https://www.tallahassee.com/story/news/2020/03/24/fsu-trustees-approve-boosters-request-finance-college-town-2-5-million-startup-incubator/2899395001/?fbclid=IwAR0-52e0ckoAHgwbbINd6DrA8uhVg2Cm3DpdZ6mHaFBgno3yWqntKgDe60s
Florida State University’s Board of Trustees, meeting via teleconference Monday, approved the FSU Research Foundation committing $2.5 million in matching funds toward a startup incubator in Innovation Park.
They also approved a finance plan for Seminole Boosters regarding College Town, and heard from President John Thrasher on FSU's response to the coronavirus measures.
Gary Ostrander, vice president for research at FSU, said space for start-up companies, many created by FSU faculty to commercialize technology created in their labs, is lacking in Tallahassee.
But a concerted effort is underway to correct that void with the construction of a $17-million, 40,000 square foot wet and dry lab incubator in Innovation Park.
Ostrander said the city and county, through Blueprint, have committed $2.5 million and the Leon County Research and Development Authority are chipping in $1.8 million.
At the same time, the research authority also is expected to be successful in its grant application for $10.2 million from the Economic Development Administration. That funding would come out of the Hurricane Michael disaster relief fund for economic development.
“Presently, feedback from EDA is very encouraging and there is a good chance that LCRDA’s grant will be funded,” Ostrander said in a request to trustees.
The FSU Research Foundation board, which previously pledged $2.5 million, also approved the request.
“FSURF’s fund will be expended if funding from the EDA grant is received and the total funding commitment reaches $17 million,” Ostrander said in his appeal.
Trustees on Monday also gave Seminole Boosters approval to finance $45 million for College Town I and II.
The request will come before the Board of Governors for its approval Wednesday, when members meet on a conference call.
Andy Miller, president and CEO of Seminole Boosters, said residential and retail spaces in College Town I and II are 100-percent occupied and the third phase, College Town III, is 98 percent occupied.
The Boosters request to finance $45 million for College Town I and will go toward:
- College Town I – Refinance $15,000,000 Hancock Loan
- College Town II – Payoff Developer’s $22,881,955 Mutual of Omaha Loan
- College Town II – Buyout Developer’s $1,850,000 interest
- College Town II – Buyout $4,900,000 of outside investors interest, with expectation of receiving the remaining $2,100,000 as a donation.
- Financial Advisor Fees: $146,250
- Loan Origination Fees: $225,000
Miller said The Boosters have 100 percent ownership of College Town Phase I, and they must refinance their existing Hancock $15 million interest-only loan by Oct. 1.
Hancock Bank extended the date from Feb. 1, 2020 to allow Boosters time to refinance with College Town II financing, according to meeting materials.
College Town II has a developer buyout option, which expires on May 1, 2020. The 30 percent developer ownership interest could result in a much larger buyout requirement in the future.
The developer is currently guaranteeing the existing College Town II loan and has significant amount of their borrowing capacity tied up in this project. The Boosters expect the developer wants to sell their interest or determine how to no longer guarantee the loan.
College Town II has an Investor buyout option expiring on December 31, 2020, which includes a 5 percent discount on the purchase price. The Boosters are working with several of the Investors on receiving their shares as a donation.
The Boosters must have 100 percent ownership of College Town II to apply for property tax exemption on the residential part of the property, which could result in $100,000 to $200,000 savings.
“If the Boosters do not proceed as planned, they may lose the opportunity to buy College Town II,” according to meeting materials. “This will create competition with their interests in College Town I & III.”
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