OLYMPIA – A state agency with roots in Spokane’s 1980s push to attract more high-tech jobs to the region would be eliminated under legislation approved this week by the House.

Innovate Washington would cease to exist and its Riverpoint building, leases on other office space in the area, reports and even furniture would be turned over to Washington State University under a bill that passed Thursday evening on an 88-9 vote. . . .

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. . . With the new space available from that change, WSU would turn over some other classrooms at Riverpoint to EWU.

Innovate CEO Kim Zentz said she was surprised by the House move, because staff had been working since last summer to be absorbed by the state Department of Commerce under a plan by Gov. Jay Inslee to consolidate economic development programs. She did not expect the agency to be eliminated entirely, as required in an amendment added to HB 2029.

“I did not see it coming,” Zentz said. The bill could eliminate state-sponsored technology-based economic development in Washington, she said.

The Senate has a separate bill more in line with Inslee’s plan for the Commerce Department to absorb Innovate programs and data. But it failed to meet a key deadline this week and could be dead.

The House proposal could cause the state to default on some federal grants that require matching money from the state unless WSU or the Legislature comes up with it, she said.

Those defaults could count against the state if it tries for other federal grants in the future, she added.

Innovate Washington is the successor to the Spokane Intercollegiate Research and Technology Institute, or SIRTI, which opened in 1994 and was an anchor to what is now the Riverpoint campus. SIRTI was an outgrowth of Momentum, a group of business, civic and education leaders who began in 1987 to find ways to attract more technology based businesses to the region.

It served as an incubator for business startups and entrepreneurs seeking to apply academic research to commercial uses.

But SIRTI regularly faced legislators skeptical of the return on investment. It was combined with the Washington Technology Center in 2011 to form Innovate Washington. Last year, Innovate sought $5.6 million in state funding; it got no new money but had $2.6 million in reserves left over from its merger with the center.

Although it was preparing to be absorbed by the Commerce Department, Innovate expected research being conducted with the help of federal grants would continue. Among its largest grant programs are research into new technology to improve energy efficiency in existing buildings, which began in 2012. It also is working on ways to bring engineering and manufacturing jobs American companies have sent overseas back to United States to distressed communities.

That work began last October, and the separate Innovate Washington Foundation, a non-profit organization associated with the agency, accepted a $500,000 federal grant for the work on Friday.

Although the ultimate fate of agency remains in doubt, WSU already has plans to move into the Innovate building on the Riverpoint campus. On Friday President Elson Floyd told legislators WSU reached an agreement with Eastern Washington University to use Phase 1 and increase the Cheney-based school’s classroom space on the campus east of downtown.

That would be good news for both institutions, Sen. Mike Baumgartner, R-Spokane, said, and “increase the academic vibrancy” of the community. It’s contingent on transferring the Innovate building to WSU, but one way or another that’s likely to happen before the end of the session, he said.

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