Project Category: Innovative Project Financing
Organization Name: Michigan Economic Development Corporation (MEDC)
Organization Website: http://michiganbusiness.org
615 South Saginaw Street
Flint, Michigan 48502
Project Cost: $7,639,952
This project would not have happened without the partnership between local, public and private entities. It took the collaboration of six organizations and four separate modes of financing to secure this project and bring it to fruition.
Skypoint Ventures, LLC approached us about their desire to create an innovation hub for the Flint community with a location in the heart of downtown. The innovation hub would serve as the first business incubator of its kind in Flint, modeled off the platform of “Invent@NMU”, an innovation hub located at Northern Michigan University in Marquette. The Ferris Wheel intent is to be a catalyst for additional revitalization of the community through entrepreneurship, business expansion, and collaboration. In order to accomplish this, Skypoint Ventures had two major hurdles to meet; rehabilitating the vacant 46,354 square foot Ferris Wheel building to house the facility, and establishing the Invent@NMU program for the Flint region. After thorough review it became evident that there was a gap in funding needed to restore the vacant building. Our Michigan Community Revitalization Program (MCRP) completed an assessment and met roughly 17% of the gap awarding $1 million to the project. Skypoint graciously accepted the challenge of supporting 83% of the costs associated with the rehab of the building, foregoing most of their monetary return on investment for the purpose of promoting growth for the Flint business community.
On the administrative side, we still had to determine how to fund the hub and after internal discussion, realized the best fit would be under the MEDC’s Entrepreneurship & Innovation Business Incubator program. However, our funding was limited. Knowing that the project was critical to the city, we worked with MEDC leadership who connected us with the Michigan Business Development Program (MBDP) to secure the $1.5 million needed to make the project happen.
Current Status: In construction
Community Needs Addressed:
Flint has experienced an accelerated economic downturn due to the loss of manufacturing jobs, plant and business closures, and most recently, the water crisis. This unfortunately has left Flint in a state of turmoil as they try to develop a sustainable economic structure.
The impacts of this has led to the following in the city of Flint (as of 2013 and 2014 Census Bureau Data):
- 13.7% unemployment rate, double the US average
- 40.1 % residents live in poverty which is 60% for people under 18
- Crime rate index score in 2014 was 680.9 which is nearly 2.5 times the U.S. average crime rate
- Ranked 3rd in the state for violent crime including robbery
- Only 50% of population is in the workforce partially due to a mass retirement of baby boomers
- Population has declined by 49.7%
- Only 21.8% of Flint residents have an associate’s degree or higher
- Median household income is only 52.5% of what is was for the state of Michigan with per capita income at $14,827
- About 41,000 people worked in the city and about 86% commuted in while 14% actually lived and worked in the city
The revitalization of the Ferris Wheel building will eliminate almost 30 years of blight and inactivity to the building while restoring over 46,000 square feet, encouraging new development and growth not only inside the hub, but to surrounding downtown businesses as well.
The innovation hub will provide an atmosphere where entrepreneurs, local businesses, and the educational institution can meet to redefine the entrepreneurial landscape. This will address the “at-risk” population by providing alternate avenues of resources to produce income, promote new businesses and create more jobs. The commercialization of inventions and products will create the opportunity for revenue to return to the area.
Benefits and outcome:
The innovation hub is designated to serve Flint entrepreneurs, inventors, companies and university students. It is bridging the gap between the 5 universities that serve the Flint region by connecting students with real world applications and paid experience. Utilizing this approach lowers the overhead costs of the facility, allowing the innovation hub to meet the needs of the Flint population with low cost services bringing new ideas and businesses to the area.
It will also bring about additional benefits through:
- Fueling more vibrancy and excitement throughout the downtown business community and area residents, encouraging walkability
- Offering opportunity to showcase talent and work/build your business
- Non-discriminatory environment for budding entrepreneurs from all walks of life and stages
- Board of Directors to include diverse representation and include community stakeholders
- Building is directly adjacent to multiple community development supported projects including the Flint Farmer’s Market, Michigan State University School of Public Health, the Capitol Theatre, the Dryden Building and Buckham Alley
- Greatly increase the density of available quality office space in downtown Flint and increase foot traffic for businesses in the area as a result
- Promotes sustainable development through the reuse of the current vacant structure, adding usable materials to the waste stream, adding eco-friendly heating and cooling solutions with VRF HVAC system with EcoSmart controls and building zone management
- Skypoint Ventures has also designated 14% of their budget for educational institutions to participate in joint programming opportunities to improve their educational offerings in STEM related areas
- Partner with local colleges, trade schools, non-profits and others to implement workshops, competitions, mentoring, boot camps & other educational programming
- Attract and retain local talent
Project partners and collaborators:
We partnered with Skypoint Ventures who funded 83% of the rehabilitation costs and committed a match of $1.5 million to the programmatic side of the project for the administration of the innovation hub. The C. S. Mott Foundation, a local non-profit located in the heart of downtown Flint also contributed an additional match of $1.5 million to the innovation hub. The City of Flint also stepped in and approved a 10 year Commercial Rehabilitation Act exemption valued at $70K. The Flint DDA awarded an infrastructure improvement grant of $35K. The University of Michigan Flint committed to supply complimentary incubation and business development programming services as well as small grants to support inventors and innovators that lack the immediate resources to move their ideas forward. The Michigan Community Revitalization Program (MCRP) committed $1 million for the rehabilitation portion of the project and the Michigan Business Development Program (MBDP) allocated $1.5 million of their funding to see the project move forward.
What makes your project unique?:
The Flint Ferris Wheel Innovation Center will operate as a business incubator and is the first model of its kind in the area and the second one in the state of Michigan. The model will employ university students who will be paid $10-15 an hour gaining real-world experience while helping entrepreneurs in critical areas such as: project management, industrial and graphic design, accounting, marketing, sales, intellectual property, public relations, creative services, software development, data analytics, fabrication, supply chain management, and hospitality. It will incorporate a “pay it forward” concept where entrepreneurs whose ideas are vetted will be required to sign a contract stating that if their idea goes to market, they will fulfill a positive social impact determined between the organization and the entrepreneur (i.e. – hiring people with barriers to employment or locating in a distressed area). The incubator model is dedicated to promote economic stability in Flint beginning with the renovation of the former Ferris Wheel Building, turning 2,354 square feet of the first floor into a retail space and developing the remaining 44,000 square feet into office space. The final outcome would be a 7 story flex space anchored by the innovation hub.
This project will add an innovative entrepreneurial space to the list of other community and economic assets that have recently seen new life in the downtown area. The added innovation hub compliments other investments, such as the Capitol Theatre and the local offerings of the new downtown Flint Farmer’s Market, providing serious talent attraction elements for the Flint community as talent desires to locate in areas where local food options and cultural assets are prevalent. The Ferris Building will become a larger revitalization strategy to re-invent Flint as a place where businesses and residents are attracted to while supporting the chronically underserved commerce market.
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