Building Our City: Foundation could perk up Innovista

USC looks for help building research campus

By JEFF WILKINSON - jwilkinson@thestate.com

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The USC Development Foundation might be willing to use its private endowment — land and money — to build the university’s struggling Innovista research campus, but can’t consider it until all financial issues are resolved with the former developer, foundation officials said.

And any new developers would have to have spotless track records and demonstrate they could deliver buildings and tenants before the foundation would team up with them, officials said.

“We want to help,” said Russ Meekins, chief financial officer for the foundation. “But we don’t want to help by committing suicide. We want to go into this with our eyes wide open.”

USC foundations

USC has five private foundations that operate independently of the university, but in support of it. The foundations are:
EDUCATIONAL
Supports the university in its educational, research, instructional, scientific, literary, charitable and outreach programs, including scholarships, fellowships and faculty supplements.
DEVELOPMENT
Acquires real estate and other assets either by purchase or gift. It then holds, develops, manages and maintains these properties. For instance, the foundation owns a private home in Cheraw, which is used by the school of medicine; industrial land in downtown Columbia, and an island off the S.C. coast used for marine science research.
RESEARCH
Provides assistance in implementing research grants and contracts, building infrastructure and developing intellectual property for the faculty. It submits grants to federal agencies, receives those funds and passes them on to the appropriate research projects.
ALUMNI ASSOCIATION
Promotes lifelong connections to the university for USC’s 240,000 alumni through news and events.
BUSINESS PARTNERSHIP
Raises and invests funds to improve the programs of the Moore School of Business.
SOURCE: USC Foundations

USC president Harris Pastides is reassessing how to build two private research buildings after the firing of private development partner Kale Roscoe of Michigan. The buildings are intended to attract or incubate high-tech businesses based on university research and create jobs.

Roscoe and a previous developer were not able to secure loans and tenants to build the two buildings.

Under a likely scenario, the development foundation would use its real estate holdings and cash to back loans and partner with one or two developers. Those developers then would build two planned research buildings.

The university has five foundations — educational, development, business partnership, research and the alumni association. They receive, hold and invest private donations to USC. They then assist the university in many ways — from scholarships to real estate purchases — with the gifts and proceeds from its investments.

Foundations executive director Jerry Odom stressed that only the development foundation would be involved in Innovista.

“Money in the education foundation intended for academic purposes would never be used,” Odom said.

But using the endowment to build speculative research buildings could be risky, foundation officials said, especially when two private developers have already failed.

“There is a difference between a vision and a plan, and a plan has to make financial sense,” Meekins said.

Odom said, “We would do a lot of due diligence.”

Pastides told The State earlier this month that the university might use its foundations to partner with one or more developers.

Foundation officials said they were contacted by Pastides after Roscoe was fired to inquire if they would be open to help with construction of the campus. Construction has been stalled after two publicly funded research buildings and parking garages were built at a cost of more than $100 million.

The two private buildings would cost about $20 million each to build, not including money to outfit them for offices and research facilities.

The arrangement — using the university’s endowment to partner with a private developer — has happened only twice before, Odom said.

The foundations own 49 percent of the Adesso condominium complex at Main and Blossom streets. Atlanta developer John Holder owns 51 percent.

Also, Columbia hotel developer Bert Pooser owns 20 percent of the Inn at USC; the foundations own 80 percent.

Odom said one advantage of the arrangement is that USC would continue to own the land on which the buildings would be built.

“But we can’t do anything until the deal with the last developer (Roscoe) is unwound,” Odom said.

Both USC officials and Roscoe said Thursday no agreement has been reached to repay Roscoe for work he has produced.

“We haven’t resolved our unwinding at all,” Roscoe said Thursday.

Roscoe was fired for failing to build the first of the two private research buildings even after being given nine extra months to start construction. He was the second developer to leave the project, after buying the project from North Carolina’s Craig Davis.

Roscoe has said he wants the $650,000 he paid Davis to buy into the deal. He also wants $350,000 for what he spent on design and engineering, as well as other expenses.

Reach Wilkinson at (803) 771-8495.

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