Winter Springs ‘reneges’ on $75,000 in funding for business incubator

The city of Winter Springs on Monday voted to cut all of its funding to the University of Central Florida’s Winter Springs business incubator for next year – which could result in the business and technology hub leaving the city. 

In October of 2024, Winter Springs signed a three-year contract to give the UCF Business Incubation Program $75,000 annually. Separately, in February, Seminole County opted to give the incubator $795,000 over the next three years. 

But that funding was dependent on an annual budget allocation from Winter Springs. Commissioner Paul Diaz made the motion to strip the 2025-26 funding Monday, calling it a “taxpayer subsidy.”

“The incubator has failed to demonstrate that it delivers a tangible or measurable and city-specific benefit that justifies the cost,” Diaz said. “Look, the reality is, it’s cloaking itself in glossy impact reports and regional development jargon.”

Rafael Caamaño, the Associate Director and Site manager for the Seminole Business Incubator Program, said in a statement that the incubator is reviewing what to do after Monday’s vote.

Caamaño seemed to indicate that the incubator could leave the city. 

“We had no notice that this vote was happening, only that a discussion was taking place, so last night’s vote was a shock to see them end a nearly 20-year partnership with the city in just a few minutes.” Caamaño wrote. “At this time, we’re still reviewing the impact on the Winter Springs Incubator and discussing the issue with Seminole County Economic Development, our primary funder in the county. Our primary focus is ensuring a smooth transition for the 15 companies that called Winter Springs home.”

Seminole County Commission Chairman Jay Zembower told Oviedo Community News that the county’s $795,000 in funding is not contingent on the city also funding the incubator. He said governments are having to make difficult decisions because of rising costs. 

“I don’t know if that would have been my pick to defund,” Zembower said. “The economic impact is in the tens of millions of dollars.  … I’m not real happy they decided to defund it, but that’s their decision.”

Zembower said the idea with funding the incubator is it helps create more businesses in the county, which then pay business taxes – reducing the burden on homeowners. Ironically, he said, Winter Springs was clamoring to get the incubator in city limits in 2008. 

That could change now.

“Any time you have a community partner such as UCF, they’ve got to weigh up if they’re not welcome or they can’t get the funding they need, they may decide at some point to shift gears and reallocate to somewhere else,” Zembower said.

Winter Springs incubator fosters 157 jobs, $34 million in company revenue

So how big of an economic driver is the Winter Springs incubator?

According to an economic impact report from the Haas Center at the University of West Florida, shared by the UCF Incubator, from January of 2022 to December of 2023, the incubator supported 157 jobs. 

Companies in the Winter Springs incubator had $34 million in revenue, and paid employees $13.4 million – with an average wage of $85,350. That leads to a total economic impact of $69.2 million, while getting $645,838 in local funding. 

That also includes $4.8 million in taxes paid, according to the report.

“Their (Winter Springs incubator) activity directly contributed $40.8M in gross domestic product,” the report concluded. 

Winter Springs Incubator economic impact
	Labor Income	GDP	Output	Tax
Direct	$13,412,547	$23,518,003	$37,594,628	$4,805,846
Indirect	$5,000,076	$7,774,577	$15,309,642	$1,822,173
Induced	$4,877,374	$9,500,474	$16,338,196	$2,243,766
Total	$23,289,997	$40,793,054	$69,242,466	$8,871,785

The incubator in Winter Springs assisted 16 firms that employed an average of 157 workers a year, with about $34.1M in revenue generated in 2022 and 2023. 

If you want to see that impact in person, check the bathroom next time you’re flying on Delta, United or Southwest Airlines.

“If you look in the lavatory at the foam soap that’s there, you’ll actually see ‘Winter Springs, Florida’ on it,” said Rebecca Dobo, director of operations for Freshorize. “Because of the Winter Springs Incubator, we’ve been able to come here as a soft landing client and grow our company.”

Freshorize is a United Kingdom-based company that qualified for the “soft landing” program in the incubator, where international companies can launch U.S. operations. Dobo said the company employs six Seminole County residents, including two from Winter Springs. 

“We manufacture right now in Volusia County, but  we are looking with everything going on in the world, to set up something here,” Dobo said. “And recently through the incubator, we’ve been able to secure a warehouse in Sanford. So we’re slowly moving into this area.”

Diaz, though, wasn’t swayed, saying it makes more sense for federal, state and county dollars to support a program like the incubator, because the companies that graduate from the incubator don’t necessarily stay in Winter Springs. 

“Look, this is not innovation,” Diaz said. “This is literally redundancy dressed up as outreach.”

Mayor: Winter Springs reputation damaged by vote

Winter Springs Mayor Kevin McCann said the biggest issue is the city made the decision with about 30 days left before the incubator was set to get funding for the next year. 

He said it’s a real possibility the incubator will leave the city, although the timing for something like that isn’t known. McCann said the city should not sign a contract and then break it, which erodes trust with other potential partners. 

“I don’t believe we should, as a community, be known as the group where you sign a contract and renege on it,” McCann said. “If we want to have this conversation at the end of the contract, let’s have the conversation at the end of the contract.”

The motion was approved 3-2, with commissioners Diaz, Victoria Bruce and Mark Caruso voting to defund the incubator. The $75,000 would go back to capital reserves for the city.

After the meeting, Bruce said she “would not change her vote,” even if the incubator leaves Winter Springs. Bruce said she voted to increase the funding from $50,000 to $75,000 three years ago. 

“However, after several attempts at getting UCF Incubator to be more useful for the city’s economic initiative, I decided last night that our funds can be utilized to be more useful for our constituents, as the city’s finances are incredibly tight,” Bruce wrote in an email to Oviedo Community News.

Diaz also said he would not change his vote if the incubator ends up leaving. He said that too often if an outcome on a vote isn’t liked, people “lean on weak commissioners until someone flips.” 

“I will not back down,” Diaz wrote. “Public money is never a given; it must be earned through accountability and transparency. What we are witnessing now is nothing more than an ultimatum: pay us or we leave. That is not partnership. That is extortion.”

Residents who spoke at the meeting were mixed on whether the city should continue the funding. 

Linda Freeburn, a retired Winter Springs resident, said she “fundamentally” does not believe that it’s the business of government to hand out tax dollars to specific nonprofits.

“We have people in this city that are on subsidies,” Freeburn said. “We have people in this city living on Social Security. We’re getting our taxes raised. The water’s going up. Everything is going up.” 

Resident Art Gallo said he was frustrated that the city “pulled the rug out” from under UCF. He said it should have been an agenda item where public comment was taken before the vote. Gallo said the incubator should have gotten more notice, and that the city should have honored its contract. 

“We could have waited on this,” Gallo said. “I’m disappointed. I think this was a mistake by our commission, and I’m a little embarrassed for the city, personally.”

The Learning Experience also approved in Winter Springs Town Center

Separately, Winter Springs commissioners also approved a 10,000-square-foot daycare center to come to the Winter Springs Town Center. 

The Learning Experience is part of several developments east of the Starbucks, at the corner of Michael Blake Boulevard and State Road 434. Tuskawilla Retail Partners II is responsible for constructing and installing all supporting infrastructure for this development, including grading, utility extensions, stormwater collection facilities, and the Sea Hawk Cove extension to serve the 1.02 acre development site for The Learning Experience.

Rick Kerper, a principal with KW Partners LLC, said construction should take about eight months once it starts. 

“We hope to be starting construction before the end of the year,” Kerper said.