Overlay Zone Cultivates Tech Community

Another vote of confidence for the area's technology ecosystem came in the form of a unanimous vote from Charleston City Council meeting to adopt a Tech Corridor overlay zone for an uptown section of the peninsula that is becoming increasingly attractive to Charleston's rapidly growing tech community.

The recently adopted ordinance, which amends Chapter 54 of the code of the City of Charleston, notes "the Tech Corridor Overlay Zone is intended to enable high technology and technology-related industries to anchor new development in the district."

The council action focused on properties at 995 and 999 Morrison Drive, the latter property recently acquired by the city for its latest tech incubator site, Flagship 3.

For a number of years, the 995 Morrison property has housed government offices for the County of Charleston, City Magistrate and Small Claims Court. The county recently had approved a deal with a developer to swap several undisclosed properties for 995 Morrison, with plans to build apartments for student housing.

Rezoning by the city effectively kills that deal, although few in the tech industries are mourning the loss.

In a letter to Charleston Mayor Joseph P. Riley, Jr., the Charleston Digital Corridor Foundation's board of directors -- which includes principals from Google, Benefitfocus, Blue Acorn, Boomtown, PeopleMatter and CSS -- urged the zoning overlay.

"We feel that together we are well positioned to leverage our early success and are convinced the Morrison Drive and Upper Meeting Street corridors on the Peninsula will become the centerpiece of our Digital Corridor," the letter reads. "This future for Charleston will be supported by a young and creative, high-wage workforce for decades to come."

A wage survey conducted in October 2013 of the companies that are located in the Digital Corridor showed an average income of $71,657, compared with $41,180 for the Charleston region and $38,700 statewide.

Nate DaPore, president and CEO of PeopleMatter, called the ordinance a "tremendous accomplishment" toward the overall goal of further development of Charleston's "Silicon Harbor." "We're extremely supportive of the decision by the City Council to support the technology community through this overlay," DaPore said. "We need to make sure we're carving out the right areas of the city to really embrace and build up the tech community."

DaPore compared the ordinance to similar zones and tax incentives in places like San Francisco.

"Charleston can learn a lot from them," he said. "There are densely populated centers around the city that focus on tech companies, and in situations like that, 'like' attracts 'like.' And when you gather a bunch of bright, smart entrepreneurs working together, great things happen. They feed off of each other. There's a synergy." DaPore said the overlay amounted to embracing that energy.

"It's a big endorsement by city council. This is a meaningful tech hub we have on the East Coast, and it's important to have participation from all the government entities and get them aligned behind the tech community. The city has been supportive, and we want to make sure the county is behind it as well. We need both to make it happen." DaPore said cultivating a tech corridor on the peninsula is a great move by the city.

"Daniel Island is an area that has emerged as a tech campus for big companies, but we need to carve out space for the smaller and mid-size companies. We need to create a space for the tech startups. But we also need to think through the development process and make sure we're following a master plan." The high wages typical of tech companies will benefit all, DaPore noted. "These are high-paying jobs that have a ripple effect," he said, "and it'll ripple significantly through the economy."

"This is what we're focused on -- the quality of the jobs brought into the community," said Charleston City Councilman Aubrey Alexander. "There were plans to put an apartment building out there, but we feel the need to protect this area. We're dedicated to this tech industry. We need the diversity of economy."

As to whether there might be diversity of opinion -- enough to thwart plans for expanding the tech corridor -- Alexander said, "It is my hope that all will recognize the exceptional opportunity and vision of the Digital Hub. This center of incubation, knowledge sharing and entrepreneurial opportunity will thrust the region into the forefront of successful knowledge-based economic development. What better use of public property than to promote an industry that creates jobs with salaries averaging over $70,000 annually versus a few maintenance people and small office staff to run an apartment building?"

Alexander noted that the Digital Hub will provide for incubation, expansion and opportunity for future generations. "This toddler is teething and beginning to walk!" he said. "Our goal is and has been to incubate, grow the industry and to provide space for that growth in the city. By supporting this initiative, we also expand economic diversity to insure that clean, high paying jobs are available for future generations in the Charleston area. Many of us envision an area of knowledge-based collaboration not unlike the Microsoft campus in Redmond, Wash.

That goal is certainly within reach. According to the ordinance, "the intent of the Tech Corridor overlay zone is to enable high technology and technology-related industries to anchor new development in the district. The city deems it necessary to provide additional protections to ensure these key properties are used predominately for tech office uses."

Mayor Riley devoted much of his State of the City address to affirming the city's embrace of its tech community:

"Our economy is surging. In September, a Charleston company on Daniel Island, Benefitfocus, made its debut on the NASDAQ stock exchange and in December announced 1,200 additional jobs and a $60 million campus expansion.

"The closely followed Milken Institute ranked Charleston the 11th best performing economy in our nation.Four Charleston hi-tech companies made the nation's fastest growing companies list. This follows on the heels of PeopleMatter, another rapidly growing software company opening its national headquarters on Upper King Street last year.

"The West Coast has Silicon Valley. Without any doubt, the Charleston region has Silicon Harbor and this was further reinforced by Google's announcement of another $600 million investment in the Berkeley County Data Center.

"The hi-tech economy is not, however, made up simply of large companies, but the work of countless entrepreneurs starting small initiatives or growing existing companies. It is the climate in our community that encourages and reinforces these investments.

"An important part of that climate is the investment the City of Charleston has made in its 2 Flagship buildings. These buildings have produced 76 graduate companies since 2009; that is, companies that started in the Flagships and then moved out to their own new headquarters space.

"Because of the success of our flagship incubators, we intend to create Flagship 3. City Council approved in June the acquisition of a Morrison Drive property that will allow the creation of a 45,000 square foot, hi tech business hive of activity."