Development Magazine Spring 2010

Development - Ownership

Mound Advanced Technology Center - An Innovation Driver

One of the newer buildings on the Mound campus, 480 Vantage Point formerly housed all administrative functions for the Department of Energy site contractor. The 89,290-square-foot building is available for lease. Photos courtesy of Louie Ferraro, Bella Photographics, Dayton, Ohio.

Across the country there are high-stakes redevelopment projects mired in complicated issues, multi-faceted challenges and staggering complexity. And then there’s Mound Advanced Technology Center, a decommissioned Department of Energy (DOE) nuclear weapons facility located in the geographic center of Miamisburg, Ohio, a residential community just south of Dayton. Mound has presented a myriad of redevelopment challenges since its closure was announced in 1993. It took a determined community with strong political leadership to prevent Mound from becoming a 306-acre brownfield with 2,500 jobs lost and gates permanently padlocked against future use.

Today optimism surrounds the redevelopment effort. The Mound is evolving as a thriving, modern scientific technology and business park, where 286 individuals are working in 17 technology-oriented companies. Many of these businesses are owned by scientists-turned-entrepreneurs with powerful credentials such as doctoral degrees and patents for technological innovations.

With its rolling hills and beautiful views of the Great Miami River, the campus provides an attractive environment in which to do business. Unusable buildings have been demolished, while others have been renovated and their unique spaces returned to productive use. Environmental cleanup is all but complete, and the landscape no longer features blights such as security fences, guard stations, overhead stanchion lines and water towers. These icons of Mound’s role in the nation’s defense have been replaced with modern roadways, well-lighted parking lots, enhanced building facades and landscaped green spaces.

After 15 years of preparation, negotiation, remediation and renovation, Mound is at last positioned to take advantage of its market potential. Economic development efforts are focused on attracting businesses that leverage Mound’s historic core competencies, especially in the areas of emerging energy, advanced manufacturing, materials processing applications and information systems. An exciting recent development is the growing momentum toward Mound’s becoming a center for renewable energy technologies as the nation looks for alternatives to dependence on foreign oil.

Due to the high-profile technological advances being made by some businesses on the campus – mostly owned by former Mound scientists who have found commercial applications for their pre-closure expertise – the site is gaining recognition as a center of innovation that contributes to the Dayton region’s powerful network of technology assets.

Prominent Origins Mark Beginning

To understand the challenges of redeveloping the site, it’s important to know how the facility evolved. Mound’s genesis was in the prestigious Manhattan Project, a top-secret research effort for the development of technologies associated with U.S. nuclear weapons systems during World War II. Five units of this high-level program were based in the Dayton area, including one in Miamisburg.

Immediately after the war, in 1947, the federal government built Mound Laboratory as a permanent research facility adjacent to Miamisburg’s large, conical earthen mound, an ancient burial site of the Native American Adena tribe. Although its work could not be revealed to the general public, Mound became well known in the defense community for excellence in high-tech research, design, development, manufacturing and testing of components for nuclear weapons, aircraft safety devices and spacecraft. With 2,500 workers at its peak in the 1980s, it was the city’s top employer and a significant economic force in the region.

DOE’s 1993 announcement of Mound’s closure shook the community. The department did, however, extend to the city of Miamisburg the opportunity to take responsibility for the site’s redevelopment and reuse. Determined to control the facility’s destiny, the city accepted the challenge and created the Miamisburg Mound Community Improvement Corporation (MMCIC), an economic development organization charged with abating the loss of 2,500 jobs, preserving Mound’s unique technological capabilities and transitioning the Mound site to a business and technology park.

Complicated Issues Emerge

From the beginning, MMCIC officials had their hands full. Untangling the legal requirements was only slightly less complicated than disassembling the Mound site itself, which had been built up over nearly 50 years in an uncoordinated, function-over-form manner, as the Department of Energy’s missions grew and changed during the Cold War era.

With the site’s closure, the Miamisburg community inherited a self-contained, high-security mini-city with its own utilities, communication system and public safety functions, as well as serious environmental issues. The site contained specialized spaces in a hodge-podge of 110 buildings and structures, thousands of dollars worth of high-tech equipment, difficult access from public roads and no internal roadways for traffic circulation. Employees had been bused to workplaces from large parking lots near the perimeter of the site and walked between buildings for official business. Some buildings were connected underground.

"Mound was a unique environment back then," said Doug Benner, a former Mound employee who now works at the site as vice president and general manager of defense operations for five locations of PerkinElmer, a global optoelectronics company that develops mission-critical defense technologies. "It was like its own city within the city of Miamisburg. Everything that was needed was available internally."

In addition to the site’s physical makeup, another complicating factor was Mound’s designation by the U.S. EPA as a Superfund site in 1989. Thus, the need for a substantial environmental cleanup effort represented a priority as well as a short-term obstacle to marketing to outside companies.

Legal Barriers to Start

Before meaningful redevelopment activities could begin, a preliminary legal issue had to be resolved. Since Mound was the first DOE site in the country to undergo commercialization, there were no precedents or procedures in place to facilitate MMCIC’s leasing of federal property to private businesses. Local officials worked with the office of then-U.S. Congressman Tony Hall to draft legislation, which was quickly approved by Congress.

Mound Advanced Technology Center

The 60,520-square-foot, five-story building at 965 Capstone Drive features wet and dry labs as well as office space. Originally built for defense purposes, the cost of constructing similar space today would be cost prohibitive.

A second legal barrier involved the transfer of DOE property’s ownership to another entity. A lengthy negotiation process resulted in a complex sales contract that would allow the transfer of parcels to MMCIC as the environmental restoration of the property was completed over the years. Today, 182 acres of the 306-acre site have been transferred. Through a special agreement between MMCIC and DOE, however, environmentally cleaned buildings have been made available to be leased for economic development, whether they are located on transferred property or not.

Finally, MMCIC’s acceptance of the property hinged on the indemnification of future owners from environmental liabilities. Despite a complete cleanup program, Mound’s environmental legacy could stand in the way of redevelopment. The issue of future indemnification was resolved in 2009 when an additional piece of federal legislation was adopted, allowing the indemnification to pass on to successors and assigns.

The Physical Transformation Begins

Setting Mound on a new course toward its future as a business park required a vision, a plan, significant resources and a concerted implementation effort on the part of MMCIC staff. The vision was created through community consensus, and stated the desire to redevelop the site as a center for technology businesses. A comprehensive reuse plan, adopted in 1997, identified strategies and $55 million in investments needed to achieve the vision. The plan leveraged Mound’s physical assets, such as its rolling landscape, unique spaces such as labs and production areas, robust building construction, ultra-reliable electrical service and powerful telecommunications infrastructure to maximize economic development potential.

The site’s physical transformation has been multifaceted:

MMCIC has invested a total of $22 million in capital projects to make the site and its facilities attractive in today’s marketplace. This includes the construction of 2.6 miles of roadways, the creation of more than 1,000 new parking spaces, the reinstatement of more than 322,000 square feet of building space and the installation of 13 new, energy-efficient heating and cooling systems, among other improvements. It also has involved building demolition, security fence removal and extensive landscaping. Funding has come from federal, state, county and local government sources as well as MMCIC. Of the site’s 110 original structures, 97 were demolished as part of the environmental remediation contract.

During the Cold War, Mound’s missions were critical, and they could not be dependent on public utilities. Thus, independent utility systems had been created for Mound. These centralized services proved to be expensive and impractical for a site that would host multiple tenants. Thus redevelopment required that utility services be completely revamped and switched to conventional sources.

As environmental cleanup was completed in each of the buildings not demolished, it was turned over to MMCIC to lease for economic development. The transformations of some proved challenging, however, because of their original design, both inside and out. For example, one newer brick structure was built without windows or a front entrance. But the building’s unique features – construction robust enough to withstand severe disasters, shielding technology, redundant utility infrastructure and raised flooring – ideally matched the needs of a new tenant, the Montgomery County Regional Dispatch Center. MMCIC spent $3 million on exterior and interior improvements, thus leveraging the new tenant’s investment of $12 million in customizing the interior space and high-tech equipment. With about 80 employees, the new dispatch center began operations in 2008.

Scientists-Turned-Entrepreneurs Find Success

Six of the 15 companies currently operating on the Mound campus were started by Mound scientists-turned-entrepreneurs who harnessed the knowledge and skills developed during their tenure as DOE contract employees to create new business opportunities. MMCIC originally incubated these successful companies, providing business development training, administrative support, marketing services and grant-writing assistance. Today these companies help to create an environment of innovation, excellence and synergy on the campus.

One success story is PerkinElmer Miamisburg, a company that started in 1994 with eight Mound employees working in scattered facilities around the Mound campus. Utilizing the expertise they had developed in the research, development, manufacturing and testing of components for DOE, the principals have found markets for their energetic safety devices, primarily in the defense industry. The workforce has grown to 66.

A few years ago, when PerkinElmer noted interest in expanding its facilities, MMCIC, as landlord, was able to facilitate funding assistance from a Montgomery County economic development program to help pay for interior improvements to the new building they would lease. That 45,000-square-foot space, which includes office, lab and production areas, is soon to be expanded again to accommodate the company’s growth. "Our landlord values us. They’ve shown it by being willing to invest in our growth," said PerkinElmer’s Benner. "We plan on being here at Mound a long time."

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