Innovista: A Public-Private Partnership That’s All Public
It would appear the “private” aspect of Innovista, originally touted as a “public-private partnership,” is all but dead.
To date, USC’s research campus, which has cost taxpayers more than $100 million, has just a single tenant, the University of South Carolina’s Arnold School of Public Health.
In late July, USC announced that the Moore School of Business would be relocated to Innovista, possibly by 2013. And just this week, USC revealed it would be relocating the USC Columbia Technology Incubator to the research campus.
The latest news came in response to a report on Innovista by WACH in which the Policy Council questioned what South Carolina taxpayers were getting for their investment.
To date, there’s not a single private sector job inside Innovista, but USC officials tried to deflect criticism regarding non-existent private sector investment by issuing a statement that the Technology Incubator would relocate to the research campus.
That effort shows a feeble grasp of what constitutes economic development:
- The Incubator itself employs just two full-time people;
- Moving businesses already inside the Incubator from their current location to a new site inside Innovista does not represent any net economic development gain;
- The project also does not qualify as private economic development because the Incubator has received $572,000 in state tax dollars since its inception, along with $75,000 from the city of Columbia.
Innovista was intended to be a center for research on hydrogen and other technologies and a magnet for private companies building spin-off products. But private-business interest has been disappointing to say the least.
In March 2007, Duck Creek Technologies of Bolivar, Mo., announced it planned to lease 22,000 square feet of space in Innovista. Duck Creek, a provider of software for insurance carriers and headed in part by Columbia businessman Larry Wilson, said it would bring 200 jobs with salaries starting at $85,000. But the move never happened.
Another private company, Collexis Holdings Inc., is among five private companies listed on Innovista’s website as tenants. Like the other four, Collexis isn’t actually in Innovista and may never make the move.
Collexis, whose board includes former USC president Andrew Sorensen, lost more than $5 million through the first nine months of its current fiscal year and more than $10 million in FY 07-2008. The company’s stock trades for around 5 cents a share.
While a large portion of the money that will go to the new business school is from private donations, USC’s decision to rely on state-directed development to fill up Innovista is in direct contrast to what was being said three years ago, when plans for the research campus were still in the formative stages.
“Public-private partnerships are the only way to do projects of this scope,” an official with Sasaki Associates of Boston, which prepared the master plan for Innovista, told The State newspaper in April 2006.
“The infrastructure investment is expected to generate $875 million in private development over 15 years, create thousands of jobs and generate millions in tax revenue,” the newspaper added.
But a different story is being told today. Three buildings have been constructed: One is occupied by the Arnold School of Public Health and the second is approximately 20 percent occupied, also by university employees. The remaining 80 percent of the second building and all of the third building sit empty, uncompleted because of a lack of funding.
The two Innovista buildings planned for private businesses haven’t even been built. Those structures were to be privately financed, but funding hasn’t materialized.
Of course, the high cost of space may also be a disincentive to landing private sector clients. Space in one of the buildings proposed for private companies, for example, will go for $23 a square foot, according to Innovista Director John Parks. That would make it one of the highest-priced locales in the Midlands.
Since Innovista’s inception, the two developers tapped to build the private facilities — North Carolina’s Craig Davis and Michigan’s Kale Roscoe — have been dismissed.
University officials now say they might draw down money from USC foundations to assist a private developer in securing loans to build the private buildings.
No matter what the future of Innovista, it’s apparent at this point that the university has all but given up on the idea of a public-private partnership and is instead doing whatever it can to save face by filling the research campus’s empty buildings with warm bodies.
Nothing in the foregoing should be construed as an attempt to aid or hinder passage of any legislation. Copyright 2009. South Carolina Policy Council Education Foundation, 1323 Pendleton Street, Columbia, South Carolina 29201.