$16 million question: Champaign or Iowa City?
CHAMPAIGN – William Boulanger decided Champaign-Urbana was the ideal place to start his chemical supply company.
In 2002, the research chemist did so with the establishment of Obiter Research. Today, the company employs 11 people at EnterpriseWorks and the Technology Commercialization Building, both on the University of Illinois campus.
Champaign-Urbana seemed a natural site for the company, given that Boulanger had received a doctorate in organic chemistry from the UI. Plus, the university boasts one of the top chemistry libraries in the country.
Now the company is making preparations to expand. But it's no longer a sure thing the expansion will come in Champaign.
Last week, the company's business manager, Theron Sands, said Obiter is considering moving either to Champaign's Apollo Industrial Subdivision or to Iowa City, Iowa. A decision is expected within a month.
At first blush, it would seem Champaign has the advantage. Last year Boulanger, through the entity Terran Enterprises, acquired a 2-acre parcel in the Apollo subdivision on Champaign's north side. In May, the company went so far as to schedule groundbreaking ceremonies for June 7.
But since then, the company has put the project on hold, pending consideration of what Iowa has to offer.
Sands said there are plenty of good reasons Obiter should stay in Champaign-Urbana.
"One of the most important is the University of Illinois and its research library. Those are hard things to walk away from," he said.
But Sands said it would also be beneficial for Obiter to be near pharmaceutical manufacturing facilities close to the University of Iowa.
"We're scheduled to make a decision June 16, but that's likely to be pushed off to June 23," he said Wednesday. "We're waiting for incentives from both states."
According to Jeanne Gustafson, president of the Champaign County Economic Development Corp., Iowa has offered $1.3 million in incentives. In some cases, Illinois may not be able to match those, she said.
Sands said Obiter Research plans to build a $4 million, 19,500-square-foot facility that should satisfy the company's needs for three to five years. But Obiter already is anticipating a second phase that would include a $12 million, 50,000-square-foot building.
"Right now, we have five labs. We're basically at a point where we either grow or die," Sands said. "We have to turn away work because we have no space or the ability to get space, so we can't hire more people."
Obiter's bread and butter is making hard-to-obtain chemicals.
"What we do is specialize in making chemical compounds that are difficult to manufacture," Sands said. "Whenever research scientists need something made and don't know how to make it, they can subcontract it out to us. We'll manufacture and ship it to them."
Sands said Obiter has built up a customer base for chemical research and development. The company also does production, primarily for pharmaceutical companies that are "asking us to do more and more and more."
"We have to have facilities to continue to grow," he said.
Sands said he believes that, aside from the University of Illinois, Obiter is probably the largest downstate employer of people with doctorates in organic chemistry – and the number of employees is growing.
"We've been looking for a couple more scientists since December," he said.
"We're looking at having 19 people the first year we're in the (new) building. The second year, we'll hire eight more, and the third year, we'll hire nine more."
Sands said the first phase of the expansion will accommodate small-scale chemistry in two six-person labs. There will also be facilities for midscale process manufacturing and small- to midscale pharmaceutical manufacturing.
Obiter is also teaming with a client to work on a cure for osteoporosis, he said.
"They have the biologists," he said of the client. "If they find something is working well, they'll take the tests further."
After getting his doctorate from the UI, Boulanger worked for FMC Corp. in Princeton, N.J. and MediChem in Chicago. In 1995, he was hired by Albany Molecular Research, which then had eight employees. Six years later, when he took early retirement, company employment had swollen to more than 300 and Albany had gone public.
That's when Boulanger decided to return to Champaign-Urbana with new ambitions.
"Dr. Boulanger set for himself the goal of creating his own chemical research company that could rival (Albany Molecular Research) in the pharmaceutical research and development marketplace," according to information supplied by Obiter.
In a 2002 interview with The News-Gazette, Boulanger said he hoped to target chemical supply houses and pharmaceutical companies as customers. He also hoped to do contract synthesis and in-house research.
Boulanger also revealed the origin of the company's name, pronounced "Oh-bee-tair." He said it reflects innovation and comes from the Latin phrase "Obiter dicta," used in legal circles to mean "straying from the topic."
Weighing best ways to keep young companies in C-U
CHAMPAIGN – The "graduation" of Obiter Research from the EnterpriseWorks business incubator brings to light a broader problem.
Companies can stay in the incubator for about three years, so new companies can use the facilities. Once the "incubated" companies leave, how does Champaign-Urbana convince them to remain in town?
Charles "Chip" Zukoski, vice chancellor for research at the University of Illinois, said it's not practical to think 100 percent of graduating firms will stay in town.
In some cases, a business may need to move to a bigger city such as Chicago, perhaps to be closer to a supplier, he said.
Jeanne Gustafson, president of the Champaign County Economic Development Corp., noted that Iowa offered Obiter Research $1.3 million in incentives to relocate there. She lamented Illinois can't always match those incentives.
At a recent economic development corporation meeting, Gustafson said it would be nice to be able to offer research companies grants for specialized equipment.
She proposed a "graduation committee" be formed locally with the specific purpose of retaining companies in Champaign-Urbana once they've left EnterpriseWorks.
Tom Costello, chairman of the economic development corporation, said another challenge is convincing employees – particularly young ones – that Champaign-Urbana is the best place to live.
"Do they want to live in Champaign-Urbana or in Lincoln Park?" Costello said, referring to a trendy neigh-borhood on Chicago's near north side.
Costello said the committee should consider how to create an atmosphere attractive to young people so they'll tell their employers, "We don't want to move. We like it here."