Ann Arbor Business Monthly Magazine
Published by: Duane Ramsey
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Ann Arbor SPARK, a nonprofit, economic development organization, leads the way in expanding the Ann Arbor region’s economy by encouraging and supporting business acceleration, attraction and retention in Washtenaw and Livingston counties.
In 2015, the economic development organization celebrated 10 years of growing economic prosperity in the Ann Arbor region.
“Since 2005, we’ve seen the region’s focus and efforts on supporting early stage companies evolve and mature. The seeds of entrepreneurial success planted years ago are bearing fruit that will grow our economy well into the future,” Cynthia Wilbanks, chair of the board for Ann Arbor SPARK, stated in its 20152016 annual report.
“We’ve also seen established global businesses, from Google to Mahindra to Toyota, make significant investment and create jobs here. This region has a unique combination of assets to benefit these leading companies talent, collaboration across all our sectors and a robust support system for growing businesses,” Wilbanks added.
The mission of SPARK is to advance the economy of the region by establishing the area as a desirable place for business expansion and location by identifying and meeting the needs of businesses at every stage from startups to mature companies.
SPARK has a five year strategic plan based on five strategies: acceleration, growth, talent, leadership and planning built upon the foundation of the organization’s mission and values.
In the past 11 years, SPARK has provided regional startups with incubator space, grants and talent assistance that have accelerated their growth and success. It has also served as a navigation system for entrepreneurs guiding them through the region’s ecosystem and helping them tap into the right resources.
Since 2006, SPARK’s team has facilitated 374 company growth projects with $1.9 billion in new investments, and 15,194 jobs. It assisted 1,873 startups and 2,884 other companies, nurtured 260 incubator tenants, awarded 107 preseed investments to 99 firms and 115 microloans to 103 companies.
Just since 2010, the impact on the local economy has included $96.5 million in grants to startups and $223.7 million in private equity raised, serving 369 companies that created 551 new jobs and 63 incubator graduates, according to the annual report.
The 2015 results included 37 company growth projects creating $130 million in new investments, 891 announced jobs and 5,010 retained jobs, according to the annual report. It also assisted 266 startups and 255 other companies, nurtured 77 incubator tenants, awarded three microloans and assisted one preseed investment.
In 2015, RetroSense secured FDA approval for human clinical studies of its therapy for one of the leading causes of vision loss and blindness, raising $6 million Series A investment including capital from outside Michigan.
SkySpecs, Inc., an industry leader in drone collision avoidance and provider of an automated drone infrastructure inspection platform, raised a $3 million Series A investment last year.
Clinicalstage life sciences company Millendo raised a $62 million Series B financing round – the largest venture capital round in Michigan history and entered into an exclusive license agreement with AstraZeneca in 2015.
SPARK currently has 78 active projects being developed with its project management focus. Business development in the first quarter of 2016 included seven successes with $55.6 million in investments creating 253 new jobs, according to Phil Santer, vice president of business development.
The seven companies helped in the first quarter include Antolin Interiors, Disher Design, Dot Signal, Medical Comfort Specialties, NITS Solutions, Tribar Manufacturing, and Vmax USA.
Vmax plans to open a new 30,000 squarefoot solar energy research center on a vacant site with a $2.5 million investment. It all began with a SPARK grant of $55,000 and expects to create 10 to 15 new jobs.
“The Ann Arbor region continues to solidify its global reputation as an area of innovation and economic prosperity. It’s the potential that this base of success presents that’s truly unique and presents new opportunities for our future success,” Paul Krutko, president and CEO of Ann Arbor SPARK, stated in its annual report.
The continued development of the American Center for Mobility at Willow Run, the expansion of SPARK Central, SPARK East reaching full capacity, Liebher breaking ground on a new facility in Saline, TD Ameritrade moving to downtown Ann Arbor, and the opening of Lake Trust Credit Union’s new headquarters in Brighton are just a few signs that the future is bright across the region, Krutko reported.
“Ann Arbor is a place where companies want to locate and talented people want to work and live. Our future depends on ensuring that we create the environment that continues to be welcoming to the businesses of the 21st century and the people that want to work for those companies,” Krutko stated.
Their model for economic development focuses on driving industries, companies that sell goods and services on local, national and global levels. Those driving industries include auto/mobility, software/IT, life sciences, and photonics.
Since 2010, those driving industries have represented 66 percent of the companies SPARK has served and have generated 11,266 new jobs.
Duo Security announced plans to expand its operations in Ann Arbor on April 26. The project is expected to include $2.5 million in investment and create 300 direct jobs over the next three years, according to the Michigan Economic Development Corp. (MEDC).
SPARK supports entrepreneurship with services designed specifically for them. It has assisted 1,873 startup companies which currently employ 4,672 people with $93.6 million in private funding since 2006, according to Bill Mayer, vice president of entrepreneurial services.
A survey of area CEOs by SPARK earlier this year indicated that 83 percent will hire in the coming year, 67 percent are actively recruiting new employees, 50 percent are launching new products or services, and 92 percent are experiencing sales or revenue growth, according to the annual report.
With all of the successes SPARK has had there are still challenges for continuing that economic growth.
Krutko said that “maintaining the leadership in the region and helping the region understand the challenges and opportunities in the region. Dealing with the growing pains of having so much economic success and determining where growth companies are going to go when they need to expand.”
Santer concurred that “finding the right real estate people want whether it is downtown or otherwise. How to create effective access to the resources for each company” are among the challenges.
“Helping entrepreneurs and startups with the challenges they face is challenging for us,” Mayer added.
SPARK operates two business incubators in Washtenaw County – SPARK Central at 330 East Liberty in Ann Arbor and SPARK East at 215 West Michigan in Ypsilanti. These incubators provide affordable office space and business support services to local startup companies. SPARK has tripled the incubator space to 16,500 square feet on three floors of renovated space at SPARK Central, according to Santer. Innovate Ypsi is a program developed to increase investments in Ypsilanti and eastern Washtenaw County. SPARK East is operating at full capacity supporting $3 million of investment and 35 new jobs, reported Mayer. One example is Landline Creative Labs which made a $766,000 investment in eleven modern offices creating 20 new jobs, all starting with a SPARK grant of $56,000.
Downtown Ann Arbor has become a “tech hub” with more than 2,300 IT/software employees working for many companies operating in anonymity. To familiarize the public with them, SPARK is sponsoring A2 Tech Trek on June 17 from 3 to 7 p.m. with 60 companies opening their doors to the public.
SPARK provides site selection and talent services with turnkey project management solutions that have produced results such as Thai Summit America investing $52 million and adding 130 new jobs and TD Ameritrade investing $5.75 million and creating 75 new jobs during the past 18 months.
SPARK made a presentation documenting its successful results to the Economic Development Coordinating Committee on May 6 and at its annual meeting held May 16 at the Ypsilanti Marriott at Eagle Crest.
Their results in 2015 were achieved with a staff of 22 fulltime employees and a total budget of $5.28 million, of which $2.25 million went into the business accelerator. Of the $1.65 million operating budget, $630,000 or 38 percent came from public or government funding, $635,000 or 39 percent from private contributions and sponsorships, and $385,000 or 23 percent from the University of Michigan, Eastern Michigan University, and Washtenaw Community College. The organization’s public partners include the MEDC, Michigan/ Works, UM, EMU, WCC, the City of Ann Arbor, Washtenaw and Livingston counties, and small municipalities in each of those two counties.
SPARK has served Livingston County since 2011 operating offices in Brighton and Howell at a cost of $346,000 in 2015.
SPARK is constantly marketing the assets and culture of the local community on national and global levels to continue attracting new business under the direction of Donna Doleman, senior vice president of operations and communications. For more information about Ann Arbor SPARK, go to www.AnnArborUSA.org.
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