HomeMy WebLinkAbout8B EDA Report
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: April 17, 2017
AGENDA #: 8B
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: TECHNOLOGY VILLAGE PHASE II.4 BUSINESS PLAN
DISCUSSION: Introduction
The purpose of this agenda item is to review and adopt the Technology Village
Business Accelerator Phase II.4 Business Plan.
History
The Technology Village Board of Directors annually reviews and updates the
Technology Village Business Plan.
Current Circumstances
The attached Phase II.4 Technology Village Business Plan was drafted by the
Board of Directors. This business plan outlines the status of the program and
provides an overview of phase II.4 development including program participant
focus, proposed rental rates, ‘virtual’ program participation, selection criteria and
2017 operating budget.
Conclusion
Staff will be available to discuss the Phase II.4 Business Plan and answer
questions during the April 17th EDA meeting.
FINANCIAL
IMPACT:
The EDA budget includes an allocation of $9,500 to support the Technology Village
program. The budget anticipates revenues of $8,500 from Technology Village
lease revenues to help offset the program operation costs.
ALTERNATIVES: 1. Motion and a second to adopt the Technology Village Business Accelerator
Phase II.4 Business Plan as proposed or with amendments.
2. Take no action and continue discussion at a future meeting.
RECOMMENDED
MOTION:
Alternative #1
ATTACHMENTS: 1. Technology Village Business Accelerator Phase II.4 Business Plan
BUSINESS PLAN
TECHNOLOGY VILLAGE
BUSINESS ACCELERATOR
PHASE II.4
Fy2017
CITY OF PRIOR LAKE
ECONOMIC DEVELOPMENT AUTHORITY
4646 DAKOTA STREET SE
PRIOR LAKE, MN 55372
952-447-9813
drogness@cityofpriorlake.com
www.cityofpriorlake.com
Technology Village Business Plan – Phase II .4 Page 1
TABLE OF CONTENTS
SECTION TITLE PAGE
1.0 Executive Summary 2
2.0 History 2
3.0 Overview 3
3.1 Phase I 3
3.2 Phase II 3
3.3 Virtual Program 5
4.0 Technology Village Phase III Program Analysis & Expansion Plan 5
5.0 Technology Village Phase II.4 Overview 6
6.0 Mission 7
7.0 Technology Village Goals 7
7.1 2014 Technology Village Goals 7
7.2 2015 Technology Village Goals 7
7.3 2016 Technology Village Goals 8
7.4 2017 Technology Village Goals 8
8.0 Technology Village Metrics 8
9.0 Program Participant Focus 8
9.1 Program Participants 9
9.2 Program Participant Success Rate 10
9.3 Selection Criteria 10
10.0 Organization & Management 11
10.1 Board of Directors 11
10.2 Advisory Board 13
10.3 Service Providers / Technology Village Partners 14
11.0 City Hall Rental Rates 14
12.0 2017 Operating Budget 15
13.0 Projected Program Demand 15
14.0 Staffing Plan 16
15.0 Marketing Forecast 16
16.0 Microenterprise Loans 16
17.0 Value of a Job 17
Appendix A - Current Technology Village Floor Plan 18
Appendix B - Sample Phase II Rent Scenarios 19
Technology Village Business Plan – Phase II .4 Page 2
1.0 EXECUTIVE SUMMARY
This Phase II.4 Technology Village Business Accelerator Business Plan was drafted by the Technology
Village Board of Directors. This business plan will help carry out the duties and responsibilities assigned
to the board, which include the planning and formulating of policy to guide the programming and
direction of the Technology Village program as well as ensuring the overall financial viability of the
accelerator program.
The Technology Village Business Accelerator program is currently in its fifth year of operation and has
six program participants, including two Virtual participants. Technology Village program participants
employ a total of twenty-five employees within Prior Lake.
This Phase II.4 Business Plan serves as the next step in establishing the Prior Lake Technology Village
Business Accelerator as a key economic development initiative of the City of Prior Lake and a budding
economic development initiative of the Scott County Community Development Agency (CDA).
2.0 HISTORY
In the fall of 2011, the Prior Lake Economic Development Authority (EDA) appointed a Technology
Village subcommittee in an effort to assemble and organize human resources to establish a business
incubator in the community, which was identified as a key objective of the EDA. The EDA provided
the subcommittee with direction to begin evaluating options to implement a technology business
incubator facility in Prior Lake, including a report that covers these primary issues:
• Identify models of business incubation (public, private, or combination);
• Outline financial models to support start-up and ongoing operational costs;
• Evaluate opportunities for business incubation in Prior Lake; and
• Identify a preferred plan for Prior Lake.
The subcommittee completed and presented its initial report and recommendations to the EDA on
February 13, 2012. The report identified different models of business incubation, outlined financial
options to support start-up and ongoing operational costs, evaluated opportunities for business incubation
in Prior Lake and identified a preferred plan for the city.
A business plan for the Technology Village Business Accelerator was then drafted by the subcommittee
and presented to the EDA which detailed a preferred industry focus, organizational structure, Board of
Director composition, services and programs offered through Technology Village, rental rates,
marketing, application and acceptance criteria, staffing plan, facility information, budgets and financials,
as well as potential funding sources. After discussion and revisions, the EDA approved the business
plan for the Technology Village Business Accelerator on July 16, 2012.
On September 10, 2012, after a review of the Technology Village business plan, the Prior Lake City
Council approved an amendment to the 2012 Prior Lake General Fund and Economic Development
Authority budget in the amount of $50,000 to fund the initial phase of Technology Village. A Board of
Directors was appointed by the Prior Lake City Council on November 26, 2012 to act in an advis ory
capacity to the EDA and advise the EDA on matters related to Technology Village.
Technology Village Business Plan – Phase II .4 Page 3
3.0 OVERVIEW
One of the EDA’s goals was to establish a business incubator in the community, which has been
accomplished with Technology Village. By providing the resources necessary to implement Phase II of
the Technology Village plan, the EDA and the Prior Lake City Council have further endorsed
Technology Village as an important tool to achieve the overall objectives of the EDA and 2040 Vision
and Strategic Plan by removing obstacles to economic development, promoting growth and diversifying
the city’s tax base. Below is a summary of the different phases of development and program expansion
since the program’s inception in 2013.
3.1 PHASE I
Technology Village opened in January 2013 on the main floor of Prior Lake City Hall within a previously
underutilized office space of approximately 2,000 square feet. The space consists of five hard -walled
offices and a 775-square foot open office area to support three workstations. Program participants enter
into a Lease Agreement with the City of Prior Lake EDA for a term of up to three years. Initiating the
program in the existing city hall building helped minimize start-up costs and allowed for the shared use
of services already in place serving City of Prior Lake staff, including; internet, phone, meeting space,
cafeteria/break room, etc. The office space within city hall also provided the added locational benefit of
allowing the program participants to be near city staff who administer the day-to-day program
operations.
3.2 PHASE II
The Technology Village Phase II plan allowed the program to maintain and expand its program
participation through additional office space in privately owned properties throughout the community to
serve not only emerging technology and professional service businesses but a wider variety of growing
companies.
Every effort has been made and will continue to be made to locate program participants in the existing
city hall facility whenever possible; however, at the time the Phase II Business Plan was being developed,
five program participant businesses occupied the Phase I facility and without expansion opportunities
available the board had to identify other opportunities for program expansion.
The Board of Directors entered Phase II of program development on June 1, 2014 when the first program
participant entered into a private lease agreement for space outside of city hall. Phase II allows
Technology Village to serve program participants who, because of lack of space within city hall or
business needs that cannot be served in city hall, are located in private lease space within the City of
Prior Lake. Phase II participants enter a private lease for office space in Prior Lake and receive a
reimbursement of a portion of their monthly rental payment from the City of Prior Lake.
Assuming city hall Technology Village office space is occupied, or adequate lease space is not available
within city hall, the Executive Director and Board of Directors work with existing property owners to
maintain a list of available privately owned office space and allow program participants to lease space
in multiple locations throughout the community. Technology Village program participants located
outside of city hall are eligible to receive a reimbursement of gross rental costs from the City of Prior
Lake Economic Development Authority. The reimbursed rental amount is calculated based on the actual
number of employees and actual area of lease space, not to exceed 200 square feet for single employee
businesses and 150 square feet per employee for multiple employee businesses.
Technology Village Business Plan – Phase II .4 Page 4
The Technology Village subcommittee originally considered the option of the EDA leasing space in
privately owned office space in the community and then sub-leasing that space to program participants
at a reduced rental rate. This option was ultimately not pursued because of the anticipated cost to the
EDA. The Phase II Technology Village business plan allowed program participants to enter into private
lease agreements for office space within Prior Lake and a rental reimbursement would provide by the
EDA to the participant on a quarterly basis after the monthly rent payment is received by the landlord.
The Technology Village Board of Directors has determined that this reimbursement option is more
efficient in that it will reduce the cost responsibilities of the EDA and will also eliminate the risk of the
EDA leasing and paying for space which is not occupied by program participants.
Every Phase II program participant is required to commit to three years of program participation, unless
otherwise approved by the Technology Village Board of Directors, which is secu red with a program
participation contract. For single employee businesses, each program participant is eligible for
reimbursement in the amount of $12 per square foot of lease space or two-thirds of the gross rental rate
during the first year, whichever is less. During the second year, each program participant is eligible for
reimbursement in the amount of $6 per square foot of lease space or one-third of the gross rental rate,
whichever is less. During the third year, the program participant is responsi ble for all costs associated
with the private lease agreement. The rental reimbursement is based on the actual area leased with a
maximum area allowance of 200 square feet. Any additional space leased above 200 square feet is the
sole responsibility of the program participant.
Should a program participant have multiple employees working full-time within the approved office
location, the rental reimbursement amounts are the same as a single employee business; however, the
maximum area allowance is 150 square feet per employee who works full time from the approved office
location. Program participants with multiple employees are required to submit a certificate of compliance
annually which certifies the number of full-time equivalent positions working within the approved office
location. Additional rent reimbursement scenarios are attached as Appendix B to this document.
In the event office space outside of the existing city hall Technology Village location is desired by a
potential program participant, the City of Prior Lake will make no assurances or guarantees as to the
quality of office space, furnishings or other amenities and technology offered by the private landlord.
The EDA will not furnish office space outside of city hall; however, microenterprise loan funds will be
made available for this purpose as described in greater detail below in section 16.0.
All lease agreements for office space outside of city hall are executed between the program participant
and the private landlord; the City of Prior Lake will not be a party to the private lease agreements and
will make no guarantees of lease payments or any other obligations of the program participant.
There are currently no Phase II participants in the program; however, the approved 2017 Technology
Village budget includes rental reimbursement funding in the amount of $2,250 in anticipation of Phase
II participants entering the program. It is difficult to anticipate if any participants will be identified for
the Phase II program in 2017 and if so, when they will join during the year. If Phase II participant(s) are
identified in 2017 which require a rental reimbursement in excess of $2,250, the Technology Village
Board of Directors will seek additional funding to support the new business(es) from the EDA prior to
entering into a participation agreement.
Technology Village Business Plan – Phase II .4 Page 5
3.3 VIRTUAL PROGRAM
Along with the Phase I and Phase II accelerator programs, which rely on a program participant being
physically located in an office space within the City of Prior Lake, the Technology Village Board of
Directors developed a ‘virtual’ participant program in 2016. The virtual program is designed to provide
support to emerging technology and professional service businesses located in Prior Lake, or throughout
Scott County, which are not physically located in the designated Technology Village space. The virtual
program provides an opportunity for businesses, which may be home-based or are already established in
an office space, to participate and benefit from the Technology Village Business Accelerator program.
For a small monthly fee of $50, virtual program participants will receive the following benefits:
• Mailbox service
• Professional mailing address/business identity
• Access to Technology Village Business Accelerator services, including:
o Remote Board advisory support/mentoring available
o Face-to-face Board advisory support/mentoring available within Technology Village
o Business assessment either remote or within Technology Village
o Quarterly goal review either remote or within Technology Village
o Business networking
o Referrals to professional service providers
• Networking and collaboration opportunities with other program participants
• Inclusion in all Technology Village programs and meetings designed to assist with business
development
• Inclusion of company information on the Technology Village website
• Access to conference rooms and meeting space (16 hours/month)
• Access to co-working office space (including free access to Wi-Fi and access to high speed
internet within the co-working office location)
o Conference rooms and co-working office space are reserved on a first-come, first-serve
basis by contacting City of Prior Lake staff at (952) 447-9800 (24-hour notice required).
Virtual participants are provided a monthly total of 16 hours of conference room time and
32 hours at the co-working office space.
A simple month-to-month virtual participation agreement is entered into between the City of Prior Lake
and the participant business. The agreement identifies the services that will be provided to the participant
and the expectations of the Technology Village Board of Directors.
4.0 TECHNOLOGY VILLAGE PHASE III PROGRAM ANALYSIS AND EXPANSION PLAN
The Technology Village Board has been exploring opportunities to i) expand the program focus beyond
emerging-technology and professional service businesses; ii) bring more participants into the program;
and iii) consider a Scott County partnership or leadership role with satellite or sister accelerator programs
in communities throughout the county.
In May 2015, the City of Prior Lake was awarded Technical Assistance Grant in the amount of up to
$12,500 from the Scott County CDA to assist with one-half of the cost to evaluate the Technology
Village program and develop options for program expansion.
Technology Village Business Plan – Phase II .4 Page 6
The Technology Village Board of Directors sent out a Request for Proposals, and ultimately
recommended Greenwood Consulting Group be hired, to evaluate the Technology Village Business
Accelerator program, including but not limited to:
➢ Recommendations for program expansion, including collaboration opportunities with Scott County,
MN and other Scott County communities;
➢ Recommendations for a program director position;
➢ Identify funding necessary for program expansion;
➢ Identify funding sources to support program expansion; and
➢ Identify necessary next steps and an implementation schedule to achieve program expansion.
In September 2015, the City of Prior Lake entered into a Standard Agreement for Professional Services
with Greenwood Consulting Group, Inc. to complete a program analysis and expansion plan for the
Technology Village Business Accelerator program. The Greenwood Consulting report was accepted by
the EDA on May 16, 2016 and included many recommendations to improve the existing accelerator
program and implementation steps to expand the program throughout Scott County.
5.0 TECHNOLOGY VILLAGE PHASE II.4 OVERVIEW
The primary focus of this Phase II.4 Business Plan is to continue to grow program participation and
explore program expansion throughout Scott County. Expansion of the Technology Village Business
Accelerator Program throughout Scott County is consistent with the vision of SCALE (Scott County
Association for Leadership and Efficiency) and the Scott County Commercial/Industrial Market
Analysis completed by Maxfield Research.
SCALE has set a vision (or target) of achieving 50% of the County’s labor force living and working in
the County by 2030 by focusing on transportation, land use and economic development. Accomplishing
this Vision will assist in:
• The reduction of importing low wage earners and exporting the County’s higher skill set.
• Reducing congestion on the regional transportation system; with more difficult commute times
traveling north anticipated.
• Providing jobs which support individuals and families.
The Scott County Commercial/Industrial Market Analysis for Scott County, completed by Maxfield
Research in February 2017, stated:
• “There is a large out-migration of workers from Scott County. Only 24.4% of Scott County residents,
in 2014, also worked in Scott County. Of the 75.6% that commuted to jobs outside the County, most
commuted to jobs in Hennepin County (40.6%) followed by Dakota County (15.1%)”
• “Conclusions and Recommendations”:
o Maxfield Research Inc. recommends targeting emerging industries in order to maintain a
competitive edge in today’s global competition for jobs and industry. At the same time,
however; we do not recommend revamping current economic development efforts but a
gradual implementation process.
o Clusters should be pursued in five to ten growth industries while also planning for alternative
real estate types and businesses that support a given industry. Examples may include (not in
any particular order):
▪ Healthcare and life science
▪ Diversified manufacturing and services
Technology Village Business Plan – Phase II .4 Page 7
▪ Medical manufacturing and biotechnology
▪ Business and professional services
▪ Information and communication
▪ Sustainable/Green manufacturing and services
▪ Transportation and logistics (i.e. warehouse, freight hauling, and wholesalers).
6.0 MISSION
Technology Village Mission Statement – Technology Village supports the growth of emerging
technology and professional service businesses within an entrepreneurial environment that encourages
collaboration, fosters job creation and provides connections to local & regional resources.
In general, the mission of any business accelerator is to aid in the successful development of emerging
businesses. Ideally, businesses will grow and move from Technology Village out into the community
and throughout Scott County to contribute to the overall vitality, diversity, and growth of the economy.
Not only do participants of the Technology Village Program benefit, but the program is designed so the
City of Prior Lake and Scott County benefit through greater economic development activity, new
employment opportunities, enhanced community image, increased entrepreneurialism and additional tax
revenues that support services.
7.0 TECHNOLOGY VILLAGE GOALS
The program goals, developed by the Technology Village Board of Directors and approved by the
Economic Development Authority and Prior Lake City Council, include:
7.1 2014 TECHNOLOGY VILLAGE GOALS
➢ Obtain funding approval necessary to maintain Phase I and then fully implement Phase II Business
Plans.
➢ Support and retain existing Technology Village businesses through direct assistance, networking and
resource development.
➢ Establish an adequate pipeline of technology businesses that will allow the continued full use of the
Technology Village program.
7.2 2015 TECHNOLOGY VILLAGE GOALS
➢ Continue to support and retain existing Technology Village businesses through direct assistance,
networking and resource development.
➢ Establish a pipeline of technology businesses that will allow the continued full use of the Technology
Village program while retaining the six existing program participants and identifying a minimum of
two additional program participants.
➢ Develop a plan to transition into Phase III of the Technology Village Business Plan, which includes
identifying additional funding sources to support a stand-alone facility. Phase III would allow
Technology Village to expand its primary focus of supporting technology related businesses to a
wider variety of businesses.
Technology Village Business Plan – Phase II .4 Page 8
7.3 2016 TECHNOLOGY VILLAGE GOALS
➢ Evaluate the findings and recommendations of the Technology Village Phase III Program Analysis
being completed by Greenwood Consulting Group. Based on the analysis, develop a roadmap and
provide direction and suggestions to the EDA around March 2016.
➢ Identify participants and roll-out the Technology Village Virtual Participation Program.
➢ Establish a pipeline of technology and professional service businesses that will allow the continued
full use of the Technology Village program while retaining the seven existing program participants
and identify a minimum of two additional programs participants.
7.4 2017 TECHNOLOGY VILLAGE GOALS
➢ Continue to implement the recommendations of the Technology Village Phase III Program Analysis,
primarily related to program expansion within Scott County.
➢ Identify additional program participants, both virtual and physical, to increase the number of
Technology Village related employees working in Prior Lake.
➢ Identify creative approaches to promote the Technology Village program and its participant
businesses.
8.0 TECHNOLOGY VILLAGE METRICS
The Technology Village Board of Directors has identified eight metrics which are currently being
tracked by the board. The metrics will be reported to the City of Prior Lake Economic Development
Authority on an annual basis, or as requested by the EDA.
➢ Program Participant Contacts: Quarterly meetings between existing program participants and
Technology Village Board of Director Advisors.
➢ Program Participants: number of businesses participating in the Technology Village Program.
➢ Employment: number of people currently employed by program participants.
➢ Vacancy/Occupancy Rate: percentage of city hall Technology Village space under lease agreement.
➢ Total Square Feet Leased: public (city hall) and private office space.
➢ Applications: number of program applications received, reviewed, approved and lease agreements
signed.
➢ Website Activity: total website hits, website hits by unique IP address and pages visited.
➢ Budget: Budget vs. actual expenditures.
9.0 PROGRAM PARTICIPANT FOCUS
Incubators and business accelerator programs throughout the nation vary in the way they deliver their
services, in their organizational structure, and in the types of businesses they serve. Due to space
limitations and the awareness that the Prior Lake Technology Village simply cannot meet the needs of
all potential program participants, the focus of the Board of Directors has been to focus on emerging
technology and professional service businesses.
For the purposes of Technology Village, emerging technology is defined as any technology product or
service that is currently developing or will be developed that may be commercialized and has the ability
to alter a business or social environment. The board feels emerging technology businesses provide the
greatest opportunity to positively impact the community and assist with high quality job growth. By
focusing on emerging technology and professional services, the board feels confident in its ability to
Technology Village Business Plan – Phase II .4 Page 9
create a collaborative environment where complimentary businesses can work together and share
information and resources to fully capture the business accelerator concept and provide the greatest
opportunity for program success.
The Phase II.4 program focus will continue to be on emerging technology and professional service
businesses; however, program expansion into alternate office locations in the community and throughout
Scott County will allow the Technology Village Board, EDA and CDA to provide Technology Village
services to non-tech companies with high growth and high employment potential. The city hall office
space is proposed to be reserved for tech related companies while other businesses with a focus on other
industries will be able to take advantage of this program at an alternate office location in Prior Lake or
elsewhere in Scott County.
Due to space restrictions, funding limitations, limited staff availability and board mentoring time, the
board cannot possibly approve each and every program application. The board has and will continue to
work to maximize the funding provided by the EDA to support those businesses that, in the board’s
judgment, have the greatest opportunity for success and job creation. The ability of a potential program
participant to demonstrate their business will most likely achieve the goals of job creation and
community investment and therefore address the most pressing public purpose will be the primary factor
in determining whether a business is accepted into the Technology Village program.
9.1 PROGRAM PARTICIPANTS
Below is a list of current program participants. Technology Village has six existing program
participants. The current Technology Village floor plan with program participant spaces identified is
attached as Appendix A for reference.
design a tivity
design a tivity, llc is a graduate participant who has been involved with the Technology Village program
since January 1, 2013. design a tivity is a single employee graphic design studio who previously leased
office space within city hall and has since graduated from the program and is now located within a private
office space in Prior Lake. design a tivity’s areas of expertise includes website development, logos,
brand identity, product literature and brochures, invitations, advertising, publications, packaging and
product design & development. Although design a tivity has graduated from the program, the business
is still considered a program participant and has remained very involved with the Technology Village
program.
Innovative Computer Professionals
Innovative Computer Professionals (ICP) is a graduate participant who has been involved in the
Technology Village program since March 1, 2013. ICP occupies 3,587 square feet of privately owned
office space in the Village Commerce office building. ICP provides consulting services and solutions
to the ATM (Automated Teller Machine) and POS (Point-of-Sale) industry with specialization in
gaming, card encoding/embossing, ATM/POS host systems, and PCI DSS compliance.
SWot (Virtual Participant)
SWot is a Prior Lake company that was spun off from Innovative Computer Professiona ls (ICP) in
November 2016. SWot provides consulting services and business solutions focused on Trust Accounting
and Time Management Cloud based software.
Technology Village Business Plan – Phase II .4 Page 10
Local Vibe LLC
Local Vibe LLC leases 246 square feet of office space and has been a Technology Village program
participant since October 1, 2014. Local Vibe is in early stage development of a real time, location based
marketing app. The app will provide real time information for local deals, specials and events that are
happening in that community.
etaKnowledge LLC (Virtual Participant)
etaKnowledge is a Virtual program participant who has been involved with the Technology Village
program since March 1, 2015. The founders of etaKnowledge, LLC have over 100 years of combined
experience delivering mission critical real-time systems in large complex environments. Their solutions
provide common situational awareness for increasing business knowledge and allowing optimization of
operations across the enterprise for maximum return on investment. etaKnowledge applies proprietary
algorithms to business data, turning that data into knowledge and improving outcomes for all
stakeholders in all roles.
Willwerks, Inc.
Willwerks, Inc. was formed in 2001 to provide custom application and database solutions. Willwerks
has developed numerous solutions for customers around the world ranging from Data synchronization,
shipment management, Mfg. Quality Assurance, E-Commerce, intranet web portals, extranet web
portals, internet web portals and on and on.
9.2 PROGRAM PARTICIPANT SUCCESS RATE
A study done by Inc. magazine and the National Business Incubator Association (NBIA) revealed that
80 percent of new businesses fail within the first five years. In contrast, NBIA member incubators have
reported that 87 percent of all firms that have graduated from their incubators are still in business. So
far, the Technology Village Business Accelerator success rate of 91.7% is similar to the other NBIA
member incubators. As of Quarter 4, 2016, Technology Village has had twelve program participant
businesses and eleven are still in business.
9.3 SELECTION CRITERIA
Because Phase II of the Technology Village program has made the program available for high growth
and high employment businesses, which may not meet the definition of emerging technology, it is very
important to ensure all future program participants meet the selection criteria. Due to limited funding
and limited space options, the Technology Village Board of Directors cannot accept every business into
the program. To determine which business start-ups have a strong potential to succeed and create
employment opportunities in the community and county, the following eligibility requirements were
drafted after a review of best practices of existing incubator/accelerator organizations.
• The applicant must be in the early stages of business development (first three years). Small
companies involved in a significant change in direction or launching a new business product are
also eligible to apply.
• The applicant must be a for-profit business with growth potential.
• The applicant must demonstrate a strong market for products and services.
• The applicant must have potential for positive economic impact on the community through:
o A technology, product, or service deemed to have a high marketplace potential.
o A potential for company growth and the associated creation of desirable jobs within Prior
Lake or surrounding Scott County communities.
Technology Village Business Plan – Phase II .4 Page 11
• The applicant must have a product or service that may be commercialized within the time set
forth in the lease agreement.
• The applicant must plan to remain headquartered within the City of Prior Lake.
• The applicant must have a written description of the business or a draft business plan.
• The applicant must show the ability to pay rent while they develop positive cash flow.
• The applicant must be willing to accept advice and guidance from the Technology Village Board
of Directors.
• The applicant business must be willing to take advice from the professional network and/or the
Executive Director.
• The applicant must desire to take advantage of and be able to benefit from the value-added
services and guidance provided through the Technology Village program.
10.0 ORGANIZATION & MANAGEMENT
Technology Village is a publicly sponsored business accelerator with its initial funding provided by the
City of Prior Lake Economic Development Authority (EDA). The program is now primarily funded by
rental revenues; however, the EDA and the Scott County Community Development Agency (CDA),
through the Scott County First Stop Shop (FSS), provide staffing support. The organizational structure
of Technology Village includes the Prior Lake Economic Development Authority, Technology Village
Board of Directors, the City of Prior Lake Community & Economic Development Director who serves
as the Technology Village Executive Director and City of Prior Lake and Scott County CDA First Stop
Shop staff support.
The Executive Director implements the goals of the organization and manages the day to day activities
with the assistance of City of Prior Lake and Scott County CDA/FSS staff. The Board of Directors acts
in an advisory capacity to the EDA and advises on matters related to Technology Village. The duties
and responsibilities of the board include:
• Plan and formulate policy to guide the programming and direction of the Technology Village
program;
• Assist in the hiring of the Executive Director position, when required;
• Assist in screening prospective accelerator clients;
• Ensure the overall financial viability of the program;
• Serve as a liaison between city government and the community; and
• In conjunction with EDA members or city staff, introduce potential or new business
representatives to others in the commercial community.
10.1 BOARD OF DIRECTORS
The Board of Directors consists of individuals that share the vision of Technology Village as an
economic development initiative and who are able to provide expertise that will help fulfill the program’s
mission. The board has been instrumental in promoting Technology Village in the community and
generating awareness and understanding of the Technology Village program as an important economic
development tool for the City of Prior Lake and surrounding Scott County communities. The members
have provided network connections and assistance to the Executive Director in creating networks to
professional resources that support the success of Technology Village businesses. Below is a list of the
Technology Village Board of Directors:
Technology Village Business Plan – Phase II .4 Page 12
Gerry Hughes, Chair
With more than 30 years of Healthcare experience, Gerry is a proven and successful professional services
leader within the business software industry with such well-known companies Lawson Software/Infor,
Oracle, and Healthland. Through direct efforts related to professional consulting service contracts,
product sales support, project implementation leadership and oversight, Gerry is known for being a
strategist and passionate leader who understands the importance of a goal driven organization to meet
operational objectives and maximize organic growth. Gerry is an innovative thinker adept at identifying
client and company business needs, making decisions, problem solving, mentoring and initiating
company culture change.
Dan Stratton, Vice Chair
Dan is the President of a private real estate investment company and served as the Land Manager for the
Shakopee Mdewakanton Sioux Community (SMSC). Dan’s duties for the SMSC included conducting
real estate negotiations and transactions, managing commercial and residential rental properties and
other development initiatives. Dan’s experience has allowed him to build relationships in many
industries, including health care brokerages, IT development, phone and voice services, etc. Dan is very
excited to be involved in the formation and growth of new businesses in Prior Lake and watch that
growth benefit the community.
Adam Proehl
Adam is a partner at NordicClick Interactive, a cutting-edge Twin Cities Digital Marketing
agency. Adam was instrumental in building this 18-person multi-million-dollar agency from the ground
up and he understands what it takes to make a young company succeed. With a background in marketing
and an established network of industry peers, executives, service providers and investors, Adam is an
invaluable resource for the Technology Village program. Adam loves seeing individuals who put their
soul into their business dream and working with them to grow their technology start-up
companies. Adam has spoken at several industry conferences over the last few years including SES,
Pubcon, OMS, B2B, eMetrics, and DMA. He is also an instructor at the Online Marketing Institute and
the University of San Francisco.
Lori Frank
Lori currently serves as the CEO of Argos Risk, an online credit risk management business based in
Edina, Minnesota. With over 25 years of executive management experience in the areas of technology
and finance, Lori is a visionary leader who has led several start-up companies into market dominance.
She has served as CEO of both public and private companies over her tenure and thrives in diverse and
challenging enterprises that need a focused, motivated leader.
Patrick Stroh
Patrick is president of Mercury Business Advisors providing management advisory services in business
strategy, innovation and risk management and is author of Business Strategy; Plan, Execute, Win! and
Advancing Innovation; Galvanizing, Enabling and Measuring for Innovation Value! Patrick serves on
three boards of directors including: global director for the Institute of Management Accountants who
serve 80,000 finance professionals worldwide; Technology Village, a business incubator in Prior Lake,
and Vail Place, a Minneapolis based agency supporting those with mental illness. Patrick was appointed
in 2014 to serve on the COSO Advisory Board to review the update of the 2004 COSO Enterprise Risk
Framework. Prior to consulting, he most recently held positions within UnitedHealth Group, including
chief strategy & innovation officer, client experience officer, and president consumer health products.
Patrick also writes a column entitled Innovation Elixir® for the American City Business Journals
Technology Village Business Plan – Phase II .4 Page 13
covering 43 metro markets across the U.S., is an active member of Rotary Club and is a classically
trained chef having studied at Le Cordon Bleu in Minneapolis.
Sarah Jones
Sarah has spent most her career in Healthcare technology, and participated in the successful sale of a
healthcare technology startup. She currently serves as the Director of Client Success for GreatCall, the
leader in connected health for active aging. Her previous experience offers an understanding of how
startups work and the challenges they face every day. Sarah is passionate about making Prior Lake an
even better place to live and brings a fresh, on-the-ground point of view to the Technology Village Board
and pragmatic, strategic guidance to Technology Village program participants.
Zach Braid
Zach is an entrepreneur, investor, and owner of numerous businesses within Prior Lake and the greater
Twin Cities. Zach’s business interests are in a variety of industries including; fitness, indoor air quality
and environmental services, real estate investing, and franchising. Previously he served on the sales
advisory committee at AT&T which is reserved for only the top 1% of sales representatives in the
company. He has also been recognized at other Fortune 500 companies for sales achievement and
contract negotiations. Zach is an advisor to businesses and startup companies and serves as a board
member for several companies including a non-profit. Zach was recently elected to Prior Lake’s City
Council in 2017 and serves as a commissioner on Prior Lake’s Economic Development Authority.
David Rech, Advisory Board Member
Dave has spent over 30 years as an executive in the technology sector focused on selling to the masses.
He presently owns his own consulting firm and is actively involved in real estate development and sales.
Previously he’s held global executive management positions with The Walt Disney Company, Twentieth
Century Fox, Digital River and Globalware Solutions as well as multiple distribution companies. Dave
was born and raised in New Prague, MN and his family have been residents of Prior Lake for over 13
years, they also spent 10 years in California. As a member of the board Dave brings sales, marketing,
ecommerce, contract management, coaching and SaaS experience to the mix.
Dan Rogness, Executive Director
Dan is the Executive Director of Technology Village as well as the Community & Economic Director
for the City of Prior Lake. Dan manages the day to day operations of Technology Village and fills an
important role as a conduit to the Economic Development Authority.
10.2 ADVISORY BOARD
In 2015 the Technology Village Board of Directors established an Advisory Board, which currently
includes one member, David Rech, who works with the Board of Directors to advise and mentor program
participants. The Technology Village board will be exploring opportunities to expand the Advisory
Board in 2017. The current Technology Village Bylaws prohibit any official to take action or make a
decision that would substantially affect the official’s financial interests or those of an associated
business, unless the effect on the official is no greater than on other members of the official’s business
classification, profession or occupation. The Bylaws further require that all members of the Board of
Directors be either Prior Lake residents or be affiliated with a business located within the City of Prior
Lake.
The Technology Village Board feels there may be an opportunity to capitalize on the experience and
expertise of non-Prior Lake residents or those who may wish to invest in or partner with a current or
Technology Village Business Plan – Phase II .4 Page 14
future program participant. The Advisory Board will be ex-officio, non-voting members who may not
meet the requirements to be a member of the Board of Directors but whose skills would make them a
valuable asset to the Technology Village board and its program participants.
10.3 SERVICE PROVIDERS / TECHNOLOGY VILLAGE PARTNERS
The Technology Village Board of Directors has established partnerships with Integra Telecom and the
Prior Lake Chamber of Commerce who provide their services at a reduced rate to Technology Village
program participants. The board made efforts to expand this network of service providers in 2016 to
include accounting, legal, human resources, financial, and other local professionals and institutions who
will offer their services at a free or reduced rate to program participants. The board will work to expand
this network in 2017 which will be a key initiative of the Scott County CDA/FSS support position. An
established network of service providers will help create awareness of the Technology Village program
throughout the community and county and will provide the necessary services that are needed to ensure
the success of our program participants.
The Technology Village Board of Directors will continue to enhance its relationships with the existing
service providers and organizations such as Scott County, [which includes Open to Business, First Stop
Shop and Economic Gardening], SMSC, SCORE and the Prior Lake Area Chamber of Commerce.
11.0 CITY HALL RENTAL RATES
The Technology Village Board of Directors has eliminated the escalating rent structure for rental space
within the city hall location in favor of a flat $10.00 per square foot lease rate. The rental reimbursement
for office space outside of city hall will continue to be available, as it has in the past, which decreases
over a three-year term to allow the program participant pay a larger share of their operating costs as their
business grows.
Previously, program participants paid an escalating rent payment over the lease term and the payment
received was used to subsidize Technology Village program operations. For example, the Board of
Directors had established a standard market lease rate of $15 per square foot for the hard-walled office
area; however, a business was only required to pay $5 per square foot for the first year, $10 per square
foot for the second year, followed by $15 per square foot during the third year of the lease term. Per the
recommendations in the Technology Village Analysis and Expansion Plan, completed by Greenwood
Consulting Group, Inc., the Technology Village board chose to eliminate the escalating rent structure in
favor of a flat $10.00 per square foot lease rate.
In addition to the eliminating the escalating rental rate, the Greenwood Consulting Group also
recommended, and the Technology Village Board of Directors and EDA approved, the elimination of
the ‘Equity Investment’ recapture language included in the Lease Agreement. The original Technology
Village Lase Agreement identified an estimated value of $18.19 per square foot for program costs paid
for or provided by the City of Prior Lake. These services, which are provided at no cost to program
participants and were detailed in each lease agreement included; program management, city staff time,
office equipment, furnishings, property insurance, janitorial service, grounds maintenance, snow
removal, common area building maintenance, equipment maintenance, trash removal and payment o f
utilities including gas, electric, sewer and water. The original lease agreement required repayment of any
deferred rent and this equity investment in the event the program participant relocated outside of Prior
Lake or Scott County prior to or upon graduation. This equity investment recapture language has been
removed from the lease.
Technology Village Business Plan – Phase II .4 Page 15
12.0 2017 OPERATING BUDGET
Below is the estimated operating budget for 2017 Technology Village operations. Annual rental revenue
for the Technology Village program participants within city hall and virtual participant monthly fees is
estimated to be $8,500 in 2017. These anticipated revenues will be used to subsidize the costs for
Technology Village operations.
13.0 PROJECTED PROGRAM DEMAND
It is very difficult to estimate the program’s financial needs in 2017 because it is not known how many
program participants will be accepted into the program, when they will be accepted, their space needs or
number of employees per organization. For the purpose of these b udget assumptions, the board
anticipates the current physical and virtual participants will remain in the program throughout 2017. In
addition, the board anticipates two new Technology Village program participants will be identified for
the city hall office space and one new virtual participant will be identified in 2017.
The board will first attempt to find available office space within the city hall location, which would not
require a rental reimbursement. If space is not available, or suitable, in the city hall location then office
space within the community will be used, which will require a rental reimbursement. The Technology
Village board did not assume any rental reimbursement in the 2017 budget. If additional businesses are
identified for the program resulting in an increase in the allocated funding amount, the board will request
EDA approval and funding allocation (if needed) prior to entering into additional program participation
contracts. Phase II program participants are only eligible to receive a rental reimbursement during their
first twenty-four months of program participation. The Technology Village Board of Directors may
consider rental reimbursements for Phase I (city hall) program participants who increase employment in
Prior Lake and move to a Phase II private office space.
2014 2015 2016 2017
Budget Budget Budget Budget
Revenues / Sources:
Charges for Services
33010 Property Taxes 31,315 34,000 17,650 1,000
Intergovernmental Revenues
34760 Incubator Leases 7,185 6,000 10,000 8,500
Total Revenues / Sources 38,500$ 40,000$ 27,650$ 9,500$
Expenditures / Uses:
46503 Technology Village Incubator
201 Office Supplies 500 500 500 250
304 Legal Fees - - - 500
309 Software Design - - - -
321 Communications 2,500 5,000 5,000 2,000
433 Dues & Subscriptions 2,500 2,500 2,500 1,000
437 Miscellaneous 2,500 2,500 2,500 500
520 Building & Structures 1,500 - - -
560 Furniture & Fixtures - 1,500 1,000 -
580 General Equipment 4,000 1,500 1,000 500
xxx Business Assistance 3,000 3,000 3,000 2,500
xxx Rent Subsidies 22,000 23,500 12,150 2,250
Total Expenditures / Uses 38,500$ 40,000$ 27,650$ 9,500$
Technology Village Business Plan – Phase II .4 Page 16
14.0 STAFFING PLAN
To this point, Phase I and Phase II staffing has been accomplished with existing City of Prior Lake staff
and the Technology Village Board of Directors, who have taken a hands-on approach to assist in the
program’s staffing needs. Dan Rogness, Community and Economic Development Director for the City
of Prior Lake has been serving as the Technology Village Ex ecutive Director. The Executive Director
is assisted by Prior Lake Community Development staff and existing City of Prior Lake support staff.
Additionally, members of the Board of Directors have taken a hands-on approach to assist in the
program’s staffing needs. The Executive Director and city staff, along with members of the board, have
coordinated and provided services to program participants, cultivated resource networks, managed
facility development, and managed ongoing operations.
The original Technology Village Business Plan anticipated the hiring of a full-time Executive Director
with Phase II development due to subsequent increases in staffing hours, increases in workload, and
additional funding availability. Based on the Greenwood Consulting Group Phase III Analysis and
findings report, the Phase II.3 Business Plan recommended the hiring of a part-time Executive Director
to manage the operations of the accelerator, provide direct business assistance to program participants,
establish a network of service providers and program sponsors, and continue to grow and expand the
reach of the program.
The Scott County CDA has hired a full-time Business Development Specialist for the First Stop Shop,
who will dedicate up to one-half of her time to exploring opportunities for business accelerator program
expansion throughout Scott County and assisting in the day-to-day operations of the Technology Village
program. This CDA position, which was previously part-time and not involved with the Technology
Village program, will be a valuable resource to advance the accelerator program forward in Scott County.
The City of Prior Lake has also approved a lease agreement with the Scott County CDA to office two
First Stop Shop employees within the Technology Village office space. This will be an added locational
benefit for program participants who will be working closely with the newly hired FSS Business
Development Specialist.
15.0 MARKETING FORECAST
The goal of the Technology Village Board of Directors is to fill and maintain the city hall Technology
Village office space while establishing a pipeline of applicants for future program participation. The
proposed 2017 Operating Budget includes $2,000 for communications. These funds will be used to
advertise the Technology Village program and space availability, make improvements to the existing
Technology Village website, develop printed promotional materials and sponsor business and
entrepreneur events which promote the program to potential participants and provide an educational
component to the Technology Village program.
16.0 MICROENTERPRISE LOANS
The City of Prior Lake Economic Development Revolving Loan Fund Guidelines, adopted on May 7,
2012, allow microenterprise loans to be provided to eligible Technology Village program participants.
A microenterprise is defined as a commercial enterprise that has five (5) or fewer employees, one or
more of whom owns the enterprise.
The available revolving loan funds consist of federal and state funds capitalized through funding made
available to the City of Prior Lake from the Minnesota Department of Employment and Economic
Technology Village Business Plan – Phase II .4 Page 17
Development. Federal funds are subject to the rules and regulations established by the U.S. Department
of Housing and Urban Development (HUD) for the State of Minnesota Community Development Block
Grant (CDBG). When using federal funds, national objectives and other program requirements must be
met as identified in the federal HUD program requirements for Small Cities CDBG.
The Revolving Loan Fund guidelines allow microenterprise/business accelerator businesses to be
eligible for both low-interest and deferred loans. The EDA, not the Technology Village Board of
Directors, will review all Technology Village microenterprise loan requests and determine the terms of
the loan. Deferred loans are provided at an interest rate of zero (0) percent and the loan principal
repayment shall be deferred based on conditions established for each business. For example,
microenterprise/incubator deferred loans may not have to be repaid until three (3) years from the date of
assistance. Incentives could also include partial/full loan forgiveness based on the business meeting
certain thresholds. Principal collected from loan repayments will be returned to the revolving loan fund
for relending. The maximum amount of a microenterprise loan shall be $10,000.00 and the minimum
amount shall be $2,000.00. Operating costs and working capital are not eligible loan costs.
17.0 VALUE OF A JOB
The Technology Village Board of Directors has attempted to evaluate the economic impact a new
technology related job in Prior Lake will have on the community and throughout Scott County. The
board used a paper titled, Measuring How Much Economic Change Will Mean to Your Community by
Dr. Michael L. Walden, Professor and Extension Economist, Department of Agricultural and Resource
Economics at North Carolina State University, as a reference to estimate the economic impact of a new
technology related job in Prior Lake. The table below shows an income multiplier, which is essentially
the number of times money earned and spent within a local economy circulates through the economy, to
estimate of the impact of twenty-eight new technology related jobs at an estimated $50 per hour and a
conservative leakage rate of 75%.
=$2,912,000.00
$2,912,000.00 X 25%=$728,000.00
$728,000.00 X 25%=$182,000.00
$182,000.00 X 25%=$45,500.00
$45,500.00 X 25%=$11,375.00
$11,375.00 X 25%=$2,843.75
$2,843.75 X 25%=$710.94
$710.94 X 25%=$177.73
$177.73 X 25%=$44.43
$44.43 X 25%=$11.10
$11.10 X 25%=$2.78
$2.78 X 25%=$0.69
$0.69 X 25%=$0.17
$0.17 X 25%=$0.04
$0.04 X 25%=$0.01
Total $970,666.64
$970,666.64 / 28 jobs = $34,666.67 per job
Technology Village Estimate
75% "Leakage"
Example 28 jobs @ $50/hour
Direct Earnings
Technology Village Business Plan – Phase II .4 Page 18
APPENDIX A
Technology Village Floor Plan (as of 01/01/2017)
Technology Village Business Plan – Phase II .4 Page 19
APPENDIX B
Sample Phase II Rent Scenarios
for office space located outside of Prior Lake City Hall
Example Scenario 1:
Program participant leases a 200-square foot office in a private building at a gross rental rate of $19 per square foot. Because
two-thirds of the gross lease rate is in excess of $12/SF, the EDA will reimburse at the rate of $12 per square foot. EDA
reimbursements will be paid to program participants on a quarterly basis after the Executive Director verifies rent payments
for the previous quarter have been paid in full.
First Year
• 200 SF X $19 = annual lease rate of $3,800; monthly lease rate of $316.67.
• EDA would reimburse $12 X 200 SF = annual reimbursement of $2,400; monthly reimbursement of $200.
• Program participant would be responsible for the annual lease rat e balance of $1,400; monthly lease rate balance of
$116.67.
Second Year
• 200 SF X $19 = annual lease rate of $3,800; monthly lease rate of $316.67.
• EDA would reimburse $6 X 200 SF = annual reimbursement of $1,200; monthly reimbursement of $100.
• Program participant would be responsible for the annual lease rate balance of $2,600; monthly lease rate balance of
$216.67.
Third Year
• 200 SF X $19 = annual lease rate of $3,800; monthly lease rate of $316.67.
• EDA would not reimburse lease rates during the third year.
• Program participant would be responsible for the annual lease rate of $3,800; monthly lease rate of $316.67.
Total EDA contribution = $3,600
Total program participant contribution = $7,800
Example Scenario 2:
Program participant leases a 125-square foot office in a private building at a gross rental rate of $15 per square foot. Because
two-thirds of the gross lease rate is less than $12/SF, the EDA will reimburse two -thirds of the gross lease rate. EDA
reimbursements will be paid to program participants on a quarterly basis after the Executive Director verifies rent payments
for the previous quarter have been paid in full.
First Year
• 125 SF X $15 = annual lease rate of $1,875; monthly lease rate of $156.25.
• EDA would reimburse two-thirds of the gross rental rate ($10/SF) X 125 SF = annual reimbursement of $1,250; monthly
reimbursement of $104.17.
• Program participant would be responsible for the annual lease rate balance of $625; monthly le ase rate balance of $52.08.
Second Year
• 125 SF X $15 = annual lease rate of $1,875; monthly lease rate of $156.25.
• EDA would reimburse one-third of the gross rental rate ($5/SF) X 125 SF = annual reimbursement of $625; monthly
reimbursement of $52.08.
• Program participant would be responsible for the annual lease rate balance of $1,250; monthly lease rate balance of
$104.17.
Third Year
• 125 SF X $15 = annual lease rate of $1,875; monthly lease rate of $156.25.
• EDA would not reimburse lease rates during the third year.
• Program participant would be responsible for the annual lease rate of $1,875; monthly lease rate of $156.25.
Total EDA contribution = $1,875
Total program participant contribution = $3,750
Technology Village Business Plan – Phase II .4 Page 20
Example Scenario 3:
Program participant has a total of two employees and leases a 400-square foot office in a private building at a gross rental
rate of $18 per square foot. Because two -thirds of the gross lease rate is in excess of $12/SF, the EDA will reimburse at the
rate of $12 per square foot. EDA reimbursements will be paid to program participants on a quarterly basis after the Executive
Director verifies rent payments for the previous quarter have been paid in full.
First Year
• 400 SF X $18 = annual lease rate of $7,200; monthly lease rate of $600.
• EDA would reimburse $12 X 300 SF (150SF/employee) = annual reimbursement of $3,600; monthly reimbursement of
$300.
• Program participant would be responsible for the annual lease rate balance of $3,600; monthly lease rate balance of $300.
Second Year
• 400 SF X $18 = annual lease rate of $7,200; monthly lease rate of $600.
• EDA would reimburse $6 X 300 SF (150SF/employee) = annual reimbursement of $1,800; monthly reimbursement of
$150.
• Program participant would be responsible for the annual lease rate balance of $5,400; monthly lease rate balance of $450.
Third Year
• 400 SF X $18 = annual lease rate of $7,200; monthly lease rate of $600.
• EDA would not reimburse lease rates during the third year.
• Program participant would be responsible for the annual lease rate of $7,200; monthly lease rate of $600.
Total EDA contribution = $5,400
Total program participant contribution = $16,200
Example Scenario 4:
Program participant has a total of two employees and leases a 300-square foot office in a private building at a gross rental
rate of $15 per square foot. Because two-thirds of the gross lease rate is less than $12/SF, the EDA will reimburse two-thirds
of the gross lease rate. EDA reimbursements will be paid to progr am participants on a quarterly basis after the Executive
Director verifies rent payments for the previous quarter have been paid in full.
First Year
• 300 SF X $15 = annual lease rate of $4,500; monthly lease rate of $375.
• EDA would reimburse two-thirds of the gross rental rate ($10/SF) X 300 SF = annual reimbursement of $3,000; monthly
reimbursement of $250.
• Program participant would be responsible for the annual lease rate balance of $1,500; monthly lease rate balance of $125.
Second Year
• 300 SF X $15 = annual lease rate of $4,500; monthly lease rate of $375.
• EDA would reimburse one-third of the gross rental rate ($5/SF) X 300 SF = annual reimbursement of $1,500; monthly
reimbursement of $125.
• Program participant would be responsible for the annua l lease rate balance of $3,000; monthly lease rate balance of $250.
Third Year
• 300 SF X $15 = annual lease rate of $4,500; monthly lease rate of $375.
• EDA would not reimburse lease rates during the third year.
• Program participant would be responsible for the annual lease rate of $4,500; monthly lease rate of $375.
Total EDA contribution = $4,500
Total program participant contribution = $9,000