$1M shy of hatching; Construction costs kill high-tech incubator
BYLINE: Erin Lawley
After two years of work, plans for a nonprofit technology incubator on Foster Avenue have been scrapped.
The ARTE Center, which would have helped start-up technology and life sciences companies get off the ground, didn't have enough funds to cover projected construction costs and is being liquidated, says Ken Renner, executive director of the center.
Costs came in $1 million more than anticipated.
"We had to reevaluate where we were, and without any additional source of funding, we called it a good try," Renner says.
ARTE - which stands for Advancement of Research Technology and Entrepreneurship - was first announced in May 2005. The center's management bought the incubator's building, a 138,000-square-foot warehouse at 1111 Foster Ave. near Trevecca Nazarene University, for about $3.8 million.
The plan was to renovate the building in two phases, creating office and lab space for 50 start-up technology companies, with some tenants moving in by late summer of 2005.
However, it took longer to secure financing than anticipated: The center announced $4.5 million in funding - $2.2 million in federal and state money and $2.3 million from Wilson Bank & Trust Co. - in July 2006.
Last month, construction estimates came back at nearly $2.2 million, says ARTE board member James Hiatt. That was the last straw for the project, which had pegged construction costs below $1 million.
"We were already pretty strapped, so it was just not possible to go forward," says Hiatt, who is also dean of Trevecca's business school.
The building has been put on the market to pay off creditors and wrap up the business, says Renner.
Larry Frankenbach, broker with Crye-Leike Realtors, says the property was listed earlier this month for nearly $4 million. He says the building would be suited to another incubator-type project or a distribution, warehouse or light manufacturing purpose.
Hiatt says he's disappointed the incubator fell through because he believes it's needed in the community.
"If you look at small businesses in general, the overwhelming amount go out of business when they start up within five years," says Hiatt, adding incubators, which provide those companies with shared office equipment and other lower-cost support, give "a little greater chance for small companies that start up to succeed."
In Nashville, Cumberland Emerging Technologies is a life sciences incubator and Tennessee State University's Nashville Business Incubator works with all small businesses.