6 surprising things about Chapel Hill’s new downtown innovation district
Laura Selmer and Dwight Bassett
Are you thinking about opening or relocating a business to Chapel Hill? This is the time to take advantage of significant opportunities.
Google already calls Chapel Hill home with an office on West Franklin Street. So do a bunch of other promising tech startups like CData Software and Quantworks.
Add an innovation district under construction anchored by UNC-Chapel Hill; swanky new office buildings, co-working spaces, and wet labs, this once small college town is on the verge of being transformed into a full-scale innovation hub. Pitched against Durham’s grit or Raleigh’s corporate towers, it’s the more genteel option for companies looking to incubate and launch; “with trails and green spaces” to live, work, and play in the University’s backyard.
Dwight Bassett is Chapel Hill’s director of economic development & parking services. For the last 14 years, he’s worked to grow jobs and the town’s tax base through strategic partnerships.
Here’s what he had to say about the Town’s current state of play:
1. Chapel Hill’s new Innovation Hub is set to open mid 2023.
It’s just the first phase of the district and encompasses two buildings: 136 Rosemary Street and the adjoining 137 East Franklin Street, currently being redeveloped by Charlotte-based Grubb Properties. It’s been a decade-long initiative and occupies seven floors and roughly 118,000 square feet of space. It’s all part of the Carolina Economic Development Strategy, a partnership between UNC-Chapel Hill and the Town of Chapel Hill to retain and attract innovation-oriented businesses and talent. By 2025, it will include a visitor’s center, life science center, downtown parking lot, apartments, hotel and conference center.
Among its first tenants: Innovate Carolina, the University’s central team for innovation and entrepreneurship; and Launch Chapel Hill, the business and venture lab accelerator created in 2013 through another joint effort by the town, university, and county. It offers a 22-week accelerator program that accepts eight to 12 startups, providing workspaces, entrepreneur-in-residence mentors, tech resources, and networking. Over the years, it has supported more than 150 companies that have raised more than $38 million in total funding and earned more than $69 million in annual revenue. Graduates include Seal the Seasons, which freezes and distributes farmers’ crops.
2. The hub offers plenty of wet lab space for life science companies and healthcare innovation.
Chapel Hill has never had wet lab space – until now. California-based BioLabs, a co-working space for life science startups, is leasing the entire third floor, over 23,000 square feet of space, for shared wet labs and office facilities for new research-based startups. It includes a collaboration with Innovate Carolina’s on-campus KickStart Accelerator for life science ventures. In addition, the Town recently approved Grubb Properties’ 238,000-square-foot, 7-story office building and wet lab facility on the 1.5-acre parcel at 150 East Rosemary, replacing the Wallace parking deck. It will include three levels of underground parking and dedicated street-level space for retail stores, restaurants, and public plaza.
For years, we’d lose companies to the Research Triangle and Durham because we didn’t have wet lab space. Now faculty-founded startups have an easy path to find larger shared office and lab environments when they outgrow their earliest company spaces on campus. It will also create a stronger pipeline of startups based on UNC-Chapel Hill faculty research.
3. There’s also tons of newly built, affordable office space.
Chapel Hill has come full circle since the 2008 economic downturn. In August 2021, The Gwendolyn on Glen Lennox Drive officially opened its doors. It’s Glen Lennox’s first office tower named after the first black woman to attend the University. It offers 106,000 square feet of high-end office space, along with covered parking, an on-site café, bike and pedestrian lanes, indoor bike racks, and on-site showers and locker rooms. Coworking firm Industrious has already signed on to 27,000 square feet, taking up an entire floor in the new building.
Also in the pipeline: A medical office development, known as the Tri-City Medical Building. The project proposes 60,000 square feet of office space on an existing parcel in the southwest quadrant of the NC 54 and Barbee Chapel Road intersection.
4.The hub is located in a designated Opportunity Zone.
In 2018, the Town got approved a census tract along Martin Luther King Jr. Blvd, North Estes Drive, and East Franklin Street to capture the benefit of an opportunity zone. It’s Chapel Hill’s first Opportunity Zone, and its aim is to spur economic development by providing tax benefits to investors. Those range from deferring tax on prior gains to sheltering future gains for ten-year investments in the zone. The program also offers additional benefits to businesses located in the buildings. Because of its tax structure, businesses can have lower cost to access capital – something that is particularly important for startups.
5. There are plenty of resources on the ground for early-stage startups.
Chapel Hill Downtown Partnership, founded in 2004, works to support businesses through programming, marketing, and community building. If you’re a business just starting out or searching for a location, they work to make the process smooth and efficient. The Chapel Hill-Carrboro Chamber of Commerce is also a great partner. It’s managing the Town’s ReVive Recovery Grants program, appropriating $200,000 in federal American Rescue Plan Act funds. The program awards micro grants of between $1,0000 and $5,0000 to support entrepreneurs, existing startups, and local small businesses.
Another big player is EmPOWERment Inc., a nonprofit focused on community organizing and affordable housing. It runs the Midway Business Center on North Graham Street, a small incubator for small business owners who face certain racial, gender or socioeconomic barriers. It provides ten small startups with over 6,0000 square feet of affordable office and retail space, and other shared equipment and support.
6.Chapel Hill’s angel investor network is strong, and its venture capital scene is growing.
The University’s Carolina Angel Network, launched in 2017, is an angel investing platform that connects UNC-affiliated entrepreneurs and startups to its investor network. It has 200-plus active members. To date, it’s supported more than 20 startups, investing more than $20 million and generating more than $108 million in revenue for these ventures. Among them: Gemelli Biotech, a company on a mission to support the discovery of novel diagnostics and therapeutics for the human microbiome. Another is Vital Plan, a company that aims to empower its customers to use natural remedies.
It may surprise some, but Chapel Hill is also home to one of the state’s largest venture capital investment firms, TrueBridge Capital. Founded in 2007, it manages more than $4 billion in assets and invests in venture and seed/micro-VC funds focused primarily on early-stage tech startups and select venture and growth-stage companies. Its portfolio includes well-known tech startups such as Uber, Twitter, SpaceX and Dropbox.
Between Innovate Carolina, Carolina Angel Network, and other resources on the ground, there are some significant opportunities in Chapel Hill.