Business

The military’s dilemma in building more small-business contractors

Published

2 years ago

May 30, 2023

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Of the hundreds of billions of dollars a year that the Pentagon pays for products and services, a large portion flows to established military contractors like Lockheed Martin, Raytheon and Boeing. Military leaders want to direct more of the contracts to smaller companies.In the past decade, the number of small businesses with Pentagon contracts has declined, said Farooq Mitha in congressional testimony earlier this year. He directs the Defense Department’s Office of Small Business Programs.“This is an economic and national security risk for our nation,” Mitha said. “We risk losing mission critical domestic capabilities, innovation, and strong supply chains.”The military is trying to attract small businesses in part because they account for the vast majority of companies in the U.S., Mitha said. The efforts reflect a broader shift across Defense Department agencies to collaborate with outside organizations that may not already have strong ties with the military.Military leaders said smaller organizations provide key advantages.“The biggest one is risk,” said Col. Martin Salinas, chief operating officer for the Air Force’s innovation arm, AFWERX. “Those large bites at risk, at bleeding-edge capability, are likely coming from the great American small businesses that are trying interesting things.”It’s Salinas’ job to help bring those firms into the Air Force’s fold through efforts like the Small Business Innovation Research program. It helps government agencies offer varying levels of financial support to smaller businesses developing technology or products an agency wants.With AFWERX, Salinas manages more than $1 billion a year in this type of funding, the largest SBIR budget in the Department of Defense, he said. It equates to about 1,600 contracts a year.“We understand not all of those 1,600 contracts are going to transition to a capability, but if we cast a wide net, you have a higher likelihood of finding that next great thing,” he said. “If we are funding that small American company, ideally our adversaries are not.”Challenges to break inThe process for companies that want to tap into this pool of cash can be cumbersome and frustrating.Patrick Hitchins learned that when he first approached AFWERX in 2018 about his company’s technology around tracking data from wearable fitness devices.Hitchins, the CEO of Austin-based FitRankings, said he was well-received, but that didn’t make securing a contract any easier.“The people are awesome; they’re the greatest asset of the military,” he said. “The systems in the military, the policies and the technology itself is the most frustrating … and the bureaucracy.”It took Hitchins a couple of months to register his company to work with the government before he could even apply for a contract, he said. His first application was denied.Hitchins said the process has improved greatly in the past five years, but it’s still challenging to overcome how the military has historically handled working with outside proposals.“You hear this phrase a lot: ‘Requirements driven,’” he said. “So if you have a great idea, and want to work with the DOD, if they don’t have a requirement for what you have, typically you cannot work with the government.”Salinas acknowledges this traditional thinking has hindered progress in the past.“Good ideas weren’t always well received,” he said. “If there wasn’t a requirement, it was typically brushed aside.”But the mentality has subsided, Salinas said.He adds there’s an abundance of innovative ideas, and he’s working to build demand for them inside the Air Force. That means tightening the development timeline and helping the military see that a new solution might meet most of what it’s looking for and likely at a better cost, Salinas said.Military branches also have started accepting proposals from companies that may have a solution to a problem that hasn’t been explicitly identified.Hitchins credits this “open topic” route as the reason he was able to get his foot in the door and eventually secure a contract to provide the U.S. Space Force with a new platform to measure physical fitness and readiness.However, he no longer has that contract after brakes were put on that specific change, he said.“Sometimes technology outpaces policy or rules and regulations, and then the policy needs to catch up, and it can be a painful process for that to happen,” Hitchins said. “As the SBIR Phase 3 company that developed this technology, the mandate states that eventually that work should go to us.”Hitchins said he’s working with the Air Force under other contracts and seeking business with other military branches, too.‘It’s almost like you need to hire a consultant’ Open topics allow more companies to propose ideas to different branches, but it can be hard for those businesses to know what they should include in the application.“There’s not much room for creativity to get the larger vision of the product across,” said Ashish Patel, a principal at DroneDomo. “You just don’t know who’s reading the applications on the other side; you’re unsure of ‘Is this the right way to frame it?’”DroneDomo designs and builds “drone ports,” small structures where drones can be stored, charged and maintained. He’s turning to the military as a potential client because the FAA has tight regulations on civilian drones.“We really felt like we had an innovative product and wanted to find a way to utilize it,” he said. “The military has the ability to potentially bypass some of the regulator needs.”Earlier this year, Patel’s SBIR application was rejected without much constructive feedback, he said.“Tell me why this isn’t a good application for the military,” Patel said. “I don’t know how we can change our proposal. It’s almost like you need to hire a consultant to navigate this.”Who you knowPatel came away from his experience with the impression that winning military contracts requires having contacts inside the armed services.Small-business owners who have won Pentagon contracts don’t necessarily disagree.“A lot of our success has come from the fact that we know some of these people out there, or over the years they’ve seen or heard of our work,” said Craig Brooks, the president and chief engineer at AP/ES Inc.Brooks’ St. Louis company has secured SBIR contracts since the late 1990s to provide engineering and analysis to determine how long fleets of aircraft will last.Before he started AP/ES, Brooks was an industry consultant. He has come to learn that developing an innovation is sometimes the easiest part of working with the military.“We were able to do the technology, but were we able to convince the other people to use the technology?” he said. “There’s not just one Navy, there’s not just one Air Force. You’re dealing with hundreds of entities that have their own controls, procedures and processes.”And those points of contact change frequently because of turnover in the military ranks, Brooks said.“You’re having to reintroduce yourself every few years, you have to reeducate them,” he said. “They are in a constant motion, because that’s just the nature of the military.”Despite the frustrations and challenges, Brooks and the other business owners said the SBIR and Department of Defense programs are positive and bring new technology to the military.“[The military] is a customer that is worth going through some growing pains, because it’s for all of our benefit,” Hitchins said.This story was produced by the American Homefront Project, a public media collaboration that reports on American military life and veterans.

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Laclede’s Landing is moving from nightlife hub to neighborhood

Published

10 months ago

August 28, 2024

Natural Bridge

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Laclede’s Landing has cycled through many identities throughout the history of St. Louis. Now, some people involved with its redevelopment in recent years hope the landing’s next one will be as a residential neighborhood.The small district tucked directly north of the Gateway Arch National Park has quietly undergone a massive redevelopment with more than $75 million pouring into the rehabilitation of many of the historic buildings at the landing.“We are starting to feel that momentum, especially in the last really 60 days. Things have drastically changed around here,” said Ryan Koppy, broker and owner of Trading Post Properties and the director of commercial property for Advantes Group.Advantes alone shouldered the rehabilitation of six of the historic buildings, which now sport a mix of apartments and retail or office space, he said. Four of those buildings are completed, and of the 119 apartments available, about 90% are filled, Koppy said.“It just shows you what kind of demand we do have for the area,” he said. “We’re separated from downtown a little bit, and for the tenants, their local park where they’re walking their dogs, it’s a national park.”

Sophie Proe

St. Louis Public RadioInterior of the Peper Lofts at Laclede’s Landing on Aug. 16

Another 40 apartments are set to come online next year along with some retail space, Koppy said. He added he’s noticed a wide range of people who are considering and moving into the newly refinished apartments.“It’s very mixed, surprisingly,” Koppy said. “We have a lot of young professionals, maybe on their second job out of [university], we have some empty nesters too.”Part of the newfound momentum comes from a new market, the Cobblestone, and coffee shop, Brew Tulum, opening recently and bringing more foot traffic to the area, said Brandyn Jones, executive director of the Laclede Landing Neighborhood Association. She added that more apartments are set to come online within the next few months.“We have a great riverfront area here and so there are plans in the works to activate those spaces, bring people in,” she said.That could be more daytime events, like a farmers market, music festivals (one of which is happening this weekend) or just bringing in food trucks to Katherine Ward Burg Garden, Jones said. It’s a departure from the identity the district held a few decades ago as a hub for nightlife and entertainment.“That’s part of what connects so many people to Laclede’s Landing,” Jones said. “It’s important to tell the story of where we’re evolving. It won’t be what it was in the same exact way, but it will still be fun, and it can be fun early morning, midday or late night.”It’s a view shared by Koppy.“It’s grown up, it’s a bit mature,” he said. “We’re not going to have 3 a.m. bars here anymore because we have residents here.”Koppy added that Advantes is joined by other developers working to rehabilitate buildings in the district.“We all work in unison,” he said. “If I get a call and [a client is] asking for something and maybe the square foot doesn’t really match up with what I have available, but I know it matches up over there, they’re getting a very warm welcome and introduction.”

Sophie Proe

St. Louis Public RadioRyan Koppy looks out the window of Brew Tulum Specialty Coffee Experience on Aug. 16 at the Cobblestone on Laclede’s Landing in downtown St. Louis.

This push toward making Laclede’s Landing a residential neighborhood also comes alongside broader conversations about the future of downtown St. Louis more generally as it looks to move away from a dependence on office space. While the city as a whole continues to lose population, downtown added about 1,700 people between 2010 and 2020, according to U.S. Census data.“It’s been wonderful timing to have all that going on, that stress that you’re not just in downtown to work has been critical to part of this rejuvenation and energy down here,” Jones said. “Sometimes people forget Laclede’s Landing is part of downtown, really the original downtown.”And success in the small district could spread beyond its small confines and potentially serve as a model for success, Koppy added.“My idea is, if we could get all the great things of St. Louis coming in through here, we can eventually spread that,” he said. “We understand we can’t change the whole world, but we’ll just make the effort to try and change the world around us.”

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St. Louis barbecue festival Q in the Lou canceled

Published

10 months ago

August 27, 2024

Natural Bridge

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The largest barbecue competition and tasting festival in St. Louis, Q in the Lou, has been canceled. The event was planned for Sept. 6-8, but organizers decided to cancel it due to poor ticket sales and insufficient corporate sponsorship.The traveling festival had low attendance in Denver last week, said Sean Hadley, a festival organizer.“We made the tough decision to cancel Q in the Lou,” said Hadley. “We’re seeing a lack of support … it’s just not there.”The traveling event first came to St. Louis in 2015 and drew hundreds of people to downtown St. Louis for barbecue, live music and a “major party.”“It shut down out of the blue … I’ve gone every year,” said Scott Thomas, local chef and food blogger. “It’s brilliant. You could take a tour of some really amazing barbecue restaurants and competition barbecue guys all in one place.”In a late July news conference, city officials touted Q in the Lou as a significant tourism draw and a boost for downtown revitalization.“Bringing a signature national festival back to downtown St. Louis … is making us stronger,” Greater St. Louis Inc. CEO Jason Hall said then.Less than a month later, ticket holders from every festival stop learned they’d be refunded. On Monday, organizers privatized the Q in the Lou website and deleted its social media accounts.Conner Kerrigan, a spokesperson for Mayor Tishaura Jones’ office, said city officials are disappointed the festival won’t be back this year.“St. Louis knows how to throw a festival … bringing people together to celebrate our culture is one of the things we do best as a city,” Kerrigan said in a statement. “Should Q in the Lou try to come back next year or any year after that, they’ll have the support of the Mayor Jones administration.”

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Alton’s Jacoby Arts Center likely to relocate permanently

Published

10 months ago

August 27, 2024

Natural Bridge

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The Jacoby Arts Center, a staple of Alton for many in the Metro East community, will likely permanently move out of its downtown building at the end of September.Its departure and relocation from the historic building that the arts center has called home for the past 20 years has created a tense situation for not only the arts center’s supporters but also the local development company working to revitalize Alton’s downtown that owns the building.“It’s an unfortunate situation,” said Chad Brigham, the chief legal and administrative officer with AltonWorks, the real estate company owned by another prominent local attorney working to develop the town. “I wish there wasn’t misunderstanding and disappointment in the community. It’s difficult sometimes to clarify that.”When news of the likely departure spread in June via a letter from the Jacoby Arts Center to its supporters, an outcry on social media quickly followed. Some assumed it would be the end of the arts center.“There’s a lot of feelings right now that I think are more about the building itself than there are about the Jacoby Arts Center,” said Valerie Hoven, vice president and treasurer of the nonprofit arts center’s board.For supporters of the Jacoby, moving from the building and likely never returning will be a sad affair. Exactly what’s next for the arts center remains unclear. However, Jacoby board members believe this will not be the end of the organization. It will likely look different though.

Sophie Proe

St. Louis Public RadioThe Jacoby Arts Center earlier this month in downtown Alton

Sophie Proe

St. Louis Public RadioThe Alton-based Jacoby Arts Center features more than 75 St. Louis-area artists and their work.

The history of the buildingFirst dubbed the Madison County Arts Council, the nonprofit arts center renamed itself after the Jacoby family gave it the current building in 2004. AltonWorks founder John Simmons purchased the Jacoby Building in September 2018, according to property records from the county.Managing the large building, at 627 E. Broadway, became too expensive for the Jacoby Arts Center. In 2018, the organization approached Simmons to purchase it, said Dennis Scarborough, a past president of the board and a downtown business owner.“Of course, it sounded really, really good,” Scarborough said of Simmons’ purchase. “He took over the insurance, property taxes, all those kinds of things that were really, really getting into our budget, and he rented it to us at a fair price.”The two parties entered into a lease agreement initially for five years. Since then, Simmons has spent more than $1 million in upkeep, taxes, insurance and more on the building. The lease has been extended twice until the end of September this year.Over the six years, Jacoby paid $1,500 per month, which covered a portion of the utilities.“It’s been wonderfully generous of AltonWorks,” Hoven said.Because the building is aging and needs repairs, Brigham with AltonWorks and those connected to the arts center have long known the Jacoby Arts Center would need to relocate — at least temporarily.

Renovations on the Jacoby building will begin this fall. They’ll include modernizing the aging building, repairing the old elevator and putting in apartments on the second and third floors.

News of the likely departure and controversyRenovations will begin this fall. They’ll include modernizing the aging building, repairing the old elevator and putting in apartments on the second and third floors.In May, it became clear that a preliminary proposal for the arts center to return to the building after renovations finished in 2026 would not work for them, Hoven said.She estimates the first floor and basement of the Jacoby Arts Building span roughly 20,000 square feet.

Chad Brigham is a business and legal adviser for AltonWorks.

AltonWorks’ initial idea floated to the arts center would only provide 2,553 square feet, according to both Hoven and Brigham. While the board calculated the price for the new space to be at least triple the current payment, Brigham said there was never a specific price discussed.“No discussion in terms of actual rent price,” he said.AltonWorks didn’t make a specific rent offer because the organization doesn’t even know itself, Brigham said.In addition to cash from John Simmons, there will be loans, tax increment financing and state tax credits to cover the $20 million in building renovations. The entities financing the cost of renovations will also help determine the rent when the construction is complete, Brigham said.Regardless, the price required to return will be too much for the arts center to pay, Hoven said. Also, the organization would like to maintain the many programs it offers to the community — a rentable event space, a dark room and a clay studio, for example — in the future.“For us to really meet the needs of the community and be sustainable, we need a space where we can offer some of those programs — the artists’ shop, and other spaces that offer some kind of income as well — so that we can continue to give money back to the community,” she said.AltonWorks offered at least two other locations as possible alternatives from their vast stock of buildings along Broadway to house the arts center during the roughly 18 months of construction. Those alternatives came with similar deals requiring the Jacoby to cover only utilities, Brigham said.“We did put in a great deal of work behind the scenes in trying to find an interim solution,” Brigham said. “We wanted to find a place for them to go, where it was easy for them to continue programming, whether it’s 100% of it or some portion of it, that would work for them.”Initially, the arts center hoped to keep the basement during the renovations, Hoven said. When it became clear the preliminary offer to return was for much less space than the arts center anticipated, the letter to the community was sent.“The letter that came out was merely showing our surprise,” Hoven said. “Don’t misinterpret it as panic. Don’t misinterpret it as desperation.”

Sophie Proe

St. Louis Public RadioA smorgasbord of radios are displayed at the Jacoby Arts Center in Alton.

The commentary on social media was passionate. Some critics of AltonWorks said the organization has good intentions but hasn’t executed those plans. Others said Jacoby hasn’t planned well enough for the future.For Brigham and the AltonWorks team, some of the criticism has been disappointing.“I thought that there were some decent solutions. Were they perfect? No, but they were very, I thought, very good solutions,” he said. “And the fact that it has come to the point that it is right now is a bit hurtful.”AltonWorks remains committed to the arts, Brigham said. John Simmons remains one the largest donors of the Jacoby Arts Center, Hoven and Brigham said.“I don’t think there’s ever been a question of our support of that organization — of our affinity for that organization,” Brigham said. “While some of the events were unfortunate, some of them were encouraging. The entire community rallied around the Jacoby Arts Center. That’s a good thing. It’s a good thing to have a love for the arts like that in a downtown community.”Sara McGibany, the executive director of Alton Main Street, an organization aimed at preserving the town, said AltonWorks should be commended for its vision. In many ways, her organization and AltonWorks share a vision for a thriving downtown.Even though AltonWorks hosts public meetings, McGibany believes the current situation lacks true community engagement.“We really think that if AltonWorks can get past some of the communication hurdles — and harness the community’s passion and shift to more of a bottom-up decision-making process that centers on community input — then we can turn around the growing sentiment of distrust that’s happening now,” McGibany said.Scarborough, the past board president and downtown business owner, echoed the praise for Simmons and his support of the Jacoby Arts Center. With the Jacoby likely moving, the future looks bleak, though.“It’s a community arts center that does a lot of good work,” Scarborough said. “The community is going to suffer, and they’re going to be missed by the community if they’re not there.”

Eric Lee

St. Louis Public RadioShalanda Young, director of the federal Office of Management and Budget, talks to Illinois U.S. Rep. Nikki Budzinski, D-Springfield, during a tour of a construction project by AltonWorks last April in Alton. AltonWorks, who is building the LoveJoy Apartment Complex is receiving over $1 million in federal funding.

What does the future hold?AltonWorks will continue forging ahead with its ambitious plans to revitalize Alton. The organization hopes to conclude construction on the Wedge Innovation Center, which will have a restaurant, retail and co-working space, this fall. Lucas Row, a mix of apartments and retail space, is scheduled to be completed next spring.The remainder of the arts and innovation district, currently named after the Jacoby, will also move forward.“I believe in two years it’s going to be a much different place,” Brigham said of Alton. “It’s going to be thriving. It’s going to be new businesses, new tenants — and it’s going to be a nice proof of concept for what you can do in a small community like that.”The Jacoby board recently formed a strategic planning committee. Its task: figuring out what’s next for the arts center. The committee will reevaluate what space the Jacoby needs, what programs it wants to offer to the community and how they want to make that a reality.Keeping the arts center is essential for board members like Hoven. In her experience, it’s been a place where local aspiring artists get their start.“Art is one of the only ways to show your true authentic self,” Hoven said. “And there’s more people than I realized who do not get that opportunity every day.”The Jacoby will shut its doors to pack over the next month. Hoven said she’s optimistic the board will have concrete plans by the end of September when their lease officially ends.“Alton is such a fabulous and supportive community,” she said. “We still have lots of great options, so that the Jacoby Arts Center will continue to thrive in Alton and beyond.”

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