Superior's Finance Committee approved a lease and management agreement for the Superior Business Center, but wants a policy developed to ensure past problems are avoided.
SBC Inc., a nonprofit governed by the Development Association board, oversaw the Superior Business Center until 2014, when SBC Inc. ended its management agreement with the city of Superior and Douglas County, which jointly owns the business incubation center at 1423 E. Eighth St.
Since terminating the management agreement, the facility has been managed by Jim Caesar of JCC Services under contract with the city and county. Caesar is director of the Development Association.
The purpose of SBC Inc. resuming management of the Superior Business Center is so the facility and business offerings can be expanded, Caesar said.
SBC Inc. is considering leasing the former Arrowhead Printing building to accommodate the expansion of IHS Doors, an anchor tenant in the Superior Business Center. The building would be used to accommodate some current tenants to allow IHS Doors to expand within the business center and expand incubation opportunities.
SBC Inc. would hold the lease on the Arrowhead Printing building, and would bare responsibility for the building, rather than the city and county, Caesar said.
Lease of the building would likely be eliminated, reducing available space for startups, if the city and county continue to manage the business center as they do now, said Jason Serck, Superior's economic development, port and planning director.
"It also allows for a little more flexibility and freedom for the Development Association to engage in a little bit more programming as well as engage in incubation services," Serck said.
The challenge now is the building is full and there is no additional space to incubate additional businesses, Caesar said.
"We have an anchor tenant that provides the majority of the revenue that wants to expand, and if they left, then we might as well close the whole thing down because we can't afford it, the city and county can't afford to run the building," Caesar said. "I've got a small manufacturer right now that needs space. We've brought it to three different property owners in Superior and it's too small for them. They only want about 800-900 square feet. We have a business that we can incubate; we don't have any space in the business center for it."
He said even when the center moves out tenants the space available is only conducive for office space, not light manufacturing, but leasing the Arrowhead Printing building would give them the needed space.
"We're going to let IHS Door expand ... or we're going to lock it up," Serck said. "Our plan B would be saying goodbye to some tenants to let IHS Door expand because of the jobs and the importance to the building."
Councilors on the committee questioned the reason SBC Inc. relinquished management of the facility back in 2014.
"It was financial issues," Serck said. He said the organizations would be under different leadership under the new agreement.
Caesar said he is confident that mistakes of the past won't be repeated.
Councilor Jack Sweeney said the city needs a policy to ensure that past mistakes aren't repeated.
"The lesson learned is we had a CEO ... who did things that shouldn't have been done so we have to have protections so this isn't done again," Sweeney said.
"We don't want to get in the same boat we were in," said Councilor Tylor Elm, who serves on the Development Association board.
Caesar recommended developing a policy to ensure that SBC Inc. finances remain separate from those of the Development Association, and include a reporting requirement like the city and county currently has with JCC Services.
JCC Services is required to report to the city and county on a quarterly basis.
Since JCC Services has taken over management of the facility, Serck said the Superior Business Center has gone from a balance of about $1,500 in its account to a balance now of roughly $300,000.
The agreement is still subject to review by the Douglas County Land and Development Committee, which meets Feb. 26, before it heads to the Douglas County Board for consideration March 21.
The Finance Committee's recommendation to approve the lease and management agreement will be considered March 5 by the City Council.