DANVILLE -- In Danville's Historic Mill District, the old Dan River Fabrics sign is beginning to fall apart.

The "D" and the "A" have pulled away from the rest of the sign and appear ready to leap off the building, providing evidence that the mill district is, indeed, historic.

"It's a real symbol of what Danville was," said Susan Booth, director of institutional advancement for the Institute for Advanced Learning and Research. "The opposing symbol is the institute. And that's the hope and dreams, the future, of the region."

The institute, a research facility designed to help rebuild the Southside Virginia economy, is a cooperative effort between state and local governments and Virginia Tech. It's headquartered in Danville's Cyber Park, about eight miles east of the falling Dan River Fabrics sign.

Fronted with glass and exposed steel beams, the $20 million building greets visitors with a spacious atrium and flat-screen televisions hanging from the ceiling. High-tech offices line the second floor with laboratories below.

By educating people in the area, providing research to attract potential businesses and exploring its own commercial endeavors, the institute aims to transform an old economy that relied on textiles, furniture and tobacco into a diverse economy that relies on research and innovation and a more educated labor base.

Working with Tech faculty and administrators, the institute's programs include research in motorsports, polymers, robotics, horticulture and bioinformatics. The institute is also the site for classes in everything from nursing to thermodynamics offered by several colleges in the state, including the University of Virginia, Virginia Commonwealth University and Old Dominion University, along with Tech. Danville Community College and Averett University are working with the institute on a plan to provide ways for students to receive degrees through a combination of classes offered by the three institutions.

Not a magic bullet

The institute is only about 2 years old and many of its programs are just getting off the ground, so the results of the work won't be known for several years. But director Tim Franklin is optimistic that Danville will one day be part of a large corridor of "technology economies" stretching from Raleigh to Richmond.

"What Virginia Tech has done with its leadership down here is create a model for rural communities to have a piece of what they need," he said.

The attempt, at least, is drawing some attention. On Oct. 4, the Lumina Foundation will host a conference for regional economic leaders at the institute. It has also received state and regional honors for economic innovation and was one of three finalists for a national award from the U.S. Economic Development Administration in 2005.

In addition to the positive publicity of leading an award-winning project, Virginia Tech benefits from free access to state-of-the-art research facilities. But John Dooley, Tech's vice provost for outreach and international affairs, said Tech's larger community mission as the state's senior land-grant institution played a huge role in the decision to get involved.

"It has helped us reaffirm our values," he said.

While the institute has lofty long-term goals, Franklin is careful to note that its role is not to recruit businesses or create jobs on its own.

"A lot of what we are is an asset, or a set of programmatic or institutional assets that are new to this region," Franklin said. "We want to be a reason for people to move here."

Because the institute can't take all the credit for jobs created, measuring success will be difficult. Danville economic development director Ron Bunch said the real measurable effects of the institute will be seen when research inside the facility becomes commercialized in the area. Those results will take some time, he said.

Ben Davenport, chairman of Danville's First Piedmont Corp. and a member of Tech's governing board, said he'd like the institute to develop more quickly, but that's not the reality of economic development.

"Our economy didn't get broken overnight and it won't get fixed overnight," he said. "But trying to get people to understand that isn't easy."

A long way to go

The falling sign isn't the only signal of Danville's economic troubles. Rows of empty tobacco warehouses lining streets near the river are evidence of a city caught between an old economy and a new one.

The institute is just one of several efforts by local officials since the 1990s to take the economy in a new direction. But the numbers don't prove that those efforts have been effective.

The city's population dropped from 53,056 in 1990 to 48,411 in the 2000 census and is projected to drop further by 2010. Danville's unemployment rate more than doubled from 2000 to 2005 and is now 9.5 percent, nearly three times the state average. More than half of the people receiving unemployment benefits in the city had jobs in manufacturing.

And while Danville accounts for about 0.6 percent of the state's population, unemployment compensation in the city was 2.6 percent of the state total in 2005.

Bunch said the outlook isn't as bleak as it seems. The unemployment rate in surrounding Pittsylvania County is 6.3 percent, closer to the state average of 3.3 percent. He said more people commute to Danville for work now than in 1990 or 2000 and more than 4,600 new jobs have been created in Southside over the past 28 months.

Unlike jobs created by "chasing smokestacks" to bring in new factory work, these jobs will make the new economy more stable and diverse, he said. Some 20 companies manufacturing everything from carbonaceous nanomaterials to cookie dough have arrived in Southside since May 2004. While the extent of the ties between these new companies and the institute is uncertain, some businesses have more clearly benefited from its presence.

Applied Felts, a Martinsville company that makes felt-lined polymer tubing, contracted with the institute's polymer processing branch last year to design a new bonding process.

The cooperation was a success, and Charles Mattox, chief executive officer with Applied Felts, foresees more work with the institute in the future.

"They've got some top-notch Ph.D.s and Ph.D. candidates there," he said. "I'm not big enough to have that type of research facility in house."

Community outreach

Randy Arno, director of the Danville office for the Weldon Cooper Center for Public Service, has seen a transformation in the community since he arrived 10 years ago. The old track of going to work in a mill after graduating high school has been replaced by a greater emphasis on education, he said.

Despite the population decline and job losses, the number of people receiving postsecondary degrees in Danville has grown since the mid-1990s, according to Virginia Employment Commission figures.

"They realized the new economy was going to be based on skills -- technology skills," Arno said. "The people are so eager to achieve."

While the enthusiasm is there, Arno admits that many people in the community "don't know what the hell" the institute is. He said it has great potential, but something so ambitious needs as broad a base of support as it can get.

"What we're talking about is transforming an economy that was based on tobacco, textiles and furniture for generations," he said. "It's going to take time, it's going to take thoughtfulness."

Franklin admits that two sentiments he hears about the institute from people in the community are, "I can't believe this is in Danville," and "What do they do at the institute?"

"We have ... this kind of shift in mind-set that is very dramatic and so it's hard for them to understand," he said.

Getting people inside the doors of the building is the first step, Franklin said, whether that be through field trips or science camps offered there or classes offered to adults.

Arno doesn't think the changes should be a tough sell to the community because so many of the people there have seen the alternative of relying on a big factory to solve everyone's problems.

"We've been that way before. All over Southside has been there and done that," he said. "I really believe that if you left this spot and came back in 10 years you would not realize where you are."