Agenda - 06-21-2016 - 5-k - Contract Amendment to the Existing Interlocal Agreement between Orange County and the Town of Chapel Hill for the “LAUNCH Chapel Hill” Small Business Incubator

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2 quarterly financial commitment (or $120,000 over 3 years under the Interlocal Agreement extending from January 1, 2016 to December 31, 2018) is paid from Article 46's entrepreneurial development category. The proposed facility expansion will increase the County's financial obligation by an additional $8,375 per quarter, or $33,500 annually for up to 3 years ($100,500 total over 36 months). This item has been included in the County Manager's FY2016-17 Recommended budget as an amendment. The current Interlocal Agreement (Attachment 2) is attached for review. The Chapel Hill Town Manager is presenting this contract proposal later this month to the Chapel Hill Town Council for review. Also, the UNC's Chancellor's Budget Committee officially informed LAUNCH on June 8, 2016 that it has agreed to provide funding at $33,500 per year. Timeline • As part of the Board of County Commissioners strategic planning in 2011 to utilize Article 46 funding to support key economic development priorities, the importance of growing and retaining entrepreneurial start-up talent in Orange County was included. The Board sought to reverse the historic trend where promising, growth-oriented start-up companies originating out of the University of North Carolina would eventually relocate to adjacent counties over time. Orange County contracted with UNC Chapel Hill's Department of City & Regional Planning department head, Dr. Emil Malizia, in 2011 & 2012, who conducted a regional real estate assessment of average lease costs, ideal space needs and working environments that start-up companies seek throughout their developmental life span. A key recommendation from the consultant report highlighted a severe shortage of competitively priced incubator facilities here in the County, and suggested the development of an innovation center to better retain entrepreneurial talent coming out of the University and from the local community. • In March 2012, available property located at 321 West Rosemary Street in Chapel Hill was identified as a potential incubator location, and the Town of Chapel Hill and Orange County began working collaboratively to support further development of an innovation center at this site. • 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 1/2 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, accepted the initial group of student tenants, and officially opened on May 1, 2013. In addition, UNC Chapel Hill's close mentoring support expanded and the University became a financial backer, and attracted private venture capital support by the Becker family. • 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.