New high-tech incubator bets its progeny will fly

InfoAge offers advice, low rents in exchange for 2%-5% of new firm


May 30, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

If Eric Dahler's vision pans out, the technology business incubator he's launched on the top two floors of Brown's Arcade, a retail-office complex that anchors the North Charles Street business corridor, will help recast downtown Baltimore as a hub for high-technology start-ups.

Dahler also hopes his new enterprise, InfoAge Business Centers, will prove a successful model for a national chain of technology business incubators.

"We think there are a lot of innovative technology companies in the region that are hungry for professional office space that doesn't bust their budget," said Dahler.

Unlike traditional business incubators, which usually seek to cover operating costs and break even, Dahler, 35, and his partners are in it to make a profit.

The company's business plan might best be described as hybrid incubator for hire.

InfoAge will cater to a mix of small, established technology companies as well as one- and two-man start-up ventures that need flexible leases and business and financial support.

Income from established businesses and online clients will pay the costs of carrying incubator companies, said Dahler. The big payoff for InfoAge would come if an incubated company becomes a high-flying success and is purchased or goes public.

In exchange for its reasonable rents and services, InfoAge gets a 2 percent to 5 percent equity stake in each incubator company.

Dahler's partners are an engineer who is also working on a federal government project to build a second-generation Internet and two executives who run a custom software development company on the side.

InfoAge has leased the entire 8,000 square feet of the second and third floors of Brown's Arcade, in the 300 block of N. Charles St.

The brainchild of former Gov. Frank Brown (1892-1896), the arcade's shops and vendors have had their share of ups and downs since it opened in 1904.

The top two floors, which wrap around an atrium, have been vacant for about four years after an advertising agency pulled out.

The building -- a few blocks from the Washington Monument -- was bought last year by Boxer Properties of Houston. Boxer has moved aggressively to attract a mix of retail and service tenants to the building's street-level space, beset for years by high tenant turnover.

Michael Bradley, regional leasing director for Boxer, said the company expects InfoAge to be a hit with small, emerging technology companies.

Community atmosphere

"One of the great things is that the top floors are laid out in such a way that they provide a community-oriented atmosphere. The interior was originally designed for condominiums. Now small companies can easily interact with neighbors, rather than being walled off by themselves," said Bradley.

InfoAge plans to focus on providing what's known as Class B office space for small Internet, information technology and tele- communications companies, Dahler says.

To accomplish that, the partnership has outfitted the building with new equipment, including high-speed Internet lines, known as T-1 lines.

InfoAge also has invested in a bank of computers to lease to companies that wish to have only an online presence and mailing address.

InfoAge will offer tenants a conference and multimedia room for meetings and presentations, an answering service, and back-office support equipment, including fax and copier machines.

There's no shortage of technology incubators in Baltimore.

According to the Greater Baltimore Committee, there are five other technology business incubators in the area, three of which are operated and financed by the city's Baltimore Development Corp.

InfoAge is the first for-profit incubator in Baltimore, but not the first in Maryland.

Doug Humphrey, co-founder of Internet access provider Digex Inc., operates a for-profit technology incubator in Laurel called Phase I. And Gr8 Inc., a marketing and public relations firm that caters to Internet technology companies, is planning to open, a for-profit incubator for Web-based businesses, in the Baltimore-Washington area this year.

For-profit business incubator ventures are also springing up nationwide.

The National Business Incubation Association estimates that 8 percent, or almost 500, of the 6,000 business incubators in the United States and Canada, are for-profit operations. The lion's share of incubators remain nonprofit, however, and their goals are economic development and job creation in their communities, says the NAIB.

Competing technology business incubators in the Baltimore area include the biotechnology-oriented Bard Life Science Laboratories near the Inner Harbor and the High Tech Business Incubator on the University of Maryland, Baltimore County campus in Catonsville, which has a diverse array of start-ups.

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