It’s an old saying on Wall Street, if you want to know how a company is really performing, then look at what executive insiders are doing. So consider that UNC insider and Carolina North branding expert (Mr. W. Mark Crowell) is leaving UNC and moving to the Scripps Research Institute headquartered in sunny La Jolla, California. As vice president of Scripps business development, Mr. Crowell will “lead technology transfer efforts, oversee research partnerships and industry relations, and launch business development initiatives for Scripps Research on both the California and Florida campuses.”

Although Mr. Crowell has a degree in regional planning from UNC, he introduced himself into the world of university technology development in 1987 when he became director of the Office of Technology Transfer at Duke University. Five years later at the beginning of the Centennial Campus over-promotion, he switched to North Carolina State University and visiting lecturer at the College of Management as associate vice chancellor and director of the Office of Technology Transfer and Industry Research. Three years later (2000), he moved over to UNC Chapel Hill as associate vice chancellor for economic development and technology transfer, as well as adjunct instructor at the Kenan-Flagler School of Business.

In describing his opportunities at Scripps, Mr. Crowell said, ”There's incredible science and scientists at Scripps Research. I welcome the opportunity to work with the institute's technology transfer team to build the program, support existing collaborations, and make new connections between the institute's technology and community partners.” Mr. Crowell offered no words to describe the opportunities at UNC, in general, and for Carolina North, in particular. (See Scripps Press Release.)

Part of the Scripps allure for Mr. Crowell is the opening of three state of the art buildings in Scripps new Jupiter, Florida campus next to Florida Atlantic University. Over 350,000 square feet of laboratory and administrative space for 300 Scripps scientists has been built and 300 more are scheduled to be hired in the next four years.

The facility was built with state funds of $310,000,000 and with Palm Beach County supplying 100 acres of land, plus $150,000,000 for building construction. (See Florida Bio Investment Scripps Story.)

While these developments bode well for Mr. Crowell, what do they say about Carolina North? Is Mr. Crowell saying that the prospects of Carolina North and UNC research don’t equal that of the Scripps Florida venture? Is he saying that, having used UNC moneys to feather his career nest by investing UNC time as the head of the Association of University Technology Managers organization, the grass is greener elsewhere? Or is he voting with his feet on the tortuous development of Carolina North that may be a decade late and hundreds of millions of dollars short?

Yes Sir Boss!
The Chapel Hill Town Councilors approved a special use permit (SUP) for the building of the UNC Innovation Center, first building to rise on the UNC research park known as Carolina North. But the building apparently won’t be owned or built by UNC. Private capital will build the UNC Innovation Center. Private capital will profit from the UNC Innovation Center in an opaque financial process. At a time when banks are crumbling from a lack of financial transparency in junk mortgage portfolios, UNC has responded with its own opaque deal – the UNC Innovation Center.

The town approved a permit to build to a three-story, 80,745 square foot building on eight acres at Carolina North. The building is slated for the site formerly occupied by the Town's public works and transit operations. (See Chapel Hill Herald Story.)

Permitted But Not Being Bid
Curiously, the permit has been issued in the face of an announcement that the building won’t be built any time soon. Alexandria Real Estate Equities (stock ticker ARE) told UNC’s Carolina North bosses in December 2008 that it’s suspending work on the project.

On 3 November 2008 ARE CEO Joel Marcus told ARE investors that ARE would halt work on all projects in its development pipeline that had not already broken ground. In the words of Carolina North spokeswoman Susan Houston “Alexandria continues to express interest in the Innovation Center project, but it is not clear when the project will proceed.” (See BRN Carolina North Story.)

The Opaque Deal
But who pays for the building? Who owns it at the end of the lease? Who receives rents? Who pays rents?

According to Mr. Marcus, ARE and UNC-CH have agreed that UNC will contribute land to the venture. ARE would lease at the land for $1 a year for 40 years. ARE is indicating that it must find other private partners to fund the building. (According to Mr. Mark Crowell, UNC associate vice chancellor for economic development and technology transfer, the Innovation Center will cost about $20,000,000 million to build.)

Even though ARE will buld the physical Innovation Center and apparently own the building for now, ARE didn't have to be involved AT ALL in the permitting process with the Town.

No word on who will pay what taxes to the town of Chapel Hill?

Why ARE?
Unreported in the local media is the factor of whose inevitable local pal is involved in the Innovation Center deal. In this case, the UNC pal is none other than Mr. John L. Atkins, III, an ARE director since 2007. Besides profiting from other deals made by ARE, Mr. Atkins is also chairman and CEO of O'Brien/Atkins Associates, PA, a multidisciplinary architectural design services firm that he co-founded in Research Triangle Park in 1975. He is also director, executive committee member and treasurer of the North Carolina Biotechnology Center. He is also director of the North Carolina Railroad Company. He is also director of the Kenan Center of Engineering, Science and Technology at North Carolina State University.

Obedient Town Staff
The town appears happy to issue permits for a building with no timeline for being built. According to town manager Mr. Roger Stancil prior to the Councilors decision, “It’s a matter of Alexandria and the university deciding what they’re going to do. We, meaning the town, don’t know what will happen. In all likelihood, the deferral of the project would cause the innovation center, the Alexandria project, to just become part of the development agreement for all of Carolina North. It wouldn’t be treated separately, like it is now.”

Carolina North Sketch
Since June 2007 Carolina North continues to grow on paper. According to UNC’s original 2007 Carolina North Plan, the first two phases have added the following: 125,000 square feet of “corporate partner space”; 50,000 square feet of “centers and institutes space”; and 30,000 square feet of research space. At a combined 3,000,000 square feet, Carolina North Phase 1 and Phase 2 are 21% denser.

Here’s the latest Carolina North configuration (subject to change without notice, no implied or express warranties).

^ Carolina North Phase 2^ ^

^ Carolina North Phase 3 ^ ^

Like Chapel Hill, New Haven Connecticut is a small town that shelters and supports a major national university. Unlike Chapel Hill, New Haven is home to a privately owned university (Yale). [Curiously, Yale has secured a UNC-CH benefit. It doesn’t have to pay property taxes either.]

The relationship between the two has become so symbiotic (at least on the New Haven side of the relationship) that New Haven’s mayor (John DeStefano, Jr.) says that “For us, infrastructure spending has come to mean growing the university. Yale has the money, and what they get from us is the approval to grow.” On the Yale side, its president (Richard C. Levin) has made it clear that Yale’s infrastructure wish list isn’t the same as that of the mayor. Airport expansions and high speed trains won’t be paid for by Yale.

Yale’s growth is being pushed forward by a $3,000,000,000 spending spree, a business bonanza driven by higher education’s holy tax triumvirate (increasing wealth concentration, charitable spending deductability, and income tax exemption status). Yale capital spending is comparable to an undergraduate’s Friday night binge. It’s buying whole city blocks. Its new acquisitions are filled with apartments, offices, restaurants, and retail stores. Yale has hired two specialists just to keep its rental storefronts occupied.

Who spends more on capital improvements within New Haven? Yale spends annually about $400,000,000, over twice what the city spends ($137,000,000). In defense, Yale’s president points out that “There are no corporate citizens left in New Haven, except Yale.” [Translation, there are no taxable corporate citizens left in New Haven.]

New Haven gives Yale more than permission to grow. When Yale eyed land for two more residential colleges, New Haven donated some adjacent streets, removing them from the public domain, thereby relieving the city from maintaining them. Yale responded by spending $10,000,000 on one-time, city-owned neighborhood street related repairs.

[There is no report of any ongoing debate over the number of parking spaces at Yale to support this expansion.]

(Originally reported in the New York Times - 6 January 2008.)