It's official: SRI will be building Florida facility
BYLINE: CURTIS KRUEGER; AARON SHAROCKMAN; KRIS HUNDLEY
DATELINE: ST. PETERSBURG
After nearly a year of secret negotiations, the Silicon Valley research firm SRI International is teaming up with the University of South Florida to develop and market high-tech marine science products.
From a planned $10-million waterfront building, a nonprofit company called SRI St. Petersburg will seek to combine USF's scientific brainpower with the California firm's business development expertise.
Together, they hope to sell new products for port security and environmental science and to spinoff other businesses in the Tampa Bay area.
"We're convinced we can create enormous opportunities here in Florida as well as for our customers around the state and the world," said SRI International CEO Curtis R. Carlson.
The California research company wants to come to St. Petersburg to capitalize on tiny underwater sensors and other innovative devices USF marine scientists have been developing for years.
The inventions are designed to monitor the health of oceans, track the movement of ships into ports and perform tasks vital to homeland security, such as scanning ship containers for explosives hidden by terrorists.
For the university and the city, SRI brings business expertise and scientific prestige. Although not as widely known as some other Silicon Valley innovators, SRI is a former Stanford University affiliate with 2,000 employees and a long list of innovations that include patenting the first computer mouse.
"I don't know anybody who's got the wallop they do," said Peter Betzer, dean of the College of Marine Sciences.
"All of a sudden we become a magnet for scientists," said Betzer, a key player in the deal. "This puts us on a new stage."
But it didn't come cheap. The deal will cost taxpayers more than $30-million in state and local incentives.
SRI St. Petersburg also will receive a share of the royalties on inventions it helps bring to market. So will the university and the state.
SRI St. Petersburg will start business Jan. 2 with 40 employees, most of whom now work for the university's Center for Ocean Technology. At first, those workers will be housed in leased USF offices.
By early 2009, the firm expects to expand into a new $10-million, 30,000-square-foot office on Eighth Avenue SE. The city-owned lot is currently occupied by a warehouse.
Within 10 years, the company expects to employ 200, and the building could be expanded to 100,000 square feet.
St. Petersburg Mayor Rick Baker said he hopes SRI also will generate high-tech spinoff businesses.
As part of the deal, USF is investing $8.5-million in research technology that will be matched with another $8.5-million from the state.
Monday's long-awaited announcement is the latest chapter in Florida's efforts to lure high-paying, high-tech business to the state, hoping to spark more business activity.
This venture follows similar efforts to lure Scripps Research Institute to Palm Beach County and to create a Burnham Institute for Medical Research branch in Orlando.
The $30-million SRI deal is dwarfed by the more than $500-million that state and local governments are spending to bring in Scripps.
If projections prove true, the public cost of creating 545 jobs at Scripps Florida will be nearly $1-million per job. If SRI St. Petersburg creates 200 positions by 2016, the cost of incentives would be about $167,500 per job.
SRI officials said they came to St. Petersburg because the city offered several ingredients the research firm needed for expansion of its marine science operations.
One is USF's College of Marine Science and its affiliated Center for Ocean Technology.
"It's not just a research group. These guys actually build things and put them in the water ... that is an operational engineering capability that is very rare," said Peter Marcotullio, SRI's director of business development for engineering systems.
Another factor is the cluster of different marine and science organizations now located in downtown St. Petersburg, near USF.
These include: National Marine Fisheries Commission offices; the nearby U.S. Coast Guard facility; the offices of a U.S. Geological Survey institute; the university's College of Marine Science and Center for Ocean Technology; and the state's Fish and Wildlife Research Institute.
Carlson, head of SRI, said the cluster was critical. "Having complementary organizations like this is what over time creates a critical mass," he said.
Another factor, of course, was taxpayer money.
The state is pumping in $20-million for operational costs. In addition, both the state and Pinellas County are putting up $5-million for construction of the building. USF will provide additional salary and personnel support.
What will the state get back for that money?
Officials said 20 percent of the royalties from SRI St. Petersburg's products will go into a state fund for marine science projects.
About a third of the royalties will go to SRI's employees, part of its philosophy of providing incentives to workers who succeed in bringing products to market.
USF scientists are under no obligation to commercialize their inventions through the new company. They can go elsewhere if they wish. But SRI officials said scientists will want to come to them because the company's wide experience will give them a better chance of business success.
SRI's decision to put an operation in St. Petersburg could spark interest from the private venture funds that bankroll new companies, said Alan Taetle, chairman of the Florida Venture Forum, a group of venture capital firms.
"Historically where these guys (SRI) go, spinoffs occur," said Taetle, general partner at Noro-Moseley Partners in Atlanta. "And where spinoffs occur, venture capital follows. This could be a nice stake in the ground to get stuff going in the area. SRI is a very credible organization."
Times Staff Writer Curtis Krueger can be reached at (727) 893-8232 or ckrueger@sptimes.com; Aaron Sharockman can be reached at (727) 892-2273 or asharockman@sptimes.com.
FAST FACTS
SRI International to Florida timeline
Feb. 3: A St. Petersburg Times article reports that the University of South Florida is negotiating with SRI International about building a technology research facility next door to USF St. Petersburg.
March 6: Gov. Jeb Bush invites five state legislative leaders to the Governor's Mansion to meet representatives of an undisclosed company considering a move to the state.
March 9: While not providing details, Bush acknowledges publicly for the first time SRI International was the company being wooed for a project with USF St. Petersburg.
Mid April: Two top SRI officials visit the state Capitol, urging lawmakers to provide state money for economic development projects.
June 22: A top SRI executive tells more than 100 USF St. Petersburg faculty and staff members the company is planning a business and research partnership with the school's respected Center for Ocean Technology.
Aug. 3: In a recommendation to legislative leaders, Bush requests more than $300-million to recruit two unidentified companies to Florida.
Aug. 10: A legislative budget agenda includes Bush's $20-million request for a project known as Project Watering Hole.
Aug. 17: A legislative committee approves $20-million to bring a group believed to be SRI to Florida.
Late August: Several hundred scientists, business people and academics meet at St. Petersburg's Renaissance Vinoy Resort, discussing emerging technologies such as micro- and nanotechnology.
Oct. 16: St. Petersburg officials refuse to identify a major business hoping to get tax rebates for moving to the city.
Nov. 21: Gov. Bush says a deal is near to bring SRI to St. Petersburg.
Source: St. Petersburg Times archives
Compiled by Times news researcher Carolyn Edds