The district’s continued revival is further assured by the Defense Department’s recent decision to award $80 million over five years to establish an institute here focused on creating an industry for the biofabrication of human tissue and organs. Called the Advanced Regenerative Manufacturing Institute, or ARMI, the effort is expected to draw an additional $200 million in investment from partners around the country that include major companies, universities and nonprofits.
“The millyard is going to be reborn as the single-largest hub for regenerative medicine,” said Dean Kamen, the driving force behind the effort and the founder of DEKA Research and Development Corporation, based in the millyard. While the science of biofabrication is already well underway in various research labs, he said, “there is no industry for this yet. We’re going to build it.”
The institute is a major economic opportunity for the southern New Hampshire region, while more narrowly fulfilling the vision of a revitalized millyard that Mr. Kamen, an engineer and inventor, has worked toward for more than 30 years. During that time, his company has concentrated primarily on medical innovations, including a wheelchair that climbs stairs and, most recently, an advanced prosthetic arm that allows for much greater range and dexterity. But the company is most known for its invention of the Segway personal transporter.
The millyard makes good strategic sense as the location for ARMI, Mr. Kamen said, because if you draw a line between the major research institutions at Dartmouth College, in Hanover, N.H., and Harvard and M.I.T., in Cambridge, Mass., “we’re sitting right in the middle.”
Originally from Long Island, Mr. Kamen has been a champion of the millyard since he began buying up and rehabilitating vacant factory buildings in the early 1980s. At that time, “there were tumbleweeds running through there,” Theodore Gatsas, the Manchester mayor, recalled. “Kamen made an investment down there when a lot of other people wouldn’t.”
The city has helped by loosening use restrictions to encourage revitalization, Mr. Gatsas said, but most investment in the area has come from the private sector. Recently, three mill buildings, including the one occupied by Dyn, were purchased from a longtime owner for a reported $11.2 million by Bill Binnie, the president of Carlisle Capital Corporation, in Portsmouth, N.H.
The factories’ vast interiors, located about 50 minutes from Boston just off Interstate 93, make for pleasant work environments, with wood floors, exposed brick and granite, lofty ceilings and large windows. Asking rents are competitive, at $14 to $16 per square foot, and few large blocks of space remain, according to Daniel Scanlon, a senior associate with Colliers International.
Mr. Kamen estimates he owns close to one million square feet of mill space (about a third of the total), including DEKA’s headquarters and, in the building next door, the future three-story home of ARMI.
To free up that space, Mr. Kamen negotiated its purchase from the University of New Hampshire, which maintained a commuter campus there. He then leased to the university 120,000 square feet at another mill building just up the road. As a partner in ARMI, the university will direct the nationwide education and work force development plan needed to get it off the ground, said Michael Decelle, the dean of the Manchester campus.
Aligning itself with the millyard’s high-tech focus, the campus has strengthened its offerings in science, technology, engineering and math, including a new biotechnology major, and added state-of-the-art laboratory facilities in its new location. Many students walk to internships at tech firms and medical facilities nearby.
A potential hurdle for continued growth of the dense district is the need for more parking. The millyard’s existing spaces are maxed out, and the city has been reluctant to invest public dollars in a parking garage without upfront guarantees that the spaces will generate cash flow, Mr. Scanlon said.
A planned 106-room Tru hotel, a midlevel Hilton brand, to be built on a former city-owned surface lot in the heart of the millyard, will receive a $750,000 city subsidy toward construction of an on-site garage to replace the lost spaces and add about 50 more. The $25 million project, scheduled for completion in 2018, will include 10,000 square feet of retail.
“The millyard needs to very carefully look at finding a way to unearth every new parking space they can without overinvesting,” said Peter Flotz, the hotel developer and the managing member of the Lansing Melbourne Group. More residential development will help ease the demand, he said.
Those projects are slowly taking shape. More than 500 rental units, including lofts and micro apartments, have been added in and around the mill district in the last few years, according to city economic development officials. Mr. Kamen said he hoped to see residential development speed up as the millyard added jobs.
T. J. Parker, a co-founder of PillPack, a mail-order pharmacy that prepackages customers’ prescribed daily doses, said that he would like to see more parking and amenities in the millyard, but that he had no regrets about locating his start-up here in 2013. PillPack now has customers in every state but Hawaii, and has expanded its millyard operation from an initial 1,600 square feet to 88,000, or nearly an entire factory floor.
A New Hampshire native, Mr. Parker nurtured the business in an accelerator in Boston before moving it to the millyard. Real estate and staffing costs were both more daunting in the Boston market, he said. (He lives just outside Boston, in Somerville.) And the millyard, as the base for Mr. Kamen’s company, held a special allure.
“Dean Kamen was the prototypical hero when I was a kid,” said Mr. Parker, who grew up in Concord. “I stayed home from school the day he announced the Segway.”