HomeMy WebLinkAboutAgenda - 08-23-2011 - 8bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: August 23, 2011
Action Agenda
Item No. 8 - h
SUBJECT: UNC Department of City & Regional Planning Proposal on UNC-CH Spin-Off
Companies
DEPARTMENT: Manager's Office PUBLIC HEARING: (Y/N) No
Economic Development
ATTACHMENT(S): INFORMATION CONTACT:
Proposal from UNC-CH Department of City Frank Clifton, 245-2306
& Regional Planning Economic Development, 245-2325
PURPOSE: To approve a proposal from the UNC Department of City & Regional Planning to
complete a study documenting the real estate needs of entrepreneurial companies originating
from the University and provide concrete recommendations on how to better retain spin-off
companies in Orange County.
BACKGROUND: An integral component of the County's economic development plan is to
maximize the economic impacts of the University of North Carolina at Chapel Hill. In
partnership with Dr. Emil Malizia, Chair of UNC's Department of City and Regional Planning, a
scope of work has been developed to analyze the entrepreneurial companies that originate from
UNC and establish a company presence outside the University. While a portion of these 'spin-
off companies locate within Orange County, many choose to locate initially outside Orange
County. The study will focus on identifying the real estate needs of these fledgling companies.
The work is proposed to be completed by the end of October 2011.
The final report will document the space needs of these entrepreneurial companies with the
intent of enabling Orange County to more precisely target this market segment. In addition, the
report will provide recommendations to ensure that these entrepreneurs view Orange County as
an attractive location to both establish and grow their start-up businesses.
FINANCIAL IMPACT: The proposed cost of the study is $12,200, which has been included in
the approved 2011-2012 budget.
RECOMMENDATION(S): The Manager recommends that the Board authorize the Manager to
execute the contract for the study.
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Proposed Study: Analysis of UNC Spin-Off Companies
Princi-pal Investigator: Emil Malizia, Department of City & Regional
Planning, UNC-CH
Project Sponsor: Orange County for Orange County Economic
Development (OCED)
Period of Performance: September 1 - October 21, 2011
Project Cost: $12,200
Background: Orange County recognizes the economic importance of UNC-CH as the
county's primary export industry and economic-engine. UNC-CH's economic impacts
are varied and significant including payrollr student, visitor and retiree spending,
externally funded research, and post-secondary educational services. Collectively,
these activities generate significant sales tax revenues that the county receives partly
compensating for fine university's exemption ftom local property taxes. Another
important economic impact comes from the local-companies founded by persons
affiliated with or graduates of UNC-CH.
Purpose:"fhe purpose of this study is to analyze UNC-GH spin-off companies and
associated technologies. These companies will be examined with. emphasis on their
real estate needs. OC-ED will be better able to attract and retain these companies in
Orange County with a clearer understanding of their space requirements and rent
levels.
Related Work: The study will benefit from on-going work on start-up companies.
Distinguished Professor Maryann Feldman and Assistant Professor Nichola Lowe are
building the establishment-level regional data base that was begun years ago by the
late emeritus professor Bill Little. The OCEDC sponsored an economic development
workshop course in fall 2010 that examined official spin-offs from UNC-CH.
The chancellor's interes# in innovation and the economic recess-ion have combined to
make entrepreneurship increasingly important. One well-established activity is housed
in the Office of Technology Development (OTD). Ever since Bayh-Dole passed in 1980,
universities have been exploiting their intellectual-property through patents and
business spin-offs. UNC-CH currently holds 503 U.S. patents including 27 filed in 2010.
Most of the patents are in the broad fields of biology and chemistry which correlate to
spin-off companies in the bio-tech industry. Since 2000, 51 companies have been
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launched with assistance from OTD. The majority of patents originated in the medical
school, and 33 of-these companies came from the medicallhealth side of campus. The
other 17 originated-in the departments of computer science (7), chemistry (5), physics
(3), biology (1), and psychology (1).
Almost-90% of these 51 companies have remained in the Triangle region. We have
employment data on half of them and case studies on three of them. Additional
information about these companies will be compiled in this study.
Scope of Work: The enterprise-level data base will be tapped to identify the official UNC
spin-offs associated with OTD, companies that were founded by UNC-CH graduates,
and companies with founders who had worked at UNC-CH. I will compile the following
information: company name, status (independent, subsidiary, HQ), year established,
current-location and previous location if applicable, sector, technology, active or closed,
and founder information.
will use the_company's -name to find it in the National- Establishment Times Series
(NETS) database. We-have recently acquired North Carolina NETS data from 1989-
2009. I expect to find NETS data on at least half of the companies. With these data, I
will be able to add information on the company's employment, sales, NAICS code,
current location, and whether the company moved from its original location.
One major task is to estimate the amount of space each company occupies and the
amount of rent they pay. I will use their address, Google Map and Google Earth to
gather information on the building being occupied. I anticipate that the-companies will
be in buildings devoted to office, industrial/flex, warehouse or retail use. I will assume
that the companies are renting space whjch will be true in most instances. However, a
few may own their space. I expect to find that single-employee firms are operating from
residential locations.
Another task is to examine the trajectory of selected companies in existence for more
than ten years. I will try to trace the space they have occupied over time and try to
figure out why they changed location. It may be possible to find companies that
occupied a sequence of spaces from incubator to accelerator to small commercial
space to larger commercial space. However, I expect that most companies will have
remained in one location.
I will use knowledge gained about these companies to describe this market segment;
the different types of space needed by spin-off companies and the range of rental rates
and terms attractive to them. I will recommend ways OCED could attract spin-offs to
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specific properties and how to keep spin-off companies in Orange County as they
mature. I wAl compile this information in a final report.
Proposed Payment Schedule: Orange County is expected to review this fixed-price
project on August 23, 2011. DCRP will invoice the county fir $6,100 if the proposal is
accepted. Thy $6,100 balance will be requested after the County Manager approves
the final report which should occur in October 2011.
Orange County, North Carolina Dept. of City & Regional Planning
UNC-CH
Frank W. Clifton, Jr. County Manager
Date:
Emil E. Matizia, Chair
Date:
This instrument has been pre-audited in the manner- required by the Local Government Budget
and Fiscal Control Act.
Office of the Finance Director
This instrument has been approved as to form and legal sufficiency.
Office of the County Attorney