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RTP Foundation, Marking 50th Anniversary, Will Add Biofuel Shops as Tenants, Insider Says

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Life-sciences companies will likely continue to command the largest share of tenants and building owners within North Carolina's Research Triangle Park well into the next half-century, just as they had leading up to the 50th anniversary of the foundation sharing the park's name, the man charged with managing the campus predicted last week to an audience of science writers in New York.

Rick Weddle, president and CEO of the Research Triangle Foundation of North Carolina, said that the research park's roster of more than 170 companies will be joined by shops focusing on energy efficiency and clean technology due to the prospect of new subsidy programs from the Obama administration.

Some of these concerns include biofuel makers, which could also be considered life sciences.

"We don't see either our life science or our IT presence declining. We see it stabilizing, and continuing to grow. But some of [those presences] will be supplanted by this [cleantech] growth," Weddle told BioRegion News during the March 18 meeting with members of Science Writers in New York, a regional affiliate of the National Association of Science Writers.

RTP houses 59 life-sciences employers all with a combined 10,607 employees. According to the state-funded North Carolina Biotechnology Center, which is also based at RTP but not counted as a life-sci employer, North Carolina is home to "more than 450" biotech companies employing 55,000 people headquartered or operating in the state.

RTP is also home to a research institution, the Hamner Institutes for Health Sciences; the Burroughs Wellcome Fund, which funds biomedical research and educational activities; and the GlaxoSmithKline Foundation, which funds programs that promote the sciences, health, and education.

At 29 percent, life-sci companies represent the largest plurality of RTP occupants, followed by information-technology companies, with 21 percent. The next-highest category is professional business services providers, at 15 percent, followed by materials sciences and engineering firms (13 percent) and scientific associations and institutes (11 percent).

If life-sci remains the largest category of RTP companies in the next 50 years, Weddle's foundation will have played no small role in that. Owners of property at RTP are required, before they sell any of their land, to first present the terms and conditions of their proposed sale to the foundation.

"The Research Triangle Foundation of North Carolina has the right of first refusal to purchase the property under the same terms and conditions as may be contained in such bona fide offer made to the [seller] company by any third party," according to the organization's Summary of Covenants, Zoning & Restrictions, last updated Feb. 10.

Weddle said his appearance was part of a series of talks with journalists aimed at promoting RTP, which is marking the 50th anniversary of the founding of the namesake nonprofit group that has grown into a $150 million foundation.

The RTP foundation played a key role in re-anchoring the Tar Heel State's economy away from the tobacco, textiles, and furniture industries by overseeing the development of some 7,000 acres — within the "triangle" formed by the cities of Raleigh, Durham, and Chapel Hill — into 25 million square feet of space for businesses and institutions employing more than 40,000 people.

Employers range from startups spun out of area universities, to a US Department of Agriculture's Forest Research Station, a US Environmental Protection Agency lab, and the only National Institute for Environmental Health Sciences lab outside of Bethesda, Md. Tenants also include life-sci giants such as Biogen Idec and the US headquarters of GlaxoSmithKline.

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The federal installations are expected to add staff in the near future, especially the NIEHS lab: "We see that growing rather significantly over the next several years," according to Weddle.

But GSK, which has about 5,000 staffers and 35 buildings at RTP, has cut hundreds of jobs based there since 2007, including undisclosed numbers of the 350 researchers it announced it would lay off in June 2008, and the 1,800 sales professionals it said it would idle last November.

"Between now and April, expect to hear more on job cuts/layoffs," GSK spokeswoman Sarah Alspach told Durham TV station WTVD's ABC11 Eyewitness News last month.

Another challenge for RTP, Weddle acknowledged, is the prospect of North Carolina officials trimming the state's menu of economic incentives as they scramble to plug a $3.4 billion budget shortfall for the fiscal year starting July 1.

He said the foundation expects the state to retain its pay-as-you-go incentives — with benefits awarded as employers meet milestones for spending on facilities, or creating jobs, or commercializing technologies.

"We think those kinds of incentives, which are the only ones that really make a big difference, will be preserved and maintained. The other kinds will be more difficult to sustain," Weddle said.

Another incentive that has helped build the state's research base, he said, is the state government's R&D tax credit based on a percentage of qualified research expenses. A business with North Carolina university research expenses for a taxable year is allowed the highest percentage of credits — 20 percent — toward those expenses. By comparison, the tax credit for all businesses without these expenses range from 1.25 percent to 3.25 percent.

However, Weddle stressed that incentives alone haven't driven most life-sci companies to RTP. "Most of the projects we work on really come [here] because they're having difficulty attracting high-level scientific talent where they are, and … they're having difficulty finding what we call two-year lab techs where they are at a reasonable price."

Another attraction at RTP, he said, is its efforts at community building. A council of the campus' research directors meets monthly. And the research park is forming a joint venture with the Durham Bulls minor-league baseball team — the triple-A team of the Tampa Bay Rays — to create a world series of softball involving corporate teams at North Carolina's science parks; some 800 employees at the tech park play on RTP-based teams, according to Weddle.

RTP is one of seven research parks within North Carolina that have joined over recent months to form a coalition aimed at helping them brand and locate technology resources statewide and boost the life sciences and other tech sectors. The North Carolina Research Parks Network has begun tackling how to cooperatively market and brand the campuses, share best practices for science parks, and lobby for political support among federal and state officials. [BRN, Jan. 26].

A key milestone for the network will come April 15, when it releases a "collaborative action plan" detailing how it will try to fulfill all it three goals. Network representatives met with US Rep. David Price (D-Chapel Hill), the first in what they hope will evolve into a series of briefings for US and state lawmakers on promoting innovation through federal and state policies.

Another milestone will come the following month, when the network carries out joint marketing of the state's research parks at the Biotechnology Industry Organization's 2009 BIO International Convention, set for Atlanta May 18-21.

"It's not a big thing, but it's no small task to get a bunch of heretofore transaction-oriented folks to leverage together," Weddle said.

The network, Weddle said, reflects how North Carolina maintains a more regional approach to economic development than many other states, where business and political leaders have focused on municipal needs and racking up numbers, such as jobs and deals.

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"One of the fundamental needs is to move economic development thinking in this country from transaction-based thinking — comparative advantages, one-offs, this deal versus that deal — to system-based thinking, with integrative collaboration, improved competitive advantage, and platform advantage coming from a network," Weddle said. "State governments oftentimes still tend to think in yesteryear's transaction-based thinking. They're political animals, and they have counties, and cities, and things of that sort."

Appearing with Weddle at the science writers' meeting was Luis Sanz, director general of the International Association of Science Parks. RTP will host IASP's XXVI World Conference on Science and Technology Parks 2009, to be held June 1-4.

Sanz said IASP has begun studying the effects of the increasingly global financial upheaval on members of his group, which consists of 400 member research parks housing more than 200,000 companies in 72 countries worldwide. IASP is headquartered in Malaga, Spain, and also has an office in Beijing.

Among those research parks, he said, 80 percent have at least one life-sciences tenant, the second-highest percentage behind information technology, which has 82 percent.

During his remarks, Sanz highlighted several regions and nations that have been discussing developing tech parks globally:

• Russia: Flush with oil revenue, officials have begun the long-delayed task of transforming the former Soviet-era "secret cities" into technology parks that can catalyze economic growth. "The potential is there," Sanz said. "They seem to be now seriously considering to engage and to set a number of clear policies in the country to put all that scientific potential to really develop the country economically. I cannot predict how fast that is going to happen."

• Asia: He said China's development of several vast technology parks in Singapore poses the greatest competitive threat within Asia. That nation grew into an Asian life-sci powerhouse through its Biopolis campus and its attraction of pharma giants like Novartis.

• UK: Sanz cited Aston Science Park in Birmingham as an example of how research parks can successfully revitalize depressed neighborhoods, like the industrial area where the park is located, when officials offer persistence, patience, and cash. Birmingham City Council joined Lloyds Bank and Aston University in creating the park in 1982. Today Aston is home to 107 tenant businesses.

While tech parks usually strive to build public and private sources of support, Sanz warned against the campuses becoming too dependent on government aid, especially now, as the US and other nations scramble to boost economies that have all but frozen as a result of the ongoing turmoil.

"Now what we are hearing are the voices of those who have been, let's say, silent for decades [saying] 'I told you so. This is not working. The state must come in.' Fine. We have to redefine what the role of the state is. But there are limits to that. My concern is that we may again overdo," Sanz said. "If you overdo, you'll probably get results that are undesirable, and if you look back at history, have produced more harm than benefits. And if you leave the state completely out of the game, you get situations like the one we are in now. It's an extremely fragile equilibrium.

"It doesn't seem to me that the [United] States have been doing badly in 200 years of history," Sanz added. "But the rules of the game, and even the game field, are changing now."

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