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Local View: Research park would be an investment

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By HARVEY PERLMAN

Sunday, Nov 25, 2007 - 12:10:18 am CST

The recent story and headline in the Lincoln Journal Star reporting on the university’s concept for an Innovation Park at State Fair Park no doubt caused some eyebrows to rise. The headline suggested the cost was $1 billion, $300 million of which would be paid by Nebraska taxpayers. Neither is correct.

The university does propose to create a public-private research campus with some university research facilities. Most of the buildings will be constructed by private sector companies who want to locate near our campus. These private sector buildings would be paid for by those companies who would also pay at least market rates for leasing the land.

Rather than being a “cost”, these dollars represent private sector investments in this community. These investments would add to the property tax base of Lincoln and the sales and income tax base of the State of Nebraska. Most significantly, they would create jobs that are attractive to recent college graduates. This is good for Nebraska taxpayers.

There is no expectation that taxpayers would pay the $300 million for the public research facilities. If the next 20 years are similar to the last 20 years, private philanthropy, federal grants and university generated revenue will pay for most of these University buildings.

Certain situations may require some state contribution. For example the Beadle Center was constructed primarily by a federal grant and private philanthropy but the legislature appropriated only a small portion of the cost to complete the package. That building has paid for itself with the grants generated by the scientists who came to Nebraska to work in its laboratories. But we are not assuming a high proportion of tax support for the Innovation Park.

I recognize floating numbers like $300 million and $1 billion may make these projects seem beyond our means. If the experience of other states is any guide, the Innovation Park will be at least a 20 year project to complete. It will be completed in stages as opportunities arise. At the same time, we are confident that this project can generate significant economic benefits for Nebraska.

One final point. I am often asked why we cannot build this somewhere else so that we avoid moving the State Fair. It has been demonstrated around the country that the single most important factor in the success of these types of developments is their location. Private sector technology companies want to be on a university campus with easy access to faculty who share research interests, to students who can serve as interns and to classes that can provide continuing education to their employees. Clustering these companies in a single location creates the interaction of scientists that generally leads to more innovation and more private investment.

This is a big and ambitious idea. But it is also something Nebraska can accomplish within its means. It is something, in my view, that Nebraska should do if it is to stay competitive, retain its young people and expand its economic horizons.

Harvey Perlman is chancellor of the University of Nebraska-Lincoln.


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Me Again wrote on November 25, 2007 12:31 am:
" Sounds like a good project, but what happened to the whole "research corridor." I haven't heard anything more about the southern part of this. Some maps I've seen show research facilities all the way down to O street. How is that going to work? Who takes the lead on that. I'm pretty sure the promised redevelopment of that part of town was a key benefit of the antelope valley project. "

russell wrote on November 25, 2007 7:34 am:
" Lincoln must get behind this project in a major way. It is the best and time proven method for generating jobs that are way above the 'living wage' and the profits stay in this town for the multiplying effect. This city should dump the arena idea and put our resources, which are considerable, into research. The arena will create minimum wages jobs for waiters and maids for the food and hotel chains with the profits leaving town the next day. "

Results wrote on November 25, 2007 10:31 am:
" How many jobs have been created in the state from the current research at the university. The student count is roughly the same as it was 20 years ago, but there are a lot more buildings to pay for and a lot more research being conducted. Has that research brought new companies with hundreds of new jobs to the state? I don't see much impact. Maybe it is something everyone won't usually notice, but unless the newspapers can start showing the tremendous production of new jobs from the current research, how can this money be considered an investment? Investment means you expect a return. I suspect most of any jobs that come from using the research the taxpayers support with the university budget is actually going to companies in other states. "

CS wrote on November 25, 2007 12:13 pm:
" If Nebraska would stop taxing potential employees and investors to death they might actually want to stay. LB 775 isn't enough and is suspect anyway since the legislature refuses to give an accounting of how much isn't being paid. There are lots of small technology companies in the Lincoln and Omaha area-they may be small, but they have positive revenues and aren't as corporate as working for a Microsoft or an Oracle would be. That being said, it would be nice for there to be a larger pool of resources to draw from for employees-unfortunately that requires education and a motivation to stay. Raising tuition and taxes on someone that barely has any money as it is is a GREAT way to get them to stay in NE as opposed to moving somewhere with a more favorable money climate. "

Shawn Peirce wrote on November 25, 2007 1:21 pm:
" Mr. Perlman - let's take a look at the proposal many in the community and the state feel you are trying to shove down our collective throats. Many of us agree - a nice shiny new research park, complete with new buildings and clean new streets would be a LOT more attractive to potential researchers, who are often more familiar with heavily urban settings and academic halls, than a somewhat crumbling, semi-rural outpost in the middle of a city. Unfortunately for those types of people, the foundation our economy sits on in an agricultural state like Nebraska isn't best promoted in an austere, perfect, urban environment. Our history, our tradition, and our economy is agriculture in Nebraska, Mr. Perlman, and to find a location that most of the state is willing to meet at, even once a year, to focus on that core subject of our economy is becoming increasingly difficult. The current location of the Nebraska State Fair is, definitely underused, most of the year. All parties, including your most virulent opponents on the issue of moving the Fair, can agree with that. However, the current location of the Fair - where you would like to place you research campus - is the only location, according to multiple studies, that is the most fiscally sound for the taxpayers and private sector investors of the state, for the Fair to continue at this time. There are MANY reasons for this, fiscal viability, many of those reasons having to do, simply, with Lincoln being the capital of the state. Furthermore, the promise - and even completion - of better facilities doesn't always mean people are interested in changing their habits. The NSAA High School Wrestling Championships are a perfect example. There continues, to this day, a growing movement for those schools in Western and far Western Nebraska to break away, and have their own State Championship games, since the games were moved to Omaha from Lincoln. Yes, Omaha has better facilities for the event at the Qwest - but it has very few ancillary educational reasons that smaller schools and organizations can use to justify the expensive trip and stay in Omaha. In a state that is reliant on agriculture for the majority of it's primary and secondary economic well-being, the Nebraska State Fair is an opportunity for schools, families, and kids to start off their school year not only with 4-H and school band trips to the fair, but also visits to the State Capitol, the State History Museum, Morrill Hall (a state-supported museum that UNL oversees), and many other basic educational experiences highly rural Nebraskans may not be able to fiscally convince their supporters and taxpayers to fund the rest of the year. There are many, more important mitigating factors as well, that point to your vision of destroying/moving the State Fair, while building a research campus on it's gravesite - and NOT sharing the land, as others have recommended - as a poor idea, at best. As you yourself said, "If the next 20 years are similar to the last 20 years, private philanthropy, federal grants and university generated revenue will pay for most of these University buildings." Unless you have a crystal ball, that the scientists over at the Beadle Center have developed for you, Harvey, I'd be loathe to make ANY major decisions based on the fiscal performance of the last thirty years. In case your professors haven't informed you, the weather patterns over Nebraska have become increasingly unstable over the last decade or so, compared to past history. Furthermore, water use is at an all-time high, and much of the state is on the verge of significant drought. In a state that bases it's economy on agriculture, that also bodes for an increasingly unstable economic outlook for the future. Combine that with the desperate need for most local communities, and the state as a whole, to begin heavily re-investing in our infrastructure, due to the age of many of our basic pieces of infrastructure, as well as the need to build our statewide technological infrastructure up to standards that compete with other states like Nebraska. Finally, add on top of that the extraordinary fiscal burden being placed on the backs of American citizens due to the fiscally mishandled conflicts in Iraq and Afghanistan - a burden of over $20,000 per person, by some estimates - and your comment that, "If the next 20 years are similar to the last 20 years[economically speaking]," seems to ring VERY hollow indeed. Either you are myopic, Sir, and don't believe any of the above factors will affect Nebraskans, or you are very poorly informed by those who work for you. Maybe, Mr. Perlman, no one around you has laid out the facts clearly enough for you, because they're in fear of losing their jobs, should they upset you. I don't work for you, Mr. Perlman, so I have no fear of that issue. So here are some facts that maybe you have yet to consider - on top of all those I've already mentioned. 1)There is NO guarantee that a "Research Park" of this kind would be successful in bringing in significant and meaningful economic development to Lincoln - and the chance it would have significant positive economic impact, statewide, even over the next 50-100 years is slim. Since this would be a project directed by the State's University, and paid for (even in part) by the taxpayers of the state, it is a project that first and foremost should guarantee a significant return on investment to ALL of the state, not just Lincoln. 2)The economic issues stated earlier boil down to a simple reality: at this time, the money is simply NOT there to both move the Fairgrounds AND build this proposed research park - but the money DOES exist for the solution suggested to the Legislature, that of combining the research park and the State Fair, together, and getting the optimal use from the land. This may not be what you want, Mr. Perlman - but your job is often not about what YOU want, but what is best for the University, and the State of Nebraska as a whole. While those wealthy people you have been spending an increasing amount of time with in Lincoln's so-called "2015 Vision Committee" have their own ideas about how spaces should be used in the Capital City, and what the place of the University should be within it, it is your job to not be swayed by outside voices with their own self-interests, and to watch over both the fiscal stability and the educational growth of our University system. If your judgement has become clouded on this issue, due to your close affiliation with the "2015 Vision Committee", I hope I don't need to remind you that two other men you've supported - Bill Callahan and Steve Pederson - also recently lost their jobs due to poor decision making, and risk-taking that did not pan out. 3) Finally, you also site as important the location of a facility of this nature. As any realtor would tell you, if you asked them, the place where you are trying to put your "vision" has two major outside factors missing, that a MAJOR research facility of this kind would need, and that you Mr. Perlman, nor the University have any control over: a significantly larger airport in it's city of residence, and a long-term, reliable source of water. The lack of a major viable airport IN Lincoln has already stopped some significant outside investment in Lincoln, and this problem will continue (and get worse) the longer Lincoln and Omaha squabble and bicker. An major airport between Lincoln and Omaha - and near a world-class research campus - would definitely help your cause. But you and the Regents have no control over that issue. The other major issue you have no control over is the very real potential of a lack of reliable water - an issue that is quickly becoming a VERY important issue in cities and towns around the country, and not just as an economic factor, as was mentioned earlier. A top-notch research facility needs a stable physical environment to be located in. For example, certain research projects at universities and colleges in and around the Atlanta area may have to be scrapped within the next few months due to the severe drought affecting the Southeastern region of the U.S. That may equal millions of dollars lost in grants and investments. Currently, Lincoln is currently sitting at a precipitation surplus in late 2007, so this is not an issue, at this time. However, Lincoln also happens to be downstream from some of the fastest growing water use areas in the country - areas that are already some of the most fought over regions for water in the country. That fact alone makes the environmental viability for such a project in Lincoln anything but stable at this time. While some of the factors I've outlined here could be ignored or deferred to a future time to solve, Mr. Perlman, when you add them all up, the reality of the venture you and others are proposing is this: At this time, we - the collective citizens of Nebraska - CANNOT afford the risk necessary, in order for the University of Nebraska at Lincoln to take over the area now occupied by the State Fair, and move the Fair elsewhere. Period. There IS a solution available, one that you and your supporters on this project COULD work with, where the State Fair Park campus becomes a shared venture, and the land is used for BOTH a top-notch research facility AND Nebraska's annual economic and social gathering. While this may not be the answer you wish to hear, it is the fiscally responsible one, both for the State of Nebraska and the University. "

whatever wrote on November 25, 2007 2:16 pm:
" Now "Russell", there a good idea, put the arena thing on hold and then develop a research park, it's kind of the old "work before play" philosophy. With a research park developing possibly new jobs and a greater tax base a good arena might become more affordable. I'm not sure Lincoln has the kind of bucks it needs to do "everything" it wants. Heck, I don't think Warren Buffett has that kind of spare cash laying around. "

John wrote on November 25, 2007 5:55 pm:
" Give me a break Harvey. If you are such an astute business man, why did you allow Bill Callahan a raise before the end of the season? Have you ever owned your on business? Were is the money from the 2015 group? Or is it just for propaganda. "

whatever wrote on November 25, 2007 7:51 pm:
" "Shawn Pierce", your post is probably one of the most refreshing if not the BEST post I have read in a long, long time. I am absolutely relieved to see that there are at least a few people out there that are thinking. You've stated in one post a lot of what I have tried to say on several topic, but brought in some angles I had not "put together". The bottom line is Lincoln, UNL and host of other entities need to step back and really think. We are talking BILLIONS upon BILLIONS of proposed spending in Lincoln alone. Where is the money? Where is planning? And where is the Leadership and Vision? It's clear as I have read many posts over the last year or two that there are a lot of bright people and good ideas out there. But NONE of them are coming from the decision makers. Nebraska is at a crossroads, if the wrong decisions are made no amount of vision or taxation will bring us back. Have we really reached the point in this country where we have a political and business elite that is so detached from the day to day lives of the average person that they are no longer fit to govern? "

Steve wrote on November 25, 2007 7:59 pm:
" Unfortunately, any proposals advocated by Mr. Perlman in his capacity as Chancellor will be lacking in legitimacy. Due to his recent missteps with the Pederson, Osborne, Callahan, and now the "detached" position assumed vis a vis the search/selection process for Callahan, it would be in the university's best interest for him to tender his resignation. My guess is that President Milliken is already forming a search committee for Harvey's replacement (note: minimal qualification - not wasting $7million for unwarranted raises and contract extensions).... "

Rob wrote on November 25, 2007 9:22 pm:
" The Vision 1915 crowd (Shawn, whatever, John, Steve) apparently can not read. Fathom that! And Steve, President Milliken is not forming a search committee. You will learn this in the fullness of time. Dr. Perlman has done very well in leading the U into the 21st century. Lets leave the football discussions over in the playroom where it belongs. The education side of UNL is where the serious people reside. Not the macho types with bruised egos who live vicariously on the backs of 20 year olds. "

Steve wrote on November 27, 2007 6:19 am:
" With respect to “Rob” it would appear that Perlman isn’t all that “distanced” from the athletic side of the U once more. The lead graphic for the online version of the LJS is a photo of Harvey and his academic colleague (via CBA) and Interim Athletic Director, Dr. Tom Osborne. If this search ends up as badly botched as the one that culminated in the selection of Callahan, then it’s difficult to completely absolve Perlman of responsibility. Just some things to consider when evaluating the legitimacy of Perlman’s leadership and decision making… "