HomeMy WebLinkAboutItem 6j Grant Agreement for the Renovation of the Cal Poly CIE Item 6j
Department: Administration
Cost Center: 1004
For Agenda of: 9/2/2025
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Laura Fiedler, Economic Development and Tourism Manager
SUBJECT: GRANT AGREEMENT FOR THE RENOVATION OF THE CAL POLY CIE
RECOMMENDATION
Authorize the City Manager to execute a one-time Grant agreement with the Cal Poly
Corporation for the renovation of the Center for Innovation and Entrepreneurship in a final
form satisfactory to the City Attorney and authorize the disbursement of funds in the
amount of up to $116,000.
POLICY CONTEXT
The City’s Economic Development Strategic Plan (“EDSP”), adopted by City Council in
July 2023, notes that Cal Poly State University “serves a vital role in the regional
entrepreneurial and business support ecosystem. The Cal Poly Center for Innovation and
Entrepreneurship (“CIE”) and the Cal Poly CIE Small Business Development Center
(“SBDC”) have not only fostered a culture of innovation and championed cleantech
advancements, but both have also supported local and regional business creation.”
Cal Poly and the CIE are listed as supporting partners in many strategies of the EDSP,
including:
1.1. Business Retention and Expansion (“BRE”). Develop a proactive and targeted
approach to identify and address the needs of existing businesses, while creating
an environment that fosters growth and innovation.
1.2. Entrepreneurial Support. Continue to bolster the entrepreneurial ecosystem
by improving access to resources, education, and networks for entrepreneurs.
1.3. Business Preparedness, Sustainability, and Resiliency. Implement disaster
preparedness measures that enhance the city’s abi lity to respond to economic
disruptions and effectively support business recovery.
1.4. Small Business Development. Continue to support the small business
community to sustain growth.
1.5. Business Support Infrastructure. Maintain efforts to develop and grow
business support infrastructure and tools.
3.1. System Development. Encourage the continued strengthening of the system
to create Moderate Income+ jobs.
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3.2. Employer and Employee Integration. Develop methodologies, tools, and
programs to welcome and acclimate new employers and employees to the
community.
3.3. Talent Attraction and Retention. Position the City as not just a place to visit
but also a desirable location to live and work.
For strategy 1.2 Entrepreneurial Support listed above, the EDSP contains several action
items that specifically call for the City to continue to support infrastructure for coworking
and entrepreneurship, including the CIE and SBDC:
1.2.1. Support the creation of coworking, shared resource facilities, maker spaces,
and other innovative ways to lower the barriers to entry and provide additional
resources.
1.2.2. Maintain and build on the efforts with the Cal Poly CIE, which includes the
HotHouse and other activities, to help ensure its continued success and the
success of the local entrepreneurs it supports. Where possible, increase the
promotion of the outcomes from the contributions of the City.
1.2.4. Maintain support of organizations like the SBDC, the Service Corps of
Retired Executives (SCORE), and Softec to address the needs of both startup and
existing businesses.
1.2.6. Work with REACH and other partners to promote the region in general and
the City specifically as an entrepreneur destination in select markets, such as the
Silicon Valley area. Target high-growth entrepreneurs who do not require a
significant amount of operating space to grow.
In addition, the 2025-27 Major City Goal of Cultural Vitality, Economic Resilience, and
Fiscal Sustainability includes the following workplan item, “3c. Support the creation or
expansion of coworking opportunities, such as the HotHouse, or other shared resource
facilities to lower the barriers to entry for new businesses and provide opportunities for
community members to build skills.”
In 2021, the City engaged Resonance Consulting to examine the future of downtown amid
a global pandemic. That report listed a few key opportunity areas, including increasing
daytime traffic in our downtown and creating alternative workspaces and coworking
spaces for a growing number of remote workers. Another specific recommendation was
to expand and diversify the business incubator to attract entrepreneurs and drive
innovation downtown for all types of industries.
DISCUSSION
Background
In 2010, Cal Poly opened the Center for Innovation and Entrepreneurship to expand
entrepreneurship programming for Cal Poly students, faculty, and community members
and to promote regional economic development. In 2011, the SLO HotHouse opened as
a community space through partnership between Cal Poly, the City of San Luis Obispo,
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the County of San Luis Obispo, and the business community. Also in 2011, the Cal Poly
Center for Innovation and Entrepreneurship (“CIE”) became home to the Small Business
Development Center (“SBDC”) to provide free business assistance to new and existing
businesses and to attract capital investment. Originally located at 955 Morro Street, the
HotHouse moved to the upper floor of 872 Higuera Street in 2016. Since its founding, the
HotHouse has launched 125 companies, helped raise more than $250 million in capital,
and witnessed acquisitions that totaled $650 million. In 2023, the HotHouse renovated its
office to accommodate more private working spaces, with support provided by the City.
The SLO HotHouse has been home to five thriving programs that drive economic
development and bring countless professionals into downtown San Luis Obispo each day.
Those programs include:
1. Coworking: The SLO HotHouse provides local entrepreneurs, business owners
and remote workers with designated desks and private offices. These coworkers
eat and shop downtown and host regular meetings at the SLO HotHouse. The SLO
HotHouse began offering coworking in May 2013 and is now averaging 70 to 80
members monthly.
2. SLO HotHouse Event Space: The SLO HotHouse event space is home to 50+
events, gatherings and workshops each year, drawing well over 1,000 visitors
downtown.
3. Small Business Development Center (SBDC): The SBDC provides free consulting
services to regional businesses. Through state and federal grants, the SBDC
connects 40+ consultants with businesses of all types, to help them grow, thrive
and create jobs in our community. The SBDC advises about 500 clients per year,
including small downtown businesses. In 2024, they achieved 14 business starts,
127 jobs created, and more than $18.8M in total capital (loans and equity). In 2025,
they achieved 17 business starts, 120 jobs created, and $57.4 million in total
capital (loans and equity).
4. Incubator Program: The Incubator program provides high-growth startups with two
years of targeted support, space in the SLO HotHouse and introductions to
professional investors with the goal of helping these startups scale in our
community. As of May 31, 2025, there were 12 companies selected through a
competitive application process incubating full time virtually or in-person at the
HotHouse. Seven start-ups that have emerged from the HotHouse incubator have
kept their headquarters in San Luis Obispo, and four have corporate offices in San
Luis Obispo. Of the companies that have remained in SLO, 82 jobs have been
created.
5. Summer Accelerator: The Summer Accelerator program has 7 startups enrolled
for 2025 for an intensive 13-week program designed to turn ideas into scalable
businesses.
More than 50% of SBDC clients are based within the City of San Luis Obispo, including
the following that may be familiar: Blue Mango (operating Luna Red and Novo), Bread
Bike, Junk Girls, the SLO International Film Festival, Whalebird Kombucha , and Whiz
Kids Toys. Other businesses the SBDC has supported include Whitefox, Novocuff,
Inspired Flight, Pashion Footwear, Mantis Composites, HiView Solutions, and Digital
Market Media.
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Overview of HotHouse Move to 1144 Chorro Street
In 2024, Cal Poly approached the City to advise on its plans to move the HotHouse to
1144 Chorro Street to expand the reach and effectiveness of its program and to provide
additional resources, mentorship opportunities, and particularly, improved infrastructure
to the community’s aspiring entrepreneurs. The new location will allow for expanded co -
working space to serve more local professionals, which is needed as the current location
operates at nearly 100% capacity. The purpose-built event space will allow the CIE to
introduce expanded programming, including entrepreneurship events, speaker series,
and economic development convenings.
The new HotHouse location will be filling a 15 -year vacancy at 1144 Chorro Street,
activating a 24,500 square foot ground floor location in the heart of downtown. In addition,
the Cal Poly Mustang Shop Downtown currently located at 767 Higuera Street will be co-
located with the CIE at the new 1144 Chorro Street location. The move from a smaller
second-floor office to a larger ground-floor space with a retail shop in a prime location is
expected to increase foot traffic and awareness of its offerings. The move also opens up
the possibility of a future redevelopment opportunity at its current location. The ground
floor of CIE’s current location at 872 Higuera Street has been leased to the owner of
Thrifty Beaches for an expansion of the vintage clothing store next door.
Cal Poly has secured $1.86 million to date out of its fundraising goal of $4.25 million to
support the development of the CIE, including a $350,000 commitment from the County
of San Luis Obispo. The total project cost, including tenant improvements for the Cal Poly
Mustang Shop, is $7.9 million. In a letter to the City Council of San Luis Obispo dated
August 15, 2025 (included as Exhibit A in the attached draft grant agreement), Cal Poly
CIE formally requested a one-time investment of $250,000 from the City. The new
HotHouse is expected to open in the first half of 2026.
Overview of the Grant Agreement
The attached draft grant agreement outlines the conditions for the City’s proposed
contribution of up to $116,000 for tenant improvements (such as furnishings or the
audiovisual equipment for the community meeting space) for the areas of the CIE
intended for use for community-facing events or for business support services:
Community event space: The City will have the ability to use the event and meeting
space at no additional cost up to 4 times per year. In addition, the event and
meeting space may be made available as an event rental space for businesses
and non-profit organizations in the community.
Recognition: The City will be recognized as a sponsor of the CIE and SLO
HotHouse with signage at the entrance of the building, logo placement in monthly
emails, and on printed displays at public events. To acknowledge the City's critical
role in funding the new space, the CIE will have signage affixed in the community
and event space with the City’s logo and anticipated language of the following,
“This space made possible through a grant by the City of San Luis Obispo." The
mockup of the design will be shared with the City prior to printing for approval.
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History of Prior Funding from the City
The City has been providing financial support for the HotHouse since its establishment in
2011. In the 2019-21 Financial Plan, the City increased the annual funding amount from
$25,000 to $30,000 and has been funding the CIE at this level since then.
In the adopted 2025-27 Financial Plan, $30,000/year has been budgeted to continue this
partnership from the Economic Development program’s budget and the annual grant
agreement will be approved separately by the City Manager following the City’s
procurement policies.
The annual services agreement with the CIE includes additional services and benefits to
the community, including:
A seat for a representative from the City of San Luis Obis po on the CIE Advisory
Council;
SBDC programming which provides no-cost business advising and training to
entrepreneurs and local businesses;
The two-year start-up incubator program to help entrepreneurs launch companies,
create and retain jobs, attract capital investments, and grow and scale their
businesses; and
HotHouse coworking and office space.
The Economic Development and Tourism team has been meeting with CIE leadership to
improve coordination and collaboration. In 2025, the ED&T team will be working with CIE
to share the City’s Business Navigator program and services with its HotHouse and SBDC
clients in an effort to support more businesses in starting and staying in the community.
In 2023, the City provided an additional $21,630 to support the expansion of the CIE
HotHouse in its current location on Higuera St. to provide more private workspaces for
small teams or individuals to better meet entrepreneurs’ workspace needs. The City’s
contribution covered half of the total cost for the office renovation.
The County of San Luis Obispo has provided $200,000 in funding per year to the CIE.
Cal Poly similarly requested $750,000 additional one-time funding from the County of San
Luis Obispo for the HotHouse move and has received $350,000.
Although Cal Poly requested an investment of $250,000 from the City for the HotHouse
move and renovation, staff arrived at the recommendation for $116,000 in one -time
funding for two reasons. First, Cal Poly requested $750,000 in funding from the County
and received $350,000; a $116,000 contribution from the City would be in keeping with a
roughly 3:1 funding ratio with the County for the CIE. Second, the available balance in the
Economic Development Assigned Fund Balance in the General Fund in the 2025 -27
Financial Plan is $116,000. Please see the Fiscal Impact section below for more details.
Municipal Investment in Business Incubators
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The benefits of agglomeration development in a municipality mean that businesses gain
competitive advantages by physically locating close to other businesses in related fields.1
The HotHouse primarily focuses on technology and innovation industries, attracting
agglomeration development in the industries of medical, defense, environmental and
agricultural technologies. As the San Luis Obispo and Central Coast region becomes
poised as a central location for space, aerospace, clean tech, renewable energy,
precision manufacturing, and agtech, the HotHouse serves as starting point for new and
relocating businesses in these high-paying fields.
Many other cities have sponsored business incubators in their communities, including
Cleveland, Austin, Berkeley,2 Santa Fe,3 Yucaipa, Merced, Los Angeles, and San Jose.
As opposed to traditional economic development practices of attempting to incentivize
single corporations, business incubators attract multiple small, home-grown companies.
There is evidence of long-term return on investments for public dollars put into business
incubators. In New Mexico, the State saw a 57 to 1 cost benefit ratio, or $57 dollars in tax
revenue for every $1 of State funding.4 In Austin, an average of $67 of local economic
activity was generated annually for every $1 the City invested in the Austin Technology
Incubator.5 Additionally, the National Business Incubator Association indicates that 84%
of incubator graduates stay in their communities.6
Previous Council or Advisory Body Action
As noted in greater detail in the Policy Context section above, support for the Cal Poly
CIE and an entrepreneurial ecosystem has been part of successive Council-adopted
Economic Development Strategic Plans since CIE’s founding.
In addition, the 2025-27 Major City Goal of Cultural Vitality, Economic Resilience, and
Fiscal Sustainability includes the following workplan item,
“3c. Support the creation or expansion of coworking opportunities, such as the
HotHouse, or other shared resource facilities to lower the barriers to entry for new
businesses and provide opportunities for community members to build skills.”
Public Engagement
Through the financial planning forums and surveys, community members expressed a
continued desire for economic development and business support to remain a focus as
part of the 2025-27 Major City Goals, as well as support for downtown vitality. In addition,
community members may provide feedback on this item at or before the Council meeting.
1 Incubator Cities: Tomorrow’s Economy, Yesterday’s Start-ups, Michigan Business & Entrepreneurial
Law Review.
2 Entrepreneurship Hub | Capital Strategies
3 City of Santa Fe Ordinance No. 2014-24
4 New Mexico Legislature, Economic and Rural Development Policy Committee Handout: New Mexico
Certified Business Incubators
5 Overview of US incubators and the case of the Austin Technology Incubator, International Journal of
Entrepreneurship Innovation Management
6 ) “Innovation Works”, Morgan State University Office of Technology Transfer and Intellectual Property
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Item 6j
During the update process for the 2023-28 EDSP, the City engaged the community
through a survey which generated 982 responses, 9 virtual roundtables with key
stakeholders, and interviews and other outreach. This engagement progress revealed the
community held the promotion and support of entrepreneurship as a top need for the new
EDSP.
CONCURRENCE
The proposed agreement has the concurrence of the Administration, Finance, and the
City Attorney.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (“CEQA”) does not apply to the recommended
action in this report, because the action does not constitute a “Project” under CEQA
Guidelines Section 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2025-26
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $116,000 $116,000 $0 N/A
State
Federal
Fees
Other:
Total $116,000 $116,000 $0 $0
The identified funding source for this grant agreement would be the Economic
Development Assigned Fund Balance in the General Fund. The approval of this grant
agreement and subsequent disbursement of $116,000 of funds would fully expend this
assigned fund balance by the end of the 2025-27 Financial Plan.
For each year of the approved 2025 -27 Financial Plan, the Economic Development &
Tourism program had several Significant Operating Budget Changes (SOBCs) approved
to receive $246,000 from the same Economic Development Assigned Fund Balance that
this proposed grant to the CIE would be drawn from. The SOBCs support childcare
expansion, implementation of the Economic Development Strategic Plan, and “support
local” programs such as the Buy Local Bonus program during the holidays and SLO
Restaurant Month.
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If this grant agreement is approved and funds are disbursed, this funding source wou ld
be completely depleted by the end of the 2025-27 Financial Plan. The $30,000 annual
services agreement with CIE is part of the Economic Development program’s ongoing
base budget.
ALTERNATIVES
1. Council may request changes to the draft Grant Agreement or decide not to
authorize the City Manager to finalize and execute the draft Grant Agreement.
The Council should provide direction on which aspects of the grant agreement should
be revised.
2. Council may increase or decrease the amount of the recommended grant of
$116,000. If Council elects to increase the recommended grant amount, Council
should specify the amount and provide direction that the approved SOBCs in the
2025-27 Financial Plan drawing from the Economic Development Assigned Fund
Balance should be re-evaluated for reduction to accommodate an increase in the CIE
renovation grant. The approved SOBCs support childcare expansion, implementation
of the Economic Development Strategic Plan, and “support local” programs such as
the Buy Local Bonus program during the holidays and SLO Restaurant Month in
FY2025-26 and FY 2026-27. Council may also elect to provide $116,00 0 in funding
now to support the CIE and evaluate during the FY 2024-25 Year-End Budget Report
scheduled for the November 4, 2025, City Council Meeting whether additional funding
should be made available.
ATTACHMENTS
A - Draft Grant Agreement between the City of San Luis Obispo and Cal Poly Hothouse
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GRANT AGREEMENT
CAL POLY CORPORATION
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on
____________________________, by and between the CITY OF SAN LUIS OBISPO, a
municipal Corporation, hereinafter referred to as “City”, and CAL POLY CORPORATION
hereinafter referred to as “Cal Poly” with reference to the following:
WHEREAS, Cal Poly has requested that the City contribute to Cal Poly’s efforts to move the Cal
Poly Center for Innovation and Entrepreneurship (CIE), which is home to the HotHouse and
Small Business Development Center (SBDC), from 872 Higuera Street to 1144 Chorro Street,
San Luis Obispo, by providing financial support towards tenant improvements in the new
location, and
WHEREAS, the City and Cal Poly have partnered since the inception of the CIE to foster an
entrepreneurial ecosystem in the region and have historically maintained a separate annual
services contract related to entrepreneurship programming and business support services, and
WHEREAS, the 2025-27 Major City Goal of Cultural Vitality, Economic Resilience, and Fiscal
Sustainability includes the following workplan item, “3c. Support the creation or expansion of
coworking opportunities, such as the HotHouse, or other shared resource facilities to lower the
barriers to entry for new businesses and provide opportunities for community members to build
skills,” and
WHEREAS, the City’s 2023-28 Economic Development Strategic Plan lists Cal Poly and the
CIE as supporting partners for implementing many strategies, particularly around entrepreneurial
support, small business development, and business support infrastructure, and
WHEREAS, the City has determined that contributing to tenant improvements for the CIE would
enhance CIE’s ability to perform its services and increase community access to business support
services.
NOW, THEREFORE, CITY and CAL POLY CORPORATION for and in consideration of the
mutual benefits, promises and agreements set forth herein, do agree as follows:
1. Term
The term of this Agreement shall be from the date this Agreement is made and entered, as
first written above, until June 30, 2026.
2. Incorporation by Reference
Cal Poly’s scope of work as the basis of their request for funding is hereby incorporated in
and made a part of this Agreement, attached as Exhibit A. The City’s insurance requirements
are hereby incorporated in and made part of this Agreement, attached as Exhibit B. To the
extent that there are any conflicts between Cal Poly’s scope of work and the City’s terms and
conditions as stated herein, the City’s terms and conditions shall prevail unless specifically
agreed otherwise in writing signed by both Parties.
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3. Grant Amount and Allowable Expenses
City agrees to pay Cal Poly a one-time only grant of up to $116,000 as provided in Section 3
to reimburse costs for tenant improvements, finishings, and furnishings directly related to
areas of the CIE intended to be used for events and provision of business support services or
coworking spaces, as described in Exhibit A. Examples of allowable expenses would be for
furnishings and the purchase and installation of audiovisual equipment for conference rooms
and the event space.
4. Reimbursement Requests
Reimbursement payment requests for allowable expenses as described in Section 3 shall be
submitted to City’s Deputy City Manager. Reimbursement payment requests shall include
supporting documentation including invoices or receipts. Reimbursement payment requests
will be reviewed and approved for reimbursement by the City in a timely manner, and City
will make best efforts to process and pay reimbursement requests within thirty (30) business
days from the date of such payment request, provided that sufficient documentation
supporting the reimbursement request is provided to City. Sufficiency of payment
documentation shall be in the sole but reasonable discretion of the City and City reserves the
right to request and receive additional reasonable documentation to support Cal Poly’s
reimbursement requests and as may be appropriate to aid in City’s determination of whether
the requested reimbursement payment is for an Eligible Cost.
5. Funding Source Recognition
Cal Poly will ensure recognition of the role of the City in providing funding through this
Grant Agreement. The City shall be identified as a funding source in all applicable
publications, press releases, social media outreach, and similar fundraising promotions. The
City will be recognized as a sponsor of the CIE and SLO HotHouse with signage at the
entrance of the building, logo placement in monthly emails, and on printed displays at public
events. To acknowledge the City's critical role in funding the new space, the CIE will have
signage affixed in the community or event space with the City’s logo and anticipated
language of the following, “This space made possible through a grant by the City of San Luis
Obispo." The mockup of the design will be shared with the City prior to printing for
approval.
6. Event and Meeting Spaces
City may use the event and meeting spaces at no additional cost up to 4 times per year. In
addition, the event and meeting spaces will be made available for rent by businesses and non-
profit organizations in the community.
7. Amendments
Any amendment, modification or variation from the terms of this Agreement shall be in
writing and shall be effective only upon approval by the City Manager of the City or their
designee.
8. Complete Agreement (Integration Clause)
This clause serves to explicitly state that this written agreement, including all writings
specifically incorporated herein, shall represent the complete and final agreement between
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the parties regarding this subject matter. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement
between the parties hereto. No oral agreement, understanding, or representation not reduced
to writing and specifically incorporated herein shall not be of any force or effect, nor shall
any such oral agreement, understanding, or representation be binding upon the parties hereto.
No alteration or variation of the terms of this agreement shall be valid, unless made in
writing and signed by both parties, by those authorized to bind the parties.
9. Notice
For purposes of notice under this agreement, all written notices shall be considered effective
upon being sent by certified mail to the following addresses:
Teresa Purrington, City Clerk City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Attn: Economic Development Program
Maral Kismetian, Director of Grants Development, Cal Poly Corporation
1 Grand Ave., Building #15
San Luis Obispo, CA 93407
10. Authority To Execute Agreement
Both City and Cal Poly do covenant that everyone executing this agreement on behalf of
each party is a person duly authorized and empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
CITY OF SAN LUIS OBISPO, A Municipal Corporation
By: _____________________________________
City Manager
APPROVED AS TO FORM:
By: _____________________________________
City Attorney
Cal Poly Corporation
By: ________________________________
Director of Grants Development
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Exhibit A – Letter to City Council from Cal Poly CIE
OFFICE OF THE PRESIDENT
August 15, 2025
City of San Luis Obispo
Attn: Mayor and City Council Members
990 Palm Street
San Luis Obispo, CA 93401
Subject: One-Time Funding Request for the Cal Poly Center for Innovation &
Entrepreneurship
Dear Mayor Stewart and Members of the San Luis Obispo City Council,
Construction is well underway at 1144 Chorro Street—the future downtown home of the Cal
Poly Center for Innovation & Entrepreneurship (CIE) and the Cal Poly Mustang Shop. As
previously shared, our vision for this location is to create a dynamic regional hub for
entrepreneurship, innovation, and economic development, activating a storefront that been
vacant for 15 years. In support of this vision, we respectfully request $250,000 in one-time funds
from the City of San Luis Obispo.
While we are excited about what’s to come, it’s important to recognize the tremendous success
the CIE has already achieved through its current downtown presence at the HotHouse. Since its
founding in 2010, the CIE has played a vital role in developing entrepreneurial talent in our
region. The CIE has launched 125 companies, helped raise more than $250 million in capital,
and witnessed acquisitions that totaled $650 million. Thousands of students and community
members have benefited from CIE programs, tools, and mentorship.
The HotHouse has become the cornerstone of Cal Poly’s commitment to San Luis Obispo and
regional economic development. In addition to our student programming, it houses the Small
Business Development Center, which supports over 500 clients annually, and our two-year
Incubator program, which helps early-stage companies grow into financially stable, high-growth
enterprises. These achievements have been made possible through the support of valued partners
like the City of San Luis Obispo.
More than 50% of our SBDC clients are based in the City of San Luis Obispo. Our HotHouse
location will provide expanded opportunities to engage our local entrepreneurship community
and will allow us to work with regional partners to advance our economic development goals.
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Upon opening in the first half of 2026, the HotHouse will expand its offerings to include
entrepreneurship events, speaker series, and economic development convenings, all supported by
a purpose-built event space. This space, available for community bookings, will accommodate
up to 70 guests seated or up to 100 in a cocktail-style setting.
The expanded coworking space—currently operating at nearly full capacity—will allow us to
serve more local entrepreneurs, freelancers, and small businesses. The HotHouse consistently
maintains a waiting list for private offices, and the new facility will double the number available.
This increased capacity will not only meet existing demand but also draw more professionals,
startups, and visitors into downtown San Luis Obispo, adding to its vibrancy and economic
activity.
The total project cost, including tenant improvements for the Cal Poly Mustang Shop, is $7.9
million. Of this, the CIE’s share for its new downtown facility is $4.25 million. As a self-
supporting nonprofit, the CIE is actively raising these funds. A lead donor has committed a $2
million dollar-for-dollar matching challenge to accelerate the campaign. To date, including
matched contributions and a $350,000 investment from the County of San Luis Obispo, we have
secured $1.86 million—leaving a funding gap of $2.39 million. The City’s proposed $250,000
contribution would directly reduce this gap and be applied exclusively to the HotHouse portion
of the project, ensuring the new facility is fully equipped to serve the community.
The City’s contribution would fund the outfitting of the event space and community coworking
areas, offsetting costs associated modernized audio-visual systems, conference tables and
seating, modular coworking desks, reception and lounge furnishings, whiteboards and
presentation boards, signage, lighting fixtures, and other movable equipment needed to ensure
the space is fully functional and welcoming for community use.
The County and City grants are critical in demonstrating to private donors the long-term
commitment of our local government partners, and the importance supporting local small
businesses, and the innovation and entrepreneurial community. We believe this investment
strongly aligns with the City’s Economic Development Strategic Plan and the Future of
Downtown – Downtown Development Recommendations. The CIE’s ongoing success
contributes to the vitality of our local economy and elevates San Luis Obispo’s reputation as a
center of innovation and entrepreneurship.
Thank you for considering this funding request. With your support, we can further empower
students, support entrepreneurs, and deepen the connection between Cal Poly and the City of San
Luis Obispo.
Sincerely,
Karen Tillman
Economic Development Advisor to the University President
Interim Executive Director, Cal Poly Center for Innovation & Entrepreneurship
ktillman@calpoly.edu
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Exhibit B – Insurance
Cal Poly, hereinafter the Contractor, shall procure and maintain for the duration of the contract
insurance against claims for injuries to persons or damages to property which may arise from
or in connection with the performance of the work hereunder by the Contractor, its agents,
representatives, employees or subcontractors.
Minimum Scope of Insurance. Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence form CG
0001).
2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile
Liability, code 1 (any auto).
3. Workers' Compensation insurance as required by the State of California and Employer's
Liability Insurance.
4. Errors and Omissions Liability insurance as appropriate to the consultant's profession.
Minimum Limits of Insurance. Contractor shall maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and
property damage. If Commercial General Liability or other form with a general
aggregate limit is used, either the general aggregate limit shall apply separately to
this project/location or the general aggregate limit shall be twice the required
occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Employer's Liability: $1,000,000 per accident for bodily injury or disease.
4. Errors and Omissions Liability: $1,000,000 per occurrence.
Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be
declared to and approved by the City. At the option of the City, either: the insurer shall reduce
or eliminate such deductibles or self-insured retentions as respects the City, its officers,
officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing
payment of losses and related investigations, claim administration and defense expenses.
Other Insurance Provisions. The general liability and automobile liability policies are to
contain, or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, agents and volunteers are to be covered as
insureds as respects: liability arising out of activities performed by or on behalf of the
Contractor; products and completed operations of the Contractor; premises owned,
occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed
by the Contractor. The coverage shall contain no special limitations on the scope of
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protection afforded to the City, its officers, official, employees, agents or volunteers.
2. For any claims related to this project, the Contractor's insurance coverage shall be
primary insurance as respects the City, its officers, officials, employees, agents and
volunteers. Any insurance or self-insurance maintained by the City, its officers,
officials, employees, agents or volunteers shall be excess of the Contractor's insurance
and shall not contribute with it.
3. The Contractor's insurance shall apply separately to each insured against whom claim
is made or suit is brought, except with respect to the limits of the insurer's liability.
4. Each insurance policy required by this clause shall be endorsed to state that coverage
shall not be suspended, voided, canceled by either party, reduced in coverage or in
limits except after thirty (30) days' prior written notice by certified mail, return
receipt requested, has been given to the City.
Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating
of no less than A:VII.
Verification of Coverage. Contractor shall furnish the City with a certificate of insurance
showing maintenance of the required insurance coverage. Original endorsements effecting
general liability and automobile liability coverage required by this clause must also be
provided. The endorsements are to be signed by a person authorized by that insurer to bind
coverage on its behalf. All endorsements are to be received and approved by the City before
work commences.
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