The city of Kent has taken on a temporary lease agreement to give start-up businesses in the Regional Economic Growth Corporation's small business incubator time to transition after learning the organization is no longer able to sustain the program.
The Regional Economic Growth Corporation, formerly known as the Kent Regional Business Alliance, has been active in helping start-up small businesses grow in Kent through services including consulting, subsidized office space, loan assistance and more for more than 20 years.
It was first located in the Kent State University Business Administration Building, then at the Kent administration complex on Summit Street and most recently at 277 Martinel Drive.
Kent City Manager Dave Ruller told council this month that the organization is currently working through a restructuring and is unable to keep the doors open for its small business incubator.
"It's become obvious from their end that sustaining the incubator on their side of the ledger isn't going to work," Ruller said. "We've had successes such as AlphaMicron, which grew out of that, but it is a tough business."
Regional Economic Growth Corporation Chief Executive Officer Jack Crews said the organization is going through a transitional period and declined to offer further comment until its outlook became clearer.
Under the terms of the agreement approved by Kent City Council, Kent is facilitating a 90-day bridge lease agreement with Harbor Properties, the property management company for the Martinel Drive space, which expires on Dec. 1. Kent will pay $2,000 per month during that time frame, a reduced rate from the $3,000 the small business incubator paid, and will offset the costs with the rental income from the start-up businesses working within, about $825 per month.
Kent Community Development Director Bridget Susel said the small business start ups in the incubator space were notified that Kent will assume the sub-tenant leases and they'll be able to stay through the end of November, after which Kent will relinquish its control.
"Financially, the city is not in a position to be able to continue to pay that payment and utilities for all that space, it's just not feasible," Susel said.
She said the city's hope is that another entity will take over, but it is unknown at this time if that will happen, as is the future for the start ups.
"There was a business that was interested and they have been in communication with me, but they also have recently talked about looking at another building," Susel said. "Whether or not it will land (at 277 Martinel Drive), the city is committed under the bridge lease through Nov. 30. After that point, the city will not pay, this is just a transitional time."
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