REC

Ravalli Entrepreneurship Center (REC)

Press Release – February 2009

International pharmaceutical giant GlaxoSmithKline is supporting a local Montana effort to start a business incubator to foster the Bitterroot Valley’s fledgling biotech industry.

“We’ll be assisting the RCEDA with vetting applicants and assessing proposals to make them more solid, to make sure they have rigorous review and a solid business plan,” said Michael Covarrubias, site director of GSK’s Hamilton operation. “We expect that most of them will need money. The RCEDA can introduce them to investors, and our hope is that some could be funded.”

For Julie Foster, head of the Ravalli County Economic Development Authority, Covarrubias’ aid — beginning with his service as an advisor to the nonprofit’s board of directors — gives a tremendous leg up to her effort to get the $3.2 million Ravalli Entrepreneurship Center from drawing board to reality. Plans call for a groundbreaking in early 2009 and for the 10,000-square-foot facility to be completed in early fall of 2009, Foster said.

“Our primary goal is to create the infrastructure for knowledge-based business growth in the Bitterroot valley,” Foster said. The center will be funded in part by a $1.6 million federal grant.

Central to the local biotechnology growth has been the $137 million expansion of GSK’s vaccine manufacturing facility. The company bought the former Corixa laboratory three years ago, mostly for its work on new vaccines and the manufacturing of a type of key drug component — called an adjuvant. Adjuvants are compounds used to enhance a vaccine’s ability to elicit a strong, durable, protective immune response making it more effective.

One key to GSK’s success has been its use of small, largely independent research centers, like that on its campus in Hamilton.
“GSK researchers collaborate with institutes and academic institutions all over the world,” Covarrubias said. “While we’re not necessarily looking to collaborate in that way or to directly sponsor or fund new businesses here, we want to support this important local initiative.”

Foster’s new biotech incubator could provide a ready place for small companies spinning out of work by post-docs and other researchers at the GSK lab, the federal Rocky Mountain Laboratories, also in Hamilton, or from the University of Montana in Missoula.

With practical help on business plans and other nuts-and-bolts assistance from Covarrubias and his Hamilton team, those nascent companies could thrive and grow, and eventually become a cornerstone of the local economy.

“We know we’re laying the groundwork, and we expect it to take time,” Foster said, referring to her goal of helping to grow the valley’s knowledge-based economy.

“You have to start somewhere, and to have these guys step up and say they think it’s a good thing, that they’ll add their expertise. This is just huge,” she said.

Business Plan

The Ravalli County Commissioners, at the request of the Bitterroot Valley Chamber of Commerce and the Chamber’s Business Advocate Committee, created the Economic Development Authority in 1997.

Charged with serving the needs of local businesses, as well as helping entrepreneurs create valuable new businesses, the Ravalli County Economic Development Authority (RCEDA) decided to research the advisability of establishing a business entrepreneurial center.

Since the inception of the RCEDA and the first discussions about establishing a Ravalli Entrepreneurship Center (REC), supporters of economic development have been confronted with some new economic realities. These include:

1) A fourfold expansion of the life sciences cluster with the nearly $200 million in recent investments made by GlaxoSmithKline Biologicals (GSK) and Rocky Mountain Laboratories (RML);

2) Increasing awareness among local, regional, and federal leaders about the need for this project in Ravalli County because of the valley’s unique life science resources;

3) Acknowledgment that the information economy is the wave of the future including, especially, biotechnology;

4) General realization of a shift from the traditional extraction industries to a service and technology economy, and the unlikelihood of a reversal of that trend.

The goal of the Ravalli County Economic Development Authority is to create the infrastructure for a knowledge-based business community in the Bitterroot Valley.

Realizing this vision will involve a large part of the community, take many years to bring to fruition and will require adequate infrastructure, skilled workers, access to capital and affordable housing. Another key to realizing this vision is to preserve the quality of life in the valley, especially the natural and recreational amenities that draw many highly skilled and educated workers to this area.

This means making good decisions on land use through compromise and community dialogue. RCEDA will use the Economic Gardening model. Economic Gardening means growing an economy by providing opportunities for existing local businesses and entrepreneurs. The Economic

Gardening approach that nurtures the “locally grown” entrepreneur is a widely accepted, successful model that began in Littleton, Colorado in the ‘80’s (Gibbons, 2007). The model has been especially successful in rural communities. The approach places maximum value on home grown entrepreneurs that have long term ties and commitments to the local community. Local businesses protect quality of life because they are more likely to make economic decisions with social and civic responsibilities in mind.

RCEDA Economic believes growth that provides good jobs while protecting a community’s quality of life does not happen by accident. RCEDA must take a leadership role in fostering quality economic growth in the Bitterroot Valley.

Executive Summary
Ravalli Entrepreneurship Center (REC) Business Plan

A Ravalli Entrepreneurship Center (REC) will meet the Ravalli County Economic Development Authority’s (RCEDA) goal of a knowledge-based model for economic development. The Center’s 4 acre campus will collaborate with The University of Montana and the recently organized Bitterroot Community College. Land for the REC has been donated by the Ravalli County Council on Aging. The 10,000 square foot facility is expected to cost approximately 1.5 million dollars to build.

The REC will be more than just a landlord for entrepreneurial tenants. REC will provide a range of business services to help “incubate” businesses.

The objective of the REC is to provide technical assistance that will help local small businesses achieve higher productivity, thereby making them profitable earlier, while increasing sustainability.

The REC will provide:

• Business coaching,

• Mentoring,

• Advisory boards,

• Networking opportunities,

• Access to a variety of capital programs,

• Timely and accurate market information,

• Quality space to conduct business,

• State of the art technology infrastructure.

The REC will provide tenants these services in house as well as connect them with other business services available from local consultants and state and national programs. Service provider lists are already being set up using the RCEDA’s Business Expansion and Retention (BEAR) Program.

While Ravalli County only has a population of 40,000, it is one of the fastest growing counties in Montana. Two major biotech centers have a presence and are expanding; National Institutes of Health (NIH) Rocky Mountain Laboratories (RML) and GlaxoSmithKline Biologicals (GSK).

These, along with the medical community provide a built in customer base for REC clients. Market and demographic information provide positive indicators for the economic success of the REC. This is coupled with the enthusiastic support of RML, GSK and the general business community.

The Center will be operated by a Facilities Director in conjunction with the Executive Director of the RCEDA. Support services are readily available from the RCEDA and contractors.

The facility is projected to open in late fall of 2009.