North Campus Research Complex after 3 years and $200M: 'Are we making the most of the opportunity?'

But at $108 million, the facility was a bargain. Woolliscroft and others predicted that having so much blank space at the school's ready would spur innovation and quicken the pace of research and development growth at the school.

"When the university typically builds a building, it pretty much has all the occupants in mind for the building so that when the building opens, it's pretty full," explained David Canter, executive director of the North Campus Research Complex. Canter led the site when it was under the ownership of pharmaceutical company Pfizer. "NCRC represented a very different strategy. ... We didn't have all the occupants lined up and it was seen as a completely different way of working.

"We took a risk," he continued.

The outcome, U-M officials have since surmised, turned out to be well worth the risk; and now the conversation over NCRC has turned tide.

"The risk is not seen as a such a risk anymore, now it's seen as 'are we making the most of the opportunity?' " Canter said.

University President Mary Sue Coleman said recently that she considers the acquisition of the Pfizer complex one of the top accomplishments of her tenure, which began in 2002.

"Universities never have the chance to purchase 2.2 milliion square feet of space and all this land at pennies on the dollar," she said. The complex sat untouched on the market for a full two years after Pfizer's closure and was losing value.

When U-M first acquired the complex in June 2009, Vice President for Research Stephen Forrest called it "a way to re-envision actually how the University of Michigan does research fundamentally."

In a recent interview, Woolliscroft said the acquisition allowed U-M faculty and administrators to "think differently."

"For the first time in our history we had sufficient space. Space wasn't a limiting factor. When space is the limiting factor then you're very reluctant to use it for more experimental relationships and collaborations," he said. "In some ways it’s the coffee pot. [NCRC] is allowing people to bump into one another."

Center spawns institute

As NCRC marks its third year, the complex has reached a new milestone: It has spawned its first institute, one that includes economists, public health researchers, engineers, medical researchers and behavioral scientists.

The Institute for Healthcare Policy and Innovation has set up shop in NCRC, bringing 400 existing university faculty and researchers together to create a nucleus of health care research in Ann Arbor.

Officials are hoping that NCRC can facilitate the key ingredient necessary to make the institute a success: collaboration. It's an ingredient that's been missing from efforts at Duke and Harvard universities, creating failures in innovation, says interim institute director Rod Hayward.

"A lot of unviersities have tried to do this," Hayward said in an interview with AnnArbor.com. "There's all of these successful investigators doing their own thing. To get them to [collaborate] with other individuals ... can be hard."

The institute's success, he added, will hinge on making sure the barriers to collaboration are minimal, researchers are using the space well, having seminar series that are top-notch and that bring people together for discussion and interaction, and establishing best practices for submitting grants.

The number of research grants U-M received in 2011 is down from the number received in 2010, recent budget figures show.

Woolliscroft said that the institute would "absolutely not" exist if U-M did not purchase NCRC: "Without NCRC we wouldn’t have even been thinking along those lines."

$300 million over six years

Since the $108 million purchase of the complex, the university has put nearly $92 million in additional investments into NCRC, including construction projects and yearly operating costs.

The university is spending $13.7 million to renovate a 120,000 gross-square-foot NCRC building for health services research and is planning to renovate or repair 10 additional NCRC buildings by the end of 2013. Other costs that are difficult to quantify include administrative support surrounding NCRC, faculty recruitment efforts and the overall operation of a expanded research enterprise.

In the next three years, the university expects to invest another $100 million in NCRC, bringing the tab to $300 million.

When the university chose to purchase NCRC, the medical school agreed to pay operating costs for the complex's first 10 years, Woolliscroft said.

Today, the complex costs roughly $18 million a year to operate, including utilities and maintenance but not accounting for faculty salaries or administrative support.

Those costs are shouldered by each of the medical school departments and centers, including ones that don't currently use NCRC space.

Woolliscroft called the cost sharing a "tax that each of the departments have imposed on every faculty member," but said that in his experience faculty made the sacrifice willingly because "what's in all of their interests is to enhance ... the standing of the medical school."

Other departments and schools that use NCRC space also contribute toward operating costs.

Isolated from Central Campus

When Woolliscroft began advocating U-M's purchase of the old Pfizer complex, one of his platforms was the proximity of NCRC to existing university property. The complex is adjacent to North Campus and, as Woolliscroft puts it, 100 years from now when the NCRC buildings are outdated, the property could provide "wonderful flexibility and opportunities for the university" to expand.

But while NCRC is close to university property, it's far from the active and heavily populated Central Campus and Medical Campus and some faculty have been reluctant to trade the buzz of campus life for more isolated NCRC quarters.

Steven Katz, a medical school faculty member, had such concerns during his move from Central Campus to NCRC last month.

"As a team we were hesitant about the NCRC move, especially me. I live in Burns Park, my offices were on campus and I was happy walking or riding my bike to work for 20 years," he said. "So I was particularly resistant to the move as were many of my colleagues located near Central Campus."

But Katz said that a week into his new office, he began to understand the advantages of working at NCRC.

"[It's a ] very dynamic, inviting work environment now increasingly populated by a wide community of investigators and staff ... across divisions and departments who I can now engage in ways that were challenging on central campus," he said.

Internal U-M survey results indicate that satisfaction with NCRC has increased in the past year. In 2012, roughly three-fourths of employees expressed a high or moderate level of satisfaction with the space, up from 65 percent of respondents in 2011.

However, preliminary 2012 survey results indicate that 21 percent of employees are dissatisfied on some level with collaboration at NCRC, compared with 29 percent of respondents reporting dissatisfaction in 2011.

Growing faster than projected

When the university first acquired NCRC, officials predicted that it could take as many as 10 years to reach capacity, which is projected at between 3,000 and 3,500 employees.

Today, Canter says the university is four to five years out from having that many employees on site. "I don't think it will take the full 10 years," he said.

There are currently 1,423 workers on site at NCRC and roughly one in six of them are new hires, according to U-M data. The majority are from the medical school; others include public health, economics, social work, engineering, pharmacy and dentistry.

By the end of 2012, the school is expecting upward of 1,700 employees on site.

Additionally, 18 startups are located in the incubator and the university also has leased NCRC space to the Veterans Administration Hospital of Ann Arbor.

Although the facility is 2.2 million square feet in total, just more than 1 million of the square footage is what U-M considers assignable, or usable for office, research or gathering purposes. Of that space, 440,700 square feet is assigned.

Canter says that without U-M's June 2009 investment, it's likely that the complex would still be sitting empty, unused.

"If Pfizer hadn’t sold it to the University of Michigan it would probably still be empty, unsold," Canter said. "Maybe even Pfizer would be contemplating bringing its costs down by knocking as much down as possible."