Downtown Vegas tech incubator stalled

Kevin Ferguson

Wednesday, March 14, 2001 | 11:19 a.m.

Lack of action on a proposed high-tech business incubator downtown doesn't mean the proposal is dead, says Mayor Oscar Goodman.

But some experts associated with the incubator say it's stalled and needs to be revived.

It's been more than 10 months since the mayor announced plans to use downtown land the city planned to acquire from Union Pacific Railroad for a high-tech business "accelerator," which would nurture a cluster of young companies by providing capital, office space and seasoned business guidance.

"It was a great idea a year ago, but I don't know how strong high-tech incubators are these days," said David Johnson, chief executive of Everycontractor.com. His Las Vegas company had signed a letter of intent to lease space in the incubator building, but Johnson said his company is now past the incubation stage.

"We've developed our product and now we are at the stage of marketing it," said Johnson, whose company allows construction-related businesses to buy and sell products in bulk quantities on markets created in cyberspace.

Johnson is one of a handful of local tech executives that were excited last summer about the proposal for a business accelerator downtown to help bolster the tech community. But a series of delays related to problems with the proposed land and lack of local investors, have turned some of the project proponents to skeptics.

Goodman was unavailable for comment this week, but city spokesman Erik Pappa said: "The project is very much alive."

But Johnson is not so sure.

"If we don't see any progress from the city in the next 90 days, we're going to look at other options for expansion," he said.

The 10.64 acres proposed for the incubator has not yet been acquired by the city and Marek Thompson Advisors, the center's original investment group from Los Angeles, abandoned the project after a few months of struggling to find local investors.

Another investment group, Las Vegas Downtown Redevelopment LLC, has taken over. But now problems with the land have delayed construction.

The city learned recently that nearly half of the 10 acres is undevelopable, partly because a proposed U.S. 95 offramp may run near the land, requiring a portion of the acreage to be set aside for gutters, sidewalks and other road work.

The news of the proposed freeway offramp has sent the developers back to the drawing board. Hugh Anderson, a local financial consultant and spokesman for the group, said the LLC needs to submit new architectural renderings for the shrunken site for city approval.

The city will have no stake in the business incubator, but it must fit within the mayor's vision of downtown redevelopment for the land to be sold to the group, Anderson said.

The tentative agreement called for the city to purchase the site at $9.25 a square foot for a total of almost $4.3 million. Immediately after closing escrow, the city was to sell the land to Anderson's redevelopment group for the same price.

Anderson noted the group has enough land on the remaining five acres for a 90,000-square-foot building.

Anderson's partners in the project are Tony Caporicci and Fred Maxik, executives of Netbooth Corp., a local maker of computer kiosks. Five others are also part of the LLC, but Anderson declined to release the names.

Marek Thompson Advisors unsuccessfully had hunted for investors willing to plow $25 million into the downtown project.

Anderson, who's day job is with Merrill Lynch, said the redevelopment group plans to get a loan from Canadian investment firm CIBC for $7 million to $10 million to construct the building and it's seeking additional funding to run the incubator.

Anderson corrected comments that had been made public previously about AT&T and technology giant Cisco Systems investing in the project.

"AT&T and Cisco were not going to be investors. Instead, they are going to be vendors (planning) to equip the building," Anderson said. "AT&T has been wanting to increase its presence in Las Vegas for a while."

The Nevada Innovation Center (NIC) -- made up of the Nevada Test Site Development Corp., the Nevada Development Authority and UNLV -- has been waiting to help get the project going.

"The NIC started talking to the (group heading) the high-tech incubator six months ago, but then its deal fell apart," said Stephen Rice, UNLV associate provost for research. "But if it comes back to life, that would be wonderful."

A local trade association that planned to be part of the project offered similar sentiments.

"I believe it's going to move forward, but the question is, 'When they will get a piece of dirt to build it on?"' said Richard Fitzpatrick, president of the Internet Business Alliance of Nevada.