By Timothy S. Donahue

Top Takeaways:

• Potential property sale: VCU has signed a letter of intent to buy Altria’s 450,000sf research building in downtown Richmond for $150 million.
• State approval required: The acquisition still depends on authorization and funding approval from the Virginia General Assembly.
• Future relocation possible: If the deal proceeds, Altria could build a new research facility at Philip Morris USA’s Manufacturing Center complex.

Virginia Commonwealth University has signed a letter of intent to acquire a major research facility owned by Altria Group in downtown Richmond, a deal that could transform the use of one of the tobacco company’s key research properties if approved by state lawmakers.

The university is seeking to purchase the 450,000-square-foot building at 601 E. Jackson St. for $150 million, according to officials who discussed the proposal during a February meeting of the VCU Board of Visitors finance subcommittee.

The company is giving this building away. The Altria Center for Research and Technology, completed in 2007 for Philip Morris USA/Altria Group, is situated in the Virginia Bio-Technology Park. It houses advanced labs, offices, and a vivarium, serving as a hub for cigarette and tobacco innovation.

Thousands of researchers, local dignitaries, foreign officials, journalists, and others have visited the cutting-edge facility. It’s where the company made major developments in its next-generation tobacco products. It was also one of the most secure facilities in Richmond.

Beyond developing new products, the lab can conduct some impressive experiments. The building has several environmental chambers that can simulate extreme temperatures and humidity levels combined with mechanical stress. These are often used to push materials to their breaking points, including large tables that vibrate at specific frequencies to mimic the “ride” of a delivery truck or cargo plane.

The nine-story building occupies approximately 4.3 acres in downtown Richmond. Local tax records estimate the property’s assessed value at around $275.97 million, which is much higher than the proposed purchase price.

VCU officials state the building can support the university’s growing health sciences programs, including research at the Massey Comprehensive Cancer Center and expansion of the university’s School of Public Health and School of Pharmacy.

VCU Chief Financial Officer Meredith Weiss described the potential purchase as a rare opportunity to acquire a large, fully equipped research facility. “In my opinion, it’s just an opportunity of a lifetime for VCU,” Weiss told the committee. “It really is. It’s an incredible facility. It’s in excellent condition.”

Weiss noted that building a comparable research facility from the ground up could cost around $715 million, making the current Altria building notably more economical for the university.

The idea emerged after VCU officials learned that the building contained laboratory space that might not be fully utilized. Weiss said she contacted Altria’s finance leadership to explore whether the company would consider selling the property.

According to Weiss, Altria expressed interest in a potential transaction. However, the deal remains far from finalized. A VCU spokesperson confirmed that the university must obtain authorization and funding approval from the Virginia General Assembly before it can move forward with the purchase.

“VCU has requested funding from the state to support the acquisition,” said Michael Porter, VCU’s senior director of communications. “Since VCU needs state funding approval to move forward, it is too early to provide details about a closing date, occupancy or renovation costs.”

Budget negotiations in Virginia are ongoing, and lawmakers are expected to continue reviewing the proposal as part of the state budget process before the legislative session ends.

It’s a tough offer for VCU to turn down. If the transaction ultimately closes, Altria has previously indicated it would likely construct a new research facility at the Philip Morris USA Manufacturing Center complex in Richmond.

For VCU, the acquisition would represent one of the largest research facility expansions in the university’s history and could significantly expand laboratory capacity for health sciences research in the region.