.
5.2 Has the business been cited or found to violate any federal or state statute or regulation
within the last five years (including, but not limited to environmental regulations, payroll
taxes, Occupational Safety and Health Administration laws, Fair Labor Standards, the
National Labor Relations Act, the Americans with Disabilities Act)? If yes, please explain the
circumstances of the violation(s).
N/A
5.3 Has the company or any officer of your company been involved in bankruptcy or
insolvency proceedings during the past 7 years from the date of this application? If so,
provide the details.
In October of 2005, Ann Ashby declared personal bankruptcy. This was a result of a
divorce.
Revised 11/15/06
8
5.4 Are you or your business involved in any pending lawsuits? If yes, provide the case name of
the lawsuit, docket number, and city and state where it is pending.
N/A
Section 6: Summary of Required Attachments
Check off each attachment submitted. If not submitted, explain why.
[~. Business plan (if start-up business)
[y/ Balance Sheet (3 year historical if an existing business. Start-ups must provide a pro-
/ma balance sheet)
[] Profit and loss statements (3 year historical if an existing business, 3 year projection for
start-ups)
[ LJI' 12 month cash flow statement (if the business does not expect to turn profitable within the
first 12 months, provide a cash flow statement extended to the year the business expects
to turn profitable)
[] Description of fringe benefits provided to employees, if applicable
[v(/ Brief description of the education, technical and business background for all the persons
listed under Management (Question #1.4) (' t 5 u (")'\ e.
Revised 11/15/06
9
[l-.(
Please provide the social security numbers for all the persons listed under Management
(Question #1.4) , _ ~ It+-
[ ]
If an existing company, copy of the company's quarterly Iowa "Employer's Contribution and
Payroll Report" for the most recent quarter.
[ ]
Construction loans only: Cost estimates for construction and a statement of the source of
any additional funds
[ ]
Include a list of any machinery or equipment or other non-real estate assets to be
purchased with the financial assistance and the cost of each item as quoted by the seller.
Include the seller's name and address.
Upon review of a submitted application, the City reserves the right to request additional
information in order to assist the City with its evaluation of an application.
Release of Information and Certification
NOTE: Please read carefully before signing
I hereby give permission to the City of Iowa City (the City) to research the company's history,
make credit checks, contact the company's financial institution, and perform other related
activities necessary for reasonable evaluation of this proposal. I understand that all information
submitted to the City relating to this application is subject to the Open Records Law (1994 Iowa
Code, Chapter 22) and that confidentiality may not be guaranteed. I hereby certify that all repre-
sentations, warranties or statements made or furnished to the City in connection with this
application are true and correct in all material respects. I understand that it is a criminal violation
under Iowa law to engage in deception and knowingly make, or cause to be made, directly or
indirectly, a false statement in writing for the purpose of procuring economic development
assistance from a state agency or political subdivision.
If applicant is a proprietor or general partner, sign below.
By:
Date:
If applicant is a Corporation, sign below:
/) /J
thm td!J biqJ - q - / - t!J
Corporate Name and Seal Date
By: ~7~ tlJ Air-
Attested by iJ :~~ of it~
Signature ~rporate ~
Revised 11/15/06
10
Lorenz 2.0
Business Plan 1.0
August 31, 2009
Contact
Ann Ashby
319-330-4914
Executive Summary
Lorenz 2.0 will be the "new" version of Lorenz Boot Shop, a well known shoe store in the Iowa
City community from 1919 to 2006. Lorenz 2.0 is a 21st century retail business model that pulls
together the industry expertise and retail experience of the owner with an underserved market
of primarily young women in the Iowa City region. Lorenz 2.0 will fill a gap in the downtown
district for retail establishments; augment other emerging retail sector businesses in the district
and provide a unique shopping experience for a growing segment of the near-downtown
population.
Lorenz 2.0 will be set up to accommodate the buying habits of a young, price conscious
shopper. Our focus will be on fashionable footwear at low prices. The majority of the shoes will
sell for $19.99 to $49.99. We will strive for high volume with a fast turn, keeping the store
looking fresh at all times. The unique in-store experience will offer a wide array of fashionable
women's shoes, promote a 'pull down and tryon' experience and be branded as the store with
a trendy, rapidly changing inventory.
Unique to the new Lorenz experience will be the high tech- high touch relationship marketing
which will utilize Facebook, Twitter and other social media to engage, attract and serve a
technology saavy c1ientle. The combination of the owners 30 years of experience in the shoe
industry, the prime location of the business on Clinton Street, soft competition, and a clear,
executable understanding ofthe customer base will provide Lorenz 2.0 with rapid profitability.
Lorenz remains a familiar name in the Iowa City community and the re-opening of the store will
create excitement and will be very positive for Downtown Iowa City.
Products and Services
Lorenz 2.0 will offer inexpensive, fashionable footwear. The inventory will be fast turning,
keeping the store fresh at all times.
The shoes will all be on the selling floor in their boxes which will allow the customer to shop
quickly and easily. We will offer exceptional customer service, but will not have to staff as
many employees by having the shoes on the selling floor versus in a stock room.
The line of shoes at Lorenz 2.0 will be directly purchased from importers on the coast allowing
us to take advantage of volume pricing. A variety of import houses have been identified and
initial credit will be secured via credit card. This form of direct purchase offers many benefits to
Lorenz 2.0. Our research indicates that our target market is less interested in name brand
shoes and more attracted to lower pricing. For this reason, we intend to offer an array of
trendy shoes, largely without brand identification, which can be purchased at a much lower
price point. In addition, we intend to take advantage of Just In Time inventory management by
making 6-8 direct inventory purchases annually, with immediate shipping to the Iowa City store.
This is critical to our business model; we will be able to offer the most trend setting styles of
shoes as they gain popularity elsewhere in the country, rather than waiting weeks or months to
secure inventory through traditional wholesalers. We will carry less cost inventory on the floor
as a result of this strategy as well, reducing the risk associated with the occasional 'bad buy'. In
addition, our wholesale strategy will allow Lorenz 2.0 to be highly competitive with online shoe
retailers, while offering the additional opportunity to touch, try and test the shoes in the store!
Market
Our primary market will be young women ages 15-34, with moderate incomes who live within
the community of Iowa City. Much of this population is found at the University of Iowa.
According to the 2009 University of Iowa profile, there are 30,561 undergraduate students
currently enrolled; just over 51% (15,586) are women.
The buying habits of these women are well documented. According the 2007 Consumer
Expenditure Survey ofthe U.S. Census, Midwestern women in this age group spent an average
of $310 per year on footwear. This would indicate the market potential for shoe sales among
female university students is $4,847,246.00. We expect to capture approximately 9% of this
market during the first year of operations, based upon our proximity to the campus community,
a unique social media marketing strategy and a price structure and shoe inventory tailored to
their buying habits.
This business model is an emerging strategy among retailers on both coasts. In California in
particular, small retail venues are catering to this market with open floor plans featuring
shallow lines of trendy, un-branded goods. The inventory turn over with this model is nearly
twice that of traditional shoe stores and caters to frequent, multiple purchases by a youthful,
female customer. A similar approach has been implemented in young woman's clothing sales
this past fall in downtown Iowa City, with good results.
The women who will patronize Lorenz 2.0 are technologically connected 24 hours a day. They
Facebook, Twitter, phone and text regularly. Lorenz 2.0 staff will engage these women through
those social media tools on an ongoing basis, in part through action messages that feature
pictures of new shoes on the floor, surprise sales events which may last for only a couple of
hours and other messages and tools that create anticipation and interest. Working from an
existing base of followers on Facebook, Lorenz 2.0 will develop a highly customized set of
communications, touching every customer on a regular basis.
Location. Location. Location
Lorenz 2.0 will be located at 132 South Clinton St. in Downtown Iowa City, at the corner of
College and Clinton on the Pedestrian Plaza. This is the same location that it was located before
from 1990 through 2006. It is one of the best locations in Downtown Iowa City.
132 South Clinton is within ready walking distance from campus and features a corner
storefront with full length windows, a deep interior layout which will showcase the inventory
and 'Pull down and Try on' experience in a positive way.
The leasehold is in place and only a modest amount of remodeling needs to take place.
Competition
Over the past several decades, the retail base in downtown Iowa City has eroded and an
entertainment district emerged. As a result, traditional shoe stores which once were in
abundance have all closed, leaving only a few retail outlets in the district with any type of shoe
inventory. Today, fewer than a half a dozen outlets (mostly expensive boutiques) exist in the
district with any kind of shoe inventory.
At the time Lorenz Boot Shop closed in 2006, annual sales were nearly $600,000 annually, in
part due to the lack of competition from other downtown stores. That gap in the market place
remains today. Lorenz 2.0 will be the only store in the district dedicated solely to shoe sales.
We expect to be the first stop for pedestrian shoppers' downtown seeking shoes.
-_._----_.....-~--'~"--_.__._.-
Manaf!:ement
Lorenz 2.0 will be managed by Ann Ashby, who has had 7 years of experience owning a shoe
store, 8 years managing shoe stores and 15 years working on both the wholesale and retail side
of the shoe industry. She has a keen understanding of business management and the shoe
industry. In addition, Ann is uniquely qualified to develop the marketing strategy associated
with engaging the Lorenz 2.0 target audience. She boasts extensive experience in online social
media marketing through an early stage technology venture started in the Fall of 2006.
Personnel
Lorenz 2.0 will employ 2 to 3 part-time employees. Employees will most likely be part of the
target market for Lorenz 2.0 and have skills in sales. They will be fluent in Facebook and
Twitter.
Ann Ashby
PO Box 10125
Iowa City, Ia 52240
319-330-4914
.
.
Profile:
Successful entrepreneur with over 30 years of experience excelling in sales, marketing and
management dedicated to providing uncompromising customer service.
Career:
What Once Was Auctions (WOW Auctions), Iowa City, IA
Co-Founder / eBay consignment business
. Seek and obtain Clients with saleable inventory for eBay business
. Negotiate and write contracts
. Manage all financials
Jut 2006-present
Lorenz Boot Shop, Iowa City, IA Jul1992-Jul 2006
Manager/Owner
. Grew business to sales in excess of $750,000
. Hired, trained, managed and motivated 15 employees
. Provided all purchasing and the management of inventory
. Performed all fmancial duties
. Lead advertising and marketing department
. Aided in physical duties of receiving and stocking of inventory
. Initiated a web-site and eBay business to sell our slow moving inventory
. Attended m~or industry trade shows
. Started a side business selling to the state of Iowa
. Designed and created all in-store and window displays
. Communicated with customers on a daily basis
Steve Madden Shoes, New York, NY Jan 2005-Apri12007
Sales representative, independent accounts
. Managed over 120 accounts in 12 states
. Consistently met sales goals
. Helped manage inventory and maintain relationships with the major department stores
u.S. Shoe Corporation I Easy Spirit Division, Cincinnati, OH Aug 1990-Jul1992
Marketing Associate
. Conducted product knowledge seminars, held in-store promotions
. Maintained displays
. Managed inventory
. Created contests and sales incentives for sales associates and managers
. Serviced over 100 independent accounts and consistently exceeded sales goals
Page 1 of2
Ann Ashby
PO Box 10125
Iowa City, Ia 52240
319-330-4914
.
Cartan's Classic Shoes, Iowa City, IA
Sales / Management
Lorenz Boot Shop, Iowa City, IA
Sales
Education:
University of North Texas
B.S. - HUItUln Resource Management
Volunteer Work:
Downtown Association of Iowa City
Promotions Chair
. Increased membership 40%
. Implemented lights on all of the trees in Downtown Iowa City
. Organized seasonal events and fundraisers
. Planned all of the advertising for the Downtown area
. Won the presidents award in 1996
Or2anizations - Activities - Interests:
. Bicycling, walking, reading
. BSF International Bible Study
Page 2 of2
.
1986-1990
Jan 1977-Dee 1985
Dee 1989
Jan 1994-Mar 1999
Lorenz 2.0
Highlights
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
FY 2010
Sales
Gross Margin
. Net Profit
Page 4
Lorenz 2.0
Start-u
Requirements
Start-up Expenses
Legal
Rent
Computer
Supplies
Telephone !Internet
Travel
Remodel
Security Deposit
Trade Name
Other
Total Start-up Expenses
$1,500
$4,500
$2,000
$500
$200
$700
$5,000
$9,000
$15,000
$0
$38,400
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
$3,000
$20,000
$0
$0
$23,000
Total Re uirements
$61,400
Page 5
-^.^~,,----_...,-----"----_.". ,.---
Lorenz 2.0
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
Start-up
$0
Sales Forecast
FY 2010 FY 2011 FY 2012
Sales
Shoes $392,000 $411,600 $432,180
$0 $0 $0
Total Sales $392,000 $411,600 $432,180
Direct Cost of Sales FY 2010 FY 2011 FY 2012
Shoes $203,840 $214,032 $224,733
$0 $0 $0
Subtotal Direct Cost of Sales $203,840 $214,032 $224,733
Page 6
.~~----"-'~..--~"._--~,._~._~,._'~.._'~.-
Lorenz 2.0
Sales Monthly
$40,000
$35,000
$30,000
$25,000
$20,000 Shoes
Series2
$15,000
$10,000
$5,000
$0
Sales by Year
$450,000
$400,000
$350,000
$300,000
$250,000 Shoes
$200,000 Series2
$150,000
$100,000
$50,000
$0
Page 7
<-~,-~---~-~.._---""'-
Lorenz 2.0
Personnel Plan
FY 2010 FY 2011 FY 2012
President $30,000 $33,000 $36,300
Sales Associates $24,000 $26,400 $29,040
Name or Title or Group $0 $0 $0
Total People 0 0 0
Total Pa roll $54,000 $59,400 $65,340
Page 8
Lorenz 2.0
Start-u Fundin
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$38,400
$23,000
$61,400
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$20,000
$3,000
$0
$3,000
$23,000
Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities
$7,500
$38,900
$0
$0
$46,400
Capital
Planned Investment
Owner
Investor
Additional Investment Requirement
Total Planned Investment
$15,000
$0
$0
$15,000
Loss at Start-up (Start-up Expenses)
Total Capital
($38,400)
($23,400)
Total Capital and Liabilities
$23,000
Total Fundin
$61,400
Break-even Anal 'Sis
Monthly Revenue Break-even
$25,469
Assumptions:
Average Percent Variable Cost
Estimated Monthl Fixed Cost
52%
$12,225
Page 9
Lorenz 2.0
Break-even Analysis
$5,000
(T!-
II i
\ II-
Ti1
11 I
I i I
$0 itt
i I i
II 'i ~---/~
+\/1 ~~_..._...-
iilb~-
ill
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--1----
r----
- ,1
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_ _ . I i
I. I
I, i
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I,
i "
il
\--'1
II
Ii
'!.I
I;
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_ ^ ~--:,. ~- -1 j ~,""W~!1;"'~
----- r
$10,000
($5,000)
($10,000)
($15,000)
I
-- --j-
""""1---
_ "__1 -----. ..-.........--......-.. ...-- n__
-1--
- 1-
$32,000
$40,000
$0
$8,000
$16,000 $24,000
Monthly break-even point
Break-even point = where line intersects with 0
Page 10
Lorenz 2.0
Pro Forma Pro It and Loss
FY 2010 FY 2011 FY 2012
Sales $392,000 $411,600 $432,180
Direct Costs of Goods $203,840 $214,032 $224,733
Other Costs of Goods $0 $0 $0
------------ ------------ ------------
Cost of Goods Sold $203,840 $214,032 $224,733
Gross Margin $188,160 $197,568 $207,447
Gross Margin % 48.00% 48.00% 48.00%
Expenses
Payroll $54,000 $59,400 $65,340
Marketing/Promotion $1,200 $1,200 $1,200
Depreciation $0 $0 $0
Rent $54,000 $54,000 $54,000
Utilities $4,800 $4,800 $4,800
Insurance $4,200 $4,200 $4,200
Payroll Taxes $8,100 $8,910 $9,801
Telephone / Internet $2,400 $2,400 $2,400
Supplies $1,800 $1,800 $1,800
Freight $5,400 $5,940 $6,237
professional Services $1,800 $1,800 $1,800
Travel $7,200 $7,400 $7,600
Other $1,800 $1,800 $1,800
------------ ------------ ------------
Total Operating Expenses $146,700 $153,650 $160,978
Profit Before Interest and $41,460 $43,918 $46,469
Taxes
EBITDA $41,460 $43,918 $46,469
Interest Expense $4,424 $4,042 $3,843
Taxes Incurred $11,111 $11,963 $12,788
Net Profit $25,925 $27,913 $29,838
Net Profit/Sales 6.61% 6.78% 6.90%
Page 11
Lorenz 2.0
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
Profit Monthly
Profit Yearly
$0
FY 2010
FY 2012
FY 2011
Page 12
Lorenz 2.0
$20,000
$18,000
$16,000 -
$14,000 -
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
$250,000
$200,000
$150,000
$100,000
$50,000
Gross Margin Monthly
Gross Margin Yearly
$0
Page 13
Lorenz 2.0
$25,000
$20,000
$15,000
$10,000
$5,000
($5,000)
Cash
$0
Net Cash Flow
Cash Balance
Page 14
Lorenz 2.0
Pro Forma Cash Flow
FY 2010 FY 2011 FY 2012
Cash Received
Cash from Operations
Cash Sales $392,000 $411,600 $432,180
Subtotal Cash from Operations $392,000 $411,600 $432,180
Additional Cash Received
Sales Tax, VAT, HST/GST $0 $0 $0
Received
New Current Borrowing $0 $0 $0
New Other Liabilities (interest- $0 $0 $0
free)
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $392,000 $411,600 $432,180
Expenditures FY 2010 FY 2011 FY 2012
Expenditures from Operations
Cash Spending $363,235 $384,545 $403,243
Bill Payments $0 $0 $0
Subtotal Spent on Operations $363,235 $384,545 $403,243
Additional Cash Spent
Sales Tax, VAT, HST/GST $0 $0 $0
Paid Out
Principal Repayment of $3,984 $3,984 $0
Current Borrowing
Other Liabilities Principal $5,748 $5,748 $5,748
Repayment
Long-term Liabilities Principal $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $372,967 $394,277 $408,991
Net Cash Flow $19,033 $17,323 $23,189
Cash Balance $22,033 $39,356 $62,545
Page 15
Lorenz 2.0
Pro Forma Balance Sheet
FY 2010 FY 2011 FY 2012
Assets
Current Assets
Cash $22,033 $39,356 $62,545
Inventory $1 7,160 $18,018 $18,919
Other Current Assets $0 $0 $0
Total Current Assets $39,193 $57,374 $81,464
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $39,193 $57,374 $81,464
Liabilities and Capital FY 2010 FY 2011 FY 2012
Current Liabilities
Accounts Payable $0 $0 $0
Current Borrowing $3,516 ($468) ($468)
Other Current Liabilities ($5,748) ($11,496) ($17,244)
Subtotal Current Liabilities ($2,232) ($11,964) ($17,712)
Long-term Liabilities $38,900 $38,900 $38,900
Total Liabilities $36,668 $26,936 $21,188
Paid-in Capital $15,000 $15,000 $15,000
Retained Earnings ($38,400) ($12,475) $15,438
Earnings $25,925 $27,913 $29,838
Total Capital $2,525 $30,438 $60,276
Total Liabilities and Capital $39,193 $57,374 $81,464
Net Worth $2,525 $30,438 $60,276
Page 16
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CITY OF IOWA CITY
MEMORANDUM
Date:
September 11,2009
Re:
Economic Development Committee
Wendy Ford l{~
Entrepreneurial Development Center request for funding
To:
From:
Attached you will find a letter of request for $20,000, and accompanying marketing materials from the
Entrepreneurial Development Center, Inc., (EDC) headquartered in Cedar Rapids. This request comes as
part of the EDC's Vitality 2014 campaign, a new five year fundraising initiative.
You may recall that the EDC also approached the City Manager's office in 2007 for funding and was
referred to the Council Economic Development Committee. At the Dec. 18, 2007 Council Economic
Development Committee meeting, the committee decided to defer a decision on the request for $15,000
for six months pending more detailed information about the program.
General Comments about EDC, Inc.
. Since their initial approach to the City in late 2007, and the committee's desire for more
information, we did not hear from the organization again until late July, 2009 when they submitted
this current request and marketing materials for the Vitality 2014 campaign.
. We know that other economic development organizations in the north end of the corridor, namely
Priority One and the CR Chamber have either eliminated or diminished their funding to EDC over
the past three years. In the south end, the Iowa City Area Chamber has not invested in EDC.
. EDC has approached the Iowa City Area Development Group (ICAD) for support and the ICAD
Board voted to support the EDC with a one time commitment of $7,500 with specific performance
metrics required.
. The City of Cedar Rapids recently committed $100,000 per year for 5 years to EDC.
. I am not aware that the EDC's CEO has established or maintained any relationships with key City
of Iowa City staff. Mr. Stein, the author of the letter of request has been solicitous in providing
Vitality 2014 background information and has offered to make a presentation to a subsequent
meeting of your committee if you desire.
Staff Recommendation
In 2006, the City substantially increased its investment in ICAD. The City depends on ICAD for, among
other things, some of the services that EDC also offers.
For now, staff recommends taking a "wait and see" approach and not grant funding this year based on the
following reasons:
. The City lacks the funds to start supporting entities not supported in the past without cutting
existing programming;
. ICAD will have implemented the kinds of metrics that would also be important to the City, so we
should evaluate EDC's performance based on those and possibly other metrics at the end of the
first year of ICAD's funding commitment;
. EDC's connection with and commitment to the south end of the corridor is unclear.
Please be prepared to discuss this request at your meeting.
We would be grateful for the opportunity to meet briefly with your Economic
Development Committee, and layout the details of our past, current and
future efforts in Iowa City. If appropriate, we would then submit a request for
the Economic Development Committee to consider funding for EDC
beginning with the 2010-2011 fiscal years, on or after July 1, 2010, and for
four subsequent years, subject to your annual approval. Based on what other
. public sector entities are or intend to do regarding this campaign, we would
[ntrepreneuTlal appreciate your consideration of committing an annual amount of $20,000.
Oeuelopment
Center. Inc:
Campaign Chairs
Tom Aller
PreSident
Interstate Power and Light Co.
Robert N. Downer
Meardon. Sueppel & Downer PL.C
Sally Mason
PreSident
University of Iowa
John Smith
President & CEO
CRST InternatIOnal
EDC Board of Directors
Charles Klasson Jr.
CIVCO Medical (Chair)
David Rusch
CRST (Past Chair)
Mary Quass
NRG Media. LLC (Chair-elect)
Tom Aller
Interstate Power and Light Co
AI Ruffalo
Ruffalo Cody
Larry Helling
Cedar Rapids Bank & Trust
Charles Rohde
King's Material
Jon Dusek
Armstrong Development Co.
William McCartan
Bradley & Riley PC
Paul Rhines
AAVIN Equity Advisors
Steve Schoenauer
RSM McGladrey
Pamela York
University of Iowa
Research Foundation
Terry Sullivan
CIPCD
Bruce Lehrman
In volta
Lance Dunn
2nd Story Software
Shannon Meyer
Cedar Rapids Area
Chamber of Commerce
..
"building wealth in our community"
July 28, 2009
Ms. Wendy Ford
Economic Development Coordinator
City of Iowa City
410 E. Washington Street
Iowa City, Iowa 52240
Dear Wendy,
Thank you for your call last week, and your suggestions regarding meeting
with your Economic Development Committee, possibly in September.
EDC is the primary organization in the Corridor focused on the development
of new and early-stage, primarily high-tech businesses that will be
headquartered in the region. EDC has served thirty-nine clients in Johnson
County, seventeen of which were in the last twelve-months.
The growth and commercialization of these businesses will not happen
without the hands-on assistance provided by EDC. EDC has delivered proven
results in its first five years of operations, and is poised to make a significant
impact on the local Iowa City economy and the regional economy through
new business formation and growth.
As I discussed with Interim City Manager Dale Helling, when we met earlier
in July~ EDC is undertaking a one-time, five-year campaign which will enable
EDC time to develop incremental revenue streams, leading to financial self-
sufficiency. Many other public sector entities have, and intend to continue to
support EDC financially in this endeavor.
230 Second St. SE, Suite 212 . Cedar Rapids, IA 52401 . 319.369.4955 . 866.950.4955 · wwwedcinc.org
Per your request, three copies of Vitality 2014, our campaign marketing
docu!llent are enclosed for members of the committee. ShQuld you need any
further information or clarification, please contact me via email:
cstein@sdsecdev.com, or cellular: 614-946-8660. Thank you for your
continued interest, and I look forward to having the opportunity of meeting
you in the near future.
Sincerely,
~
Charles L. Stein
Enclosures (3)
Vitality 2014
fnfrepreneurial
eu@ln.pment
tntre
Deu
Center
Established in 2003, the Entrepreneurial Development
Center (EDC) is a private/public sponsored business
accelerator. EDC's mission is to provide economic growth in
the Corridor and throughout Iowa, through the expansion
and development of entrepreneurial enterprise. EDC is
focused on creating local wealth for area re-investment by
growing and cultivating Iowa-based regional,. national and
internationa.l businesses.
Businesses with less than 500 employees represent 97.4%
of Iowa's employers, creating over 60% new
jobs from year to year.
Campaign Chairs
Tom Aller
President
Interstate Power and Light Co.
Robert N. Oownel"
Meardon. Sueppef & Downer P L. C
Sally Mason
President
University of Iowa
John Smith
President & CEO
CRST InternatIOnal
EDC Board of Directors
Charles Klasson Jr.
CIVCO Medical {Chair]
DaVid Rusch
CRST {Past Chair]
Mary Quass
NRG MedlB, LLC (Chaw-elect]
Tom AileI'
Interstate Power and Light CD.
AI Ruffalo
Ruffalo Cody
Larry Helling
Cedar Rapids Bank & Trust
Charles Rohde
King's Materia!
Jon Dusek
Armstrong Development Co
William McCartan
Bradley & Riley PC
Paul Rhines
AAVIN Equity AdVisors
Steve Schoenauer
RSM McGladrey
Pamela York
University of Iowa
Research FoundatIOn
Terry Sullivan
CIPCO
Bruce Lehrman
Involta
Lance Dunn
2nd Story Software
Shannon Meyer
Cedar Rapids Area
Chamber of Commerce
fntrepreneuri al
Ueuelopment
Center. Inc
"building wealth In our community"
Small business drives the growth of the United States economy. Given
the state of the national and global economies, relocations and
expansions of businesses to new areas will be harder to come by.
Economic developers are turning to growing locally-owned start-up and
early-stage businesses as a balanced opportunity to impact their
economies in today's environment.
In Iowa, businesses with less than 500 employees represent 97.4% of
employers and create on average over 60% of the state's net new
jobs from year to year.
Over 800 Corridor businesses were directly impacted by the Flood of
2008, and over a thousand more were affected. U.S. Department of Labor
statistics indicate that we will ultimately lose over half of them forever.
The Entrepreneurial Development Center (EDC) has a five-year
successful track record in growing start-up and early-stage high-impact
interstate-commerce businesses. These are the exact type of businesses
that infuse new money and lasting vitality into our economy. '
Since E.DC was formed, over 300 start-ups, early-stage and mature
businesses have been supported, generating:
. 42 new interstate-commerce businesses (high-tech and
manufacturing)
. $158 million in increased sales
. $55 million in capital investment
. I $106 million in wages (840 total jobs; 560 direct; 280 indirect)
. $48,000 average annual wage, 33% higher than the 2007 per
capita average in the Corridor
. $327 million total economic impact
EDCis the only Corridor resource with talents specifically focused on
creating and growing high-impact interstate-commerce businesses:
. EDC accelerates the development of early-stage, primarily
technology-focused businesses, at a rate two or three times faster
than if these businesses struggled on their own.
. These businesses pay wages 33% above the regional average.
. Every business created is a locally-headquartered business that
can:
o Build economic diversity and vitality over time
o Create spin-off businesses and attract new talent
Continued..,
230 Second St. SE, Suite 212 . Cedar Rapids, IA 52401 . 319.369.4955 . 866.950.4955 . www.edcinc.org
1
o Create the careers needed to keep graduating talent in Iowa
o Provide stable, long-term community leadership
o Create wealth that gets re-invested locally
In the Corridor today:
· Of the top 25 manufacturers, 16 of them were founded here
. Only four (4) of them remain headquartered here
. Growth, mergers and acquisitions are a natural progression
· If we do not continually add new locally-rooted businesses, we will
be more and more out of control of our economy
EDC's business model has proven itself effective time after time across
the country. The U.S. Small Business Administration reports that
IIbusinesses launched in incubators (accelerators) have an 87%
survival rate for five-years, compared with just 25 percent for
businesses that start on their own. "
EDC is embarking on a new five-year plan that we believe has significant
merit, and will play an even more important role in our economic recovery.
This plan enables EDC to create incremental revenue streams over time
and become financially self-sufficient by 2014.
We invite you to join us in leveraging EDC's existing and successful model
by providing the necessary investments of time, human and financial
resources needed to accomplish our goals. Our success is dependent
upon your leadership to move the Corridor towards being a hub of
entrepreneurial technology business in the United States.
On behalf of everyone associated with EDC, we look forward to your
involvement in this important initiative - Vitality 2014.
Sincerely,
~~
'--J~ ~~
Sally Mason
President
University of Iowa
Tom Aller
President
Interstate Power and Light Co.
l~L
9w~~
Robert Downer
Meardon, Sueppel & Downer P.L.C.
John Smith
President and CEO
CRST International
2
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, L ..J '-.' V ,Cl.t.-
rate to date has
been
outstanding.
Charles Stein
CEO,
Strategic
L..
Development
Services
4. .
d
I
1~:.~S
The EDC accelerator model was constructed and grown based upon
proven national best practice models. From North Carolina to Oklahoma,
over a dozen successful programs were studied and the EDC model was
built accordingly. Based upon performance and talent, EDC ranks in the
top 15 nationally.
a
EDC's model was vetted and approved by the Iowa Department of
Economic Development, the Cedar Rapids Chamber of Commerce
Executive committee, and the Priority One Executive committee. A
Conflict of Interest policy, with annual reviews, is in place, all program
agreements have been vetted and approved by local counsel, and overall
governance is provided by a 16-person board of directors.
F ~)(") 111 /-1"('''' 1'/1 ("1/1 /'""' 'l"'O'7.LJ t ''1
,'-' l j I- /... . J t I vI f ' !\.J . t ,I,
Since its inception, EDC has grown in size and talent base and has
learned from its successes and failures. In 2009, the program was again
improved to increase the overall client success and growth rates by
investing a greater amount of time with more qualified clients. Accordingly,
EDC staffing is fully absorbed by current clients and the continual intake of
new clients.
230 Second St. SE, SUite 212 . Cedar Rapids, IA 52401 . 319.368.4955 . 866.950.4955 . wwwedcinc.org
3
Exis
rl eLU S
are enhanced
o-reatlv bl/
() ,"
h{tUI'VI U ''}If
J~.' c' . I l-.:') t
SUl)l}ort
~ t
EDe, has
helped Oil r
business grC!7D
{rorn
/1 ') o/1'ln(iOl/tCJPc: it,.
rL c, r -l......L-C -" !
two ural's.
"
Bruce
Lehrman
CEO, Involta
EDC'S TRACK RECORD (2003-2008)
What does EDC do? Since 2003, EDC's primary function has been to
1) provide hands-on professional and business direction and 2) connect
entrepreneurial needs with qualified community and state resources to
maximize business success and growth rates. While working with both
emerging and existing businesses, EDC supports the development and
commercialization of new products and new technologies. Staffed by
seasoned veterans, EDC helps entrepreneurs maximize their success by
helping them navigate resources, strengthen knowledge, improve skills,
form strategic alliances, and secure proper capitalization.
Who does EDC help? EDC provides support services for start-up
entrepreneurs as well as those with early-stage and long-established,
scalable businesses. EDC focuses specifically on interstate I international
commerce business models founded in Iowa to increase the amount of
new money infused into Iowa's economy.
Performance to date. Since 2003, EDC has raised and invested $2.9
million in operating capital, both private and public, and for this
investment, EDC has accomplished the following:
Return on investment:
. Over 300 start-ups, early-stage and mature businesses have
been mentored
. 42 new interstate-commerce businesses have been created:
o High-tech and manufacturing
. $158 million in increased sales have been created
. $55 million in capital investment has been generated
. $106 million in wages have been created:
o 840 total jobs; 560 direct; 280 indirect
o At a $48,000 average annual wage
o 33% higher than 2007 per capita average in the Corridor
.$327 million in total economic impact has been created
230 Second St. SE, Suite ;::'12 . Cedar' Rapids, IA 52401 . 319.369.4955 . 866.950.4955 . www.edcinc.of'g
4
Since 20(l5,
hm)c strategzzed
[ui th EDC on
almost
business, frmn
nw cllstomer
(inanCll1(<
(
!ssues. Tn thai
tl
,
1
grO'{uJ! rny 7)lant
6'o1713,SOO
Sl7UClre feet to
, I
over 35,000.
Eric Bochner
CEO, Bochner
Confections
J
~'
~/
Why business accelerators are needed:
. National statistics indicate that 60% to 75% of business start-ups fail
within the first year
. Most failures related to mistakes and missteps that could have been
avoided with experience-based guidance
. Business accelerators have grown from the desire to increase the
success and growth rates of viable, high-impact businesses necessary to
maintain the nation's global economic position
Accelerators provide value and results:
. The SBA reports that businesses launched in incubators / accelerators
have an 87% survival rate for at least five years
. Early-stage high-tech businesses require significant assistance to move
from the idea, or even prototype stage, to market entry
. Early-stage companies require even more experienced help to move from
initial commercialization to scaling enterprises needed to produce
economic vitality _
. Accelerators reduce barriers to entry and accelerate the pace of
commercialization by providing hands-onguidance from experts who
have done it before
. Accelerators act as "magnets" to attract research and investment dollars
from national and global investment firms and federal resources
. Accelerators consistently provide better return on economic development
investments across the country
As recent as January 2009, the U.S. Department of Commerce, Economic
Development Administration (EDA) indicated that for every $10,000 spent,
accelerators create 4X the new jobs, as opposed to other public sector EDA
investments.
Acceler~tors provide hands-on guidance in the areas of:
. Business situation analysis and market fit identification
. Business, marketing and sales planning
. Team attraction, creation and development
o Legal structure and intellectual property protection
. Leadership development and -attraction
. Financial analysis and planning
. Equity, grant, and debt funding
. Operations and product development
. Crisis management
. Mergers and acquisitions
. Education and networking
. Connections to appropriate professional services
23CJ Secorld St, SE, Suite 212 II Cedal' Rapid:;, IA 5240'1 III 319,3694955 II 866,950.4955 II vvwVII,edclIlc,or'q
5
berYL
7LJ("I"~;r'U elUl..;clu
v ~} \. 1 l.(~ '- ~ I..' / ..J
?lll'i.!l PZP {:'T)C
v.' . I. ' d ~. ,~L
for some time
and tutUI'
'I
receruea
SU1Jl7ori tII1J1
r,
\tzIidancc that I
(...,
could not hmH'
obtained
elsezuhe re . From
planning
fundin\"i the
" (.
E DC has been a
tremendous
resource foy liS.
Dennis
Henderson
CEO, HH
Ventu res
--~
r~adymobile
pes'
Vitality 2014 is EDC's five-year plan to increase EDC's economic impact in
the Corridor from 2010 through 2014, and provides for EDC financial self-
sufficiency by 2014.
Challenge
Given the current recession and the state of the national/global economy,
recruitment-based economic development is expected to slow dramatically. And,
over time, typical economic development organizations (EDOs) are also realizing
that given finite resources, they are generating a better return-on-investment
from a combination of retention, expansion, and new business creation.
EDC is proud of the $327 million of Corridor economic impact it has helped
create in its first five years of operation. EDC has grown in capability and results
annually so that by 2008, EDC was able to employ $1 million in resources that
generated $115 million in economic activity. This impact was realized specifically
in the areas of retention, expansion, and high-impact new business creation.
However, due to the significant changes in the economy, as well as the
economic impact of the flood, a major portion of EDC's funding stream will
terminate in 2009.
The Corridor is fortunate to have an established organization of EDC's caliber
and scale with which to combat the devastating impacts of the flood and
economy. However, without a continued funding stream, EDC, like other early-
stage companies, will fail to survive. Given the current state of the national and
local economy, most community leaders do not find that acceptable.
Opportunity
The Corridor has numerous comparative and competitive advantages relative to
other areas of the Midwest when it comes to growing our own economy:
. Quality of life ranks high
. Land for development is plentiful and economical
. The labor pool is plentiful and relatively skilled
. Area colleges and universities provide significant workforce development
capabilities
. We have a respected major research University that generates significant
intellectual property
Provided EDC can continue to increase economic impact through business
creation and growth, we can continue to increase,the Corridor's vitality by
creating locally-rooted high-impact businesses and the quality jobs and
community investments that come with them. Vitality 2014 will replace the
funding EDC is losing in 2009, and allow EDC time to develop the incremental
funding needed to reach financial self-sufficiency by 2014.
6
2:30 Secomj St SE, SUite ~)1~) ill Ci'ciclr' Rapicis. 11'1, ~j24(YI III :3'1~]3m=j,4955 III 86Ei 95[J,495~J III
'7<;<;[";:; f'Od
He, ,. L I
Asoy ia.fieorn
..;t:IYtUP iIzrough
a SL(rnificant
(~ j
5erles capital
raise, EDC's
expenence, 175
7()oll '7C; YP<.;rirlJ1al
,,-t~ l. -b Ul._ , '--- _ i--L- ,.--1
(
and national
conLacts. have
proven
ln7.Jaluable to
Ollr grmulh,
,r--: f/' 1
,--yreg t,-eeley
CEO, Asovia
e
An aggressive Vitality 2014 initiative needs incremental investments from its
current and future partners. EDC cannot continue to produce $115 million per
year ($575 million plus, over the next five years) in economic impact, with
reduced funding.
Commercializing early-stage high-tech companies is a people-intensive, hands-
on process. In its first year of operation, EDC's budget was less than $250,000,
with only one and one-half employees. The budget (and impact) has grown
incrementally to fund five full-time employees, one part-time, and four highly
skilled independent contractors. Remaining resources are used for marketing,
education, and general administrative expenses.
The Vitality 2014 initiative will increase funding from all sectors: public, private
and academia, with goals as follows:
PROJECTED SOURCE OF FUNDS ($5 million across five years)
III Private
~ Public
o Aced~mia
Over EDC's first five years, $2.9 million has been invested as follows:
USES OF FUNDS
. Talent / Staffing
III General & Administrative
[J Marketing & Education
230 Second St. SE, Suite 212 III Cedar Rapid~3, IA. 52401 III 319.369.4955 III 866.950.4955 III wwwedclnc.org
7
! GROWTH TO SELF SUFFICIENCY
J'mn helping
As promised when founded, it is EDC's long-term goal to become self-sustaining.
Through a combination of fee for services, fund management and related liquidity
events, EDC is projected to achieve this goal by the end of this five-year Vitality
2014 initiative.
ZI) I 17l1/
11/?J-," 1 J-7 'l
'I, - 'j, '2,
':
Source 2010 2011 2012 2013 2014
Fund Fees $37,500 $70,000 $70,000 $70,000 $70,000
Client $50,000 $150,000 $300,000 $450,000 $550,000
Fees
Equity $0 $0 $0 $50,000 $100,000
Events
Total $87,500 $220,000 $370,000 $570,000 $720,000
,17uslness
fj-1P "(/nz'[171
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necCSSarl! to
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~ " ~
UIJSlflCSS. E
has
BUSINESS CREATION AND GROWTH
adVisor,
New Starts
Cumulative '
Chris Kavars
President.
Reference LLC
SENS
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2010
2011
2012
2013
2014
Capital Raised
Cumulative
Total Jobs
Cumulative
$60,000,000 Y
1/
$50,000,000y
/
, ,/
$40,000,000 ( / _
$30,000,000 r~ .~ i
$20,000,000 Y
$10'OOO,000t~ _-. -
$0 lL---~-
2010 2011 2012 2013 2014
2010
2011
2012
2013
2014
8
2~jO Second St. SE, SUitE; 21~) III CedEH' Rapids, IA 52401 II :319:.369.4955 .. 866.9~JOA955 iii
I stavted
'iJ(.-'J~!-;1.1 (' 7'1]'tI7..
In.- ,I Ilj~. ~(S "l/, ,(..
foe Iuhen 1
founded Inl!
business in
') () ') :: n ]'1 (i 1'/"
;..~ .. l eJ I (..l ~- /.' .. i
2()()8 Iny
cmnpnnlj was
fisted at #148
on Inc
!Vlagnzinc's
Fastest
Grn7uln~
<-
Private
Companies list
MattJ\!Jiller
CEO,
MobileDell1and
,~
mobileOemand'
P
!iv'
Pl~f
......... ~ i.. ~
Members Benefits
Less than 50 employees ($1,000) Receive all EDC information, e-
50 or more employees ($2,500) newsletters, no-charge entry to all
EDC networking events, client
referrals, plus discounted
educational events
Fundraise Investors Benefits
$5,000 annually . Membership benefits
. Acknowledgement on major
marketing materials
. Early knowledge of new
business creation
. Listing in vendor services
directory
$7,500 annually . Preferred access to
investment opportunities
$10,000 annually . Logo and hot-link on EDC's
website
. Acknowledgement on EDC
marketing materials
. Opportunity to serve on
board committees
230 Second St. SE, SUite 212 iii Cedar Rapids, IA52401 .. 319369.4955 II 866.950.4955 II www.edcinc.org
9
The EOe was by
.far the best
con/act '[ue made
> >
m our Journey
horn business
.J
idea to launch
and beyond.
EDC real! 11 hehJs
...' J
you zpork out the
strategies needed
to be successful
fC1ster and
Ivithouf costly
mistakes.
Doug
Iv1iskimen
President,
Cedar Crest
JVlanufacturing
~
.. -.: T
-1l .rf 0 }/I ill '1/1/1
lfvtt'llil-
EDC's Impact to the Corridor:
. Diversification and stabilization of our economic base
. Increased employment and career opportunities for residents
. Increased ability to attract and retain skilled talent
. Increased ability to retain college graduates
. Increased ability to attract and retain management talent
. Increased attraction of federal research and development funding
. Retention of technology developed locally
. Wealth creation and the resulting community investments
. Attraction of national venture capital
. Improved Corridor market image to enhance all other economic
development opportunities
older
General Business Community:
. New client opportunities
· Improved talent pool - trailing spouse and job changes
. Increased vitality to improve talent attraction and retention
. View the horizon before your peers
. First look at investment opportunities
Healthcare Industry:
. Window on new technologies
. Increased clinical trial opportunities'
. Opportunities to productively utilize excess facilities and/or equipment
. Reduce uncompensated care as jobs and wealth are created
Existing Technology and Life Science Firms:
. Increased access to and collaboration with academia
. View the horizon before your peers
. Partnering opportunities through alliances and investment
. Increased visibility in the community for the industry
Academic Institutions
· Increased returns from equity participation and royalties
. Increased deal-sourcing
. Enhanced next-level funding for university-based IP
. Increased contract research
Continued. .
230 Second St. SE, Suite 212 . Cedar Rapids, IA 52401 . 319.369.4955 . 866.950.4955 . wwwedc1nc.org
10
The EDC has
been invaluable
mc{ssisting Inc
In the
fundmising
process. They
hmx; 7uor1ced
tirelessly to
help lrIr? with
J '
aaV1CC on types
offunding, lunu
to applll, and
creating the
lnlsiness plan
needed to be
sllcces~ful.
Larrv
Selensky
President,
Ovation
Networks
~ .f' l
i~vaton ;
1 i 1('< \."\5'( If ;<.....,r~c I
. Increase career opportunities for graduates
. Enhanced collaboration with private sector
. Enhanced faculty recruitment opportunities
. Prominent local and national visibility
. Co-op and intern opportunities for students
Public Sector: $115 million in economic impact per year, with $48,000 per
year jobs (compared to jobs at the 2007 per capita of $35,827), enhances:
. Home ownership and property taxes
. Disposable income and sales taxes
. Per capita income and income tax
Examples of impact on various local government tax rates (Assume 80%
home ownership and property tax rollback of 51.3874%):
. City of Cedar Rapids:
o $14.62 per $1,000 assessed valuation
o Average home value $153,000
o 840 jobs at $48,000
o Annual property tax increment of $771,297
. Linn County:
o $5.89 per $1,000 of assessed valuation
o Average home value $153,000
o 840 jobs at $48,000
o Annual property tax increment of $311,191
· Cedar Rapids Community Schools:
o $14.37 per $1,000 assessed valuation
o Average home value $153,000
o 840 jobs at $48,000
o Annual tax increment of $759,842
· State Income Tax on 840 jobs at $48,000 of taxable income = $2,274,938
230 Second St, SE, Suite 212 III Cedar Rapids, IA ~'i2401 II 319369-4955 III 866,95CJ4955 II www,edcinc,org
11
Due to the
iY'lz'd'-"ve qnd
t, I "IlL, v .'
.." II VII~(-I rj' h'011"
"1 ("f: rJ-" -J" l l
[he E DC have
pyoi,fressed fi'om
(-" -
rny
07.U11 company
.c:,cl JiIJill
products on
n'!r-
\<. V t_
nation's 41
lIOme shoppinX
rlef''L,Uork
Susanne
\tV estoli,
Founder,
WrapItFast
. WraplfFast
Tom Aller
Interstate Power and Light Co.
President
Charles Klasson (Chair)
CIVCOMedical
President
David Rusch (Past Chair)
CRST Carrier Group
COO
Tom Aller
Interstate Power and Light Co.
President
Larry Helling
CRB&T
President
William McCartan
Bradley & Riley
Partner
Bruce Lehrman
Involta
CEO
Pam York
UIRF
Director
Steve Schoenauer
RSM McGladrey
Managing Director
John Smith
CRST International
President & CEO
Mary Quass (Chair Elect)
NRG Media
President & CEO
Paul Rhines
AAVIN Equity Advisors
Principal
AI Ruffalo
Ruffalo CODY
President & CEO
Charles Rohde
Kings Material
President & CEO
Terry Sullivan
CIPCO
CFO
Lance Dunn
2nd Story Software
President & CEO
Shannon Meyer
CR Area Chamber
President & CEO
Jon Dusek
Armstrong Development Co.
President
230 Second St. SE, SUite 212 II Cedar Rapids, IA 52401 II 319.369.4955 II 866.950.4955 .. www.edcinc.org
12
From helping
us find key
talent to
helpina us
b
raise the
equity capital
necessary to
bring our
business to
life, the EDe
continues to
be an excellent
asset for our
company.
Joan Severson,
Founder,
Ccwnitive
b
Media
;'4t [J:('
~ i. I f,-
~) tv~ )' ',).,)
Curtis Nelson
President & CEO
('cm tractors)
Josie Heskje
VP Marketing
Vaughn Halyard
Entrepreneur in Residence
Stacey Paoli (part time)
Office Coordinator
Peter Fry
Entrepreneur in Residence
Jane Burroughs
VP Operations
Christie Remley
Manager / Market Research
Julie Zelinski
Marketing Contractor
Jami Gordon
Market Research Assistant
'-177100.....1 f
vi t~ . OL l ::1
Tim Kintner
Bankers Trust
Dee Baird
Kirkwood
Nancy Kasparek
US Bank
Roger Klouda
MSI Mold Builders
Mark Long
Wells Fargo
Duane Smith
True North
o
;j-fo)'
t. . I. G t. .
Cindy Lyness
MRI
Kathleen Kleiman
Simmons Perrine
Roger Baker Dennis Wangeman
Bowker Mechanical Corridor Management
Brian Brown
Murphy Business
Joe Hladky
Gazette Communications
Kevin Knutson
Holmes Murphy
Matt Krigbaum
Aegon
Steve Ropp
Hills Bank
Monica Vernon
Vernon Research
230 Secorld St. SE, Suite 212 . Cedar Rapids, IA 52401 II 319.369.4955 II 866.950.4955 .. wwwedclnc.org
13
Our community faces a challenge unlike any
it has ever seen. The ability to put people back
to work and shore up our econ01nic base is
absolutely critical to our community's future
vitality. EDC has proven it can provide
assistance to a variety of businesses that will
playa lnajor role in rebuilding o1:lr community
in the nlonths and years ahead. I urge you to
join us in supporting EDC accordingly.
~~~
Tom Aller
President, Interstate Power and Light Co.
EDC Board of Directors
Charles Klasson Jr.
CIVCO Medical (Chair)
David Rusch
CRST (Past Chair)
M~ry Quass
NewRadio Group (Chair-elect)
Tom Aller
Interstate Power and Ligl1t Co.
AI Ruffalo
Ruffalo Cody
Larry Helling
Cedar Rapids Bank & Trust
Charles Rohde
King's Materif:jl
Jon Dusek
Armst(Qn€IOevelopment
William McCartan
Bradley &Riley PC
Research Foundation
What EDC Clients Say about EDC Value
I started working with EDC when I founded my business
in 2003, and in 2008 my company was listed at #148 on
Inc. Magazine's Fastest Growing Private Companies list.
There is no way we would be where we are without the early
and ongoing support of the experts at EDe.
Matt Miller, CEO
Hiawatha
EDC assisted Asoyia from start-up through a significant
Series A capital raise. They identified the need for an
industry experienced CEO and matched me to that role.
EDe's experience, as well as regional and national contacts,
have proven invaluable in our growth to date.
Greg Keeley, CEO
Iowa City
I have been working closely with the EDC for some time
now and have received support and guidance that I could
not have obtained elsewhere in this community. From the
planning phase of our acquisition of Ready Mobile, to
providing a venue for pitching our business to investors
and securing state and equity funding, the EDC has been a
tremendous resource for us.
Dennis Henderson, CEO
Hiawatha
Since 2005, the EDC and I have strategizedon almost every
facet of my business from how to grow my customer base
to financing issues. In that time, I'vegrownmyplantfrom
3,500 squarefeet to over 38,000.
Eric Bochner, CEO
Iowa City
The EDC was /;Jy far the best contact we made in our
journey from business idea to launch and beyond. EDC
provided their knowledge and resources to assist us in our
efforts for thorough business plan development, investor
funding, banking resources as well as overall business
planning, to avoid the early pitfalls we would be up
against. They go much further than the basic text book
approach. EDC really helps you work out the strategies to
be successful.
Doug Miskimen, President
Cedar Rapids
EDC has made the start up of WrapItFast progress from a
dream to a reality of a small business in Cedar Rapids. Due
to the business counseling and referrals the EDC provided
my business, I have been able to market and sell my product
to QVC, the #1 home shopping network.
Suzanne Weston, Founder
Cedar Rapids
As a locally-founded business that has been around for over
a decade, having a highly-competent support organization
such as the EDC to turn to when we need them has been
extremely valuable for the growth of my business. The EDC
provides expert-level business advice from entrepreneurs
that have "been there" - a level of experience I have not
found in any other service provider.
Dawn Ainger, President & CEO
Cedar Rapids
Ovation
The EDC has been invaluable in assisting me in the
fundraising process. They have worked tirelessly to help
me with advice on what type of funding, where and how to
apply, creating and massaging business plans and finally
being there for s rtduring the often frustrating and
time consuming-ssGs that raising funds can cause.
Larry Selensky, President
Cedar Rapids
,~ 1
!:~~~'t
,,~..ga.~
-.. --,
CITY OF IOWA CITY
MEMORANDUM
Date: September 11,2009
To: Economic Development Committee
From:
Wendy Ford, Economic Development Coordinator *
Re: a) Annual Report on Economic Development Activities, through 2008
b) Discussion of update to Strategies and Policies for 2009-2010.
Final Report on 2007-2008 Plan
Following is a final report on the activities of the Economic Development Division for the two
year calendar period of 2007 and 2008. This report gives a view of the strategies and activities
to achieve the objectives, and importantly, a benchmarking of planned and accomplished tasks.
This document may be helpful in our review of the past plan as we consider updating for the
future.
Update Strategies and Policies for 2009-2010
Also included in your packet is a copy of the Economic Development Policies and Strategies
document adopted in January 2007 for the calendar years 2007 and 2008. At your meeting, let's
"walk through" the document and discuss changes or additions for an updated 2009-2010
document.
As a quick overview, your economic development policies are to:
1. Diversify and increase the property tax base by a) encouraging the retention and expansion
of existing industry and b) attracting industries that have growth potential and are compatible
with existing businesses and industries.
2. Develop the available labor force consistent with the needs of employment opportunities.
3. Provide and protect areas suitable for future industrial and commercial development.
4. Continue to cooperate with existing local and regional organizations to promote economic
development within Iowa City.
5. Improve the environmental and economic health of the community through the efficient use
of resources.
6. Consider financial incentives and programs to facilitate achieving the above.
Your four key objectives for economic development have been:
1. Foster the retention and expansion of primary sector existing businesses and attract new
businesses to Iowa City.
2. Support the development of Downtown to ensure a healthy mix of retail, services,
entertainment, office, residential, lodging, and nightlife.
3. Assist in the development of entrepreneurial businesses in Iowa City.
4. Workforce development.
I look forward to discussing an update to our Policies and Strategies at our meeting on the 15th.
'1"lIl1i1li1OOfllihJlll<~llhillliru,'ilfll~mi'~killitlljji,~limIWIj'jt,i:lIlli!lI!:JlNiIW"lIimUIllIIlH1mlilmlUl<1It$"IIIWl!n:~mI1!ll'1~!\ilIiM*imlilllil!ll~WW!lli~!llriWIlHIH~l!IllllilllJ,'jJlllIlIiIll!lIlIl~~Nliliiil~ill!!l1!l!!*_;lllliilIllll:il/lliWl1~lIll~Iun,'llmliliJ!1J/IilllOOUf!mi~1mi1IIWim
FI NAL REPORT ON
City of Iowa City
Economic Development
Objectives and Strategies
CALENDAR YEARS 2008-2009
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CITY OF IOWA CITY
FINAL REPORT ON
Economic Development
Committee
2009
Economic Development
Objectives and Strategies
CALENDAR YEARS 2008-2009
Regenia Bailey, Chair
Connie Champion
Matthew Hayek
Wendy Ford, ED Coordinator
Jeff Davidson, PCD Director
.
OBJECTIVE 1
Foster the retention and expansion of primary
sector1 existing businesses and attract new
businesses to Iowa City.
How to Measure . 2 expansions; 2 new businesses; 0 business losses (of those City has
Success assisted)
. Create/update marketing materials
Completed . Assisted ICAD in the hosting of site visit for wind power manufacture,
high tech security services firm, and blood plasma research and
development firm
. 2 expansions-Alpla, a manufacturer, $5 million building expansion
to add new product line, Kleffman North America, an agricultural
research company, $300,000 expansion of facilities in downtown
Iowa City
. 3 new businesses-ITC Midwest, a supplier to the electric power
industry, BioTest, a blood plasma research firm, and Rock Tenn
Alliance, a display manufacturer
. Assisted ICAD in marketing to several wind energy companies; at
press time, we are still awaiting company decisions
. Completed Working Numbers, a booklet highlighting Iowa City's
benefits and features to interstate commerce companies
STRATEG I ES
A. Have ability to respond as needed to infrastructure needs.
Plan and budget for economic development infrastructure in Capital Improvement Plan;
including roads, utilities, telecommunications, water and sewer.
Apply for RISE (Revitalize Iowa's Sound Economy) and other financial opportunities for
assistance.
1 Primary sector includes business and industry who can CHOOSE to locate here and whose market is not dependent on
Iowa City.
Completed
· Purchased 173 acres of land, worked with Urban Planning Division
to annex and rezone the property
· Working with JCCOG staff, successfully submitted application for
RISE funds for 420th Street improvements
· Work with PCD Director to maintain high priority for economic
development-focused capital improvement projects
· Participate in ICAD's Shovel Ready Site Program initiative as Task
Force Member and as facilitator in Wind Energy Supply Chain
Campus Pilot Project
· Work with developers of EC04 Moss Green Urban Village concept
on Oakdale Boulevard from Highway One west into Moss Farms
On-going
B. Market new and existing land for development and redevelopment.
Fully utilize LOIS (Location One Info System) system to post information on the
community, buildings and sites in the market
Completed
· Assisted ICAD in getting concept plan for new industrial area to
prospective businesses
· Concept plan, annexation and rezoning complete; in process of
platting of new Industrial Park for development lots
· Distributed new marketing materials to larger employers in Iowa
City
· Updated LOIS information
· Work with listing agent for Aviation Commerce Park land sale/
lease
· Working with Urban Planning Division, use Southeast District Plan
to facilitate growth of expanded industrial area
· Distribute new marketing materials to larger employers in Iowa City
· Begin 2008 update of LOIS information
· Complete southeast Iowa City annexations
On-going
Planned
C. Design comprehensive marketing and presentation package in concert with ICAD (Iowa City
Area Development Group).
Completed
· Assisted ICAD with their response package update
· Worked together on new marketing brochure to be completed 1/08
· Financial Assistance Package information in production, scheduled
for completion 2/08
· Doing Business in Iowa City, 20 page booklet with wide range of
business information
D. Develop system of regular communications about business in Iowa City.
Maintain positive relationships with existing businesses with public recogmtIOn of
accomplishments including long term businesses in Iowa City, good corporate citizens in
Iowa City, and stability of permanent full time employees of the labor force
Act upon ICAD's annual retention surveys and gather information to evaluate satisfaction
with governmental and area support services.
Respond to selected set of targeted business leads
Communicate through local media the positive economic climate in Iowa City
Communicate through City's economic development web pages
2
Completed
.
.
.
.
.
.
.
On-going .
.
. Helped to build relationships with land owners forfuture development
of commercial/industrial and office growth
. Attended a meeting of ICAD-surveyed businesses to listen to
concerns
. Served as Iowa City government liaison to Business Friendly
Communities Task Force of the Chamber of Commerce to improve
perceptions of doing business in Iowa City
Roberts Dairy land swap agreement drafted
Updated slide show "Use of TIF in Iowa City"
Completed Downtown Market Niche Analysis
Updated Community Profile
Updated CDBG guidelines and application forms
Letter to business community with Working Numbers brochure
Updated City's Economic Development website
Maintain positive relationships with business community
Set up meetings between key City staff, elected officials and key
business and industry leaders
E. Review, refine and improve programs for providing incentives to increase tax base through
construction of new facilities or improvements to existing facilities.
Completed
On-going
. CDBG guidelines updated
. Attended information session on State Historic Tax Credit program as
first step in assessing feasibility of facade improvement program
. Improvement of application and processing of tax incentive
applications
. Redesign application materials to eliminate duplication with and
complement State of Iowa applications
F. Propose redevelopment plans and/or invest in public spaces in areas of the community, such
as South Riverside Drive, Towncrest, South Gilbert Street, North Dodge Street, Muscatine
AvenuelFirst Avenue, Mormon Trek, and Aviation Commerce Park commercial areas.
Completed
On-going
. Assist private pub/private partnership with Dolphin Pointe
Enclave (Lakeside) Apartments renovation
. Towncrest area urban renewal plan underway
. On-going work with realtor on Aviation Commerce Park
G. Develop local, regional and state business network by active involvement and presence with
Chamber, Chamber government affairs committee, ICAD (Iowa City Area Development
Group), CVE (Iowa City/Coralville Convention and Visitors Bureau), IDED (Iowa
Department of Economic Development), PDI (Professional Developers ofIowa)
University ofIowa departments
Mid-American Energy
3
Completed
On-going
Planned
. Assisted with letter to UNESCO in Iowa City's bid to be a
UNESCO Literary City
. Involved with Chamber, Gov't Affairs, Business Friendly
Task Force, ICAD, DTA organizations and committees
· Assist CVB in Great Place application
Continue work with ICAD in attracting new businesses
. Do more with University of Iowa Centers for Enterprise
and Pomerantz Career Center
· Do more with PDI
.
OBJECTIVE 2
Support the development of Downtown to ensure
a healthy mix of retail, services, entertainment,
office, residential, lodging, and nightlife.
STRATEGIES
A. Facilitate market niche analysis for downtown
B. Create a facade renovation incentive program
C. Explore development of creative business incubator
D. Capitalize on the Cultural District designation
How to Measure Success
Completed
On-going
4
· Begin implementation of program of marketing to
commercial tenants; retain existing retailers, gain 5 new
businesses
· Completed work with consultant on Downtown Market
Niche Analysis, setting the stage for the program of
marketing
· Worked with local partners to build support for a
downtown business incubator
· Secured EDA funding for feasibility study on downtown
business incubator
· Entered into agreement for cost-sharing projectto enhance
the Sheraton Hotel exterior walkway
· Provided $50,000 financial support to the Englert Theater,
year one of a requested three year commitment
· Participated in Retail Caucus group of businesses in
downtown and Northside Marketplace to promote
shopping destinations with events, promotions and
web site
· Work with business community to build support for
recommended downtown business manager
· Meet with Northside Marketplace merchants to hear
concerns and begin dialog of working together to make
safety and aesthetic improvements
.
OBJECTIVE 3
Assist in the development of entrepreneurial businesses in Iowa City.
STRATEGIES
A. Market financial assistance programs via bankers, the web, and community outreach.
B. Explore possibilities of incubator development.
C. Develop relationships with Technology Innovation Center (TIC) businesses and opportunities
for their expansion in Iowa City.
D. Collaborate with the Chamber's Small Business Education and Entrepreneurial Development
(SEED) program to provide informational and/or coaching resources for small businesses.
E. Use $250,OOO/year in CDBG funds to assist new businesses.
How to Measure Success
Completed
· Support 10 new businesses
· Presented City financial programs to Chamber member
seminar
· Worked with local banks to promote CDBG ED program
· Assisted nine entrepreneurs with CDBG funds: Discerning
Eye, La Reyna, Nile Valley Restaurant, Gluten Evolution,
The Wedge Pizzeria, Home Ec. Workshop, Alfie's Beauty
Supply, Textures Salon, Atlas Home Service
· Networked with Operator Performance Lab director at
the airport to gain knowledge of work and be ready to
assist in clustering complementary new business nearby
· Developed Flood Recovery $5,000 Forgiveable Loan
program that was duplicated in Coralville and Johnson
County; distributed $74, 400 to 18 businesses
· Administered Jumpstart Business Disaster Recovery
Program; distributed $1.2 million to 49 recipients
· Continue promoting CDBG economic development
funds
· Business Rental Assistance Program of Flood Recovery
On-going
.
OBJECTIVE 4
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Workforce development
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STRATEGIES
A. Be a partner in communicating the workforce business resources of the Cedar Rapids-Iowa
City Technology Corridor™ to business and industry.
B. Encourage and advocate local industries' use ofDI Career Center's Expo for internship and full
time job postings to attract young professionals to Iowa City
C. Create recognition progTam/positive public relations opportunity for companies employing
permanent full time employees.
D. Reserve dollars from City's CDBG (Community Development Block Grant) funds for job
training.
E. Maintain information about and actively support workforce development strategies of Kirkwood
Community College, ICAD, Priority One, and Skills Advantage.
5
How to Measure Success
Completed
On-going
Planned
6
.
Ensure workforce/laborshed data is shared with targeted
industries
Benchmark Iowa City-based companies' use of Expo at UI
Career Center,
Complete annual public relations on permanent
employment programs
Partnered with ICAD in communicating the workforce
business resources of the Cedar Rapids-Iowa City
Technology Corridor™ to business and industry
Maintained information about and actively support
workforce development strategies of Ki rkwood Com mun ity
College, ICAD, Priority One, and Skills Advantage
Maintain information about and activelysupportworkforce
development strategies of Kirkwood Community College,
ICAD, Priority One, and Skills Advantage
Work with Planning Office on concept for Mixed-Use
Parking Facility that would increase downtown workforce
housing
Create recognition program/positive public relations
opportunity for companies employing permanent full
time employees
Benchmark area use of UI Career Center's Expo online
job posting
.
.
.
.
.
.
ECONOMIC DEVELOPMENT
Policies and Strategies
for the
City of Iowa City
Approved January 23, 2007
Council Economic Development Committee
Approved January 23, 2007
Council Economic Development Committee
City of Iowa City
Economic Development Policies
1. Diversify and increase the property tax base by 1) encouraging the retention and
expansion of existing industry and 2) attracting industries that have growth
potential and are compatible with existing businesses and industries.
2. Develop available labor force consistent with the needs of employment
opportuni ties.
3. Provide and protect areas suitable for future industrial and commercial
development.
4. Continue to cooperate with existing local and regional organizations to promote
economic development within Iowa City.
5. Improve the environmental and economic health ofthe community through the
efficient use of resources.
6. Consider financial incentives and programs to facilitate achieving the above.
City of Iowa City (January, 2007)
Economic Development Strategies (Calendar Year 2007-2008)
VISION
Iowa City aspires to be a global community defined by the creativity, diversity and
innovation of its citizens and businesses.
MISSION/GOAL
To achieve a vibrant local economy.
OBJECTIVES (Areas of focus)
1. Foster the retention and expansion of primary sector1 existing business and
attract new business to Iowa City.
Measurables: 2 expansions; 2 new businesses; 0 business losses (of those we have
assisted); create/update marketing materials.
STRATEGIES
a. Have ability to respond as needed to infrastructure needs
. Plan and budget for Economic Development infrastructure in Capital
Improvement Plan, including roads, utilities, telecommunications, water and
sewer.
. Apply for RISE (Revitalize Iowa's Sound Economy) and other financial
opportunities for assistance
1 See list following Objectives and Strategies.
2
Approved January 23, 2007
Council Economic Development Committee
b. Market new and existing land for development and redevelopment
. Fully utilize LOIS (Location One Info System) system to post information on
the community, buildings and sites in the market
c. Design comprehensive marketing and presentation package in concert with ICAD
(Iowa City Area Development Group)
. Updated Community Profile
. Updated "How to do Business in Iowa City" pamphlet, to market Iowa City
. Updated Financial Assistance package information
. Zoning map and available land
d. Develop system of regular communications about business in Iowa City
. Maintain positive relationships with existing businesses with public
recognition of accomplishments including long term business in Iowa City,
good corporate citizens in Iowa City and stability of permanent full time
employees of the labor force
. Act upon ICAD's annual retention surveys and gather information to evaluate
satisfaction with governmental and area support services.
. Build confidence of land owners for planning of commercial/industrial and
office growth
. Respond to selected set of targeted business leads
. Communicate through local media the positive economic climate in Iowa City
. Communicate through city's Economic Development web pages
e. Review use of tax and other incentives to increase tax base through construction
of new facilities and/or additions to existing improvements
. Review, refine and improve program policies
. Review, refine and improve program application processes
f. Propose redevelopment plans and/or invest in public spaces in areas of the
community, such as South Riverside Drive, Towncrest, South Gilbert Street,
North Dodge Street and Muscatine/First Ave. Mormon Trek Extension, Aviation
Commerce Park commercial areas
g. Develop local, regional and state business network by active involvement and
presence with
. Chamber, Chamber government affairs committee, ICAD (Iowa City Area
Development Group), CVB (Iowa City/Coralville Convention and Visitors
Bureau), IDED (Iowa Department of Economic Development), PDI
(Professional Developers of Iowa)
. University of Iowa departments
. Mid-American Energy
2. Support the Development of Downtown to ensure a healthy mix of retail,
services, entertainment, office, residential, lodging, and nightlife
Measurables: Begin implementation of program of marketing to commercial tenants;
retain existing retailers, gain 5 new businesses.
STRATEGIES
a. Facilitate market niche analysis for downtown
. Use as guide for implementing program of marketing available commercial
property
3
Approved January 23, 2007
Council Economic Development Committee
b. Create a fayade renovation incentive program
c. Explore development of creative business incubator
d. Capitalize on the Cultural district designation
3. Assist in the development of Entrepreneurial Businesses in Iowa City
Measurables: support 10 new businesses
STRATEGIES
a. Market financial assistance programs via bankers, the web, & community
outreach
b. Explore possibilities of incubator development
c. Develop relationships with Technology Innovation Center (TIC) businesses and
opportunities for their expansion in Iowa City
d. Collaborate with the Chamber's Small Business Education and Entrepreneurial
Development (SEED) program to provide informational and/or coaching
resources for small businesses
e. Use $250,OOO/year in CDBG funds to assist new businesses
4. Workforce Development
(Measurables: ensure workforce/laborshed data is shared with targeted industries,
benchmark Iowa City based companies' use of Expo at UI Career Center,
complete annual public relations on permanent employment programs)
STRATEGIES
a. Be a partner in communicating the workforce business resources of the Cedar
Rapids I Iowa City Technology Corridor™ to business and industry.
b. Encourage and advocate local industries' use ofUI Career Center's Expo for
internship and full time job po stings to attract/employ young professionals to
Iowa City
c. Create recognition program/positive public relations opportunity for companies
employing permanent full time employees
d. Reserve dollars from City's CDBG (Community Development Block Grant)
funds for job training through companies' career development
e. Maintain information about and actively support workforce development
strategies of Kirkwood Community College, ICAD and Priority One and Skills
Advantage.
4
Approved January 23. 2007
Council Economic Development Committee
City of Iowa City Primary Sector
Industries and Technologies Opportunity List
This list identifies industries and technology groups that are compatible with the Iowa
City community.
The purpose of the list is to focus the City's proactive economic development activities
and ICAD's efforts on behalf of the City ofIowa City.
The focus of the City's proactive economic development activities will use this as its
preferred industry and technology list:
. to focus efforts on retention or expansion of existing businesses,
. to focus efforts on attracting potential business,
. and focus on locating new businesses and expanding businesses as permitted under
current zoning,
. as a guide for considering the offer of financial assistance,
. and will not discourage other industries and companies from seeking assistance.
The list includes these industries and technologies
1. Biocatalysis and Bioprocessing Research and Development
2. Communications Services
3. Computer Software Development/Computer Simulations of Complex Systems
4. Drugs/Pharmaceutical
5. Educational Services
6. Electronic and Other Electrical Equipment
7. Environmental Technologies and Energy Resource Alternatives Research and
Development
8. Insurance Services
9. Human Health and Medicine (Alternative Health Care Systems)
10. Light Manufacturing
11. Medical Instruments/Instruments and Measuring Devices
12. Music Recording Studios/Audio-Visual Production
13. Printing and Publishing (Public Relations/Graphic Arts/Design)
14. Value Added Agricultural Products
5