RTP seeks to be more inviting for smaller companies, quick innovation

Published: April 29, 2012 

RTP-NE-042012-TEL

Recent N.C. State graduate, Amber Arrington, 23, cares for corn stalks Friday, April 20, 2012, at Syngenta's greenhouse research facility in Research Triangle Park. Although RTP continues to attract major investments from companies, its sprawling suburban campus lacks many of the amenities and features that companies today say spurs innovation.

TRAVIS LONG — tlong@newsobserver.com

Research Triangle Park seeks to become more inviting for workers, smaller companies. But it won’t yet share the plan.

— As a 23-year-old contract worker for agribusiness giant Syngenta, Amber Arrington enjoys her job as a greenhouse technician, roaming the aisles of the company’s greenhouses and inspecting supplies of corn.

But ask her how she feels about the legendary research park where she works, and a puzzled look comes over her face.

“I don’t hang out here or go out to lunch here,” she said. “... I leave and then come back to work.”

Her complaint is not new.

For decades, Research Triangle Park’s model was simple: sell large chunks of its 7,000 acres to major companies for sprawling campuses. But early in this decade, it became obvious that wasn’t enough. People who worked in RTP wanted more – more places to live, to eat and to go after work. The companies they worked for, concerned about retaining and hiring the best talent, wanted those things, too.

Two years ago, concerned about competition from other research parks within the state and around the globe, RTP hired a New York urban design firm to update its master plan for the first time since the park was formed in 1959.

Since then, the urgency has also heightened as new competitors – Durham’s American Tobacco Campus and N.C. State University’s Centennial Campus, to name two – have attracted numerous start-ups.

The park, meanwhile, has been hurt by appearing to be content to be a suburban, isolated campus environment, said Joel Marcus, CEO of Alexandria Real Estate Equities, a California company that has been in the park since 1998 and today owns nearly a million square feet of lab space in RTP.

“That’s really not today’s world,” he said.

The new master plan is supposed to rectify that, though in typical RTP fashion the park’s leaders are being very deliberate in how they go about making changes. The design firm’s review is now complete and the contents of it are being shared with the park’s various stakeholders, but have yet to be released to the public.

Park officials say they are making sure that all the parties – landowners, local governments and the legislature – are on board before presenting their plan to the world. They also say they have a obligation to do it right given the park’s importance to both the Triangle and the state.

“This is a historic moment,” said Bob Geolas, the new CEO of the Research Triangle Park Foundation, the nonprofit that runs the park. “This park has driven the psychology of this state.”

Geolas, 47, took over from Rick Weddle, who led the foundation from 2004 until early last year. Geolas previously led both Centennial Campus and Clemson’s International Center for Automotive Research, and his arrival has been welcomed by people such as Marcus who are eager to see the park evolve.

“I think the park has lost ground over the last five to 10 years because of a lack of leadership,” Marcus said.

While not disclosing specifics, Geolas describes a future RTP where the phrase, “It’s Friday night, let’s go out to the park,” could be uttered with a straight face. Clearly adding more amenities – restaurants, shops and residential apartments and homes – to certain areas of the park will be part of the new vision.

But Geolas talks less about real estate deals and more about innovation – turning the park into a kind of technology city where researchers from all the Triangle universities will do groundbreaking work and visitors will be able to understand how the research being done there affects their everyday lives.

Economic calling card

To say there’s a lot riding on turning this vision into reality is an understatement. RTP has been the economic engine of the Triangle, so much so that its redevelopment is arguably the most important infill project in the state.

The importance of the park’s continued success has only grown in the wake of the Great Recession. At a time when all states are scrambling to figure out where the jobs of the future will come from, RTP remains North Carolina’s economic calling card to the rest of the world.

About 39,000 employees now work in the park, plus an estimated 10,000 more contractors. RTP has about 600 acres available for sale, plus another roughly 370 acres that are owned by companies but are expected to come on the market in the future.

The updated master plan is likely to revise the zoning restrictions to allow for more high-density development to occur both on corporate campuses and in select development areas that will be sprinkled throughout the park.

The desire for such changes is an acknowledgement that although the park remains a place where many companies do cutting-edge work, its model no longer fits the way the global economy operates.

Advances in technology and science have shortened the life cycle for all kinds of products, putting increased pressure on even the most established companies to constantly innovate or risk becoming obsolete. In the last few years a number of iconic brands – from Sony to Blackberry-maker Research in Motion to Yahoo – have see their businesses erode at stunning speed.

Companies today equate innovation with collaboration – not isolation – and they are seeking places that offer amenities and work environments that will help foster it. For the park, this will mean bringing in developers to create centers – think North Hills or American Tobacco – where workers and visitors alike can eat, shop, stay overnight at a hotel and even live.

“Clearly people are very focused on are there amenities that will keep you in and around locations,” Marcus said. “Science is very collaborative so you want collaborative spaces and you want amenities.”

Geolas believes that while RTP remains among the premier research and development parks in the world, its appeal to younger workers such as Arrington is no longer as secure as it once was.

“If you’re 45 and younger, it’s a much bigger list,” he said. “We may or may not be in the top 15.”

A ‘reaction vessel’

Part of the challenge for RTP is that, unlike research and development hubs in places such as Boston and San Francisco, the park won’t ever be considered an urban environment no matter how much redevelopment occurs. Geolas said the key will be to make improvements while still retaining one of the attributes that makes it unique: large amounts of green space.

He cites the N.C. Museum of Art in Raleigh as an example of a place that has a unique look and feel that also speaks to the identity of the state.

Perhaps the best example of the direction the park is headed in is the partnership announced in February between Alexandria Real Estate Equities and the Hamner Institutes.

Hamner is selling its 56-acre RTP campus to Alexandria for $20 million as part of a sale, lease-back deal, and the two are joining forces to create the Research Triangle Park Collaboration Consortium. It will be a neutral setting where universities, public and private corporations and other institutions can come together to accelerate the development of new medicines.

William Greenlee, Hamner’s CEO, describes the project as North Carolina’s equivalent to what’s going on in Cambridge, Mass., where Harvard University, the Massachusetts Institute of Technology and numerous life sciences companies are all within a few blocks of each other.

“While we’re not going to create Cambridge in the park, through the master plan we were able to develop on this 56-acre site ... a life sciences cluster that would not be about any one entity,” Greenlee said. “I call it a reaction vessel where the molecules will collide. We think that can be a real hotbed of innovation.”

Geolas said a key component of the master plan revision will be to make the park more accessible to a wider range of companies, possibly by creating “pop-up labs” that will allow for the type of incubators now being operated in downtown Durham and elsewhere.

Today, RTP is filled with a number of aging office buildings designed for a single tenant. Although there is some incubator space, the majority of the park’s more-than-170 companies either bought and developed chunks of land or signed the type of long-term lease that requires an extensive credit history.

Smaller is better?

Particularly in the fields of science and technology, it is often smaller companies with limited access to capital that are doing the most cutting-edge work. Their lack of a presence in the park is considered a detriment, even by the large, established companies that the startups are trying to topple.

That’s not to say large companies want to abandon their existing campuses in the park. Indeed, many continue to spend millions upgrading and expanding them. They simply want the benefits of being close to their more nimble competitors.

Biogen Idec, for example, which employs 950 people in the park, is in process of constructing a 190,000-square-foot office building loaded with amenities that will give the company’s employees little reason to leave its campus. Still, the drug development company eagerly supports the park’s efforts to bring in more startups because of the opportunity to share ideas through co-development agreements, acquisitions or other partnership arrangements.

“Most future innovation is coming from these smaller companies,” said Mike McBrierty, senior manager of public affairs for Biogen. “... By having more of that mix and increasing the attractiveness for smaller, entrepreneurial companies, I think everyone wins.”

Geolas knows this better than most.

At Centennial, Geolas watched as Lucent Technologies announced to great fanfare its plan to locate a research center on the campus. Two years later, the telecommunications company shuttered the center. About a year later, a startup named Red Hat moved in.

As for when RTP will make public its new master plan, which will ultimately require approval from officials in Durham and Wake counties and the legislature, Geolas said no timetable has been set. He hopes it will occur this year, but he reiterated that getting it right is the most important thing.

“What’s important to me is that people see the park as moving forward,” he said.

News researcher Teresa Leonard contributed.

Bracken: 919-829-4548

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