Wet lab facility first step in redevelopment of Whitaker Park

by Jordan Green

Winston-Salem City Council makes an economic-development grant to support a wet lab that will attract tech companies to Whitaker Park, once RJ Reynolds Tobacco Co.’s state-of-the-art cigarette plant. The company donated the facility for a long-term redevelopment project.

When RJ Reynolds Tobacco Co.’s Whitaker Park manufacturing plant opened in 1961, it was the world’s largest and most modern cigarette factory.

The tobacco giant, now a subsidiary of Reynolds American, has since consolidated operations at the newer Tobaccoville plant. The last Reynolds employees vacated Whitaker Park in 2012. With the announcement in early January that the company will donate a significant portion of Whitaker Park for redevelopment purposes, business leaders hope the plant — located on 124 acres of prime real estate about two miles north of downtown and immediately east of Wake Forest University — will shepherd in the next generation of industrial activity.

Reynolds has entered into an agreement to donate a 70,000 square-foot building, a laboratory building and 120 acres to the Whitaker Park Development Authority, a nonprofit set up by Winston-Salem Business Inc., the Winston-Salem Alliance and Wake Forest University for the purpose of redeveloping the property.

Mayor Allen Joines has played an active role in efforts to redevelop the property in his role as president of the Winston-Salem Alliance, an organization designed to promote economic development. Joines said discussions about the future of Whitaker Park have been going on for a couple years.

“It was a group of community leaders talking with Reynolds,” Joines said. “When they mentioned they were going to be vacating this site, there was a concern that there was going to be a huge vacancy that could become blighted where we were trying to revitalize east Winston.”

This is not the first time Reynolds has donated obsolete facilities and land. The company donated its original complex of factories along the eastern flank of downtown about 15 years ago for the biotech park now known as Wake Forest Innovation Quarter, and donated land in Davie County that has been used to recruit new industry, said David Howard, a company spokesman. The sale of the downtown Reynolds Building, a prototype for the Empire State Building, for adaptive reuse as a high-end hotel likewise reflects the company’s interest in the community.

“I think when we look at the various situations we evaluate what we think is best on having a positive impact on the company and, most importantly, having a positive impact on the community where our employees live and where our retirees live,” Baker said. “RJ Reynolds Tobacco Co. has a long history in Winston-Salem. If you want to look at donations and sales, look at the Reynolds Building. Now, it’s going to be a high-end hotel and restaurant that is helping in the continued redevelopment of Winston-Salem. It’s a cornerstone of our community, and will continue to play that role.”

Bob Leak, the president of the economic-development outfit Winston-Salem Business Inc., serves as the volunteer president of the new Whitaker Park Development Authority.

Joines said redevelopment of Whitaker Park is “probably one of the more important projects we’re going to be working on in the next five years.” The mayor said Whitaker Park, with its massive buildings and sprawling campus, would be an ideal host for startup companies that have outgrown Wake Forest Innovation Quarter and are ready to expand.

“There were close to 16,000 people working in that area at one time,” Joines said. “If we can do this right, we have the potential of creating back 10,000 to 15,000 jobs, which is important to the redevelopment of our city.”

Winston-Salem City Council voted unanimously on Monday to approve a $200,000 economic-development grant to the Whitaker Park Development Authority to develop a wet lab — an advanced facility where chemicals, drugs and other materials can be handled in liquid solutions — that can be used to recruit tech companies to the city.

The renovations are expected to cost $2 million to $2.5 million, according to a memo prepared by Assistant City Manager Derwick Paige. To date, the development authority has raised $350,000 towards the goal from private foundations.

Paige said in the memo that Keratin Cosmetic Sciences, a manufacturer of hair-care products, is considering leasing space in the new facility. With three employees, the company plans to launch a new product in the summer, with plans to invest $1.8 million and expand to 36 employees with salaries in the range of $30,000 to $35,000, Paige said. He noted that city council approved a similar request for a grant to support the creation of a wet lab at what is now Wake Forest Innovation Quarter in 2007. Five start-up or early-stage companies have used the space, expanding from 22 to 70 employees.

“This is a game-changer for the city of Winston-Salem,” said Councilwoman Denise D. Adams, who represents the North Ward where Whitaker Park is located. “We all remember when the building went dark. We all hoped it would become light again. The economic activity on the north side of the city was the heartbeat when you talk about 10,000 people moving in and out of jobs every day.”

Councilman Dan Besse characterized the investment as the “classic variety” of economic development.

“We are recruiting net new activity to the area, not like retail [incentives] where we’re just shifting it around,” he said.

The larger effort to redevelop Whitaker Park calls for a long game, Joines said.

“It’s really a rare opportunity to do a comprehensive plan for a huge tract of land and set of buildings,” he said. “You should really be patient in this development and not take the first user, and you should follow a logical plan in terms of its redevelopment.”

As recommended in a report by the Urban Land Institute, local business leaders envision a mixed-use development that combines advanced manufacturing, distribution, residential and retail.

A 2012 report completed by the Urban Land Institute cited limited market demand for industrial and commercial space in Winston-Salem, with vacancy rates of 28.4 percent and 11.7 percent respectively. Focusing initial phases of redevelopment on residential and retail uses could catalyze momentum for long-term redevelopment goals, the report said. Interim uses to generate revenue might include self-storage and light manufacturing inside the buildings, and temporary fairgrounds, a farmers market and university intramural sports on the grounds.

The report noted a significant challenge related to the industrial legacy of the facility when Whitaker Park was cranking out cigarettes at full capacity from the 1960s through the 1980s.

“The negative aspects of the manufacturing legacy and location of large public or institutional uses in the same general location has created large voids in the urban fabric,” the report said. “A view of the study area from 20,000 feet reveals a region that is dominated by very large structures and fields of surface parking. Street, pedestrian and open-space connectivity is disconnected, and adjoining neighborhoods appear isolated from each other.”

The report also recommends extending Akron Drive with an “architecturally-significant” bridge across a rail line to connect the Whitaker Park campus with Highway 52 to the east.

While noting that the “primary goal set for site redevelopment is creation of well-paying jobs in forward-looking industries of the new economy to replace legacy jobs once provided on site by RJR,” the Urban Institute warns that redevelopment is not a job for either the impatient or risk-averse.

“Wishing the numbers to look more favorable than they are will not make it so,” the report concludes. “This project is very hard, long and expensive.”