Danville Rises From the Dust

Ready to Take Flight and Soar with Nanotech Company Luna

By Laura Hendrix Corbin

Like the Phoenix arising from the fire, the city of Danville, VA, is emerging from the devastation that was the 1970s – when thousands of textile and tobacco industry jobs suddenly vanished – to perch itself on the leading edge of the broadband revolution.

Such emergence has quickly caught the eye of Luna Innovations Inc., a leader in nanotechnology. In March of this year, Luna announced it would invest $6.4 million to locate a nanomanufacturing facility in the city of Danville's Tobacco Warehouse District, creating 54 new jobs. The facility expects to open its doors in early November in that converted tobacco warehouse.

The nanomaterials manufactured in Danville will be used for research and development of new military and commercial applications, officials said. Virginia successfully competed with Maryland and North Carolina for the project.

This small, rural community of 48,000, on the North Carolina border, fell on hard times, as did many of its southern counterparts, in the 1970s. Textile manufacturer Dan River, then the town's largest employer, boasted 10,000 workers. Now, fewer than 2,500 of the community's workers are still in textiles.

The town's other economic foundation, tobacco, saw the closure of most of its auction houses by 2000.

City Manager Jerry Gwaltney and other town officials saw their rural community being stepped over and on the verge of dying, but they weren't satisfied to simply sit by and wring their hands while lamenting how textiles and tobacco had let them down.

Instead, they made a conscious decision to save themselves. They went into the broadband business, deciding to install a business-class fiber optic network to deliver voice, data and video services – a network called nDanville. The system is being built in phases with the help of World Wide Packets, a company that specializes in municipal networks. The state-of-the-art system offers speeds up to 1 gigabit in both directions, 1,000 times faster than most DSL systems.

Gwaltney has said deciding to join the broadband revolution was about one thing – jobs. Danville decided to join other communities tired of waiting for commercial providers to get around to their towns.

“We did this for a couple of specific reasons. One, we felt that the private providers were not willing to invest in our community to meet our needs, so it was in the best interest for us, especially given a strong need for an education component,” Gwaltney says. “We used our city government and our education component as the basis for our core. By doing that, we began to develop a ring to serve all our needs.” He notes that Danville was equipped to handle the job because it owns all the other utilities.

The other reason, Gwaltney says, is the city “needed to set ourselves apart in this global economy in order to compete. We had to have that infrastructure.”

Danville's rollout will include three phases: 1) wiring local schools and government offices for Internet access, which has been completed; 2) taking nDanville to businesses for voice and data services; and 3) taking service to consumers for voice, data and video services. The total expected cost is $37.5 million. Danville's municipal electric utility reserves funded the first phase at $2.5 million.

The decision to take Danville's destiny into its own hands – on the information superhighway – and its strong history of the textile-agricultural work ethic got Luna Innovations' attention.

“Locating in Danville started from an idea of Dr. Kent Murphy (Luna Innovations' founder, chairman and CEO) as he drove through the community about a year ago,” says Charles Gause, vice president of Luna in Danville. “He saw that the community had faltered, that its infrastructure had fallen off, and he commented on how strong the town and workforce is and wondered whether there was something we could do. We had this manufacturing project in the works and we realized we had a unique opportunity in Danville.”

Danville's technology initiative and overall vision easily integrate into Luna's future direction. “They were flexible and responsive,” says Gause. “They just made it easy. They coordinated temporary space for us in the city's business incubator while we were renovating the tobacco warehouse.”

City Manager Gwaltney notes, “For Danville to be able to land a nanomanufacturing facility positions us well to be a player in the new emerging technology realm. It's important to our overall economic development game plan.”

Gause says other factors played into the decision – the strong work force, the low cost of doing business, the quality of life, the accessible location, among others. “Danville owns most of the utilities, for example, such as power and sewer service, so they were in a unique position to provide a turn-key operation,” he says. “They helped us get the necessary permits and paperwork done with ease.

“You also can't beat the work ethic that comes from a manufacturing heritage,” Gause says. “In terms of what we're doing in nanomanufacturing, there's a misconception that the manufacturing jobs are really ‘high-tech' and must have highly specialized workers. In reality, the more ‘typical' manufacturing technicians can probably pick this up faster than anyone because of their backgrounds.” While Luna has recruited a world-renowned nanotechnologist, Dr. Stephen Wilson, from outside the area, it is hiring locally for other technical and manufacturing jobs.

Renee Wyatt, marketing and research manager for the Danville Economic Development office, notes that Danville is the fifth-highest MSA for manufacturing in the country. “We've lost a lot of manufacturing jobs, but we still have a strong manufacturing history and work ethic, and we have the opportunity to train this workforce. It's a win-win situation for everybody.

Luna also selected a place “where not only the company could be successful, but where Luna could truly make a difference in the community,” Gause says. “At the time of the decision to locate in Danville, unemployment in the region was at 13 percent, compared to 3.7 percent for the state as a whole, and this is before Pillowtex left. The area has an aging population and an outward migration of youth because of the old economy mentality. The Luna project has brought excitement to the area with a new economy outlook.

“Economic indicators project that for every dollar spent by Luna's nanomaterials division, the economic impact on Danville is nearly double,” he adds.

A Virginia-grown, high-tech business headquartered in Blacksburg, Luna Innovations is inventing, building and commercializing innovative ideas that are improving life through practical applications of technologies. Luna identifies market opportunities, marrying them with qualified, novel technologies and moves the concepts from the laboratory to the marketplace, says Gause. Core technologies for Luna reside in fiber optic and ultrasonic sensing, biotechnology, advanced materials and integrated systems.

“Luna specializes in the synthesis, creation, purification and application of nano-sized materials, such as carbons,” Gause says. “Our expertise is in carbonaceous nanomaterials.” Company focuses within the Luna Group of businesses include manufacturing process control, novel nanomaterials, next-generation cancer drug development, analytical instrumentation, advanced petroleum monitoring systems and wireless remote asset management.

Luna Innovations has transferred institutional research to commercialization in nanomaterial manufacturing. With an existing production facility in Blacksburg, Luna is the world's only producer of Trimetapsheres – hollow molecules of carbon atoms that enclose various metal and rare earth elements, a discovery made at Virginia Tech.

Luna's Danville initiative, based on the latest research in the creation of new materials – nanomaterials – is another opportunity for economic development, officials say. “That discoveries from Virginia Tech's labs are among Luna's resources shows how basic research can lead to important technologies that support commercial partnerships,” says Jim Blair, interim vice provost for research at Virginia Tech and director of the board of Virginia Tech Intellectual Properties Inc.

The company will manufacture carbonaceous nanomaterials and nanocomposite thin films. Commercial applications include both consumer and military uses, such as vehicle parts, enhanced textiles, ship hull coatings and fuel cell components.

“Luna Innovations is an employee-owned company focused on bringing innovative technology to the marketplace,” says Murphy, Luna' CEO. “This project allows Luna to work closely with Danville, where there is a highly motivated and qualified workforce to secure Virginia as a leader in the nanotechnology sector. The applications of nanomaterials are almost limitless and include healthcare, defense, telecommunications and biotechnology.”

Gov. Mark R. Warner approved a $250,000 grant from the Governor's Opportunity Fund to assist Danville with the project. The city also obtained $400,000 in Tobacco Region Opportunity Funds from the Virginia Tobacco Indemnification and Community Revitalization Commission. The Virginia Economic Development Partnership and the City of Danville Office of Economic Development assisted Luna Innovations with its location decision. Virginia's Center for Innovative Technology (CIT) has provided ongoing support to Luna Innovations. The company will take advantage of the Virginia Department of Business Assistance's Workforce Services Program and will be eligible for enterprise zone tax credits through the Virginia Department of Housing & Community Development.

Wyatt says that since landing Luna, Danville has received a lot of interest from similar operations. “This is really moving our community forward. Over the course of 12 months, we have created 1,200 jobs here, and have seen $40 million in new investment. That's major, considering that at one point, Danville was facing double-digit unemployment.

“The future is bright for Danville and Luna,” she adds, “as we continue to build our technology cluster. We certainly have strength by having a nanotechnology facility in our community.”