Photo by Alfred Wekelo Bob Skunda says lab space is filling up fast at Virginia Biotechnology Research Park in downtown Richmond.

Capital Improvements
More than $1 billion worth of public projects are under construction in the Richmond region, and more are on the way.

By LAURA E. BLAND

When Bob Skunda took over as president of the Virginia Bio-Technology Research Park in downtown Richmond, the idea that an internationally renowned researcher would relocate from Yale to Virginia Commonwealth University's medical school would have seemed far-fetched.

Yet Skunda modestly acknowledges that Dr. Ronald C. Merrell's decision to move from Yale to VCU was based in part on the existence of the biotechnology park, a major catalyst in the resurgence of downtown Richmond. Merrell moved to Richmond in May to become chairman of surgery at the medical school, which is adjacent to the biotechnology park. Merrell is a world leader in telemedicine and research into how technology can improve health care.

Leveraging the biotechnology park for economic development purposes is all part of the plan for Skunda, 53, an architect by trade, who served as former Gov. George Allen's secretary of commerce from 1994 to 1998. But the biotechnology park has had its share of skeptics.

Most of them, however, have been quieted by the steady progress of the park: Five buildings are complete, and they are approaching 100 percent occupancy. They offer state-of-the-art office and laboratory space to 34 tenants, including the Virginia Division of Forensic Science. But Merrell's arrival gave the project a final seal of approval.

"The park and the university, the medical sciences campus, are mutually self-reinforcing," Skunda says. "Even though the university has been recognized for some time as a strong research university, competition and changes in the marketplace occur in research and higher education the same way they do in business. When you see the Harvards and other places, because of endowments and other resources, putting $30 million into a new bioinformatics program, it goes to show you that a lot of people are recognizing the potential of this industry.

As with most any ambitious public project in the Greater Richmond area, the biotechnology park owes its existence of regional cooperation. Capital improvements under way around Richmond include the $192 million overhaul of Richmond International Airport, the $160 million expansion of the Richmond Convention Center and the $324 million effort to build the Pocahontas Parkway. None of these projects would have been possible if business, civic and government leaders hadn't been willing to set aside their differences long enough to pursue progress.

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The Virginia Bio-Technology Research Park traces its roots back to the fall of 1984. That was the year when city leaders adopted a new downtown plan that said land near VCU's medical school should be used, through a private-public partnership, to create a research complex for biomedical companies.

But it wasn't until six years later, when Eugene Trani took over as VCU's president, that the idea for such a park began to flourish. Trani set up a task force and began convincing people to ante up. Richmond Renaissance chipped in $100,000 to cover predevelopment expenses, and the park attracted $5 million from a higher education bond referendum, which paid for construction of the park's "incubator" facility. Then the Retail Merchants Association of Richmond contributed $100,000 toward the park's start-up operating expenses.

Momentum gathered as Henrico County and Chesterfield County each chipped in $200,000, and Hanover County followed with $75,000. The General Assembly established an authority for the research park, which sold bonds and entered into a long-term lease agreement with the state for the new $30 million forensics center. Trani, whom Skunda describes as the biotechnology park's most steadfast supporter, spearheaded the construction of the park's second building, BioTech One.

"It was a very unusual situation that, to my knowledge, had never been done before in Virginia, where a higher education institution, with the approval of the governor and the General Assembly, essentially built a spec building," Skunda marvels. "It was a true build-it-and-they-will-come philosophy."

There's still a long way to go until the park reaches its goal of 1.5 million square feet of space, a half a billion dollars of investment and 3,000 new research jobs. And key questions remain unanswered. This winter, for example, the park's leaders will ask Gov. Jim Gilmore for $10 million over the next two years for land acquisition.

Although the city has been a "friendly owner," Skunda says, other landowners in the area may demand top dollar for their property. And with the nearby expansion of the convention center, land values in the area are going up fast. "We estimated last year when we went before the General Assembly that it would take $20 million to acquire all of the land within the 34 acres, but that's a floating figure," he admits. The park received a $1 million appropriation in the commonwealth's 1999-2000 budget to help it acquire 10 of those acres from private owners.

Initially the city provided land for the park at no cost, but "the city is pressed for revenues," Skunda notes. On the other hand, he says, "The city is a partner, and the city stands to get the benefit of improved property, real estate taxes, new businesses, etc. So clearly they should take a long view and I think they are. The mayor and city manager both sit on the authority's board, and they see the impact that this is going to have — 3,000 high-technology jobs right in the middle of downtown is nothing to be sneezed at. ...That's the equivalent of one of these semiconductor fab plants in the suburbs."

Nevertheless, Skunda is optimistic that leaders will see the park as he sees it: as a "distributed asset" with the potential to benefit, not only downtown, but the suburbs once research and development companies start looking around for manufacturing facilities and office space.

"I think the park could be pointed to as one of the premier examples of early partnership and cooperation on the part of the region," Skunda says. "A lot of people were skeptical that it was going to happen." But now, "it's not a question of 'if' there's going to be a research park, because there is a research park here. Now the question is, are we going to achieve our full ... dream?"

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If there's a task tougher than developing a biotechnology park from scratch in downtown Richmond, it's building crosstown expressway that isn't funded by the state.

But it's happening in Richmond, thanks to the Public-Private Transportation Act of 1995. The act provides a much quicker alternative to the quagmire of traditional highway financing. The first project to proceed under the new law is the Pocahontas Parkway, an 8-mile link under construction from Chesterfield County to Richmond International Airport. The expressway includes a bridge over the James River and an $324 million price tag.

The state contributed only $27 million to project. Then FDMK, a private road-building partnership, and the state established a non-profit organization that issued bonds to private investors to finance the rest of the project. The debt will be repaid with tolls of $1.50. This unprecedented financing has greatly accelerated construction of the parkway, which was probably about 10 to 15 years away from reality. Construction started last October, and the highway is scheduled for completion in early 2002, says Tamara Neale, a spokeswoman for the Virginia Department of Transportation.

"This is going to increase economic development opportunities in the Richmond area and provide another access across the James River," Neale emphasizes. "It will help Richmond, Henrico and Chesterfield because of this direct link to the airport."

In stark contrast to the Pocahontas Parkway is the 17-mile extension of Route 288 across the James River connecting Chesterfield County and Powhatan County to Interstate 64 west of Richmond. First proposed in the 1960s, this $200 million highway is finally under way.

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By the time the Pocahontas Parkway is complete, Richmond International Airport should have happier passengers. Business travelers and tourists alike have long complained about the exorbitant cost of flying out of the state capital, and their gripes are not just anecdotal: A 1998 U.S. Department of Transportation study branded Richmond as one of the nation's most expensive markets for flying.

A more recent report by the Greater Richmond Chamber of Commerce found that passengers flying out of Richmond are paying between 17 percent and 30 percent more than passengers in comparable cities for similar journeys. The report said these high air fares are driving nearly 1,100 passengers a day to other airports in Virginia and Maryland. This equates to 23 percent of the total domestic air traffic from the Richmond area.

And it's not just domestic travelers who are willing to add hours of road time to their journey: The chamber of commerce report says an additional 77 passengers leave the Richmond area each day to catch international flights. This boosts the number of fleeing passengers to 1,177, or 29 percent of the airport's daily volume. These runaways cost the airport an estimated $6.6 million per year. But the real figure is much higher when lost time and other factors are tallied up, perhaps as much as $30 million.

In spite of the air fare flight to other airports, Richmond International Airport has been growing steadily. "We're operating our airfield at a level ... at which we need to be planning for capacity enhancements," explains Todd Sheller, executive administrator at the Capital Region Airport Commission.

Over the past seven years, under former Executive Director David Blackshear, freight traffic and passenger levels were up 50 percent. Blackshear argued that the best way to attract more competition and cheaper flights was to attract more frequent flyers, but to do that, facilities had to get better. So Blackshear oversaw $120 million in improvements, including two new covered parking garages.

The airport is now being run by acting Executive Director Robert C. Brammer. He is charged with overseeing a second phase of improvements worth $192 million. These include $80 million to create a two-level terminal-and-road system with the remainder going to extend a runway, expand a runway, buy land to build a parallel runway, expand cargo ramps and build new passenger gates.

It's an ambitious bid to maintain momentum, but "the commission has been working together very well," Sheller says. "We have three committees: planning and construction, finance and audit, and service. ... Projects come before the full commission for a vote, and by that time everyone's on board."

Better yet, Brammer and the other 14 members of the multijurisdictional airport commission are not alone in their efforts. A new business group, Friends of Richmond International Airport, came together in September to help the airport attract a low-cost carrier such as Southwest Airlines. This private-sector assistance bodes well for the future of the airport, but no one is making any guarantees about lower air fares. The hope, however, is that a better airport will serve more passengers, and more passengers will attract more airlines, and more competition will lead to lower prices.

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Most of the regional projects in the Greater Richmond area are related to transportation. But one major exception is the expansion of the Richmond Convention Center in the heart of the city.

In 1989, regional "stakeholders" in the center — the city of Richmond and the counties of Chesterfield, Hanover and Henrico — realized that the area was losing convention business to other midsize cities because the facility was too small.

"We were not competitive with anybody," complains Jack Berry, president of the Metro Richmond Convention and Visitors Bureau. But an expansion feasibility study was shelved until 1995, when area leaders, including Lt. Gov. John Hager, then chairman of the bureau's board, resurrected the idea. The board asked the General Assembly for permission to increase local lodging taxes in the counties to help pay for the $160 million addition. The state would put up $10 million, and the city would pay for nearly half of the facility from its lodging taxes.

Richmond got the nod, and site preparation work has already begun. But it will take three years to expand the structure to 700,000 gross square feet.

"This is very significant, not just as a regional project, but as a state project," Berry says. "We're going to have the best-looking convention center in the country."

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With more than $1 billion worth of projects under construction, the Richmond region might be tempted to take a break. But the public-private partnership machine remains in high gear, particularly when it comes to projects that facilitate transportation and economic development.

Extensive private development along Richmond's downtown riverfront is expected to follow the recent completion of the city's Canal Walk. This restoration and beautification project was made possible, ironically, by a federal directive to fix Richmond's sewer overflow problem.

The federal government also is helping to bring Amtrak service back to Main Street Station, a historic train depot in Richmond's Shockoe Bottom district.

Like many of Richmond's recent accomplishments, these projects likely will require regional cooperation and public-private partnerships, but a strong precedent for both has been set.