NEW YORK (GenomeWeb News) — A pair of projects taking shape in New York reflects the most ambitious effort to date that seeks to transform the city into a top-tier national bio-cluster.
Construction has begun on the 725,000-square-foot first phase of East River Science Park, an office-laboratory complex on Manhattan’s East Side being built by Alexandria Real Estate Equities.
The project hopes to serve as the flagship for a biotech sector that advocates admit has had trouble attracting and keeping young biotechs growing in the city.
“It really acts as an anchor for what we hope will be a great future growth in New York City, and really New York State, and hopefully make New York State the third leg of the triad that will be thought of as Boston, New York, and San Francisco,” said Joel Marcus, CEO of Alexandria Real Estate Equities.
He said he expects the space to be completed in late 2009 or 2010, or as late as 2011.
Marcus spoke yesterday during a panel discussion at the New York Biotechnology Association’s 2007 annual meeting, held in midtown Manhattan.
East River Science Park’s first phase would consist of an east tower, while a west tower would be completed six months later. The east building would house a digital conference center and a “convergence” café. The west building would feature “chemical and heavy infrastructural capabilities for tenants,” though the breakdown of office, lab, and incubator space has yet to be set, Marcus said.
The science park is contemplated as a 1.1 million-square-foot campus on 3.5 acres sandwiched between two medical institutions: Bellevue Hospital Center and New York University Medical Center.
Marcus would not confirm the project’s cost, which the city said two years ago would run as high as $700 million. Asking rents will be set when Alexandria begins marketing the project.
Alexandria plans to build the science park’s second phase of 442,000 square feet as soon as market demand warrants it. But the ultimate timing of that phase hinges on how fast New York finds a home for what occupies the second-phase site now: the unidentified remains of people who died at the World Trade Center on Sept. 11, 2001.
Government and business leaders in New York have shepherded the project. The city Health and Hospitals Corp. selected Alexandria as a preferred developer two years ago, then negotiated a ground lease with the nation’s largest laboratory-oriented real estate investment trust, headquartered in Pasadena, Calif.
City officials also agreed to $251 million in property tax abatements over 25 years, plus $22.7 million in abatements on city and state taxes on sales and mortgage recording. The state and city have also agreed to spend more than $40 million on infrastructure.
Two business groups, the New York City Investment Fund and Partnership for New York City, have committed to invest up to a combined $10 million in the science campus.
According to the public-private New York City Economic Development Corp., the city has 112 bioscience companies, 1.7 million square feet in biotech research space, and more than 130 venture capital firms.
The city also has 11 major academic research institutions and 26 research centers and labs, all spending a combined $1.7 billion on R&D annually.
Yet the Big Apple has been anything but big for life sciences, due in part to high living costs and less-robust incentives compared with other areas.
Another key problem for New York — which the science park hopes to eliminate — is a shortage of suitable space for biotechs. The city’s largest life sciences development until now, Columbia University Medical Center’s three-building, 579,000-square-foot Audubon Business and Technology Center, has filled all of its available space for biotechs, said Carol Shuchman, director of commercial leasing and development, at the panel discussion. Plans still call for the construction of two additional buildings totaling 517,000 square feet.
The space crunch forces the roughly 30 companies spinning out of New York incubators each year to move out of town. “We have an awful leakage out of the system,” said William Fair III, managing director of healthcare and biosciences with New York City EDC.
“It’s not just a local development. It’s international in scope. For European companies that want to have a US headquarters, East River would be a place to do that.”
Much of the city’s recent biotech space construction has been carried out by academic institutions. “When you look at it in those terms, New York City actually has a little bit of a building boom going on,” said Nathan Tinker, who took office last month as NYBA’s executive director.
East River Science Park is crucial if New York is to draw biotech businesses, said a real estate professional familiar with the region’s life sciences market.
“The East River project is a vital component to New York City. It will be the gateway and the opening door for other biotech to develop here,” said Patricia H.C. Ardigo, a first vice president and director with CB Richard Ellis’ Life Sciences Group.
“It’s not just a local development. It’s international in scope,” she added. “For European companies that want to have a US headquarters, East River would be a place to do that.”
A Biopark Grows in Brooklyn
Meantime, across the East River in Brooklyn, the State University of New York Downstate Medical Center has raised $8 million toward a $13-million, 50,000-square-foot incubator building within Downstate Biotechnology Park.
The park currently comprises a 13,000-square-foot lab building built and vacated by ImClone Systems. It also has a two-phase project totaling 24,000 square feet composed of an 11,000-square-foot space, which has been fully leased to six companies, and a 13,000-square-foot space completed last December that now houses expansion space for two incubator companies, plus three businesses new to the center.
Later this year the school will issue a request for proposals to developers seeking to build the third and fourth phases comprising the second half of the park. SUNY Downstate hopes to start building these final phases early next year, depending on how much money it can raise, said Eva Brown Cramer, vice president of biotechnology and scientific affairs.
“We’re waiting to hear how much additional revenue is going to come in so as to decide how big the space is going to be,” said Cramer, a distinguished service professor of anatomy and cell biology at the medical center.
Companies outgrowing the incubator space can graduate to the Brooklyn Army Terminal, where more than 450,000 square feet of expansion and manufacturing space will be created in phases for Brooklyn biotechs that grow enough to carry out their own manufacturing.
The first phase, Cramer said, will consist of 130,000 square feet. An anchor tenant is set to move from the incubator into 30,000 square feet at the terminal in January 2008 – International AIDS Vaccine Initiative International, a global public-private nonprofit group that researches and develops vaccine candidates, conducts policy analyses, and serves as an advocate for preventive HIV vaccines.
To date $54.5 million in state and city funds have been raised toward the bio-manufacturing space project, called BioBAT. SUNY Downstate and the Brooklyn Economic Development Corp. have also generated support for the biotech effort through the public-private Brooklyn Biotechnology Consortium.