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Questions arise about Innovation Centre lack of revenue in pre-budget deliberations

Timothy Schafer
By Timothy Schafer
March 7th, 2021

A Nelson Innovation Centre delegation was taken to task in the wake of an $85,000 ask from the city as the annual pre-budget setting conversations continued in the virtual realm at City Hall.

The fledgling centre — located in the CP Rail building — is unable to open its doors to the public at the moment due to COVID-19 pandemic restrictions, but representatives from the two organizations which helped create the Nelson Innovation Centre (NIC) appeared via Zoom at city council in order to request a $60,000 to $85,000 grant from the city in its next budget cycle.

It wasn’t the amount of the request that irked some councillors — who will consider the proposal over the next few weeks as the coming municipal budget is crafted — but the nature of the request.

Coun. Cal Renwick pointed out there was no revenue stream contained in the NIC budget, but instead $183,500 in operational revenue, including primarily government funding, corporate and local sponsorship.

“I’m looking at this innovation centre much like I am looking at the (Nelson and District) Chamber of Commerce in that they are there to support the tech community, just like the chamber supports the business community,” he said. “The difference is the chamber has over 500 members that pay a pretty darn good membership amount and get good value for their dollar. I don’t see that happening here.

“Basically, what I see is a lot of taxpayer dollars funding this thing and no real revenue stream coming in.”

Renwick said he would like to see the NIC stand on its own two legs. When the NIC concept first drifted over the council table several years ago, he added, it was first floated as an idea that would not require city funding to move forward.

Andrea Wilkey, of the Nelson and Area Economic Development Partnership, said the membership model has always been a part of the NIC vision and it was in development. Once the NIC can open its doors again it was something they will focus on.

Kootenay Association for Science and Technology’s (KAST) executive director Sean Smillie admitted COVID-19 did disrupt a business plan and a membership plan that was in place for NIC.

“What I see now is an opportunity and it’s not without challenges. How are we going to monetize our engagement?” he said.

Smillie said NIC was creating a model where its online programming, workshops and events were going to start drawing in revenue.

“It’s going to be tough to begin with, and I’m not sure what our scope and capacity will be to attract these people, but it starts with engagement and putting down the foundation of a business plan that hopefully is going to get us there,” he said.

Part of that plan was to have office space for rent, workshops and boardroom rentals to generate revenue.

“We could easily book this place out seven days a week but we’ve been disrupted. There is a plan in place to maximize online revenue,” said Smillie.

Coun. Rik Logtenberg struggled with the concept of NIC outside of the technology sector and how it related to the City of Nelson.

“The tech community isn’t necessarily our responsibility. Our responsibility is the taxpayer and the core services that we exist to provide,” he said. “Given the number of asks we deal with, we have to weight them against each other.

“And this one seems pretty far from our mandate compared to other requests we have received and that we have turned down. So I struggle with that.”

Logtenberg felt that well before the NIC came to the city to ask for money it should go to the tech community and really make sure it was delivering value such that people were willing to pay a membership fee for it.

Most technology sector support models around the world rely on government support, Wilkey said, but Smillie was looking to make the NIC work as a private business.

Logtenberg also wondered about the innovation aspect of NIC, and how it might put its focus on helping the city solve its challenges at large.

“How does this innovation centre help the city innovate?” he asked.

“What I do see as councillor … is I see a lot of challenges that the city is facing that need innovation to address them, and if we did put money into an innovation centre I would want it to return to the city on some really tricky problems that we are facing.”

Smillie said the city should contact him and explain what challenges it was facing and NIC could work on some solutions.

“But, unless you come to me and tell me what some of these challenges are …” we can’t help, said Smillie. “We are happy to collaborate. We are collaborating with everyone we can at this point, so come to us and let us know what that is.”

“It would be worthwhile just having a conversation with Sean and sitting down and seeing what would the City of Nelson sees as deliverables from the Innovation Centre and getting an agreement in place,” Wilkey offered.

The last few years have been about building NIC, she explained, and now it can be about specific things.

“I think it’s an opportunity to have this conversation with KAST and the NIC and see about specifics,” Wilkey said.

A decision on the funding request will be made in the coming weeks as city council drafts its next budget.

NIC timeline

KAST signed a three-year lease with the Nelson and District Chamber of Commerce in June 2019 in the CP Rail building.

Phase one of NIC was completed in September 2019 and features 750-square feet of office space for anchor tenant, Mountain Culture Group, with high ceilings and exposed timber beams.

Phase two of NIC, the 1,500 square foot community hub was completed and scheduled to open in March 2020 but was delayed by the onset of COVID-19.

A soft-opening of the NIC took place in July 2020.

Study in feasibility

A feasibility study, conducted in 2016 by Angela Tu Weissenberger, identified that Nelson’s unique combination of assets including an entrepreneurial culture, educated and creative workforce, business and industry base and start-up leader combined with the emerging innovation ecosystem provided a stable foundation for the creation of an innovation centre.

The final concept includes:

  1. flexible work hub where members can work, meet a client and network with like-minded people as well as a full-projector and sound systems for hosting events;
  2. state of the art boardroom equipped with everything needed to do a training session, workshop or virtual meeting;
  3. private work-booth available for private meetings;
  4. anchor tenant Mountain Culture Group operating out of the phase one space; and
  5. three offices which house KAST who manages the space, Bruce Hardy of NRC-IRAP  and cannabis tech-entrepreneur Sami Majadla of Certificraft.

Source: Nelson and Area Economic Development Partnership

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