Good news for the University of Tennessee Research Park (UTRP) at Cherokee Farm and its plans for continued rapid development at the high-profile site.
The U.S. Department of Commerce’s Economic Development Administration (EDA) has announced a $645,600 grant to Knoxville-based Three Roots Capital to support the implementation of an economic development strategy to drive investment at the site located in one of Tennessee’s 176 designated Opportunity Zones. In addition to the federal funding, the project will be matched with $161,400 in local funds, bringing total investment to more than $800,000.
As frequently happens, the partnership between UTRP and Three Roots Capital continues a long-standing working relationship between the Presidents and Chief Executive Officers of the two entities that dates back to their days at the old Technology 2020 venture development organization where Tom Rogers and Grady Vanderhoofven worked together to accelerate the region’s start-up community. When the organization was shutdown in 2016, its not-for-profit charter was amended and transferred to Three Roots Capital.
“More than two years ago, Three Roots Capital began advocating to the University of Tennessee that we should collaborate, leveraging the fact that the UT Research Park is located in an Opportunity Zone, to attract capital, development projects, established companies, and start-up companies to the Park,” Vanderhoofven said. “As an impact-focused investor who also understands the necessity of producing positive economic returns, we believe this grant from EDA validates the attractiveness of our value proposition and helps fuel our collaboration to produce substantial and enduring positive economic impacts in our community and in the broader region.”
Through the grant funding, Vanderhoofven says that the project is designed “to leverage the location of the UT Research Park to create positive and enduring economic impact in the community and the region.” Specific strategies include:
- Attracting private sector companies to the Park by leveraging the expertise and existing private sector relationships of researchers at UT and Oak Ridge National Laboratory (ORNL);
- Attracting private developers to UTRP by having quality private company tenants and attractive equity and debt financing;
- Attracting equity investment in UTRP by leveraging the Opportunity Zone program and the UTRP’s location in one in conjunction with the two previous bullets;
- Attracting debt financing to projects and companies located in UTRP by leveraging incentives and opportunities available to financial institutions that will work with Three Roots Capital as a Community Development Financial Institution; and
- Supporting start-up companies with on-site incubation, training services, and access to capital.
UTRP, which was announced more than a decade ago but required a significant investment in infrastructure before it could be developed, has seen substantial growth since Rogers came on board as the top executive a little more than 18 months ago. Today, it is home to the Joint Institute for Advanced Materials (JIAM) where the six companies in the new “Spark Innovation Center” are housed. UTRP also includes one completed privately-developed building, a second one now under construction, and more on the drawing board.
Innovation North, the completed building, houses a Volkswagen Group of America Innovation Hub and Civil & Environmental Consultants Inc. among others, while the 81,000-square foot, three-story building under construction is a joint venture between the UT Medical Center and OrthoTennessee (see recent teknovation.biz article here).
Ironically, two new tenants in Innovation North were announced yesterday, taking a combined 6,100-square feet. They are: (1) C2 Labs Inc., an enterprise-wide compliance and security software company that has decades of experience in national security and highly regulated industries; and (2) University Health Pharmacy, a specialty pharmacy owned by UT Medical Center, that is moving to the Park to enhance relationships with researchers whose work focuses on cancer, multiple sclerosis, hepatitis C, cystic fibrosis, rheumatoid arthritis and other conditions for which specialty medications are necessary.
With these two additions, the Park is now home to 12 different entities in addition to JIAM and OrthoTennessee once the building is completed.
The EDA proposal was actively support by the East Tennessee Development District and by Knox County. Both Terry Bobrowski and Mayor Glenn Jacobs wrote letters in support of the project.
“We’re grateful to EDA for this funding support,” Rogers said. “The UT Research Park is uniquely situated in a Federally designated Opportunity Zone, and we want to carefully examine every tool at our disposal to attract companies that will create good paying jobs by collaborating with the University of Tennessee and ORNL.”
In its news release announcing the grant, EDA’s Dana Gartzke said, “The Economic Development Administration is pleased to support this locally-driven strategy to propel private investment to the University of Tennessee’s Cherokee Farm Research Park.” He is the individual who is performing the Delegated Duties of the Assistant Secretary of Commerce for Economic Development. “The project’s location in an Opportunity Zone will stimulate economic development and resilience through private investment and quality job creation in the research park and the surrounding area.”
Three Roots Capital provides impact capital and advisory services for job creating small businesses, placemaking real estate projects, and community facilities. Vanderhoofven says the name of the entity describes its three roots: capital, coaching, and connections. It invests and lends at the intersection of return on investment and positive community impact.