DOWNTOWN LOS ANGELES - There's a new project in the Arts District that, at first glance, doesn't stand out. The 3,500-square-foot space has cubicles - enough for eight small companies to share - with faded, used furniture, a conference room, a reception desk and a coffee maker. But if the managers of the recently opened building are right, this temporary office is the seed of L.A.'s future economy.

Welcome to the L.A. Cleantech Incubator.

The Community Redevelopment Agency, in partnership with the Department of Water and Power and Mayor Antonio Villaraigosa's office, have long imagined developing an industrial business district for companies dealing with clean technologies along the Los Angeles River. The La Kretz Innovation Campus, a planned 60,000-square-foot facility on the block bounded by Hewitt, Colyton, Fifth and Palmetto streets, is slated to break ground next year and open in summer 2013. The future permanent home of the incubator will house some 25 young companies seeking to develop and launch new green products and technologies.

For now, the incubator is in the smaller space, about a block away. Fred Walti, a veteran business consultant who is running the project, talked about the present and the future.

Los Angeles Downtown News: How did you come to take this gig?

Fred Walti: About three years ago, four other executives and myself formed a management consulting company called the Propellant Group, which is focused on helping early stage technology companies grow. I got interested in cleantech because I came to the conclusion that if we are ever going to get control of our country, we have to get off the dependence on foreign fossil fuel. So I started to work on an informal basis about four years ago with the city in forming Cleantech L.A. A year or so ago when they decided to do the incubator, I got a call - I was in Bolivia, riding a motorcycle across the country with my wife on an extended vacation - asking if I was interested in applying for the position. That was probably the only job that would have gotten me back.

Q: If I'm a start-up company, why would I locate here?

A: If you're an entrepreneur and you're interested in leasing space, you need to pay for tenant improvements, Internet, utilities, parking, reception, coffee machines. It's all here and it's here at a really inexpensive price, $300 per month per desktop. I spend close to that on my cell phone. 

Most people don't know that L.A. is the biggest green economy, and that's all things relative to energy, transportation, efficiency and so on, in the country. They're growing at a very rapid rate. New companies need access to three things: capital, talent and the market. We're building off the third one first. That's why companies are doing business here, that's why every week there's a delegation from some foreign country coming through - they're interested in entering the clean business market in L.A.

Q: What's the role of the incubator?

A: We're the business equivalent of a baseball farm system. Baseball organizations go out in the very early stages, find young talent and then train that talent, through Triple A, batting practice and so on, and then they graduate to the show. We're the same thing. Our job is to find really talented entrepreneurs and promising technologies and people who've started companies and then help them get into the marketplace or expand, and we help them by giving them real easy plug-and-play space.

We also give them CEO coaching. Many of the people who start tech companies are very familiar with technology and product but are less experienced in how to build a company. We're pretty experienced in how to build a company. We're building a growing network of mentors and advisers that we are in the process of vetting. We introduce our companies to people who may be able to help them, whether that is potential financing sources or potential customers.

Q: What companies are here now and what do they do?

A: The companies are 350Green and Gridtest Systems. They're both involved in electric vehicle infrastructure. 350Green is an owner/operator of public charging stations. They have a contract with Walgreens to put charging stations in Walgreens across the country, of which 160 will be in L.A. They came here from San Diego because this is the biggest market for their products.

Gridtest Systems makes testing equipment for the manufacture and implementation of charging stations. There are a lot of companies developing charging stations of all kinds. Gridtest's system simulates different kinds of vehicle situations, driving, stopping and so on, to assess the effectiveness of the stations.

Q: Once the permanent facility is up and running, what effect will it have on the neighborhood?

A: Building an ecosystem to support the development of new companies is not a five minute job. I'm not sure it's a five year job. But we're going to build that center and those companies are going to generate 600 direct jobs and maybe 1,100 indirect jobs, and they're well paid positions. We're going to attract service companies and accounting firms, banking firms, retail establishments. These guys are going to work here.

I used to live in Hollywood. Now I live two blocks away. I figured if I'm going to sell it, I've got to live it. I think it's going to be the tipping point for what's called the arts and innovation district, the cleantech corridor and for the city's green economy effort.

Contact Ryan Vaillancourt at

©Los Angeles Downtown News.