Watch out for those side effects

A funny thing happened today. I was driving along El Camino Real (which runs through Silicon Valley where I'm attending a conference) and listening to the college radio station from Stanford University in Palo Alto. A show called The Lunch Special came on in which they interview a professor or community leader while playing music selected by the guest. Today's guest was Palo Alto Mayor Yoriko Kishimoto. I turned up the volume, fascinated to get glimpse into local politics on the other side of the country.

The conversation touched on a variety of topics, but the main one was how to manage the local university's growth in the middle of an already-thriving community. Mayor Kishimoto compared Stanford's proposed medical center expansion to life-saving medical advances: they are usually beneficial, but also can come with dangerous side effects. She spoke clearly about the need for the university to listen to the community's needs to ensure the long-term health of both. It sounded very familiar.

Which reminded me that UNC's third "Community Meeting" on Carolina North is coming up tomorrow. The details are below, thanks to our friend and neighbor Linda Convissor.

Dear Friends and Neighbors:

Just a reminder that our next Carolina North community meeting is this Tuesday, May 29, the day after Memorial Day. You may also want to mark your calendar for the June meeting, which will be on Thursday, June 21. Both will be held at the School of Government at the intersection of South and Country Club Roads, opposite the Old Chapel Hill Cemetery.

I will send out a reminder email and details for the June 21 meeting closer to the date.

As we've done at the previous meetings, on May 29 we will hold sessions at 3:30 and 5:30 p.m. with the same information presented at each. Please attend whichever is more convenient for you.

There will be limited parking in the School of Government parking lot for both the 3:30 pm and the 5:30 pm sessions with overflow parking available in the Hwy 54 Visitor Lot. Parking may also be available at the meters along South Road. We encourage you to carpool or use transit. Information on transit service to the School of Government is below.

At the meetings, University representatives will present two conceptual plans for development of Carolina North that focus on possible approaches to transit and energy.

For background information on Carolina North, visit http://carolinanorth.unc.edu. Comments from the March and April community meetings are posted and have influenced the ideas that will be shown this month. Please note that we now offer an RSS feed for email alerts when the site is updated. To sign up for this service, go to http://research.unc.edu/cn/RSSfeed.php.

If you are a neighborhood or community contact, please forward this to your group as well as any others who may be interested. We have had great participation from the community at the previous meetings and hope you can join us at this one

As always, please feel free to contact me. We know there is great community interest in Carolina North and look forward to your input.

Best,
Linda

The School of Government is served by the FCX, S, and V routes. Please check the Chapel Hill Transit site at http://www.townofchapelhill.org/index.asp?NID=399 for maps of the routes, exact schedules and real-time transit route information.

Linda Convissor, Director of Local Relations
Office of University Relations
University of North Carolina at Chapel Hill
Linda_Convissor at unc dot edu
CB# 6225
Chapel Hill, NC 27599-6225
919-962-9245
919-843-5966 (fax)

Obviously I can't be there in person to live-blog it this time, so please go to one of the meetings and post your own thoughts below.

Issues: 

Comments

Demonstrating that UNC does respond to criticism - first up some coverage on the economic necessity of the campus. Instead of illuminating which side of the street folks will be parking on we're about 10 mins. into a presentation by UNC's grey goo expert.

2,550,000 million sq/ft. over 15 years

academic vs economic balance might change dramatically over time

1/2 of activity projected for CN already exists - relocation instead of new employment - interesting considering the emphasis the earlier economic dev. story places on new activity...

CN, Evans is saying, is really an overflow campus....

Evans makes clear that %75 preservation is permanently off the table

Land use for public presentation June 21st

3 scenarios down to 2 - EW version and NS version

Evans -"depth of dialog" -maybe UNC folks have had dialog but there's been very little community back-n-forth during the sessions I've attended...

NS is biased towards MLK - watershed from SE corner still absent

Appears to skirt "wetlands" area on N

Designs influenced by comments on keeping connections to existing neighborhoods down - connections missing in fact

footprint presented is 50 year footprint - 15 year footprint is a strict subset

EW - concentrate development on already disturbed land... buffers on the south-side...

Someone asks "advantages/disadvantages" building NS vs EW on existing runway

Still won't be pinned down on starting point

Energy commitment -rising to Chancellor's challenge to CRED

No coal on this site - biofuels, etc. for cogen/gen opportunities...

Bit of a fumble from UNC when asked about "process" improvements to achieve their energy goals...

This is the vetting process, it's all very good.

On another topic, is Orange Politics only about discussing development issues? Why no mention of the 5 teens in Orange county court today on gang rape charges?

Interestingly, of the 2.5 million SF of projected development over the first 15 years only 500,000 is projected for housing (say 250-500 units). Jack Evans pointed out that this number will be dependent on market conditions but I think it also reflects the sense, as WillR pointed out above, that CN is now being portrayed as an 'overflow' campus (e.g., 200,000 SF listed for the law school). Hopefully we will begin to see much more concrete plans in the next two months - it is awfully difficult right now to get a handle on what UNC really wants CN to be when it grows up.

I attended the forum on Carolina North today.
I want to thank UNC for having these forums and doing
their planning thinking in the open, soliciting our opinions.

Though Jack
Evans did not give the numbers of employees, both those
living on site and those not, we can estimate them now.

Here are some numbers for the end of phase 1, the 15-year
time point.
2 million sq ft of office, lab, service space. This means
5000 to 8000 employees, based on 400 sq ft per person through
250 square feet per person. 0.5 million sq ft of residential,
which means, for example, about 500 dwelling units at 1,000 sq ft each.

These figures in combination show that Mark Chilton was
absolutely correct when he suggested several months ago
that CN was providing nowhere near enough housing.
At 1 employee per household, this means 500 people
who work at CN will live there. At 1.6, 800 on-site-
housed workers. So about 10 pct of CN employees will
live on site. This is a marginally mixed-use development.

Also, in both CN plans, there is a major N-S road
that originates in the middle of the CN center, and
traverses northward, immediately adjacent to the
Glen Heights neighborhood, and exits the CN property
onto Homestead across from Weaver Dairy Road
Extension. I speculate that they moved this road
to its current location because of the environmental
impact of its previous location, N-S through the middle
of the Chapel Hill portion of the tract.
In an off-line conversation
with George Alexiou, I commented that this road is
possibly unnecessary, given that (to use the midrange)
about 6,000 people will have to commute to CN
during rush hour. Can't MLK and the other nearby roads
handle this? He said, likely yes, and we may not need
this road for phase one.

I think your estimate is off Joe.

Of the 2.5 million square feet planned, 315,000 are estimated to serve the needs of centers and institutes currently spread around off-campus. By your 400 persons per square feet that means about 800 employees already live in this area (won't need housing). 75,000 square feet will go to a pre-school so the 400 person square feet estimate doesn't apply (subtract another 200 employees). Then there is the 500,000 square feet being allocated to housing--no employees will be generated for that space (subtract another 1250 employees).

So a third (900,000 of 2.5 million) of CN will not create any new housing needs. Leaving 2,750 potential employees needing housing. Still a lot but not that close to previous estimates.

The N&O's Jesse DeCanto reports on today's 3:30pm meeting.

“It's more relocation than it is new space,” he [EVANS] said. “A lot of those employees are already here. They're not net new load on the community.”

Sorry Jesse. That's Jesse James DeConto.

I learned 3 other interesting things at today's meeting.

First, any further requests or discussion about preserving the 75% of undeveloped land need to be addressed directly to the board of trustees. It's their decision not to commit to the preservation. The planning team has no say in it--even though they have committed to designing for no more than 25% of the tract.

Second, the (estimated) 525,000 sq feet of corporate space and 100,000 of commercial/retail, and possibly some of the housing will not be treated as part of the core university function, meaning that it will be taxable.

Third (saved the best for last!), the nanotechnology group is training their researchers to be entrepreneurs. They want them to create startups as small local businesses here in town and/or Orange County rather than partnering with larger corporations that will expect them to move out west where the venture capital resides. Those start up businesses can get their start in the innovation incubator, but if the community wants them to stay local, commercial space outside of CN will be needed for them to transition into.

Terri,
Your third point, creating entrepreneurs from the nanotechnology research is to be encouraged and applauded but the likelihood that these ventures could succeed without venture capital (or vulture capital to some) is questionable. Commercializing these types of technology often require large sums of money for proof of concept studies (yes Robin C, these might involve animals) and often, depending on the technology, studies in man. And then there are patents. Whether we agree or not whether what has happened to the patent system in the US is good, patents are still critical to commercialization. And the last time I looked it takes $250,000+ to prosecute each patent for worldwide rights (also essential in this global economy). And most of these technologies would have several patents to support them. Thus I think it unlikely that these technologies can move very far forward without significant cash inflows. But, the west coast is not the only source of venture capital. There are local sources but they pale in comparison to that of Calif., NY, Boston, etc. although they certainly are easier to talk to.

Without a doubt, capital is an important consideration George. But at least one faculty member, Joe DeSimone, has already successfully achieved the goal by converting his research into toxic free dry cleaning (Hangars Cleaners). That company was created with grad students who learned entrepreneurial skills while perfecting their research skills and the community benefitted economically and environmentally. Now he is again partnering with grad students in another spin off company.

It may not work as a model for every researcher, but if the university and the community can partner to facilitate such beneficial transitions for some, I'm all for it. It sounds like an excellent investment opportunity to me.

Terri,
Joe DeSimone's company is a good example of a Carolina success story but I don't know from where and how much his capital infusions were. I do know that a number of companies that came out of UNC, NC State and Duke would have never got off the ground without venture capital. A small start-up nowadays is one that gets only $5 million in the A round of financing.

Why do successful entrepreneurs at local universities need labs paid for by tax payers AND research-patent incubators in a mixed use zone? What are they teaching? Business or science (or the business of science)?

Professor DeSimone is obviously very successful at what he does and no doubt graduate students from UNC could continue to work along side him in the public sector.

The reply to questions regarding how much of that revenue recycles back into our community was rather murky as well.

Nano technology is cool - I love it! Seems a bit of a stretch to me to suggest that this and other successful ventures from a local research campus will do anything to reduce the cost of living in Chapel Hill, Carrboro, and Orange County, Chatham County and North Carolina....or, maybe I misunderstood what sounded like an implication...

Here's a video of yesterday's 3:30pm session (including an extended overview of the science of grey goo ;-) ).

I'm looking more deeply into yesterday's numbers and, at least at this point, the refactoring of Main campus into dual campuses seems to be a substantial shift from the 2001, 2003 and even 2006 LAC justifications.

Given that the first 15 years of development are being recalibrated to include this shift of "known" assets - people, functions, facilities - it would seem that UNC should have little problem calculating traffic flows (they know where those folks live and work now), survey their workforce to see if on-campus living would be attractive, etc.

Speaking of numbers, how troubled are folks that we're this close to UNC's July delivery date with so few details worked out?

With 45-60 days left in their self-imposed schedule, the flux their plans and justifications seem to be in, in fact their inability to even sketch a starting point both in time and space for this project, well, that's one heck of lot a work to get done in a very short time...

squonk,
I think you're correct - very little of the revenue going into an incubator facility would find its way to the community at large. The real advantage is to the University and the inventors. Universities are allow to patent inventions funded by federal research and to own the inventions under the Bayh-Dole Act of 1980. The government does retain "reach-in" rights to re-acquire an invention if it is not being developed to the benefit of the public but I'm not sure they have ever exercised this right although I do remember them threatening to do so once.
So research is funded by federal dollars, the universities patent it and, if lucky, license it for an upfront fee and a royalty stream on any future sales. The faculty members (inventors) usually get a percentage (25-50% on a sliding scale) of whatever the university gets. In a few cases, this has been enormous. For instance, when Amgen licensed the rights to commercialize leptin (the anti-obesity protein) from the Rockefeller University they paid $20 million upfront to the university and the inventor got $7 million. Of course, it fizzled as a drug so Amgen lost out on their investment but the Rockefeller University and the inventor won.
So if you wonder why UNC and its faculty are willing to try to get startups going...

Steve and George,

I'm confused (I'm also very tired so if I'm being dense, please be gentle).

The incubator, as a non-core function of the university, will pay property taxes (and business licenses) so there is *some* degree of value to the community although not as much value as a fully capitalized mature business. In fact, a big part of Carrboro's economic development plan has been to support and nurture small businesses (see this thread for instance), including faculty entrepreneurship. But the real value that I see would be in the transition from those businesses that start in the incubator out into the community--like Hangars Cleaners.

Are you saying small local commercial businesses would create local economic development UNLESS they start at the university?

Before the Bayh-Dole Act of 1980,

----since research at public universities was funded by taxpayers, any discoveries were considered to belong to the public. . .(in the past corporations said they had to charge outrageous prices for prescription drugs due to the high cost of research and development---now taxpayers fund the R & D at Universities and prescription drug prices are still outrageous--now that's progress!)

---since universities and academic researchers couldn't patent their research and discoveries for profit the research was considered more pure, and academic researchers were considered the "watchdogs" of corporate researchers who might be tempted to fabricate safety studies or findings . . .

----since no profit motive was involved, academic researchers and scientists were more likely to share data and findings in order to further science and to prevent duplication of efforts and research. . .(now protection of trade secrets and research is paramount to protect possible patent rights and future profits. . .)

And you can find many articles and papers by doctors, researchers, scientists and other experts who say the Bayh-Dole Act of 1980 was a very bad mistake as now corporate interests are unchecked and have taken over universities. . .

And now university research is as suspect as corporate research and many times (not always) tends to focus on potential big money making drugs. . .

So it seems it is a legitimate question to ask whether we, as citizens, want to continue the trend with more university research parks catering to public/private partnerships. . .and we should be asking this question not just as people who live in a university town but as citizens concerned about the growing corporatization of universities in general. . .

Oh, and Terri---some university spin off businesses operate as nonprofits that are funded with tax dollars---once they have a product that's marketable--citizens rarely see a break in pricing even though they basically paid for the research and discovery. . .

The fact is universities are suppose to be for education--they simply don't work as "economic engines of growth"----well, at least not for the people as a whole---as George C. pointed out some people---like some lucky university researchers end up making millions even though the end product is a bust. . .

There is a 2001 paper by Sol. S. Shalit, Prof. Emeritus of Economics and Finance of the University of Wisconsin, entitled “The University's rationale for growth does not stand scrutiny” that will provide you with lots of info on how across the country university expansions are having harmful impacts on communities.

Terri, I'm confused by your statement:

The incubator, as a non-core function of the university, will pay property taxes......
In our recent history,
UNC has fiercely fought paying property and other taxes, even on
obviously non-mission-related properties. This has been
one of the sticky points in all town-gown relations, in
Chapel Hill and in other university towns in NC.
Am I missing something?

Joe, Jack Evans told us Tuesday night that all non-core functions would be paying taxes. I am not sure whether that included the residential or just the corporate and commercial properties.

Geez, guys, "non core"????? It is either a State owned property or function (non taxable) or it is a private corporation, or sole proprietorship (taxable). Kinda like being pregnant or not......Which is it? The rest is pretty doggone simple tax wise (although you may want to include tax increases in your estimate!)

were it that simple.......
State law does not require UNC to pay property taxes on any property it owns, regardless of use. and they don't. Witness the Carolina Inn or any of the fast food franchises located on campus or the private homes that rent around town.
It seems unlikely that UNC will ever actually sell any of the land at Horace Williams so regardless of use or tenancy they will be operating within the law when if they do not pay taxes..........

FWIW:

PROPERTY TAXES

Property taxes are paid to Orange County, Chapel Hill, and Carrboro, including the Chapel Hill-Carrboro City School District, and apply to the residential component and the buildings of the joint/private and the service/retail uses. The land for the joint/private and service/retail buildings is owned by UNC-Chapel Hill and is exempt from property taxes. The total tax rate for Chapel Hill is $1.655 per $100 assessed value in 2004-2005, and the total tax rate for Carrboro is $1.7948 per $100 assessed value. The total rates include $0.880 for Orange County and $0.200 for the school district. All of the service/retail and residential development is in Carrboro in Phases 1 and 6, while the other phases occur in the Chapel Hill part of Carolina North. The institutional space is all in Chapel Hill except for the 30 percent of the space from Phase 1 being built in Carrboro.

To be conservative, we use the construction cost as an estimate of the value of the housing and buildings. The value of the buildings is assumed to be the same as the assessed value. For residential property, we have included the cost of land (assumed to be 20 percent of the construction cost) in calculating property tax revenue. We assume that property values increase at the 2.5 percent inflation rate, and we ignoretaxes on real property other than the land and buildings. At the end of Phase 2, $305
million in commercial buildings and houses will be subject to property tax. This figure will rise to $2.51 billion when the Carolina North construction is completed.

From the rather airy 2004 UNC commissioned Market St. Services economic impact report (here).

BTW, if you believe those numbers, especially with the new relocation spin, I have a bridge I'd like to sell you...

Cam, care to comment on those tax rates?

The University has been pushing to create and fill a position of arborist/forester specifically for the HW tract. We've all heard from numerous sources that this is a critical, important public conversation, and that this new position would be responsible for the well-being of the trees etc. in the not-to-be-developed part of the tract.
My husband interviewed for the job the Monday after the March forum, and all three people who interviewed him were at the May forum. None of them would talk to him about the status of the position at the forum this week, and all of them disappeared before he had a chance to ask them if it had been filled yet.
We live in Glen Heights, and walk in the HW tract all the time. He's a certified arborist with a dozen other certifications and qualifications.
It's only been 5 weeks since that interview, but it feel so much longer.

There's a certain irony in the distress some people are feeling over Weaver Street moving 60 jobs to Hillsborough and the total lack of comment over the loss of UNC centers and institutes in downtown Chapel Hill through relocation to CN. I realize the move isn't imminent, but the concept of relocating all those groups to CN and away from the local restaurants and businesses in downtown Chapel Hill sounds like a pretty big deal to me.

 

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