'Like a fish tank': Lake Wales Commission seeks audit as backers defend business incubator

As Derrick Blue stood inside the BizLinc office in Lake Wales on a recent afternoon, he directed a visitor’s attention to a conference room fronted by glass walls. The design is intentional, he said, allowing those outside the room to see what happens inside.

“It’s like a fish tank kind of thing,” Blue said.

Lately, Blue and the business incubator in Lake Wales’ Northwest Neighborhood have been enduring a version of the fish tank experience. An article last month in a local publication raised questions about the performance of the incubator, whose leaders received a promise of $1.2 million over three years in an agreement signed with the city’s Community Redevelopment Agency in 2022.

Blue addressed the questions at the Feb. 20 City Commission meeting, rejecting allegations made in the Lake Wales News article and defending himself and the incubator’s clients. Several owners of businesses affiliated with BizLinc took turns at the microphone, expressing anger about aspects of the coverage.

While most city commissioners seemed supportive, and some joined in criticizing the media outlet, the panel decided a week later to appoint a consultant to conduct a performance audit of BizLinc.

The business incubator emerged from Lake Wales Connected, a comprehensive and open-ended strategy adopted by the City Commission in 2021. The guide to revitalization, developed by the consulting firm Dover, Kohl & Partners, draws upon a city plan created in 1931 by Frederic Law Olmsted Jr., the designer of Bok Tower Gardens, and his brother, John Charles Olmsted.

Lake Wales Connected provides a template for reviving the city’s downtown as well as the Northwest Neighborhood, a predominantly Black section. The plan listed more than 100 recommended actions, among them the potential creation of a business incubator to train and support local entrepreneurs.

The 2022 agreement specified that the incubator would provide co-working spaces, business units and training classrooms and would be operated at least 40 hours a week. The CRA, whose board is the City Commission, awarded the contract to Florida Development Corporation, a company founded in Spring Hill in 2016.

In 2022, FDC bought a vacant, 3,570-square-foot office building at 225 W. Lincoln Ave. as the site for the incubator. The purchase price was $250,000. The name “BizLinc” reflects its location on what was once the main commercial strip of a thriving section of Lake Wales. The Northwest Neighborhood has endured declines in recent decades, and many former retail buildings now sit vacant.

Blue is a co-founder and chief operating officer of FDC and oversees the operation of the BizLinc facility. He previously spent 12 years with Tampa-Hillsborough Action Plan Inc., a minority-based nonprofit promoting economic development, rising to the position of CEO.

The operational agreement with the city listed target numbers for FDC to meet. Those included “measurable action items” from FDC and “measurable results” from business owners using the facility.

For example, the incubator was expected to provide 10 training seminars in each of the first two years and five in the third year, along with 2,000 hours of technical assistance in each year. For business owners, the agreement expected 10 jobs to be created in the first year and 20 in each of the next two years.

Complaint raises questions

The recent scrutiny of BizLinc apparently began when a man living near the facility filed an anonymous complaint with the Polk County Tax Collector’s Office. The resident, identified by Blue at the Feb. 20 City Commission as Howard Davies, said he became suspicious after noticing that few vehicles seemed to be parked at the facility.

Davies submitted a list of businesses affiliated with BizLinc that he said had not obtained business tax receipts from the Tax Collector’s Office, proof that they were licensed to operate in Polk County. Businesses operating from a physical address in Lake Wales must gain those receipts before receiving another business tax receipt from the city.

While raising doubts about the business permits, the Lake Wales News article questioned the experience of BizLinc’s leaders in economic development while also making claims of phony testimonials, plagiarism and invalid contact details on the entity’s website.

BizLinc’s leaders and partners, bolstered by city officials, have aggressively challenged the report. Blue gained permission from city officials to make a presentation at the start of the Feb. 20 meeting, and he offered a rebuttal to many points in the Lake Wales News article.

The comments lasted more than an hour, as Blue was joined at the lectern by Florida Development Corporation CEO Frank Cornier and several business owners, who touted their academic and professional credentials. Blue said that he had voluntarily left his position with Tampa-Hillsborough Action Plan around the time FDC received the Lake Wales contract.

Blue said he helped funnel “millions and millions” into the economy of East Tampa, securing numerous state and federal grants. As Blue called local business owners to the lectern, entrepreneurs bandied such words as “sabotage” and “evildoing,” and one raised the prospect of legal action against the publication.

The extended discussion precluded Blue from giving his planned slide presentation, which he instead delivered at Tuesday’s Lake Wales CRA meeting.

City Commissioner Daniel Williams defended the BizLinc leaders from what he called an attack and lies. Commissioner Keith Thompson said he was “inspired by the testimony” of the business owners.

While the BizLinc defenders mentioned state licenses and professional certifications, records from the Polk County Tax Collector’s Office show that some businesses affiliated with the incubator did not have business tax receipts at the time of the initial Lake Wales News article. The office provided a list of nine businesses, three of which did not need the receipts as nonprofits.

Of the other six, three had paid the business tax before the article ran and three did so after publication, among them BizLinc itself.

Blue said that he incorporated "BizLinc" and related names for possible future use but that it isn't a company transacting business and therefore did not need to pay the county tax. He decided to do so after the article ran to clear up any confusion. Blue said that some businesses list the incubator’s address as a “virtual mailbox” and don’t conduct business there, but he advised the owners to get business tax receipts “for the sake of public consumption.”

BizLinc has forged an agreement with the Tax Collector’s Office to conduct training sessions on the county’s requirements at the incubator that will be open to all local businesses, Blue said.

The original Lake Wales News story (later revised) suggested that the Tax Collector’s Office was investigating BizLinc over the question of business tax receipts. Spokesperson Ashleigh Mills said the office has no enforcement authority but had responded to Davies' submission with an inquiry.

Blue acknowledged two points from the recent article. The publication reported that the BizLinc website featured “fake” testimonials, with stock images portrayed as clients touting their success in working with the incubator.

Those were indeed generic photos and invented quotes. Blue said the website appeared in a draft form, with the fictional testimonials and “clip art” serving as placeholders until statements and images from actual clients could be posted. Soon after the Lake Wales News article published, BizLinc took down its original site, posting one under a different web address.

The new site features testimonials and photos from current BizLinc members.

The article also described some material on the original BizLinc website, such as a “terms and conditions” section, as plagiarized from other sites, including that of Catapult Lakeland, an entrepreneurial center. Blue said that business entities commonly appropriate proven ideas and material to save time, and he said that Catapult President Christin Strawbridge told him she did not mind the copying. Strawbridge confirmed that to The Ledger.

Davies, the object of Blue’s criticism at the recent City Commission meeting, said he did not seek a public dispute. Blue said he got Davies’ name from an employee with the Tax Collector’s Office, though Davies said he dropped off material anonymously at that office and did not provide his name to anyone there.

Having previously worked in information technology, Davies said he noticed discrepancies when he first looked at the original BizLinc website about two years ago. He raised concerns with Blue, who said he invited Davies to assist with constructing the website. Davies said he left a message for Lake Wales City Manager James Slaton expressing his concerns but never heard back from him.

Davies lives within sight of the BizLinc office, and he said that he rarely saw any vehicles in the parking lot until early this year. Blue said that activity at the incubator has certainly increased since the start of the year, but he said it is misleading to judge the facility based on parking lot volume.

Some members use the facility in the evenings, he said. And BizLinc sometimes conducts training sessions and other services by videochat, he added.

“I kind of get worried when it's too many cars there,” Blue said, “because I'm wondering, ‘Are you out working? Are you making any money?’ ”

Davies also questioned whether the incubator is primarily benefiting Lake Wales. He pointed to a roster of BizLinc members posted on its website last year, noting that seven were not based in the city. The list included one business from Miami and one from Brandon, with the others in Polk County.

The eligibility requirements posted on the site say businesses must be based in Lake Wales “or surrounding areas” or have plans to locate in Lake Wales in the next two years.

Blue said all the current partners are based in or near Lake Wales. Williams and Associates Premiere lists its principal address in Miami in a state filing, but owner Andrea Williams lives in Babson Park, Blue said.

As BizLinc has faced scrutiny, some have questioned Blue’s connection to Lake Wales Mayor Jack Hilligoss. Blue and his family attend HighPoint Church, where Hilligoss is senior pastor. Some have suggested that this creates a conflict of interest, as the CRA forged the agreement with BizLinc.

Blue said he only began attending the church about a year ago, long after his company had received the contract to run the incubator. An ordained pastor, he said he teaches small groups at the church but is not on the staff.

Weighing 'measurable results'

Under the operational agreement signed in 2022, Lake Wales pays FDC $500,000 for the first year and $400,000 for the second year to cover operating costs and salaries for full-time staff “during initial program stabilization.” The agreement has an option for a third-year payment of $300,000, contingent upon FDC meeting “deliverables” listed in a chart included with the contract.

The third-year funding is due to be paid in July.

The guidelines have two categories, “measurable action items” from FDC and “measurable results” from business owners. The incubator was expected to provide 2,000 hours of technical assistance to clients each year and had target numbers for business training seminars, networking sessions, mentor connections and business training seminars. BizLinc also agreed to become a charter Toastmasters Club.

Blue said there is no charge for training and other services BizLinc offers, other than office rentals.

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The agreement also has quotas for business owners: 10 jobs created in the first year and 20 in each of the next two years. Other categories include businesses “positioned to obtain financing,” creating websites and developing business plans.

The agreement entitles Lake Wales to terminate the contract with 120 days notice, after giving FDC an opportunity to fix any failures. The contract requires the company to maintain books and records in a form that may be reviewed and audited by the city.

FDC began submitting quarterly and annual reports to Lake Wales starting in November 2022, as required in the agreement.

A technical assistance log from the third quarter of 2023 lists 20 companies, 13 of which received services during that period. Asthon Brown Enterprises had the highest total, 316.2 hours. BizLinc reported 2,108 hours of technical assistance for the quarter, exceeding the total required for the year.

A report detailing BizLinc’s performance through the end of last year documented a total of 106 jobs created, 23 of them in the third quarter of 2023. In other categories, the numbers were low through that third quarter but jumped dramatically in the final quarter of 2023 — for example, 15 businesses obtaining websites after a combined six in the previous four periods.

Slaton and Lake Wales Finance Director Dorothy Abbott addressed what Slaton called the recent “dustup” over the incubator at a City Commission workshop on Feb. 28. They recommended having a performance audit of BizLinc conducted by Carr, Riggs and Ingram, the company that reviews city departments.

Commissioners agreed with the suggestion, as Deputy Mayor Robin Gibson said he had suggested such a requirement in the operational agreement. (Hilligoss was absent.)

When Commissioner Danny Kreuger asked whether Lake Wales had been receiving performance reports from BizLinc, Slaton confirmed that the city had but added, “There could be a bit more detail and some other areas of improvement,” saying he had discussed the matter with Blue two days earlier.

The city has not set a timeframe for completing the audit.

A report submitted by FDC lists jobs created by each member business during each quarter of 2023, a total of 12. Asked in a later interview whether BizLinc is required to submit documentation to support the numbers in its reports, Slaton said that is one of the subjects to be discussed at the March 12 CRA meeting as an area of improvement. He said he had asked for such detail in his recent meeting with Blue.

“That's also one of the things that Carr, Riggs and Ingram are going to verify, up unto this point,” he said.

Blue said that he welcomes the review.

“That’s kind of been a part of the plan from the beginning, to have a third party come in and measure us against the agreement,” he said. “So we're looking forward to that.”

Office space for rent

BizLinc occupies a former dental office, a single-story structure with a concrete exterior built in 1982. As Blue led a tour of the incubator on a recent afternoon, many of the offices were occupied, perhaps in anticipation of a visit from a reporter and photographer.

A TV screen hung on a wall of the small, gray-carpeted lobby, a space that Blue said is used for meetings and as a co-working area when appointed with portable desks.

Blue’s wife, Melanie, was working in the central conference room, which was outfitted with a whiteboard. Melanie works with her husband as a consultant, he said.

The building holds seven private offices controlled by card readers, which glow red when the room is occupied. Blue said that all seven are currently rented, and members pay well below market rates. Just off a hallway sits an open area with 10 “dedicated desks,” ready for use by members who bring their own laptop computers.

Blue said that BizLinc has openings for 10 entrepreneurs to rent dedicated desks.

A small room serves as a podcast studio, offering equipment for audio and visual recording. BizLinc is producing a first series of segments promoting partner businesses, Blue said. Another room is designated as the “phone pod,” allowing members who use the desks in the communal area to find privacy for phone calls and videochat sessions.

In its second year of operations, BizLinc is at just over half its potential business activity, Blue said.

An exterior wall of the building bears a mural with “LINCOLN AVENUE” in black letters against blocks of vivid colors, with an abstract image at its center. Blue described plans to create a patio space beside the wall, in what is now a grassy lot.

The Florida Development Corporation, BizLinc’s owner, also purchased from the Lake Wales CRA a small parcel just to the east, at Lincoln Avenue and B Street. Blue said the company plans to create BizLinc Plaza, constructing a two-story building with retail on the ground floor and perhaps elderly house on the second floor.

Between that lot and the BizLinc building sits a vacant, two-story structure that once held a jazz club that Blue said drew such performers as Ray Charles, a reminder of Northwest Neighborhood’s transition from thriving to struggling.

Back inside the incubator, a private office with a window was occupied by Lori Young, owner of two businesses, and her assistant, Tasha Kemp. The room was neatly appointed, with a set of white chairs and an orchid on display.

Young, who lives in the Northwest Neighborhood, is administrator for The Auto Injury Coach, started in 2017, and the newer AIC Lawn Care Services. Young, whose older business uses five contract employees, said she previously had an office in downtown Lake Wales and then operated her business from home for a period.

She began renting an office at BizLinc in early February after learning about the program from community discussions. Young said she is now in the BizLinc office every working day.

Simone McFarlane-Tucker, founder and CEO of Girls Leave A Mark, a nonprofit, said hers was the first business accepted into the BizLinc program in 2022. She has rented a private office at the facility since September and said she uses it at least once a week.

A Dundee resident and a mother of four, McFarlane-Tucker had her first child as a teenager. Her nonprofit, known as GLAM, provides services to help teen mothers become self-sufficient, she said.

McFarlane-Tucker said she recently attended two meetings over two days at BizLinc aimed at helping nonprofits improve their operations. She said she thinks the benefits she receives from BizLinc go beyond specific training sessions.

“I love networking,” she said. “So I love that we get a lot of opportunity to network in BizLinc.”

Tamise Robinson, owner of Compassionate Cleaners, a for-profit business, said BizLinc allows her to rent an office for less than it would cost in a typical commercial building. She said she uses the office nearly every day to do paperwork, such as compiling payroll records.

“I do need office space, and I can't afford to just rent a building,” said Robinson, a Frostproof resident. “So I feel like they're helping the community with what they’re doing.”

Robinson is expanding her business by adding a lawn care component and expects to hire more employees.

McFarlane-Tucker spoke at the Feb. 20 City Commission meeting, indignantly responding to the doubts raised about BizLinc. Speaking later about the controversy, she said, “My advice to anyone is, come see for yourself. Come see what Derrick is doing.”

Gary White can be reached at gary.white@theledger.com or 863-802-7518. Follow on Twitter @garywhite13.

This article originally appeared on The Ledger: Lake Wales seeks performance audit as backers defend business site