A $10 million fund that will award grants to local technology entrepreneurs won final approval Tuesday night from the Sacramento City Council, giving Mayor Kevin Johnson a key piece of his agenda to boost the city’s high-tech sector in his final year.
“That was huge,” Johnson said after council members approved the plan.
The Innovation and Growth Fund, a project of the Mayor’s Office of Innovation, will offer $1 million annually to local programs that help young tech companies through leadership training, work-share spaces and other support. It will also examine the potential of investing in local and national venture capital funds, according to Abhi Nemani, Sacramento’s chief innovation officer and head of the project.
Some of the funding may be awarded as soon as August, Nemani said.
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The fund began as a traditional economic development program in 2013 using redevelopment money from local property taxes after the statewide dissolution of redevelopment agencies.
In 2014, the City Council dedicated other revenue to that pot, including proceeds from the sale of city-owned lands. The fund was tagged with its new name during last year’s budget deliberations at the behest of Johnson, who has spoken frequently about expanding the city’s economic base.
The fund generates about $2 million annually and will use about that amount every year, Nemani said. That includes $500,000 the economic development department can use to lure technology companies to move or expand in the area. An additional $425,000 is allotted to the Office of Innovation, housed within the mayor’s office, for salaries and other costs – including hiring a full-time person to replace Nemani when his contract expires in December and a program manager who was hired last month.
An additional $125,000 is reserved for the purchase or development of technology to aid the city in streamlining its own business in areas such as planning and permitting – another key focus of the mayor’s economic agenda.
The remaining $1 million will be paid out to local projects and companies with strategies that could promote a tech ecosystem to draw and nurture other investment, Nemani said.
The city will begin accepting applications for those Rapid Acceleration, Innovation, and Leadership in Sacramento grants Wednesday via its website. Applications will be accepted for 30 days, then reviewed by a panel of city personnel and local business leaders, still to be named.
Nemani said it was important to have successful entrepreneurs participate in the process to gain private sector insight.
The program isn’t looking for scratch ideas but instead will give money to existing local endeavors that already have some funding and a track record. Applicants can request larger amounts, but Nemani said the goal is to award a range of smaller grants to enhance the program’s success.
The City Council will have final say over innovation funds and likely will choose the inaugural group of seven to 15 winners in August, Nemani said. He plans to present a package of grantees, rather than asking the council to debate on individual applicants.
Approval was unanimous, but two council members, Jay Schenirer and Eric Guerra, said they had concerns about whether the plan does enough to establish career paths for young people in Sacramento.
“We are trying to make sure we are creating opportunities ... for (people) here,” Guerra said.