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Lawmakers snub NU’s $25 million request for Innovation Campus

By   /   April 16, 2015  /   News  /   No Comments

Courtesy innovate.unl.edu

STRUGGLING: An aerial view of the University of Nebraska’s Innovation Campus, which has struggled to attract tenants since NU bought the former state fairgrounds in January 2010.

 

By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. — Nebraska lawmakers don’t appear interested in sinking another $25 million into the University of Nebraska’s Innovation Campus, even as the research campus struggles to attract major tenants.

The state kicked in $25 million to help jump start the project in 2011, but NU wants more. A bill that would’ve given the university $25 million hasn’t gotten out of committee.

An aide to Sen. Matt Williams, who sponsored the bill, said the legislation is “not moving forward” and isn’t expected to be folded into another bill.

“All I really know is that it hasn’t moved out of committee,” said Dan Duncan, executive director of Innovation Campus. The money would have been used to create an “evergreen fund” to build buildings, with matching funds from the private sector.

Nebraska’s planned $800 million, 250-acre research campus has struggled to attract private companies as it tries to reach its goal of creating over 2 million square feet of research, meeting and office space on the site of the former state fairgrounds. Planners envision 5,000 people working on the campus one day.

But so far, ConAgra Foods is the only major company signed on as a tenant, along with three other smaller companies, although another may make an announcement Monday.

In February 2013, Duncan said Innovation Campus was entering a phase of “rapid development.” Then in December 2013, he said private companies were close to signing leases and “we’ll start picking up more speed.”

So far, that hasn’t happened.

“It’s always difficult to be the first at anything,” Duncan said Wednesday.

Meanwhile, the University of Nebraska-Lincoln has sunk more money into the project than expected, leasing nearly $8 million worth of space and moving its Food Science and Technology Department this year. That was a big “drain” on the university, UNL Chancellor Harvey Perlman acknowledged in September.

“We have made considerable investments beyond those that were originally contemplated,” he told the NU Board of Regents.

Perlman said it’s difficult attracting initial tenants.

“You want people to believe there is actually something there,” he said. “It’s hard to attract people to go out there to be pioneers when they would be isolated.”

Some shuffling occurred last year, with the university taking over business development and recruitment from the developer.

During an October interim hearing on tax incentives, Sen. Al Davis, R-Hyannis, questioned how many government subsidies would be thrown at Innovation Campus. In addition to state subsidies, it’s the city of Lincoln’s biggest tax increment financing project to date, at nearly $11 million.

“So you have Innovation Campus here, which required the state of Nebraska buy into that property to begin with in order to move the State Fair… then we have TIF financing on the property,” Davis said. “And now I read the other day in the paper, the university says it’s going to have to have additional money to make that work. When do we draw a line to these things? I mean, how far are we going to go?”

Lincoln’s urban development director, David Landis, told Davis it was worth the risk.

“Is it costly to produce an Innovation Campus? Yes, it is. A lot of money, public money? Yes, it is. Is it a gamble? You bet it is. The city of Lincoln would have liked to have had both, would have loved to have had the State Fair and an Innovation Campus. The point, I think, is that there is a general belief in city and state government that the growth of the future economy is in the generation of ideas and intellectual capital and not industrial productivity. And an Innovation Campus is a 21st century investment. And most investments have a painful period. I’m not at the point to pulling the plug. So far, so good, I think.”

With 150 research campuses in the U.S. and more than 700 worldwide according to the Association of University Research Parks, was Nebraska too late in jumping on the bandwagon?

“I don’t think it’s too late,” said Fred Reinhart, president of the Association of University Technology Managers, whose members are involved in bridging the gap between universities and industries. “Whether it will fly and be a going concern is another matter.”

He said NU needs to find its niche. So far, that’s been food, fuel and water research.

“This is becoming much more common and it’s a growing area of interest,” Reinhart said. “It is definitely a growing area.”

Industries want to set up on or near campuses to work hand-in-hand with universities, he said. It’s not that NU can’t be competitive, it’s more about what companies would want to locate near its university. Private enterprises sprang up on their own in Cambridge, Mass., near MIT, but Nebraska will probably have to do more prodding, he said.

“You take a place like Nebraska, they are going to have to take a completely different approach,” he said. “They are going to have to do it themselves… and hope to attract enough tenants to make it viable proposition and not lose money every year.”

He used to work for Wayne State in Detroit, which set up a tech park with grand plans to lure a genomics center, but “in the end you’ll lease to anybody who will pay their bills.”

UNL has already tried its hand at spinning off business with a technology park in north Lincoln, but it ended up with tenants such as a Verizon call center. The tech park was put up for sale in 2013 as the university turned its attention to Innovation Campus.

NU must play to its strengths and be patient, Reinhart said. North Carolina’s Research Triangle took years to establish, for example.

“These things do not make money. They’re lucky if they break even,” he said. “You’re not going to see massive job creation for several years.”


Deena can be heard on KHAS-AM in Hastings every Wednesday at 7:30 a.m. and 12:45 p.m. and KOIL-AM in Omaha every Monday at 4:05 p.m.

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Deena formerly served as staff reporter for Watchdog.org.