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Is Purdue Tech Center living up to promise?

Is Purdue Tech Center living up to promise?
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buy this photo John J. Watkins JOHN J. WATKINS

Four years ago in Merrillville, dapperly dressed politicians and executives opened the Purdue Technology Center of Northwest Indiana with great fanfare.

U.S. Rep. Pete Visclosky, who had secured nearly $7 million in federal money to help build the business incubator, spoke proudly of the hope the site held for his district.

"This is a great and hallmark day for all of us," the Merrillville Democrat said. "The incubator ... provides new opportunities to diversify Northwest Indiana's economy."

Since that time, one-quarter of the center remains empty, at least six companies have moved out and the highly lauded prospects of at least one homegrown, incubated firm have fizzled.

Center proponents say it is contributing to its goal of business growth. They note the glass is three-quarters full, with the facility at 75 percent capacity. Purdue Research Foundation spokeswoman Cynthia Sequin said through marketing and word of mouth, the center receives continual interest from companies seeking to lease space at the Merrillville site.

But others wonder -- four years and millions in funding later -- whether the center is accomplishing its goal of boosting diverse economic development in Northwest Indiana.

Not every one 'graduates'

Business incubators such as the Purdue facility offer fledgling companies shared tools, including printers, office space and cheap rent.

Come get your feet wet, incubator officials say, and grow into a company sustainable outside the center that benefits the local economy.

Folks in the incubation game call it "graduating," said Linda Knopp, spokeswoman for the National Biz Incubation Association.

But a Times review of some former Merrillville tenants shows that not every company achieves its incubation goals.

In 2006, a Purdue center official deemed local company Brogan Pharmaceuticals a "poster child" for the kind of rapid progress officials wanted for incubating businesses.

The company -- which was developing a drug for diagnosing cancer in children -- was branching out of the center into Crown Point, with the help of $500,000 of the city's seed money.

But three years later, the company never opened its Crown Point office, and city officials said the company may have violated its loan agreement with Crown Point. Brogan CEO Brett Dines did not return multiple calls from The Times seeking more information.

Brogan is one of three of the original seven firms -- and one of the only two local startups -- that have left the center, with none appearing to have built businesses in Northwest Indiana or the state outside of the Merrillville facility.

Despite several attempts, The Times was unable to reach the owner of another Northwest Indiana firm, Spectral Data, to discuss why it left the incubator.

Sierra Nevada, a Nevada-based company making military and security software recruited by Visclosky to be one of the center's first tenants, also has departed. A spokeswoman for Sierra Nevada said the company was not able to respond to Times questions.

Three more companies -- Innovative Energy Solutions, OG Technologies and Schneider Corp. -- have come and gone from Merrillville since opening.

In comments recently made to The Times, Visclosky acknowledged some of the Purdue Technology Center's tenants have left.

"That's community job growth," he said. "Those are the seeds you want planted in Northwest Indiana. They are paying employees. We hope the work they are doing adds value to the economy. In the longer term, (they can) be successful staying here and expanding their businesses."

But The Times was unable to confirm any local or state businesses established by the departing incubator firms.

Who's the model tenant?

The remaining four original site companies -- three of which Visclosky referred to the center -- still lease space there but have fallen short of an unofficial success benchmark.

According to Knopp, the average incubation time before "graduating," or leaving an incubator, to set up shop elsewhere is just less than three years. The four original firms have been at the Merrillville site for more than four years.

The three Visclosky referrals, in fact, are not small local startups, but instead large government contractors headquartered in other states.

Knopp said it's common for incubators to include some larger, more established companies, which often serve as mentors for entrepreneurial brethren.

But, Knopp added, "In most cases, you wouldn't want to fill up a center with nonstartups and have no space for startups."

Officials from some of the bigger companies now leasing Merrillville space -- including 21st Century Systems and ProLogic -- did not respond to Times' requests for interviews.

Staff writer Bill Dolan contributed to this report.

Copyright 2012 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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