Warsaw Redevelopment Commission approved a $500,000 agreement Monday evening with OrthoWorx for the creation of AcceLinx Inc., a multi-stage medical device orthopedic business accelerator.
Additionally, the Indiana Economic Development Corp. has offered up to $1.2 million over six years in funding to establish and operate the new entity, according to a press release this morning from OrthoWorx. Discussions currently are underway with other regional economic and private stakeholders toward the remaining funding needed for the six-year, $4.8 million operational budget, the release states.
City Planner Jeremy Skinner told the Commission Monday, “We’ve been working with them for some time on the creation of an accelerator. This contract is for $500,000 over six years. And we’ll pay $165,000 initially, with yearly payments of $67,000.”
The business accelerator was originally part of the Tech Park plans.
“The idea was we’re going to create an atmosphere in which we could have start-up companies that would ultimately be located within the Tech Park. That’s what this agreement is. There will be other partners that will form as part of this agreement, but this is our portion of it,” Skinner explained.
Mayor Joe Thallemer said, “We have been working for many years to come up with the proper model that will be collaborative, obviously with the local industry that we have here. That’s really what we’re striving for. It appears we’ve got that model set up,” and the dollars generated from the tax increment finance district of the Tech Park will go toward the success of it.
Skinner explained that the Tech Park can only capture up to $5 million, but it doesn’t appear to have a set time limit on when it can capture that money. So the first half million received will be designated toward that accelerator, he said.
“This is state taxes. These aren’t local taxes. So it’s captured off state income and sales tax and reinvested so that’s what makes it positive for our community,” Skinner stated.
OrthoWorx Executive Director Brad Bishop said, “We think this is an opportune time to capture talent that is in the region and use it to broaden the economy, diversify the economy. And as Jeremy said, we’re working with another partner (IEDC) and we can’t really announce their participation and some of the fine details until tomorrow, but we’ve worked a long time on the model and tested it with quite a few potential collaborators, and we feel it’s a good direction. It’ll help maintain Warsaw and our region as an innovation center for medical devices.”
Rick Snodgrass, Redevelopment member, said, “It sounds like a win-win to me.”
Redevelopment Commission President Tim Meyer asked if the accelerator was designated for medical device businesses.
“Our plan is to start with what we know best, which is orthopedic medical devices, spine, biologics, so it could change over time,” Bishop replied.
“Initially, that’s what it’s targeting,” Meyer said.
The press release states the innovation process in medical devices has become more complex due to factors including a complicated web of regulatory clearances that are required to market and gain reimbursement for products. The path from concept to a mature company in medical devices often takes six or more years. Large companies are more likely to acquire technologies or products that are further along in their development cycle than in the past to assure that regulatory paths, clinical performance and commercial potential are well understood. That means entrepreneurs can benefit from guidance and technical/production support to develop and test their concepts from an economic as well as a medical perspective. Moreover, human capital as much as financial capital is a key differentiator for success.
AcceLinx is designed to work with selected entrepreneurs to navigate that pathway and will partner with companies whose ventures are at varying stages of development in the orthopedic, spinal and biologics medical fields. Those companies will draw on the supply of talent, services and suppliers in northern Indiana to assist in their growth, the press release states. Companies will receive resources including orthopedic industry-specific expertise, either from in-house AcceLinx experts or through their extended network of supply chain companies, operational talent and end users. Other support will include access to capital from an affiliated partner and working space as appropriate depending on a company’s stage of development.
The organization will be headquartered in Warsaw. Although legally separate from OrthoWorx, AcceLinx initially will be housed within OrthoWorx offices with a physical location expected to be established within the next year.
According to Sheryl Conley, OrthoWorx president and CEO, initial efforts will focus on creating the AcceLinx entity, assembling the team and network, and establishing the funding partner. Future announcements will be made regarding how AcceLinx will engage with entrepreneurs who want to learn more, the release states.
The agreement and plan were sent down to the state and subject to legal review before being presented to the Redevelopment Commission, the board was told.
After unanimously approving the agreement with OrthoWorx, the Commission then approved a contract for design and engineering services with The Troyer Group for the CR 300N Trail project. The contract is for $69,973.
The bike trail will go from the Tech Park to Madison Elementary and to the residential area on Sheldon Street. Skinner said he wants to do a portion of the trail this year, but that will depend on the engineering as well as the county’s work on a side path and bridge on 300N.
The engineering work is for all of the trail, but the whole trail may not be finished this year.
In other business, the Redevelopment Commission:
• Approved claims, including $10,012.50 for A & Z Engineering for the roundabout design on Husky Trail; $4,882.50 for Faegre Baker Daniels for professional services; $200 for Reith Appraisal Service for an appraisal along the Commission’s CR 300N trail project; and $8,160.91 for NIPSCO.
Payment to NIPSCO is subject to a review of the terms of the contract between NIPSCO and the Commission by President Tim Meyer as there was a question as to how much NIPSCO should be paid. NIPSCO helped the city develop a gas line to the shell building at the Tech Park, but as part of its payment NIPSCO is billing the Commission $27,000 over the next six years for gas it expects the building to use in that time. Skinner said it was all “convoluted” to him.
• Reviewed the annual Redevelopment Commission Report, which also was presented to the Common Council later Monday evening. Skinner said it’s due to the state by April 15, and it reports everything the Redevelopment Commission did and spent in 2015.
The Commission’s next meeting is scheduled for May 2 at 4 p.m.
