To our partners, co-workers, sponsors and friends, we thank you all for your faith and support, both for the SIC, and your own community. It is our sincerest wish that, as we explore options for our next iteration, you all join us to continue to grow as a community.
Recently, there have been stories in the media and beyond that paint the Stamford Innovation Center and its management in a negative light. As a team that has poured heart and soul into this community, we feel it is appropriate to tell our side of the story.
Old Town Hall was renovated by the City of Stamford in 2006-2007 at a cost of $22 million. Financial structure of renovation required that it be controlled by a third party quasi-government agency: Old Town Hall Redevelopment Agency (OTHRA). To further complicate matters, as the building was no longer “City Owned,” the mayor levied a property tax on the building (which was paid to the city by itself, but included in OTHRA P&L). This resulted in very high overhead for the building, which made it uneconomic from the beginning. The building was vacant from 2007-2011 and lost about $300k per year, including property taxes.
I was introduced to the situation in 2011 after a successful career as a private investor in many companies. I formed the Stamford Innovation Center in March of 2012 and signed a 10-year lease in June 2012. As part of the lease, SIC agreed to:
- Invest at least $300k into Old Town Hall as the building was unfinished, for which we received rent abatement for 30 months in exchange.
- Borrow $500k from DECD, to complete the building renovation and fund startup costs.
- Operate as a for-profit company and rent no more than 15% of space to not-for-profits (dictated by OTHRA financing terms).
- Augment our loan with personal funds, corporate sponsorship, operating revenues (terms of DECD loan).
- High Lease rate (initially $14,667 per month and increasing to $52,667 per month by year 10) to satisfy building operating requirements, plus a fixed-rate HVAC charge. This was clearly unsustainable, but had been agreed to in principal prior to my involvement.
That year, SIC became an initial member of the DECD-organized CTNext program. Involvement in CTNext, with initial State funding levels, plus aggressive growth estimates for co-working revenues, justified the initial rent schedule. First-year funding from CTNext was nearly half of their original proposal, and declined significantly each year, following takeover of the program by Connecticut Innovations (CI) from DECD. At the same time, CI professionals repeatedly told SIC that they were very concerned about rent payments to the city, and that their funds should be used for programming instead. In response, SIC worked to increase non-State revenues in an incredibly competitive market while maintaining high levels of “incubator programming.” We have done this work with a small but efficient team of employees, all of whom work at a rate far below payment levels from previous careers.
In light of lower than expected state funding, and direction by CI that its funds should not be used to pay “exorbitant” rent to the City of Stamford, I contacted OTHRA President Tim Curtin in January 2014 to discuss modifying our lease. We discussed many options over the course of almost three years. We agreed on several potential solutions. Unfortunately, Mr. Curtin was never able to deliver consensus from the conflicted OTHRA board. During this time, CMO Peter Propp and I presented SIC accomplishments to the OTHRA Board and City of Stamford. They never engaged in any dialogue regarding development of an entrepreneurial ecosystem and exhibited little to no interest in SIC’s activities or success.
SIC has continued to grow despite a complete lack of support from the City of Stamford. We focused our efforts on making a positive impact on Stamford and Connecticut. Our hard work was recognized over the years by many awards and positive press, most recently by The Wall Street Journal.
Since inception, SIC has continued to pay “Additional Rent” as per the lease every month while spending its own money on building infrastructure (wifi, painting, repairs, etc). While trying to work with the City and OTHRA, we have presented many proposals but never received any tangible offer to continue.
SIC reinvested all of its real estate “profits” into programming and ran at breakeven while repaying the initial DECD loan. Even as State funding declined every year since our founding, the SIC community and influence have continued to grow.
- Approximately 5,000 people participate annually in SIC sponsored events.
- Approximately 100 workers and two dozen companies are currently housed here.
- Over $30 million of capital has been invested in SIC startup companies.
- Four SIC “alumni companies” have outgrown SIC’s space capacity and taken standalone offices in Stamford. Those companies currently employ approximately 100 people.
- We estimate that SIC resident and alumni company workers spend approximately $800,000 annually at local businesses.
- Over the years, we have donated time and space worth thousands of dollars to local nonprofits, meetup groups, and entrepreneurs seeking advice and guidance.
- The above does not include property taxes or rent paid by SIC resident or alumni companies, the multiplier effect of local expenditures, or the heightened local, regional, and national awareness of Stamford as a result of our activities.
- Based on our success in Stamford, SIC began to explore expansion into the Norwalk market. This was met with very positive reception by Norwalk leaders. SIC led the Norwalk Planning Grant Application process for the State’s expanded CTNext program. However, Stamford officials responded negatively to our efforts to work with additional communities.
- NOTE: Based on hundreds of discussions with local business leaders, we believe that a lack of cooperation and the difficulty of traveling between cities like Stamford and Norwalk is one of the reasons small businesses find it challenging to grow in CT. It was our hope that our work in Norwalk, coupled with our outstanding track record in Stamford, would allow us to address this challenge.
March 2016 – I continued to discuss potential changes in occupancy terms with Mr. Curtin/OTHRA. We came up with a solution whereby SIC would form a not-for-profit (OTHRA financing unwound eliminating the prohibition) and take over management of the building so as to remove the cost from the City. The conflicted OTHRA board rejected this solution.
July 2016 – SIC met with Stamford Downtown Special Services District (DSSD)’s head of operations, who was highly impressed and expressed interest in helping. I again asked to meet with OTHRA Board members. They did not respond.
September 2016 – Local entrepreneur Bob Dorf and I met with Mayor and his Chief of Staff to see if a solution could be reached. Mayor indicated he would be willing to listen but expressed a need for “every nickel” of funding, while complaining about the lack of state support for roads, parks, etc.
October 2016 – Following the meeting with the mayor, I met again with Mr. Curtin. He said the mayor had not encouraged him to find a solution, no compromise was possible, and they would evict SIC by the end of the year. Mr. Curtin told me “many people” were interested in renting Old Town Hall, even though the City currently suffers from a 30% vacancy rate in commercial property. I was told the City was not interested in finding a solution. Mr. Curtin suggested that SIC reach out to the OTHRA board to present its case regarding performance. I continued to receive no response to my efforts, despite sending letters to both OTHRA and the Mayor’s office
Mr. Curtin called me on October 11th to say a story regarding the eviction of SIC would be in the Stamford Advocate the following day.
SIC has paid its HVAC and other bills to the City in a timely fashion every month. However, we did not pay the high rent ($57k/month) referenced above. To do so would have eliminated our ability to provide any of the value-added programming for which SIC was created. SIC has also continued to devote significant funds toward maintenance, upkeep, and development of Old Town Hall. These expenditures are not required by the lease, but necessary in light of the City’s absentee approach.
SIC has endeavored to work with the City since inception to build a stable, lasting institution to foster the entrepreneurial, tech, and startup communities in Stamford and Connecticut. In terms of direct economic impact, owing greatly to the number of companies formed and located here, our efforts are paying off. Unfortunately, the City of Stamford appears to have no interest in supporting these efforts. Rather, the City has become hostile to SIC for reasons that have nothing to do with our existence, relationship, or performance.
SIC will continue to offer its services to our community at least through year’s end. As of this writing, SIC has not received an eviction notice or any notice of default from the City or OTHRA.
SIC is being treated inappropriately and unfairly by the City of Stamford. It has invested approximately $2 million over the past five years to revitalize an otherwise vacant and difficult to use historic building, and helped create a vibrant entrepreneurial community where none previously existed. Actions by the City are causing material and irreparable harm to SIC and its Community.
Again, we wish to thank our Community and our Partners for their ongoing support in this difficult time.