Partners envision new downtown life science, tech cluster

Jun. 04, 2014 @ 08:12 PM

Renovation work is underway on a former tobacco warehouse on North Duke Street where Duke University plans to move research labs and offices downtown.

Nearby, a private development firm is partnering to examine the feasibility of building more than a million square feet of new construction.
The university labs and the proposed development are part of the vision for a proposed new urban research cluster called the “Durham Innovation District” that would locate life science and technology companies near university research labs and offices.
“We’re trying to see if what we wanted to build is possible,” said Jessica Brock, the managing director of the Durham office for Boston-based Longfellow Real Estate Partners. The firm is a leading partner in the proposed new district, which she said is in the planning and feasibility stages.
The firm started working with officials from Duke and the Durham-based educational assessment company Measurement Inc. about 18 months ago to create a master plan for the proposed district, said Adam B. Sichol, a co-founder and managing partner at Longfellow.
The firm has about 10 acres under contract in the proposed area, Sichol. According to a news release, the area is bound by Morris, Liggett and Fernway streets.
Longfellow has working agreements for land now owned by Measurement Inc., said Hank Scherich, president and founder of the educational testing company. The agreements are for property now used as parking lots, as well as some vacant land. Some Duke property is also involved in the deal, he said.
“We have a good bit of property in this area down here, and we’ve signed up with Longfellow as our partner for exclusive development,” Scherich said.
The four buildings owned by Measurement Inc. downtown are not part of the deal, and the company has reserved the right to develop some of its own land. But he also said the company doesn’t have deep enough pockets to build out the property alone.
“It seems like a good option for us to have a partner like Longfellow who can bring in outside capital who can bring outside tenants,” he said. “It (would) take 100 years for Measurement Inc. to develop all this property.”
The concept, generally, is to develop the parking lots and vacant land as commercial space for use by biotech and technology firms, he said. Commercial developments of that type typically have street-level shops and restaurants, he said. There would possibly also be some in-fill residential development. For parking, he said the lots would be replaced by decks.
“Primarily they’re looking to bring biotech firms, biomedical firms into this area,” Scherich said. “Lab space -- that’s their primary target -- is in fairly high demand around the country, and so they believe they’ll be able to bring some other lab space tenants to the area and we hope they will be to do (that),” he added.
He added that the plan is more long-term.
“It’s not a plan that I expect you’ll see anything growing out of the ground in three months or even six months,” Scherich said. “I don’t know how long they’ll take. (Measurement Inc.) decided that Longfellow would be a good partner to bring equity and expertise and we chose to partner up with them.”
Sichol said Longfellow officials are preparing marketing materials and are in “preliminary conversations” with potential companies about leasing in the proposed district. Brock said it could be as many as 10 years away from build-out.
The Innovation District is in the planning stages, but Longfellow is already an investor in downtown Durham and the Triangle.
Duke occupies part of a former Liggett Group building at 710 W. Main St. that Longfellow partnered to buy from the developers of West Village in 2011.
In addition, Duke is planning to move science research labs into another building at 300 N. Duke St. that Longfellow partnered to buy in 2012.
The North Duke Street building, called the Carmichael Building, is undergoing renovations. It previously housed the Durham County Department of Social Services.
In addition, the company owns another 180,000 square feet of space in Durham in the Imperial Center Office Park. The firm acquired the Exchange Place building and three single-story buildings called Royal Center there in February.
Sichol said firm officials see Durham as an opportunity in the area of life sciences and innovation. He added that the area is anchored by three major research universities that attract both federal and private dollars.
“We believe in the future of the life sciences industry,” he said.