Charleston West Virginia Economic Development

Discussions on Economic and Community Development in West Virginia and the Charleston MSA as well as issues of the Charleston Regional Chamber of Commerce.

Wednesday, February 13, 2008

Hatching a business
Charleston Area Alliance's business incubator helps local, international companies

By Sarah K. Winn
Gazette Staff writer
Photo by Chirs Dorst
A label rewinder sits on a desk between Jeff Isner (left) and Michael Panzeri at the office of D.P.R. LLC, an Italian company that makes and distributes the machines for the labeling industry.

Jeff Isner, a West Virginia native, works for an Italian company. He speaks two or three times daily to the company's president, and meets with the president's son and business partner.

Isner does all this out of a small office in Charleston, at the Charleston Area Alliance's business incubator on Smith Street.

"I wanted to test the international waters, but stay home in West Virginia," he said. "I think it is great that the [Charleston Area] Alliance is trying to attract international companies."

With a degree in international business, Isner started working for D.P.R. LLC last summer. The Italian company makes unwinders, rewinders and dispensers for the labeling industry.

Most recently, the leadership and engineering staff of Kureha PGA LLC, the Japanese company that is designing, constructing and operating the new $100 million polymer plant in Belle, has taken up residence.

The Alliance is providing free office space for eight of the company's employees while the facility is built.

"[The incubator] is like a bridge," said Matt Ballard, the alliance's president and chief executive officer. "It can help provide support for other companies here."

Since 1986, 104 companies have been through the incubator, creating 257 employees.

Today, the incubator houses 20 companies with 56 employees. Many are small, family-owned operations, but some are international companies looking to get a foot in the market.

The incubator opened its doors on Sept. 2, 1986, with six tenants on two floors, after two alliance predecessors bought the old Charleston Hardware building on Smith Street, said Michael Aeiker, the Alliance's vice president.

Grants totaling $1.375 million helped buy and renovate the 72,000-square-foot building.
In just over a year, 19 companies offering 75 jobs occupied all of the incubator's available office space, Aeiker said.

To keep up with demand, third-floor construction began in March 1988, adding 14 offices by August.

Most recently, the alliance renovated the fourth floor of building to create 10 loft suites, encompassing 13,000 square feet.

"I believe what was envisioned 20 years ago as a desire to establish a small-business incubator in this part of Charleston has stimulated new life back into not only the old building ... but new life back into Smith Street," Aeiker said.

John Nottingham of Novel Geo-Environmental LLC was a tenant from 2002 to 2004. Now, he has offices in Pittsburgh and St. Albans, with 25 employees company-wide.

"We are still in the area and continue to grow," he said. "It is surprising how well we matched what we had planned. We are where we hoped we would be."

Companies that want to be housed in the incubator have to meet certain criteria, including being a start-up company and having a well-written business plan, Aeiker said.

Companies' rents are economical, he said. Nottingham paid just $230 monthly for a single office. After the first year, he added another.

Renting just one office can be hard to do in commercial spaces, Aeiker said. However, he emphasized that the business incubator is not taking away business from commercial real estate, he said.

"If [companies] rent commercial space elsewhere in the city, they are not allowed to come here," he said.

A typical stay for a company is about five years, with companies re-signing each year, he said. Companies can stay longer, if space is available, and the alliance works with each business to develop an exit strategy, he said.

"If they are kind of struggling, we are not going to push them out," he said.

Also, companies can move out before their lease is up, as long as no money is owed, Aeiker said: "We are not your typical landlord."

Without the incubator, Nottingham said he would have likely just worked out his home, trying to make contacts for his engineering consulting business.

"If you work out of your home, you sometimes feel isolated," he said. "When you get up and go to work into a business environment, it helps motivate you."

Kanti Patel of American Geotech Inc. was housed in the incubator from 1993 to 1998.
Patel started in a 200-square-foot office, moving next to 1,000 square feet with warehouse space and finally a 3,000-square-foot space, he said.

"When I needed more space, it was always there," he said.

Now, his building on 601 Ohio Ave. is 16,000 square feet, with nine to 10 employees during the winter and 15 to 18 in the summer.

Patel's company has done soil studies for the Clay Center, the Embassy Suites hotel and NGK, he said. Now, with his new home and steady business, he has moved up and on, he said.

"It was the best thing to happen to me and helped me get off the ground," he said. "My egg has hatched. We graduated."

To contact staff writer Sarah K. Winn, use e-mail or call 348-5156.


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