By The Numbers
$25 million: Government investment.
$8.8 million: Private investment.
$6 million: Loans.
$3.66 million: Amount of loan Citywide Development took out in 2010 for improvements at site.
60,000: Square feet available space in Tech Town’s empty third building.
36: Companies with a presence in Tech Town.
3: Buildings that make up Tech Town, including two built on a former Harrison Radiator site.
Tech Town timeline
1919-1996: General Motors uses land between Mad River and Monument Avenue.
September 2000: The first building of what becomes Tech Town, the Entrepreneurs Center, opens at 714 E. Monument. Across Monument are several deteriorating factory buildings, former GM/Harrison Radiator plants.
2003: City officials announce plans to convert plants to a high-tech business park.
December 2005: Ohio provides $5.5 million for clean-up at site.
September 2006: U.S. Department of Commerce gives city $2.5 million to build what is now considered Tech Town’s second building, the Creative Technology Accelerator.
September 2007: Dayton City Commission approves $1.4 million to create an incubator meant to assist businesses focused on Radio Frequency Identification (RFID) technology.
October 2009: The Dayton RFID Convergence Center opens its doors to the public at the Creative Technology Accelerator.
January 2012: Dayton and Citywide officials acknowledge that the RFID Convergence Center has not become self-sustaining through the royalties of tenant companies. The center’s executive director had gone 20 months without being paid.
September 2012: After announcing in May that it was in talks with Citywide to place a team at employees in Tech Town’s third building, Versailles manufacturer Midmark Corp. says it is reopening its office search.
City of Dayton officials envision the $40 million Tech Town business park becoming a hotbed of research, home to thousands of high-paying technology jobs. But for now, the development’s parking lot during business hours is, at best, half-full.
The park’s newest building remains empty a year after it was built while the property’s owner, the public-private Citywide Development Corp., is repaying a $3.66 million loan on the development in a schedule that requires more than $170,000 of payments each year through 2031.
But Tech Town’s success will be measured in years, not months, officials say. The city’s 20-year plan includes 10 to 12 buildings with 2,000 jobs, built mostly with private money. Citywide leaders say there is interest in the site, but they are being selective, weeding out prospective tenants that don’t fit a research-driven model. Another hurdle to the ambitious project has been competition in the suburbs, which have attracted some of the very companies coveted by Tech Town.
“If we were just a real estate business, we could fill that building up really quick,” said Steve Nutt, strategic development director for Citywide, a nonprofit organization that developed Tech Town with the city.
Tech Town, a 40-acre site on the northeast edge of downtown near the Mad River, dates back to the late 1990s. For decades, the site was home to Harrison Radiator plants.
The first building of what became Tech Town — the 35,000-square-foot Entrepreneurs Center — opened in September 2000. The park grew into a multi-building development with the construction of the 42,000 square-foot “Creative Technology Accelerator” just across East Monument Avenue from the Entrepreneurs Center. The third and newest building — costing $9.1 million and offering more than 60,000 square feet — opened in October 2011.
Today, there are 36 companies with some kind of presence in Tech Town, Nutt said. Last week, the Dayton RFID Convergence Center — a business incubator housed in Tech Town’s second building — announced that three additional companies had moved into the building “within the last couple of months.” A total of four employees from the companies work at the building, the center’s director of operations said.
The number of cars parked in Tech Town’s lots don’t tell the full story, Nutt contends. The roughly 100 people who work at Tech Town’s second building don’t keep traditional business hours, he said. Some office space in Tech Town is rented out as satellite locations for companies that primarily operate out of state.
More than jobs
Tech Town has suffered two significant setbacks this year. Earlier this month, officials with Midmark Corp., a Versailles-based medical and dental equipment manufacturer, backed out of a tentative deal that would have relocated nearly 60 executives to Tech Town’s newest building. Citywide’s monthly utility bill for the empty building is roughly $3,800 a month.
In January, officials shook up the Dayton RFID Convergence Center’s business model, announcing a new role for the director of the business incubator housed there.
Even with the setbacks, Tech Town is not just about new jobs, its backers say. A key facet of Tech Town is cleaning up what was a blighted industrial site. Much of the cost — and strategy — of the project centered on demolishing and cleaning up the former plant area between East Monument and the river.
“It is a broader strategy than just job creation … the value is not just a real estate piece. It’s about creating an area where there’s energy and like industries that people want to be a part of,” said Shelley Dickstein, Dayton assistant director of economic development.
The aim for Tech Town is to create a technology center emphasizing research and leveraging its proximity to Wright-Patterson Air Force Base, the University of Dayton and Wright State University. City officials hope the influx of tax dollars will “seed the market” and pave the way for private investment at the site, Dickstein said.
“The ultimate goal is to create new jobs and new industries to replace what we lost,” she said.
Citywide officials say the Entrepreneurs Center is 90 percent full. While it’s too early to judge whether the overall park — which pre-dates the recession — has been a success, there are signs that Tech Town is off to a sluggish start.
Key tenants of Tech Town’s second building included IDCAST (the University of Dayton’s Institute for the Development and Commercialization of Advanced Sensor Technologies) and the RFID Convergence Center, billed as the world’s first business incubator for start-ups in the field of radio frequency identification technology (RFID).
But city officials decided in January to shake up the convergence center’s business model. Citywide officials acknowledged at the time that Brad Proctor — the center’s founder and former executive director — had not received a salary for his 20 months on the job, and that the center’s revenue wasn’t enough to pay for operations.
Arijit Sengupta founded Smart RF Solutions LLC, which spent 10 months at Tech Town’s second building in 2009 and 2010. Sengupta said his experience there was discouraging. He said his company received less assistance in getting its business established than he expected.
That’s disappointing, Sengupta said, because Tech Town was marketed as a resource for technology-focused start-ups to find their way.
“Not a good place to start, which was initially how they sold that place,” said Sengupta, an assistant professor of information systems and operations management at Wright State.
Smart RF Solutions today exists in name only, although Sengupta does consulting work in addition to working as a WSU faculty member.
Sengupta feels that Proctor, the convergence center’s founder, assisted a more established company outside Tech Town — rather than Sengupta’s company — in securing a city of Dayton project.
“After losing that project, we kind of lost faith in Tech Town,” Sengupta said. “We had the insider’s perspective for a little while. We felt like it (Tech Town) was basically being used as a rental property.”
Proctor did not return calls seeking comment.
Steve Varner, Sengupta’s partner and co-founder in Smart RF Solutions, said he and Sengupta were initially impressed with what they saw at the park.
“I was blown away with Tech Town,” Varner said.
He also was impressed with the development’s master plan: “I’d look at the plans there, and I was sold.”
Varner — a programmer and analyst for ClarkDietrich Building Systems — said he should have asked, “Who is going to pay for it?” He said that in the 10 months his company was at Tech Town, “It was anything but fully leased.”
Added Varner, “Just drive by on a work day and count the cars.”
He said his company – which developed automatic vehicle identification and RFID technologies – leased space at Tech Town for about $390 a month.
Built on ‘spec’
Tech Town’s most recent setback was Midmark’s decision to back out of a tentative deal to move dozens of executives to the business park. In a statement to the Dayton Daily News, Midmark president and chief executive Anne Klamar said Midmark was still interested in a Dayton area office, but that the company is reopening its search.
“Negotiations and evaluations on the Tech Town property weren’t completed to our requirements. We will continue our search until all requirements are met,” Klamar said.
Midmark officials did not elaborate on how Tech Town failed to meet their needs. Citywide president Steve Budd said it is “disappointing” that Midmark leaders reversed their decision.
“But at the end of the day, it’s not going to make or break Tech Town’s success. We still have interest in the site,” Budd said, adding that possible announcements about future tenants may be days or weeks away.
Even if Midmark had moved into Tech Town’s third building, the building would have been two-thirds empty. It was constructed “on spec,” or without identified tenants. The idea was that if companies were interested in Tech Town, there would be space for them.
Through a now-defunct program to encourage similar spec building, the state invested a total of $13 million into Tech Town. But the state has since gotten out of the business of paying for buildings that don’t have any end-users in mind, said Thea Walsh, deputy chief of the Ohio Department of Development’s office of redevelopment.
“The job-ready sites program was our most innovative program to do something like that,” Walsh said. “But as you know, the economy has changed. Our resources have certainly changed and ultimately this program had its sunset.”
Although Tech Town has been slow to catch on, the state still holds the development in high regard and uses it as a positive example of post-industrial urban redevelopment.
“I would not say it’s been unsuccessful,” Walsh said. “We’re just in times where we’ll have to see how well we can market it, (and) how well our message is received in the market.”
Robert Greenbaum, an Ohio State University professor who teaches urban development, said spec projects are common in the private sector.
“I’m not against government taking risk,” Greenbaum said. “We encourage that among private businesses … so of course they should be scrutinized, but I think governments should not be afraid to innovate.”
David Robinson, a Columbus-based economic development consultant, said whether Tech Town is ultimately successful will hinge on how closely it sticks to its mission as a technology hub.
“Otherwise it looks to me more like it’s a real estate play,” Robinson said.
“You can’t just put a sign up and say, we have highway access and tax incentives,” he added. “The economy is so bad you need to be able to say, ‘This is an industry we’re focusing on, and this is our strategy.’ ”
Lure of suburbs
Dayton and Citywide market Tech Town and its environs as urban space and a “unique live-work-play community” within walking distance of Public Market, Fifth Third Field and downtown restaurants, according to a promotional brochure.
City officials hope Tech Town’s urban character can distinguish it from nearby competing developments, such as Austin Landing off Interstate 75 south of Dayton, and the Mills-Morgan development along I-675 in Beavercreek.
Bob Mills, chairman of Synergy Building Systems and the Mills Development companies, has successfully attracted businesses to his development over the past year, attracting the same types of research jobs Tech Town is trying to lure. He calls himself a “big fan” of what Tech Town is as a redevelopment project, but said his locations are better-suited for more-established businesses.
“We have so many tenants that many looked at Tech Town and looked at downtown Dayton. Many were in downtown and moved out to the suburbs,” Mills said.
He said companies chose his sites for the ease of access to Wright State, I-675 and amenities such as hotels and restaurants, as well as Beavercreek’s lack of income tax.
“Tech Town doesn’t have a lot of those things, and it’s unfortunate that people would have to drive just a little bit further to get to those amenities,” Mills said.
Still, Tech Town provides an offer to subsidize a young company’s operations. That can be key to small businesses trying to get off the ground, he said.
Ben Staub, owner of Bastech and Rapid Direction — located just north of Interstate 70 off North Dixie Drive — said his company has been pleased with what it has seen since placing at least one employee in a Tech Town building full-time since April. The company, which manufactures prototypes for customers, has “3-D” printers in place at Tech Town to pursue leads and work with prospective customers.
Networking with the entrepreneurs who are at Tech Town, and those who visit the park, has made having an employee there worthwhile, Staub said.
“We’ve been very impressed with just the daily interaction with the companies that are already there,” Staub said.
Citywide’s Budd acknowledges that Tech Town is a risk, and that city officials need to balance between paying the bills and staying true to the development’s mission. But he added that Tech Town’s overhead remains manageable.
And Budd is giving his organization a deadline for filling Tech Town’s third building.
“We need to have some significant tenants in that building a year from today,” Budd said in a Sept. 21 interview. “Write that down.”
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