Mixed bag for tech parks: Facing heavy competition for tenants, some developments thrive while others struggle

The stretch of land along Interstate 74 near Shelbyville lies mostly vacant, save for a couple of buildings and a network of roads and other infrastructure snaking through the property.

This barren look is not what Intelliplex Park organizers had in mind more than two years ago, when their project became one of the first to receive the state’s certified technology park designation.

“This is a lot harder than I thought it was going to be,” said Tony Lennen, CEO of Shelbyville’s Major Hospital, which invested more than $18 million in the park and an oncology center it built there. “I think we are somewhat a poster child for the old Indiana and what we want to see the new Indiana become.”

A few hours northwest of Intelliplex, another certified technology park teems with 139 companies employing more than 2,500 people. Purdue Research Park in West Lafayette also features more than 195,000 square feet of incubation space for new businesses.

That park has numerous built-in advantages. It started incubating companies in 1993, nine years before the state launched the certified technology park program. And it’s near a major research university.

Still, the contrast underscores the fact that the state’s 17 certified technology parks are showing a big discrepancy in performance. It’s a gap state leaders are determined to narrow, said Indiana Economic Devel- opment Corp. Vice President Nathan Feltman.

Last month, they helped sponsor the first of what they hope will be a series of twicea-year workshops where tech park leaders meet and swap ideas and best practices.

“The last thing we want to do is just give up on parks that are out there,” he said. “We want to do the opposite, and we are.”

The state launched the certified technology park program as a way to encourage hightech development. Parks are eligible for state grants and are able to keep up to $5 million in payroll taxes paid by park tenants, which they can funnel into additional development.

In general, parks close to research universities and major metro areas are faring best. Some in outlying areas are struggling for tenants, especially those with a strong technology bent.

Shelbyville leaders aren’t shy about admitting that’s the case with Intelliplex. They built roads, sewer and water lines on 140 acres of land an exit southeast of the Indiana Downs horse track. They also landscaped and installed drainage and a fiberoptic network.

Last year, Major Hospital opened its Benesse Oncology Center, and Indiana Wesleyan University built a branch at Intelliplex.

Columbus, Ind.-based Makuta Technics Inc. recently decided to move there next year. The company, which makes micromolding parts for the medical and automotive fields, will bring 17 jobs with the possibility of adding 10 more, Shelbyville Mayor Scott Furgeson said.

But business otherwise has been slow. When planning began, community leaders thought infrastructure and constructionready sites would be enough to spur development, Furgeson said. “That’s just not happened,” he said. He thinks it might take as long as 10 years to fill the park. Lennen said he thought Indiana had more life sciences job opportunities than it has. “I think we as a state may have underestimated the incredible competition out there nationwide for these jobs,” he said.

Indeed, there are more than 130 university-related technology parks employing 250,000 people in the United States, according to the Reston, Va.-based Association of University Research Parks.

Maintaining a strong relationship with a research university that churns out new ideas is a key factor behind a technology park’s success, said Bill Drohan, the association’s executive director.

Feltman agrees. He wants to bolster university sponsorship for parks that aren’t near major campuses. He’d like to provide incentives to encourage them to spread their research-and-development wealth.

Other successful locations, such as Intech Park on the northwest side of Indianapolis, sit close to major population bases and also boast nearby support businesses, such as banks, hotels and day care centers. Intech’s seven office buildings are about 95-percent leased.

“It’s not just having an office building. You’ve got to have the amenities for these people that these companies are competing to hire,” said Tag Birge, vice president and market officer for park developer Lauth Property Group in Indiana.

Longevity helps, too. Purdue Research Park, for instance, “got in the ball game years ago, not as a result of the certified technology park program,” Feltman said.

State leaders also see other keys for success, such as housing business incubators in the parks. Low-cost office space and support services draw entrepreneurs with innovative ideas.

“It gives them an opportunity to get started without draining their resources,” Feltman said.

The parks also need strong anchor tenants that can spin off additional businesses or draw supporting companies into the park, Feltman and Drohan said.

Once a company opens, the park must keep support flowing by providing assistance with legal services, strategic planning or accounting.

“Those are things highly valued but not often represented at our parks,” Feltman said. He noted that while many communities court business, “once they’re there, they tend to get forgotten a little bit.

“Then all of a sudden, the new highgrowth company you lured to your community is on oxygen,” he added.

Patience will be another key, Major Hospital’s Lennen said. He noted that it took Intech Park a couple of years to build development momentum.

“How could you have a better site than that?” he said. “I think it will be very interesting to see how this plays out in Indiana.”

In the meantime, Intelliplex backers will continue to pitch the park’s strengths, including the fact that it’s just off the interstate and a comfortable, relatively trafficfree drive from Indianapolis.

Next year, they’ll also add to the park’s appeal by building a 150-seat conference center for tenants. In addition, Major Hospital is considering a couple of spin-off businesses that would be housed in the park.

Major Hospital, Shelby County and Shelbyville invested $8.5 million in the land and the infrastructure, Lennen said. As they wait additional growth, Major picks up the site maintenance bill.

“It’s not a huge drain, but it’s not cheap keeping 140 acres up and looking nice,” Lennen said.