9UNP0188SD_Mike_Bugher_WordPress_

- Welcome everybody to Wednesday Nite at the Lab. I'm Tom Zinnen. I work here at the Biotechonology Center here at the UW-Madison and I also work for UW-Extension, Cooperative Extension and on behalf of the Wisconsin Alumni Association thanks for coming to Wednesday Nite at the Lab. We do this every Wednesday night, 50 times a year. Tonight it's my pleasure to be able to introduce Mike Bugher who is the Director of the University Research Park. I had the pleasure of traveling with Mark to Russia to a place called Kirov, Russia which is about 13 hours by train east of Moscow back at the end of March I believe it was. And so he's going to be talking a little bit about that but also about what it takes to start up and keep perking along a university research park. Mark has been Director of the Research Park since 1999. In 1996 he was appointed Secretary of the Department of Administration under the Tommy Thompson Administration. *Earlier in 1988 he was Secretary of the Department of Revenue and before that he was Home Secretary for Congressman Steve Gunderson of the 3rd Congressional District here in Wisconsin. 

He currently chairs the Wisconsin Technology Council, the Marshfield Clinic Advisory Board and the Greater Madison Chamber of Commerce Board. So please join me in welcoming Mark Bugher to Wednesday Nite at the Lab. (applause) - Everybody can hear? All right. Excellent. Well it's great to be here, and I appreciate the invitation by Tom and of course it's nice to join all of you on such a beautiful night when we have Concerts on the Square, so all of you get high honors and credit for being here on this gorgeous summer evening. It's about time we had summer. *It's my pleasure to come and talk a little but about the University's Technology Transfer Program, the University Research Park as a sort of launch pad for that program and also talk a little bit about the research park and the university's effort to kind of spread the Technology Transfer word all across the country and around the world. Tom mentioned our recent trip to Russia and we'll discuss a little bit of that trip and then hopefully answer some of your questions. It's wonderful to see a good turnout tonight. 

I'm also honored to have Art Hovey here with us. Art has recently completed a history of the Research Park, the first 15 years. It's -- if you desire a hard copy of that you can contact me at the Research Park Office. We have copies that I'm sure Art will sign, or you can look at the publication online. It's a very interesting sort of from 1984 forward when the Research Park was first started. And the thinking that went into the creation of the research park on behalf of the University of Wisconsin-Madison. Let's talk a little bit about the background of the research park and why we are involved in the activity that we're involved in. *The research park is really the physical manifestation of our Technology Transfer Program here at the University of Wisconsin-Madison. And what that means is that we believe strongly in this notion of transferring technologies from the research labs and classrooms of our university faculty to the private sector, or taking all of those discoveries and those wonderful research activities that occur here on this campus and making sure that they're available to the citizens and taxpayers of the State of Wisconsin. It's all part of the essence of the Wisconsin Idea. 

The boundaries of the University are the boundaries of the State. I don't know if you can read that clearly, but this is a notion that's been around this campus since the early 1900s. As many of you know, Charles Van Hise originally coined this phrase and land grant university responsibility to make sure that what we do here at this university is shared with the people that pay the bill for the cost of operation of our university. And that's really the essence of the research park, creating a place or an infrastructure, a physical place for faculty members to transfer that technology from the University out into the private marketplace. Many of you may know that the creation of private companies is not permitted on University owned property and so this notion of being able to commercialize intellectual property can only occur on a sort of privately owned real estate which is what the research park really is. But I'd like for you to think of the research park as more than just a landmass and a collection of brick and mortar and wires and windows and that sort of thing. It really is the essence of an idea and that is embodied in the Wisconsin Idea and that's making sure that we owe it to the citizens of Wisconsin that we transfer all of this wonderful discovery that occurs on this campus to the citizens and taxpayers of the state all across our State of Wisconsin. *And for those of you that know John Wiley, he's kind of an internationalist of course he would probably say the boundaries of the University are the boundaries of the universe. So that's his perspective. In order to have a successful and vibrant research park in a technology transfer program, you really have to have a strong university, and one of my takebacks from many of the presentations that I make all across the State of Wisconsin, even in the city of Madison is that people frequently don't appreciate the potency and magnitude of the resource that we have here on this campus. 

The way that the University of Wisconsin-Madison is viewed by others all across this country and world. In some cases is much more substantial than the way it's viewed here in our own hometown. That's unfortunate but part of my job and others that are involved in this program is to sort of tell the story about what the university is doing in the area of technology transfer and make people aware of the magnitude of the effort that we're involved with here on this campus to transfer technologies to the private sector and participate in economic development and job growth for our state and for our region. You can see that this university is one of a very elite group of universities that are really considered to be the premier, top universities in the country as it relates to this notion of technology transfer or making it easy for faculty to commercialize their intellectual property. And it's a pretty rarified era that we're involved with there but in many ways it's due to the intellectual prowess of the faculty on the campus, the depth of our faculty and the extent to which the faculty are involved not only in teaching and training but also a substantial research engine here on the campus. As I mentioned the research park or any of our technology transfer programs would not be successful without a strong university and this is a slide that I have in this presentation. Perhaps it's information that you already have, but we like to share this with people who really don't appreciate the magnitude and size of the campus and the number of students that we educate here on this campus which is in the range of 42,000 now. *And you can see the breakdown among undergraduates and graduates. Numbers of doctorates awarded, we consistently rank in the top five of PhDs awarded across the country. And of course this last point which I think is very important because it gets to the qualitative part of the education that we provide here on this campus is that UW-Madison and Harvard tie for having the most number of CEOs for Standard and Poors 500, the top companies in the country as the leaders of their companies. 

And that I think speaks to the quality of our academic program here at the UW-Madison Campus. And ironically not all of those CEOs are business school graduates. It's pretty ironic and interesting when you go through the backgrounds of those individuals that many of them are from non-business school academic backgrounds but have risen to the top of their various companies because of their leadership ability and that sort of thing. Our technology transfer program has really embodied with three main players. These are the parties that are involved in this whole notion of helping the university in its economic development strategy. And that's sort of unique because I think many people feel as though a university is really for preparing our students for jobs and workforce of the future. But over the course of the last I would say ten or 15 years, many research universities and this one in particular have sort of evolved in their thinking and have come around to a point of view or a philosophy which would suggest that we are responsible not only for teaching and training the workers of the future, but we're also in part responsible for helping to create jobs for those graduates to fill once they complete their education here at UW-Madison. *And the research park is a living embodiment of that philosophy because many of the workers out there in the park are graduates of our various programs here on campus or the comprehensive campuses all across our State of Wisconsin. And so there is a rationale and connection between the whole economic development strategy and the University's main mission which is to educate students and the economic development piece is certainly a part of that. But the three main players are really of course the research park, WARF, and we'll talk a little bit about WARF and its role. 

Wisconsin Alumni Research Foundation. You're all familiar with that and have heard a lot about WARF for years. And of course the Office of Corporate Relations which is the third leg of our technology transfer stool. WARF's story is widely known by many of you but I just put some just general dot points here on WARF because the research park is kind of joined at the hip with WARF. We work very very closely with them and many of the companies that are in the park hold a WARF license and have gone through a patenting and licensing process with WARF and so I think that if you were to talk to Carl Gulbranson, the managing director of WARF, he would say that we would not be as successful at WARF were it not for the research park and I think I can safely say that the research park would not be successful were it not for WARF as well. So there is a symmetry between the research park and WARF that works extraordinarily well, and this model of cooperation and collaboration is really one that's viewed nationally as a premier model of technology transfer with these three players that I mentioned earlier involved in a collaborative effort to help economic development and job creation. Yes, Tom. - Is is public knowledge as to what the overall value of WARF is? - I think it is public knowledge, but it's in the range of just under $2 billion in terms of their overall assets that they manage, and they manage those assets internally, but I think that's public knowledge. If it isn't it is now, right? 

But this gives you a flavor for the level of activity that WARF is involved in, products sold, the 409 invention disclosures is an extraordinary number. This is a legal step that faculty members make when they make a decision to go forward with a protection or a protection strategy or a patenting strategy on their technology that they may have discovered in their research labs, and just by way of background, in the State of Wisconsin, faculty members that create technology that's really developed using federal dollars, federal designated research dollars, that technology is really owned ultimately by the citizens and taxpayers of the state and so WARF is the agent for in representing the University and the citizens and taxpayers of the state of Wisconsin in ensuring that that technology is protected. If you are a researcher on campus and don't use federal research dollars to create a discovery of some kind or another, usually this would be like a computer scientist or that sort of thing, then you are not required by state and federal law to use WARF as the protection agent for the University, you can literally own the technology yourself and have it patented yourself and have the benefits of it yourself. But if you use federal research dollars, and many of the researchers on campus do, you're required by state and federal law to use WARF as the patenting agent to protect your technologies. So 409 disclosures per year is a faculty member going in to say to WARF "I have an important discovery in cancer therapy or something like that and then WARF will do the, do diligence on that technology and then move forward with the patenting process which can be quite lengthy and also quite expensive. So that's a major benefit to the faculty that are interested in commercializing that particular intellectual property. You can see some of the other data points here that represents the level of activity that WARF is involved in. *They're extraordinary in their breadth of technology transfer activities. They also have sort of an unseen presence on campus in terms of what they provide in the way of resources and not only for bricks and mortar but also for the programmatic aspects of the operation of our program here on campus. I speak to groups that for instance in the humanities that aren't necessarily so thrilled with this notion of commercialization of intellectual property because folks in the humanities don't necessarily have the same view of this technology transfer program that the faculty in the life sciences do. 

And one of the things that I think is important for everyone on campus to understand is that WARF returns about $60 million per year back to the graduate school to help stimulate graduate education on this campus, so this is a kind of a, for all this business activity that we're talking about, there is a return that comes back to campus that helps to stimulate the entire graduate education program on campus. So there is a pump priming or returning on equity so to speak that occurs from all this business activity that WARF is involved in. WARF also participates directly in helping to fund many of the large particularly science and technology buildings that you see springing up all over campus. I think in the last 10 years we've had about a billion dollars worth of bricks and mortar go up on this campus. The Wisconsin Institutes for Discovery going up across the street, the big hole across the street is a $150 million project. And that is in part financed by WARF who pitched in $50 million to build that building. John and Tasha Morgridge, two of our wonderful and very successful alums pitched in $50 million to build that building and then last but not least the state taxpayers contributed $50 million to build that 300,000 square foot double tower which will be an extraordinary research facility and make this university one of few in the country that will encourage interdisciplinary research to the extent that we will in that building. *So that will be quite a landmark when it's finally done. But you can see some of the activities that WARF is involved in. They are clearly a major player and contribute substantially to the success of this university and of our program. 

The Office of Corporate Relations is a little different kind of operation. It's really established as the second player in the three legged stool of technology transfer. And their job is really to be a liaison between the faculty and the business world. We know that historically, faculty members and business folks don't necessarily communicate on the same wavelength or the same kind of language and that sort of thing. We also know that the business community in this state and in this country frequently is critical of the university for being very difficult to access for resources, very difficult to find information about specific technologies that they might be interested in for a research perspective, that sort of thing. So the office of corporate relations forms this liaison role, the bridging the gap between the academic world and the business world. And the folks that are hired, these are all university employees by the way are a specific skill set that can both navigate the academic perspective and also understand the needs of the business community. *So their job is to keep their antenna up, keep their ears open, understand what the business community is looking for in the way of research, communicate that to the academic world that might be trying to figure out what specific industries want in the way of research and make sure that everybody understands what everybody is doing. Conversely when a company contacts the university, you can imagine trying to contact an enterprise like UW-Madison, you know just call up Bascom Hall, the Chancellors office and say you know can I talk to somebody. You really need to have a contact in a department that you might be interested if you're a manufacturing company and want to contact somebody in engineering, and if you don't have a direct contact or a person that you know of in that department at school, it's pretty hard to kind of track it down. 

So the office of corporate relations is really that linkage. If a company has an interest in a particular technology, they will contact OCR, OCR will then put them in touch with the specific faculty member that might be of interest to that company and make that linkage and help advance the issue that the company might be interested in. OCR is also involved in a whole array of other things including helping faculty members with this whole concept and notion of commercializing intellectual property. Most faculty members are not trained in this side of sort of the business world. They're not too familiar with this notion of patenting, all the legal issues and other complexities that come as a result of this whole technology transfer world. So part of what OCR does is help them through that transition of making them familiar with what their rights are, what their exposures are and everything else associated with the commercialization of their intellectual property. This office is located in the research park itself, so it's a UW office with UW staff that's located in the research park close to the companies and the activity associated with our technology transfer program, and they're very effective at what they do. *Now the goals at the University Research Park are quite straightforward and a little bit unique and different than a typical academic mission. I know that frequently you have speakers here talking about their discoveries and so tonight's presentation is a little bit of a variation on that theme because I'm not talking about discoveries tonight. But what I like to think that we do at the research park is create a platform or a place for those discoveries not only to occur but also to be successful and to be commercialized and made available to the public. 

And so encouraging economic development is kind of a unique goal for an academic unit of the university but that's really our role and responsibility. We also view our role as providing opportunities for faculty and staff. Some of the more senior faculty are not quite as interested in this whole notion of having a start up company or that sort of thing, but many of the new faculty that are involved in the life sciences are very much interested in the whole notion of commercializing intellectual property and creating a start up company and that sort of thing. And so we want to do everything we can to help them with that rather challenging approach in making sure that they have all of the assets and help that they need in being successful. Since the research park is really owned by the University and going back to 1984 when the original founders of the research park really had in mind creating a place for the faculty to commercialize their intellectual property. This land is really held by the Board of Regents and also, I believe by the research park. And so my job as the director is to continue to make that asset more valuable tomorrow than it is today so that if at any time in the future the University decides to get out of the business of technology transfer and liquidate all of these assets that we have at the research park, we will have a very significant investment that will flow back to future students, faculty and administrators at the campus. *Yes, Tom. - Who owns all the buildings there? You own the land, do you also own the buildings? 

- The buildings -- there is 38 buildings currently in the research park. This is coming in a future slide, so I'll cover that in just a second, but we'll talk about specific ownership of the buildings and how that breaks down and who gets the rent and where the revenues flow. The Research Park is really a biotechnology park, and I don't know that in 1984 anybody sat around and said we shall create a biotechnology park. It sort of evolved based on the activities on the campus. And the campus of course places extraordinary emphasis on biotechnology, and that has created of course the inertia that in many ways stimulates the activities out in the university research park and you can see that this university has extraordinary assets and commitments to this broadly defined area of biotechnology which can mean a lot of things granted, but we have significant commitments in the area of faculty all across 60 different departments on campus and of course as I mentioned earlier, this university ranks second in the nation with regard to total research dollars that are applied to this campus and to the faculty from the federal government to help stimulate research and create those ideas that ultimately end up in companies out in University research park and across our State of Wisconsin. We have lots of rankings that we don't like, party school and all of that kind of thing. These rankings about technology transfer, quality of life, the extraordinary quality of our faculty and those kinds of things are the rankings that we do like and like to highlight, as opposed to some of the other ones. *This is a slide which gives you a sense for our neighbors in the technology transfer business and when I show this to people in Madison they kind of go, wow, we didn't think that UW-Madison was really up there in that rarified era of the top universities in the nation, but we are. UW-Madison ranks second to Johns Hopkins University. This is the latest data that we have. 

The 2007 data is coming out soon, probably in a month or so. We'll probably be up there in that general neck of the woods. And I don't know if you can see these other universities that are up there, but Johns Hopkins is first at $1.5 billion, and of course that university is involved pretty significantly in a lot of defense related work that we are not involved with on this campus, and so that kind of artificially alters the rankings a bit, but UW-Madison is at $832 million per year, the University of California, UCLA is slightly below us and then all of the University of Michigan campuses, all of the system for the University of Michigan falls into the $800 million range and then dropping down from there. But the importance of this is to give you some sense of the scale of where we are as a campus relative to other campuses across the country and this is an incredible accomplishment by our faculty and administrators to get this kind of federal research dollars. And in Wisconsin we talk a lot about not getting our fair share of federal dollars back for the amount of tax dollars we send to Washington. The numbers are never in those calculations. It's usually you know these transfer payments that come from the federal government that they use to make those calculations and Wisconsin ranks 48th or something like that in terms of our net receipt of federal dollars, but this number here is not included in those and this would substantially change, I think, those calculations. *So a little bit about the park. And you can if you want to pick up Art's book you'll hear more about this, but the park was established back in the early '80s, as you can see was the brainchild of then Chancellor Irving Shane and others who really wanted to create a place for faculty members to commercialize their intellectual property, a special place, not a typical business park, not a typical industrial park, but a really special place that was unique to UW-Madison and was available to faculty to start businesses and to commercialize their intellectual property, and that's really what has grown over the years and has really developed into what the university research park is today. Still with an emphasis on faculty start up companies. 

If a company comes to me and asks to be located in the park, the first question we ask them is what is your relationship with UW-Madison. When we get through that explanation, we ask about, do they have faculty entrepreneurs in their company, was a faculty member involved and responsible for their technology that created the company and do they hire our graduates and that sort of thing. And so those kinds of questions we ask. There are some companies in the park that are not what I call faculty start up companies. The split is about 70/30 roughly, 65/35 or 70/30 roughly with 70% of the companies being university inspired companies and about 30% being what we call service providers or other tenants that have found their way in to the park over the years. You'll find for instance a business bank, the First Business Bank that was allowed to come in back in the late 1990s, and they're -- the reason for allowing them to come into the park was that they are a business to business bank only and pledged to do and provide services to the start up companies in the bank or in the park with regard to business banking activities. So we have a relationship that's established and many times, the companies that have been allowed to come in which are not specifically university related companies are those that provide direct services to the start-up companies in the park, architectural engineering, banking, legal intellectual property services or accounting to those companies that reside in the park. *We have website developers that work for the companies in the park. We have communication and public relations folks that work directly with the companies in the park. We have venture capitalists that we've asked to come into the park, and have resided in the park, because the importance of having people that are going to finance these start up companies close to the companies that they're investing in. 

And so we do clearly have a rationale for a company to come into the park that's not a university inspired company and usually it's to provide benefit to those individual companies, our university companies. (inaudible) - All right! She's a member of SCORE, and they're in the park, in the incubator, so we appreciate the advice that we get from the representatives from SCORE as well, providing advice to our companies, and other companies as well. You can see that the original plot of land there was 351 acres. This is the old College of Ag and Life Sciences demonstration plots for many of you that were on the faculty back in the '60s and '70s, and maybe early '80s, you probably remember it. *I've had people that have come up to me who used to ride their bike out to these farms and buy eggs back in the early days and so this area has a long history in agriculture and when the university made the decision to move all of the sort of ag research activities way far out in the country, now located just on the other side of the Beltline behind Menards and Target there. At the time it seemed like we were moving those activities 20 miles out into the country and now it seems like they're right on the verge of being on the commercialization area again, but at the time, with rapidly urbanizing city of Madison around the College of Ag and Life Sciences property, the University felt like it wasn't compatible to have all of this ag research going on right in the middle of the fast growing west side of Madison. And so they made the decision to move, and rather than sell this property as a residential development which would have been very easy to do, Irv Shane and others, Wayne McGowan made the decision to create this special place where we would commercialize this intellectual property and retain ownership by the university and develop it as a place for faculty to commercialize and so that's what we have today. We're up to about 38 buildings now. A little over 1.6 million square feet under roof, about half of that square footage is what we describe as wet labs, you can see those kinds of things in this building as an example. 

These are your basic wet labs which are available for the science and technology related companies, to help them with their work. We have an excess of $160 million worth of value out there and many of you perhaps know that the university does not pay property taxes to the City of Madison. Public enterprises like public universities are tax exempt on the tax rolls, but the research park made the decision back then to voluntarily pay full property taxes to the City of Madison. We wanted to make sure that the research park was viewed as entrepreneurially as possible. That it was viewed as non-competitor with other private sector developers in this county and in this city. *And so right now we pay a little over $3 million in property taxes to the City of Madison and that helps us not only with the real estate community who would I think otherwise feel that we were unfairly competing against them, and that's always an issue when the university gets into things that are a little bit non-traditional from its core mission. But it also helps us with our land use issues and that sort of thing at city hall. We developed a relationship with the city which permits the university research park to develop projects independent of the city's approval process. We have our own planning commission, it's called a design review board, but the city in exchange for having the research park pay property taxes, gave the research park the authority to approve its own buildings and its own real estate developments in the park. So we don't have to go through the normal approval process that you read about in the papers that's so horrible down at city hall frequently. 

Our approval process is much more expedited and much more defined in terms of its approval timelines. And that's I think one reason why you get the certain high tech, high quality look of the research park because our design review board has created certain higher standards than are generally applied to normal commercial developments in the City of Madison and throughout other normal industrial parks and regions in the city. We currently have 115 tenant companies in the park. Those companies are employing slightly over 3,500 employees, so that is an incredible array of workforce, and many of those, I think 48% of the employees in the research park have a bachelor's degree or higher. We have a big slug of employees in the park that have a two year associate degree from MATC which is another very significant asset to our park and to this community. *These are the people -- the young people that do the bulk of the basic lab work. They have an extraordinary lab tech program at MATC that feeds much of the workforce in the research park and so this is sort of like the job creator of the future as manufacturing declines in the city of Madison and throughout the State of Wisconsin you know we have a science and technology segment of the economy that's growing very very rapidly. We're increasing jobs incredibly and aggressively in this community and throughout the State of Wisconsin. And if you look at the total amount of payroll that is paid by the companies in the park, that equates to about $62,000 per year per employee on average. If you know anything about the Wisconsin economy, our average per capita income is about $32,000 in the state. 

And so we've created a model -- this is what we like to talk to the policy makers about, the governor and the legislature, we've created a model by marrying up the academic powerhouse of the university with entrepreneurial, sort of free market approach to the creation of companies and that has developed what I would characterize as a higher quality level of job that currently exists in the research park that certainly pays a much higher salary than the average worker in the State of Wisconsin receives, so we're pretty proud of that particular statistic. Let me go back to Tom's question on the buildings in the park, and this is kind of a crummy slide. I think it's a little bit hard to see this slide. The buildings in the park are in large part owned by a non-profit corporation that I am responsible for as the director of the park, so we own many of the buildings in the park. There are some buildings that are owned by private developers and in that case what we do is we purchase individual parcels of land from the board of regents that are sort of the main focus of the research park and then we ground lease or land lease those parcels to individual developers, in some cases a 50 year ground lease, in some cases a 90 year ground lease so developers that are private entrepreneurs and one example would be the business bank right here on the corner. *This is Mineral Point Road. This is Whitney Way down through here and this is the sum total of the current research park. But this building here is an example. This is the First Business Bank. That's a bank, a building that houses the First Business Bank and one other tenant. 

We do not own that building, but we own the land underneath the building and they make monthly payments to us on a 50 year ground lease for the privilege of being in that location. It helps the research park control the usage of the buildings in the park. It also creates an endowment-like revenue stream that ultimately flows into the coffers of the research park for the end use of the university at some point depending on how they want to use the money. So we are not just selling lots and then spending the money somewhere. The money is all being capitalized in a very secure kind of income stream that is reflected in ground lease payments for the buildings that we don't own. *The vast majority of the buildings in the park we do own and in that case we build those buildings and lease them out to benefit the entrepreneurs, the faculty entrepreneurs. And the rents that are collected also flow into those coffers of the research park to ultimately benefit the university as well. So that sort of answers Tom's question about who owns what and how those revenues are distributed through the budget of the university research park. For those of you that are here or have been here a long time, of course I mentioned that this is Mineral Point road. This is the Cuna Mutual Insurance Company across the street. 

And I don't know if you remember that the university and the City of Madison teamed up to sell this parcel of land to Cuna Mutual back in the late or early '80s and in retrospect it would be nice to have that decision back because frankly we're almost full in the current park and would love to have the 60 acres of land for continued expansion for the university research park. We've made efforts to try and buy it back from Cuna Mutual, but Cuna Mutual wants to develop this property, and they're working on a plan for a mixed use development which will include housing, including an expansion of Oakwood Village right here, some retail, and some commercial, class A, high quality office buildings. The research park has traded this building right here which we own. It's called the diagnostic testing lab, a veterinary medicine building where the chronic wasting disease for the deer herd was tested. That facility has been moved to the large animal hospital down on campus now in the Veterinary medicine department. *So that building is vacant so we traded that building along with this little farmhouse on the corner here that many of you probably see if you drive down Mineral Point Road on a daily basis. And then there is a veterinary medicine, a series of veterinary medicine buildings here and here, that we've traded to Cuna Mutual, a total of 12.5 acres of property in exchange for 20 acres right here in sort of the meat of the park. And so we're working on an arrangement right now to have an agreement on the land use plan that will be developed as a result of that, but the research park will use this 20 acres for continued expansion over the course of the next couple of years and then we'll work with Cuna Mutual to develop a quality development on the balance of the property over the course of the next few years as well. So you'll start to see news of those kinds of developments springing up here in the next few years. Quality housing in here, probably. 

Some expansion of senior housing and some workforce housing for people that want to work in the park. With almost 4,000 employees in the park, you'd like to-- and with gas prices at $4.00 a gallon, I think these apartments and nice living quarters closer to work become much more attractive in today's environment, so that's the kind of thing that we'll be looking at trying to encourage. This is Tom Zinnen here, this right here. We had an analysis done of the impact, the economic impact of the park and of course it is staggering to many people the $680 million to the economy annually, this is goods and services that are purchased and the sort of economic activity that occurs in the park. Many of the companies, in fact all of the companies in the park do business internationally. *This is a full scale, extraordinary economic engine out there, and it's delivering significant benefits on behalf of the university and on behalf of this economy locally. The 9,100 jobs is over and above the jobs that currently exist in the park. These are the jobs of people that sell goods and services into the companies in the park, so the sort of indirect impact of job creation in addition to the ones that are located directly in the park, and of course the sales tax revenue, local tax revenue and income taxes that are paid by the employees is a significant benefit to the State of Wisconsin and the City of Madison and that sort of thing. The heart and soul of the park is really the MG&E Innovation Center. It's our incubator facility and many of you may have been to that. 

It's where the SCORE office is. It's a very significantly important facility because it's really the heart and soul, the heartbeat of the research park. It's the first stop in the entrepreneurial chain of growth that companies have or make when they come from campus with their idea and their license in hand and their company, the first stop in the chain is really this particular building. It's a very successful incubator. We credit Madison Gas and Electric which is our local utility for helping us significantly with the development of this facility. *This is a 113,000 square foot facility which is by most standards one of the largest incubators you'll find anywhere and also one of the more successful ones financially. Most incubators don't work very well and flounder financially. This one is doing very well. But Madison Gas and Electric participated directly by providing a $1.3 million grant to us years ago to help us develop and build this facility, no strings attached. Of course we do spin the meters out there with the companies in the park, so there is a sort of quid pro quo that comes with that, but they could see the benefit to the community, also see the benefit to their company and provided that money to the park to help us build this facility. 

But we currently have 37 start up companies incubating in the incubator. These are the sort of start up companies. And 85 incubation suites. And of course you can see that we're fully occupied right now, and our biggest challenge in our work is trying to juggle tenants who want to be in, but can't be in because we're full, and that sort of thing so it is a very attractive place for people to come to. This is just a brief sketch of some of the amenities and services that we offer at the park, and of course the connection to the library. *This is the only offsite connection to the university library that exists. We have two kiosks out there where employees of the companies and the park can access the university's research library and then by accessing the Big 10 libraries as well. So many of these companies take full advantage of that connection to the campus in addition to the library access, so these kinds of things are very attractive and we develop these amenities really talking to the entrepreneurs and the faculty members and asking them what kinds of services they really wanted to see in this building. And so we try to deliver what they want. As I mentioned, we are getting very close to being fully absorbed in the current park and so we're in the process of starting research park two. 

So this is going to be developed in 2009. We have this preliminary plat currently in front of the city's planning commission and the planning staff of the City of Madison. This is Mineral Point Road here. This is Menards right here. This is the Beltline here. *So there's a big tower right here to put you in a geographic perspective. This is going down to Verona. This would be Hawk's Landing down here. This would be Holy Name Seminary right here. So that should put it in perspective. 

This is all farmland right now. And we own all 270 acres of that property. It's currently vacant. It's being farmed. We plan on developing this as research park number two. *It will be almost identical to the current park, a little bit denser with a few more buildings per acre, that sort of thing. But you can see that we expect to have in excess of 200 companies out there in addition to the companies we have in the current research park. We think that this will bring about 10,000-15,000 additional employees in the science and technology business in this marketplace which will add extraordinarily to the economy of the area and also provide significant opportunities not only for the faculty but for our graduates to work here and stay here once they graduate from UW-Madison. Now the one question that I get from people when they see this is that any of you that have gone to this intersection on a Saturday morning or any time of the day for that matter wonder how in the world are we going to pack 10,000 or 15,000 additional employees into this area, and I will tell you that as part of our job to develop this, we have become transportation experts and so we're working with the city to fully rebuild and develop Junction Road. This is Pleasant View Road which comes in on the north which will be extended through the research park and extend all the way down to Verona. 

That will be carved right through the research park. This is west on Mineral Point Road. The city will build a roundabout here in 2009. It will be a very sophisticated sort of high tech round about. They will completely rebuild this intersection on Valley View Road heading south in 2009, lower that big hump in the road and build a huge roundabout there as well. *And so the plan is to build an urban overpass at the junction of Junction Road and Mineral Point Road so the cars going North and South will not have to stagger at those lights and wait forever like they currently do. And it will free up the traffic in this area much more substantially than currently exists. And that will help I think. The current modeling of this traffic intersection when the engineers put the traffic flow and traffic count into the computer model it suggests something in the range of 80,000 cars per day when the park is fully developed out and this is just unsupportable with the current infrastructure. And so we really need to do something in order to ease the traffic burden for those that not only want to access the park, do business in the park but also the citizens that are coming from the southern part of Dane County up through this area, so that will substantially alleviate and help our traffic situation. 

Just a quick few minutes on our mission and then I don't know if you can read that or not but one of the things I wanted to touch on a little bit is the role that we play in helping to extend this notion of technology transfer to other universities, other cities and other countries around the world. Tom mentioned our recent trip to Kirov and he and I were part of a delegation of ten people from this country that were invited by the state department to go to Russia to talk to Russian scientists about technology transfer, about bio-technology and development and commercialization of discoveries that occur in labs and commercializing those and building companies around those. This is a concept which is sort of not understood in Russian society these days, and so we made the 12.5 hour plane trip and the 13 hour train trip to a city in Russia, which is about 1,000 miles due east of Russia, just this short of the Ural Mountains out in the middle of nowhere so to speak, and our job was to meet with, and this happens to be the location of former nuclear and biological weapons facilities for the Russian government, and the State Department's mission, and I was kind of intrigued by our government actually investing money in Russia to make sure that their scientists, who are former weapons scientists don't go to places that aren't our friends to develop weapons to use against the United States. So the State Department is quite concerned about Russian Scientists going to Iran and to North Korea and those kinds of things. So the goal that we had going over there to talk about commercialization of technology was to try and show them that you can develop technologies, you can discover ideas in your labs and convert those ideas to companies and create economies that will provide jobs for your citizens if you follow the certain kind of framework that we laid out for them. *And I think we found that it was a successful trip. The delegation for Kirov has been over here since then, and I know there has been a couple of different relationships already established with our faculty here on campus, particularly in the area of cellulosic biofuels which is big over there. They have millions of acres of woods and lots of wood, and wood chips and pulping, and that kind of thing so the potential for a biofuels kind of strategy for them is extraordinary, and so we've attempted to try and help them and help them understand what the potential for that is. But part of our job as directed by my board is to work with other countries, other universities and other communities to explain the structure of our technology transfer program on this campus which is very unique and very extraordinary and very successful. We have lots of universities that come and visit UW-Madison's campus and they're always in awe of WARF. 

Very few universities, or very few places in this world, have a successful enterprise like we have here in Madison. And so we are happy to talk to other people about what it takes to be successful and help them with their efforts to convert their technologies to economic development and job creation. And that's part of our overall mission. We've had visitors from all over the world: from Asia, from Canada, from Europe. We've got a delegation coming next week from Germany. *We frequently have visitors from the German states. So we're pleased as part of our role is to spread the gospel so the speak of the University of Wisconsin. I can't tell you how exciting and rewarding it was to see the excitement and the enthusiasm of the Russian people that we talked to, and I think we made an impact on behalf of UW-Madison on them. We certainly are on their radar screen for sure. And so, if we can develop even one or two technologies and relationships with those kinds of outreach efforts, we're very pleased and happy to do it as part of our mission at the research park and at the University. 

With that I will conclude and thank you very much for your attentiveness, and I'd be happy to respond to any questions that you might have about what we're doing. Thank you so much. (applause) Yes, sir? - I'm assuming when you went there you took a group of people along with you that speak Russian so that you could communicate effectively to these people. *Am I correct? - Yeah, the question is I'm assuming when you went to Russia you brought some translators along to help you communicate with the Russian people. The answer to that was that the delegation provided translators and we did presentations to the Russian people. We did it similar to what you see in the United Nations meetings where they had translator microphones on the earphones and there was a real live translation person sitting next to our presentations. And we would speak very slowly and deliberately and then they would convert that to Russian and then vice versa when a Russian person was asking us a question. One thing you feel, and many of you have traveled in Europe and Asia and that sort of thing and you do, there is a -- English is spoken almost everywhere in the world, but here you realize that you're really in a foreign country because it's very difficult to kind of fake your way through a Russian description of what you want. 

You can't look at a menu and figure out what it is at all. You really need translation over there and rarely do people speak English, even though as I was telling somebody outside when you go to the restaurants or live music venues. I know Paul McCartney was there last week and did a fabulous show there. But they sing American songs and perform American Musicals, that kind of thing, and at nightclubs it's all American music but then they don't speak English which is kind of odd and strange. *But yes we did have translators everywhere we went. Yes ma'am. - It looks like the University now is in the business of creating jobs and commercializing the research which seems to me as the business of business but they are still teaching students which should be the primary goal. What I wonder is who is doing the basic research that doesn't have commercialization of some particular thing in mind. - The question was the research park is doing the commercialization of intellectual property and creating companies around research that's going around on campus, who's doing the basic research at the University? Is it still being done, is traditional teaching being done? 

I would say the answer to that is yes, it's being done on campus. Tom might be a person that can help answer this question. All of the departments on our campus have very strict conflict of interest issues or regulations that protect against faculty members doing research on their public time so to speak that's inappropriate or that they shouldn't be doing. We are very careful I think of the notion of becoming a kept University and don't want to have people perceive UW-Madison as a place where you're just doing research for the purpose of enhancing the private sector or the business community. *I think that if you talk to faculty, maybe not all faculty agree with this, but I think if you talk to faculty generally, basic research for traditional learning is still being done to a large degree on this campus but there is a substantial amount of research that's being done for commercialization purposes and in some cases paid for with federal grants. I mentioned earlier that over $900 million in federal grants in some cases are paid for with agreements from major corporations that pay for their research to be done, and reimburse the university for costs of the research. So that's a relatively short answer to your question. Yes sir. - Do you have a visitor center, a way of reaching out this information for tourists who come to town? - We have a website that we try and get the word out on our technology transfer program and on the research park. 

It's pretty widely accessed by people around the world and so that's essentially how we -- we don't have a marketing budget other than the research park believes strongly in making targeted sort of marketing efforts in areas where we think it will benefit the faculty, benefit the research program at the university. We do a fair amount of investing in cultural arts programs here in Madison because we think that contributes to the quality of life here in this community which is what we think our employees in the research park really want. This is a highly educated workforce that wants a good cultural, many cultural opportunities in this community so we invest in things like the symphony. We're currently sponsoring one of the artists down at the Madison Museum of Contemporary Art. *We sponsor a nice concert every summer in the Garner Park, right across from the research park. It's called "Concerts in the Park." Beautiful evening event, and starving artists and that sort of thing, so there's a fair amount of cultural investment that goes into this, but we don't generally, you know, sort of advertise around the world or anything like that. Our major direction of major approach is to do this through our website and through word of mouth and that sort of thing. But our target market really is the faculty at UW-Madison anyway. We're not trying to attract companies from California and Massachusetts and that sort of thing. 

Yes, sir. - I was looking at some of the research that goes in here like AIDS research and some viruses. Are there, what about the safety of some of that research if stuff escaped and you know. - The question is, the gentleman noticed, looking through the list of companies that are in the park there's AIDS research, Avian Flu Virus research going on. *Our buildings are all of course built to the highest standards in terms of safety and inspection. We have a BSL3 Ag facility in the park which is a high containment Avian Flu research facility. It has to be inspected by the Centers for Disease Control, a federal agency to make sure that it's safe, and that inspection is done I think annually. They've been up here to look at that. Of course we have requirements and standards for safety to make sure that there is no public safety problems associated with any of the quality of the buildings or that sort of thing. Many of the things that are being done in the park are also things that are being done on campus for that matter, research that's occurring on campus, and so we follow in many cases the protocols that exist on the University campus in terms of the kinds of technologies that we put in place out there to ensure safety of our citizens. 

I will say this as well, we have an extraordinary relationship with our neighbors, the neighborhood associations that surround the park. We have gotten great cooperation from them and have reciprocated with trying to be helpful to the neighborhood associations when they needed help as well. So we've developed a good partnership because we understand how fragile that sort of balance is when you've got a major commercial enterprise like we have there right in the middle of a residential neighborhood and respect that significantly. Yes, sir. - A couple of questions, one is do you have any relationships with non-profit organizations and if so, what? And the other is around the education thing, do you have medical research going into education and things of this nature, and if so, are there companies developing out of this going into the education field? - First question was do we have any relationships with non-profit organizations. These would be organizations like associations, or educational initiatives or that sort of thing. We have the Foundation for Madison Public Schools as an example. It's a tenant in the park. 

We approved that tenant because of our commitment to K-12 education in Wisconsin. We have the Madison Community Foundation that's located -- that's an organization that raises money for various charitable efforts here in the City of Madison. Those folks are in the park. We have two childcare facilities in the research park. *I guess those aren't non-profit, but the owners would probably say they're not too profitable. We house I think 130 little scientists in one daycare facility and about 260 in Preschool for the Arts, which is a pre-kindergarten kind of facility. I'm just trying to think of other non-profits that may exist there. We do have the latest Masters of Biotechnology program which is I guess an academic program at the University, but it was created only about four or five years ago. This is a program that allows returning students, so this is adult learning. This is like an MBA, but it's in Biotechnology. 

And it's a program that was created as a result of our concerns about whether or not we had enough in the way of experienced workforce or managers to run these biotech companies. And so what you get into this Master's program in Biotechnology is returning students, students who are out, lawyers, bankers, folks that work in biotechnology companies now that want to move up the ladder in their company, and this is a two year program for a select group of students. It's Thursday, Friday, Saturday morning just like an MBA program. And so that's located in the park. *We deliberately have that academic program in the incubator so that they can work with the companies in the park. We built them a lab, sort of a demonstration lab in the park so they can be educated and learn from the start up companies in the park. We think this is the best way to train these folks. Off the top of my head, those are the only sort of non-profit or other kinds of sort of non-entrepreneurial activities that we have in the park. And on your second question, are we converting sort of medical education to some kind of entrepreneurial activity. I think the med school, I think if this is the answer to your question, I think the Med School is the single largest contributor of intellectual property that we have in the research park, so many of the faculty at the med school are the inspiration behind many of the technologies which are usually centered on cures for disease of some kind or another. 

so we have a lot of cancer therapies going there, Alzheimers, muscular dystrophy therapies that are being worked on in the park. And so the extent to which we're taking what occurs in the med school from the education process that occurs in the med school and converting that to entrepreneurial activity is something that's quite frequent and common if that answers your question. - Brain research and education, any relationship to that at the moment? - We have one company in the park that's doing brain research and this is on -- I'll probably get this wrong, but it's on some kind of technology where they use a jellyfish material which is supposed to be regenerative. *It either stops or starts plaque on the neurons in the brain, helps to allegedly slow the loss of memory, so I know there's a company, it's called Provigen -- okay she knows it well. That is located in the park, that's a technology that came from ironically the University of Wisconsin at Milwaukee, and they are doing pretty well in the park. So that's the only one I can think of off the top of my head, but there's probably -- if you check the booklet or check our website, the website has a brief description of all the companies that are in the park and kind of describes what each technology is about and then you can scroll into each company and learn more about the individual companies. If you want to come out and do a tour of the park, we're happy to walk you around. We'll come and visit this young lady at the SCORE office and give you a grand tour of the incubator and that sort of thing as well. Yes, ma'am. 

- Are you at all affected in the research park by the recession? - Good question, that's a very good question. Are you at all affected in the research park by the recession. The answer to that is no, not yet. *We hope that that doesn't occur. The research park is full. We have no vacancies currently in the park. Many of our tenants in the park have not observed or complained about the effects of recession. I will say this, as we look to build additional buildings in the park, we're about ready to start two additional buildings in the park. The cost of steel and copper and other building materials which is affected by oil prices, by material prices and by a whole array of international impacts is substantially impacting the cost of what it takes to put a building up, and the kinds of buildings that we've built are not cheap four walls and a roof. 

They're pretty sophisticated science and technology buildings and so we're finding that in order to put these buildings up, the per square foot cost is going up really substantially, and that's a concern of mine because of course many of the companies that come to the park are not wealthy, you know, initially companies. They are scrimping and saving to pay their rent and that sort of thing, and so we, our goal is to try and keep the per square foot rents to these tenants as reasonable as humanly possible so that they can afford them. But we're being forced I think in part by all of these forces that I have talked about that are forcing up building costs. But thus far, energy costs and that kind of thing have not been a focus of complaint. *One of the things we're contemplating doing is maybe a little bit more in terms of ridesharing and sort of shuttling as gas prices become much more sensitive for people, the park reaches 4,000-5,000 employees, many of them going back in forth to campus, whether they're faculty or students or just doing business on campus. We currently have limited shuttle service, now bus service. We do have a bus hub in the park, but we think we might at some point start running some kind of a route system that we can -- where people can just jump on and they don't have to drive their cars back and forth to the university campus or downtown which I think would be helpful and help to provide some efficiencies. The other thing we're doing is all of our future projects and new buildings that we're looking at building will include or contain some kind of green technology whether it's roof gardens, whether it's a high energy saving heating, ventilating and air conditioning systems, window systems that are much more efficient. All of that kind of technology designed to help conserve energy in these buildings which burn a lot of energy, as you can imagine. These science and technology companies are quite good at that, so our goal in the future is to look at ways to try and conserve and preserve as much as we can, and we've got some great technologies that will allow us to do that. 

Yes, Tom and then over here. - University Research Park II is going to be out beyond the Beltline? - Yes, right. - I think just north of that is the West Madison Research Center, when will that be developed into University Research park III? - Well, stay tuned. Not on that, but on another announcement that we'll be making soon on other opportunities for the research park. I think if Molly John was here who is the current dean of the College of Ag and Life Sciences, she'd probably say "keep your hands off of our current west side research facility" and so we respect that. The university owns about 400 acres on the north side of Mineral Point Road as you go through that horrible intersection of Junction Road and Mineral Point. So everything to the right as you're heading west is really university owned property and it's farmed for ag research. You know, that's basically, turn back the clock 20 years, what we had here. 

This was that 20 years ago on the current park. My guess is someday, some future Chancellor will be stuck with a decision on what to do with that property when the city of Madison has grown around it to the west. Now the city of Madison has determined that its most westerly boundary by a 50 year agreement with the town of Middleton is Pioneer Road, which is just slightly out Mineral Point Road about a mile beyond our current park. And so the growth of the city of Madison is constricted to the west for 50 years, and so there is a limit to how far the city of Madison can grown westerly. *The question will be the infill for this publicly owned land and will the university be able to resist the extraordinary pressure to sell this property or to develop it in some other way. And there was a question. Yes, sir. - Concerning your activity in Russia, one should remember that there are remaining still very many victims of Soviet Russian Communism and they should be compensated sooner or later, but better sooner. So I think in all activities you do there should be some principle that 5-10% of the income should be directed to some foundation which will be compensating the victims of communism. - Well I don't disagree with that, we didn't quite get into that kind of dialogue with them, thankfully. 

I didn't want to sort of try and debate the benefits of a democracy v. communism with them. I will say that the younger people in Russia seem to be quite entrepreneurial. We had a chance to interface with a lot of the young students in Russia that were at this state university that we presented at, and they are very vibrant, active, similar to what you see on this campus, young people who are looking for a unique opportunity and are in some ways affected by international exposure to culture in other countries. *And the more senior people in Russia seem to be having a little bit more of a struggle with the whole notion of the democratization of the country, and I think we talked to some of the folks who frankly prefer the old ways as opposed to the new ways as to the organization of the government in Russia. But we tried desperately to stay out of the political dialogue there because we knew it was kind of sensitive. I can say that they're very warm and hospitable to us, and it was an extraordinary experience to go there. And one of the things that I think Tom and I came away from growing up in the '50's and '60s, I had this view and vision of the Kremlin and Red Square which is much different than what I saw in Russia. It's actually an extraordinarily beautiful place. The architecture is absolutely out of this world, gorgeous churches and the Kremlin itself is quite impressive and beautiful and so I came away with a much different impression of Moscow in particular and even the architecture in the rural parts of Russia, that which has survived communist rule, the churches in particular were just absolutely extraordinary. 

So that was quite rewarding. Yes sir. - When you were there, in Russia, were you able to observe the type of music for example the radio in automobiles was playing. Was it American music, was it Russian music? *Both? - I wasn't. I don't recall what was going on on the radios. We did ride in a car quite a bit and spent a lot of time on trains which didn't have radios. Train travel there, we were on a train for about 13-14 hours to get to this place that we went to meet with a Russian delegation. The night clubs and restaurants have in some cases live music, and that music is American Music sung by Russian performers who don't speak English. 

So it's pretty interesting and different to say the least. - The reason I asked is because I was in Prague last year, and I was very impressed with American music being played in Bohemia. - Yeah, I think it's an international sort of language, American music. And that's why people like -- when Paul McCartney goes to Russia there is this extraordinary outpouring of support for people like him. *Well, no I mean "English" let's call it English. - Yes, ma'am. - Have you investigated geothermal heating for your buildings and the windmill and all of that? - The question is have we investigated geothermal heating and windmills and that sort of technology for our buildings? One of our jobs that we're doing is the remodeling of Olin House which is the house that the Chancellor lives in. And John Wiley moved out of Olin House about a year ago and so this is a house that was built in 1911 that's never really been touched and so it's in very bad shape. 

So we had to rip out the whole heating, ventilating and air conditioning system in Olin House. It's a 12,000 square foot house with six fireplaces and five or six bathrooms and that sort of thing. Very much inaccessible to any handicap accessibility. There was seaweed in the walls for insulation which was apparently fashionable back in the early 1900s when John Olin built the house. *And so we ripped out that and we put in geothermal heat in Olin House, so that will be-- when Olin House is open to the public, probably the first or second week in August, that will be one of the featured issues that geothermal is part of that. Geothermal costs about $30,000-40,000 more than a traditional HVAC system for that house. And MG and E, Madison Gas and Electric basically paid the difference between the cost of geothermal and what it would have costs to install a normal, average, traditional heating, ventilating and air-conditioning system and so we really appreciate their commitment. And our buildings, because of the extraordinary sort of pressure on heating, ventilation and air conditioning, some cases these labs need negative air. They need HEPA filtering, extraordinary technology associated with building these science and technology buildings, we can't or have not tested yet and don't really want to test something that's unreliable. Not that geothermal is, but we want to make very sure that the HVAC systems that we put in, we've got for instance, the national stem cell bank at the MG&E Innovation Center. 

I don't know millions and millions of dollars worth of stem cells and materials that are being stored there, and if a system started going down, heating or ventilating systems or electrical systems of that sort of thing, we've got major problems and so we've put in a very sophisticated, highly efficient HVAC systems but haven't looked at windmilling or anything like that as of yet. But have done other environmentally sensitive issues related to our systems. Any other questions tonight? Very good. *Thank you so much for your attention. (applause) *