Prior Lake's plan to develop a "technology village," an incubator for fledgling businesses, is moving forward as part of a broader plan by the city to stimulate and diversify its economy.

The City Council recently approved a board of directors for the new enterprise that's made up of residents with a broad range of experience in technology and business formation.

The six-member board includes veterans of large companies like IBM, Honeywell International, CPT Corp. and Lawson Software. Board member David Rech said he believes his experience at the Walt Disney Co., Twentieth Century Fox Home Entertainment and Digital River in Eden Prairie provides him with a good background for helping entrepreneurs.

Rech said he learned about plans for the technology village when the city was scouting the market for office space and looked at some properties he manages. The city eventually decided to carve out work space for the new venture in City Hall in an area that formerly housed the Park and Recreation Department.

"We're starting with baby steps now," Rech said. The short-term goal is to offer enough help to get three to five young businesses up and running, he said. "Long-term, I think we want to build a whole campus of facilities to help businesses," he said.

Community & Economic Director Dan Rogness said the space in City Hall is large enough four small offices, a common work room and some open space for a few cubicles.

The area is being outfitted with computers, printers, phones and other office equipment paid for with $50,000 from the city. Entrepreneurs that sign up as technology village tenants will pay nominal rent for their space, starting out at $5 a square foot for the first year, Rogness said.

"I think it's going to work very well," said Rogness, who is serving as the incubator's interim director.

The short-term goal is to work with three local tech-related small businesses, providing them with space, use of the office equipment as well as development assistance and advisory support from him and board members.

"What we're going to build on is access to a range of community services, things like legal and accounting," Rogness said. The city hopes to tap educational and mentoring services offered by the south metro chapter of the Service Corps of Retired Executives (SCORE). "We want to make this unique to Prior Lake," Rogness said.

Rogness said bringing the young businesses together also offers them the opportunity to learn from one another. That's a benefit that many startups typically don't enjoy because they frequently are operated out of people's homes.

Developing more high-tech businesses could increase the city's labor force, which had begun to shrink even before the recession. A city report says almost two-thirds of Prior Lake's labor force works in the arts, entertainment and hospitality sectors, mostly at Mystic Lake Casino and Hotel.

The technology village is part of a more ambitious plan to attract and retain tech-related business that includes the possible development of a community-wide fiber network. Earlier this year city officials heard results of consultant's study on a fiber project that would cost about $28 million and would require bonding of about $35 million.

The City Council hasn't acted yet on the consultant's recommendations.

Susan Feyder • 952-746-3282