NORTHERN UTAH VENTURE FUND - ogdencity.com

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Ogden City Council Meeting: August 3, 2021

NORTHERN UTAH VENTURE FUND

- Proposed Interlocal Agreement with Weber State University, Ogden-Weber Technical College, Davis County Council of Governments, and Davis Technical College

Action: Adopt / Not Adopt Resolution

Executive Summary The Council will consider a resolution authorizing an Interlocal Cooperative Agreement with Weber State University, Ogden-Weber Technical College, Davis County Council of Governments, and Davis Technical College to create the Northern Utah Development Foundation which will manage the Northern Utah Venture Fund. The Fund will seek investors to fund startup costs for promising new businesses.

Background Community Capitalization For the last decade, the Community and Economic Development

Department has had “community capitalization” as part of its strategic mission. Community capitalization is the term used to describe efforts to infuse funding and other resources into the community to support development of local businesses, new housing stock, educational opportunities, new technologies, and supporting infrastructure to promote the growth of a healthy, balanced community. CED supports the theory that small businesses rooted in the community have the greatest long-term impact on the local economy.

The Department started with strategic use of the City’s CDBG grant funding, developing programs that were focused on the strategic mission. The Business Information Center assisted with small and micro business loans and now provides a wide range of services for the business community. The department leverages exiting CDBG funding with a line of credit from Synchrony bank to increase the number of homes the City can complete each year.

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In partnership with Weber State, Start-Up Ogden was created as a business incubator. The BLU Loan program and the Wildcat Micro Fund have provided funding for new businesses and development of new technologies and concepts. The one element of community capitalization not currently found in the City’s arsenal is access to equity interest in new products and businesses.

Proposal The Administration is proposing that the City enter into an Interlocal Agreement with

o Weber State University o Davis County Council of Governments o Ogden-Weber Technical College, and o Davis Technical College

to create the Northern Utah Development Foundation. The Foundation will manage the Northern Utah Venture Fund and encourage investors to fund startup and early-state development of promising new businesses. The primary purpose of the Agreement is to promote regional economic development by strengthening and growing the entrepreneurial ecosystem in Northern Utah.

The Interlocal Agreement outlines the following key requirements :

• Parties agree to establish a venture capital fund named the Northern Utah Venture Fund

• Parties intend to establish a separate legal entity designated as the Northern Utah Development Foundation to manage the Northern Utah Venture Fund and other funds that may follow

• Each of the parties will contribute $25,000 • Each party shall have one seat on the Board of the Foundation,

and each shall have one vote • The Foundation will prepare an annual budget • The Foundation shall create bylaws to govern the manner of

acquiring, holding and disposing of real and personal property • The Agreement is for twenty (20) years • The Agreement may be terminated by a two-thirds vote of the

parties

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• A party may withdraw from the agreement with a ninety-day written notice

The current plan for the Venture Fund is to focus on development of small emerging enterprises, new technologies promoted by local innovators, and aerospace technologies that support the Air Force’s missions.

Fiscal Note The City’s contribution of $25,000 will come from CED’s business promotion fund. No additional funding will be required for FY22.

Attachments Administrative Transmittal Proposed Resolution Proposed Interlocal Agreement Council Staff Contact: Janene Eller-Smith, MPA/JD (801)629-8165

DEPARTMENT: DIRECTOR: Community and Economic Development Tom Christopulos DIVISION: MANAGER: Economic Development Tom Christopulos STAFF: CONTACT: Tom Christopulos, Director CED Tom Christopulos REQUEST: Ogden City Community and Economic Development to obtain permission to be a participant in the creation and establishment of a venture capital fund to encourage and support economic development in Northern Utah. This would be done through an interlocal agreement between the Davis County Council of Governments, Ogden Weber Technical College, Davis Technical College and Ogden City. The agreement allows government units to establish a means by influencing the development of the entrepreneurial ecosystem within norther Utah. The agreement is attached and has been reviewed by legal. Certain technical changes will need to be made by the board of the fund. The contribution to the capital development of the fund will be from CED’s promotion fund. The one-time contribution is $25,000. Further capital for the fund will come from private sources and grants developed by the corporation. REQUESTED TIMELINE / REQUESTED ACTION: The requested action is for permission of the Council to participate in the Interlocal Agreement. Funding to be provided from Community and Development budget as a promotional cost. All parties to the agreement will have signed copies. BACKGROUND INFORMATION: This informational transmittal also contains a presentation by the Northern Utah Venture Capital groups Norsatch Fund. The participants money will be utilized to provide a foundation for the development of fund participants from various private based sources. Highlights:

A. Introduction and Background

Ogden City has been pursuing a long term multi-layered approach to the development of locally owned businesses in the community. That multi-layered approach established basic startup funding for locally owned companies trying to establish themselves financially.

The theory that is being pursued is that small businesses rooted in the community have a greater magnitude of impact economically than any other form of business.

Much of the theory of capitalizing the community is to establish a means to grow and accelerate our own companies locally:

Ogden City Council Transmittal Submitted to CAO: 18 June 2021

OGDEN CITY COMMUNITY AND ECONOMIC DEVELOPMENT

Received by Council:

• The current plan focuses on the development of:

o Small emerging enterprise development. o Establishment of development of new technologies being developed by inventors and innovators

within the area. o And developing latent aerospace technologies that can be used to support prime missions

established by the air force.

A. The Guiding Strategy is focused by the following principles to aid in the development of an entrepreneurial ecosystem:

Weber State and local entities will facilitate networks and partnerships to accelerate the rate of technology growth within the community.

B. Contribution to Desired Outcomes

This strategy will contribute to the following Desired Outcomes associated with the primary goal of using the communities and educational institutions intellectual assets, economic influence, financial resources, and human capital in partnership with regional communities to seek a sustainable economic, social, cultural, and environmental system that ensures opportunity, equity, and inclusion.

Substantially grow the regions entrepreneurial ecosystem

a. Initial Concept - WSU and Ogden have joint created and/or facilitated several initiatives to create an Entrepreneurial Ecosystem.

Facilitate the growth and efficiency of the Defense and Aerospace Industry

b. Initial Concept - WSU has utilized our convening power to establish a more coordinated Defense/Aerospace Ecosystem by engaging industry partners and together developing programs that will strengthen the Ecosystem. Targeting increases in partnerships and other initiatives

c. Ogden has utilized its economic office to encourage the development of missions at the Start Up Ogden center as in the process of developing partnerships for the development of technologies emerging from various technological initiatives at Hill AFB.

C. Potential Models

https://www.wichita.edu/research/NIAR/ https://www.sdl.usu.edu https://www.catalystcampus.org https://www.weber.edu/WSUToday/092816_StartupOgden.html

https://www.wichita.edu/research/NIAR/

https://www.sdl.usu.edu/

https://www.catalystcampus.org/

https://www.weber.edu/WSUToday/092816_StartupOgden.html

RESOLUTION NO. 2021-13

A RESOLUTION OF THE OGDEN CITY COUNCIL APPROVING AN INTERLOCAL AGREEMENT BETWEEN WEBER STATE UNIVERSITY, OGDEN WEBER TECHNICAL COLLEGE, DAVIS TECHNICAL COLLEGE, THE DAVIS COUNTY COUNCIL OF GOVERNMENTS, AND OGDEN CITY TO CREATE A VENTURE CAPITAL FUND TO ENCOURAGE AND SUPPORT THE ECONOMIC DEVELOPMENT IN NORTHERN UTAH.

WHEREAS, the Utah Interlocal Cooperation Act, Title 11, Chapter 3, Utah Code Annotated, 1953 as amended, permits governmental units to enter into agreements with one another for the purpose of exercising, on a joint and cooperative basis, powers and privileges that will benefit their citizens and make the most efficient use of their resources;

WHEREAS, Weber State University and Ogden City have long sought a means to strengthen the entrepreneurial ecosystem in Northern Utah through impactful educational opportunities, mentorship/talent networks, financial assistance to small and early-stage start-up businesses, and creating dynamic, growing companies in the region;

WHEREAS, the Interlocal Agreement provides for the creation of a venture capital fund, designated the Northern Utah Venture Fund, to encourage investors to support and/or fund start-up and early-stage development of promising new businesses;

WHEREAS, each party to the Interlocal Agreement commits to a one-time investment of Twenty-Five Thousand Dollars ($25,000.00) to seed and/or capitalize the Northern Utah Venture Fund;

WHEREAS, after careful analysis and consideration of the relevant information, Ogden City understands and acknowledges the importance of entrepreneurial support for start-up and early development businesses, and desires to enter into the Interlocal Agreement with Weber State University, the Ogden Weber Technical College, Davis Technical College, and the Davis County Counsel of Governments, and contribute the one-time investment, to facilitate creation of the Northern Utah Venture Fund and support entrepreneurship in Northern Utah;

WHEREAS, Section 11-13-202.5 of the Interlocal Cooperation Act requires that certain interlocal agreements be approved by the legislative body of a public agency before such agreements may become effective;

NOW, THEREFORE, BE IT RESOLVED by the Ogden City Council as follows:

1. The Interlocal Agreement between Ogden City, Weber State University, Davis TechnicalCollege, Ogden Weber Technical College, and Davis County Council of Governments,substantially in the form attached hereto as Exhibit A, is approved in final form and shallbe executed for and on behalf of Ogden City by the Mayor and City Recorder.

2. Pursuant to Section 11-13-202.5 of the Interlocal Cooperation Act, the InterlocalAgreement has been submitted to legal counsel of Ogden City for review and approvalas to form and legality.

3. Pursuant to Section 11-13-209 of the Interlocal Cooperation Act, a duly executed originalcounterpart of the Interlocal Agreement shall be filed immediately with the City Recorder,the keeper of records of Ogden City.

4. Ogden City is hereby directed to publish or cause to be published a notice of the Interlocal Agreement in accordance with the Interlocal Cooperation Act, and make a copy of the Interlocal Agreement available for public inspection and copying at the City’s offices during regular business hours for a period of at least thirty (30) days following publication of the notice.

5. The Interlocal Agreement shall take effect immediately upon execution.

6. This Resolution shall take effect upon adoption.

APPROVED AND ADOPTED this day of , 2021.

_______________________________ Chair

ATTEST: __________________________________ CITY RECORDER APPROVED AS TO FORM: JAT 7/28/21 Legal Date

EXHIBIT A

INTERLOCAL AGREEMENT

INTERLOCAL COOPERATION AGREEMENT

BY AND AMONG WEBER STATE UNIVERSITY, OGDEN CITY,

DAVIS COUNTY COUNCIL OF GOVERNMENTS, OGDEN WEBER

TECHNICAL COLLEGE AND DAVIS TECHNICAL COLLEGE FOR THE PURPOSE OF

ESTABLISHING A VENTURE CAPITAL FUND TO ENCOURAGE AND SUPPORT

ECONOMIC DEVELOPMENT IN NORTHERN UTAH.

This Interlocal Cooperative Agreement (the “Agreement”) is entered into by WEBER STATE

UNIVERSITY, a public institution of higher education in the State of Utah (the “University”); OGDEN

CITY, a municipal corporation of the State of Utah; (the “City”); DAVIS COUNTY COUNCIL

GOVERNMENTS, a nonprofit corporation of the State of Utah (the “Council”); OGDEN WEBER

TECHNICAL COLLEGE, a public institution of higher education in the State of Utah; and DAVIS

TECHNICAL COLLEGE, a public institution of higher education in the State of Utah (the “Colleges”).

The entities listed above may be referred to herein as (the “Parties” or “Party”).

RECITALS

WHEREAS, the Utah Interlocal Cooperation Act, Utah Code Ann. § 11-13-101 et seq., (the “Act”),

permits local governmental units including City, counties, and other political subdivisions of the State to make the

most efficient use of their powers by enabling them to cooperate with other public agencies on a basis of mutual

advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental

organization that will accord best with geographic, economic, population, and other factors influencing the needs

and development of local communities and to provide the benefit of economy of scale, economic development,

and utilization of natural resources for the overall promotion of the general welfare of the state; and

WHEREAS, the University is committed to fulfilling its institutional mandate to teach and

provide educational opportunities to its full-time students as well as providing support for community

economic development; and

WHEREAS, the City is committed to furthering economic development and promoting new

business enterprises within their corporate limits; and

WHEREAS, the Council is committed to furthering economic development and promoting new

business enterprises within their geographical limits; and

WHEREAS the Colleges are committed to fulfilling their institutional mandate to teach and

provide educational opportunities to their full-time students as well as providing support for community

economic development; and

WHEREAS, the Parties have recognized the need to strengthen and grow the Northern Utah

Entrepreneurial Ecosystem by supporting the development and expansion of entrepreneurs, innovation,

infrastructure, and financial networks; and

WHEREAS, in order to achieve this objective, the Parties intend to establish a Northern Utah

Venture Fund to promote regional economic development by (1) financing small and early stage startup

businesses; (2) supporting entrepreneurship to revitalize or stabilize low to moderate income areas; (3)

creating investor talent and networks; (4) creating impactful educational opportunities for students and

faculty; (5) creating dynamic, growing companies in the region; and (6) providing a positive financial

return; and

WHEREAS, the Parties desire to memorialize their respective commitments, responsibilities,

and mutual intent to achieve the goal of strengthening and growing the Entrepreneurial Ecosystem in

Northern Utah; and

WHEREAS, the Northern Utah Venture Fund will complement and assist in the fulfillment of

the foregoing purpose.

NOW THEREFORE, the University, City, Counties, and Colleges hereby agree as follows:

ARTICLE ONE

PURPOSE

The purpose of this Agreement is to promote regional economic development by strengthening and growing the Entrepreneurial Ecosystem in Northern Utah.

ARTICLE TWO

NORTHERN UTAH VENTURE FUND

In order to accomplish this purpose, the Parties intend to establish a venture capital fund to be

named the Northern Utah Venture Fund to encourage investors to fund the startup and early-stage development of promising new businesses.

ARTICLE THREE

NORTHERN UTAH DEVELOPMENT FOUNDATION

The Parties intend to establish a separate legal entity to manage and direct this joint and

cooperative undertaking as provided by the Utah Governmental Nonprofit Corporations Act, Utah Code Ann. §11-13a-101 et. seq. The new entity shall be a Utah nonprofit corporation designated as the Northern Utah Development Foundation (the “Foundation”). The Foundation shall be established upon receipt of the financial contributions committed by the Parties as set forth below:

ARTICLE FOUR

FINANCIAL COMMITMENTS

Each of the Parties shall make a financial contribution to the Foundation in the following amounts:

Weber State University $25,000

Ogden City $25,000

Davis County Council of Governments

Ogden Weber Technical College

Davis Technical College

$25,000

$25,000

$25,000

ARTICLE FIVE

MEMBERSHIP

The Foundation shall not have members.

ARTICLE SIX

GOVERNING BOARD

The Foundation shall be governed by a Joint Board of Trustees (the “Board”). Each of the Parties shall be entitled to one seat on the Board of the Foundation.

ARTICLE SEVEN

VOTING

Each of the members of the Board shall have one vote in the joint administration of the Foundation. Each decision of the Board shall be by a majority vote, unless a greater number is specified in this Agreement or in the bylaws. A majority of the members of the Board shall constitute a quorum.

ARTICLE EIGHT

JOINT ADMINISTRATOR

The Board shall appoint a Joint Administrator by contract to manage the operations of the Foundation.

The powers, duties, and compensation of the Joint Administrator shall be set forth in the contract and approved by the Board.

ARTICLE NINE

BUDGET AND FINANCE

The Foundation shall be capitalized by the financial contributions of the participating Parties to this

Agreement. Additional financial contributions thereafter may be permitted only upon an affirmative two-thirds majority vote of the Board and only if the additional financial contributions are appropriated and approved by the Parties’ respective legislative or governing bodies. An annual budget shall be prepared by the Joint Administrator and submitted to the Board for approval. Reports of revenues and expenditures shall be submitted for the Board’s review and approval on a quarterly basis or more often as needed for the Board to exercise due diligence in its

oversight function. Any Party may inspect such reports of revenues and expenditures upon request.

ARTICLE TEN

REAL PROPERTY

The manner of acquiring, holding, and disposing of real and personal property used in this joint and cooperative undertaking shall be set forth in the bylaws of the Foundation to be adopted by the Board.

ARTICLE ELEVEN

NECESSARY AND PROPER POWERS

The Foundation shall be granted all necessary and proper powers reasonably required and legally permissible to fulfill its purpose as set forth herein. The necessary and proper powers shall be enumerated in the articles of incorporation and bylaws of the Foundation.

ARTICLE TWELVE

DURATION

This Agreement shall be for a period of twenty (20) years.

ARTICLE THIRTEEN

TERMINATION

This Agreement may be terminated upon the two-thirds affirmative vote of the Parties. Upon termination, any funds remaining after payment of debts and expenses of the Foundation shall be distributed in accordance with provisions of the bylaws and applicable law.

ARTICLE FOURTEEN

DISPOSAL OF PROPERTY

The real and personal property of the Foundation shall be disposed of by the Board in accordance with provisions of the bylaws and applicable law.

ARTICLE FIFTEEN

WITHDRAWAL

A Party may withdraw from this Agreement upon giving written notice to the other Parties not

later than ninety (90) days prior to the date of withdrawal; provided, however, that the initial contribution affording membership in the Foundation and any subsequent financial contributions made by the withdrawing party shall be nonrefundable.

ARTICLE SIXTEEN AMENDMENTS

This Agreement may be amended only upon mutual consent and approval by appropriate

resolutions of the Parties.

ARTICLE SEVENTEEN

BREACH

Other than is expressly provided in this Agreement, no breach of this Agreement shall entitle any party to unilaterally cancel, rescind or terminate this Agreement; but such limitations shall not affect in any manner any other rights or remedies which either party may have by reason of any such breach.

ARTICLE EIGHTEEN

BINDING NATURE

This Agreement shall be binding upon each of the Parties and their respective assigns and

successors-in-interest. No Party may assign this Agreement or any interest herein without having first obtained the written consent of all other Parties, except that an assignment may be made to a successor governmental entity with which the assigning party is consolidated, merged, or replaced.

ARTICLE NINETEEN

ADDITIONAL DOCUMENTS

Each Party agrees to execute such other and further documents and instruments as may be

reasonably necessary or proper to consummate the transactions contemplated by this Agreement and to implement the intent of the Parties as expressed herein.

ARTICLE TWENTY

SEVERABILITY

Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to

be valid; but, if any provision of this Agreement shall be held in a final judicial determination to be invalid or prohibited under applicable law, such provision shall be ineffective to the extent of such invalidity or prohibition without invalidating the remainder of such provision or the remaining provisions of this Agreement. Notwithstanding the foregoing, however, should such judicially determined invalidity of any provision of this Agreement frustrate the intended purpose of the Parties, as expressed herein, such invalidity shall cause this Agreement to be terminated, with the parties, to the extent possible, restored to the status quo as though this Agreement had not been signed.

ARTICLE TWENTY-ONE

PARAGRAPH HEADINGS

The section and paragraph headings of this Agreement are for the purposes of reference only and

shall not limit or define the meaning hereof. This Agreement shall be construed only by the contents hereof and there shall be no presumption or construction in favor of or against any Party.

ARTICLE TWENTY-TWO

ENTIRE AGREEMENT

The Parties agree that this document contains the entire agreement and understanding between

and among the Parties and constitutes the entire agreement with respect to the specific issues contained herein and supersedes any and all prior oral representations and agreements.

ARTICLE TWENTY-THREE

GOVERNING LAW

This Agreement shall be governed by the laws of the State of Utah.

ARTICLE TWENTY-FOUR

REQUIRED FORMALITIES

This Agreement shall not be effective until approved by a resolution of the governing body of

each Party. A signed copy of this Agreement shall be filed with the keeper of the public records of each Party. As required by Utah Code Annotated, Section 11-13-9, and as a condition precedent to this

Agreement's entry into force, it shall be submitted to an authorized attorney for each Party who shall approve the Agreement as being proper in form and compatible with the laws of the State of Utah.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly

authorized representatives effective as of the day and year of the last Party to sign.

WEBER STATE UNIVERSITY

By: Signature Title

ATTEST:

Date:

Approved as to form and as compatible with State law:

By: General Counsel Signature

OGDEN CITY

By: Signature Title

ATTEST:

Date:


By: City Attorney Signature

DAVIS COUNTY COUNCIL OF GOVERNMENTS

By: Signature Title

ATTEST:

Date:


By: County Attorney Signature

OGDEN WEBER TECHNICAL COLLEGE

By: Signature Title

ATTEST:

Date:


By: Assistant Attorney General Signature

DAVIS TECHNICAL COLLEGE

By: Signature Title

ATTEST:

Date:


By: Assistant Attorney General Signature

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