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BioRegion Real Estate: Jul 17, 2009


Burrill Creates $1B Hybrid Fund, Eyes Stimulus Money for Minnesota's Elk Run Project

G. Steven Burrill, the San Francisco biotech investor/analyst who is the main investor behind the 200-acre BioBusiness Park at Elk Run, planned for Pine Island, Minn., told the Star-Tribune of Minneapolis on Thursday he will complete by year's end a $1 billion hybrid fund intended to finance the project. The fund would divide its assets evenly between real estate and venture capital.

The fund will spend about $500 million to purchase $20 million equity stakes in 15 to 25 companies — ranging from startups to publicly traded businesses — that will move to the bioscience center. The remaining $500 million will go toward the rest of developer Tower Investments' real estate projects on Elk Run, which include a healthier living center, offices, shops and homes, according to the newspaper.

Burrill, the CEO and founder of Burrill & Co., traveled to Minneapolis this week to court potential investors. To date, he told the newspaper, he has received a commitment from a large investment firm he declined to name, and is talking to local pension funds, wealthy families, foreign sovereign wealth funds and many of Minnesota's largest corporations, including Piper Jaffray, Cargill, General Mills, 3M, Medtronic, and Boston Scientific. Burrill said he hopes the corporations will either invest in the fund, or spin out technologies into companies that will reside at Elk Run.

Burrill also told the Star-Tribune that Elk Run developer Tower Investments is close to securing millions of dollars from the $787 billion American Recovery and Reinvestment Act, the economic stimulus measure enacted in February by President Obama, to construct an interchange that would connect Hwy. 52 to the project site.

According to a spokesman for the Minnesota Department of Transportation, however, the state had yet to approve any stimulus money for the interchange, the newspaper reported.

Report: Biomedical Company Would Employ 300 at Planned $80M Atlanta Manufacturing Facility

An unidentified biomedical company plans to invest about $80 million in a manufacturing operation near Atlanta and create at least 300 jobs, the Atlanta Business Chronicle reported on Friday.

The firm has spent several months searching for a site, but has recently focused on locating a high-tech manufacturing plant within a new 200,000-square-foot building in Majestic Realty’s Airport Center project in Union City, Ga., according to the Business Chronicle, citing unnamed "sources familiar with the deal."

Majestic Realty won approval in June from Union City officials for a 202,000-square-foot building to rise as part of the 137-acre Airport Center III site, near Hartsfield-Jackson Atlanta International Airport. Community Development Director Ann Lippmann told the newspaper she had no specific knowledge of the biomedical company.

Jones Lang LaSalle, the commercial real estate firm that represents the biomedical firm, and state economic development officials would not comment to the newspaper on the deal.

The development comes about two months after Atlanta hosted the nation's largest annual life-sciences industry show, the 2009 BIO International Convention, held at the Georgia World Congress Center. And, according to the newspaper, the New Economy Task Force of the Metro Atlanta Chamber is expected to recommend that the region focus on attracting health and biosciences companies, especially those in that focus on global health and communicable disease, medical biotech and medical research.

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Samaritan Health Services, WUHS, Join on Plans for New Med School, Mixed-Use Project

Samaritan Health Services has joined with Western University Health Sciences of Pomona, Calif., on plans to build a Pacific Northwest campus for the medical school in Lebanon, Ore., as the anchor of a 55.5-acre mixed-use project that would also include a conference center, hotels, stores, and apartments, according to the Daily Journal of Commerce in Portland, Ore.

Ground for the project is set to be broken by year's end.

“This is undoubtedly going to be a major benefit to this community,” Walt Wendolowski, community development manager for the town of Lebanon, told the newspaper.

Once completed, the school will accommodate about 400 students and dozens of faculty and staff members. “The land we have here is intended to provide additional capacity for companies that want to stay in our state in the future,” Samaritan Community Hospital President Julie Manning told the Daily Journal.

Ground will be broken on the first phase of the project before year's end, she added.

Samaritan Health Services, based in Corvallis, Ore., has entered into negotiations with other developers to build on the land, but no agreements have been reached yet, the newspaper reported.

According to the Daily Journal, Wendolowski said the project's ultimate goal was to attract biotechnology companies to join the mixed-use part of the development — while Manning countered that it’s questionable whether biotech firms will be drawn to the development: “It’s too soon to answer [the biotech] question intelligently."

Before the project can proceed, Samaritan Health Services must clean up the property because it was subjected to use as agricultural land during the 1950s and 1960s, and thus exposed to the cancer-causing pesticide Dieldrin, Bryn Thoms of the Oregon Department of Environmental Quality told the newspaper.

Genzyme Renews Lease for NYC Office Space After City, Suburban Search

Genzyme has renewed for another 10 years its lease for 98,000 square feet at 521-33 West 57th St., a midtown Manhattan building between 10th and 11th avenues, after exploring options for new office space in three different boroughs of New York City and two of its suburban regions.

The biotech giant headquartered in Cambridge, Mass., occupies the fifth and sixth floors of the building. Asking rent for the space was in the mid-$40s per square foot.

Genzyme looked at 25 different properties in Manhattan, Brooklyn, and the Long Island City section of Queens, over the course of 18 months, David Dusek, a senior managing director for the real estate firm Studley, which represented the biotech company and announced the deal, told Crain's New York Business.

According to the newspaper Genzyme could have been the anchor tenant at one site it was considering — the East River Science Park life-sci campus, whose first phase is under construction by developer Alexandria Real Estate Equities.

“At the end of the day, the cost of capital to recreate their current infrastructure didn’t add up,” Dusek told Crain's. “It was purely economics.”

Dusek told that Genzyme also searched in northern New Jersey and lower Westchester County — where OSI Pharmaceuticals is purchasing the 43-acre, 400,000-square-foot Ardsley Park Science and Technology Center [See story in this issue].

Genzyme has been at 521-33 West 57th since 2004, when it acquired a tenant of the building, Impath Technology, in a bankruptcy sale.

Joining Dusek in representing Genzyme for Studley were Peter Capuciati, executive vice president; and Alex Blue, managing director. The building owner, an affiliate of Himmel + Meringoff Properties, was represented in lease talks by Farrell Virga, president, and Mark Stein, senior vice president and director of leasing.

Biotech Startup VitalMedix Bolts Minnesota for Wisconsin; Talks in Progress on Two Sites

VitalMedix, a Minneapolis biotech startup, told the Post-Bulletin of Rochester, Minn., that it plans to move within 90 days to either of two Wisconsin sites for which it is in lease, drawn by better incentives than it said were available in Minnesota.

Charlie Goff, lead investor for VitalMedix and general partner of the $10 million NEW Capital Fund in Appleton, Wis., told the newspaper that Wisconsin's investment tax credits "had everything to do with" the pending move. The drug developer said it is in lease talks for sites in Hudson and New Richmond, and expects to move to either site within the next 90 days.

If VitalMedix is successful at developing into a large operational company, the company might move to Madison or Milwaukee, according to the newspaper.

VitalMedix holds an exclusive global license from the University of Minnesota for Tamiasyn, a drug the company plans to combine with a delivery device that first responders and medics can use to treat hemorrhagic shock. The four-employee company has raised $4.5 million from investors and US Defense Department grants, CEO Jeffrey Williams told the Post-Bulletin.

VitalMedix is among companies benefiting from Wisconsin's decision earlier this year to double its cap on tax credits for investors in life-sci and other tech startups, from $4 million to $8 million. The state also raised its cap on eligible angel investments to $4 million, and more than tripled the total credits available each year, from $11.5 million to $37 million, as part of the Act 2 measure signed in to law by Gov. Jim Doyle.

The Scan

Harvard Team Report One-Time Base Editing Treatment for Motor Neuron Disease in Mice

A base-editing approach restored SMN levels and improved motor function in a mouse model of spinal muscular atrophy, a new Science paper reports.

International Team Examines History of North American Horses

Genetic and other analyses presented in Science find that horses spread to the northern Rockies and Great Plains by the first half of the 17th century.

New Study Examines Genetic Dominance Within UK Biobank

Researchers analyze instances of genetic dominance within UK Biobank data, as they report in Science.

Cell Signaling Pathway Identified as Metastasis Suppressor

A new study in Nature homes in on the STING pathway as a suppressor of metastasis in a mouse model of lung cancer.