PORT ANGELES — Clallam County is getting ready to pull the first plug on the long-defunct Clallam Business Incubator.
The county’s three commissioners Tuesday will consider forgiving the $750,000 it loaned the nonprofit organization in 2004, a debt it has not seen a chance of being repaid since the Incubator fell into financial trouble more than two years ago.
Forgiving the debt would be the first step toward dissolving the mothballed organization.
But the move is contingent on the Port Angeles School District, as the Incubator’s landlord, agreeing to take the debt off the organization’s hands, which it has not done.
The issue will be discussed at the Clallam County commissioners’ Monday work session, which will begin at 9 a.m. in the commissioners’ boardroom at the Clallam County Courthouse, 223 E. Fourth St., Port Angeles. A vote will occur the following day.
County Administrator Jim Jones said the Incubator cannot dissolve if it still owes the money, used to finish the interior of its space at the Lincoln Center, 905 W. Ninth St.
The county also can’t forgive a loan to a private group, which is why, he said, it needs a public entity to place the debt in its name.
The school district wouldn’t be required to repay the funds, Jones said. The loan, with 1 percent interest, came from the county’s opportunity fund.
The Incubator, with the support of local public entities, opened its doors at the Lincoln Center almost eight years ago to lease office space to start-up businesses and provide advice to aspiring entrepreneurs.
It has been on hiatus since it ran out of cash in October 2009.
The Incubator started making payments on the loan in 2006, and about $709,000 is still owed, with interest not included.
Jones said the Incubator has a only a few thousand dollars in assets, and seeking any repayment through the courts would cost more than the county would receive.
“We think that this is the cleanest break,” he said.
School district Superintendent Jane Pryne said the School Board will consider the proposal.
A majority of board members are expected to attend Monday’s county commissioners meeting.
“I need to see what happens in the wake of Tuesday’s session before I can make that commitment,” she said.
“Assuming a $750,000 debt is always a concern.”
The School Board may take action at its Feb. 27 meeting, Pryne said.
Both Jones and Pryne have been board members of the Incubator since the previous board dissolved in fall 2009.
Although its days are numbered, the Incubator may already have a replacement.
Peninsula College
Last year, Peninsula College started the Clallam County Business and Community Development Center at the Lincoln Center to offer many of the services provided by the Incubator, including advising businesses on how to start and expand.
Jones said the college’s group is in need of funding to get off the ground.
College interim President Brinton Sprague did not return a request for comment.
Jones said the group would be more financially stable than the Incubator since it would not rely on revenue from leasing offices to its clients.
Linda Rotmark, Clallam County Economic Development Center executive director, attributed the surplus of commercial space caused by the economic recession as one of the reasons for the Incubator’s failure.
The EDC has been the Incubator’s caretaker since 2009.
Rotmark said the Incubator has kept two clients: Homeward Bound, which is a community land trust; and a pretzel company.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
