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HomeMy WebLinkAbout11/15/2017 - STAFF REPORTS - 1.G. �ppALM$A4 r O V N h CptIF01004 CITY COUNCIL STAFF REPORT DATE: November 15, 2017 CONSENT CALENDAR SUBJECT: PALM SPRINGS INNOVATION HUB AND ACCELERATOR CAMPUS QUARTERLY REPORT FROM: David H. Ready, City Manager BY: Community and Economic Development Department SUMMARY The Consulting Services Agreement approved July 6, 2016, with the Coachella Valley Economic Partnership ("CVEP") requires CVEP to prepare and submit quarterly Palm Springs Innovation Hub ("PSiHub") reports. This item will receive and file the third quarterly report for the 2017 Calendar Year (first quarter for Fiscal Year 2017). RECOMMENDATION: Receive and file the third quarterly report from the Coachella Valley Economic Partnership for the Palm Springs Innovation Hub for the period of July 1 to September 30, 2017. STAFF ANALYSIS: On July 6, 2016, the City Council approved Consulting Services Agreement (A6875) with CVEP for continued management of the PSiHub and Palm Springs Accelerator Campus, (the "Program"). The Agreement facilitates the terms by which CVEP delivers management, administrative and client services to meet the goals of the Program, including, but not limited to, providing education, support, training, business assistance, and networking programs. CVEP also manages the physical office space reserved for PSiHub clients housed at the Rabobank Regional Business Center and at the Accelerator Campus. In accordance with the Agreement, CVEP is required to submit quarterly progress reports to the City identifying how the Program is performing. rmm N0. _ City Council Staff Report November 15, 2017--Page 2 Coachella Valley Economic Partnership Report CVEP has submitted its third quarterly report for the period of July 1 to September 30, 2017, which is included as Attachment 1 for reference. ENVIRONMENTAL IMPACT: Section 15061 (b)(3) of the California Environmental Quality Act ("CEQA") Guidelines exempts activities that are covered under the general rule that CEQA applies only to projects that have the potential to cause significant effects on the environment. Where it can be seen with certainty that there is no possibility the activity in question may have a significant effect upon the environment, the activity is not subject to CEQA. The requested action requests the City Council receive and file a quarterly report on the activities of CVEP and the PSiHub, which itself will not result in any new direct physical impacts to the environment. Therefore, the requested action is considered exempt from CEQA. FISCAL IMPACT: The City compensates CVEP $196,500 annually, paid in quarterly payments upon submission of the Quarter Report metrics required by the Agreement. SUBMITTED: Jay Vi , irector of Community David H. Ready, Esq., . and Econ is Development City Manager Attachment: CVEP PSiHub Quarterly Report July 1 to September 30, 2017 02 ATTACHMENT Palm Springs Hub and Accelerator Campus Quarterly Report July 1 — September 30, 2017 03 PALM SPRiNGa IHUB AND ACCELERATOR CAMPUS QUARTERLY REPORT July 1 — September 30, 2017 Submitted by: Joe Wallace Palm Springs il-lub Managing Director October 10, 2017 Executive Summary The Palm Springs Innovation Hub (PSiHub) is a State designated business incubator funded by the City of Palm Springs and managed by the Coachella Valley Economic Partnership (CVEP), an economic development organization serving the entire region. Currently the investors in the iHub are the City of Palm Springs, the Desert Healthcare District, and Wells Fargo Bank. In 2013 the City of Palm Springs and the Desert Healthcare District partnered to fund the refurbishment of a 43,000 square foot complex of buildings now known as the Palm Springs Accelerator Campus. The purpose for this campus is to encourage promising companies with proven concepts and markets to establish their supply chains and manufacturing operations in Palm Springs to reduce the risk of flight to places like Silicon Valley where exemplary incubation clients are often enticed by venture capital. The iHub's primary focus is on early stage businesses in the renewable energy and associated technology space. The iHub facilitates education, support, training, business assistance, and networking programs to contributing members, and overseas operations of a small business incubator. This report covers the third quarter of 2017 The quarter saw the client base in the iHub exceed capacity with 6 in-house, 12 in the Accelerator Campus, and 16 virtual clients for a total of 34 clients. A number of metrics for evaluating PSiHub progress were checked that are consistent with the goals of creating wealth and setting the transformation of the Coachella Valley economy into motion. PS Mub Q3 2017 Report Introduction The Nub is a network that enhances Coachella Valley's competitiveness by stimulating partnerships and collaborations that accelerate investment and economic development around research clusters. The!Hub is focused on clean technology,with emphasis on sustainable businesses,renewable energy,and enhancing technologies. The goals of the Nub include: • Transform the local economy through growing renewable energy based enterprises • Continue to accept 10 companies per year in perpetuity after achieving the goal of SD companies in the first 5 years • Create local high paying technology and manufacturing jobs in the Coachella Valley • Develop programs to enable and encourage the Coachella Valley and California compete in the global marketplace • Increase the per capita household income and standard of living regionally • Attract angel and venture capital investments in client companies The!Hub operates a small business incubator that has the capacity to mentor up to six clients in-house at the Rabobank Regional Business Center,twelve at the Accelerator Campus, and twelve virtually. The Nub offers office space to clients,complete with office equipment and amenities,access to shared conference rooms,a board room,and a dedicated staff that monitors and assists the clients. CViHub clients have access to professional services at free or reduced costs,targeted training classes,and workshops. 05 9 Community Relations/Accolades The iHub participated in the following events this quarter: • Riverside County EDA Regional Planning Sessions • Monthly California Innovation Hub Conference Calls(3) • Palm Desert Rotary Club, Invited Speaker • CSUSB-PD Advancement Board of Directors:Assigned to Executive Committee • Desert Valley Builders Association:Invited Speaker Palm Springs iHub Clients on September 30,2017 The iHub started Q3-2017 with thirty six incubator clients. During the third quarter a total of 3 applications or visits of Interest to the iHub were reviewed and none were accepted. Two companies that were not making progress were taken off of the iHub roster. The total at the end of the quarter was thirty four. Partnership Activity The partnerships resulted in tangible activity during this quarter: • Univ.of Redlands interviewing new candidates for MBA students to do comprehensive business plans. + Workforce Excellence separation activities continue. Financial separation is functionally complete. • Appeared in video for California Renewable Energy Alliance • Attended NREL(National Renewable Energy Labs)and Wells Fargo Summit in Golden,CO at their expense for training on applying for next round of funding for IN2 Incubation Centers Metrics: The PSiHub updates their metrics and reports on them quarterly. The metrics include: ......... _ Metric Result I i Number of resident companies 6 Number of Virtual Companies 16 Accelerator Campus Clients 12 Number of graduating companies 0(11 total to date),with 12 others receiving services. i Number of jobs created by PSiHub companies to date 167(4 this quarter) Revenue/sales from PSiHub companies(estimated for quarter) Greater than$1 Million Investment Dollars Raised by PSiHub Clients $200,000 equity Number of sponsors,corporate partners,members or contracts for the Over 200 identified iHub Number of patent applications and issued patents(total) 21"and 2fd patents issued .,_,__ - Number of licenses or agreements by PSiHub companies 1 in discussion Funding sources and amounts leveraged/invested WFB deal extension deferred until 12/2017 Number of companies receiving outreach services S(excluding iHub clients) 06 - --- -- Number of entities providing outreach services 4 Client Highlights from Q2-2017 • Companies domiciled at the Palm Springs Accelerator Campus are all running ahead of their sales for 2016 by percentages ranging from a low of 35%to a high of over 100%. It is expected that lHub companies had about$7 Million in revenue In 2017 • SecoSys has agreed in principle to be acquired by an International company. Due diligence is in process and a significant announcement Is pending completion. Completion expected Q12018. • INDY Power Systems was awarded US Patent#9,223,372(the 81b patent for IPS) • Fanny Ramirez of Incontinence Technologies was named a Semi-Finalist in the Spirit of the Entrepreneur Awards • Heppolt was awarded US Patent#9,670,899(the 2nd patent for Heppoit)Johannes Steinlechner is also nominated for the SBEMP Innovation Award • Rick Axelrod of Lifestream(Board Member)was named a Finalist in the Spirit of the Entrepreneur Awards Previously Stated Goals for Q3-2017 • Tour La Kretz Center in Los Angeles($67 Million Accelerator Campus) • Establish a volunteer attorney in residence for iHub companies • Continue cultivation of Wells Fargo Bank follow on contract with PSiHub for support • Continue to investigate feasibility for having a Maker Space at the Accelerator Campus. Supplier under consideration is Gene Sherman of Riverside who has a similar facility up and running there. Findings from trip to La Kretz Center LACI La Kretz Center Palm Springs Mub Facilities 60,000 square ft.(rent free) 50,000 square feet(rent paid) Cost of Facilities Improvements $67 Million $1.8 Million Annual Operating Budget $3.6 Million $322,032(actual FY 16-17) Dedicated Staff 32 FT plus 10 PT 2 Half Time plus 20 hours per mo.consult Companies Attracted 56 overall,32 active 57 total,34 active Funding Sources LADWP,City of Los Angeles City of Palm Springs,WFB,DHCD Equity Raised by Companies 11 $134 Million $21 Million($20 Million from outside) Goals for Q4-2017 • Apply for next round of IN2 Incubator funding from Wells Fargo • Continue to attempt to establish a volunteer attorney in residence for iHub companies:Identify more candidates • Continue to investigate feasibility for having a Maker Space at the Accelerator Campus. Supplier under consideration is Gene Sherman of Riverside who has a similar facility up and running there. • Speak at three local civic organizations about what CVEP and the iHub do to add value to the economy + Make funding presentation to IID Measure J Progress Report • All projects completed and all dollars expended and accounted for. 07 Appendices: • [Hub Companies circa September 30, 2017 08 3111 E.Tahquitz Canyon Way Palm Springs,CA 92262 p:(760)340-1575 p:(760)548-0370 w: Palm Springs iHub Roster(End of Q3 2017) Energy(Renewables/Management/Conservation) • Desert GeoExchange: Parent company Geothermal Resource Group provides drilling services. Desert GeoExchange is evaluating its entrance into geothermal heating/cooling systems. • EV Enterprises:Producer of lithium-ion battery components,microelectronics and other related products for electric vehicle applications and more. *Located at Palm Springs Accelerator Campus • Heppolt:Heppolt has created a new wind turbine. The design allows for installation &maintenance to be carried out at ground level as opposed to current vertical turbines. HWE is receiving support from Los Alamos National Lab. • indy Power Systems:Offers a patented energy blending technology to enable customers to minimize their load charges by storing energy during periods of low demand for use during peak demand times. • Sactec Solar:A designer and manufacturer of all-in-one alternative energy solution systems.These units can be deployed in regions or situations where power is not easily accessible. *Located at Palm Springs Accelerator Campus • SECOSYS:Their platform seamlessly integrates into existing water meters to manage, control&conserve water in real-time for water districts,property managers and consumers. *Located at Palm Springs Accelerator Campus • Salads Power Cells:Producer of super capacitor, solid-state cells that have the potential to store energy with rapid charging rates. *Located at Palm Springs Accelerator Campus • SalAquo:China-based manufacturer of solar/solar thermal components looking to establish a U.S.-based manufacturing hub. • Swiss Hytech:Swiss-based business engaged in hybrid LeMans racing.Their technology uses a flywheel to store energy as opposed to other storage systems such as battery systems. • Vestaxx: German-based startup developing insulating glass units for applications in intelligent and dynamic windows and glass building facades. Their propriety glass coating technology increases thermal insulation efficiency. Healthcare/Medical Innovation • ButterFLi Inc.: ButterFLi has created a local infrastructure for on-demand assisted transportation for seniors and those with disabilities,such as those who are wheelchair-bound.ButterFLi is like USER but for non-emergency medical transportation for seniors and those with disabilities. *Located at Palm Springs Accelerator Campus 09 3111 E.Tahquitz Canyon Way Palm Springs,CA 92262 p:(760)340-1575 p:(760)548.0370 w: f.,,:j;.:,c'b""M J-., • The Connected Grip:The Connected Grip executive team includes a former member of RIM's(Research in Motion) Blackberry team. They are developing new products in the exercise machine category that incorporate new technologies such as predictive modelling and customized Uls. 'Located at Health&Medical Innovation Center • Elizabeth Wong:Elizabeth Wong is a local CRNA who was recently granted a U.S. patent for a new sterile IV port and syringe system.She is currently working on prototype variations of this system. • GattaCo: Developing products that replace the need for centrifuges and allows for extraction of plasma from whole blood in half the time of current means. 'Located at Health&Medical innovation Center • Incontinence Technologies:The Fanny Wrapper is an adult diaper system with an integrated sensor unit used to aid caretakers of incontinent adults. • Pacific Coast Innovations: Designer of a proprietary data compression algorithm that has many different Industry applications.Their first application will be in the manufacturing of medical devices. • Pet PraJx LLC: Pet Projx is introducing a new hand sanitizer/disinfectant that will focus on the social acceptance, appeal and form factor that currently hinders this category. Pet Projx also has ancillary products to introduce down the road that would expand into the beauty and cosmetics category. • Priatas: A medical device company focused on intelligent design of medical and lab ware disposables throughout the entire life cycle of the product. By using less material and modulating instruments, they hope to decrease medical waste. "Located at Health&Medical Innovation Center • PureOzone 360: Currently researching a new type of disinfectant that would use proprietary technology for end-consumer sales. • Restroom Aid: A proprietary system designed to give independence to handicapped individuals who otherwise need assistance using the restroom. • Shannon Stevens:Shannon Stevens is a local nurse who has developed a medical-product to be used in operating room environments for the irrigation of limbs or other body parts subjected to trauma that need to be cleaned and treated. • TransMedimaging: Operates in the electronic health record industry. Their propriety service eliminates waste in medical imaging by facilitation of cloud based data,and hi-res medical images storage. Software--Primary(Education,lifestyle,Marketing,Social Media) Pocial:A new,creative social network designed to connect like-minded individuals based around polling in an effort to foster and encourage debate,create a collective voice and quantify opinions. • PS Talent:Developer of virtual entertainment products on the Sony PlayStation platform • SpartaApp:Propriety mobile application platform for connecting artists with art collectors worldwide. 10 4 3111 E.Tahquitz Canyon Way Palm Springs,CA 92262 p:(760)340-1575 p:(760)548-0370 w: • Univocity Media:Univocity is a cutting-edge,multi-media company leading the way in the production, distribution and marketing of audio and video content,across platforms. "Located at the Palm Springs Accelerator Campus • Wise Education:Delivers online English as a second language education worldwide using a unique video conferencing platform. Hardware—Primary(Security,Service,Social Media) • Heightened Security:HS Is a local manufacturer of security solutions for residential and commercial clients.Their product can seamlessly integrate into existing security systems. • Paul Roide:Paul Roide is a local tradesman.He has developed and patented a new paint gun sprayer that aims to dramatically increase the efficiency of currently available models. 'Located at the Palm Springs Accelerator Campus • Post Modern:A developer of integrated hardware/software systems for consumer marketing.Their system allows marketers to integrate social media into marketing events and tradeshows using interactive kiosks. "Located at Palm Springs Accelerator Campus • Seismic Warning Systems:Developing a regionally-based earthquake warning system with proprietary detection and customized-alert technology. Textile&Wearables • Eco Culture Manufacturing:Textile manufacturing focused on recyclable materials and integration of sensor technologies for smart devices. • HipS-sister:Manufacturer of the fashionable,functional and flattering alternative to the fanny pack that integrates a shield for electromagnetic fields caused by cell phones. 'Located at Palm Springs Accelerator Campus • Platinum Sun:Designer of rash guards,leggings and neoprene jackets.Currently based in Miami with intentions of relocating operations to California.