The Palmetto Insider

The blog of the South Carolina Policy Council

Innovista’s Private-Tenant Hopes Continue to Dim

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innovista

Despite $140 million in public investment, most of Innovista remains unfinished and sits empty.

Collexis Holdings Inc., touted less than two years ago as one of Innovista’s first private tenants, continues to sink slowly into financial oblivion.

Stock in the publicly traded firm, which announced plans in October 2007 to relocate to the University of South Carolina’s development boondoggle, hit a new low this week, dipping down to 5 cents a share.

The collapse of Collexis, which now appears unlikely to ever move into USC’s research campus, has coincided with Innovista’s downfall. Tuesday, USC fired the Michigan developer tapped to build the private portion of Innovista.

USC pulled the plug on a deal with Kale Roscoe because he couldn’t land a loan to build the campus’ first private building — nine months after his deadline for starting construction, according to The State newspaper.

Roscoe is the second developer to leave the project. Roscoe replaced Raleigh developer Craig Davis last year, after Davis failed to build the building or deliver major tenants.

Innovista, originally intended as a center for research on hydrogen and other technologies, and a magnet for private companies building spin-off products, still has no private tenants nearly half a decade after the university announced the undertaking.

In fact, the campus remains largely vacant as a majority of the buildings constructed can’t even be completed for lack of funds, despite more than $100 million in tax dollars being pumped into the project. In addition, two planned private buildings have yet to be built.

Collexis, believed to have fewer than 10 full-time employees in Columbia, is struggling to stay afloat, having lost nearly $10.4 million last year alone.

If Collexis doesn’t make it into Innovista, it won’t be the first time a private company has pulled the plug on plans to move into the 500-acre research campus.

Missouri-based Duck Creek Technologies was announced as the first major private sector tenant for Innovista in March of 2007. Duck Creek, a provider of software for insurance carriers whose board includes Columbia businessman G. Larry Wilson, said at the time it planned to lease 22,000 square feet of space in Innovista and bring a minimum of 200 jobs with an average salary of $85,000.

But that move never happened and the university never offered an explanation.

Then-University of South Carolina president Andrew Sorensen, a driving force behind Innovista, played up Collexis in 2007, when he made the announcement about the company’s planned move into the research district.

“I am delighted that Collexis will become part of Innovista,” said Sorensen, who retired as president last year and serves as a distinguished professor at the University’s School of Medicine. “Collexis aligns very nicely with our research in alternative energy and fuel cells, the health sciences and computing. It is exactly the type of company that we want to have here.”

Collexis has been closely tied to Innovista and USC almost from the time the company began in Columbia:

  • In fall 2007, it was announced that USC had signed an agreement with Collexis and SC Launch to create a partnership for hydrogen fuel research and funded the project with $200,000. SC Launch is an arm of the South Carolina Research Authority, created by the General Assembly in 1983. SC Launch is partly sustained by contributions to the Industry Partnership Fund, for which contributors receive dollar-for-dollar tax credits;
  • Last November, former USC president Sorenson joined Collexis’s board.
  • Collexis is a graduate of the USC Columbia Technology Incubator, which has received $572,000 in state tax dollars since its inception.

Today Collexis appears in desperate straits. According to its most recent annual report, filed with the U.S. Securities and Exchange Commission last October, it lost $11.3 million for the year ended June 30, 2008, and the company’s auditors stated that they had substantial doubt as to Collexis’s ability to continue as a going concern.

During the first nine months of the current fiscal year, the company has lost nearly $5.5 million, including almost $1.4 million for the three months ended March 31. It has yet to file a financial statement for the 12 months ended June 30, 2009.

To meet short-term capital needs, Collexis recently sold nearly 40 million shares at 7 cents a share. That effort considerably diluted the company’s stock. Collexis’s stock, which once sold for as much as $12 a share, has been trending downward steadily the past couple years. It closed Wednesday 5 cents.

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Written by Cotton Boll Conspiracy

August 5, 2009 at 2:37 pm

One Response

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  1. […] PMSC was headed by USC graduate Larry Wilson, an S.C. Research Authority board member and venture capitalist. About three years ago, a Missouri-based insurance software company whose board included Wilson was announced as the first major private tenant on USC’s financially struggling Innovista research campus in downtown Columbia. But the move never happened. […]


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