At “The Vine,” Developer Builds a Vertical Campus for Tech Startups

In downtown San Diego, a private real estate company best known for its master-planned communities in suburban Southern California has posed some existential questions for regional tech hubs looking to build their own startup ecosystems.

For example: Can a 20-story office tower serve as a “vertical campus” and innovation hub for local tech companies?

Such campuses abound in Silicon Valley, in a sprawling, horizontal way. Google has the Googleplex, its campus in Mountain View, CA, with 3.1 million square feet of office space. About eight miles south, Apple has its headquarters at One Infinite Loop in Cupertino, CA, with an additional, spaceship-shaped campus that is more than a mile around expected to open by next year.

Can the Irvine Company accomplish something similar as the landlord at 101 West Broadway? It is an otherwise conventional downtown office building, with tenants like JPMorgan Chase and Gordon and Rees, a large law firm.

John “J.T.” Turner, a regional vice president at the Irvine Company, has been giving such questions a lot of thought in recent years.

“The roots of our company are in community-building on the residential side,” Turner said. Inspired chiefly by the tech industry’s move into downtown San Francisco and the rejuvenation of the “SoMa” neighborhood South of Market Street, Turner said the Irvine Company has been asking, “can we create the same sense of community in our office complexes?”

In San Diego, the Irvine Company provided the entire second floor of its Broadway Street building at no cost for the downtown EvoNexus incubator. The developer also provides rent-free space for a second EvoNexus incubator in University City (about a mile or so from UC San Diego) and a third EvoNexus incubator near UC Irvine that opened at the end of 2014.

In San Francisco, municipal tax incentives have helped the urban revitalization (and spurred local controversy) by luring big software companies like Twitter, Zendesk, Dropbox, and Salesforce to the city.

The Irvine Company, The Vine, 101 West Broadway

101 West Broadway tower in downtown San Diego

In San Diego, Turner counts his success in steps that are more modest, such as a “grand opening” of the new offices for MindTouch, a local software company that has taken the entire 15th floor at 101 West Broadway. The company moved in about four weeks ago.

After raising $12 million in its first venture round earlier this year to expand its business, MindTouch has grown to about 100 employees. The 11-year-old company provides customer relationship management software-as-a-service for companies like Electrolux, Whirlpool, and Samsung, helping them re-purpose their training materials and other “help content” to improve their customer experience.

While MindTouch already was based in downtown San Diego, CEO Aaron Fulkerson said he viewed 101 West Broadway as the center of the downtown tech community. A number of tech startups that graduated from the EvoNexus incubator have moved into other offices in the building. The Irvine Company also has created the ROC (as in Real Office Centers), a co-working space on the third floor that offers temporary offices, conference rooms, concierge services, high-speed Internet, and other business equipment and services.

In April, a study released by the San Diego Regional Economic Development Corp. (EDC) revealed that job growth in software development is exploding at three times the rate of overall job growth in the area. The study pegged the overall economic development of the software industry in San Diego at $12.2 million, with a regional workforce of 21,600 software developers and 19,660 related jobs.

At the MindTouch party Thursday evening, the EDC’s Jesse Gipe noted that more than half of San Diego’s software startups are located downtown, and “companies do show a fair amount of loyalty to the Irvine Company.”

“The tech community has helped us evolve as a company here,” Turner said. As tech companies have moved to operate as more of an “always on” business, and to cater more to the needs of elite programmers and other skilled employees, Turner said conventional companies “have come to realize that their workplace is more of an investment than an expense.”

Irvine Company regional VP John Turner

John “J.T.” Turner

In some cases, he said the Irvine Company now will provide month-to-month leases for startups, or a more economical lease structure that increases over time. “We’ve changed the way we view our customers, from landlord-tenant to more of a partnership.” At the MindTouch grand opening, Turner said they listened to what tech companies want, and what they need to attract and retain employees. By one account, Turner used the word “vibrant” 14 times while answering reporters’ questions at the event.

At 101 West Broadway, Turner said the Irvine Company has begun to provide the kind of amenities and infrastructure expected by tech companies and their employees, including discounted concert tickets, fitness programs, and food services. The Irvine Co. has re-branded the entire building as “The Vine,” a vertical campus with a goal to create what Turner calls “a vibrant workplace community.”

As one of the biggest landlords in Southern California, the Irvine Company has many advantages—including the fact that it is a private, multi-billion dollar business. Given the Irvine Company’s financial strength and market dominance,  Turner said he believes time is on his side. “We’re not doing this to position a building for sale,” he said. “We have an endless time horizon. There is less risk for us, because we have the time to make it work.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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