Agenda - 11-17-2015 - 7a - New Interlocal Agreement Between Orange County and the Town of Chapel Hill to Continue Funding the “Launch Chapel Hill” Small Business Incubator

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2 On April 3, 2012, the Board of County Commissioners received a summary of the potential economic development project during closed session. Following this report, the Board agreed to continue moving forward on this opportunity. In July 2012, Orange County prepared a draft Interlocal Agreement outlining the commitments of both parties. The final version of the Interlocal Agreement was signed by the County and Town in late 2012, establishing an initial 3 '/2 year term where both local governments would provide a 50/50 co-share of the lease cost for the facility. The County's cost, paid by Article 46 funds, was $10,000 per quarter, or $140,000 total. "Launch Chapel Hill" eventually took form at 321 West Rosemary Street by accepting the initial group of student tenants, and officially opening on May 1, 2013. In addition, UNC Chapel Hill's close mentoring support expanded into becoming a financial backer, and a conduit to attract private venture capital support for Launch. On November 4, 2015 the University of North Carolina at Chapel Hill was recognized among the top five best performing university business accelerators in North America, based on a 2015 benchmark study by UBI Global, a thought leader in performance analysis of business incubators around the world. A memorandum (see attachment 1) from Launch Program Manager Dina Rousset outlines the incubator's recent success stories, a list of current entrepreneur companies, and a brief survey of private funding raised by many of these start-up firms. This summary describes how Launch "brings in a cohort or class of 6 - 10 companies every six months (January & July). Bringing companies in as cohorts allows us to most effectively and efficiently serve their needs. We have traditionally received 3 applications per available space at Launch. Selection is made by a selection committee made up of the Entrepreneurs in Residence, Launch graduates, and university and town representatives. The number of companies we are able to accept is based on the size of the teams and the number of seats we have available. As each new class or cohort comes into the program we look to identify both those that are not performing and those that are growing and have secured funding to move out into space in the community." With the original 2012 Interlocal Agreement expiring on December 31, 2015, the small business incubator is now seeking a continuation of support from the County and Town. The proposal is to sign a 2-year lease (January 1, 2016 through December 31, 2017) to fund "Launch" at the current location, and allow the option for a third year (January 1, 2018 through December 31, 2018). This allows some flexibility if UNC, also a financial supporter of Launch, is able to bring together a larger combined space within two years. This proposal outlines a new 3-year economic development relationship where the County and Town continue backing the existing "Launch Chapel Hill" innovation center located at 321 West Rosemary Street in Chapel Hill. The County's total financial commitment to be paid from Article 46's entrepreneurial development category is $120,000 over the next 3 years. The draft Interlocal Agreement (see attachment 2) was prepared by the County Attorney and is similar to the small business incubator's original 2012 Interlocal Agreement. The new document has also been reviewed by the Town's Attorney and will be presented to the Chapel Hill Town Council for review on November 17, 2015. FINANCIAL IMPACT: The proposed new Interlocal Agreement requires Orange County to contribute $10,000 per quarter for three years, or, a total of $120,000 from January 1, 2016 through December 31, 2018. This is the same level of funding support, per quarter, as