University of Maryland has long been a proponent of entrepreneurship on campus and it's extending its reach outside of school doors by applying to be a qualified institution in Maryland's Regional Institution Strategic Enterprise Zone program. The qualification would allow the university to provide tax incentives for companies near the university.
The RISE Zone program bill was passed last year by the Maryland General Assembly to afford tax breaks to ventures (primarily startups) around research universities or federal labs. Applying requires a two-step procedure that involves first earning status as a qualified entity (i.e. a research university or federal lab) and then pitching an economic development and/or revitalization plan for the area along with a financial commitment to the project. The Secretary of Business and Economic Development has 90 days to review and either choose to accept or reject the application – which can't be submitted until July 1, 2015.
UMd is only in the preliminary stages of the application process according to Brian Darmody, who serves as associate vice president for corporate relations at the university. Once UMd is approved as a qualified entity, Darmody says then conversations will begin with College Park, Riverdale Park and other regional players that need to be taken into consideration when creating the layout and exact delineation of the RISE Zone.
Darmody explained over the phone that once the RISE Zone is created, companies that fall in the specified area will be able to apply to the Department of Business and Economic Development to receive tax benefits. If approved, businesses located in the RISE Zone will be entitled to property tax credits of 80 percent for the first five years the property is within the RISE, 70 percent for six, 60 percent for seven and so on and so forth until they hit year 30 percent at year 10. This is all according to the RISE Zone program bill summary submitted by the Maryland General Assembly.
It's easy to see how the RISE Zone program fits seamlessly into the university's bigger picture that involves encouraging entrepreneurial growth on school grounds, which Darmody made clear.
"We're a large national research university. We graduate more STEM degree holders each year than any other university in the state or Greater Washington region. So we're producing human capital, a lot of the technical and research capital and, through the Dingman Center, we're trying to build some financial capital with angel groups to commercialize technology. Whether it's human, financial or technology capital, a lot of that exists in and around the university," he said.
Darmody also mentioned a study performed recently by a venture capital firm on the graduates of universities that created companies that attracted venture capital. UMd was ranked in the top 10 in all international universities in terms of producing those kind of students, which explains why the university would want to be a part of the RISE Zone organization.
"Given our location in the Washington, D.C. area, given the fact that we produce a large number of STEM students, given our research profile, it makes sense that we should focus on creating conditions that support companies in and around the area. The state came up with a tool to create financial benefits that support these companies so we wanted to take advantage of them," Darmody said.
When UMd President Wallace Loh announced during his State of the Campus address in November that the "future of Maryland's economic vitality and quality of life depends on the quality of the research university," he likely had the RISE Zone program in mind.
"It's a tool," Darmody said, "that can help us achieve the vision that President Loh has about the university being an entrepreneurial school."
