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NC’s Piedmont Triad Plans Expansion in Bid To Create Alternative to Suburban Campuses

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In a state known for suburban-style tech campuses such as Research Triangle Park and the North Carolina Research Campus in Kannapolis, the Piedmont Triad Research Park in Winston-Salem, NC, offers an alternative: Lab and office space in the downtown of a city eager to grow its economy beyond tobacco and financial services.
 
According to PTRP officials, the park’s urban approach to campus development has spawned enough demand for space from biotech companies to justify planning for its first expansion since it opened in 2000 with the completion of One Technology Place.
 
PTRP expects to sign an agreement by Jan. 1, 2008, with a development partner, Baltimore-based Struever Bros. Eccles & Rouse, to redevelop 2.19 million square feet of space within 74 acres comprising the park’s northern district.
 
Doug Edgeton, PTRP’s newly designated permanent president, told BioRegion News last week that SBER envisions a roughly even mix of biomedical, residential, and neighborhood retail space. The Baltimore developer’s mixed redevelopment concept was a key reason why PTRP chose the firm over other developers that sought to build primarily apartments, he said.
 
Edgeton said PTRP and SBER are looking to submit their expansion plan for the research campus to Winston-Salem officials, then undergo local planning reviews, “probably within the next six to eight months.” The co-developers hope to start construction soon after, and build out the northern district within five to seven years.
 
Key questions to be reviewed include: How much demand is there for lab space among businesses? How much existing space can be reused? And how much new space will developers want to build? Edgeton said the co-developers are looking to keep any new buildings to the same height range of existing structures, namely four to five stories, to contain costs and keep a campus feel to PTRP: “High-rise buildings detract from that.”
 
“They [SBER] are probably thinking somewhere along the lines of 100,000 square feet of research and lab space coming on line in the first chunk, and then the same thing for housing and same thing for the retail amenities, so that 300,000 square feet comes on line in the next year to year and a half. They haven’t laid that plan out. It’s just speculation on the way things are going right now,” Edgeton said.
 
He said PTRP and SBER to date have explored developing between 300 and 500 units of housing for the northern district, as well as creating space for neighborhood stores to be frequented by the residents and life sciences employees who will move into the campus.
 
“We have companies that are sort of interested in co-locating either at or near our campus, and there’s a need for our campus to grow. So from an economic development standpoint, we sort of feel like the Triad is, first of all, a great alternative. It’s an urban-based park, not a former pine field. It actually has universities practicing and working in the park,” Edgeton said in an interview.
 
“When you draw in people from academic [backgrounds], a lot of them have lived historically in large cities and like living downtown. So with five universities in this area, there are a lot of academically oriented people who have had that experience and want to have it again.”
 
Edgeton spoke to BRN on Nov. 27, 11 days after PTRP announced his permanent appointment to the campus leadership post he has carried out on an acting basis since July 2006, in addition to his duties as executive vice president and chief operating officer of Wake Forest University Health Sciences.
 
Wake Forest has the largest presence at PTRP, with several offices employing some 3,800 people, making the university Winston-Salem’s largest downtown employer, and the largest life sciences employer in the 12 counties that comprise North Carolina’s Piedmont Triad region. When its Baptist Medical Center is included, WFU employed 11,398 people earlier this year regionally, according to Triad Business Journal data quoted by the regional economic development group Piedmont Triad.
 
Distribution Focus
 
The region’s life science operations have historically focused as much on manufacturing, drug delivery products, and medical devices compared with R&D, said Donald Kirkman, president and CEO of Piedmont Triad Partnership, the primary economic development marketing group for 12 North Carolina counties, including Winston-Salem’s county of Forsyth.
 
One reason, he said, is because many life sciences companies are among businesses that want their testing or distribution operations near a FedEx hub for Mid-Atlantic regional deliveries that is under construction and set to open in June 2009 at Piedmont Triad International Airport. “Triad” refers to the region’s three metro areas — Winston-Salem, Greensboro, NC, and High Point, NC.
 
“We are now seeing an increasing number of companies that would want to locate in the Piedmont Triad to maximize the distribution benefits to East Coast markets,” Kirkman said.
 
PTRP’s expansion is significant because it will flesh out the now-nascent R&D and lab science pieces of the region’s life sciences cluster, Kirkman said.
 
Another biotech specialty emerging in the region is nanotechnology, said Jim Shamp, a spokesman for the North Carolina Biotechnology Center, the private, nonprofit, state-funded organization charged with developing the state’s biotech industry. He noted the state has allocated about $60 million to develop a new college of nanoscience and nanoengineering, in a joint venture between North Carolina Agricultural and Technical State University and University of North Carolina-Greensboro, to be housed in Greensboro at the Gateway University Research Park.
 
The two schools are also teaming up with Wake Forest to develop a virtual “center of excellence” focused on nanotech; the consortium of universities has received a $100,000 planning grant to create the North Carolina Center of Innovation in Nanobiotechnology, or COIN [BioRegion News, Nov. 5].
                       
Within PTRP, Wake Forest facilities within PTRP include its Institute for Regenerative Medicine, its School of Medicine’s department of physiology and pharmacology, the WFUHSoffice of technology asset management, the WFUHS lipid sciences research program,and the WFUSM physician assistant program.
 
Wake Forest is also seeking space to accommodate growth of these and other programs, Edgeton said.
Two other academic institutions are also on the campus:
  • The North Carolina BioNetwork Pharmaceutical Center, a collaboration of Forsyth Technical Community College and Guilford Technical Community College.
  • Winston Salem State University’s Project Strengthen, which operates eight laboratories devoted to research in biochemistry and molecular biology, genomics, proteomics, microbiology, chemistry, immunology, and physiology. WSSU is on the eastern side of the southern district.
Near PTRP are three other academic institutions: North Carolina School of the Arts, Forsyth Tech Community College, and Salem College.
 
The presence of Wake Forest and WSSU, and proximity to other schools, has helped create at PTRP a cluster of 35 businesses, one third of them university spin-offs.
 
The largest business at the park, Targacept, occupies 55,000 square feet, including 15,000 square feet on the first floor of the campus’ One Technology Place building that Targacept moved into earlier this year. The expansion was needed to help the company accommodate its expanding pipeline of five clinical-stage compounds, said Linda Gretton, a Targacept spokeswoman, in an interview.
 
Targacept’s lead compound, now in phase 2B clinical trials and co-developed with AstraZeneca, is designed to combat Alzheimer’s disease and effects associated with schizophrenia. The research has moved beyond the company’s original focus of studying the chemistry and biology of nicotine; Targacept was spun out of RJ Reynolds Tobacco in 2000.
 
A year later, with 45 employees, Targacept moved into PTRP. The company now has 102 staffers and partnerships with AZ and GlaxoSmithKline for many of those products. The company has stayed in Winston-Salem because of its ability to build relationships with city officials and regional development groups, Gretton said.
 
“By virtue of having a park established here, with all of the companies that are within it, by its physical environment and aesthetic environment, it establishes a physical presence that mirrors the excellent work going on inside the buildings,” Gretton said. “It’s an excellent place to be. There’s a lot of opportunity for sharing of scientific ideas. The scientific environment is excellent. The quality of living and networking are excellent. The critical mass of all the companies that are here lend a certain amount of credibility to biotechnology in this area.”
 
City to Pitch in
 
Helping PTRP nurture other companies like Targacept is a priority for Winston-Salem, city Mayor Allen Joines said in an interview. Biotech is one of seven industry sectors on which the city has pinned the rebuilding of its economy. The other six are financial services, medicine, design, advanced manufacturing, logistics, and travel/tourism.
 

“From an economic development standpoint, we sort of feel like the Triad is, first of all, a great alternative. It’s an urban-based park, not a former pine field. It actually has universities practicing and working in the park.”

PTRP’s planned expansion, Joines said, will require a new “overlay” zone for mixed-use development that the city planning department has been working on, a zone he said the city is inclined to grant, since PTRP anchors the eastern end of the city’s downtown revitalization or “Central Area” plan.
 
In addition, Winston-Salem would consider economic incentives for the expanded park, once the developers project how many additional jobs and how much more in taxes and economic activity would result. The city has already agreed to fund infrastructure improvements such as the construction of new roads and utilities.
 
“We will definitely be a player in the rest of the expansion,” Joines told BioRegion News. “We may approach it incrementally in a certain number of phases. I’m sure [SBER] will be wanting us to build some parking facilities, maybe do some street work, landscaping and streetscape, that sort of thing.”
 
Joines said the city is supportive of PTRP’s expansion plan, part of a larger plan completed in 2003 by Sasaki Associates for a total build-out of 5.7 million square feet in three sections or districts totaling 230 acres.
 
Almost all new construction would be pursued in the southern district and especially the central district, between downtown Winston-Salem and US Route 52. There, PTRP is razing several single-story former metal fabrication shops on parcels it has recently acquired, Edgeton said. But that development will have to wait until several infrastructure projects are completed over the next couple of years, including the relocation of railroad tracks to create a “Research Parkway” thoroughfare through the research park; the daylighting of a now-covered creek; the placement of overhead utility lines underground; and the relocation of the city public works yard.
 
PTRP now encompasses six buildings totaling 554,000 square feet of wet lab, office, meeting and residential space, all within the central district. The campus is home to 35 tenants — 15 life science companies, another 11 information technology businesses and eight providers of business services — employing a total 890 university and business staffers. The North Carolina Biotechnology Center has a regional office at PTRP as well.
 
And in about four weeks, PTRP will welcome its newest attraction, the Wet Lab LaunchPad set to open within the Richard H. Dean Biomedical Research Building. The LaunchPad will consist of three separate labs and accompanying office space on the building’s first floor. LaunchPad will cost $724,000 to build, of which $125,000 is coming from the city of Winston-Salem.
 
Looking to Life Sciences
 
Joines said Winston-Salem is increasingly looking to the life sciences and other tech specialties to grow a city economy that has been stymied by the decline of the textile and tobacco industries, as well as the loss of major employers. In 2001, for example, locally based Wachovia merged with another banking giant, First Union, but Wachovia consolidated the combined company’s headquarters within First Union’s home base of Charlotte, NC.
 
Since then, Joines said, the city has encouraged residential redevelopment within its downtown, with a total 1,000 housing units completed, under construction or under review over the past four years. Last month, with Hank Aaron in attendance, ground was broken for a $22.6 million, 5,500-seat stadium for the Winston-Salem Warthogs, a minor-league baseball team affiliated with the Minnesota Twins. The stadium will be part of a larger mixed-use project by Warthogs co-owners Andrew (Flip) Filipowski and Billy Prim that will bring new retail and office space to the downtown’s western edge.
 
SBER Principal Bill Struever told BioRegion News last week his firm was drawn to the Winston-Salem project by the challenge of redeveloping the “gorgeous collection” of former Reynolds buildings.
 
“Winston-Salem is a great town, with a highly energized leadership civically. It’s a college town. Wake [Forest] is totally committed to downtown and rebuilding the economy and creating a lively place to live and work and do business and have fun,” Struever said in an interview. “The idea is to have the very strong Wake Forest brand mixed in, whether it’s office space, housing, lab, a hotel, retail. That kind of college-town character is an important part of it, and we’ve done a lot of college partnerships.”
 
“We’re working on a master plan and program. We’re in an early stage right now,” Struever added.
 
He said Winston-Salem’s mixed-use focus on life sciences will allow SBER to draw on experience from some of its other successful projects. They include a $72 million renovation of four former tobacco warehouses within the American Tobacco Historic District in Durham, NC, whose tenants include Duke University’s corporate education program; the 270,000-square-foot Providence [RI] Point development near Brown University and its medical school; a $100 million renovation of Boston’s Fenway Park that added 284 seats atop the left field “Green Monster” wall; and Harbor Point, a $720 million redevelopment of Baltimore’s waterfront that the firm is carrying out with partner H&S Properties Development Corp.
 
Harbor Point is within weeks of breaking ground, though the developers are still seeking $163 million in tax-increment financing from the city of Baltimore. The project’s first phase includes a seven-story, 262,000-square-foot office building, a 150-unit condominium building and a 225-unit apartment building. Long-range plans call for a total 650 units, 1 million square feet of office space, 500,000 square feet of retail and restaurant space, and a Four Seasons hotel.
 
SBER’s projects in general — and the urban-oriented Baltimore project in particular — also attracted PTRP to Struever and his firm, Edgeton said.
 
Edgeton said PTRP decided to partner with a co-developer after Reynolds discussed donating to the park some 60 acres in the northern third or “district.” Reynolds helped create the park in the early 1990s by donating manufacturing buildings it had vacated. Even after its downsizing, Reynolds remains the largest private employer in Winston-Salem, with about 4,000 employees, Joines said.

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