SOUTH BEND -- Consider it a graduation gift -- with one important string attached.
The city, by way of the Redevelopment Commission, has decided to invest in F Cubed, a start-up company that recently announced plans to move out of Innovation Park at Notre Dame and into part of the old St. Joseph High School.
The catch? The company must reimburse the city 150 percent of the value of the investment if it doesn't eventually move into Ignition Park, the city's state-certified technology park south of downtown, in the old Studebaker corridor.
"I can tell you, generally, that we're working with them (F Cubed) on the basis that they will ultimately move into Ignition Park ... and to assist them in their expansion," Scott Ford, the city's director of community investment, said.
F Cubed, which "graduated" from Innovation Park last month, is in the process of setting up a high-tech manufacturing facility inside the part of the old St. Joseph High School that used to constitute the art wing, at the northwest corner of Indiana 933 and Angela Boulevard.
The company has developed a bio chip that is able to detect target DNA in water, blood and other samples, which it plans to manufacture at the facility, according to Les Ivie, the company's president and CEO. Potential applications for the chip include those in the health, environmental and food safety industries.
The city is interested in using the technology to test for E. Coli in its drinking water system, Gary Gilot, the city's director of public works, said.
The city's investment involves the purchase of about $103,000 worth of lab equipment, which F Cubed needs to manufacture the chips on a commercial scale, Ford said. The Redevelopment Commission had approved spending up to $140,000.
The city intends to pay for the equipment with tax increment finance, or TIF, dollars appropriated out of the Airport TIF District, which encompasses the airport and parts of the old Studebaker corridor, including Ignition Park.
According to Ivey, F Cubed intends to move into the park, which currently is home to just one tenant, Data Realty, as soon as the city creates some space for it there in the form of a building.
Ford said the city plans to construct a multi-tenant building in the center of the park in the next couple of years and then lease space in the building to F Cubed and other potential tenants. Whether the city would manage the building or outsource that job to someone else has yet to be determined.
Though TIF funds generally must be used within the district in which they are collected, the city has determined that it is OK to use them outside the district, in this case based on the fact the use will ultimately benefit the district.
Had the city not invested in the company, F Cubed would have moved ahead with its plans to manufacture the chip regardless, Ivie said. However, he said, "that would have meant going back to our investors and convincing them to invest additional money in the company."
The company still plans to do that, Ivie said. Now, however, it will be able to use that money to hire new employees and invest in other improvements, including other new pieces of equipment.
Ivie said F Cubed intends to invest about $2 million in the St. Joe property to get its manufacturing facility up and running there, all of it from private investors.
He said the company expects to add about a dozen new jobs immediately and as many as 30 by 2015. The jobs would primarily be technical in nature, he said. They would pay upwards of 30,000 a year, plus benefits.
The company currently employs eight full-time and three part-time people, Ivie said. All but one of those people live in South Bend, he said.
He said he expects production of the new chip to begin at the St. Joe site sometime in late January or early February.
Staff writer Erin Blasko: