A new crop for Rockingham

SRI International center turning region into a biotech hub

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by Heather B. Hayes

Farms and poultry production houses still dot the landscape in rural areas of Rockingham County, but Virginia’s top county for agricultural products is going through a quiet economic transformation.

Local officials and business leaders have laid the groundwork for turning the Harrisonburg/Rockingham County area into a haven for biotech research and back-end operations outside of Washington, D.C.’s “blast zone.”

“We score very well on overall economic indices, so as a result, site selectors are zeroing in on us,” says Brian Shull, Harrisonburg’s director of economic development. They are attracted by assets such as James Madison University, an abundance of underground broadband fiber, a relatively low cost of living, a high quality of life and proximity to Washington.

Harrisonburg/Rockingham County, which now has a population of more than 100,000, appears ready to break out of its historic role as the breadbasket of Virginia. In the first nine months of 2007, the city and county received $366 million in new investments, or 18 percent of all investments throughout Virginia, according to the latest state economic report. “We’ve really been put on the map as a good place to do business,” Shull notes.

This spring, for example, Criticon, an Alexandria-based data processing and preparation host, announced that it will invest $115 million to open a 150,000-square-foot facility in Harrisonburg that will house its own data center and those of other high-tech tenants. Meanwhile, SI International, an information technology and network solutions company based in Reston, recently began operating in a new facility in Harrisonburg to assist the U.S. Patent and Trademark Office in classifying 38,000 patent applications a month. The contract is valued at $138 million over 10 years.

However, the news that made the Rockingham County business community almost giddy was the decision of Menlo Park, Calif.-based SRI International, a major player in the biosciences industry, to put its Center for Advanced Drug Research (CADRE) on the outskirts of Harrisonburg.

The new facility, which by 2009 will be the lead anchor at the soon-to-be-built Rockingham Center for Research and Development, will focus on finding faster and more effective therapies for diseases often neglected by drug companies. CADRE has moved into temporary facilities at JMU and will break ground on its new center this month. During the next 10 years, its plans to hire 140 employees at an average annual salary of more than $85,000.

The company’s presence provides the region with state-of-the-art research and development capabilities, a critical ingredient for an emerging biotech hub, according to Robin Sullenberger, executive director of the Shenandoah Valley Partnership.

Other components already available for that hub are JMU and its strong biotechnology research and undergraduate degree programs; biopharmaceutical giant Merck & Co., whose Stonewall plant east of Harrisonburg is undergoing a $300 million expansion; and Atlantic Research Group, a startup firm in Staunton that manages clinical trials. “We feel that we have become a very viable location for the biotech industry, which tends to cluster,” says Sullenberger, noting that CADRE has already spurred inquiries from biotech startups as well as larger players.

SRI expects to quickly attract companies that provide instrumentation services, research supplies and other basic infrastructure necessities, says Dr. Krishna Kodukula, executive director of CADRE and head of SRI Shenandoah Valley. SRI, which discovered the first successful treatment for malaria, also has a long history of spinning off companies from its research programs.

Although CADRE will grow slowly over the next several years, the benefits are expected to be immediate. At JMU, for example, faculty and students already are helping SRI scientists with the initial cloning steps for a vaccine for dengue fever, an infectious tropical disease. “The bottom line that I expect here — and that we’re already seeing — is cutting-edge science,” says Dr. Robert McKown, program coordinator for JMU’s biotechnology degree, an interdisciplinary program offered through the Integrated Science and Technology (IST) Department. “These are some of the best scientists in the world, and they’re here, working and interacting with us. It’s very exciting.”

In fact, JMU was the ingredient that put Harrisonburg/Rockingham County over the top as a location for SRI. The university has similar research interests, faculty members with practical experience in industry and research, and an enthusiastic student pool. Just as important, JMU has a cooperative research and development agreement with the U.S. Army Medical Research Institute for Infectious Diseases, an organization that CADRE is eager to work with, as well as working arrangements with the University of Virginia and Virginia Tech. “They have the infrastructure we needed, and what SRI brings is the right set of problems that they can help us solve,” says Kodukula. “It’s really a match made in heaven.”

McKown notes that SRI will be an immediate boon to the biotech program, which started just three years ago and remains the only undergraduate degree program in the state. He expects to see more demand from top-quality students for the 25 annual slots available in the degree program, as well as high interest from professors and researchers who want to work for JMU. SRI’s presence also improves the university’s chances of creating a more expansive biotech program and a future master’s degree program. “Our students and faculty get to work with scientists who are actually solving real-world problems and doing drug discovery that will lead to the development of biopharmaceutical products,” McKown says. “It’s an attraction, no question about it.”

Kodukula says he hopes eventually to find and hire many protein biochemists, molecular biologists, chemists, computer scientists, chemical engineers and analytical engineers from JMU, as well as researchers with doctorates from U.Va. and Virginia Tech.

Having SRI nearby will benefit Merck as well, says Larry Russell, director of support operations at the Stonewall plant. As part of its expansion, the company plans to add 70 employees to its existing work force of 700 to help produce Gardasil, a cervical cancer vaccine, as well as future vaccines. SRI and Merck have already had some meetings about opportunities to work together locally. Russell and Kodukula think that having two large companies in the area will help attract a high-quality, high-tech work force. “As beautiful as the Valley is, a lot of professionals generally like more metropolitan areas where they have more career choices and more colleagues that they can do activities with outside of work,” says Russell. “This just gives people more options and different circles for them to operate in.”

But the good news does not eliminate a number of challenges facing the region. The area has a 3 percent unemployment rate, one of the lowest in the U.S. While that rate is good for employees, some companies have difficulty finding the workers they need. “It’s helped, though, that more and more of our announcements need employees that have the strong skills we see coming out of the university,” says Shull. “And it’s nice, because we can keep more of our college graduates here in the Valley.”

In addition to the low jobless rate, the areas must deal with some infrastructure problems. A much-publicized WiFi network planned for Harrisonburg has been put on hold after the initial contract fell through.
Also, the region continues to grapple with increasing congestion on scenic Interstate 81, which runs the length of the Shenandoah Valley. “Every year it becomes a bigger and bigger issue for us,” says Sullenberger. “It’s not hurting growth, but site selectors do inquire about it.”

While the state has allocated the money for expansion and major upgrades on the interstate, there is still no set schedule for those improvements, officials say. “I-81 is a lifeline for us,” says Shull. “We just need to make sure that upgrades are not put off too far in the future.”

Still, Sullenberger says, Harrisonburg/Rockingham County is on its way to achieving a balance between its existing agricultural economy and emerging high-tech industries. “We certainly realize that we are in the initial stages of this growth and don’t expect to be an overnight success,” he says. “But we are, in fact, a player, and we intend to take full advantage of that fact and look forward to additional opportunities.”

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