A local public/private partnership is building an incubator for tech entrepreneurs.
By Toni Denis
Jon Haass, President of the Prescott Regional Opportunity Foundation (PROF), imagines Prescott as a high-tech entrepreneurial hub someday soon, with a supportive infrastructure that leads to new ideas and generates jobs for generations to come.
In partnership with the City of Prescott, PROF’s nonprofit Prescott Center for the Future is opening its first offices in downtown buildings. Four tenants are expected to set up shop in 3,700 square feet at 220 S. Marina Street, including one startup from Phoenix, one created by Embry-Riddle students, and two established companies looking to expand.
“Absolutely it’s beneficial for companies, because it’s pretty tight here in terms of office space,”Haass said. “It’s not easy (to find), so the ability to have this space and in a great location a block away from the plaza, you can’t beat that.”
City Recreation Services Director Joe Baynes, also responsible for facilities and fleets, said the decision by Head Start not to renew rental space at the Rodeo Grounds freed up office space, and the Internet Technology Department moved out of the lower level of City Hall. The Human Resources Department took over the IT space, opening up its old offices for Center tenants in a building across from the Public Library. The office suites for tenants and the departments are being renovated using $92,000 provided by the City, a small portion of the monies freed up when it received $5.1 million in federal CARES funding.
“We think that the timing couldn’t be better, especially as the economy comes back,” says Haass.
“I think we actually created some efficiencies and now are better utilizing the lower level ofCity Hall,” Baynes said. Contractors are moving a couple of walls in one building and will cover a window in one office to create a Global Security Operations Center (GSOC) for Silicon Valley-based CyberCore International. The first tenant, SimpleWAN, a cybersecurity and voice-over-internet company which was based in Phoenix, was the first to move in during December. The others, Katalyst Space Technologies, a satellite-related company founded by ERAU graduates, plans an early-January move. CyberCore International will provide security intelligence and analytics services for tenants and smaller companies that otherwise couldn’t afford to do it themselves. The fourth tenant is expected to be Softcrypt, an encryption company.
“My vision is that seven years from now we’ll have a campus with buildings and we can look to the time we’ll not only have incubated and accelerated, but we’ve attracted companies much like CP Technologies, (which) is building a building out on 89 and Deep Well Ranch Road,” Haass said. “We can imagine having other companies joining us and creating an ecosystem of technology companies. … Why not do it here from Prescott, where it’s beautiful to live and work?”
It’s easy to picture young biking or skateboard-riding employees zipping down the streets on their way to work, stopping in a coffee shop or picking up lunch at one of the downtown restaurants, embracing the slower pace of life in Prescott after battling traffic and crowds in San Francisco, Seattle, Los Angeles or one of their pricey satellite suburbs. Corporate refugees from the ever-lengthening superheated Phoenix summers could easily adapt to Arizona’s Mile-High City, where in the era of Zoom and remote collaboration they are still a short drive from clients in the Valley, whom they may only see in person a few times a year anyway.
Millennials in particular value quality of life over the corporate ladder, and many tech entrepreneurs have already embraced the area for its benefits, from lower living cost, four seasons and superb mountain air to extensive hiking and biking trails and forest scenery.
Business driving demand
Headquartered in San Diego with a branch in Huntsville, Alabama, CP Technologies designs, manufactures and integrates high-performance computing platforms, data links and LCD displays for aviation, military, industrial and commercial markets. It is expanding by establishing its CP Aeronautics branch in Prescott to produce high-end unmanned aerial vehicles. The new location near ERAU means ready access to aviation graduates, among other benefits.
“CP Technologies workers couldn’t afford to buy houses in San Diego and had to commute in for two hours,”Haass says, explaining that the lack of opportunities and office space in the area for graduating Embry-Riddle students who wanted to stay in the area first sparked the idea for the Center in 2016.
He approached ERAU with the idea, but despite enthusiasm from now retired Chancellor Frank Ayers, the university’s board in Daytona wasn’t interested in investing in a building on campus. He then pursued establishing the nonprofit and worked with Prescott’s economic development consultant, Jim Robb, on advancing his vision.
On August 11 last year the City offered formal support, including up to $3.7 million for construction of a new building near the Prescott Regional Airport on the east side of Deep Well Ranch/Crystal Lane and SR 89 when the city-owned space is maxed out.
The City and PROF are working with an architect on potential designs. Haass said they will likely collaborate with the construction company for CP Technologies, Sun State Builders, which has several workable designs that it could customize for the Center. Because of the distance to such amenities now, the design may include a café, now considered standard in most incubators.
Assistant to the City Manager Tyler Goodman says Prescott was eager to back the Center because the city manager, council and Robb all saw the value in diversifying the economy — and had wanted to move forward on a center for years.
“It came down to when can we realistically do it,” Goodman said. The CARES money “gave the Council the opening to allocate a portion of that” for startup costs. “We had such demand from these companies, they were just banging on the door saying ‘we want in now.’ We didn’t want to lose them.” When the government space became available, they offered it for Center use.
Haass said the Center will allow new and accelerating companies the support to succeed by offering low rents and an array of services from legal support and pro business advice to venture-capital funds that the foundation plans to raise this year. Haass likens the Center to other incubator models like Plug and Play in Sunnyvale, California, SkySong in Scottsdale and the Southwestern Colorado Accelerator Program for Entrepreneurs in Durango, which now in its seventh year has raised its third venture-capital fund. Its first was a modest $250,000. Haass believes the Center for the Future could easily follow a similar timeline, with the added advantage of strong local support, including investment and donations.
The two Prescott Center locations would provide synergistic possibilities, since the “Prescott North” campus downtown would be near the new Sam Hill Convention Center, where events could be held. The planned building near the expanding airport would have the highest-quality online connectivity available. “All of these (aspects) start to make a powerful story for companies that want to locate here or grow here,” Haass said.
Arriving in Prescott in 2013 as founding faculty for ERAU’s Cyber Intelligence and Security program, Haass earned his PhD in mathematics from the Massachusetts Institute of Technology. Prior to launching the ERAU Cybersecurity department, he established five other academic programs at other universities. The ERAU department works with the State of Arizona in providing cybersecurity for state agencies.
He believes the Center could be an innovator in “cybermobility” — cybersecurity for autonomous vehicles, from cars to drones to jets — as urban mobility spreads.
Retaining young talent and attracting families that will want to stay permanently and be a part of the high-tech community are both goals of PROF. By helping startups get established, the Center could give the area a major financial boost and make it so that the City doesn’t have to rely on “fleeing Californians” to pump money into the economy.
“We think that the timing couldn’t be better, especially as the economy comes back,”Haass said.
Toni Denis is a frequent contributor to 5enses.
The Center for the Future in Prescott promises to help create jobs and raise wages in the area.
Current economic statistics point to a brain-drain of talented, trained high-tech workers who graduate or leave existing companies to seek higher wages elsewhere.
• Prescott has 35% fewer eligible workers than the national average. (Yavapai 2020 Economic Report)
• Prescott wages are 31% below the national average. (Yavapai 2020 Economic Report)
• 25% of workers in Yavapai County live at the poverty line. (Economic Leaders)
• One tech job brings $536K in economic impact to the area. (Yavapai 2019 Tech Job Report)
• There were 2 million tech-occupation job openings in 2019. (CyberStates)
• Median tech-job wages are 89% higher than the national median. (CyberStates)
• Opportunity: “Today, less than 1% of jobs in the Prescott Area are high-tech jobs. Let’s change that!” (Bureau of Labor Statistics)