Fort Worth could soon have a new corporate research and development and technology center in downtown Fort Worth.

The Fort Worth City Council discussed a proposed economic development agreement Tuesday with Sinclair Digital, the smart buildings technology startup behind downtown’s Sinclair Hotel.

Sinclair Digital was born after hotel developer Farukh Aslam began to explore sustainable options for hotel lighting. The luxury downtown hotel uses low-voltage, direct-current power commonly used in cars, household appliances and electronics.

The hotel development received tax incentives for the project in 2019, which first opened the door to conversation with the city, Aslam said. The city realized the hotel’s technology was attracting many tech executives to Fort Worth and became more curious, Aslam said.

“Anytime a city stands behind a company, it’s an endorsement to investors that their local government feels so strongly about a home-grown company,” Aslam said.

Michael Hennig, economic development manager for the city of Fort Worth, said the office building conversion turned into an opportunity to experiment and think creatively about the technology that powered this historic building. Now, a whole business has grown out of the project, Hennig said.

“We’ve been working with Farukh and his team since their original project with the Sinclair Hotel in downtown, which set a very high bar in the global hospitality industry for new and inventive ways to use and store energy,” Hennig said.

The potential deal proposes city grants of up to 35% of the company’s annual research and development costs, maxed out at $10 million. For Sinclair Digital to receive the full $10 million, it would have to create about $121 million in new property value.

In exchange, Sinclair Digital would spend about $87 million over 10 years to establish an R&D lab, technology demonstration room, product mock-up room and project demonstration site. R&D costs would be a minimum of $4 million per year.

Sinclair Digital would spend about $850,000 on facilities improvements and $20 million on equipment installations. The project is expected to have average salaries of $100,000 annually with 63 new jobs in five years.

City Council member Michael Crain expressed support Tuesday during a council work session.

“I’ve seen what Farukh has done with this technology, and I think it’s a great thing that we can support in a lot of different ways,” Crain said.

The council will vote whether to approve the agreement with Sinclair Digital on April 25.

If approved, this will be the city’s third research and development credit project. Linear Labs and GKN Aeospace previously received tax credits for a portion of their R&D costs within Fort Worth.

The discussion comes as experts in the Fort Worth entrepreneurship community call for local government attention on Fort Worth’s technology and innovation pipeline. In comparison to other cities across the country, Fort Worth lacks behind in early-stage startup funding.

Despite being the 13th largest city in the U.S., Fort Worth ranks 40th nationwide in early-stage funding raised, according to data from UNT HSC’s innovation ecosystem dashboard Sparkyard.

Les Kreis, managing partner of Fort Worth-based venture capital investment firm Bios Partners, said he thinks the key to solving the lack of funds involves a city business development agenda that puts technology at the top.

If Fort Worth wants to get serious about venture capital, it will have to get serious about technology, Kreis said.