- The Washington Times - Monday, February 12, 2001

Want pension fund to build tech sites

Several Maryland colleges and universities are urging the stewards of the state's $33 billion pension fund to use some of the money to help build technology business parks near their campuses.

The University of Maryland at College Park and other schools say they could miss out on lucrative research and development contracts because there is a dearth of office space for technology companies in the state.

The schools want the system's 15-member Board of Trustees to use $150 million, or less than one-half of 1 percent of the $33 billion fund, to help developers build so-called smart parks near college campuses.

The parks would be leased to technology companies, including firms that partner with universities on research projects. Proponents say investing in the parks could generate healthy returns for the pension system.

"We need this. We have leased every bit of available space within walking distance of our campus," says Brian Darmody, assistant vice president for research and economic development at the University of Maryland.

The university expects to receive $267.2 million in research grants and contracts this year. Mr. Darmody says it could miss out on future contracts if the technology companies that work with the school cannot find space near the College Park campus.

Other schools in the state including Johns Hopkins University in Baltimore and the University of Maryland at Baltimore County say they are also hampered by a lack of office space near their campuses.

Maryland House Speaker Casper R. Taylor Jr., Cumberland Democrat, and David S. Iannucci, state secretary of business and economic development, pitched the smart parks offer to the pension system board in January.

In addition to using the money for parks near university campuses, Mr. Taylor and Mr. Iannucci say the projects could also be built near the estimated 45 federal labs in Maryland.

Mr. Iannucci says the state must help developers move forward with new office buildings, even if they have not secured tenants. Technology companies in the state have experienced rapid growth, and tend to need space faster than developers can provide it.

"These companies don't want to look at a plan or a blueprint. They want to look at the frame of a building they can occupy within six months," Mr. Iannucci says.

If approved, no more than $30 million should be spent on a single smart park, Mr. Iannucci says.

The Maryland Retirement and Pension System administers benefits on behalf of 250,000 current and former state government employees, including teachers, police officers and bureaucrats.

State Treasurer Richard N. Dixon, chairman of the system board, says the board is reviewing the proposal and does not know when it will make a decision.

The pension system currently invests $1.3 billion, or 5 percent of the fund, in real estate. Most of the investments are in shopping centers, office buildings and warehouses around the country, Mr. Dixon says.

The 55,000-member Maryland State Teachers Association, a leading union of state employees, says it has no objections to outside groups making recommendations on pension investments, as long as state lawmakers do not use legislation to dictate investments.

Several states invest a portion of their government pension funds in real estate. Virginia operates a $39.5 billion pension system, of which $1.6 billion is invested in real estate, according to a spokesman for the state Retirement System.

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