Review finds Lake Wales business incubator BizLinc fell short of some goals in contract

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A city-funded business incubator in Lake Wales fell short of meeting some requirements in its contract during its first year, according to a long-awaited independent analysis.

The City Commission in February ordered an audit of BizLinc, a nonprofit business-support hub that opened two years ago in Lake Wales’ Northwest neighborhood. The city hired the Orlando accounting firm Carr, Riggs & Ingram to conduct a review of BizLinc, which is operated by Florida Development Corp.

The company completed its report on June 26, and Lake Wales shared it last week.

The Lake Wales Community Redevelopment Agency signed an operational agreement with Florida Development Corp. in 2022, offering a potential $1.2 million over three years to manage the facility. In a four-page report, Carr, Riggs & Ingram reviewed BizLinc’s performance in six categories, covering the first year of the contract, a period ending July 24, 2023.

The consultants found that BizLinc failed to meet its goals in three areas.

What benchmarks did it miss?

Under the agreement, the BizLinc management promised to hold at least 10 training seminars for local business owners during the first year. The auditors could verify that only five such seminars took place.

Carr, Riggs & Ingram obtained sign-up sheets for seminars and selected 50% of the scheduled participants to confirm their attendance. The report indicates that only six people signed up to take part in the seminars.

The contract specified that FDC would provide at least 2,000 hours of technical assistance for BizLinc members. Based on logs provided by FDC, the auditors calculated that the incubator had offered 1,365 hours of technical assistance, a shortfall of 32%.

The consultants confirmed the services provided by selecting a sample of assistance hours recorded and inspecting sign-in sheets and signatures of members, the report said.

In the third shortcoming, Florida Development Corp. submitted only one quarterly report to the city during the one-year period, the auditors reported.

The operational agreement specified that business owners using BizLinc’s services were expected to create 10 jobs in the first year and 20 in each of the next two years. The report from Carr, Riggs & Ingram did not address that variable.

Under the agreement, Lake Wales paid FDC $500,000 for the first year and $400,000 for the second year to cover operating costs and salaries for full-time staff “during initial program stabilization.” The agreement has an option for a third-year payment of $300,000, contingent upon FDC meeting “deliverables” listed in a chart included with the contract.

The payment for the third year was due to be paid this month.

‘Great stuff happening’

Derrick Blue, director of BizLinc, said that FDC got a late start in establishing the incubator.

“But we’ve kind of since made up what we needed to make up,” Blue said. “And I don’t have a doubt that that’ll be demonstrated during this during the second half (of the contract). We’ve been seeing some great stuff happening. I want to kind of get this behind us and start focusing on working with a new group that’s coming in.”

Blue said that BizLinc has seen an “influx” of local business owners seeking to take advantage of its services.

Blue, FDC’s co-founder and chief operating officer, said Friday that he had not yet discussed the report with any Lake Wales officials. The board of the CRA, which consists of the City Commission, will hold a regularly scheduled meeting Tuesday at 2 p.m. The City Commission meets for a work session on Wednesday.

BizLinc has faced scrutiny since the Lake Wales News published an article in February questioning how many of its client businesses were based in Lake Wales and had obtained business tax receipts required by Polk County. The City Commission invited Blue and his FDC business partner, Frank Cornier, to speak during the Feb. 20 meeting, at which several business owners angrily defended BizLinc.

The Lake Wales News article also exposed fake testimonials on the BizLinc website. Blue later said that those were used as generic placeholders when the website was created, and profiles of actual BizLinc clients have since been posted to a new website.

Further questions arose when Charles Young Jr., FDC’s former chief financial officer, was arrested in April on accusations of embezzling more than $250,000 from the company. Young faces one felony charge of grand theft of more than $100,000 and another of property fraud.

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Blue said that Young’s alleged embezzlement had not affected the finances or operations of BizLinc.

Lake Wales paid Carr, Riggs & Ingram $10,500 to conduct the review of BizLinc’s performance.

No comment from Lake Wales officials yet

Lake Wales Mayor Jack Hilligoss did not respond to a voicemail left Friday. Deputy Mayor Robin Gibson and Commissioner Keith Thompson said they thought it would be premature to comment on the report until after the City Commission discusses it.

The creation of a business incubator in the Northwest neighborhood was one of many suggestions in Lake Wales Connected, a comprehensive and open-ended strategy for revitalization adopted by the City Commission in 2021. The framework, developed by the consulting firm Dover, Kohl & Partners, derives from a city plan created in 1931 by Frederic Law Olmsted Jr., the designer of Bok Tower Gardens, and his brother, John Charles Olmsted.

In 2022, FDC bought a vacant, 3,570-square-foot office building at 225 W. Lincoln Ave. to house the incubator. The Northwest Neighborhood, predominantly Black, has endured declines in recent decades, and former retail buildings sit vacant along Lincoln Avenue.

BizLinc does not charge clients for training and other services, but some businesses opt to rent office space at the building on Lincoln Avenue.

Gary White can be reached at gary.white@theledger.com or 863-802-7518. Follow on X @garywhite13.

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