June 5, 2014

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Star Bright

Will USTAR Improve or Implode?

By Rachel Madison

June 5, 2014

“There was some talk to defund the program, but the program has great promise,” says Shiozawa. “We wanted to be responsible from a taxpayers’ standpoint, but we also wanted to foster this program.” That’s why SB62 calls for annual audits of USTAR as well as a very intense audit every five years.

“We recognize it’s a work in progress and it’s going to take time,” Shiozawa says. “The bill will also tighten up leases, the utilization of physical facilities and look at our research teams. They’ll need to report to us at least annually on how they are progressing and what’s in the pipeline.”

Although the bill is fairly rigorous, Bell says USTAR’s governing authority agrees with SB62. “The legislature and people of Utah invested a lot of money with USTAR, so we want to be as transparent as possible. We will comply with all reasonable procedures. We really need to restore confidence in USTAR, so we’re very open to that.”

Shiozawa believes while most legislators were supportive of SB62, some are still concerned. “We have to think about it. Over $330 million has been involved in this project until now, but we haven’t seen commercialization revenues or jobs increase like they should have. That’s why everyone is guardedly supportive.”

Sen. Stuart Reid, R-Ogden, is one legislator who voted for SB62 but still has concerns regarding USTAR’s future. He says one of USTAR’s biggest mistakes has been having the wrong personnel leading the operation.

“They have engineers, scientists and attorneys, but they don’t have people there who have an economic development background,” he says. “If they’re going to get a return on investment, they need to get the right personnel in there.”

Personnel changes at USTAR have been frequent since the audit. Bell, former Utah lieutenant governor and current president and CEO of the Utah Hospital Association, was appointed as the chair of the USTAR governing authority in January by Herbert. He replaced Dinesh Patel, who had served as chair since USTAR’s inception.

In late May, USTAR also named a new executive director, Ivy V. Estabrooke.  The former director, Ted McAleer, resigned shortly after the audit was conducted. Estabrooke was previously a program officer for basic research in the Office of Naval Research (ONR), where she managed a high-risk/high-payoff research portfolio.

USTAR has also hired a new finance director, Jim Grover, who has a public accounting background and has worked for the Governor’s Office of Management and Budget.

Reid isn’t convinced the personnel changes will do much good. “I have a lot of respect for [Greg] Bell, but again he’s an attorney, and I think his appointment was to reestablish some credibility and trust among the legislators, not to be someone who will be able to get the return on investment that is expected by the legislature and promised by USTAR,” he says. “No one in the organization to date knows how. That’s at the board level, the chair level and the executive director level.”

USTAR’s Future

In the future, Reid expects SB62 to put more pressure on the USTAR system in a way that’s “just going to be frustrating for everybody.”

“They’re never going to be able to meet the goals and objectives they claimed when they were initially organized,” he says. “[SB62] will highlight the problems year in and year out with the stringent oversight, and the problems will just be magnified for the Legislature and the public. I don’t know if that was the intent of the bill, but that will be the outcome. [USTAR] was destined to fail and, frankly, it has failed. I would like them to be successful, but I just don’t believe they will be.”

But Bell believes USTAR’s future is bright. “It’s got a lot of potential and we’ve got great teams in place at the universities,” he says. “We’re doing good work. Utah is going to be the center of a lot of exciting things, and part of that will be thanks to USTAR.”  

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