NANAIMO — Shutting down the final piece of the Nanaimo Economic Development Corporation (NEDC) will be an expensive exercise for the City.
On Monday night, Council received a staff report showing nearly $150,000 worth of expenses related to winding down SquareOne. Buyout costs for Nanaimo's tech incubator include more than $88,000 left on a contract for internet services with Shaw Cable and $50,000 remaining on a lease for furniture.
According to the report, the City currently pays $1,380 on a month-to-month contract for internet services shared across all facilities. The report said by assuming the SquareOne internet contract, at nearly $6,000 per month, and cutting the existing City service, it will save the cost of buying out the contract from Shaw.
"I'm trying to figure out how we're actually saving money," coun. Gord Fuller said. "I get it's for all the facilities...but I still don't see how there's any savings, so I wouldn't call it a savings."
Chief financial officer Victor Mema said the City can't get out of the Shaw contract. "It's more than what we require, but we're saying at least we will pay for something we are going to be using, instead of paying out."
The office on Victoria Cres. was opened by the NEDC and Innovation Island in 2014. It was designed to create an incubator environment where tech start-ups could access affordable office space, mentorship and training resources. However, "The project has not been successful as a business incubator and is now operating as a 'hot desk' facility," the staff report said.
SquareOne has operated at an average deficit of more than $120,000 over the last three years, according to the City. Shutting down the operation will complete the winding down of the NEDC.
On Twitter: @domabassi
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