When is a decision not a decision? When it’s made by the Little Rock Technology Park Authority board.
On Oct. 23, the board voted 4 to 3 in favor of using its pot of city tax dollars — the only capital it has so far — to create a “technology corridor” in downtown Little Rock. The park, backers said, could either buy property along Main Street or renovate existing buildings, and board member Kevin Zaffaroni said the process “could be a hell of a lot of fun.”
The naysayers to downtown, who voted for a University Avenue lot now occupied by Sears, promptly went on the defensive, explaining to the downtown backers why they were wrong and moving to bring in more consultants on the project. “You are destroying the reason why we are doing this,” board member Dickson Flake said.
The new language the downtown supporters use — “corridor” rather than park — embodies the difference in vision board members were expressing. Those who might be termed the old guard, who’ve been working for years toward building a park, see it as a campus-like center of university research-driven biotech and nanotech commercialization. In that corner: board Chair Dr. Mary Good, the founding dean of the College of Engineering and Information Technology at the University of Arkansas at Little Rock and a UALR appointee to the board; board member Dickson Flake, a realtor and former Chamber of Commerce chair who has been the driving force behind the creation of the park since 2005 and a city appointee to the board, and former state Sen. Bob Johnson, also a UALR appointee to the board.
Then there is the new guard, who cite St. Louis’ Cortex park model of a core building in an urban neighborhood, with start-up incubators and new companies filling in vacant warehouses and the like — the urban live/work model. In this corner: Chamber head Jay Chesshir; University of Arkansas for Medical Sciences vice chancellor Tom Butler; Acxiom senior vice president for IT Kevin Zaffaroni, and human resources consultant C.J. Duvall, who was formerly with Allied Wireless.
Standing with the downtown backers are Mayor Mark Stodola and, more importantly, the University of Arkansas for Medical Sciences, which like UALR is a sponsoring institution but which has never bought into the notion that the park can’t be more than five minutes from the sponsors, the major sticking point with the dissenters. UALR Chancellor Joel Anderson, who proposed to the board that it locate the park adjacent to UALR, has said he’ll back the park no matter where it locates, though perhaps with less in-kind support.
Watching from the sidelines are the city taxpayers who, having committed to ponying up $22 million for the park, are wondering why the board, which has been meeting more or less monthly since November 2011, has yet to agree on exactly who the park should serve. Where, too, they’re wondering is the private investment? In 2010, park planners estimated it would take $50 million to open the first building, coming from tax dollars, $15 million in private investment, $10 million from the state and the rest in grants.
Good says there will be no private investors until they know where the park is going.
A technology company CEO who is locating his business in the River Market says investors are also waiting to see what kind of park the city is building. He says there’s been no consensus because Good, Flake and Johnson are talking oranges, and the downtown supporters are talking apples.
“A bioventure is different from a tech park and different from an incubator. … They attract different kinds of capital,” Rod Ford, the chief executive officer of nGage said in an interview last week. “We’re really confused right here in Little Rock. We seemingly don’t know the difference in these three forms.” The board has spent a lot of time debating the best location, “but I haven’t seen any discussion about what is the best charter,” he said. The board has been “a lot more interested in finding a way to divide up the pie than build a bakery.”
Start-up incubators — where concepts are first proven — draw angel investment from risk-takers who invest in exchange for ownership equity. Companies that specialize in biotechnology commercialization often invest as partners of universities, and wealth flows back to the universities; Ford gave the University of Florida, which gets a 20 percent return from Gatorade sales every year, as an example. Venture capitalists who support information tech companies like nGage aren’t interested in sharing wealth. “I’m never going to commercialize somebody else,” Ford said. “I build my own intellectual property.”
Ford, who will start with 35 employees but plans to eventually employ 100 in his digital marketing firm, says urban areas make sense for business incubation and development. “I would love there to be a corridor,” he said, one that would “stimulate all type of neighborhood development and create an audience for people who have services. … Why not take Main Street and one of these depressed areas and transform it?”
There is a model that combines the university-driven research that Good, Flake and Johnson favor: Arizona State University’s tech incubator. ASU’s technology department shares a campus with a business incubator and students study a curriculum that addresses “real world problems” that the business side wants to solve, Ford said. The campus is halfway between ASU’s main campus in Phoenix and Scottsdale: the university has come to the park, rather than putting the park by the university.
“The north portion of the campus is the Arizona State Tech Department and the south side is 35 companies like mine,” Ford said, adding that the private companies in the incubator hire the majority of the graduate students turned out by the technology department. “It’s a true collaboration between a university and private enterprise.”
In an ideal world, Ford said, UALR’s engineering and information technology college “would be in a tech park and half would be for private equity for start-ups — a natural collaboration or intersection of their curriculum and innovation companies are trying to create.” But, “None of this is going to happen unless you have an investor. That’s why it’s important to understand where the intersections are. Otherwise it’s difficult to recruit private capital.”
Recruiting intellectual capital is also crucial, and that means providing a place to work that is exciting. In his own hiring, Ford said, “I’m competing against Denver, Boston. … When they fly in am I going to drag them down and show them the Sears parking lot and say this is where you are going to be working?” The River Market, where nGage will locate, “is a competitive advantage.”
That was UAMS Chancellor Dan Rahn’s reasoning as well. In an email to Chesshir on Oct. 15, Rahn wrote, “I can’t visualize recruiting to the Sears site.”
The interest that UAMS’ campus incubator, BioVentures, has shown in locating downtown was a crucial factor in the board’s vote. Rahn wrote in a separate email to Chesshir and UAMS board reps Zaffaroni and Butler, “I just want you to know that UAMS and BioVentures will be a substantial partner in this venture if it is located downtown. We think that the success for BioVentures and technology companies fits best with a downtown location.” Dr. Marie Chow, director of BioVentures, has provided the board an estimate of space needs over five to 10 years: She envisions 20 to 25 companies in 42,000 to 45,000 total square feet.
Sweetening the pot were offers by Acxiom and Merkle Inc. to create internships for students working with the incubators; by Moses Tucker to provide six months free rent in a downtown building; staff support from the Clinton School of Public Service and the UALR William Bowen Law School, and fundraising “if necessary” by the Downtown Little Rock Partnership.
So UAMS likes downtown. Business interests like downtown. But under one roof?
“Bioventures should be an anchor tenant, there’s nothing wrong with that,” nGage’s Ford said. But, “if you are going to call it a bioventure park, you automatically shut out some kinds of private capital.”
Hence the corridor idea — with BioVentures as an anchor tenant in the inaugural building and job-producing tech incubators and businesses as satellites.
Chesshir, as the chamber’s representative and the swing vote, made concessions to UALR, saying he could see that its research advantages — such as its multimillion dollar microscopes — weren’t moveable in the way that BioVentures’ were. “In the end,” he said, perhaps two campuses would be best, the idea that set Flake off.
In a larger concession, Chesshir suggested that the board bring long-time consultant Charles Dilks back to work with whichever outside party is hired to do due diligence and negotiate with property owners. Dilks, while he has equivocated on size needs for the park — he recommended 30 acres in the 2009 Angle tech park feasibility study commissioned by the chamber but, in suggesting the Sears site, said 12 acres would do — has never backed off his opinion that a site downtown, distant from sponsoring institutions, is a bad idea. Dilks can be expected to opine, once again, why the park should be built at the Sears property.
That the site was still under debate after the vote had been taken left one board member “numb,” he said. Not only were old battles being fought, but the post-vote conversation veered into the weird. Good insisted proximity was crucial to getting the cheap work force — students — that the park would need, prompting Zaffaroni to ask what difference it made once they got into a car whether they were driving to a site downtown or to the Sears site at I-630 and University. “They’ll ride their bikes,” Good proclaimed, provoking visions of students, laptops and research on backs, peddling 12 blocks on University, one of Little Rock’s most heavily trafficked streets, to get to the park.
Good also suggested that the board bring the “downtown group” — the Downtown Partnership — back before the board to talk about the location and lamented that the Sears site “will not be there forever.”
Johnson wondered how the park could be built downtown — “Are we talking about tearing down and building new or what?” — and maintain synergy. In response, Mayor Mark Stodola rose at the close of the meeting and provided Johnson with a map that indicates 900,000 available square feet at six potential sites clustered between Third and Sixth streets.
The map, prepared by Texas development firm Wallace Bajjali, which has indicated interest in developing the park, includes a parking lot between Fourth and Capitol owned by Warren Stephens. Frank Thomas, a spokesman for Stephens, said it’s possible a deal could be made on the property, though he could not provide an estimate of cost.
“I think what we need is a center of gravity to concentrate our efforts in developing businesses and attracting business related to research and the intellectual capital in Little Rock, and some of that is dependent on a good central location,” UAMS Chancellor Rahn said in an interview Monday. “I think downtown is the right location. There is private investment going in downtown and I think that’s the right location to anchor things,” Rahn said. “But I believe that we may need to do some additional things next to UALR and UAMS.” He envisions “multiple locations under the umbrella of the Authority.”
In that Rahn echoed Chesshir. What about the shared services that Flake fears will be lost if everything is not developed on a single campus? “You can’t share conference rooms, you can’t share reception functions, but you can share other kinds of infrastructure,” Rahn said. “We’re doing that with our Northwest Arkansas campus and our campus in Little Rock. … It’s one of the tenets of telemedicine.”
Rahn said Ford’s right in the difference in investors. “Those who are investing in [IT development] and those investing in a future drug, that’s different, a different time line.” But he believes you can “co-locate” the two.
“We should be focused on how we develop new business, new capital.” Including non-university research? “Absolutely.”
Stodola has evolved in his thinking about the park, he told the Times. He thought using the Methodist Children’s Home property adjacent to UALR — one of three sites first looked at — made a lot of sense, since it was considering a move at the time anyway. (Its leadership changed its mind on relocating, however.)
Little Rock is the third sponsor, committing both tax dollars and a $125,000 start-up contribution, and “deserves a voice” in the process, but Stodola said he tried “to hold back my thoughts” as the board did its work.
But once nGage’s Ford called for a downtown park publicly at the announcement of his company’s move to Little Rock, and Gov. Mike Beebe chimed in in agreement, Stodola said he decided to speak up. Downtown, he says, “is the best site for success and the creation of jobs. … The suburban greenfield is no longer the approach for a successful park.”
Stodola noted that both tech parks he and the board visited several months ago — Cortex in St. Louis and the Wake Forest Innovation Center in Winston-Salem, N.C. — used shuttles as transportation and Little Rock could as well, satisfying UALR’s concerns about movement between university and park. The mayor also noted that UALR has two floors in its EIT (engineering and information technology) building that are not yet built out, so there’s room for expansion there. Ultimately, Little Rock has the hammer. When the Park Authority board wants to pledge its tax dollars toward bonds, the city board of directors will have to pass an ordinance.
The city board, on a motion by Chesshir, voted to prepare a proposal to lease space for two years, with a two-year option, to house a business accelerator by March of next year. Time is of the essence, Chesshir said, to capture growing interest in incubator space. (Adding some urgency to settling on a downtown location, no doubt, is the fact that North Little Rock is already raising money to create a co-working start-up space, The Silver Mine, in Argenta.) Board members will discuss that at their next meeting Nov. 6, where they’ll also have to “figure out how to pay for it,” Flake said.
Little Rock has an “opportunity here to really build an image … not just an image, an ecosystem and a commerce system that’s around technology and it can’t do that unless it’s in the best location the city has to offer,” nGage’s Ford said. “What I hope we don’t do is slow down or back up. … There’s awareness, there’s momentum with a real discussion of what we are building. Now that we kind of know how the pieces of the pie are going to be divided, let’s build a bakery.”