ARTICLES

ECONOMIC DEVELOPMENT | May 08, 2007

Inventing the Future

Billionaire David Murdock is trying to turn Kannapolis, North Carolina, into a boom town for biotech.

DANIEL S. LEVINE

For 100 years, Kannapolis was a mill town, once the world’s largest producer of towels and sheets. At one time, 22,000 people worked in “the city of looms.” Now the 6-million-square-foot mill stands empty, a ghostly memorial to America’s industrial past. But David Murdock believes Kannapolis will become a symbol of the nation’s future. As an indication of his faith, he is committing up to $1.5 billon to that end.

“This would not be possible if Mr. Murdock wasn’t willing to put in his own money,” said Stephen Zeisel, director of the new campus’s Nutrition Research Institute. “If we had to do it alone, we just wouldn’t find the money to make this happen. That’s always the trouble -- getting enough money to get it up and going. Once you get the intellectual mass there, it’s going to be self-sustaining.”

Kannapolis joins a growing list of places from Florida to Singapore banking on biotechnology centers to drive their economies.

Situated about 25 miles north of Charlotte, Kannapolis is not an obvious candidate to become the next great biotechnology center. But that was before Murdock, the 84-year-old owner of Castle & Cooke and Dole Food, set his sights on making it so. Murdock wants to build the place in five years and replace the old mill with a 350-acre research complex. The development would include 1 million square feet of office and laboratory space and 300,000 square feet of retail space as well as 700 housing units. Five years from now, the campus is expected to employ 5,000 people in technical positions and up to 30,000 more in support jobs.

Construction is well under way. In the heart of North Carolina Research Campus, as it is called, is a lab built out of brick and steel recycled from the demolished mill, a notable symbol of a town being reborn. The core lab facility, which will bear Murdock’s name, will house a mass spectrometry lab, a pharmacokinetics lab, a bioinformatics lab, a DNA-sequencing lab and more, all purchased with $150 million provided by Murdock. It will also include a nuclear magnetic resonance facility featuring an 8-ton, two-story machine that will allow scientists to view the three-dimensional structure of molecules and study their interactions. According to the campus, it’s the only actively shielded 950-megahertz superconducting magnet in the world. Researchers at universities and corporations within the campus will all have access to it. That is seen as a major lure for the talent Kannapolis hopes to attract.

Murdock has also succeeded in enlisting the cooperation of major academic institutions in North Carolina. Duke will set up a translational research center on the campus, but much of the other university research there will focus on the biotechnology of nutrition -- a natural interest for Murdock, who owns a company that is the largest producer of fruits and vegetables.

The University of North Carolina at Chapel Hill is establishing a Nutrition Research Institute to perform genomic and metabolomic research. The institute will study how metabolic and nutritional needs vary among individuals and how to enhance human health by targeting those variations. North Carolina State University, along with Murdock’s Dole Food, is setting up the Institute for Advanced Fruit and Vegetable Science, which will use genomics, bioinformatics and systems biology to enhance plant breeding and the nutritional content of fruits and vegetables.

“If you had asked me two years ago if could you get Duke and North Carolina State and University of North Carolina to share a campus, I would have laughed in your face,” said Andrew Conrad, the campus’s chief scientific officer.

Also on board, North Carolina A&T State University will be working on campus developing post-harvest technologies to identify and recover health-promoting compounds from foods. These products could be used as supplements to functional foods, as well as to improve shelf life and safety of food once it’s left the farm.

The ensure that companies relocating to Kannapolis can get the workers they need, the campus has enlisted Rowan-Cabarrus Community College to provide training. The community college is developing a facility to provide workforce development to help former mill workers learn to work in the life sciences. Programs will train people to work as laboratory technicians, to work in biomanufacturing or meet the demands of jobs involving the specialized physical and electronic needs of a biotechnology facility.

But workers alone will not provide the type of sustained economic engine Murdock hopes to create. Murdock’s Castle & Cooke, which is serving as master developer of the property, is recruiting life sciences companies for Kannapolis. So far, it has landed The Biomarker Group, a private company developing diagnostics for diabetes, and Pelican Life Sciences, a maker of reagents and research tools. Red Hat, the Linux software company, is also establishing a bioinformatics office at the campus.

To help attract more companies, Murdock is establishing a $100-million venture capital fund. In the mean time, Clyde Higgs, vice president of business development for NCRC, has been in talks with nearly a dozen venture capital firms in the hopes of getting them to create a presence on the campus.

“What Mr. Murdock really wants to create is an ecosystem,” said Higgs. “Discovery and development don’t happen in a vacuum. It takes all sorts of capabilities to make discovery happen.”

But Kannapolis will need more than money and enthusiasm and even participation from research universities alone to create a viable economic engine, warns Joe Cortright, an economist and principal with the Portland, Oregon-based consulting firm Impressa.
“The process of starting a biotech center is extremely expensive, time consuming and risky,” said Cortright, also a non-resident senior fellow at the Brookings Institution who co-authored “Signs of Life,” a landmark 2002 study on biotech centers in the United States. “The key elements of success were you had to be rich, lucky and patient and I’d still stand by that. And the other thing I’d say is you better have started 30 years ago when the game was still in play.”

Other parts of the country -- and the world -- have already established themselves as biotech powerhouses. Getting into the game now will not be easy. Cortright likens the situation to the QWERTY keyboard. There may be a reason to rearrange the letters but no investment is going to make it happen. Same goes for wannabe biotech centers. That means it may be easier for places like Kannapolis to find financial capital than the human capital they will need.

“Given the risks inherent in bringing a drug to market, everybody involved is looking to maximize their chances for success,” he said. “The way they do that is by putting together a team of people who have done that before. And that is typically only possible in an established centers.”

What adds to the risk of building new biotechnology centers is that even if they make important discoveries, there’s no guarantee they will be able to reap the rewards from them. Cortright points to Oregon Health Sciences University in Portland, where research led to the development of the breakthrough leukemia drug Gleevac. Novartis owns the drug, and its development, manufacturing and marketing are all done outside of Portland. The drug got to market quickly, but there is no lasting local economic benefit to the Portland economy. The same can be said for much other research. Murdock will need to build a place where new discoveries are not only made, but commercialized.

“It’s not a trivial process to take a promising idea and turn it into one of the handful of products that will ultimately survive clinical trials and the FDA,” Cortright said.

In many ways, Murdock’s research campus itself is the grandest of the many experiments expected to take place in Kannapolis in the years ahead. Whether it succeeds in recasting the economic future for this old mill town likely won’t be known until long after Murdock himself is gone.