RIEDC Board Approves Measures Aimed at Creating 286 Jobs by Boosting Innovation-based Small Businesses
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The Rhode Island Economic Development Corporation (RIEDC) Board of Directors today approved financing and tax incentive measures for three Rhode Island small businesses that are expected to create 286 jobs in the state.
“The RIEDC’s strategic decision to invest in three technology-based businesses sends a clear message that innovation is a vital part of Rhode Island’s economic growth,” said RIEDC Executive Director, Keith Stokes. “These efforts are helping to position Rhode Island as a leader in the ‘New Economy’ as evidenced by its 16th overall ranking in a recent national comparison of how states are adapting to an innovation-driven global marketplace.”
2010 New Economy Index: www.kauffman.org/uploadedfiles/snei_2010_report.pdf
As part of the state’s commitment to grow the green economy, the RIEDC Board approved $200,000 in financing through the agency’s Renewable Energy Fund (REF) for Pawtucket-based Cooley Group, one of the state’s leading advanced manufacturers.
The financing will help the maker of engineered flexible composites create 15 jobs in Rhode Island as part of a joint venture to manufacture and install solar-powered billboard systems onto existing billboards and other outdoor advertising. The financing came in the form of a recoverable grant which will be repaid based on a percentage of sales which could generate up to $400,000 in royalty payments back to the REF by 2014.
In 2008, the REF provided the Cooley group with a $50,000 feasibility grant to determine
the potential to develop a solar technology which could be integrated into their existing business. The company has since invested more than $500,000 and developed a new flexible, thin-film solar material that can be retrofitted to existing billboards and other outdoor structures.
In its first demonstration project, Cooley partnered with other companies to install the first solar-powered billboard in New York City’s Times Square. With this success, Cooley has entered into a joint venture with Formetco, the largest full-service supplier to the outdoor advertising industry, to create CF Solar. By combining Cooley’s current market position and Formetco’s established distribution and sales channel, CF Solar looks to complete final testing and bring its product to market within the next 12 to 18 months. CF Solar has reached an agreement to with CBS Outdoor – the nation’s 2nd largest billboard company – who will provide Rhode Island billboards as part of an ongoing series of demonstration installations.
Cooley is also a leading maker of oil boom fabrics which have been used to contain the Gulf oil spill off the Louisiana coast.
Phoenix Medical Technologies
The RIEDC Board approved a $100,000 Innovation Tax Credit for Phoenix Medical Technologies, LLC in Providence that is projected to help create 86 direct jobs in Rhode Island by 2015 which will generate an additional 105 indirect jobs in the state.
Phoenix is in the process of commercializing a high-tech therapeutic medical device designed to be inserted into shoes to prevent elderly and diabetics from falling. The insole product uses low-level vibrations to create energy inside nerves, requiring less external energy which helps people keep their balance. The company’s development partners include three Rhode Island software, design and manufacturing businesses.
The RIEDC Board also approved a $100,000 Innovation Tax Credit for Pawtucket-based MoFuse, Inc. which helps businesses build and manage websites designed for handheld mobile devices.
MoFuse expects to create 37 direct jobs by 2013 that are projected to produce 43 additional spin-off jobs in Rhode Island. Brands like Delta Dental, IBM, Harper Collins, the Atlanta Falcons and the Providence Business News already use MoFuse for their mobile websites.
How the Innovation Tax Credit Works
To encourage investment in high-growth, high-wage innovation industries and support the state's entrepreneurs, the Innovation Tax Credit offers investors up to a 50 percent credit on eligible investments in pre-approved small businesses with a maximum tax benefit of $100,000. Companies must have annual gross revenues of less than $1 million in the prior two calendar years.
Credits may be carried over for up to three years and may be issued by the state in the name of the eligible company, an executive employee or employees of the company, an investor in the company or any combination of those.
For investments made on or before December 31, 2010, the tax credit may be applied against Rhode Island personal, corporate or franchise tax liabilities. Starting in 2011, credits will no longer be applied against personal tax liabilities.