As of last week, Spokane-based Innovate Washington, the statewide technology-focused economic development agency, no longer exists, and the agency’s operating reserves are under the control of the state’s Department of Commerce, which says it will fulfill its obligation on existing federal grants that require matching state funds.

The Innovate Washington Foundation, a nonprofit organization that’s assuming some of the Innovate Washington agency’s operations, will fulfill federal grants Innovate Washington took on while the agency was still viable, including research into new technology to improve energy efficiency in existing buildings, which began in 2012.

The agency also has a grant to work on ways to bring to distressed communities in the U.S. engineering and manufacturing jobs that American companies have sent overseas, says Kim Zentz, Spokane-based CEO of the Innovate Washington Foundation, and former CEO of the agency. 

State lawmakers voted to defund Innovate Washington, a merger of the Washington Technology Center and Sirti, the Spokane Intercollegiate Research and Technology Institute, in February, abolishing the agency. Its building on the Riverpoint Campus and work it was pursuing on aviation biofuels have been turned over to Washington State University, Although the Innovate Washington agency went dark on June 12, the state commerce department is still negotiating with the foundation on transferring assets, archiving records, and developing contracts. 

What remains to be worked out is the transfer of assets and records from Innovate Washington to Commerce and how the state will fulfill its obligation to match grants that have been awarded to the foundation on several different projects, including an $11 million I-6 clean energy partnership and a $3 million “Make It In America” challenge, Zentz says.

“The state asked Innovate Washington to apply for the grants. The obligation transfers to Commerce, and we will be working together to identify how to do that,” Zentz says, adding, “We’re still figuring out how to fulfill the state’s commitment to the grants. There are a whole bunch of legal fine points. The attorneys are on new territory here because the state has never closed an agency before.”  

The foundation is currently running on funding from the grants.

Nick Demerice, Olympia, Wash.-based director of external relations at the Commerce Department, says he and others at the state level are making sure funding of grants gets transferred over to the state. 

“The Innovate Washington agency had (few) assets,” Demerice says. “Our principal focus is to identify the match requirements,” Demerice says. “When the agency was abolished by the legislature, it had about $2.6 million in ‘non-appropriated reserves,’ but that account has about $900,000 in it today since they used some funding to continue to pay for salaries of employees.”   

Demerice says he believes that the remaining funds will be enough for the state to cover its obligation on the federal grants that require matching money from the state.  

“It appears from everything we’ve seen, that there will be enough money there to fulfill those match requirements,” he says. 

Innovate Washington’s main building at 655 N. Riverpoint Blvd. on the Riverpoint Campus was transferred to WSU by lawmakers. The 60,000-square-foot, four-story building includes wet and dry lab space, light manufacturing space, and full-service offices. Another building owned by the foundation, the Spokane Technology Center, is an 8,000-square-foot business incubation center at 120 N. Pine that rents space to startups and also has wet and dry lab space. That building will remain as is, serving as a business incubation center that rents space to startups, under the Innovate Washington Foundation.

Eleven employees currently work for the foundation, four of whom are in Spokane, with the remaining seven in Seattle, Zentz says. 

She and the other three employees here currently are housed at the main building on Riverpoint Boulevard. She says she is unsure whether the foundation will remain where it is or move to another location. 

“We won’t be making a physical move for 30 to 60 days,” Zentz says. “We are still discussing that with Commerce. But, our best answer is that we’ll still be in this building.” 

Although the deadline for the transfer has passed, Zentz says she can’t say anything with certainty. 

“We are still in conversation with the Commerce Department,” she says. “We’re progressing. We’re behind schedule, and we’re still working things out with WSU and Commerce.”

Zentz says the foundation will continue its mission to support entrepreneurs and provide capital access. Also, she says, it will intensify its focus on the development of technology and health and science-related businesses in the University District. 

“Our mission is strong and going forward consistent with the grants that we have in hand. The board is doing strategic planning for the future as we speak,” she says. 

Demerice says he expects to have contracts outlining definitive provisions  for transferring the remaining grants for the Innovate Washington Foundation in early July when state officials will meet with the foundation in person.

“We want to get contracts executed by mid-July,” Demerice says. “We’re trying to wrap it up so that we can make sure the good work they’re doing continues.” 

Innovate Washington came after Sirti, which opened in 1994 and  was an outgrowth of Momentum, a group of business, civic, and education leaders who began working here in 1987,  to find ways to attract more technology-based businesses to Spokane and the Inland Northwest.  

The merger between Sirti and Seattle-based Washington Technology Center occurred after state lawmakers decreed the two state-funded organizations should combine efforts on strategies to help tech companies accelerate the development and growth of technology in the Inland Northwest.