Electrical wires dangle over an array of small tanks in one of Illuminex Corp.'s labs at Burle Business Park.

The chemical soups in the tanks respond to the electrical charges by producing extremely small silicon and metallic substances called nanowires.

Nanowires are so tiny — smaller than the wavelength of visible light — they can't be seen with a conventional microscope, said Joe Habib, Illuminex's founder and CEO.

It takes an electron microscope to study their crowded structure, which consists of about a billion individual wires to each cubic centimeter of substrate.

Founded in 2003 in a storage closet at Millersville University and funded by a series of government grants, Illuminex is working to tap the unique properties of nanowires to produce more efficient heat-transfer systems and solar-cell electric generators.

Illuminex's move in 2006 to the space at Burle that had been RCA's analytical chemical lab when that company made TV picture tubes there was one step toward that goal.

The recent inclusion of Burle Business Park in the Lancaster Keystone Innovation Zone could provide footholds for additional steps.

Being in the KIZ will qualify Illuminex for state tax credits and assistance in hiring interns, Habib said. And it may also help the company tap into the stimulus money that the national Recovery Act is funneling to the states for renewable energy projects.

An expanded zone
Illuminex isn't the only company poised to benefit from recent changes to the KIZ boundaries.

Several other startups at Burle's technology incubator — companies such as Advanced Cooling Technologies, White Wolf Security, CAPA Technologies and Arma Co. — along with Nxtbook Media at Urban Place, have also become eligible for assistance.

Besides the extension along New Holland Avenue that includes Urban Place and Burle Business Park, the changes to the KIZ include a couple of smaller additions to the northern boundary for industrial areas along the railroad to the west of Fruitville Pike and between Liberty Street and Marshall Avenue, east of Lititz Avenue.

At the same time, some mostly residential areas along the southern and eastern boundaries were removed from the zone.

KIZ coordinator Ramon Escudero has been meeting with companies to explain the benefits, and he organized a gathering last week at Burle Business Park to provide additional information.

Another change approved by the state, Escudero said, is a subtle expansion in which industries can benefit by being within the KIZ boundaries.

Each of the 29 KIZs within the state focuses on a select set of industries designated by a group of codes within the North America Industry Classification System, or NAICS.

Lancaster's KIZ focuses on the codes for advance manufacturing, communications and information technology, and health care and life sciences, Escudero explained.

Those are still the sectors the state wants Lancaster's KIZ to concentrate on, he said, but if there's a company within the boundaries that doesn't fit into those sectors but has a NAICS code included in any of the KIZs statewide, it can also apply for state assistance.

One of the main advantages for qualifying companies within the KIZ is a state tax credit.

A company must have been in operation within the boundaries at least two years but no more than eight years, Escudero said. That will make it eligible to apply for a credit equal to half its revenue growth between the previous two years.

"If they don't have a tax liability, they can still sell the tax credit," he said.

Although the new boundaries were approved just last month, the change was made retroactive to May 1, 2008, when the application was submitted.

That means rapidly growing companies like Illuminex, which had $900,000 in revenue in 2008, can apply in 2010 for 50 percent of its revenue growth between 2008 and 2009.

Already on the map
One firm that has been taking advantage of the KIZ tax credit is Iron Compass Map Co., which founder John Fix started in his basement in 2001 and moved to Liberty Place in 2004.

"We've used the tax credit each year it was available, which we have then sold to S&T Bank in Pittsburgh," Fix said.

The company, which does mapping and preincident planning for emergency services and emergency management agencies using GIS software, has been using the tax-credit money to finance additional growth, Fix said. Iron Compass has doubled its sales since the first year and now has eight employees, he said.

"As a small business, it's hard to get time to look at what's available" in government assistance, Fix said, and the KIZ has "been a big help" in that regard.

Escudero said companies within a KIZ receive preferential treatment when applying for state programs.

"They go to the top of the pipeline of requests," he said.

One of the state offerings that Iron Compass has taken advantage of is COSTARS, the state's cooperative purchasing program.

"It allows local government entities to purchase from you without going out to bid," Fix said.

"We've asked the KIZ coordinator for help in other areas," he added, including assistance with software patents and sales to the U.S. General Services Administration, which handles purchases for the federal government.

"We have actually quite a few of the fire departments on military bases interested in the software," Fix said.

Coming online
Sometimes, the advantages of being within the KIZ aren't the deciding factors when a company chooses where to locate.

That was the case in 2007, when Nxtbook Media moved from Greenfield Corporate Center to Urban Place.

"We looked at a lot of different areas, a lot in the KIZ zone," said Michael Biggerstaff, CEO of Nxtbook, a digital publisher that specializes in online magazines, catalogs and visitors guides.

In the end, Biggerstaff said, it was the proximity to downtown and Route 30 and the quality of work that developer Barry Baldwin was doing at Urban Place that were the deciding factors.

Just this month, the company expanded its operations into another of Urban Place's buildings.

That $750,000 project "added another 5,600 square feet to the 8,500 that we had," Biggerstaff said. "It's pretty good for these times when no one is expanding or growing."

Nxtbook has been growing so fast, it added 20 people last year and has been continuing the process this year, he said, including a job offer to another prospective employee just last week, bringing Nxtbook's total staffing to around 50.

Now, with the change in KIZ boundaries, Nxtbook will also have the advantages of being in the KIZ that it had passed up earlier.

"When Ramon came and told us it had been expanded, we were excited," Biggerstaff said. "Right now, we pay a lot of taxes. ... To be able to get some of that back ... really helps."

When a company is in a rapidly growing field with technology that is changing as quickly as digital publishing is, that can be a crucial advantage, he said.

Picking up the pace
Another growing company that is planning to take advantage of tax credits and other resources the KIZ offers is Advanced Cooling Technologies, which has grown to 45 employees since its founding in 2003.

"We have been growing since the beginning, both in size and profitability," said Jon Zuo, the company's founder and president.

Like Illuminex, ACT does a lot of high-tech work for such government agencies as the departments of Defense and Energy, NASA and the National Science Foundation.

"We do research and development, but we also do manufacturing of low-volume, high-end cooling products," Zuo said.

That includes heat pipes and heat sinks used in the thermal control systems of satellites, and to cool military and commercial electronics equipment.

As it grows, Illuminex is moving in a direction similar to ACT.

"Right now, we're existing off grants," Illuminex's Habib said. "We're starting to get some revenue by selling [nanowires] to other researchers."

That could change if the heat-pipe prototypes that Lancaster-based Thermacore is building using Illuminex's nanowires work out.

The nanowire wicks in those heat pipes have the potential for greatly improving the cooling systems for electronics equipment, Habib said.

"We could scale up what you see over there [at the chemical-filled tanks] very easily," he said. "We could move across the hall and set up a manufacturing line."

Illuminex's other current focus — on nanowires with photovoltaic properties, which is being funded by a $750,000 grant from the Department of Energy — also has commercial potential.

"We've made working devices," Habib said, adding that the nanowires can be made into fabrics that will generate electricity from solar energy.

"We're looking at things like awnings," he said.

The heat pipes could be on the market by the end of the year, Habib said, whereas the nanowire solar-cell devices will take a couple of years to develop.

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Dennis Larison is editor of the business section and can be reached by telephone at 291-8753 or by e-mail at dlarison@lnpnews.com.