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Incubators to settle in downtown as ATC's basement gets upfit at last

No sooner had Tuesday's presser on a "big announcement" coming in American Tobacco been held than did construction crews start up their work in the lower level of the Crowe and Strickland Buildings.

Those spaces had long been some of the largest unleased "pads" within the 1 million sq. ft. complex; the natural light-free spaces have high ceilings and brick touches but have primarily been used for complex storage, mail room services -- oh, and this past fall's Durham Jaycees' Halloween event, when the lower level of Crowe became a haunted jail decked out in blacklight.

Well, the new tenants of the Strickland/Crowe basement will be locked up there in some cases 100 hours a week, but this jailing will be by choice.

The lower level will become home to American Underground, ATC's branding for a shared-use incubator space that's latched on to two of the recent big announced names arriving in the Bull City -- the Launchbox Digital and Joystick Labs incubators for web and casual gaming startups. CED, the Council for Entrepreneurial Development that's one of the premier such organizations of its kind in the country, will also ditch leased space in RTP and head up to American Underground as well.

The underground space will contain offices and office suites, along with a sixty-person classroom, break rooms and other similar space -- along with, as the N&O notes, softened credit requirements that can open up this incubator space to early-stage companies that usually couldn't break in to ATC-style space.

The H-S notes that Joystick Labs, CED and Launchbox will together only occupy a quarter of the more than 26,000 sq. ft. allocated to the Underground complex. 

(A tip of the hat to the H-S, by the way, for running a story on Underground last week in advance of the official CBC announcement -- too often local media waits patiently for the scraps fed to it from press conferences and doesn't break news before the news story's sponsor is ready to move the story, so kudos to Monica Chen and the editors at the H-S for advancing the news on this one a few days.)

It's an interesting move by Capitol Broadcasting in lots of ways.

In general, downtown Durham has tended to aim towards startups and smaller firms, in part because the floor plans of buildings once developed for retail and small-office use aren't really given to big open floor plates that would allow, say, a Quintiles or BCBSNC to make effective use of the space.

Heck, even the signature Hill/CCB/SunTrust Building downstairs has a tiny footprint on the tower, suitable for Central Carolina Bank's use a half-century ago but poorly adapted to office space today.

But even as downtown lost out on tenants like the American Institute of Certified Public Accountants -- which moved to new-built space on the I-40 corridor after being unable to find enough contiguous space in downtown Durham for their needs -- it's done well with attracting smaller tenants, startups and the like.

Those smaller tenants fit well into Durham's historic and present image of the Bull City as an entrepreneurial magnet.

Certainly there's plenty of services here for those who want to start up new businesses, of which the new incubators and the ATC's space are just the latest additions.

From one of the Southeast's largest VC funds (Intersouth) to Square One Financial, which specializes in banking and financial services for early-stage firms and which makes downtown Durham home to their southeast US office, to the burgeoning social entrepreneurship efforts at Bull City Forward on Main St., to the new directory listing companies from Shoeboxed to Bronto to TheraSim to Snaptotes, Original Projects, and more -- it's a rich scene of emerging companies downtown.

Underground gives ATC a chance to dabble in to this emerging leasing market and to attract the kinds of tenants who otherwise would be too small -- in space needs, size, resources -- to afford to come into ATC.

And it's not exactly like they're giving away prime real estate in doing so. (The basement ain't exactly the Ritz-Carlton -- they certainly weren't offering up, say, the first floor Power Plant space once destined for the once-planned-but-recession-stalled Ben Benson's Steakhouse.)

One thing's for sure: it helps everybody in the startups business to have American Tobacco jump into this space.

And it'll really be part of a continuum of options, bridging small-space offerings like the upcoming Durham Coworking space from the Carrboro Coworking folks and Bull City Forward's member access to desks and office resources with the ability of larger startups like Bronto or PocketGear who are mature enough to lease their own space.

In a region long known for the monotony of big, shielded suburban campuses at RTP, south Durham, Raleigh and elsewhere, American Tobacco in specific, and downtown Durham in general, has a much greater feeling of authenticity and funkiness than any other large office area in the Triangle.

Plenty of businesses don't need that, and won't pay the price premium for it. (ATC's lease rates have long been top-of-market in the Triangle, which speaks to the uniqueness and interest in their space.)

But the kind who want that space and are willing to pay for it tend to be great fits for Durham's innovation culture, a culture burgeoned by the proximity to Duke, UNC, Research Triangle Park and so many other assets.



This is a big win for downtown durham (and the region as a whole).

The best thing (other than the cool space) about the Underground space for entrepreneurs is the flexible lease terms.

I really hope ATC stays true to their promise of 1-year leases. It is really,really frustrating as a startup owner when you don't know how big you'll be in 6 mos or 1 yr and landlords want you locked in to a "short term" 3 yr or 5yr lease!


This truly is significant for Durham - these accelerator incubators which focus on a particular industry, not necessarily a region, will bring in startups from all around the country. With the great regional resources, human and otherwise, hopefully they'll stick around.


Good point Will. On that note, the first two companies announced for LaunchBox are teams moving here from Colorado and Berkley, CA. I know Joystick is reviewing applications from across the country as well as Europe and Central America. It's really exciting they will be bringing these talented teams and tech leaders from around the world to Durham.

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