Wednesday, June 12, 2024

N.C. Research Campus in Kannapolis presses on with hefty UNC System aid

By Shannon Cuthrell

A City Can Dream. That’s the catchline Kannapolis emblazoned around its new baseball stadium and other downtown construction sites, reflecting one of the most ambitious municipal turnarounds in North Carolina’s history. Dreams matter, to be sure, but it’s also taken hundreds of millions of dollars and nearly a generation of strategizing to position North Carolina’s most-famous textile town for a potential rebirth as a research center. It’s happening, just much more slowly than promoters expected.

It’s been 16 years since the world came crashing down on Kannapolis. Cannon Mills’ successor Pillowtex filed for bankruptcy protection on July 30, 2003, and fired 6,450 employees in Kannapolis, nestled 30 miles northeast of Charlotte and split between Cabarrus and Rowan counties.

Kannapolis 1983
[/media-credit] A 1983 photo shows downtown Kannapolis when Cannon Mills ranked among the world’s most powerful textile companies and manufacturing dominated the N.C. economy.

Unlike most Southern towns ravaged by textiles’ collapse, the Towel City had a dealmaking billionaire determined to create a legacy enterprise: Dole Food mogul David Murdock entered the state to buy Cannon Mills in 1982, when the company employed about 30,000 people in Kannapolis. Its downtown area, adjacent to the mill complex, included homes, restaurants, shops and civic venues. Quickly sizing up textiles as a fading business, the California-based magnate sold the company three years later to Eden-based Fieldcrest Mills, while holding on to Cannon Mills’ real estate.

With Kannapolis’ downtown factories shuttered after decades of textile-industry malaise, Murdock envisioned a vibrant epicenter for nutrition research and human-health discoveries. He pitched the idea to local and state officials, as well as research leaders at the UNC System and Duke University.

Impressed with his pledge to invest massive amounts of his own money — and pressed to do something, anything, to boost an economically depressed region — local and state business leaders and elected officials quickly warmed up to Murdock’s vision.

Kannapolis Mayor Darrell Hinnant, then a city councilman, remembers asking, “‘What are we going to do with this white elephant sitting in the middle of the town?’ When we got some initial appraisals for the cost of tearing it down or reusing portions of it, the numbers were astronomical.”

The challenge didn’t faze Murdock, now 96 years old and living in Los Angeles, who provided a lifeboat for a dying town. His organization says he has invested or donated more than $500 million over the years to redevelop the land where the mill once stood, as well as much of the surrounding downtown area. On the grid of land that once housed Cannon Mills and Pillowtex arose the North Carolina Research Campus, a public-private venture that includes specialized research programs from eight UNC System universities.

The system signed initial building leases with Murdock’s Castle & Cooke development firm in mid-2008, right before the real estate market crash. “Our timing for the startup of the campus could not have been worse,” recalls Lynne Safrit, former president of Castle & Cooke North Carolina who was often called Murdock’s right hand. “Little did we know when we opened the N.C. Research Campus’ institutes and the David H. Murdock Core Lab Building that a few short months later, the national economy would come to a crushing halt.”

The 2007-09 recession crimped state spending on the UNC System, which Safrit says slowed university plans to add researchers in Kannapolis. Industry partners also scaled back amid the worst economic downturn in generations.

Remarkably, the state’s commitment to UNC and Murdock’s hefty checkbook have kept the research campus progressing, albeit at a slower pace than the initial expectations for a $1.5 billion, 1 million-square-foot development. The N.C. General Assembly has allocated nearly $270 million for the campus since 2006 with a continued annual pledge of $29 million since 2014-15. About $21 million is appropriated directly by lawmakers to UNC institutions with programs there. The remaining $8 million comes from various pockets of money within the UNC System.

Since its inception, campus stakeholders have hoped to attract global companies to pick Kannapolis over nearby Charlotte and Concord for major research projects. While never likely to match the world-famous Research Triangle Park in Durham and Wake counties, the Cabarrus campus was also envisioned as a launchpad for commercializing projects that could morph into self-sustaining startups.

Those hopes haven’t panned out with any blockbuster biotech and nutrition industry success stories. Instead, it’s shown slow, incremental progression, reflecting an unconventional approach.

The campus’ structure and organization is extremely decentralized. No central authority determines priorities. Recurring funding for the university programs comes from government support, grants and federal research solicitations. Though Castle & Cooke leases space and provides general overhead support, it doesn’t organize operations or funding. The city of Kannapolis is a key stakeholder but has limited management oversight.

Authority wasn’t always so diffused. “When David Murdock was younger and actively involved over here, he made every decision about everything involved around the campus,” Hinnant says. “But as he aged, he started visiting less and less. It’s been two years since I last saw him. His absence has created a sort of vacuum for combined leadership, and we’ve said over and over that there needs to be a centralized control factor.”

A committee of Castle & Cooke, university representatives and local government leaders now meet regularly to make decisions on campus projects, but no one has clear oversight authority.

“A critical piece to the [campus’ growth] is that we need to define a new structure of how it’s managed and marketed and develop a game plan from within to get all the players together on the same page,” says Mike Legg, Kannapolis’ city manager since 2004. His office plans to support whatever new structure is created.

Murdock’s nonprofit contract-research organization, the David H. Murdock Research Institute, broke ground in 2006, creating a 311,000-square-foot building that would fit into any Ivy League campus. The regal look and feel of the core laboratory facility are reflective of Murdock’s vision for nutrition research and increased longevity.

Just past the towering columns that line the exterior, the atrium is complete with marble walls and floors, gold-colored elevators, and a hand-painted ceiling mural of an eagle surrounded by an arrangement of fruits and vegetables.

In the basement sit three nuclear magnetic resonance spectrometers, sophisticated machines used to study metabolic changes in the brain, muscles, body tissue and other organs. The building houses conference rooms and event space, plus laboratories ranging in size from 1,500 to 3,000 square feet for resident companies and programs.

NC Research Campus
[/media-credit] More than $750 million of investment from the state of North Carolina and California investor David Murdock since 2006 has created a research campus that backers say has potential for sprouting biotech and food-science companies.

Adjacent to the core lab are two buildings leased to the UNC System: the 125,000-square-foot UNC Chapel Hill Nutrition Research Institute and 100,000-square-foot N.C. State University’s Plants for Human Health Institute.

Across the courtyard from the core lab is a 100,000-square-foot Georgian-style building that serves as Kannapolis’ city hall and police headquarters. Murdock donated 6.6 acres for the building and parking area in 2013.

The medical-office plaza, situated on the edge of campus, is leased by Atrium Health and affiliated family-practice and internal-medicine clinics and a Duke University research group. Rowan-Cabarrus Community College’s Biotechnology Training Center, which includes a 55,000-square-foot center that opened in December, is located on 3 acres donated by Murdock.

While the public-private investments have attracted about 255 UNC-affiliated employees to the campus, the uninspired surroundings have stunted its growth, officials say. When Mark Spitzer moved to North Carolina to become Castle & Cooke N.C.’s vice president of operations in 2015, he got an earful from the UNC research executives.

“One of the things I heard loudly was, ‘We’re doing good science here, but we’re having difficulty recruiting folks because Kannapolis is a ghost town,’” says Spitzer, a former human resources director for Murdock’s company based in Westlake Village, Calif. “There was truth in that back then, but there were also a lot of things that were being done by the city, such as a nice YMCA, a great library, and ‘mommy and me’ classes at the Cabarrus Health Alliance. But the downtown area literally was a ghost town — there were three or four businesses, but that was it.”

Kannapolis Ballpark
[/media-credit] A rendering of downtown Kannapolis and its $52 million stadium slated to open in April. Michigan-based Barton Malow is the general contractor.

Now, the most evident change in downtown Kannapolis has nothing to do with genetics or plant science. Rather, it’s a $52 million, 3,200-seat ballpark that will be home to the Kannapolis Cannon Ballers baseball team. It is expected to open in time for the first game slated for April 16. It’s the centerpiece of the city’s renewal hopes, answering a demand for some glitter that includes new apartments, shops and a downtown streetscape with lots of benches, chairs and art.

The city knew it had to act. “If we didn’t do what we’re doing, the campus wouldn’t grow. It would be like a dead appendage that needed to be fixed,” Legg says. “Putting the money into downtown to make it a more livable, walkable, workable place for people to visit and spend money and to enjoy was critical to the future growth of the campus. It’s another selling point of why a company or nonprofit would want to invest here on the campus.”

The plan started in September 2015 when the city spent $8.75 million to buy 46 acres of downtown properties, mostly owned by Murdock’s companies. That kicked off a multiyear endeavor to reposition downtown as an entertainment center for locals and hopefully attract outsiders’ attention. The overall effort has pushed Kannapolis’ long-term debt to $241 million as of mid-2019, versus $74 million in 2011. Agencies Moody’s and Standard & Poor’s retain investment-grade ratings on its bonds.

Perhaps the city’s largest success so far is a $61 million project launched by Fort Lauderdale, Fla.-based Lansing Melbourne Group that includes a 125-room hotel, a 286-unit apartment complex and 54,000 square feet of new and rehabbed retail space. The city is investing $13.4 million for an adjacent parking deck.

More and better housing options are key in recruiting staff to fill positions at the research campus, says Suzanne Dane, director of community outreach for the Nutrition Research Institute, which has about 90 employees at the campus including students. The group has bought six renovated mill houses for student housing, aided by the Kannapolis Rotary Club and the Cannon Foundation, which is funded by heirs of the textile company’s original family.

“We needed housing [that was] safe, within walking distance from the campus, met state standards for student housing” and accommodated their academic schedules, Dane says. The group of houses is on a single street, creating a “sense of campus and community that has been missing from this location.”

Spitzer praises the city council’s “courage to take a broad and bold step into the future. … With the town’s revitalization going on, the questions and concerns I heard about Kannapolis becoming a vibrant place are quickly going away, and the efforts to recruit new faculty members and scientists have improved significantly.”

Spitzer and other research-campus developers are now focused on attracting the Charlotte-based U.S. Performance Center, which helps train athletes as young as 4 to prepare for world-class competition. The group is considering a campus site that may cover as much as 70 acres. Among its backers is department store heir Ike Belk, whose grandfather, Irwin Belk, was a 40-year member of the U.S. Olympic Committee. In October, Kannapolis approved $1.5 million in incentives for the project, which is considering other locations.

While Spitzer emphasizes that Castle & Cooke plans to be a long-term partner with Kannapolis, local officials privately concur that knowing what happens post-David Murdock is an unanswerable question. A brash, unpredictable style has marked the billionaire’s career, and nothing has changed as he approaches centenarian status. Then again, Murdock told The New York Times in 2011 that he planned to live to 125.

In any case, no one familiar with Kannapolis’ history could have dreamed in 2003 that it would evolve from a classic collapse to a potentially high-tech future.

Kannapolis “had its back against the wall because everyone had moved out,” says Scott Padgett, who was mayor of neighboring Concord for 16 years before stepping down in 2017. “But they decided to roll the dice big, and that’s what they had to do. I think they are positioned to be very successful, and they are making exactly the right moves.”

The next two to three years are critical for attracting outside interests to Kannapolis and filling the vacant spots left both in the commercial district and on the campus, Hinnant says.

“Our community will pivot in a way we’ve never pivoted before… [with] a lot of new people coming to town [and] bringing new ideas.”

As has been the case since the center’s inception, it’s a chicken-and-egg situation. “It’s clearly going to make downtown much more successful more rapidly if the campus finds a new gear and starts to grow more rapidly than it has in the past,” City Manager Legg says.

“We didn’t build our downtown plans on whether the campus grows or not, but there’s no way to ignore that having 600, 800 or 2,000 employees added to the mix will help make it even more successful than we thought.”

Flickers of life

[/media-credit] N.C. State University opened a Kannapolis campus lab last year to spark food-related innovation.

The N.C. Research Campus’ path to commercial independence and sustainability has been slow, but there are sufficient signs of progress — and continued state support — to spur enthusiasm.

Officials are particularly bullish on prospects for the North Carolina Food Innovation Lab that opened late last year. It’s a partnership among the campus, N.C. State University and the N.C. Department of Agriculture and Consumer Services, and it’s aimed at promoting the state’s robust, politically popular ag industry.

Constructing and equipping the 16,000-square-foot, $10.9 million lab was paid for mainly by the state and Rocky Mount-based Golden LEAF Foundation. It is hailed as one of a handful of university-run centers of its kind nationally with similar scope and certification from the U.S. Food and Drug Administration. The goal is to attract promising entrepreneurs and innovative companies that want to create and improve foods based on production from North Carolina’s $90 billion annual agricultural economy.

The project aligns closely with state officials’ desire for more in-state processing sites and increasing consumer demand for healthier, more sustainable food, says lab director Bill Aimutis. He worked for Minnetonka, Minn.-based ag giant Cargill for 16 years before taking the N.C. State post.

The lab could have been placed nearer N.C. State’s well-regarded School of Agriculture and Life Sciences in Raleigh. But putting it in Kannapolis emphasizes a commitment to enhancing the research campus and developing stronger ties with industry partners and adjacent UNC institutes, N.C. State Provost Warwick Arden said at a formal opening in November.

At another N.C. State affiliate, the Plants for Human Health Institute, Director Mary Ann Lila has recruited researchers globally, but particularly in Italy and the United Kingdom.

“The NCRC is a campus where all of the faculty are concerned in some way with nutrition and human health, but each of the university partners has a special expertise and emphasis,” she says. “We can capitalize on these strengths in collaborative projects, an advantage that would not be so easy on main campus.”

Among the most successful campus affiliates is UNC Chapel Hill’s Nutrition Research Institute. Institute Director Steven Zeisel and colleagues have sparked one of the research campus’s most promising ventures: SNP Therapeutics, a genetics testing and treatment startup with intellectual property licensed from the university. The business received a $1 million investment from Coddle Creek Capital, a private equity company based on the campus, and is working toward attracting millions more, says CEO Jon Kleu, who is also Coddle Creek’s managing director.

SNP is developing tests that can identify genetic roadblocks in metabolism with potential products to treat liver and muscle disease and infertility. “There’s so much research going on at the campus that has not been commercialized,” Kleu says. “We’re the first spinoff on campus, which is a big deal. I’m hoping we’re opening the door for many other opportunities.”

Another success is Appalachian State University’s Human Performance Laboratory, which has secured more than $5.3 million in funding over the last decade from more than 30 agencies and sources, including the U.S. Department of Agriculture, Under Armour and the McCormick Science Institute.
“The North Carolina Research Campus is a winning concept because all the universities are working together on one thing, using high-level measuring tools to figure it all out,” says David Nieman, director of the Appalachian State lab.

“This close access helps us to better gauge nutritional intervention in human health. In Boone, none of that is happening because it takes high-level experts with high-level equipment to do.”

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