NJ EDA to Back Tech Coworking Spaces in Garden State
The New Jersey Economic Development Authority (EDA) will be issuing a solicitation — probably by the end of July 2014 — that will let for-profit companies that want to develop tech coworking spaces in New Jersey compete for up to $1 million in loans, some portion of which will be forgiven if milestones are met.
Multiple bids may be awarded. The EDA expects to approve the awards at its November 2014 board meeting.
The funds will be used to back the acquisition, improvements and fixed assets associated with developing a new or expanding facility.
The EDA will also entertain bids from companies that wish to develop extensive makerspaces in the Garden State, provided that coworking makes up more than 50 percent of the deal.
In a memo from Timothy Lizura, president/COO to the board, the EDA said that over the past 12 months its Technology and Life Sciences group had received “numerous inquiries for support of technology-focused shared office space projects from entrepreneurs, universities, municipalities and real estate developers.”
NJTechWeekly.com has spoken to a number of entrepreneurs who are eager to open new tech coworking spaces.
“We recognize the significant economic potential that our technology industry yields, and we remain committed to offering a continuum of support to ensure we are able to help entrepreneurs, startups and established companies,” said EDA CEO Michele Brown in a statement. “By creating an environment that catalyzes innovation, we will generate new job and investment opportunities and ensure New Jersey remains a destination for the industry,” she said.
According to preliminary information, the funding for this solicitation and the ultimate award(s) will come from the EDA’s economic recovery fund.
Successful projects will be financed with long-term loans. The actual milestones coworking spaces must reach to have part of their loans forgiven will be announced with the RFP, but they may include:
- Renting to a certain number of tech startup companies per square foot, as demonstrated by membership enrollment
- Implementing a specified number of entrepreneurial programs in conjunction with New Jersey research universities
- Obtaining minimum rental revenue
- Developing demonstrable alliances with regional tech startup communities
- Offering preferred rates on business services for tenant tech companies
The EDA anticipates that many of these projects will be located in Smart Growth Areas. The most attractive projects will be located near urban transit hubs, such as Camden, Hoboken, Newark, East Orange, Elizabeth, Jersey City, New Brunswick, Paterson and Trenton.
Hoboken, Newark and Jersey City are areas the EDA says are anchored by a strong commitment to innovation programming, startup community management and strategic collaboration with universities and enterprise.
The EDA expects solicitations to be competitively ranked by a committee that will study a number of criteria that may change when the final RFP has been set. Some of the criteria mentioned include but are not limited to:
- Economic development (will the coworking space be located in a transit hub or a distressed area, for example?)
- Business model (are there details on any supplemental income streams, such as course content, education, coding, etc.?Does management have a clear go-to-market strategy for attracting entrepreneurs and startups?)
- Strategic partnerships (does the coworking space have agreements with mentors, universities, service providers? Is there a structured approach to hiring New Jersey university graduates with science, technology, engineering and mathematics [STEM] degrees?)
- Management (do company leaders have experience in developing a startup community? Prior experience running a coworking space? Experience raising capital? The ability to commit time to the project?)
