PEDA Debates Options For New Innovation Center
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"We're trying to get the best advice possible so that we don't make mistakes going in and delay the process," PEDA Executive Director Corydon Thurston said at a meeting of the board's Special Projects Committee on Tuesday. "We're spending a little extra time on early discussions to try to flush it out and get as much input as we can in terms of the best approach."
The eventual corporation that emerges could be one of two kinds of nonprofit, a 501(c)3 charitable entity, a 501(c)6 business league, or even potentially some combination of both that would include two different boards of directors.
In either case, board members will be chosen from among the eventual member organizations, slated to include various commercial and educational partners from Berkshire County and beyond.
The city of Pittsfield, of which PEDA is a quasi-public branch with board and staff appointed by the mayor, will remain the actual recipient of the $9.7 million dollars in promised funds for the project, and will retain ownership of the facility at least in the short term, with the new membership nonprofit as its tenant. This new entity will hire its own staff to run the building and its programs, and could potentially take over ownership of the building in the future.
It could take up from nine months to a year to complete the process of acquiring Internal Revenue Service nonprofit status, but PEDA anticipates the entity will be incorporated and begin working on planning and developing business infrastructure for the 20,000 square foot center "in the very near future," said Thurston.
Board member Pamela Green weighed in against the proposed possibility of "recycling" the incorporated framework of the Berkshire Economic Development Corp., a 501(c)6 which was abandoned with the emergence of the 1Berkshire economic development organization. Green said that while this might make things go faster, it could open up potential problems later, including inheriting any liabilities and past associations of that entity.
"This project I think is too important to take any chances," said Green, "If a c6 is the way to go, you're better off starting out with all new c6."
Another possibility reviewed by the committee is having both the more business-oriented corporation with an associated charitable foundation to support it, as in the case of some local cultural and educational institutions.
This option is being examined because of the diverse kinds of activities which the center could eventually be involved in, which could include such adjunct operations as rental of its high-tech equipment for occasional use by non-member businesses and start ups.
"It's still economic stimulus, it still qualifies for exemption, but it's not a charitable purpose," said Thurston. "We're stimulating jobs, we're creating new economic opportunities throughout the region. That's the purpose of this center, to be a catalyst for economic growth and innovation."
"No matter which way we go, it's not an easy process," said Green.
Green was also adamant in suggesting that PEDA hire an attorney based in Western Massachusetts to aid in the requisite legal work, as opposed to some possibilities offered by PEDA's consultant for the center's feasibility study.
"To be honest, I have never met an attorney from Boston that understands the Berkshires," said Green. "I'd rather see someone from Springfield or closer, who's potentially at least already heard about the project, and will give it the attention that it deserves."
Thurston told the committee that in the case of dual entities, it would "add another layer of bureaucracy," but also "provide another level of scrutiny," as the two boards would need to have different board members and carefully segregate their finances.
None of the "soft costs" of organizing the new institution, including administrative and legal fees, are reimbursable through the state grant, which is limited entirely to capital expenditures, and will need to be financed either by the city directly or through PEDA's own dwindling, finite funding created as part of the Definitive Economic Development Agreement of 1998 under which it was formed to administer the former General Electric properties that make up the current business park.
Tags: life sciences, PEDA,
