Skip to main contentSkip to main content
You are the owner of this article.
You have permission to edit this article.
Edit
In honor of Independence Day, roanoke.com is providing unlimited access to all of our content from June 28th-July 4th! Presented by Hopkins-Lacy Branch Group

Economist says Tech, Carilion Roanoke campus will contribute at least $465 million to economy within 8 years

  • 0
skd vtcomnewclinic 042518 p01

Construction is under way on a second building for the Virginia Tech Carilion Research Institute. The site near the Roanoke River was being elevated as shown in this photo taken in late April.

The impact on the state’s economy by Virginia Tech Carilion health sciences campus in Roanoke will grow from $214 million today to $465.2 million annually within eight years, according to an economist’s conservative projection.

The addition of a second building for the research institute alone will create 828 new jobs and generate $150 million in additional spending by 2026.

An economist with the University of Virginia’s Weldon Cooper Center for Public Service looked at expected growth on the VTC health sciences campus once the second research building opens there next year.

He said the study is conservative and did not look at the impact hundreds of additional undergraduates will have on Roanoke, nor did he include projections for Carilion Clinic’s growth or speculate about additional development that could occur on the campus or in the surrounding area.

“This is just a basic benchmark based on exactly what is happening at Virginia Tech and Carilion right now. It is not a measure of possible impact,” said Heywood Fralin, chairman of the VTC Academic Health Center Steering Committee. “The possible impact is going to be far greater than what is shown in this study.”

The steering committee, which is made up of people who are not employed by either Carilion or Virginia Tech, is charged with advancing VTC through philanthropy, government relations and economic development.

Fralin said the study will encourage philanthropy and economic development.

“I think that as a region we need to think big because this is an opportunity that comes our way once a century,” he said. He equated the impact of the health sciences campus and innovation corridor on Roanoke to that of Norfolk Western moving its headquarters here in the 1800s.

Tech and Carilion formed a partnership a decade ago to build a medical school and research institute on the Riverside campus. The research institute is at capacity, and a new building is underway that will double its size and expand its reach in advancing medical discoveries through trials and to market. Tech intends to offer more undergraduate programs in Roanoke centered around its school of neuroscience, and the Virginia-Maryland College of Veterinary Medicine will move its cancer treatment center to Roanoke. Four companies have been spun off from research since 2010. At that pace, the economist expects 10 more companies will form by 2025.

Fralin said the pace of growth will quicken and have a greater impact on the region with philanthropic investment.

“Clearly, the more financial support we can give to this effort the better it will be,” Fralin said. “There is an enormous list of things that are needed. To date, the commonwealth of Virginia has funded the buildings. I don’t think it’s reasonable to assume that every building going forward will be built by the commonwealth.”

Beth Doughty, executive director of the Roanoke Regional Partnership, said the study will help in attracting developers.

“It helps to portray the potential of the future. It documents and confirms, this is the beginning, there are plans and there is a strategy,” she said.

The study’s author, economist Terance Rephan, said the VTC economic footprint through payroll and operational and capital spending will more than double from its current $42.1 million to $110 million once the new building opens next year, and that figure will grow to $190.3 million as research teams are recruited.

Rephann said his report includes spending on salaries by the university but does not include spending that will come through grants, such as those from the National Institutes of Health. The research institute now has a $100 million portfolio of such grants.

Currently, about 1,700 people are employed on the campus, which also houses Carilion administrators and physician clinics. By 2026, the workforce will rise to nearly 3,150 employees. Rephann kept the Carilion jobs level static.

The study does not address the impact that the growth of undergrads from 300 to more than 1,000 will have on Roanoke.

“That can be huge and how the story is even better,” Doughty said.

Carilion also announced earlier this year that its Jefferson College of Health Sciences will become part of Radford University, which would allow for a greater expansion of programs to train health care providers.

Jefferson and Radford offer programs at Carilion Roanoke Community Hospital, which is at the opposite end of the Jefferson Avenue corridor from the VTC Riverside campus. Jefferson is expected to become part of an innovation corridor with a grouping of academic institutions, affiliated businesses, housing, restaurants and other services that the growing population will need.

“We’ve brought in several groups of site locators and they are blown away by the potential for it,” Doughty said. “To this point, it’s been an undiscovered opportunity, but that’s going to change.”

Roanoke City Manager Bob Cowell said the city recently updated its downtown plan and included provisions to guide growth and to build more pedestrian and bike ways.

“The beauty of the campus is that it is an urban campus, and we can get people there in as many different ways as possible,” Cowell said. “The real objective is to figure how people can move without getting in cars.”

Cowell said another challenge will be housing. He said the Franklin Road area “is very ripe for investment. There are folks that have moved out, large tracts of land, parking lots and those things.” He said Earth Fare and Carilion Institute for Orthopaedics and Neurosciences provide examples of how redevelopment along Franklin Road might look.

He said most of Franklin Road is zoned commercial, so the city will need to look at more mixed uses to accommodate housing. He said the city is also talking with Roanoke County officials about plans to redevelop the area around Tanglewood Mall, as that would anchor the other end of the corridor.

Cowell said there are more buildings downtown that could be converted to apartments and condos, and he does not foresee the construction of new apartment buildings in residential areas.

“It would be a real challenge and inappropriate to push that activity into the neighborhoods,” he said.

Cowell said a committee of key stakeholders meets monthly to talk about the issues.

“The hope is they can realize what they are projecting and that we can accommodate and capitalize on that,” he said.

0 Comments

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News

Sports Breaking News

News Alert