Groups May Vie for O.C. Small-Business Development Center

The small-business development center contract that was left up for grabs after UC Irvine closed its Accelerate program is now attracting interest from several groups in the county.

Next month, the state Trade and Commerce Agency plans to begin accepting proposals for a new center, which will receive about $300,000 in annual funding from the state and the federal Small Business Administration. California has 42 of these centers, which provide early-stage companies with services such as management advice and links to investors and financing sources.

Such programs are considered important to the local economy because they help stimulate new business formation and the development of fast-growth firms.

“We support an industrial base that provides the jobs for Orange County,” said Sandy Sutton, the SBA’s acting regional director.

Although these development centers receive the bulk of their funding from the state and federal governments, they are required to have a host organization that provides additional funding and office space and operates the program.

Cal State Fullerton, the city of Anaheim and the Orange County Business Council said they might submit proposals for a new center. Chapman University is also considering a bid, but officials said they’re waiting to see what the government requirements will be.

UC Irvine pulled the plug on Accelerate last December after operating it for about eight years as an adjunct to the university’s business school. UC Irvine said it closed the center because of a possible gap in government funding and a desire for a broader effort linking the university to the business community.

But it was also well known that UC Irvine had been unhappy with the management of Accelerate under former director Tiffany Haugen and wanted a program that was more closely aligned with university functions.

The controversial decision to close the popular program has sparked an ongoing discussion in county business circles over the best means to support and encourage the growth of entrepreneurial firms.

Since Accelerate was formally shut down, former clients have continued to receive services from the Santa Ana-based Orange County Small Business Development Center. The center, the county’s only other SBDC, is sponsored by the Rancho Santiago Community College District.

Accelerate had focused on high-tech and biomedical clients, while the Orange County center offers services to all other types of start-ups, from restaurants to chiropractors.

Mike Marando, a spokesman for the Trade and Commerce Agency, which runs the Small Business Development Center program statewide, said that the new center also will focus on technology. It could be located anywhere in the state, he said, but the agency wants it to be based in Orange County because of the heavy concentration of technology businesses here.

“Industry cluster surveys have shown that in Orange County high-tech is going to be one of the drivers of the economy for years to come,” he said.

The agency hopes to have the new center open by Sept. 1.

UC Irvine said it hasn’t decided if it will submit a proposal but is leaning against it. A university task force has been studying the issue. But it is considering starting a program modeled after UC San Diego’s Connect, which is privately funded and places greater emphasis on networking among business people than on counseling services typically provided by small-business centers.

“I can’t say it’s been ruled out entirely, but it looks like we’ll not be bidding on the SBDC contract,” said UCI Graduate School of Management’s Dean David Blake, who ordered the Accelerate closure.

With UC Irvine likely to be out of the bidding, other groups are considering trying to snare the contract.

Jonathan Sive, special projects coordinator at Cal State Fullerton’s Small Business Institute, has been making the rounds in the county looking for potential partners to join in a proposal.

He sees the university’s Small Business Institute, which provides consulting services to firms, as an ideal complement to a small-business center. Together, he said, they could become a “one-stop service provider” for small businesses, with the development center being the first point of contact for entrepreneurs seeking assistance.

One possible service that would be valuable to technology companies, for instance, would be a database of patents that could be accessed by SBDC clients, Sive said.

The Orange County Business Council, a nonprofit organization based in Irvine, is also considering a proposal for an SBDC that would dovetail with some of the group’s existing services.

Jay DeLong, director of strategic initiatives at the business council, said that the group is also discussing joining others to submit a bid but that no decisions have been made.

“I don’t anticipate a lot of proposals going in because I think everyone will collaborate to put together one or two great proposals,” he said. “This is too important to Orange County’s early-stage companies to not have this be a collaborative effort.”

But, he added, “our prospects are pretty strong if we decide to do it independently.”

Anaheim officials said they are interested in the SBDC contract and are considering a joint bid with Cal State Fullerton.

“We think that having an SBDC would be a great service for the community,” said Richard Brookner, the city’s redevelopment and economic development manager. “But we haven’t settled on a course of action.”