Downtown business incubator proposed by mayor, NDA

Erin Neff

Friday, April 28, 2000 | 10:24 a.m.

It is being called the Silicon Oasis -- a high-tech incubator in downtown Las Vegas designed to jump start redevelopment with dot-com businesses.

But whether the planned business center unveiled Thursday is merely a mirage now rests squarely on the shoulders of local industry.

The incubator plan is a venture between the Nevada Development Authority, the city of Las Vegas, a Los Angeles development company and venture capitalists from New York.

The goal now is to raise $5 million from local bankers to help entice private capitalists to raise $25 million for a venture fund. The cost for the incubator, which could include a new building or renovations to an existing one, will come out of both the bankers' contribution and the venture fund, Mayor Oscar Goodman said.

"It's just too expensive anymore to have these kinds of businesses in the Silicon Valley," Goodman said. "They feel that Las Vegas is a natural for it because there's no competition here."

An incubator is a physical facility that provides administrative and financial assistance to start-up companies. Anywhere from six to 10 business share certain resources until they have the wherewithal to leave the fold and become full-blown businesses.

"Those companies will be nurtured and monitored and packaged to venture capitalists," said Christine McKiernan, NDA vice president. "When they get turned out, they'll set up shop nearby and then that area will be energized.

"In those areas you'll have cafes and culture and this would just be the catalyst for what the mayor's trying to do," McKiernan added.

The Merrick, Thompson Co. from Los Angeles and Playgroup Ventures, a New York venture capitalist firm, are committed to the incubator.

Merrick, Thompson recently started an incubator in Korea that has been successful attracting high-tech businesses.

In an NDA statement, Ken Merrick said Las Vegas was an ideal location because other markets like San Jose or Los Angeles are saturated with incubators.

"The (Las Vegas) entertainment aspect is very attractive to entrepreneurs looking to produce entertainment-based content," Merrick said in the release. "The tax benefits of doing business in Nevada are a very strong incentive to entrepreneurs looking to get started."

The city's Neighborhood Services department has had a small business incubator since 1998.

"We've had a lot of graduates, and we've had a waiting list since the day we opened," said Neighborhood Services Director Sharon Segerblom.

Her department's incubator assists start-ups by helping them write business plans, obtain loans and learn marketing skills. The small business incubator has 14 offices, some rented at market rate and others subsidized by the city.

The high-tech incubator would employ similar techniques and it would be located in the redevelopment area.

Goodman said he had a particular building in mind to house the incubator, but he declined to say which building.

McKiernan said she hopes the financing can be in place within 60 to 120 days, with the incubator possibly up and running by the end of the year.