Saturday, July 15, 2006
A recruiting drive is on to bring more businesses downtown.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- A new $5.5 million home for two rapidly expanding companies has officials hoping a cluster of technology companies can be created downtown.
Turning Technologies and Softek Software International are eager to move their combined 100 staff members into the new office. Environmental remediation and demolition of five vacant West Federal Street buildings will start soon, and groundbreaking for the new building is planned for September.
Downtown boosters already are planning an encore.
"Turning Technologies and Softek are the anchors," said Reid Dulberger, executive vice president of the Regional Chamber. "It starts with them, but it doesn't end with them."
The vision is for a cluster of downtown technology companies who feed off of one another's success by sharing ideas on how to grow a young company. They also would have easy access to the resources of Youngstown State University.
Dulberger said discussions have started on how to attract growing technology companies and entrepreneurs from Northeast Ohio and western Pennsylvania. The new building will show that downtown officials are serious, he said.
"This isn't based on speculation. It's based on the very real success of several firms already in the Youngstown Business Incubator," he said.
Plus, Turning Technologies and Softek probably aren't done growing themselves, he said.
"It's likely that this building will not be big enough for them, so we are talking about follow-on projects," he said.
The incubator provides free rent and services to fledging companies. The state, which provides most of its funding, has given it a mission of developing technology companies.
Flagships
Turning Technologies, which makes audience response systems, and Softek, which makes sales software for power sport retailers, have grown beyond needing free rent but have stayed in the incubator as paying tenants so they could be part of the incubator's new building.
"In the last five years, we've seen a lot of change in downtown, and we're proud to be part of it," said Mike Broderick, Turning Technologies president and co-founder.
He's one of those who think the changing face of downtown will include the headquarters of several technology companies.
More company owners will be attracted by the area's reasonable pay rates and low rents, he said. The operating expenses of Turning Technologies, for example, would be three times higher in Silicon Valley in California, he said.
Technology companies don't have to be in California to explode with growth, he said. He pointed to Smart Technologies, which has grown to 800 employees despite being located in Calgary, Canada. It makes interactive whiteboards.
"Can Youngstown have two, three or four companies with 1,000 employees? Yes. Can it have 10? It would be fun to try," he said.
The new building is the first step. Plans call for a 30,000-square-foot building, with Turning Technologies and Softek occupying about 80 percent of it.
Funds secured
So far, the incubator has cobbled together $4 million for the project, including $2.75 million from the state for construction, $750,000 from the state for demolition and $450,000 from the federal government.
Officials expect to learn next month whether their final funding request will come through -- between $1 million and $2 million from the federal Economic Development Administration.
Moving Turning Technologies and Softek to the new building will open up space for developing companies.
"We think we can fill that space pretty quickly," said Jim Cossler, incubator director.
He has been working with six early-stage companies even though the incubator doesn't have room for them. The incubator is helping them line up partners to test their products, find customers and arrange for professional services.
Developing such companies is vital to the area's economic health, Broderick said. They aren't providing service jobs that just redistribute money that's already in the Mahoning Valley; they are selling business-to-business software to clients that could be anywhere.
"These are global revenues that are coming into Youngstown," he said.
shilling@vindy.com