City Council balks at giving money to business incubator : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis

GREENSBORO — City Council members like what the Nussbaum Center does for small businesses, but they aren’t convinced the city should pay $1.2 million in cash to renovate a building for the nonprofit.

Business leaders with the Nussbaum Center for Entrepreneurship made a public pitch Tuesday to the Greensboro City Council, asking the city to pay for the nonprofit to relocate to the Carolina Steel headquarters building.

Council members said they wanted to help the center find ways to make the renovation happen, but they did not commit to providing any city funding.

“You are a private business, and there is a business problem here,” Mayor Bill Knight said. “We want to help solve that problem.”

The nonprofit leases space at Revolution Mills Studios, which is rented to 66 businesses. The center will have to give up the space soon because the owners are remodeling and want to raise lease rates.

The Carolina Steel Building was donated for the Nussbaum Center’s new location. The building requires $4 million worth of renovation. Nussbaum leaders asked the city to kick in $1.2 million toward the effort.

Sam Funchess, Nussbaum’s president and CEO, told council members Tuesday night that the center has created more than 1,300 jobs with an average pay of $49,000.

Councilman Zack Matheny said if an out-of-state company promised those kinds of results for an incentive, “We would trip over ourselves and give them probably more than $1.2 million.

“What we’ve got here is a one-time ask — and, Sam, it better be a one-time ask — to invest in the citizens of Greensboro, to invest in creating jobs for the citizens of Greensboro,” Matheny said.

But other council members expressed concern about spending tax money on the project.

Councilman Danny Thompson noted that the Nussbaum Center, with a city-subsidized renovation, would compete against other landlords who might have office space to lease to small businesses.

Funchess said the Nussbaum Center encourages businesses to move out when they are ready but said the nonprofit provides a service by renting to those businesses when they are most at risk of defaulting on a lease.

“We take entrepreneurs and businesses when they are at their most fragile. We bear that burden,” he said.

Council members suggested other options for financing the renovation, including low-interest federal bonds or economic development bonds.

“It’s hard to ask taxpayers to take on a debt of $1.2 million when there is no money coming back,” Councilwoman Trudy Wade said.

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com

The FNP

April 21, 2010 - 1:05 am EDT

The city has never before given Nussbaum any money. However, Nussbaum has been loaned money by the city before, which has always been paid back in full. Wade's comment also does not take into account that Nussbaum is one of the best ways to create new jobs here in Greensboro. And has a 20-year long track record of success.

Nussbaum fostered several of the Greensboro success stories, including Lomax Construction, Kindermusik, Ashtae Products, Notion Music, and Mack & Mack. These companies were started right here in Greensboro, and because of Nussbaum, they currently employ hundreds of workers, have a huge positive effect on the local economy, and *pay taxes*.

casper

April 21, 2010 - 9:50 am EDT

If all these companies are such great success stories because of Nussbaum, why don't they just go get the money from all these great companies? After all, they would have never existed without them. This is private enterprise and if it were such a great idea, there would be no problem finding private money to back it. Corporate Welfare needs to stop, right along with private welfare.

taxed out

April 21, 2010 - 12:03 pm EDT

Mayor Knight, Dr. Wade, Mr. Thompson and Mr. Matheny all recognized Nussbaum’s long track record of success. Mayor Knight offered to sit down and help them find a creative solution to this business problem. Nussbaum should try some of the suggestions that were given to them before coming to the council to ask for $1.2 million in “cash”.

Does anyone know what is included in the $4 million dollar renovation? Maybe there are items that could be removed from the list. That would certainly reduce the amount of money needed for this renovation.

For those people that did not watch the meeting, it was mentioned that there was $70 million raised for the proposed pharmacy school. That money is still out there. Nussbaum should try to reach out to that donor(s) to secure funding.

The graduates of the Nussbaum program should be willing to give back to help the center progress. They are alumni and it is not an uncommon practice to go back to your alumni and ask for support.

Finally, the taxpayers should not be asked to fund this renovation. Nussbaum was given money when they first started up. Asking for money from the council (last resort) should be in the form of a loan and Nussbaum should pay it back with interest.

Why should the small business owners in Greensboro have their tax money allocated to fund this renovation? There is a business incubator at the corner of Elm and Lee. Do we need to give them money too? Greensboro cannot afford to write a check for $1.2 million in “cash” to “just one group”. There are many companies in Greensboro that provide many jobs for this area. I am sure any one of them could use $1.2 million to help their businesses succeed.

April 21, 2010 - 7:51 pm EDT

The Nussbaum Center has been given money. http://www.news-record.com/blog/55399/entry/88296
"The center got some start-up funds from the city, totaling $250,000, when it began 23 years ago."

commoncents01

April 21, 2010 - 9:43 pm EDT

$250,000 investment 23 years ago yields a return of over $4.0 Million in Tax Revenue year over year with over 1300 jobs...

Is there any investment by City Council in Greensboro by Greensboro Citizens that has matched that return on investment?

I am no fund manager but that makes commoncents to me...

April 22, 2010 - 4:51 am EDT

So you think it is okay to ask the taxpayers to give this company $1.2 million in CASH to renovate a building. Nussbaum is in the business of teaching entrepreneurs how to start and grow businesses. What are they "teaching" when they ask the Greensboro taxpayers to GIVE a private business money to buy furniture and setup reserve funds?

Look at this article http://www.news-record.com/blog/55399/entry/88296 "$150,000 for conference room furniture, $250,000 for office furniture, and $663,000 in reserve funds for building maintenance and operating capital, according information they handed out to council."

This makes no commoncents to me......

citywatcher

April 21, 2010 - 8:43 am EDT

Just goes to show how short sighted some of our city leaders are. They balk at giving money to the business incubator which will great jobs here and in the same week WInston-Salem city council voted to give money to their research park which is an incubator for jobs. If we are not careful Winston-Salem will surpass us and take the title of being 3rd largest city in the state.

Beachwalk

April 21, 2010 - 4:28 pm EDT

Its doubtful the Nussbaum Center will stop doing what they are doing now. And it is doubtful they will go anywhere else, since Nussbaum was a business leader and mayor of Greensboro. They are tied very tightly to this community. No need to give them the money. Mayor Knight did the right thing by suggesting to assist with finding other ways to assist them.

April 21, 2010 - 5:13 pm EDT

I wonder if these comments are based off of facts or just opinion.

If you watched the meeting it was said that they have to leave because the owner of Revolution Mills has plans for that building and he has a $80 million project with tax credits. For those with knowledge of tax credits, the project must be completed in time so that the tax credits can be applied. The project can not be completed in the Nussbaum center is in the building.

Sam said in the meeting that Revolution Mills believes they do not have a lease which basically means they are operating month to month.

Lets draw the dots.

$80 Million Project + Must Be Done Before Tax Credits Expire + Nussbaum Center in the Way + Nussbaum Center has no lease = Nussbaum Out on It's Tail

It is hard to be an incubator if you have incubation...

April 21, 2010 - 8:29 pm EDT

They have $2.8 million of the $4 million for the renovations. I'm sure $2.8 million will rent some very nice office space somewhere in Greensboro. I never said they were not going to have to leave their present location. I very simply said They won't leave Greensboro and they won't stop assisting small business. They have too many ties to this location. And besides why does the money have to come from Greensboro taxpayers? As Mayor Knight said, he will assist in helping them find other assistance.
Geez, try reading what people actually write.

April 21, 2010 - 9:38 pm EDT

They do not have $2.8. If you read the story, they have $200k. The $2 Million is in federal grant money that is MATCHING. By matching it means that when they raise $2 Million, they will receive an additional $2 Million.

buzzman

April 21, 2010 - 8:49 am EDT

Last sentence under CITY COUNCIL INSIDER should read: The city manager and city attorney confirmed there had not been a settlement OFFER.
It's really unfortunate that these young students are being pushed by certain special interest groups to make accusations that are completely unfounded. It would be nice if the chain of hatred from folks like Cardes Brown, Nelson Johnson et al could be broken before the new generation picks up the racism torch.

Nussbaum Center is an important part of Greensboro. Asking the city to help them get into new facilities is certainly no different than some company coming to Greensboro to ask for an incentive to relocate here. I agree that there may be some other ways for them to obtain the funding, but the city should help them if other means are not available.

itsallaboutyou

April 21, 2010 - 8:59 am EDT

We really need to get out of the business of subsidizing any private business, and that includes American Express. We need leadership in the country to stop the practice of extorting money out of local municipalities by private businesses, however the Nussbaum center is focused on helping people start businesses that stay here in Greensboro. By contributing to this effort, this is one way government can actually help create jobs. This is something the city should support.

jebbrooks

April 21, 2010 - 9:04 am EDT

I have no connection to Nussbaum, but it's easy to see that local businesses and entrepreneurs will grow our economy. Not corporate relocations. City leaders who don't believe in supporting home-grown businesses are short-sighted. Thanks to Mr. Matheny for his leadership on this issue.

April 21, 2010 - 4:30 pm EDT

The question is not do we give money to the Nussbaum Center OR do we give it to some corporation for relocation. The question is do we give the money at all. It is not an either/or situation.

goodtimes

April 21, 2010 - 9:18 am EDT

Let's see- 1300 hundred jobs created with an average income of 49,000, sounds good! Maybe the center should consider a fund drive of current and past businesses. They need 1.2 million; so 1300 hundred people could contribute around $925 over the year or about $2.50 a day to keep the ball rolling. May be tax deductible too! Good Luck!

Bosco

April 21, 2010 - 11:08 am EDT

Has anyone questioned the $4 million renovation cost or is this figure just taken as gospel.

April 21, 2010 - 4:41 pm EDT

The Nussbaum Center is asking for $1.2 million of the $4 million to renovate. That means they must have or at least have access to $2.8 million. As many office buildings as there are sitting empty in Greensboro, surely they can find suitable office space with the $2.8 million the now have.

April 21, 2010 - 5:09 pm EDT

As can be seen in this News & Record article: http://www.news-record.com/content/2010/02/15/article/golden_leaf_gives_.... They dont have $2.8 cash. They have $200k in cash and a matching federal grant for $2 million. So, it seems to me they have been very resourceful to get the money they have none.

April 21, 2010 - 8:40 pm EDT

Maybe they need to be a little more resourceful and find an office space that doesn't need $4 million in renovations. There is plenty of empty office space in Greensboro. You act as if this space and using taxpayer money are their ONLY options. That's BS.

DRA922

April 21, 2010 - 1:25 pm EDT

The City Council needs to realize they can't have it both ways -- you can't have an economy that grows and creates jobs and a do-nothing City Council that's too timid to lead, too timid to make a commitment and too timid to invest in the city's success. $1.2 million for the Nussbaum Center is a great investment for Greensboro.

April 21, 2010 - 4:51 pm EDT

The citizen's of Greensboro and some of the liberal politicians need to realize they can't have it both ways. You can't keep spending money you don't have and not expect it to bite you in the butt in the future.
I don't read anywhere in this article that the Nussbaum Center will cease to exsist if they don't get Greensboro taxpayer money. Knight has said he will help to seek other ways to assist them. As usual, Zack Matheny goes off, half cocked and wants to throw money away, that doesn't need to be spent.

April 21, 2010 - 5:15 pm EDT

They will cease to exist if they dont have a building...

April 21, 2010 - 8:31 pm EDT

And ONLY taxpayers can provide this for them. Give me a break.

newtogso

April 21, 2010 - 3:22 pm EDT

There is no incubator at the corner of Lee and Elm. As a former tenant, it is good cheap office space but provides none of the services an incubator does. While it is worthwhile to evaluate the cost of renovation, the City Council, upon doing so, should step up to the plate. They just held a small business summit asking how they could help small businesses. This would be one way - not to mention that this new location is on S. Elm-Eugene Street in a part of town that could use some new life and signs of success. Evaluate, consider, fund.

VoiceOf Reason

April 21, 2010 - 3:58 pm EDT

I watched the city council meeting last night and I would like to further answer some of the questions that were raised. Trudy Wade said, "It’s hard to ask taxpayers to take on a debt of $1.2 million when there is no money coming back." This statement is simply not true. The money comes back immediately to individuals and businesses that will be hired to renovate both the current space of the Nussbaum Center as well as the old Carolina Steel Building. The jobs that will come from these projects will affect thousands of people and put money into the construction industry that is struggling the most. Then, more money will stem from tax dollars resulting from all of this activity. This is only the beginning. The Nussbaum Center will create thousands of jobs for years to come that will directly affect the citizens of Greensboro and their families.

The Nussbaum Center is not competing at all with commercial office space buildings, but in fact, they are working with them. The Nussbaum Center prepares entrepreneurs to fill those spaces within three years of incubation by taking a risky businesses who would not otherwise be applicable for commercial office spaces. A majority of these businesses turn out to be viable with the support of the Nussbaum Center and they graduate to other commercial office spaces. Also, within three years, the cost of rent to associates is escalated to market rate or above which encourages them to move out when their rate jumps to that level. This keeps a constant flow of businesses starting up in the Nussbaum Center, growing to a successful company, and moving out to make room for more start-ups to go through the incubator cycle.

Lastly, the timing of this project is why the funding is so vital to the economic development of Greensboro and it needs to be passed. The landlord, Revolution Mill Studios, has a chance to convert the current space of the Nussbaum Center from class C into class A office space but they need to do it this year. This is why a low-interest federal bond would not work because it would take a minimum of six months before it is approved and the renovation of the Carolina Steel building would not start in time to be conducive for both projects. The Revolution Mill project and the re-location of the Nussbaum Center to the old Carolina Steel building could have a huge impact on the economic turnaround that Greensboro is starting to see. It should not even be a question to fund this project when it will immediately result in two major economic development projects for the city of Greensboro this year.

April 21, 2010 - 4:36 pm EDT

What kind of example does the Nussbaum Center set, if it can't survive without taxpayer money? Personally I think this is more of a "want" than a "need" for the Nussbaum Center.

April 21, 2010 - 5:16 pm EDT

We must operate from facts, not thoughts or feelings.

The example that the Nussbaum Center sets is that we all need assistance for sometime. For the last 23 years, the Nussbaum Center has helped Entrepreneurs and Greensboro. So, why not return the favor? We aren't talking about a brand new incubator without a track record. This center has a track record of providing assistance and building a tax base.

April 21, 2010 - 8:36 pm EDT

If they can't be self-sufficient, they should go out of business.

"we all need assistance for sometime"
I am self-employed. I don't expect or ask anyone to prop me up.
.

April 21, 2010 - 5:41 pm EDT

Take a look at this article in the N&R. Nussbaum reno numbers http://www.news-record.com/blog/55399/entry/88296
"So what will that $4 million go toward? It includes $150,000 for conference room furniture, $250,000 for office furniture, and $663,000 in reserve funds for building maintenance and operating capital, according information they handed out to council."

Is this how we want $1.2 million in "cash" of our taxpayer dollars spent? They need to find their funding just like every other small or large business in Greensboro. This is the real world and Greensboro does not have the money to hand out "cash" to one "special group".

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