AMES – How quickly will the next piece of the Iowa State University Research Park fall into place? A lot depends on how much help it gets from the Grow Iowa Values Fund.

The university is counting on a $10 million investment from the Values Fund to help fund a key research and development facility designed to draw more biotechnology companies to the research park.

However, the fund has so far received just one-tenth of the total $503 million expected, and the $400 million in tax revenues that were forecast during the fund’s seven-year life are unlikely to be realized. Consequently, Values Fund board members are questioning whether it can afford to make a $25 million investment at the state’s three Regents universities.

Iowa State plans to spend $19.8 million for the biologics facility and added business incubator space at the research park.

Now planned as a two-story, 18,000-square-foot building, the biologics center will provide a facility for extracting proteins from plants, a process with many potential applications in the pharmaceutical and industrial fields. That makes it a big drawing card for attracting more biotechnology start-ups to the park.

FUEL FOR GROWTH

“There is an issue of timeliness here,” said James Bloedel, ISU’s vice provost for research administration. “This is an industry waiting for a state or region to make a commitment. Industry these days is very mobile; if we don’t do this in a timely fashion, we will lose the edge we would have in doing this in the short term.”

Leasing space to businesses in the biologics facility would also provide additional revenue to fuel further expansion of business incubator space at the research park, Bloedel said.

Some sources of funds are already available. A year and a half ago, the state appropriated $3.2 million for the biologics project. Additionally, university officials are waiting for final approval of $2.6 million in U.S. Small Business Administration funds.   Additionally, Iowa State may need to borrow some money through conventional financing sources, Bloedel said. “If we launch construction of a building, we may need to pay bills faster than Iowa Values Fund money comes in,” he said.

At its meeting last week, Values Fund board members were informed that the $25 million designated for the universities is not set in stone and could be adjusted downward proportionally if the expected funding isn’t received through sales tax revenues. That Department of Management opinion ran counter to the belief that the fund was obligated to the full amount.

Funding the Regents requests fully would result in a greater return on investment for the Values Fund than other uses, said state Sen. Bill Dotzler, a non-voting member of the board.   “I think it’s important to go back to the intent of the Legislature,” he told the board. “We all agreed the Regents were important.”

Henry Royer, who chairs the Values Fund’s due diligence committee, said reducing the funding would put the universities in a bind to get their planned facilities built.

EXPANSION PLANS

Economic development has always been the central focus of the ISU Research Park, which 15 years ago was formed as a joint initiative of ISU, the University of Iowa and the city of Ames.

“It was seen as opportunity to capture more of that economic good through start-up companies, and it was likely that the companies would value the proximity to the university,” said Steve Carter, president of Iowa State University Research Park Corp. The private, not-for-profit corporation owns the park and manages the leased space.

Since 1988, the park has been an incubator to 132 technology businesses, many of which have moved on to their own facilities, creating openings for new companies to come in.

Also located in the research park is the ISU Pappajohn Center for Entrepreneurship, which has assisted 245 nascent businesses since it opened in 1997, creating more than 800 new jobs. Research park tenants receive access to the center’s services as part of their lease arrangement.

The research park completed construction of its fourth building last year, giving it more than 300,000 square feet of laboratory and office space. About 30,000 square feet of space remains available in the newest building.

Also located in the park are three buildings that have been constructed by companies that expanded out of the incubator.

With an additional 65 acres of empty land to build on and an option to purchase another 100 acres, there’s plenty of room for growth.

“We believe we can expand the number of companies coming out of Iowa State University,” Carter said. “There are a good base of companies here that are positioned for growth.”