Economic development efforts that attract a new business to town are often touted in the local media. The business owner boasts of new jobs created in the
community, the mayor participates in a ribbon cutting ceremony, and reporters write of the move's positive economic impact. But what about the community that lost the business? What is the economic impact on that community.
Roger Jensen thought a lot about that question so when he helped to establish the Anoka County Economic Development Partnership in 1985, he didn't set out to attract businesses from other communities. He attempted to foster
business start-ups that would create new jobs. The non-profit organization works to support emerging high-tech companies that pay good wages.
The partnership initially set up the Minnesota Medical Enterprise Center in Coon
Rapids. The idea was to provide a space where young companies can grow. In the same facility would be support services that could provide sterilizes, a working lab, assembly and packaging areas. The center continues to operate
today, but the Anoka Counts Economic Development Partnership has since shifted its focus to respond to the kinds of calls it would get about the Medical Enterprise Center.
Companies from all over the world called about the
center, most of them needing money. The real key to economic development, Jensen quickly learned, is the ability to provide capital. So Jensen set out to create an equity fund which would make direct investments in emerging
technology businesses that agree to set up shop in Anoka County. The Anoka Electric Co-op was the first to invest in what today is known as the Anoka County Capital Fund. Norwest Minnesota and Northeast Bank of Minneapolis
expressed interest but faced regulatory hurdles. Those eventually were overcome when the Office of the Comptroller of the Currency authorized the creation of a multi-purpose, multi-investor community development corporation through
which they could contribute to the fund. This CDC was unique because such institutions usually are authorized for housing-related projects, not for-profit investments in technology companies.
Another key component in the effort
is an office building which serves as an incubator for the young businesses. The building, located in Columbia Heights, is leased by Genesis Business Centers, Ltd. Harlan Jacobs, the owner, takes stock in the companies that
locate there in exchange for rent. It's an arrangement the companies like because they can use their limited cash for product development rather than for facilities and office furnishings. Jacobs likes the deals because he knows
the return on his investment could be substantial as the companies grow.
Seven companies currently are operating in the incubator; five have received money from the capital fund, which also has awarded funds to 10 other
companies. Two companies that were operating in the incubator have grown sufficiently to need other quarters; two firms that started there have gone out of business.
Typical capital fund investments range from $25000 to $50,000.
The recipients are companies that need more room than the average entrepreneur can find in his or her basement, but do not yet have a product in production. Most are working on prototypes trying to win production contracts.
Although no one has made any big money on the concept yet, many are interested in being a part of the effort. For example, 10 banks and 12 other entities are now contributing to the capital fund, which today is worth about
$735,000. And, two investment clubs have been formed that allow participants to buy stock in the emerging companies. Anoka Investment Partners LLC is for people who want to invest directly and Anoka Investors, LLC is for people who
want to invest through a self-directed IRA.
Zebra Communication, Inc., is typical of the companies to get help from the capital fund and reside in the Genesis incubator. Set up in a sparse but adequate office, the company is
working to develop technology to facilitate high-quality faxing over the Internet.
Other companies include Medicord Inc., which makes a device that records basal body temperature, Visual Circuits which makes circuit boards that
give old computers sophisticated graphics capabilities, and Comedicus, which makes a device that delivers drugs to the pericardial space around the heart.
To date, Jensen says the fund has invested in 17 companies that have
created about 75 jobs in Anoka County. Other economic development professionals are watching the Anoka County approach carefully and Jensen said he expects it to be repeated in other areas throughout the state.