Business incubator opens for startups

McKinstry executives on Wednesday announced they’ll launch a Spokane “innovation center” — a technology incubator meant to attract startups ready to take advantage of the company’s high-end office space and its team of business experts.

The Spokane version is modeled after McKinstry’s Seattle-based innovation center, which opened in 2010 and now houses a dozen companies.

The Spokane center, said McKinstry Vice President Tony Stewart, has enough room for about two dozen tenants.

McKinstry, based in Seattle, has offices across the Northwest. Last year the company moved into a former electric railway repair shop at 850 E. Spokane Falls Blvd. That building and a nearby fabrication shop will provide 38,000 square feet of space for innovation center tenants, said Stewart.

The first four tenants have already signed up, but Stewart said their names will be released in August, when the center’s office spaces are ready to occupy.

McKinstry will spend $5 million to build out the innovation center, he added.

Not every company seeking to move into the space will be accepted; companies need to be a good fit, Stewart said. Those accepted will be focused on the clean technology, life sciences and education fields.

McKinstry designs, installs and manages mechanical systems for other businesses. It has roughly 100 Spokane employees at the renovated McKinstry Spokane & Inland Empire Railroad building.

The company also looks for ways to strengthen local economies and to build connections between its work force and area educators, Stewart said.

One reason McKinstry spent about $20 million to move into its Spokane headquarters was its location in the expanding Spokane University District, company officials have said.

Stewart said the companies moving into the innovation center will pay lease rates slightly “above market rate” for Class A office space here, but will have access to amenities such as shared meeting and conference space. Offices could be configured from as small as 100 square feet to 5,000 square feet or more, Stewart added.

The focus on open space will also give McKinstry’s managers and employees a chance to meet and exchange ideas with workers in the tenant firms.

“It’s good for our own people to be around people who are different from them, and who are innovators tackling and solving interesting problems,” Stewart said. “The whole idea is to share ideas and accelerate the development of new products and services.”

One of the first tenants in the Seattle center has been Seattle’s General Biodiesel, which collects restaurant cooking oil and recycles it into biodiesel and glycerine. Company CEO Yale Wong said the two-plus years the firm has been with McKinstry have been valuable. The company has been in business more than 10 years and has been profitable since 2011.

One key benefit was being able to tap into McKinstry’s network of company executives and advisers, Wong said. That meant help with grant writing, learning how to create requests for proposals and other topics, he said.

Spokane City Councilman Steve Salvatori attended Wednesday’s announcement and said he regards McKinstry’s innovation center as a major asset for the region. Also on hand was Kim Zentz, CEO of Innovate Washington, the newly created agency that combines what was Sirti and the Washington Technology Center. Zentz said Innovate Washington sees the McKinstry center as complementary to its services.

She said in general companies that contract for help with Innovate Washington are more likely to be early-stage startups, while McKinstry’s tenants will be more established companies that are generating some revenue.

“I do think some of our clients, as they grow, would be ones we’d advise to eventually move into offices in the McKinstry center,” Zentz said.