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McCarran poised to hatch business incubator

After making slow headway in signing small, local retailers through the standard bid process, McCarran International Airport will try a new approach: a business incubator.

The Clark County Board of Commissioners on Tuesday approved a search for a manager to operate what was termed an incubator by overseeing eight pushcarts which will be scattered throughout the airport.

The carts would be reserved for businesses that do not currently have a presence at the airport but meet still-unspecified small-business standards.

The idea took root a couple of months ago, Clark County Aviation Director Randall Walker said, when the top seven bids for a shop space near Concourse D were companies that already have stores elsewhere in the airport. Largely because of that, all of the bids were rejected on Tuesday.

It often costs hundreds of thousands of dollars to finish and stock a full-fledged airport store, generally well beyond the means of individuals. In addition, airport experience counts significantly in the regular selection process because the business techniques are often much different than in typical shopping centers.

Having a manager install carts, which would require a retailer only to stock the shelves and turn on the power, would slash the entry expenses. If the incubator works as designed, it would let small businesses "have a better opportunity to compete for … future in-line stores at the airport," Walker said.

By starting small, the carts are supposed to give retailers a chance to build their operational and financial resumes, not only boosting their scores in bid proposals but giving them a better chance at landing bank financing.

Another important factor in grading bids is how much rental income a store can generate for the airport, something very difficult for a new business to prove.

"It’s a different marketing model and a different business plan (at an airport)," said Commissioner Chris Giunchigliani. "Businesses that might make it in the outside world have a very difficult time making their rent and so forth at the airport. Then it looks like a failure. We’d rather do it where we are supporting a particular business."

Several other airports across the country have gone to carts, said Ann Ferraguto, a principal in the Alexandria, Va., consulting firm AirProjects, including Philadelphia, Seattle and Washington, D.C. They not only act as incubators, but also as outlets to test new lines of merchandise on a limited scale or to sell items that don’t warrant a full store, such as cellphone accessories.

"It’s a way to give smaller companies a start without a huge capital investment," she said.

She did not know of any statistics to measure how many startups have graduated to larger stores. But she said that one of the best-performing stores at the Seattle-Tacoma International Airport, Fireworks, started as a cart that stocked the work of Washington state artists.

Trying to exclude incumbent retailers from new-store openings would risk wading into a legal swamp, said Walker .

The carts would be spread throughout the airport. At this point, however, the airport spaces are in the crowded Concourse C, which is used entirely by Southwest Airlines.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or 702-387-5290.

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