Research Park eyes program for loans

The Research Park Corp., the nonprofit corporation that operates the Louisiana Technology Park and owns a stake in the Bon Carré Business Center on Florida Boulevard, might launch a business and industrial development corporation - called a BIDCO - to provide working capital for young technology firms.

On Thursday, Research Park's executive committee recommended its full board take that step in March, creating what's called a specialty BIDCO that would take $1 million in Research Park funds, match it with $1 million in state funds from the Louisiana Economic Development Corp., and make short-term loans, for a return of 16 percent to 25 percent, to companies that can't get bank financing. Loans would be in the $75,000 to $100,000 range, said Eddie Ashworth, the Research Park president.

"It would be focused primarily on early-stage Louisiana companies," he said, firms that would need to demonstrate stable cash flow. There are 13 other BIDCOs in the state, according to the Louisiana Office of Financial Institutions, which regulates them.

Board member Cornelius Lewis, who supervises the Gulf Coast BIDCO, said the for-profit BIDCOs take moderate risks for moderate returns, compared with venture capital investors, who take high risk for the promise of high returns.

Research Park Corp., which has been funded largely by the state to spur the growth of technology startups, is slated to have received nearly $30 million in state funds by the time its state cooperative endeavor agreement ends this year.

The agreement was struck with the Gov. Mike Foster administration in 2000.

The nonprofit corporation, which provides space and services at below-market rates to eligible companies in the technology park, will be self-sustaining after the agreement ends.

But it will continue to have stable revenue streams. A portion of the city-parish hotel tax provides about $810,000 a year to Research Park while income from tenants produces about $350,000 annually and income from the Bon Carré center brings in another $270,000.

Income from programs such as the BIDCO and investments also will smooth the corporation's transition from state aid.

At Thursday's executive committee meeting, Ashworth said long-term investments produced a nearly 10 percent return last year and the corporation has a portfolio worth $14.7 million.

Should the Research Park board agree to create the BIDCO, it would name a separate five-member board to manage it.

The BIDCO would be a wholly owned for-profit subsidiary of Research Park. But to achieve specialty BIDCO status, a legislative change would be needed to qualify the nonprofit corporation as an eligible participant along with minority and female-owned businesses.

Regular BIDCOs can gain only $1 in matching funds for every $2 they contribute, rather than the dollar-for-dollar match available to specialty BIDCOS.

But the specialty BIDCO's limit of state matching funds would be $1 million, while regular BIDCOs can leverage up to $2.5 million in matching money. Either can raise additional private sector dollars.

"This location should be a big advantage to us," BIDCO business plan consultant John Chamberlain told the board, "because you're already seeing a lot of groups that cater to (technology-based) business."

Ashworth said the BIDCO, which could launch by late 2008, would look at deals statewide.

"We look at this as providing a service to (technology park clients) but we also look at it as being a good part of our portfolio, too," he said. "We're excited about it. We think it's another step along Louisiana's progression toward a knowledge-based economy."