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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/08/2013 - ROCKY MOUNTAIN INNOSPHERE (RMI) HISTORY, BUILDINGDATE: January 8, 2013 STAFF: Bruce Hendee, Josh Birks Pre-taped staff presentation: available at fcgov.com/clerk/agendas.php WORK SESSION ITEM FORT COLLINS CITY COUNCIL Attending for Rocky Mountain Innosphere: Mark Wdowik, Chairman; Chris Otto, Treasurer; Mike Freeman, Chief Executive Officer SUBJECT FOR DISCUSSION Rocky Mountain Innosphere (RMI) History, Building Financing, and Current and Future Activities. EXECUTIVE SUMMARY The City Council Leadership Planning Team has requested an update and review of Rocky Mountain Innosphere (RMI). The presentation will cover four topic areas: (1) a review of the history of the RMI; (2) an explanation of the financial agreement involved with constructing the RMI building; (3) an update on the current status of RMI; and (4) an overview of the future of RMI. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Does the City Council have any unanswered questions about Rocky Mountain Innosphere or the building financing? BACKGROUND / DISCUSSION History The Rocky Mountain Innosphere (RMI) began as the Fort Collins Virtual Incubator in 1998, supported by the City of Fort Collins with General Fund dollars. Over the years, the program grew to include entrepreneurial support services, such as the Kaufman Foundation FasTrack program, subsidized office space, and advisors in residence. Today, RMI provides a wide array of services to start-up companies in Fort Collin, including the physical office and wet lab space of the newly constructed facility. RMI began planning for a new facility in 2008 when it partnered with the Northern Colorado Economic Development Corporation (NCEDC) to evaluate available buildings and sites for expansion. The initial search identified an existing building; unfortunately the property was purchased by a third-party before RMI could act. The effort then shifted to construction of a new facility. The initial plans included the City of Fort Collins lending funds directly to RMI for construction of the facility. However, the approach quickly shifted to using the New Market Tax Credits program (NMTC Program) when the Colorado Housing and Finance Authority (CHFA) approached the group. The NMTC Program was established by Congress in 2000 to spur new or increased investments in operating businesses and real estate projects located in low-income communities. The new facility lies in a qualified Census Tract according to NMTC criteria. Therefore, this financial approach was January 8, 2013 Page 2 available to aid in furthering the construction project. The City considered this approach beneficial, in part, because it would reduce the overall size of the potential loan to RMI2 Properties LLC (“RMI2 Properties”), a limited liability company formed for the express purpose of construction and operating the new facility on behalf of RMI. In addition, the transaction would leverage an equity investment from U.S. Bancorp Community Development Corporation (US Bank CDC, a subsidiary of U.S. Bancorp Corporation d/b/a US Bank) a private for-profit partner in exchange for the tax credits. RMI is a 501(c)3 nonprofit corporation formed to accelerate the success of high growth, high impact, innovation-based startup companies and to promote the development of an entrepreneurial culture and infrastructure to sustain and nurture scientific and technology-based industries in Colorado. Its major goals are: 1. Creation of primary jobs in the engineering, scientific, professional and managerial categories to enhance utilization of our highly educated workforce and positively impact regional wages. 2. Advancing existing and emerging scientific and technology industry clusters. 3. Accelerating technology transfer, research commercialization and spinoffs from Colorado State University and the University of Northern Colorado. 4. Addressing challenges for start-up companies to receive initial funding. The Financial Transaction The NMTC Program resembles several other Federal tax credit programs, including Low Income Housing Tax Credits, Historic Preservation Tax Credits, and Renewable Energy Tax Credits. The program allows for a private for-profit entity to receive tax credit against its federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (“CDEs”). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years). The CDE must, in turn, use the funds to make Qualified Low Income Community Investments (“Qualified Investments”) according to the program criteria. The construction of the new facility for the purpose of operating a privately owned, non- profit business incubator qualifies under the terms of the NMTC Program as a Qualified Investment. A NMTC Program financial transaction involves a verity of entities. The flow of funds through these entities can be complex. Due to the number of transactions involved in a NMTC Program financing the transactions are typically differentiated between Upper Tier transactions and Lower Tier transactions. The Upper Tier transactions bring investment funds and debt funds together for the purpose of making a Qualified Investment through a qualified CDE. The Lower Tier transactions manage the process of making the Qualified Investment in a qualified project. For further details see Attachment 1 - memorandum to City Council dated February 2, 2012 titled Rocky Mountain Innosphere – New Market Tax Credit Financing,. The City of Fort Collins and/or the Fort Collins Urban Renewal Authority (UR”) had three major contributions to the NMTC Program financing of the RMI building. These contributions include: January 8, 2013 Page 3 1. City: $5.3 million loan to the URA. Terms – 20 years, 2.5% interest with principal repayment staggered to follow tax increment availability and the NMTC Program. 2. URA: $5.3 million loan to the NMTC Program investor fund. Terms – 20 years, 1.5% interest only. The Redevelopment Agreement with RMI requires a refinance event occur in the eighth year in order to receive Tax Increment Financing (TIF) assistance. 3. URA: $2.8 million pledge of TIF assistance for specific reimbursable costs. RMI does not receive credit for this assistance until the eighth year and only if it refinances the outstanding $5.3 million loan between the URA and the investor fund. Current Services RMI provides an array of programs and services designed to support start-up companies connect with capital, research institutions, professional service providers and workforce talent. These programs and services include: • Social and Advisory Group for Entrepreneurs (“SAGE”): Provides early stage companies with advisory and mentoring assistance as they prepare themselves to become sustainable businesses. • Advisors In Residence (“AIR”): A network of subject matter experts structured to assist entrepreneurs with specific functional requirements; companies have access to these experts free of charge during their normally scheduled office hours; expertise includes Intellectual Property Law, Accounting, Financial Management, etc. • Entrepreneurs In Residence (“EIR”): A network of successful entrepreneurs in several specific industries available to meet with and mentor start-ups and entrepreneurs. • FastTrac: An award-winning program developed by the Kauffman Foundation helps entrepreneurs refine their business concepts and develop their business plans, investor presentations, elevator pitches and all of the necessary tools to acquire funding and launch or grow a business. • Innovation After Hours: Monthly event showcasing successful client companies with an emphasis on the target industry clusters. • NoCo Capital: This is a new program designed to provide increased access to capital to client companies. The program includes a pool of funds offered as grants to companies that have been reviewed by the Venture Lab (a partnership with Colorado State University). The Venture Lab identifies funding and execution (e.g., team, technology, or market) gaps that the company then uses these funds to address. The City’s funding is tied directly to these programs and services and accounts for approximately 14 percent of the annual operating budget of RMI (based on the 2012 budget). The current operating revenue by contributor for RMI is provided as shown in Table 1. January 8, 2013 Page 4 Table 1 2012 Innosphere Impact - Identifying and Promoting the Success of Start-up Companies Currently, RMI supports 32 startup companies in its incubator program. In 2012, five companies graduated from the program successfully and there were three early exits or failures. An early exit occurs when a company does not execute on its growth plan to realize the scale of impact predicted when it was admitted as an Innosphere client. Early exits make up the RMI’s fail rate, which, as of mid-2012, was 9 percent. Semi-annual reviews with companies do not include all the detailed metrics collected for annual reporting; however, the charts in Attachment 2 give a snapshot of overall health of RMI’s portfolio companies. RMI has successfully supported more than 40 companies in the past three years, averaging more than 25 client companies in each of the past three years. RMI’s ability to attract high potential technologies and entrepreneur teams is essential in fulfilling its mission. RMI on-boarded thirteen new clients from an applicant pool of 81 potential clients this year and is currently offering pre-incubation services to another fifteen, tracking their progress to see if there is potential for them to become a client at some point in the future. Of the remaining companies, RMI continues to analyze and assess fourteen companies to determine whether RMI is the best resource to match their current needs. The Future RMI is focusing on capital access as the key strategic priority again in 2013. If the companies that are being incubated ultimately cannot access capital to grow – the program has failed the entrepreneur. In 2012, RMI has driven two major capital access programs: (1) the formation of the Colorado Angels; and (2) the development of an early stage debt pool ($500k) with the Colorado Enterprise Fund and a local bank. In 2013, the focus will be to complete fundraising for an early January 8, 2013 Page 5 stage investment pool or a seed fund and to fundraise and complete a Community Development Venture Capital Fund. RMI’s other priorities include continuing to expand its relationship with Colorado State University (CSU) and CSU Ventures. This involves more integration with CSU’s commercialization process, supporting companies at the Power House (former Engines Lab) and the Research Innovation Center. RMI sees an ongoing high quality pipeline of start-up companies coming from CSU over the long term. The goal is to support the growth in technology based headquarters companies in the community. ATTACHMENTS 1. Memorandum to City Council: Response to Allegations Regarding Rocky Mountain Innosphere Financing, February 2, 2012 2. Rocky Mountain Innosphere Annual Report, 2011 3. Powerpoint presentation ATTACHMENT 1 2011 ANNUAL REPORT bring your vision ATTACHMENT 2 Colorado State University Ventures Colorado BioScience Association City of Fort Collins City of Loveland Colorado State University THANKS TO OUR FUNDING PARTNERS: 41% 7% 7% 24% 21% Clean Tech Tech Software BioScience Tech Hardware Other 2011 IMPACT 30 client companies served $4.5 mil revenues of current client companies 73.5 part-time employees of companies 99 full-time employees of companies $55,000 average annual salary of company employees* 5 companies that have completed a Series A round $36.1 mil capital raised to date by current client companies $9.4 mil capital raised in 2011 * This compares to last year’s average of $66,000 which did not include part-time employee salaries. 2011 HIGHLIGHTS • St. Renatus successfully secured funding for its FDA Phase III studies • DH2i secured an SBA loan that enabled it to get its first customer and ship its first software product • Crashbooxx, Clear Path and Canvasback began collaboration in the innovation of a new product • Symbios was rewarded CEA grant funds to match an SBIR award from the National Science Foundation • YouSeeU secured an Angel investment round and first customers • Ridekick launched a successful marketing campaign leading to its first international sales • WeatherFlow secured offshore wind contracts for Virginia and North Carolina PATENT PRODUCTION 17 provisional patents filed 18 national/ foreign patents filed 4 patents awarded INDUSTRY PORTFOLIO INNOSPHERE CLIENTS Tenants AGP Advanced Regenerative Therapies BeginAgain Canvasback Legal Technologies Crystal Creek Energy Czero Delta Circuit Design DH2i Eckstein Diagnostics Forston Labs Logimesh Ridekick International WeatherFlow Wirsol Solar Yewsavin, Inc YouSeeU Non-Residents Advanced Microlabs CarboAnaltics Clear Path Labs Crashboxx DVM Systems Membrane Protective Technologies Panda Bicycles Physical Activity Innovations Propel Laboratories St. Renatus Stewart Energy Symbios Technologies VanDyne SuperTurbo ZeroHero INNOSPHERE GRADUATES* Inviragen Sprig Toys *The practice of graduating companies only began in 2009 since the Innosphere rebranding. Ridekick International produces an electric motor and battery that clicks on any bike in seconds. Founded in 2009, Ridekick transformed their prototype to sales in 13 months, growing from 2 entrepreneurs to 9 employees. Innosphere has supported Ridekick with more than office space. The collaborative environment and community of entrepreneurs is vital in sharing solutions for early stage businesses and the programs have provided access to resource that young companies can’t typically afford. “ The Advisor in Residence program is thousands of dollars worth of free services. That’s advice I can afford.” – Mark Wanger, Ridekick International Czero provides critical engineering resources to a wide variety of companies working on clean tech projects. Since becoming a client of the Innosphere, the company has grown from 2 employees to 7, revenue has grown steadily since inception and the founders received the 2010 Bravo “Emerging Entrepreneur” award presented by the Northern Colorado Business report. “ Innosphere has been instrumental in several capacities. First and foremost they have assembled a large team of highly skilled advisors who provide excellent mentorship in all areas critical to startup companies. Secondly, they have created and fostered an entrepreneurial ecosystem that brings many different companies, city and state resources, university personnel and individuals together allowing us to develop relationships, find synergies, learn from each and help each other. Finally, they have been vocal supporters of the companies and have brought in resources to help us and have knocked down roadblocks.” – Guy Babbitt, Founder of Czero Why do companies around the world compete to develop “the next big idea?” Because innovation drives the global economy. The spark from a new product, process or material can transform an entire industry, launching businesses and creating jobs in its wake. Innovation has long been an area dominated by the U.S. But that’s no longer the case. If the U.S. is to regain momentum, we need to encourage entrepreneurs as they try to get fledgling ventures off the ground. And one of the best places to do this is right here in Colorado. Home to two of the nation’s top research universities and national research facilities such as NREL (National Renewable Energy Laboratory) and NCAR (National Center for Atmospheric Research), Colorado’s Front Range communities have become one of the nation’s hotbeds of technological innovation. The economic impact of innovation is already being recognized in Fort Collins and the surrounding region: • Ranked 3rd, Best-Performing Cities 2011, Where America’s Jobs are Created and Sustained:: Milken Institute - December 2011 • One of America’s 20 Most Economically Vibrant College Towns: TheAtlanticCities.com - September 2011 • Ranked 5th Best Places for Business and Careers: Forbes - June 2011 • Fort Collins, One of the Top 10 Cities Adopting Smart Grid Technology: U.S. News and World Report - May 2011 • Top Colorado City for Job Growth, Fort Collins-Loveland: 2011 Best Cities for Job Growth, newgeography.com - May 2011 To keep the momentum going, we need to feed this innovative flame – which is exactly what Innosphere does. Innosphere is a non-profit organization that nurtures entrepreneurial activity in Colorado. We enable and accelerate the success of innovation- based startup companies that compete in the global marketplace. We actively promote the development of an entrepreneurial culture and the infrastructure to sustain scientific and technology-based ventures. In short, we’re a hub for entrepreneurial activity. “ Cleantech market grew from $188.1B in 2010 to $246.1B in 2011.” - Clean Energy Trends 2012 Report “ Innovative water technologies is a $360B market and growing” - Forbes March 2012 “ US still the top market for life science investors.” - Jones Lang LaSalle February 2012 OUR MISSION When it comes to launching a business, entrepreneurs need more than innovative ideas and perseverance. They need the support of organizations and individuals who can help them refine their business concepts, identify funding sources, find affordable office space, access professional resources, market their products, and much more. Through our programs and services, Innosphere helps create a powerful support network that nurtures young businesses. Programs and Services Innosphere offers programs and resources – such as market research, educational seminars, capital access assistance and PR – to serve the needs of early-stage entrepreneurs. Examples: • Coordination of access to capital occurs through a significant network of angels, venture capitalists and strategic investors. • Advisors in Residence enlists subject matter experts such as CPAs, corporate attorneys, intellectual property attorneys, marketing and HR professionals to serve as trusted advisors. • The Social and Advisory Group for Entrepreneurs (SAGE) gives entrepreneurs the opportunity to pitch their concepts to a group of 40+ business mentors who offer real-time advice in order to help assess the business opportunity made possible by their idea. After the presentation, business mentors volunteer to work in small advisory teams, leading the company through a three to eighteen month engagement for up to 48 hours of pro-bono advisement. • Executives in Residence are experienced entrepreneurs who have a demonstrated record of success in a variety of industries, work individually with client companies in a collegial and confidential manner to overcome challenging business issues. • Innovation after Hours is a monthly networking forum showcasing some of the region’s top business, academic and government leaders. Networks Innosphere serves as a platform to connect startup businesses with the resources they need to grow. To do so, we leverage the complementary expertise of academia, industry and government. For example, our entrepreneurs have access to outstanding faculty members at nearby Colorado State University, a top-ranked research university that ranked first, on a per-faculty basis in federally funded research and development groups among all public institutions in 2008-09. 2010 marked the third consecutive year that the university surpassed $300 million in total R&D expenditures. (Colorado State University website.“National Science Foundation ranks CSU one of nation’s top 50 research institutions,” Oct. 8, 2010) Innosphere also works closely with local, country, state and federal governments and national laboratories. At the same time, we collaborate extensively with private investment programs, capital sources, economic development groups and business service providers. Facilities Our new LEED Platinum – certified building in the heart of downtown Fort Collins offers startup companies 30,000 square feet of first-class office space, conference meeting space and bioscience laboratory facilities. OUR TOOLS for empowering results OUR PLAN to get results Innosphere Focus Areas Like the client companies we work with, Innosphere is somewhat of a startup. Innosphere has transitioned through two major growth stages and we are now entering our third. With strong support from our funding partners, Board of Directors, and our stakeholders – the organization is stretching to reach new heights by significantly increasing the value of our programs and services to the entrepreneurial community we serve. In 2012, there are two major initiatives that are our focus: implementing a new access to capital initiative and fully integrating our services for entrepreneurs with Colorado State University Ventures (CSUV). Access to Capital We are living in an era where the traditional methods for accessing capital in a startup venture have radically changed. Increasingly, we have seen our founders and CEOs spending inordinate amounts of time seeking modest early stage seed funding. This distracts from addressing the critical technology development and market characterization work that is essential in an early venture. Lack of early stage capital starves the company of essential resources it needs to grow and create impact. Innosphere and CSUV have teamed to address this issue and are actively putting cutting edge and novel tools in place to help fund our top start-up ventures that will be implemented in 2012 and 2013. Integration with CSU Ventures Innosphere and CSUV have a long tradition of providing programs and services designed to speed up the pace of new venture creation. Over the years, our programs and services have become more substantial and impactful. We realize that to be effective there cannot be duplication of effort and we must combine our limited resources. This year our organizations will be integrating aspects of business support including a common incubation application, access to capital, combined advising and due diligence. We are looking forward to making significant progress toward providing the highest quality and most impacted services to our entrepreneurial community. OUR SUCCESS is fueled by your support. 5 YEAR GOALS 50 New Startups $200 Million in Capital 600 Primary Jobs 1,200 Spinoff Jobs $2.5 Million in Seed Funding SPONSORSHIP OPPORTUNITIES Donor Pool Debt Fund Community Development Venture Fund Program Sponsorship Entrepreneur Sponsorship TAX CREDIT EXAMPLE FOR INNOSPHERE SPONSORS* Innosphere Contribution Amount $100,000 Assumed 35% Federal Tax Rate -$35,000 4.63% Colorado Tax Rate -$4,630 Colorado EZ Tax Credit -$25,000 Adjusted “Cost” To The Contributor $35,370 (35.37% of Total Contribution) REFER If you know individuals who may be interested in volunteering or engaging in the Innosphere network, please refer them to our website www.rmi2.org and encourage them to contact us. *EKS&H We are more than a building. We are more than an incubator. We are more than a network. We are a force—borne of ideas and shaped by passion. We are a community of entrepreneurs, leaders and supporters. We are an ecosystem for innovation. We are an engine for economic opportunity. We are a catalyst for progress in Northern Colorado. We are Rocky Mountain Innosphere. Bring your vision. 320 E. Vine Drive Fort Collins, CO 80524 970.221.1301 rmi2.org (a 501c3 tax exempt non-profit organization) 1 Rocky Mountain Innosphere Update on Program and Building January 8, 2013 ATTACHMENT 3 1 2 Agenda • Brief History of RMI • Update on RMI status • Future RMI plans • Review of the financing transaction 2 City of Fort Collins, CO Innosphere Update – City Council Work Session January 2013 3 Our Evolution – Staff 98‐06 FCTI 06‐11 RMII 11 ‐ 12 Innosphere 2012 & Beyond Kathy Kregel Mark Forsyth Kelly Peters Nicole Franklin Mark Forsyth Ryan Speir Ryan Daniel Jamie Sherwood Mike Freeman Doug Johnson Maggie Flanagan Emily Wilson Ryan Daniel Whitney Baggett 4 Our Evolution - Programs FCTI • Advising RMII • Advising •SAGE •FastTrac Innosphere • Advising •SAGE •FastTrac •AIR &EIR 2012+ • Capital Access •Scale Capacity •Intake Process •Regional Impact 5 We are more than a building. We are more than an incubator. We are more than a network. We are a force—borne of ideas and shaped by passion. We are a community of entrepreneurs, leaders and supporters. We are an ecosystem for innovation. We are an engine for economic opportunity. We are a catalyst for progress. We are Rocky Mountain Innosphere. Bring your vision. 6 Our Mission To enable and accelerate the success of high growth, high impact, innovation‐based startup companies and to promote the development of an entrepreneurial culture and infrastructure 7 2011 Impact 30 client companies served $4.5 mil revenues of current client companies 73.5 part-time employees of companies 99 full-time employees of companies $55,000 average annual salary of company employees 5 companies that have completed a Series A round $36.1 mil capital raised to date by current client companies $9.4 mil capital raised in 2011 8 Industry Portfolio 9 Pursuing Technology in Important Markets •Cleantech market grew from $188B in Cleantech 2011 to $246B in 2012 • Innovative water technologies is a $360B market and growing Water Innovation Water Innovation •The US is the top market for life Biosciences science investors • Will represent $400B ‐ $1T in new investments by 2020 Impact Investing Impact Investing 10 5 Year Goals 50 New Startups $200 Million in Capital 600 Primary Jobs 1,200 Spinoff Jobs $2.5 Million in Seed Funding 11 Programs – What does Innosphere DO? • Education • Kauffman Foundation’s FastTrac Tech Venture • Lunch & Learn presentations • Workshops • Pitch Coaching • Mentorship • Social and Advisory Group for Entrepreneurs (SAGE) • Advisors in Residence (AIR) • Executives in Residence (EIR) • Access to Capital • Funding/ Exit Planning • Investor Forums • Active Fundraising 12 New Client Engagement •Review application •Clarifying phone call ‐ needs alignment Initial screening •Meet with RMI staff •Business Analysis Business Analysis •Presentation to advisor group •Advisors complete criteria review sheet Advisory Review 13 2012 Accomplishments  14 new client companies  Expanded programs  Fundraising  Access to capital 14 Seed Start‐Up Growth Gate Gate Progress: Fund for Innovation CO Angels Debt Options CDVCF Access to Capital Program 15 CDVCF’s provide equity capital to businesses in underinvested markets, seeking market‐rate financial returns, as well as the creation of good jobs, wealth, and entrepreneurial capacity. CDVCF’s are qualified investments under the Community Reinvestment Act an acknowledgement of the importance of the CDVCF industry and its tremendous ability to provide financial support to underserved areas. 16 4Q Client Company Pipeline Activity 34 client companies 25 applicants 8 disqualified 3 new client companies 2 graduates/ early exits 25 companies in the pipeline 17 Sample 4th Quarter New Client Companies Community Funded- A perks based crowd-funding platform and payment gateway solution. To date, CF has helped 19 organizations raise over $163,000 towards their projects. Innosphere is supporting customer development and fundraising to help the management team scale this model beyond the region of Northern Colorado. MOCO Development Co.- MOCO designs multilingual solutions to help educational institutions and businesses reach out to an ever- growing international market. Innosphere is providing ideal mentor guidance to drive MOCO toward first revenues and market validation prior to fundraising. VetDC- Founded on the principle that companion animals should have greater access to novel, innovative medical treatments. VetDC "reverse-engineers" promising new human technologies specifically for development in companion animal markets to address serious veterinary medical conditions. 18 Maturity Ratings Scale Definitions Early: Pre‐revenue; in need of capital; 2+ years to graduation Mid: Pre‐revenue or insignificant sales but making progress on milestones; about 1 year from graduation Mature: Post‐revenue; some successful fundraising; within a year of graduation 19 Revenue Status Annual revenues: 2010- $8.35 million 2011- $4.5 million 20 Primary Funding Paths 21 22 New Market Tax Credit Financing • Congress Established the program in 2000 • Allows for a private for-profit entity to receive tax credit against their federal income tax return – 39 percent of original investment amount • Requirements: – Project must be in a qualified census tract – Must be made through a Community Development Entity (certified by US Treasury) – Investment must occur in a qualified project – Compliance managed by IRS 22 23 Financing Structure • Due to the complex nature of the financing structure typically broken into two parts • Upper Tier Transactions – Brings together the investment funds and debt funds • Lower Tier Transactions – Involve the management of making the qualified investments through a CDE in the project 23 24 Upper Tier Transactions U.S. Gov’t Investor Fund CHFA (CDE) US Bank CDC (Investor) URA (Lender) CITY $35 Million Allocation $2.8 Million Tax Credit $5.3 Million Loan $2.0 Million Contribution $5.3 Million Loan 24 25 Lower Tier Transactions Qualified Investment (Sub-CDE) CHFA (Manager) RMI RMI2 Properties LLC $7.3 Million Investment $220,050 Fee Two Loans: (A)$1.8 Million (Equity) (B)$5.3 Million (Debt) Annual Property Tax Payments (TIF) 25 26 Financing Summary • City: $5.3 million loan to URA – 20 years, 2.5% interest w/ principal repayment • URA: $5.3 million loan to Investor Fund – 20 years, 1.5% interest only – Redevelopment agreement specifies refinance • URA: $2.8 million in direct Tax Increment Assistance – For specific reimbursable costs – RMI receives credit in 8th year – Must refinance $5.3 million URA loan 26 27 Direction Sought • Does the City Council have any unanswered questions about Rocky Mountain Innosphere or the building financing? 27 is your opportunity OUR UNIVERSE Clean Energy Clean Water Bioscience Information Technology Modeling, Simulation and Geospatial Technology Engines and Transportation OUR BENEFITS Innovation Ecosystem Engine for Job Creation Catalyst for Urban Vitality Showcase for Area Startups Nationally Recognized