From the Research Park Archives ‘89: Bringing high-tech to FAU

Source: The News – March 13th, 1989

About this topic: 

Round Table brings together community leaders to discuss various South County business issues. 

Participants meet in the conference room of the Greater Boca Raton Chamber of Commerce, and the discussion is moderated by Patricia Elich, business editor for The News. 

This month’s discussion, which appears here in edited form, focuses on Florida Atlantic University’s proposed high-tech park, a 52- acre development project adjacent to the university that seeks to attract companies involved in state-of-the-art technology and research. 

The project is being overseen by the Florida Atlantic Research and Development Authority, a government-appointed board that has chosen the local development team of VMS Temple/Shubin. 

Bill Shubin and John Temple, who have leased the park land from the Authority, will develop the project and market it to prospective tenants. In return, the developers will share their revenues with the research authority. 

Before going into partnership with VMS Realty Partners in Chicago to form VMS/Temple Development, Temple was president of our Arvida Corp., longtime Boca Raton development company. Shubin, now president of Shubin Property Co., was president of Arvida’s commercial-industrial division at the same time as Temple was at Arvida. 

Speakers: M.J “Mike” Arts, Executive Director of the Greater Boca Raton Chamber of Commerce, Robert Langford, member of the Authority’s board, John Temple, president and chief operating officer of VMS/Temple Development Co., Jeffery Tennant, Executive Director of the Florida Atlantic Research and Development Authority. 

 

Moderator: (To Tennant) Can you give us a brief history of the planning of the park? Whose brainchild was it?

Tennant: The basic notion of the park has been discussed probably since 1980, but it took a period of time before the university thought it was mature enough to move ahead on the park.

We all wait for examples, and now parks are developing all over the country. Having examples of success tends to encourage you to move forward, yourself.

Dr. [FAU President Helen] Popovich has to be credited with providing real incentive for the park. Her philosophy was that the only reason to put the research park on the property of Florida Atlantic University was if it could enhance the university. And the park is going to enhance this institution.

Moderator: These are popular things for universities to have right now, aren’t they? High-tech parks are a relatively new concept.

Tennant: Yes, it’s relatively new, but I’d like to drop the ‘high-tech’ and talk about advanced technology instead.

Moderator: You don’t find ‘high-tech’ to be descriptive?

Tennant: Well, it just rings a bell with me.

Moderator: We’ll get back to that. You were about to explain why universities are establishing high-tech parks.

Tennant: The ultimate purpose is to create a meeting ground between the industrial research practitioner and the faculty researcher, in a way that we are supporting them and they are supporting us. And we are larger together than we would be standing separately.

We’ve had a very positive experience in a very similar way. Remember, IBM (IBM Corp. has a large manufacturing and product development complex near FAU) is across the street from us. It’s a big street – I 95 – but they are across the street from us.

We are the only university in the nation that is close to a major IBM facility, and we have a very powerful relationship with IBM. We hope to replicate that in the park, by bringing other players right there on campus.

Moderator: How much could the park be worth when it is built?

Tennant: You can play with all kinds of numbers. Some numbers have gotten into the press and I suppose they are about as good as any: $65 million. That number is simply taken from national statistics that calculate how many square feet you have and anticipate building something of even nominal value on it. There’s a lot of latitude with these numbers.

Moderator: (To Langford) Bob, you are a local accountant and one of the members of the (Florida Atlantic Research and Development) authority. What is your role, and the role of your fellow board members?

Langford: Like all endeavors sanctioned by the state of Florida, a board of laymen like myself is set up to superintend the staff. We are the official governing body that blesses the contracts that are put forth by the technical people, and by the partners, and the vendors. We have a signature authority, the responsibility to file approval on the contract.

Moderator: How did you come to be selected?

Langford: I think they just wanted local people who are involved with the university. 

Whether you call it high-tech or advanced technology, the park will be available to the entire institution, not just the engineering college, or the computer people. It’s available to everybody.

Moderator: What use would the non-technical disciplines have for this park?

Tennant: I think the information sciences as a whole will find it useful. They are always looking for new ways to gather and interpret data. For instance, one group that is intensely interested in new technology is the social sciences. Social sciences happens to be the leader, believe it or not, in technology transfers (developing business applications for technological innovations).

Moderator: At least initially, FAU was criticized by some as a johnny-come-lately to the idea of academic high-tech parks.

 

Your critics said there were already too many universities in Florida with high-tech parks, and that we didn’t need another one.

Tennant: There is only one that has any record of success at all, and that is in Central Florida. (The University of Central Florida’s high-tech park has far more tenants than any of the state’s other university high-tech parks.)

Moderator: Meaning the field is still wide-open?

Tennant: I don’t think they are in competition with one another. They are separated geographically. We went through these arguments when we were given the authority by the state to develop our own research park. What happens in Gainesville (The University of Florida also has a high-tech park) has very little to do with what happens here. What we are looking for are companies that want to come to our park because of the association they can have with our university, perhaps because we have a specialty they are interested in. 

Let’s take robotics or ocean engineering or artificial intelligence. Those are some of the things that we are really making headway in.

Moderator: Somehow, then, your park is differentiating itself from those elsewhere in the state?

Tennant: It should be differentiated by our academic strengths, at least in the beginning. Later on, the university should be flexible enough to accommodate park tenants as they change direction.

Moderator: What is the financial arrangement between the park and the university?

 

Tennant: Let me stop you and draw technical line. 

The university, from a legal standpoint, is out of the game. The property now resides with the Florida Atlantic Research and Development Authority. 

The authority holds the lease on the property. The authority holds a charter that says they are to develop the property as a research park for the benefit of Florida Atlantic University. (The authority is authorized to spend proceeds from the park either on the park or on programs to benefit FAU). 

Moderator: FAU donates the land…

Tennant: FAU didn’t donate the land. FAU doesn’t even own the land. We are tenants on that land, just like any other state agency. It happens to be owned by the state. FAU did give up the land to allow the park to be developed, and the land, in turn, was released to the Authority.

Moderator: Does the authority receive a yearly budget, or will it?

Temple: Basically except for some seed money from the counties, (Broward and Palm Beach), the developer has all the exposure. 

The university, through the authority, received a base income for letting us lease the land, and then as we built out the land, they have a continuing participation in the revenues.

Moderator: How much money will the authority be getting five or 10 years from now?

Temple: It’s back to the number that we threw out before: $65 million. I’ve never actually sat down and done the calculations, because we are looking at the future, and you don’t know exactly how long it’s going to take or what’s going to be there. It will mean millions of dollars a year for the authority.

Moderator: Do you get a set percentage? 

Tennant: It’s a two-stage process. We get roughly 10% of the rent that they receive, until the land value exceeds $7.50 a square foot.   When the value of the land goes above that, we get 40% of the amount of the rental exceeding $7.50.

Moderator: (To Tempe) How did you and Bill (Shubin, Temple‘s partner) get involved?

Temple: First of all, Bill and I both come from California. We were both in real estate. And, before that, I was involved in the research park in California. My first job there was at a company that was a tenant in the Stanford Research Park. 

This was 1965. I was chief financial officer for a small electronics company that was making disk memories for computers. 

We were tenants in the Stanford Research Park. We were small, and we had a close relationship with the university because we were dealing in a technology that resolved at that time. 

We had some technical problems with our disks, and we had to go to the university to use its facilities to try to figure out how to solve these problems. 

Being right on campus was a help for us. In fact, the company was found by an ex-professor.

Moderator: What was the name of the company? 

Temple: It is called Data Disk. 

Moderator: Is it still around? 

Temple: It was merged into another company. 

Moderator: That’s typical of a lot of high-tech, start-up companies. 

Temple: Because I worked for that company, I understand what type of companies will come to the park here. 

Companies come to high-tech parks to be close to university. Also, high-tech parks tend to have small spaces and small parcels available, which is attractive to small ventures. Also, there is an element of prestige to be in a high tech park. When your name is an IBM or Hewlett-Packard, that helps. That is why Bill and I encouraged Helen Popovich when this process of building a park started.

Of course, we (Shubin and Temple) were both with Arvida. Because we were with Arvida, we knew that the Park of Commerce (a business park developed by Arvida that has several major high-tech tenets couldn’t satisfy the need for a university high-tech tenants) couldn’t satisfy the need for a university high-tech park. 

We realized there was a need for a different kind of product. In fact, before we left the company, Arvida was selected as the developer for FAU’s park. And then, after we left, Arvida went through a process without us and came to a different conclusion than what Bill and I did. 

We’ve been a long time believer in the need for this park. We both have a lot of background. I know what these companies are looking for.

Moderator: How close are you to actually building the park? 

Temple: First of all, we need an extension on the lease. (Temple currently has a 50-year lease, with an option for an additional 49 years. He insists he needs a straight 99-year -lease on the park land to make the project feasible. He is still waiting for the state to approve his request.)

Arts: I believe what you are doing with FAU really enhances the marketability of Arvida Park of Commerce. And it helps and enhances the reputation of FAU and the university’s interaction with business. 

The business community is continuing to grow, and it continues to be more oriented toward high-tech all the time. 

You know, we lost some IBM jobs. (Since June, IBM has been paring 1,600 employees from its workforce). 

I think it has to enhance all sectors of the high-tech house to have this park. We have so many entrepreneurs out there right now, what with the IBM reduction. 

Tennant: What we were talking about is, the university is beginning to step into the kind of role that the major research universities play in supporting the companies that are found on Route 128 in Massachusetts and in (California’s) Silicon Valley. 

Moderator: (To Tennant) Why do you object to the term ‘high tech’?

Tennant: It’s an over-used term. 

Moderator: You think it has become a cliche. 

Temple: High-tech suggests brand new. That is a very small part of what happens in a research park. 

The biggest part of what happens is taking something that has been discovered, maybe, five years ago and applying it to a current business need. 

Jeff will know this better than I do but – in my experience – it usually takes 3 to 5 years after something has been discovered to actually start doing something practical with it. 

Moderator: (To Temple) Presuming you get your 99-year lease by April or May, what’s next?

Temple: By April or May, we will have a master plan. Then we have to work with the city to make sure what we plan to do is practical. Then we start a marketing program to try to line up some tenants. 

Moderator: Can you predict when you will break ground?

Tenant: Hopefully, we will break ground before the end of the year or early next year.

While Shubin and Temple were with Arvida, the company made a preliminary commitment to develop FAU’s high-tech park. However, last year, Arvita pulled out of the deal. 

Now Temple and Shubin have teamed up to do the project themselves.