PART 3: Young reflects on evolution of the greenfield park

(EDITOR’S NOTE: The article that follows is the latest in a series of profiles on the parks in the Knoxville-Oak Ridge Innovation Valley and their unique roles in accelerating the growth of technology-based enterprises in the region. The focus on the Community Reuse Organization {CROET} of East Tennessee will include four articles that collectively explore its purpose and role in developing three distinctively different parks. This is the third of those CROET articles.)

The Community Reuse Organization of East Tennessee (CROET) is focused on the development of three distinctive business parks in the region – brownfield and greenfield sites and the first-ever park within the secured area of a national laboratory.

The greenfield site, named the Horizon Center, is the one that best reflects the unencumbered vision of Lawrence Young, CROET’s President and Chief Executive Officer. And, like a parent who must let a son or daughter eventually leave home to fully mature, Young made the same decision about the Horizon Center about 18 months ago.

In his extended interview with teknovation.biz, Young described the vision that he had for Heritage, its evolution, and its more recent transfer to the Oak Ridge Industrial Development Board (ORIDB).

“While we were working on the brownfield site (Heritage Center), we recognized the need for a greenfield park,” Young said.

It was 1997, and Young recalled that “there were not many regional parks (at the time) that would cater to higher end business clients.” The landscape has changed in the ensuing 15 years with Pellissippi Place in Blount County and the University of Tennessee’s Cherokee Farm as examples.

Young wanted a destination park that would have significant development covenants, the feel of a research park, and a rich mix between land used for commercial purposes and acres dedicated to green space.

“We invested $9 to $10 million to develop the park’s infrastructure,” Young said. The Horizon Center covers 1000 acres, but only 500 acres are optimal for development.

Like its sister Heritage Center, the Horizon site was initially conceived as a park that CROET would develop for the Department of Energy (DOE) under a lease arrangement. Young says that the Horizon Center experienced the same challenges as its sibling – land leases with a federal agency are not optimal for companies trying to secure financing for a new building.

Fortunately, DOE conveyed the land to CROET in the early part of the century.

“Our business model was not particularly good for the Oak Ridge community,” Lawrence acknowledged. The reasons included strict design standards and restrictions on the types of acceptable tenants.

In 2009 Young convened a small group to explore options for the Horizon Center to ensure its success. Representatives of the City of Oak Ridge, ORIDB and Oak Ridge National Laboratory (ORNL) were part of the initial group that was later expanded.

Young’s proposal was simple – let’s find the best way to create more churn in Horizon. The concept that emerged from the small group’s discussions called for CROET to transfer the property to the ORIDB and for the latter to engage the Oak Ridge Economic Partnership (OREP) to work more closely with it to market the park. The ORIDB could even change the development restrictions, a concession that was somewhat painful for Young.

The only continuing tie that CROET has to the Horizon Center is a requirement that $9500 per acre sold be returned to CROET for “reinvestment in the Heritage Center,” Young said.

In the 18 months since the ORIDB assumed ownership of the land and OREP has been more actively engaged, nearly 50 acres have been sold and another 11 acres are under option. The sold acreage includes property where ORNL’s Carbon Fiber Technology Center has been constructed and where 25 tons of carbon fiber will be produced annually beginning in early 2013.

For Young, it is bittersweet. The high end business park that he visualized 16 years ago has evolved to one that is less restrictive than had been planned, and his vision for a vibrant partnership between OREP and the IDB was dashed when the latter voted in May to terminate the arrangement on June 30.

Yet, the benefit of new businesses and new jobs created in Oak Ridge through leveraging of DOE land is CROET’s purpose. And, with acres being sold that were lying dormant three years ago, it provides revenues for CROET to use to enhance its brownfield site.

NEXT IN THE CROET SERIES: Focus on the first-of-its-kind business park within the secured footprint of a national laboratory.

The Oak Ridger published a 2008 three-part series on CROET, written by Ray Smith. The links to the articles in the series are:

Part 1 – http://www.oakridger.com/columnists/x596325760/Community-Reuse-Organization-of-East-Tennessee

Part 2 – http://www.oakridger.com/news/x1009160641/Community-Reuse-Organization-of-East-Tennessee

Part 3 – http://www.oakridger.com/news/x1435860716/Community-Reuse-Organization-of-East-Tennessee-Part-3

Stay connected with us on Twitter and LinkedIn. Article ideas and other suggestions should be sent to tballard@pyapc.com. Include the name and contact information (phone and email) for follow-up.