A small business incubator program designed to help small businesses obtain office and retail space has languished unfunded.

The legislation enacted on June 28 1995 was supposed to offer small business owners a start-up location.

Simultaneously the legislation would have provided guaranteed rents for the commercial real estate market.

Public Law 23-37 introduced by then senator Felix P. Camacho stated “There is established to operate in cooperation with the University of Guam Small Business Development Center a business incubator program for Guam. The incubator space will be rented from current available commercial rental space.”

The purpose of the incubator was listed as “providing professional office space and professional office facilities to small business owners and operators who are unable to afford office rental space at the going market rate. The tenants of the business incubator shall be selected by the Guam Small Business Incubator Board of Directors.”

Ten years have elapsed and the SBDC is now known as the Pacific Islands Small Business Development Center Network. The SBDC was only one month old when the law was enacted but the program was never funded — no total rental amount or number of clients to be served was noted in the legislation.

Under the law the chairman of the board is listed as the university’s president presently Harold L. Allen. The Journal spoke with Cathleen Moore-Linn director of integrated marketing and communication at the university to ask about the Guam Small Business Incubator program and was referred to the small business development center.

Casey Jeszenka network director of the PISBDCN said “I would love to offer this program but if the legislature is going to require this then the legislature needs to step up and provide the funding to allow it to take place.”

He said a government of Guam entity exists to address a need for an incubator. Jeszenka said the Chamorro Village acts as a de facto business incubator and the Guam SBDC refers clients to its management. “The GCIC building also offers a floor with a receptionist copier and other shared amenities ” Jeszenka said.

Despite a lack of local funding for rental the idea of a business incubator took hold.

In 1999 the Guam SBDC received about $150 000 from the federal government to study the feasibility of building an incubator on-campus.

Betsy R.C. Iriarte network operations manager of the PISBDCN said Guam received the money from the U.S. Economic Development Administration to support an architectural and engineering study and plans for its own incubator facility. The plans were completed in 1999.

The jungle lot facing the university compound sign was selected as the incubator site. Iriarte said the lot is the property of the university. “Initial estimates put the cost to build the incubator a little over $1 million. It’s probably more than that now and if anyone is interested in funding the cost of construction we would be willing to hear their proposal ” Jeszenka said.

He said U.S. EDA funding was not available following the completion of the plans. However despite not having a business incubator Jeszenka continues to operate the Guam division of the network. The staff of five including a Citibank-funded women in business representative receives a grant from the Small Business Administration at $500 000 and a match of about $75 000 — and office space from the university. Jeszenka said the outer islands als see the value in the program and have continued to increase their funding for their centers. Numbers gathered from January to August indicates 251 people were counseled 72 workshops were conducted with 1 010 people attending and 18 jobs were created while existing businesses were able to retain 35 employees with SBDC assistance. The center also assisted in helping clients receive $870 000 in loans and equity injection. These numbers contribute to the network that includes five additional centers: in Yap Palau Chuuk Kosrae and the Republic of the Marshall Islands.

According to Jeszenka based on the network’s numbers the PISBDCN rivals the number of clients aided in Hawaii. “In fact we’re over our numbers.” While successes can be seen with the current number of staff and resources Jeszenka continues to advocate for more funding and donations. Jeszenka said “We help private sector development and economies in the region benefit from the service that we provide. The other affect we have is on the migration of people from the outer islands into Guam. As we help to raise the standard of living in the islands — [and] this will help stem future migration.”

The Northern Marianas College opened its Business Incubator Program in 1989 and the program became the SBDC in 1993. The Business Incubator Program which is still among SBDC’s services offers low-cost office space access to equipment a conference room high speed Internet free consulting assistance and limited administrative support.

There so far are nine successful SBDC incubator graduates among them:

• Island Apparel which started in 1990 and has now become one of the largest silk screen printers in Micronesia. Island Apparel was sold to United Micronesia Development Association Inc.;

• Action Locksmith which was provided with assistance regarding its business plan and loan proposal. The company obtained a loan with Bank of Hawaii that was guaranteed by CDA. It is now in its ninth year of business;

• Sine & Muna Tax and Accounting Services;

• Kin’s Auto Center;

• Juanny’s Hair salon which opened in 1994 and is now considered one of the most successful salons on island also diversifying to Guam where it has a salon at the Hyatt Regency Guam;

• New Horizon Visual/Saipan Photo Lab which is being operated by Jack Hardy a retired surgeon;

• Island Grip Services which opened in January 2001 and provides assistance in film lighting and equipment rental.

Eric L. Plinske SBDC director said the incubator program is a success. SBDC has developed to provide counseling workshop and training to expand its services. (See related story on Page 30). MBJ