Published on HamptonRoads.com | PilotOnline.com (http://hamptonroads.com)
LifeNet tissue bank nears deal to expand headquarters
City officials are renegotiating a million-dollar deal to sell 6 acres of land to LifeNet Health, one of the largest tissue banks in the country and an anchor of the burgeoning medical village along Princess Anne Road.
The deal is expected to be settled next month, said Douglas Wilson, executive vice president of LifeNet.
The biomedical firm and the city first started talking last year about redoing the contract, said Steve Herbert, the Beach's chief development officer.
LifeNet had an option to buy 6.57 acres adjacent to its corporate headquarters on Concert Drive, but the discounted deal was to expire on June 10. The City Council approved a 30-day extension that day so talks could continue.
Wilson said there is no doubt LifeNet will buy the land - the second phase of a deal first announced in 2003 - but the company needed time to work on development plans.
He wouldn't go into detail, but said the company would likely invest at least $2 million and expects to create up to 100 jobs in the next three years. LifeNet, founded in 1982, already employs more than 550 people, spokeswoman Dena Reynolds said.
"The negotiations have moved very efficiently," Wilson said. "We're very pleased to be where we are in this corridor of Virginia Beach. It's gone well for us."
In 2003, LifeNet bought roughly 16 acres along Concert Drive for $1.97 million. The land is in the area known as Princess Anne Commons, a series of medical and athletic villages stretching from Tidewater Community College to Dam Neck Road.
LifeNet's deal included a five-year option to buy the adjacent six-acre plot for $125,000 an acre, plus an annual increase based on the consumer price index. Those increases have pushed the price under the deal to about $150,000 an acre, said Warren Harris, Virginia Beach's economic development director.
When LifeNet buys the parcel, the cost is expected to be around $1 million. The City Council must approve the deal.
Without a final plan on what to do with the new acreage, Wilson said, LifeNet isn't quite finished with the contract. He added that talks with the city have been amicable.
"It's not an unusual request," Councilman Bob Dyer said. "They've been a good friend to the city. To really promote a friendly business environment, these are the type of things we need to do."
Herbert said the extension request gave the city a chance to strengthen the contract with investment thresholds and firm time -lines for construction.
"We're trying to find a middle ground here where they can continue to enjoy the benefits of the option agreement," he said, "and the city can get... a little more certainty about the nature of the investment."
Harris said any LifeNet expansion makes the Princess Anne Commons corridor more attractive to other firms. It also solidifies the city's attempts to recruit more medical companies with high-paying jobs in the Princess Anne corridor and elsewhere.
"LifeNet is an important player," Harris said. "They anchor an important piece of our strategy to attract other health science or medical device companies to Virginia Beach."