Research Park Nets Luna Innovations

Wednesday, June 08, 2005

The Blacksburg-based technology firm will share a building with Carilion Biomedical Institute.

By Jeff Sturgeon
981-3251
The Roanoke Times ©

A prominent Blacksburg technology company will move its headquarters to a new $8 million office and laboratory complex in Roanoke under a job-creation partnership with the Carilion Biomedical Institute, the building's other main tenant.

Luna Innovations Inc. said it expects to have 50 employees in the building when the four-story structure is completed next summer on South Jefferson Street. Kent Murphy, the company's chief executive officer, said that by the summer of 2008, the Roanoke payroll could reach 100 employees.

The company has a history of rolling out new products and spinning off subsidiaries, some of which it ha s already sold for a profit.

Although no formal partnership agreement has been signed, Luna and institute officials plan to look for joint projects and collaborate often.

"It's melding of minds and energies," said Luna spokeswoman Karin Clark.

The Luna-biomedical institute alliance shows that a cluster of biomedical companies and interests is taking shape in Roanoke, one observer said.

News of Luna's move was released at a news conference and groundbreaking Tuesday related to the Riverside Centre for Research and Technology, a 110-acre urban redevelopment project begun about five years ago.

The first phase will be known as the Riverside Corporate Centre and consist of 27 acres along South Jefferson Street and Reserve Avenue.

Within the Riverside Corporate Centre, Carilion Health System said it will build the 55,000-square-foot office and laboratory complex in which Luna will occupy 22,000 square feet. The Carilion Biomedical Institute will establish its headquarters there, leaving rented space downtown; and biomedical product companies American Biosystems and Medical Enzymatics LLC will lease space.

Synergy is expected.

The 5 1/2 -year-old institute is focused on economic growth through medical innovation.

Luna is a large technology company that dedicates about a third of its efforts to medical products. After 15 years in business, it posted sales of $17 million during its last complete fiscal year. It employs 130.

Putting the two companies under one roof "is a beautiful thing to see," said Jay Foster, president of SoftSolutions in Roanoke and a member of the executive committee of the Roanoke-based NewVa Corridor Technology Council. Foster said that soon after Luna's plans became public, "I saw an e-mail go around the technology community" praising the move as positive for Western Virginia.

"It's a great example of an evolution of a technology cluster coming together through CBI," Foster said. Rather than viewing Luna's move as a loss for Blacksburg and a gain for Roanoke, Foster said he would characterize it as a company migrating within the region for strategic advantage.

In economic development terms, a cluster is a geographic concentration of interconnected companies, suppliers, service suppliers and associated institutions in a particular field. A 2004 study identified "hospitals, labs and medical services" and pharmaceutical companies as clusters with growth potential in the region.

Luna is well-known for innovation in the New River Valley. "If they're going to move, I'd rather that they move to Roanoke than Richmond or Raleigh," said Ken Anderson, who operates a Blacksburg design firm and is secretary of the New River Valley Economic Development Alliance. "The benefits are in the higher salaries."

Murphy, Luna's chief, grew up in Roanoke and, while he built his company in Blacksburg, where he attended and taught at Virginia Tech, he lives in Troutville. He said he looks forward to closer collaboration with the institute and shared a story that cemented his dedication to job creation.

Murphy described driving his sons, 13 and 16, past Roanoke Valley companies where he used to dream of working. He found the facilities either closed or much smaller than he remembered as a young man. At one, the former Ingersoll-Rand rock drill plant in the Hollins area, "there's literally grass growing up in the parking lot," Murphy said.

Dr. Ed Murphy, Carilion's president and chief executive officer, called the pending start of construction and related news a milestone in transforming the region's economy to one grounded in high-tech industry. He said he dreams of the day the park is full with businesses, but knows that will take years.

"Today is only one step in what undoubtedly will be a very long journey," Murphy said.

Murphy spoke through a public address system to be heard above the industrial din of Roanoke City Mills, a flour mill directly across Jefferson Street from where the new structures are planned.

The mill is scheduled to be demolished more than two years from now to make room for a future phase of the biomedical park.

Initially, the mill's presence may be a minor, short-term issue in the leasing of remaining available space in the new office-lab building, said Ed Hall of Hall Associates, whose firm will provide marketing and property management.

"It will have a minor impact in the beginning," but prospective tenants will be assured that the mill will be removed, Hall said.

Carilion also plans to break ground this fall on a 50,000-square-foot building for its expanding laboratory services business. The estimated cost of each structure is $8 million. Both will be designed to be expandable if needed.

Carilion, which has become deeply involved in economic development projects in recent years, earlier bought most of the land within the Riverside Corporate Centre from the Roanoke Redevelopment and Housing Authority.

The authority had bought the land from other businesses and demolished various structures at city taxpayer expense.

The Riverside Corporate Centre will support five more office buildings, three parking decks and a hotel, officials said. Who will develop those, and when, is unknown.

The architectural theme for the Riverside Corporate Centre calls for brick and precast concrete exteriors with limestone accents, glass and steel.

To avoid the effects of flooding in the historically flood-prone Reserve Avenue area, designers will elevate the first floor of each building several feet above grade and place only parking on the first floor. The first occupied floors will be higher than the 100-year flood-plain elevation. Equipment such as electrical transformers and air handlers will be installed at that height, too, or on the roof, a press release said.