COLUMBUS — Rocket Ventures LLC, the venture capital firm formerly associated with the University of Toledo, essentially emerged from probation on Tuesday as the state loosened its purse strings to release $1 million in funding it had withheld as an incentive for improvement.
After some debate, the quasi-legislative Ohio Controlling Board voted unanimously to release the funds at the request of the Ohio Third Frontier Commission, the borrowing-fueled body that funds investment in high-tech research and development and the jobs they may create.
In 2012, after an independent evaluation criticized Rocket Ventures’ success rate in nurturing start-up companies, a perceived inexperience in product commercialization, and a lack of regional collaborators, the commission agreed to provide $1 million for 2013.
But it withheld another $1 million for 2014 until Rocket Ventures demonstrated improvement. Taxpayer-guaranteed bond money will be gradually released as reimbursements to Rocket as the commission continues to monitor its progress.
“Since that time, we have worked with them, and there’s been a fair evaluation of what they are doing,” said John Mahaney, legislative liaison for the Ohio Development Services Agency. “We are satisfied now that they are meeting the goals we have set for them. We believe things look good in the future.”
Two Democrats and one Republican on the seven-member controlling board questioned how Third Frontier will grade Rocket Ventures’ performance, as well as how the state might recoup the money if it does not succeed in its mission.
“In northwest Ohio, we’ve had issues with certain kinds of investments in the past,” said Sen. Lou Gentile (D., Steubenville).
Norm Chagnon, deputy chief of Third Frontier’s office of technology investments, told the controlling board that Rocket recently severed ties with UT and solidified its partnership with the Regional Growth Partnership as it seeks to demonstrate more of an 18-county northwest Ohio approach.
“We have been working diligently with the organization on specific elements of their business plan that we wanted to see changed,” he said. “Recently, after the decision to provide the funding, a decision was also made to change the leadership of the organization. There’s a new executive director in place.”
State Rep. Chris Redfern (D., Catawba Island), who doubles as Ohio Democratic Party chairman, pointed to Rick Stansley, Jr., who recently quit as a consultant for University of Toledo Innovation Enterprises under a contract that paid him $1,200 a day for a total of more than $1 million over three years.
Mr. Stansley also served as board chairman of Rocket Ventures, although Mr. Chagnon emphasized that he did not receive compensation from Rocket.
“I make no judgment on his compensation,” Mr. Redfern said. “I do make judgments as someone who’s lived and worked and helped create jobs in northwest Ohio, having never understood the role that Rocket Ventures plays outside of perhaps Ottawa Hills and parts of the city of Toledo.
“With the exception of Xunlight, which received a great deal of attention in the media, I don’t know of a project that Rocket Ventures has been engaged in,” Mr. Redfern said.
Reached later, Bob Savage, Jr., Rocket Ventures’ executive director since Jan. 1, emphasized that funding for the entity was never interrupted.
In the immediate wake of the 2012 criticisms, Rocket Ventures maintained that the state and its independent evaluators were trying to apply a template to the entity that was not a good fit. While Rocket had issues with that assessment, Mr. Savage said Tuesday improvements have been made that have proven beneficial.
“We were different from the big three regions [of the state],” Mr. Savage said. “We didn’t have a similar [pre-existing] organization from day one. We’ve been playing catch-up for a while. We were beginning from a harder start position. It’s been over six years at this point, but we’re starting to see good progress.”
Rocket says since 2007 it has helped to create 326 new jobs paying an average salary of $51,000 a year.
The controlling board also voted to release:
● $1.45 million for improvements and construction of amenities at Middle Bass Island State Park. Plans include partial renovation of an existing building known as the Press House, construction of a public restroom and a 5,400-square-foot pavilion shelter, and water and sewer line improvements near the former Lonz Winery facility. The vacant facility was acquired in 2001.
● More than $1.8 million to provide heating and ventilation improvements as well as upgrades to the existing chilled water plant to support ongoing University of Toledo laboratory renovations on the Health Science Campus.
Contact Jim Provance at: firstname.lastname@example.org or 614-221-0496.