Innovista construction delayed a year

By JAMES T. HAMMOND and C. GRANT JACKSON

Construction of Innovista, USC's city center research campus, has hit some bumps in the road, resulting in a yearlong delay in construction of a privatesector building at Assembly and Blossom streets.

But University of South Carolina officials and developer Craig Davis expect to see the building begin rising by late August or early September.

Davis said he has lease commitments for 75 percent of the 110,000-square-foot research complex he expects to be ready for occupancy by fall 2008.

The original timetable in the contract between USC and Davis called for a second private-sector building to be started at Lincolnand College streets in the second quarter of 2007 and completed within 17 months. Davis said that as demand for space in the two buildings quickens, he hopes to speed up completion.

Construction of the privatesector building is key to Innovista's development in two ways:

** The state law that authorized $58 million in taxpayer funds for two university buildings required that USC obtain matching private- sector investment.

** The private-sector building is intended as a magnet for hightech research companies that would locate in Innovista, partner with university researchers, and generate a new researchbased economy for the city.

The university expects to announce agreements with several tenants before the end of September, but so far has only identified Duck Creek Technologies, a software developer. Duck Creek will occupy 59.7 percent of the Davis building.

Columbia Mayor Bob Coble said Innovista construction is "moving at a very good pace" and he is satisfied the delays have not affected private-sector interest.

"This is a transformational project," Coble said. "Changing the face of downtown Columbia will not happen overnight, but it will happen over the next three to five years."

Ike McLeese, president of the Greater Columbia Chamber of Commerce, said hiring John Parks as Innovista director has "kicked it up a notch," as the veteran research park developer seeks tenants.

"I don't detect within the business community any loss of confidence that this will work," McLeese said.

Davis, the North Carolinabased developer, cited as his personal commitment to the project the approximately $1.2 million he has spent on the Horizon Center, and the additional $4 million of his own funds he has pledged.

Davis said National Bank of South Carolina has agreed to lend the $15 million to complete the companion structure to a university building, the steel skeleton of which towers above Main and Blossom.

Rick Kelly, USC's chief financial officer, said the university and Davis pursued a joint strategy in seeking a major tenant and share responsibility for the delays.

USC and Davis initially agreed to seek one nationally recognized leader in high technology research for the building Davis would build.

But a year ago, it became apparent to university leaders that the structure must be redesigned to serve several tenants, Kelly said. DELAYS AND COSTS

The delays have resulted in the cost of the private-sector building rising to $19 million from the $13 million estimate, Davis said.

Costs also have risen $10 million on the university building at Main and Blossom to about $40 million, including equipping research labs.

But unlike USC, which has been able to supplement state funds with about $8 million in federal grants, Davis must get his investment back through rents. That means corporate tenants will be paying more rent than originally expected.

But Kelly and Davis said having close proximity to the university helps offset the cost of the rent.

Ben Arnold, Columbia real estate developer, said rising office rental and occupancy rates will help Davis. And USC's Innovista continues to stimulate the local property market and attract high-paying jobs and high-tech tenants.

Arnold said he is converting 24,000 square feet of his "entertainment complex" at 700 Gervais St. into office space because of the demand.

But Arnold said it is "imperative" the Horizon Center be completed by the March 31, 2009, National Hydrogen Conference that Columbia is hosting.

USC expects to occupy its own Horizon Center building by November or December of 2008. TRIGGER FOR GROWTH

Across the street from the Horizon Center at Main and Blossom, Atlanta developer John Holder is building a luxury residential building, a collaboration with USC Development Foundation called Adesso.

Throughout the downtown area west of Assembly Street to the Congaree River, new residential, commercial and retail development is under way or on the drawing boards.

John Parks, executive director of Innovista and former director of the University of Kentucky's research park, said the project already is transforming the city.

With more than 550,000 square feet of space under construction, "that's already an average size research park, and we're just out of the chute," Parks said.

"I've talked to a number of private developers, and they are very enthusiastic about it. This is a very ambitious project."

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Reach Hammond at (803) 771-8474. Reach Jackson at (803) 771-8376.