Success at Jefferson Lab Spurs Need for More Space

Newport News Wants Building as a Transition for Those Outgrowing the Incubator

With the Applied Research Center nearly leased by high-tech companies and local colleges, the Newport News Industrial Development Authority wants to develop a smaller second building, one that will provide space for light manufacturing, lab work and research and development.

The city agency plans to hire an architectural and engineering team by this fall, and construction could start as early as next spring, said Paul Miller, the city's director of the department of planning and development.

Miller said the building, a two-story structure with 40,000 square feet, could be completed by the third quarter of 2000. Two expanding companies from the ARC building could take about half the proposed space in the new building, Miller said.

For example, Miller said, Dilon Technologies, a start-up that's developing a breast cancer detection system, uses the second floor of the ARC building for office, research and development and some assembly. That company is now licensed by the federal government, however, and Miller said it plans to start manufacturing its breast cancer detection systems from the Newport News location.

Also, The Southeastern Universities Research Association, which runs Jefferson Lab, wants to add office space in the park, Miller said. In addition, two other companies with only small spaces in the park are looking at expansion, Miller said.

Robert Yancey, a member of the city's Industrial Development Authority, said he sees the second building as a "transition building" for companies like Dilon Technologies.

"When we opened the first building, we set aside 25,000 square feet to be used by companies who came to work with Jefferson Lab, incubator companies. As those companies develop, they may need to expand to 5,000 to 10,000 square feet for that next step, a transition from the first step. The [following] step could be a leap to 20,000 to 30,000 square feet," Yancey said.

Miller said the second building in the park will be about one-third the size of the $18.4 million ARC building, which opened last May with about 123,000 square feet of space. The ARC building, which also offers 30,000 square feet of heavy lab space, is the cornerstone of the 200-acre business park known as the Jefferson Center for Research and Technology. The city put it up along Jefferson Avenue to take advantage of the nearby Thomas Jefferson National Accelerator Facility.

Yancey, who is also a vice chairman of the Peninsula Alliance for Economic Development, said the alliance is also working with a number of prospects that could enter the park as a "big user."

"Should one of those prospects materialize, we could have a initial operator going into the park," Yancey said. "It would be a notable name with a large building. When that could happen, l can't say. We are in competition with a number of sites nationally. There's just no way of knowing."

Miller said the park has four owners: The College of William and Mary owns 43 acres; the Newport News School Board owns 39 acres; Jefferson Lab owns 37 acres; and the City of Newport News owns the remainder.

Miller said the master plan for the park includes between 30 and 40 buildings over the next 10 to 15 years.

ARC tenants pay between $16.50 and $21 per square foot, depending on the type of tenant they are and the type of space they use. In comparison, Class A office space on the Peninsula leases at a top price of $17.50 per square foot.

City officials said they plan to keep the flex space in the new building at under $10 per square foot, a price that will cover the building's operating cost and the debt service.

"The development of a second building testifies to the faith that the ARC building would work," Miller said. "We not only filled it up, we re bubbling over."