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POLICY PROPOSAL
DATE FILE NUMBER ESTA6L,RtiMENTEOFLXT11 LUBUSIOS INEUBATOR PAGE_OF_
3/7/89 C. P.• 137
PROPOSAL PROPOSED BY: Councilmen CITY • G R' REbIEW
Williams, Webber, Vance
It is proposed that City Council adopt a resolution in support of the establishment a
small business incubator in the South Enterprise Zone which specifies that:
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1. The City supports Small Business Incubator Committee in 4" pursuit of a
small business incubator in the South Enterprise zone; and
2. The City will cooperate with the Small Business Incubator Canmittee to achieve the
goal of establishing a small business incubator in the South Enterprise Zone; and
3. The City will assist the-Small Business Incubator Committee in obtaining resources
to implement the small business incubator as needed.
BACKGROUND
A small business incubator is a valuable tool for encouraging the development of new
businesses and fostering local eoonomic development. Business incubators provide an
environment where public and private resources can combine to meet the needs of small
businesses during their critical start up period. Incubators are facilities in which
a number of new and growing businesses operate under one roof with affordable rents,
sharing administrative services and equipment and having equal access to a wide range
of professional, technical and financial programs. Most incubators limit the amount
of time a tenant may occupy space in the facility; this period usually ranges from
two to five years, thereby acting as a hatchery for new businesses and new jobs.
01 For several years, numerous organization and groups in Southeast Fort Worth have been
studying ways to improve the economic vitality of the area by increasing employment
opportunities within close proximity to the residents' hones. The concept of
creating a business incubator within the area was first discussed in 1984 when the
City approached City Venture Corporation to study the conversion of the Oakbrook Mall
into a business incubator.
In April 1988, a Sall Business Incubator Committee was formed to develop a concept
paper outlining the potential of a small business incubator for alleviating
unemployment in Southeast Fort Worth. Their findings include the following points:
1. Businesses generating the most new jobs tend to be small (66% of all new jobs are
in businesses employing less than 20 persons);
2. Only 20% of the businesses which entered an incubator have discontinued operations
versus an 80% mortality rate within five years for all business start-ups; -
LEGALITY ❑
FISCAL NOTE ❑ OFFICIAL RECO."M
CRY MANAGER'S COMMENTS ❑
CITY SECRETARY
POLICY PROPOSAL (cont'd) P1°oE—oF
3. Business failures are clue primarily to inadequate management or capital;
4. Shoring up small businesses and nuturing new business formation in declining
markets will be more important than attempts to attract major employers frau
outside the area;
5. Business inculcators should build upon existing markets for products - large local
corporationsig gover, —1 s, etc.;
6. Government grants, donations of buildings or other services and volunteer efforts
are important to achieving positive effects;
7. An incubator should be viewed as a long term investment in job creation; and
S. There are over 220 successfully operating incubators in the United States.
It was the unanimous position of the oannittee that the establishment of an incubator
in Southeast Port Worth could furnish a positive change agent for the area, but only
if it receives visible and meaningful support from city governsaent and private
industry.
The committee has recently requested assistance frau the University of Texas at
Arlington College of Business Administration to conduct a study analyzing the
feasibility of the concept. Ponding for this study will be partially provided by the
U.S. Small Business Administration's Small Business Institute Program.
LEGALITY
FISCAL NOTE
None. APPROVED BY
CITY MANAGMIS COMMEN S CITY COIMNCIL
AS AMENDED
Excellent concept. MAR 7 1989
C.
Bert C. Williams, Mayor Pro-Ten
District 5 Gita Seawarf of the
' CLT of FIX -AC B6 1 erns
'W- ... - dg;��-
VikginiaoWll Webber, Councilwoman
District 8
Adopted Resolution No.:L3
Estil Vance, Jr., Councilman
District 9
OFFICIAL RECORD
CITU SECRETARY
CRY OF FORT WORTH
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WORTH,