MUSC, College of Charleston Could Get Millions for Business Incubator, Commerce Records Show

April 18, 2013

Investigative Reports

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Business IncubatorThe Medical University of South Carolina and College of Charleston together would receive $4 million out of a proposed $6 million in state funding for a business-incubator program that has been kept largely under wraps by the S.C. Department of Commerce, documents show.

After Commerce officials didn’t respond to repeated initial requests for information about the plan, The Nervesubmitted a formal request under the S.C. Freedom of Information Act (FOIA) for records related to the state budget proposal.

The agency recently provided 67 pages of documents to The Nerve at a total cost of $106.75, which works out to about $1.60 a page. The Nerve unsuccessfully protested the cost.

The documents show that MUSC and the College of Charleston would each get $2 million in state funding next fiscal year for a joint endeavor to establish a new business incubator in Charleston that would focus on digital technology.

How the remaining $2 million of the proposed $6 million would be spent for the fiscal year that starts July 1 was not specified in the documents.

In passing its version of the fiscal 2014 state budget last month, the House earmarked $5 million in projected surplus general funds (H. 3710) and another $1 million from the state Capital Reserve Fund (H. 3711) to Commerce for the incubator program, as The Nerve first reported on March 14.

Commerce and other state officials at the time did not respond to The Nerve’s requests seeking specifics on the project. Documents provided to The Nerve under the FOIA show that MUSC and the College of Charleston would participate in the new incubator program.

“So do we have 2 incubators at $2 mil(lion) and therefore only $2 (million) left?” Commerce Secretary Bobby Hitt asked in a Feb. 22 email to Deputy Secretary Patrick George and Michael McInerney, Commerce’s director for external affairs.

“Just one $2M (million) bite of the apple for now … These are the same (state budget) provisos for the Digital Technology Incubator – one under CofC (College of Charleston) which ran into some opposition so then it was going to be parked under MUSC before the ‘better’ solution of DOC (Department of Commerce),” George wrote to Hitt and McInerney on Feb. 25.

South Carolina already has 19 incubators statewide, a Commerce Department PowerPoint presentation to the House Ways and Means Committee shows, some of which have a focus on technology. Documents obtained by The Nerve reveal that Commerce now desires a specific incubator model that focuses on public-private partnerships and universities.

“By incenting incubators to attract these firms and offer coaching services to win SBIR (federal Small Business Innovation Research) grants, the statewide program effectively aligns the interests of the incubator with interests of the business, university and state,”  according to a memo by David Clayton, Commerce’s research division director, in early February.

Commerce seeks to join Pennsylvania, Washington, Maine and New Mexico as states that have successful business incubators, the memo said.

Other documents obtained by The Nerve include emails between House Ways and Means Committee staff and Commerce officials while drafting language for a budget proviso, which says the incubator program is intended to “invest in technology-based economic development projects.”

The proviso also states that eligible projects should:

  • Foster economic development;
  • Encourage technological innovation and business recruitment;
  • Leverage the state’s scientific potential and existing knowledge base; or
  • Encourage research and development collaboration.

An “interactive digital technology” incubator also has gained attention from the University of South Carolina and a Clemson University graduate program, said private financier Bob Kosian of Charleston, who told The Nerve that he would oversee crafting business plans for participants in the proposed new incubator, dubbed the “Charleston Immersive/Interactive Creative Technology Incubator,” or “Ci2” for short.

The new incubator would be a nonprofit entity established by Commerce, Kosian said. It would be located in a single building that would house needed computer infrastructure, and provide mentors and space to share ideas, documents show.

Kosian said Debra Rosen, the first head of the S.C. Film Commission, would lead Ci2, and Hollywood producer Elliott Lewitt would assist them.

Commerce spokeswoman Amy Love did not respond to an email request by The Nerve Wednesday seeking comment about Rosen’s involvement. Rosen is out of the country and could not be immediately reached by The Nerve.

Kosian said people familiar with video games have already seen interactive digital technology.  But the technology that would be the focus of the incubator program has a “very broad application,” he said, noting, for example, that such technology could be used to show a patient with a medical condition what would be done during a surgery.

Documents obtained by The Nerve show that besides the entertainment industry, the technology could be used in science, medicine, health care, education, manufacturing, museum exhibition, disaster relief and homeland security.

Kosian said the goal is to give “young, bright” computer-science college graduates a place to develop ideas and create business plans that establish South Carolina as a “world-leading center” where interactive digital-technology businesses flourish. He said students who do this work now go to California, New York City or Austin, Texas.

Chris Starr, head of the College of Charleston computer science department, said the proposed incubator in Charleston not only could create high-paying jobs and a new industry in South Carolina, but also could be used as a tool to recruit quality students from other states.

College of Charleston officials say digital technology is a growing industry for the Lowcountry.

“Accordingly, the revised strategic plan calls for us to also take advantage of and support both Charleston’s existing assets and its emerging assets,” P. George Benson, the college president, wrote last fall in a newsletter. “The plan calls out the following industries as the city’s emerging assets: aerospace, digital media and technology, and healthcare and biosciences.”

Olson can be reached at (803) 254-4411 or curt@thenerve.org. Follow him on Twitter @thenerve_curt and @olson_curt. Follow The Nerve on Facebook and on Twitter @thenervesc.