Incubator building coming down

The spate of new student housing going up around the University of Minnesota is continuing. And a well-known small-business incubator will close to make room for more.

David Jasper, owner of the University Technology Enterprise Center (UTEC) at 1313 SE. 5th St., says the 90-year-old former John Marshall-University High School where he ran UTEC will be torn down and replaced with a 317-unit, mixed-use apartment/retail building in the Dinkytown neighborhood. Jasper is selling the building to Chicago-based developer GEM Realty Capital in a deal that will close next month.

The new building -- which also will contain 44,255 square feet of ground-floor retail -- is part of a wave of hundreds of apartment units either being built or in the planning stages around the U, including projects from Solhem Cos., Opus Development, CPM Property Management and others.

Making way for the U apartment boom have been some longtime area businesses that have succumbed to the development pressure, including Jasper, who says the imminent closing of his long-lasting incubator is producing some bittersweet emotions for him. For 26 years, UTEC has catered to the unique needs of start-ups, many of which were started by U students.

"The 85 or so tenants that were left when we announced we intended to sell couldn't believe it," he said. "Over the months since then, many of them have come into the office and told me or one of the staff how difficult it has been for them to find anything remotely comparable to what we offer."

What UTEC offered was flexible, one-year leases for spaces as small as 100 square feet in the old high school, which Jasper and a partner bought out of foreclosure in 1986. Back in the days before personal computers and other technological advances, it offered shared office equipment such as copying and fax machines to often cash-strapped young entrepreneurs.

Jasper and his staff also offered something intangible that some tenants found was even more valuable: a supportive landlord who was willing to deal with the rapid changes in staffing levels, space needs and cash flows that start-ups commonly undergo.

The UTEC staff in effect acted as business mentors for many of their young tenants.

"Most tenants stayed loyal, even the ones that moved out because they got too big," he said. "They often came in and felt bad about leaving. So I feel very rewarded that we made a big contribution and it made a difference to a whole lot of businesses."

Over the 26 years the incubator has been in operation, Jasper estimates that it spawned some 2,000 new jobs for the Twin Cities.

But more importantly, he said, "what we got were people who were doing what they really loved. That's a great personal reward."

Things have changed, however, including the fact that, at age 75, Jasper says he is ready to retire. But probably the biggest factor was financial -- the building needed up to $7 million in upgrades to keep it viable.

One recent "graduate" of UTEC whose business is now thriving credits it with giving him the vital first step he needed.

Casey Profita, the 23-year-old owner of Gophermods, a company that repairs game consoles and iPhones, said despite having to leave UTEC for a bigger space in northeast Minneapolis this year, his heart remains there.

"I do have strong emotions for UTEC," he said. "That's where I got my start. It was the first commercial place that was willing to take me in after working out of my dorm room." Now, he said, he has 12 employees with two more to be hired soon and plans to add another location.

"I'd never rented office space, so I had no idea what was going on," Profita said. "I was really fortunate to find them, and it worked out perfectly."

Don Jacobson is a freelance writer in St. Paul.