The Lake Elsinore Technology Center -
A Business Incubator

The City of Lake Elsinore has been offered a $2.6 million dollar grant from the United States Economic Development Administration to build a Business Incubator in our Historic Downtown. According to the EDA regional representative, the $2.6 million represents the most ever secured for a business incubator project— amounting to over 45% of total project costs. Also according to the regional representative, this project will represent the first U.S. EDA funded business incubator in the Inland Empire. A business incubator is a supportive environment designed to assist start-up and early-stage companies to grow successfully. Most entrepreneurs starting a new business do not have
the resources, knowledge and insights needed to effectively launch their company. Incubators can provide many services, such as legal, accounting, and business advice, in one convenient location.

The Lake Elsinore Technology Center (LETC) business incubator would initially include about 13,000 square feet of space, which would house ten to fifteen technology-based companies at below market rate rents. The incubator will be designed to expand to an
additional 8,000 square feet as space is needed. The City expects that incubator companies will graduate after a maximum tenancy of three years, in which time they are expected to have made significant progress toward self-sufficiency and the ability to be competitive in the market. Tenant companies can graduate sooner if, upon review, they are ready, or they can apply to stay for a longer period of time if they have demonstrated significant progress.

According to the National Business Incubation Association (NBIA), its members’ report that 84 percent of the firms that graduate from their business incubation programs stay in their communities, and that 87 percent stay in business. The NBIA also reports that technology, mixed use, and empowerment oriented incubators average an annual full and part-time job growth rate of 3.7 per firm. Conservatively, with ten businesses creating an average of two jobs per year, the LETC would yield a regional job valuation of between $1.8 and $4.2 million every three years assuming a salary range of between $30,000 and $70,000 per year. These job valuation projections do not include the 25 jobs created in the community for every 50 created in the LETC (widely accepted business incubator job projection formula), nor does it include jobs created by affiliate companies and the temporary jobs created during the incubator’s construction. The City expects this project to facilitate at least $2.5 million annually in private sector revenues from incubator tenant and graduate companies; over nine years, this translates into more than $22 million private sector dollars reinvested in the regional economy. The LETC will help cultivate an emerging technology-based industry cluster to give Lake Elsinore more jobs, higher incomes, and increased investment.

Interested small technology-based businesses are invited to contact the City.