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HomeMy WebLinkAbout1934RESOLUTION NO. ____ j ___ {J:3=-' tf--'--. _ A RESOLUTION of the City Council of the City of Kent, Washington, in support of the City's 2016 application to the Port of Seattle's Economic Development Partnership Program. RECITALS A.The Port of Seattle has created a cooperative economic development program to help fund local development issues, the "Port of Seattle Economic Development Partnership Program." The program is designed to support local projects that create jobs, foster business growth, and support the Port's business interests. B.Under the grant proposal, the city will seek grant funding in the amount of $65,000 to set up a commercial kitchen with the Food Innovation Network (FIN) and their non-profit member Project Feast. The Food Innovation Network includes organizations, educational institutions, local government, and community members working to create pathways for health, wealth, and success through food system revitalization. FIN's responsibility will be to set up the commercial kitchen so that members of the network can pilot a food business incubator in Kent that will offer 1 Port of Seattle's Economic Development Partnership Programt Application Resolution cross-organizational resources and commercial kitchen space to underserved entrepreneurs. C.The city of Kent considers it in the best public interest to complete the projects described in the application(s) as it represents an alignment of the City's strategic vision and the Port of Seattle's Century Agenda. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: RESOLUTION SECTION 1. -The Mayor is authorized to submit all materials necessary to submit this grant application and to make a formal cooperative agreement with the Port of Seattle to receive the funding, if awarded. The organization name for the grant application is the city of Kent, a Washington municipal corporation. The project name of this application is the "Port of Seattle Economic Development Partnership Program, 2016 Funding Application." A substantially complete draft of the city's application is attached as Exhibit A. SECTION 2. -Any grant assistance received will be used for direct costs associated with implementation of the project as described in the city's application to the Port of Seattle. SECTION 3. -The city expects to receive the required matching share of project funding for this project from existing contract work with the Green River College's Small Business Development Center to support 2 Port of Seattle's Economic Development Partnership Programt Application Resolution local and small businesses. The project's estimated budget is attached as Exhibit B. SECTION 4. -The city acknowledges that the Port of Seattle will issue grant funds, if awarded, on a reimbursement basis. The city understands reimbursement basis means that the city may only request reimbursement from the Port of Seattle's Economic Development Office after the city incurs and pays eligible and allowable costs. SECTION 5. -Severabilitv. If any one or more section, subsection, or sentence of this resolution is held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this resolution and the same shall remain in full force and effect. SECTION 6. -Corrections bv Citv Clerk. Upon approval of the city attorney, the city clerk is authorized to make necessary corrections to this resolution, including the correction of clerical errors; resolution, section, or subsection numbering; or references to other local, state, or federal laws, codes, rules, or regulations. SECTION 7. -Effective Date. This resolution shall take effect immediately upon its passage. PASSED at a regular open public meeting by the City Council of the City of Kent, Washington, this IJI!: day of ���,16,L-'--' 2016. CONCURRED in by the Mayor of the City of Kent this ___ day of Cve:J.ohe h,,,,f 2 Q 16, 3 Port of Seattle's Economic Development Partnership Programt Application Resolution ATTEST: SUE HANSON, INTERIM CITY CLERK APPROVED AS TO FORM: T M BRUBAKER, CITY ATTORNEY 4 Port of Seattle's Economic Development Partnership Programt Application Resolution EXHIBIT A PortAIIIIIIIBI .. of Seattle" Port of Seattle Century Agenda 2016 Economic Development Partnership Program City Application City: City of Kent, WA Federal Tax Number: 91-6001254 Contact: William Ellis Telephone: 253-856-5707 Fax: 253-856-6412 Email: wellis@kentwa.gov Address: 400 W. Gowe St City, State, Zip: Kent, WA Website: www.kentwa.gov Declaration: I HEREBY CERTIFY THAT THE INFORMATION GIVEN IN THIS APPLICATION TO THE PORT OF SEATTLE IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. Signature of Responsible Official: Print or Type Name and Title: Date: Page 1 of7 aaa _______ a -as�----·---- September 1 st 2016 Submit application via email to: application@portseattle.org 2016 Application for Funding • Port of Seattle ED Partnership Program Port of Seattle Economic D�tHe1f3Jp�ent Partnership Program 2016 Funding Application The Port of Seattle (POS) is implementing a cooperative economic development program to help fund local economic development initiatives across King County. The program is designed to support City specific economic development projects that create jobs, foster business growth, and support the Port's business interests*. Project Description and Budget 1.Summarize the project(s) or initiative(s) you plan to support through the economic development partnership program. Please attach resolution of support from local jurisdiction. This unique proposal combines traditional business support services with innovative real world experience and access to commercial kitchen space through City of Kent contracting to the Food Innovation Network (FIN). FIN see entrepreneurship as a pathway and proposes to work with those who are still in the idea development stage as well as with those who have a proven product and are ready to launch their business. For ease, FIN refers to these groups as pre-incubation and incubation. This approach meets individuals where they are and produces a pipeline of entrepreneurs. As a pilot project, this initiative brings together various service providers in a way that hasn't been done before. Throughout the year, we will gain experience and knowledge on how to combine services even more effectively. Further, we aim to Increase revenue from the cafe over the next 3-5 years to cover pre-incubation expenses. In addition to business Incubation, this proposal Includes expanding the marketplace for food businesses especially those that offer international products and cuisines. The 4-pronged approach to supporting Kent's business development is as follows: I.Incubation for entrepreneurs with proven product and ready to establish business formally FIN will provide commercial kitchen access at reduced cost for 6-1 O entrepreneurs ready to launch their businesses. In addition to a sliding scale rental fee, entrepreneurs will receive a small grant to cover license and permit costs. Entrepreneurs agree to work with a business coach, develop a business plan and start a business checking and savings account, and meet monthly as a cohort for peer learning and support. FIN member Project Feast will provide 50 hours per entrepreneur for commercial kitchen orientation, mentorship and weekly workshops on topics like recipe development, networking with successful food entrepreneurs, etc. We envision 5-7 entrepreneurs receiving consultation and workshops from Project Feast in 2017. II.Pre-incubation for entrepreneur in business idea development stage Green River will refer 1-2 entrepreneurs per cohort for a total of 3-4 in 2017 to the Project Feast apprenticeship program. These entrepreneurs are identified as those who would greatly benefit from commercial kitchen training and hands-on experience prior to opening Page 2of7 2016 Application for Funding • Port of Seattle ED Partnership Program EXHI,BIT A Port of Seattle Economic Development Partnership Program 2016 Funding Application food industry skills among residents in South King County (see the FIN Food Business Incubator Feasibility Study, completed in 2015 and submitted separately). The pilot project is a critical step to building the necessary programming, infrastructure and resource coordination to launch successful food businesses. The pilot project will catalyze Fl N's effort to boost the local food economy and broader food system revitalization. The Port of Seattle funds will be leveraged with the funds from Communities of Opportunity and Seattle Foundation. FIN member Project Feast will also contribute matched funds from Harvest Foundation among others towards this proposal. In addition, the funds will improve and build upon existing business development services to better serve the community. Port of Seattle Economic �m«rpMent Partnership Program 2016 Funding Application Create new job Develop food As refugees and Over five opportunities for Kent businesses with the Immigrants start years as and South King County ability to "scale" and businesses today, newer businesses residents employ more residents waves of refugees and are launched immigrants will gain and access to jobs within established their own communities 3.Explain how your project benefits the Port and ties to POS business interests? The project will benefit the Port by helping both new and existing businesses achieve sustainable growth in revenue and jobs. There Is vast potential represented by the growing foreign-born population in our region to develop value-added food products (either traditional or innovative) for export to foreign markets from Washington state agriculture. Moreover, the Seattle metro, and South King County in particular, are home to a vast array of authentic eateries representing the globe. The ability to taste flavors from around the world just a few short miles from Sea-Tac airport bolsters our region as a leading tourism destination. Though South King County has numerous home based food businesses--many of them owned and operated by immigrants and refugees--there is a dearth of commercial kitchens to professionally scale up and graduate these into "brick and mortar" locations. The Food Innovation Network has recognized and documented this need, and is addressing the problems and opportunities from multiple angles. Their Initial focus is on small business incubation and piloting a kitchen within Kent to serve South King County. The FIN pilot kitchen incubator project also help Implement the City of Kent's 2014 Economic Development Strategy and its goals to: 1.Promote the image of Kent (action steps 1.1.2 Develop a City-Wide Brand, and 1.1.3 Include Diverse Cultural Identities); a)the City also adopted in 2014 the tagline "Bringing the World Home" with the intent of utilizing its immense diversity and global ties of its resident population to economic advantage. 2.Strengthen & Enhance Competitivenses of Kent Commercial Centers; (action step 2.5.6Highlight Cultural Diversity) 3.Business Climate: Highlight Support for Local Business (action step 3.1.3) *Port business interests tie closely to the health of aviation, maritime/logistics, manufacturing and construction/trades clusters. Tourism Is another Important industry to the Port. Page 5 of7 2016 Application for Funding • Port of Seattle ED Partnership Program Port of Seattle Economic D�XJiJFJp�ent Partnership Program 2016 Funding Application 4.Identify project budget and match funds using the table below: Example: Staffing Project Feast pre-incubation $28,800 $10,000 services Example: Consultants $9,000 $23,000 (City of Project Feast consultation to Kent SBDC entrepreneurs being incubated contract with GRC SBDC Consultation (City of GRC) Kent Contract) FIN project management and $17,400 coordination of cohort activities Example: Goods and Services Operation of a /ow-cost $10,500 $9,400 commercial kitchen access for entrepreneurs (rent, utilities, maintenance) Program Development $4,000 Kitchen Equipment and Supplies $6,000 Entrepreneur startup support for $5,000 $2,500 licensing and permits Service provider coordination $6,900 $8,100 and entrepreneur support Example: Marketing Market Expansion (includes pop-$4,800 $2,500 up dining) $38,800 $32,000 $17,400 $19,900 $4,000 $6,000 $7,500 $15,000 $7,300 5.If you plan to use consultants or contractors to complete all or part of the project, please identify the firm or type of firm you plan to hire for this project. The City of Kent plans to utilize its existing contract with Green River College's Small Business Development as well as create a new contract with the Food Innovation Network to complete this project. Since 2010, FIN has confirmed community interest in starting food businesses and building Page 6of7 2016 Application for Funding • Port of Seattle ED Partnership Program Port of Seattle Economic ��j)W)ent Partnership Program 2016 Funding Application their own small food business as they may not have had prior Industry experience. These entrepreneurs will receive 320+ hours of industry training and mentorship from Project Feast's Executive Chef and staff. Ill. New retail business in Kent downtown As a social enterprise, Project Feast will open a cafe staffed by its apprentices that will serve international food for lunch in historic downtown Kent. In addition, Project Feast wlll continue its successful catering program that serves food from the Middle East, East Africa and South East Asia while employing refugee and Immigrant graduates. Project Feast's social enterprise food services will bring sales tax to the City of Kent. Project Feast and other FIN members will support entrepreneurs to search for retail channels for their products. Some of the products will be sold directly at the cafe. Retail sales from these fledgling food businesses will also result in sales tax revenue for Kent. IV.Increase traffic to Kent downtown Project Feast proposes to hold 8-10 pop-up dining events in 2017. These dining events will be reflective of the diverse cuisines of the apprentices and entrepreneurs that FIN serves. Each dining event will afford the participants opportunities to plan a menu, write recipes, manage inventory, cook and serve food to an audience. These events will be marketed to residents of Seattle and South King County attracting many to discover downtown Kent. 2.Outline project goals, related strategies, desired outcomes and timelines using the table below (attach additional information if necessary): Support Local Business 6-1 0 entrepreneurs 9-14 entrepreneurs From Q1 -Q4 Development and served for incubation served in Kent in 2017 Growth 3-4 entrepreneurs 2-3 new businesses served for pre-launched in Kent incubation Tie the FIN pilot kitchen Potential new clients for 04 2016 and cafe to tbusiness In house or Virtual development services Incubator services including GRC Small Business Development Coordination and Launch by 01 Center (also located collaboration among 2017 downtown Kent), Ventures, Center for service providers that Inclusive support shared client Entrepreneurship and base StartZone Launch by 02 New Retail Business: Increased sales tax 2017 Launch new social revenue for Kent ---·-"-------, -·-· ------------- Page 3 of7 2016 Application for Funding • Port of Seattle ED Partnership Program Port of Seattle Economic D��}lfrdj!lhent Partnership Program 2016 Funding Application Expand Kent's marketing efforts and increase its tourism assets Build on Kent's assets, such as the historic downtown and central business district, the second oldest incorporated city In King County Page 4 of 7 enterprise cafe in downtown area that sells international food. In addition, Project Feast will move its catering business to Kent and grow It Increased Traffic: Introduce regular pop-up dining events in downtown Kent Recruit foreign-born residents of Kent interested in developing food business and provide training Advertise "pop-up dining" with menus ranging from Iraq to Burma on offer at the commercial kitchen and cafe on http://visitkent.com/ and include in Kent Lodging Tax Committee's marketing efforts Promote downtown Kent as a destination for tasting authentically prepared dishes sourced from global cuisines 250 new customers coming to downtown Kent for the evening "pop-up dinners" Expose individuals to business skills methods and professional kitchen practices Deepen Kent's brand of "Bringing the World Home" Kent gets known for place to go to for interesting cuisines and innovative cafe Increased foot traffic in the historic downtown; development of an unique attraction 02 2017 (after kitchen is established and first cohort is firmly in place) Increased foot traffic in the historic downtown; development of an unique attraction 2016 Application for Funding• Port of Seattle ED Partnership Program EXHIBIT A FOOD INNOVATION NETWORK PILOT KITCHEN PROJECT 2017 PROJECT BUDGET REVENUE Earned Income -Cafe & Catering Communities of Opportunity Seattle Foundation Harvest Foundation US Bank Tuialip Tribes Charitable Foundation Charis Foundation Port of Seattle TOTAL REVENUE EXPENSES Personnel 0.5 FTE Program Manager 0.5 FTE Executive Chef VISTA Stipend Rent/Utilities Repairs/Maintenance Contracted Services (Trainings by Partner Agencies) Program Supplies Apprentice Stipends (15 @ $2,000) Entrepreneur Startup Support (10@ $750) Program Administration TOTAL EXPENSES BUDGET EXCESS OR (DEFICIT) Capital funds grant from Seattle Foundation Status Anticipated Committed Committed Committed Pending Pending Pending Planned *Seattle Foundation funds can be used for operating if needed. 2017 28,000 2,500 2,500 10,000 10,000 10,000 10,000 65,000 138,000 20,000 25,000 1,200 10,500 9,400 15,000 2,000 30,000 7,500 17,400 138,000 42500 19,900 Category Low-cost commercial kitchen access for entrepreneurs Entrepreneur startup support for licensing and permits Project Feast consultation to entrepreneurs already being incubated Project Feast pre-incubation services Project Feast pop-up dining coordination Service provider coordination and entrepreneur support FIN project management and coordination of cohort activities Port of Seattle Funds 10500 5000 9000 28800 4800 6900 0 65000 Matching Funds 9400 2500 8100 17400 37400 Total Funds 19900 7500 9000 28800 4800 15000 17400 102400 Notes Rent/utilities and repair/maintenance $750/ entrepreneur Chef+ Kitchen Manager Chef+ Kitchen Manager+ Program Coordinator+ suppfies Chef+ Kitchen Manager EXHIBIT A FOOD BUSINESS INCUBATOR PHASE I FEASIBILITY STUDY: ENTREPRENEURIAL ASSESSMENT AND MARKET STUDY NOVEMBER 2015 UPDATEDJANUARY2016 PREPARED FOR FOOD INNOVATION NETWORK OF SEATAC AND TUKWILA PREPARED BY DAWN MEADER MCCAUSLAND CONSULTING EXHIBIT A FOOD INNOVATION NETWORK The SeaTac-Tukwila Food Innovation Network {FIN) is comprised of community organizations, local governments, educational institutions and business partners who meet regularly to advance a common food and economic opportunity agenda. Fl N's aim is to facilitate the development of a business incubator/ training facility in SeaTac or Tukwila. PROJECT GOAL The primary goal for Fl N's incubator project is to Increase household Income through net business income as a means of improving the health and well-being of low and moderate income residents In SeaTac and Tukwila. A kitchen incubator facility would facilitate this by lowering barriers to entrepreneurship and supporting business profitability and growth. STUDY OBJECTIVE The primary objective of this Phase I Feasibility study is to understand entrepreneur needs and assess demand for an Incubator. The Insights from this assessment will be used to refine the project concept for a Phase II analysis of financial feasibility. ENTREPRENEUR INSIGHTS Based on insights from community outreach, most of the entrepreneurs interested in participating In the incubation program are likely to be women with families who come from diverse backgrounds and live In low-income households. A large share are Immigrant and/or minority entrepreneurs and roughly half prefer to communicate In a language other than English. The majority of interested entrepreneurs have previous experience in the food industry and are Interested In growing a full-time food business. They make a variety of ethnic and specialty food products and are predominantly Interested In selling baked goods, catered meals or packaged foods directly to local customers. These entrepreneurs are motivated by a passion for food, market opportunities, and an interest in improving their financial circumstances. Many also see demand in their communities and In the region for diverse food products and have an Interest in bringing people together through food. They bring many assets to their businesses, including unique food products, connections with potential customers, and a strong work ethic. EN TREPRENEUR CHALLENGES Entrepreneurs with limited financial resources, especially those with language barriers and undocumented Immigration status, face many challenges in starting a business. They report that financial hurdles, Including a lack of startup capital and lack of credit, are their greatest concerns. They also struggle to find affordable kitchen space and report that commercial kitchen rentals are too expensive. Many are finding it difficult to navigate the licensing, permitting and tax requirements needed to operate a formal business. And some are needing to gain business management skills, English language skills, and work experience before they can start their businesses. 6 EXHIBIT A SERVICES AND SUPPORTS Entrepreneurs who participated in this study are seeking help understanding how to start a business. They are Interested in classes, one-on-one assistance and mentorship opportunities. Getting help accessing capital, learning to write a business plan, and applying for permits and licenses were their top assistance requests. Food Industry guidance In areas such as product development, marketing, food safety and culinary skills, was also important to them. There are a number of service providers offering pre-incubation/business planning, workforce training and financial services in the region. However, clients appear to have barriers accessing many of these services and more research should be done to understand these barriers. FINs outreach to the community and collaborative engagement with service providers appears to be strengthening local service offerings and coordination. To address client needs and define the incubator's role In the entrepreneurial ecosystem, FIN should seek to evaluate barriers, Improve service coordination, and expand food Industry-specific technical assistance and market opportunities. MARKET DEMAND Market conditions suggest there is sufficient demand to support the development of a medium sized shared kitchen Incubator facility In the South l(lng County area. Overall, King County has seen growth in the food sector In recent years with an expansion of food processing, food service establishments, mobile food units, and shared commercial kitchen rentals. National food industry trends are favorable to the continued growth of small, local and International food businesses. Market rate demand is projected to be moderate based upon the level of entrepreneurial activity and the limited supply of shared commercial kitchen space In South King County. A high level of interest in food entrepreneurship among low income, Immigrant and refugee residents in the area indicates there is considerable need for subsidized rate kitchen space. Local residents with llmited assets face high barriers to starting and growing businesses and would benefit from the access to capital, education, suppor t and market opportunities an incubator can provide. Given the hurdles these clients face, the overall program size is anticipated to be moderate and It wlll likely take time for many entrepreneurs to launch their businesses and for the program to be fully utilized. Program financial sustainability will require a combination of revenue streams and funding supports given the high support needs and lower rental rates expected. RECOMMENDATIONS FINs investment in client outreach, stakeholder development, and collaborative planning provides a strong foundation for an incubation program to be successful. Significant groundwork and partnership development has already been completed in support of an Incubator. Future stakeholder development should aim to deepen relationships with the business community and grow food industry participation in the FIN network. With the Insights from this study, FIN can now undertake the next phase of business model development and facility planning. In this planning, FIN should focus on exploring potential partnerships and identifying the leadership and management team for the project. This will help clarify the project vision and refine the facility requirements so financial feasibility can be evaluated. With this planning, FIN ls expected to be in a strong position to cultivate development partnerships and capital funding to launch a program. 7 EXHIBIT A Food Innovation Network (FIN) of SeaTac and Tukwila is a community initiative that seeks to improve health outcomes and economic opportunities through culturally-appropriate, community-based solutions. The goal of the Food Innovation Network (FIN) is "to address health and Income disparities through facilitating growth In the local food sector by creating jobs and entrepreneurship opportunities in the SeaTac and Tukwila communltles."1 The Network was formed after member organizations became aware of a strong community Interest in food entrepreneurship and food Industry employment among low-income, Immigrant and/or refugee residents in SeaTac and Tukwila. In response to this interest, the network was organized in 2013 with a vision of developing a Food Innovation District and food business incubator In SeaTac or Tukwila. Its aim is to "create a business cluster environment that spurs local and regional food system development and economic self-sufficiency while Improving access to fresh, local food in a community with clear Interest and deep cultural and culinary assets to contrlbute."2 Today the SeaTac-Tukwila Food Innovation Network (FIN) is comprised of community organizations, local governments, educational institutions and business partners who meet regularly to advance a common food and economic opportunity agenda. As a network, FIN focuses on engagement and collaboration with the community and its member organizations. Organizations currently participating In FIN include: •Global to Local (Network Convener)•City of SeaTac•Express Credit Union•Forterra•Highline College-StartZone and Urban Agriculture Program•Public Health -Seattle and King County 11 Lifelong Aids Alliance-Chicken Soup Brigade•Lutheran Community Services-Angle Lake Family Resource Center•Pinchot University-Center for Inclusive Entrepreneurship•Project Feast•Swedish Health Services•Ventures (formerly Washington CASH)•YMCA of Greater Seattle FIN ls not Incorporated but currently operates through a steering committee and working group structure under the sponsorship of a network convener, Global to Local. Its collective efforts are supported by the help of a few staff and consultants, with funding from several local foundations, including the Seattle Foundation's Communities of Opportunity Initiative. In addition to this support, Fl N's work is strengthened by its engagement with the local community through a network of Community Food Advocates, organized by Global to Local. The work of this diverse outreach team has contributed to FIN's awareness of community needs and enhanced Its ability to conduct outreach In culturally-inclusive ways. For this study, the Community Food Advocates and member service providers played a central role in gathering surveys and focus group participants for engagement efforts. The Community Food Advocates, Steering Committee Members and Working Group Members that contributed to this study are listed In Appendix I. 1 Food Innovation Network, Food Innovation Network website. (11/2015).2 Food Innovation Network, Food Innovation Network website. 8 EXHIBIT A PROJECT VISION· A primary aim of Fl N's work Is to facilitate the development of a business incubator/ training facility In SeaTac or Tukwila. This multi-purpose facility is envisioned as a shared commercial kitchen that offers production and classroom space for small food businesses and workforce training programs. Programs and support services, delivered In culturally and linguistically Inclusive ways, are seen as integral parts of the Incubator. Additionally, FIN members would like the facility to support health promotion and community building activities through events such as healthy cooking classes and community dinners. The project's vision is rooted In a Food Innovation District (FID) approach to food systems development. Using a cluster strategy, FIDs emphasize the co-location of several food and community resources that together support community revitalization and food system development. Michigan State University's Center for Regional Food Systems study, Food Innovation Districts: An Economic Gardening Tool, defines a FID as "a geographic concentration of food-oriented businesses, services, and community activities that local governments support through planning and economic development initiatives In order to promote a positive business environment, spur regional food system development, and increase access to local food." Some of the components of Fl N's FID vision have included the development of a retail marketplace, a co-packing facility, a community/child care center, and an urban farm/community garden. While these components remain aspirations for the group, the immediate project focus has narrowed to developing a kitchen Incubator facility as a first step toward this larger vision. A kitchen incubator would capitalize on the community's strong Interest In entrepreneurship and serve as a base of operations for other Food Innovation efforts. FOOD BUSINESS INCUBATION In general, food business incubators, also known as kitchen incubators, are shared kitchen facilities that provide affordable production and storage space along with supportive business services for food entrepreneurs. Like private shared commercial kitchens, kitchen Incubators allow small food businesses, such as caterers, bakers, food truck operators and small-scale food processors, to rent kitchen time on a part-time basis, thus reducing the investment and risks involved in launching a food business. Incubators are distinguished from shared kitchens by the business support services they offer client companies. Through individualized support and market connections, Incubators aim to Improve the success rate of new businesses and accelerate their growth into Job creating enterprises. The International Business Innovation Association, the Industry association for incubation programs, describes the role of incubators this way: "Business Incubators nurture the development of entrepreneurial companies, helping them survive and grow during the start-up period, when they are most vulnerable. These programs provide their client companies with business support services and resources tailored to young firms. The most common goals of Incubation programs are creating Jobs In a community, enhancing a community's entrepreneur/a/ cl/mate, retaining businesses in a community, building or accelerating growth In a local Industry, and diversifying local economies. Business incubation, particularly food business Incubation, Is a young and evolving Industry. Incubators are part of a wide spectrum of entrepreneurial supports, such as accelerators, coworking spaces, EXHIBIT A university labs and commercialization programs, small business development centers, and social enterprises, which contribute to the innovation environment in a region, . STAKEHOLDER GOALS The primary goal for Fl N's Incubator project is to increase household income through net business income as a means of improving the health and well-being of residents in SeaTac and Tukwila. A kitchen incubator facility would facilitate this by lowering barriers to entrepreneurship and supporting business profitability and growth. The Incubator project Is part of a larger community well-being strategy that also aims to increase access to healthy, local foods and Improve health outcomes in the community. The Results Based Accountability Framework FIN developed for its work Identifies three key community benefit outcomes: 1.All people thrive economically. 2.In FIN's target geography, there are durable social, economic and political systems and structures, formal and Informal, through which people benefit from and contribute to a sense of community. 3, All people are physically and mentally healthy,3 To further clarify the community goals of the project for this study, the consultant met with the Steering Committee to discuss the desired community outcomes. The project goals are still being refined In response to the needs and opportunities in the community but In general, the key goals for the project are to: 1.Increase the number of locally-owned food establishments 2.Build a food business cluster (expansion of business activity in all parts of the food supply chain) that grows new businesses and attracts food businesses and suppliers to the area 3, Expand the number of jobs In the food sector 4.Expand the availability of healthy food 5.Increase the market for, and utilization of, locally grown foods 6.Increase resident access to locally grown foods 7.Increase the supply of ethnic and cultural foods serving local communities OPERATIONAL GOALS Discussions with the FIN Steering Committee identified initial parameters for program operations that help inform the assessment and recommendations provided In this study. These Include the target population to be served, the program service area, and the graduation and financial sustainability goals of the incubator. Target Population/Customer: Fl N's priority Is to serve the area's diverse low-and moderate-income entrepreneurs who have fewer resources with which to start a business. These residents include immigrant, refugee and native-born entrepreneurs living in South King County. The vision is to give priority to low-and moderate-income clients and design services to help them overcome barriers. However, the program would not necessarily exclude clients with higher incomes from utilizing the kitchen facility. Tiered rate structures and/or a prioritization of space and usage times are some possible strategies for structuring program access. 3 Food Innovation Network, "Results Based Accountability Framework", 9/13/15 10 EXHIBIT A Service Area: Due to the community need and limited resources in SeaTac and Tukwila, Fl N's priority Is to serve the residents of these cities. There Is also some Interest in serving the surrounding South County cities and parts of South Seattle If these areas are not adequately being served by existing or planned resources. A larger service area may also be considered If It would provide greater financial support to the program. Graduation Goals: FIN believes that client businesses should be expected to graduate out of the facility over a reasonable period of time to allow more entrepreneurs to benefit from the resource. This means the kitchen would focus on supporting growth-oriented businesses. Retaining Graduate Businesses: Stakeholders are focused on Improving opportunities for local residents to bring money back to their households In SeaTac and Tukwila. Their Interest In retaining businesses In SeaTac or Tukwila after graduation Is secondary to the primary aim of Improving Income generation opportunities for local families. Community Role: FIN continues to be Interested In the co-location of the facility with other related uses, such as a marketplace or community facility. The aim is to create economic synergies and a gathering place for the area's diverse communities. Community kitchen uses, such as community dinners and nutrition and cooking classes, are desired to enhance the facility's role in serving the community at large. Financial Sustalnabllity: The project alms to be financially self-sustaining within a reasonable period of time, although the Network recognizes that some services are likely to need grant or donation support. The hope ls that market rate and fee-generating services can help support subsidized programs for lower Income participants. While specific financial sustainability goals have not been defined, the aim Is to have ongoing operational costs covered by revenue generating sources so fundralslng can support programs and services. Since a location has not yet been determined It Is not clear whether the facility will be responsible for ongoing rent payments. FIN selected the business Incubator as a cornerstone of its Food Innovation effort and has undertaken this study to Inform the development of a facility and related programs. The objective of the study Is to evaluate the market demand, viability and general facility requirements for a food-business Incubator consisting of a shared-use commercial kitchen and entrepreneur support services. To facilitate decision-making on the project, while also keeping pace with emerging opportunities, the team.designed the feasibility study to be completed In two phases. The primary objective of this Phase I study ls to understand entrepreneur needs and assess demand for an incubator. The Insights from this assessment will then be used to refine the project concep t for a Phase II analysis of financial feasibility. This Phase I study seeks to: 1.Gather Insights into the characteristics and needs of low-and moderate-Income entrepreneurs In the SeaTac and Tukwila area. 2.Assess the level of entrepreneurial activity and the demand for a facility and incubation services. 3.Evaluate the local market for shared commercial kitchen space in South King County. 4.Provide recommendations for strategic decision-making. This Phase I study does not provide a financial feasibility determination. The aim Is to offer a market­ based assessment of the prospects for an incubator in order to inform facility and program planning. If 11 EXHIBIT A FIN moves forward with Phase II, the next step will be to refine the business model and facility plan and evaluate the project's financial feasibility. RESEARCH APPROACH Prior to beginning this study, FIN's Community Engagement Consultant, Njambl Gishuru, and the Community Food Advocates completed significant outreach Into the entrepreneurial Interests of the community. This study sought to build upon that by gathering the collective insights from FIN members and previous community outreach and expand on them through additional outreach. These Insights were then paired with industry research and market-based analysis about demand to develop recommendations for program and facility development. In addition to several meetings with the FIN Steering Committee and Working Groups, 18 interviews were conducted for this study with stakeholder organizations, mlcroenterprise/buslness training service providers, local government staff, and community and public health agencies. A list of the Individuals interviewed Is provided in Appendix I. Direct feedback was gathered from prospective Incubation program participants through focus groups and surveys. The FIN network and Community Food Advocates collected 80 surveys from aspiring food entrepreneurs and 10 from existing small food business owners. The survey questions are provided In Appendix II. Additionally, 58 surveys were collected from Individuals Interested in finding work opportunities In the food sector. With the help of Community Food Advocates and service providers, FIN held 7 facilitated focus group discussions that engaged approximately 45 aspiring food entrepreneurs and job seekers. The focus groups were conducted at 2 engagements events held on September 15th and September 19th, 2015 at the Tukwila Community Center. Appendix Ill provides additional Information about the topics discussed In the focus group sessions. Additionally, local business activity and trends were assessed through local market data research. An analysis of the supply of shared kitchen space was conducted by identifying and surveying existing kitchen facilities. Market demand for new space was evaluated by analyzing shared commercial kitchen utilization and food Industry growth trends ln the region. Program Information from Incubation programs with similar goals was gathered to benchmark findings and Identify best practices In the kitchen Incubation industry. category Low-cost commerdal kitchen access for entrepreneurs Entrepreneur startup support for llcensfng and permits Project Feast consu!tatfon to entrepreneurs already being Incubated Projectfeast pre-Jncubatlon servlces Project Feast pop-up dining coordination Service provider coordfnat!on and entrepreneur support FIN project management and coordination of cohort activities EXHIBIT B Port of Seattle Funds Matching Funds 10500 9400 5000 2500 9000 28800 4800 6900 0 65000 8100 17400 37400 Total Funds 19900 7500 9000 28800 4800 15000 17400 102400 Notes Rent/ut!litles and repair/maintenance $750/entrepreneur Chef+ Kitchen Manager Chef+ Kitchen Manager+ Program Coordinator+ suppl!es Chef+ Kitchen Manager