Bold new ventures at the old Navy base

When the Navy closed its historic shipyard in South Philadelphia, its busy engineering station stayed behind and kept working on innovative systems for ships and vessels of the present and future.

Now, a decade later, several educational and economic development groups are joining forces to parlay that high-tech Navy complex into a national center of engineering and manufacturing innovation.

The initiative is coming together in a new facility at the former Navy base, now called Philadelphia Navy Yard, and new partners are working with the Naval Surface Warfare Center's Ship Systems Engineering Station in Philadelphia.

"We have the potential to be a future Silicon Valley in the power and energy field," said Patricia C. Woody, head of the machinery research and engineering department of the Navy unit.

Her department includes 1,200 of the 1,500 engineers and technical staff employed at the station. They are the Navy's experts on all ship machinery, environmental and propulsion systems - virtually everything on a vessel that's not a weapon. They work on challenges such as increasing fuel efficiency, reducing pollution, developing fuels cells, and designing advanced propulsion systems.

Their primary focus is on ships, but their work has broad implications for transportation and other businesses.

"So much is going on in the power and energy fields around the world," Woody said. She says she believes the planned Keystone Innovation Center will create in the Philadelphia region the nation's biggest cluster of research and manufacturing in those fields.

By sharing its costly array of laboratories and test beds, the Navy will lower its costs while helping add jobs to the region, she said.

The Navy engineering station here has long worked with private companies to develop and build new systems, and it has a 40-year academic research relationship with Pennsylvania State University.

The Keystone Innovation initiative also involves the Ben Franklin Technology Partners of Southeastern Pennsylvania, the Delaware Valley Industrial Resource Center, and the Philadelphia Industrial Development Corp.

John Grady, senior vice president of the PIDC, the quasi-public city agency responsible for converting the military base to private use, said the innovation zone is an important next step in replacing the 11,000 peacetime jobs that existed at the base in the early 1990s.

Over the decade since a Navy bugler played taps at a solemn closure ceremony, a variety of office, industrial and distribution uses have been attracted to the 1,100-acre site on the Delaware River at the foot of South Broad Street.

Many of these companies could benefit from a strengthened innovative engineering presence nearby.

The Aker Philadelphia Shipyard, built on part of the old Navy shipyard, has delivered six cargo vessels, and has a backlog for new ships that extends beyond 2015. Boston Ship Repair Inc. recently agreed to lease space adjacent to Aker for a new complex, and is seeking repair and overhaul business from private and government ship operators.

A major retailer, Urban Outfitters Inc., moved its headquarters from Center City to the base in August 2006, and the maker of TastyKake products is building a headquarters and bakery there.

The base also houses logistics, transportation, architecture, pharmaceutical, distribution, maritime support, defense and real estate firms, and a cruise-ship terminal.

Later this month, Ben Franklin Technology Partners will move its headquarters from Center City to the Navy Yard's Building 100, a former Marine Corps barracks.

Penn State is planning to construct a 120,000-square-foot teaching and research building nearby, Grady said. It would be adjacent to the Navy engineering station's Building 77-High, a former blimp hangar that houses test facilities for present and future propulsion systems.

In 2005, Gov. Rendell designated a portion of the Navy Yard a Keystone Innovation Zone, which includes an array of state incentive programs including grants and shelter from most business taxes.

The Keystone Innovation Center effort gained momentum last year when Penn State president Graham B. Spanier toured the Navy engineering station. A short time later, the university's engineering dean, David Wormley, began more detailed discussions with Woody and her colleagues.

Ben Franklin Technology Partners, a nonprofit economic development organization, intends to step up its focus on evaluating technology developed at the region's scores of universities and at the Navy engineering station, chief executive officer RoseAnn B. Rosenthal said. Since 1982, Pennsylvania's Ben Franklin Technology program has sought to encourage entrepreneurship and technology development at the state's colleges and by companies. Traditionally, it has done so by investing small amounts of state money, usually matched by greater sums from the private sector, at the earliest stages of a technology's development.

Part of the Ben Frankin center's new headquarters in the former Marine barracks would become its first business incubator, with low-cost facilities and shared services for start-up companies in the physical sciences.

"We can accelerate technology" by providing testing facilities, at the Navy station and elsewhere, and funds needed to turn an idea into a business, Rosenthal said.

She seeks companies with specific objectives. "We don't want 'maybe-we-can-do-this' situations. We need to know the hurdle they seek to overcome," she said.

Her group will ask Boeing Co., Lockheed Martin Corp., and other defense contractors that have a presence in the region what they need, then try to match that with capabilities at the Navy complex, area universities and companies.

Joseph J. Houldin, chief executive and founder of the Delaware Valley Industrial Resource Center, will open a branch of his Northeast Philadelphia center at the former Marine barracks at the Navy Yard.

His focus is to promote workforce training and other things that help manufacturers become more efficient, so they can prosper in the high-cost Philadelphia region.

Backers of the Keystone Innovation Center hope it will help link academic and training programs with the needs of local industry.

The Navy's large engineering station "is the reason why all this makes sense," said Grady, the PIDC executive.

It makes sense for the Navy, too, Woody said, adding: "A lot of what we do in research requires strong academic research. It is really attractive to have them located here and focused on power and energy."