LA Research Park: a success story that could be replicated

-A A +A
By Arin McKenna

One argument for the Los Alamos County Council’s decision last week to appoint Councilor David Izraelevitz and County Administrator Harry Burgess to the Las Alamos Commerce and Development Corporation board was the success of the Los Alamos Research Park. The development was presented as an example of what can be accomplished through mutual cooperation.

In a letter supporting more active county participation in the LACDC, Board Chair David Horpedahl wrote, “The LACDC believes the Research Park project to be the most significant and most successful economic development project that has been undertaken by Los Alamos County to date.”

“It was the lab and county working together, in this case led by our organization, to try to create something that had never really existed in this town, and that was high quality, commercially operated space for science and technology activities,” LACDC Executive Director Kevin Holsapple said.

The Los Alamos Research Park was the first large-scale economic development project supported by the county. Council awarded the project $800,000 in grant money, plus additional debt financing.

The LACDC leveraged that money to assemble more than $17 million in additional investment from outside the county, a 21:1 ratio.

The project was initially conceived when Sen. Pete Domenici was encouraging land transfers from the Department of Energy to local communities, with the goal of reducing assistance payments (which Holsapple calls moneys in lieu of taxes) to those communities.

The 40-acre parcel the Research Center stands on was not eligible for transfer, due to its close proximity to Los Alamos National Laboratory, but the DOE offered to lease the land to the county for development that could benefit the community and create a better tax base.

The county approached the LACDC and offered to cede the right to negotiate the parcel’s development with the DOE in exchange for agreements that protected the county’s interests.

After a year of negotiations, the LACDC reached a long-term land lease agreement with the DOE.

LACDC’s goal was to build a research park that would create high quality space for science activities outside LANL property capable of attracting companies and organizations that would benefit from the lab’s proximity.

“There was a lot of study and a lot of evaluation that went into understanding what makes for a successful project, and which of those lessons learned in places all over the country could be applied to our situation,” Holsapple said.

“And out of that came a plan. We lined up initial tenancies for the research park and we lined up some public support, including an $800,000 grant from Los Alamos County and assembled the financing to be able to build the research park project and open it.”

Construction on Building One began in 2000 and was completed in 2001, after being interrupted by the Cerro Grande fire. The structure houses 83,000 square feet of laboratories, computing facilities, meeting space and office space.

The Research Park has attracted multiple new university presences to the community, including the New Mexico Consortium (a coalition between the University of New Mexico, New Mexico Tech and New Mexico State University) and the University of California’s San Diego, Santa Barbara and Davis campuses.

The development has also attracted businesses such as Motorola, Authentix, Hewlett-Packard Compaq, Linde Gases, Terranear and Sun Microsystems. Service industries, including a café, a telecom company and janitorial services, have either located in the park or received substantial business from park activities.

County staff recently utilized Economic Modeling Specialists Intl. to analyze the Research Park’s impact. Findings indicate that the Research Park supports 199 direct, indirect and induced jobs and wages of about $14.8 million annually.

The county’s GRT revenues from the initial construction were $450,000. The estimated annual GRT from operations is $675,000 annually. Property tax revenue is $72,000 annually, with cumulative property taxes paid to the county at $1,042,000 to date.

The utility transfer has brought the county $13,000 in annual revenue, for a total of $152,000 thus far.

Thus, the property has generated nearly $1.2 million in local property taxes, utility transfers and revenue sharing since inception.

“That investment was the first time where you see that kind of thing being used in this way,” Holsapple said. “It also kicked off the whole county program under which those kinds of public support and help are leveraged to create bigger, larger projects.”

The county’s most recent investment was in one of the Research Park’s offshoots: the New Mexico Consortium. In December 2011, council voted unanimously to grant the consortium a lot in the Entrada Research Park (valued at $640,000) and $2 million for the construction of a research facility.

“The New Mexico Consortium is a key and very interesting success story because what you’re now seeing is a second generation investment, where the research park played a role in the Consortium’s history and development,” Holsapple said.

“The New Mexico Consortium started in one office at the research park and we at LACDC provided business assistance to them. And now they’re actually expanding into other parts of the community and creating other investment opportunities.”

One of the terms the county included in its Participation Agreement with the LACDC was a provision for the county to appoint two members to the LACDC Board. Two citizen representatives served in that role until council’s decision last week.

“The idea behind the original agreement was cementing a partnership,” Holsapple said. “The goal was to have good people on our board who the county feels are familiar with the county’s interests. And we’re interested in having good people on our board who are familiar with the county interests.”