Wednesday, January 25, 2012

EXCLUSIVE: Roanoke likely out of the running for Solstas Lab expansion

Exclusive to The Roanoke Star-Sentinel and Roanoke Free Press

By Valerie Garner

It is a high stakes economic play for 500 jobs courted by four states. Solstas Lab Partners has dual headquarters in Roanoke and High Point, North Carolina. Both locations are in play for a major Solstas expansion. Solstas’ Roanoke administrative headquarters is located in Carilion’s administrative building at Riverside.

By permission of Solstas

The Solstas name evolved from a merger of Carilion Labs in Roanoke and Spectrum Laboratory Network of High Point and now ranks as one of the country’s largest full-service labs. They provide all lab services for the Carilion Clinic hospitals. Solstas employs 400 in Roanoke and 721 in High Point. Since 2009 Solstas has grown substantially making seven acquisitions in Delaware, Tennessee, Alabama and Florida.

Besides Roanoke and High Point they reached out to other locations for tentative proposals. The other locations were Knoxville, Tennessee and to a lessor degree in Alabama said Solstas Vice President Bud Thompson in a phone call Monday.

Last Tuesday High Point City Council approved a $500,000 incentive package. A few days later Guilford County Commissioners approved another $500,000 for a total of $1 million. The state of North Carolina may kick in another $450,000 said Thompson.

High Point had a cap of $1000 per job in their economic development policy.

The hiring would take place over a 5-year period. The expansion will add $11.6 million to High Point’s local tax base. The average wage of the new jobs is over $45,000 annually confirmed Thompson.

The projection for the additional 500 jobs was based on their growth experience in High Point. “In two years they added 300 full-time equivalent jobs … we’re expecting the future to look like the past,” said Thompson.

There would be consolidation from the six lab acquisitions made in 2011. No jobs would be transitioned from Roanoke to High Point said Thompson. He expects that all of Roanoke’s IT and billing functions will remain here. They will continue to make the labs inside of Carilion Roanoke Memorial as efficient as possible he said.

“Our practice is to integrate labs onto the same operating system and information technology platforms,” said Thompson. Other eligible consolidation functions normally include billing and high-end testing. In any given week there are 160 to 180 job postings in their service area.

Rob Ledger Roanoke’s economic development director said Monday that he couldn’t release the incentives offered by the city to Solstas. He said they offered them several buildings and/or sites he could not name until Solstas communicates their decision.

Ledger did say that “we are extremely interested in it and we would do everything in our power to make it happen.” He said they explained the kind of incentives they would be eligible for but it never went any further.

Thompson shared that Roanoke provided a tentative proposal that was 40 percent less than that of High Point. That wasn’t the only reason for the more rigorous approach for expansion in High Point. “Since a substantial portion of our corporate activity resides in High Point it makes sense to build off of that infrastructure that exists there,” he said.

“As a growth oriented company if things go the way we expect them to jobs will be created in a lot of different communities,” said Thompson. Placing future jobs will coincide with the best interests of the company. “We have high aspirations for future acquisition” and he expects the Roanoke Valley to benefit from that growth.

The location itself lies evenly between Winston-Salem, Greensboro and High Point, the Piedmont Triad. The anticipated site for the 90,000 square foot building is near their current Piedmont Centre campus to the north just inside the High Point city limits. It is a half-mile off of Route 68 on Federal Drive close to the I-40 interchange and the Greensboro Airport.

Access to an airport for their larger labs is a plus but not a critical component for this expansion explained Thompson. They move specimens through their own logistics air service.

The entire 90,000 square foot building needs to be on one level with a large open space to accommodate their lab automation equipment. Riverside had no room. “More than one story would be disruptive to workflow,” said Thompson.

Another point Thompson made was that the Triad region provides better recruitment for certain jobs. They also have a higher unemployment rate making it easier to recruit entry-level positions. He also believed employees willing to relocate would be easier since there is more opportunity of employment for a spouse.

According to an article in the High Point Enterprise Dr. Michael Hanbury chief operating officer said it is in “our interest and our intent would be, all things being equal or better, is to provide those jobs and those resources here in High Point.”

Thompson was quick to point out that with the Virginia Tech Medical School and Research Center along with other enhancements Roanoke will become more attractive for certain kinds of positions in the future.

Thompson made clear there is no final agreement with High Point yet. Solstas will scrutinize the proffered conditions and benchmarks the company would be required to meet in order to receive the grants. He doesn’t expect any problems but it will be two to three weeks before they see it.

High Point has had a tough time as the “furniture capital of the world.” Furniture manufacturing has moved overseas and unemployment has risen. “This is a big deal for that community,” said Thompson. It is the largest job creation in the city of High Point by a single company in the last 13 years. Construction of the expansion is slated for mid-year.


Posted By Valerie Garner

Categories: Business, Finance

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Comments (1)

S. Hall

January 26th, 2012 at 2:32 PM    

I certainly would rather see jobs creation like this in Roanoke than continuing to rely on “taxes” — most noteably the 2% meals tax that is due to expire .. and I hope City Council lives up to its promise!

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