MURDOCK DOUBLES PLEDGE FOR HUB; DOLE OWNER VOWS $200 MILLION TO AID FIRMS AT NEW CAMPUS

David Murdock is doubling the commitment for the venture capital fund he created for his North Carolina Research Campus, and now intends to spend $200 million on it.

The billionaire businessman previously had said he would use $100 million of his own money for funding available to campus tenants at the $1.5 billion biotech hub being built in downtown Kannapolis. Clyde Higgs, who oversees the fund for the campus, confirmed the change this week.

"Ultimately, it could be bigger than that," Higgs said. "There's a recognition that it'll take a significant amount of capital to seed these companies," either alone or with partners.

The fund is one main way Murdock is trying to attract a critical mass of companies needed to make his campus viable in the long run.

Murdock, who owns Dole Food Co. and Castle and Cooke Inc. developers, would not bankroll the fund all at once. Rather, he could spend $12 million to $15 million a year, sometimes more, sometimes less, depending on projects, Higgs said.

That could translate into about $3 million to $5 million per company for several businesses a year, he added.

"The payback could be years out, but anyone who develops a venture fund, the expectation is you want to make money," Higgs said.

Murdock is no different.

The fund would invest in a company, either alone or with partners to spread the risk, with the goal of eventually seeing that firm be acquired by a bigger one or enter an initial public offering to be traded. That could take a decade or more.

"The reward can be really significant because we are taking significant risks," Higgs said.

The investment and any additional profits would return to Castle and Cooke, he said, although it is much too early to determine what the money would be used for.

Murdock has said he hopes the campus will create jobs in a community where he has massive land holdings and used to run the textile company. An advocate of healthy living, he wants the science at the campus to lead advances in health, nutrition and related fields.

But obstacles remain. Creating a biotech community from scratch is hard enough, but is even more challenging in areas outside of main clusters, like Raleigh or Boston. Other states also are promoting biotech as economic development boon.

Murdock has said he hopes to attract 100 companies of various sizes and stages of development to the 350-acre campus. Higgs said he is dealing with about 30 companies now that have expressed interest in the campus, in addition to more than 20 others who are seeking venture funding.

He expects the first venture fund recipient will be named before the end of the year.

The money is aimed at early-stage companies close to starting clinical trials in areas such as medical devices, agricultural biotechnology and diagnostics, among others.

The funding would help fill a gap, Higgs said, because much of the venture money is now focused on companies that are much further along in the testing of their products. Michael Constantino, a biotech industry expert and partner in the Raleigh office of accounting firm Ernst & Young, agreed with that assessment.

Constantino also said the annual $12 million to $15 million venture funding Murdock is looking at could help build momentum for the campus. "If they can deploy that amount in year one, they are doing pretty good," he said.

Murdock is collaborating on the campus with several universities, including Duke, UNC Chapel Hill and N.C. State.

Kannapolis leaders have embraced the project as a major economic force that can help generate thousands of jobs in a community devastated by 2003's shutdown of former textile giant Pillowtex Corp.

City and county leaders are still working out how to finance part of the $352 million needed for on- and off-campus infrastructure and related needs, from parking decks to water-sewer lines. A feasibility study that will help clarify funding issues should be in the city's hands soon.

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Adam Bell: 704-786-2185