The plan would complement an effort by local businesses to obtain federal stimulus money available through federal contracts to update health care computer systems.

"This is a one-in-a-generation opportunity," Judd said, speaking from the corner of East and South streets.

He hopes to find space in that part of town for a cooperatively operated incubator.

The east side of Frederick is identified by the federal Small Business Administration as a HUBZone, where businesses can take priority in obtaining federal contracts.

Nick Damoulakis, CEO of the Frederick Internet firm Orases, is putting together a group of businesses to pursue the federal contracts.

Damoulakis said $20 billion of stimulus funds will be available for computerizing medical records, with more than 40 percent of that reserved for small businesses.

The federal funding would be spread out over 10 years, he said.

Damoulakis said his team has until the end of this year to submit proposals for the federal stimulus funds.

Judd, who is running for his first elected office, said an incubator can help local startup firms obtain federal money.

"We've got to build a broader tax base," Judd said.

The city obligation to an incubator could come in at less than $50,000, he said, and would leverage hundreds of thousands of private and federal dollars.

"The city is simply a facilitator," he said.

Judd said the incubator would be one of his first efforts if he is elected mayor in the city's Nov. 3 general election.