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BioRegion Real Estate: Jul 31, 2009

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Minnesota DOT Awards $14.6M for Elk Run Interchange; Cannon Falls City Manager Questions Decision

The developer of the 200-acre BioBusiness Park at Elk Run planned for Pine Island, Minn., and a coalition of local, state and federal officials this week cheered the Minnesota Department of Transportation's awarding a $14.56 million grant for an interchange sought for the project at US 52 and Olmsted County Highway 12.

That grant touched off public second-guessing by Aaron Reeves, city administrator of Cannon Falls, Minn., who told the Cannon Falls (Minn.) Beacon that the grant for the Elk Run interchange contradicted an MnDOT rule requiring that projects be fully funded, since developer Tower Investments and the local, state, and federal governments to date have fallen $20 million short of the construction cost.

That may change if the project wins a subsidy under the $787 billion American Recovery and Reinvestment Act. "Indications are they have a good chance" at some of that money, the newspaper reported.

Also looking to ARRA is the main investor behind the Elk Run project, San Francisco biotechnology investor-analyst G. Steven Burrill. Earlier this month he told the Star-Tribune of Minneapolis that Tower was close to securing millions of dollars from the economic stimulus measure enacted by President Obama in February.

“Investors, as well as potential tenants, have been waiting for a signal that the interchange is a sure thing, and MnDOT’s funding is a loud-and-clear sign," Burrill said in a statement released by Tower. "It sets the stage for engaging in serious negotiations and securing solid commitments.”

The biopark would be part of a 2,325-acre mixed-use community that would include housing, a "wellness" community designed to promote healthier living, schools, medical centers, and retail, office, and warehouse space.

Reeves, while saying he was not against the Elk Run project, told the Beacon that his city and neighboring Goodhue County had sought a similar grant for an interchange construction project, only to be turned down: "If they had told us all we had to be was close, we could have packaged our grant application in a much different manner that would have made our bid cheaper and more competitive."

Cannon Falls contributed $2 million, Goodhue County another $4 million, and both municipalities sought to cover the remainder of their project cost through a $20 million MnDOT grant. Reeves has asked for a formal explanation of the grant award process from MnDOT, as well as for one of its representatives to address the Cannon Falls City Council at its next meeting in August.

State Sen. Steve Murphy (DFL-Red Wing) — who co-authored bills authorizing state spending for Elk Run infrastructure and according to a Tower statement "worked specifically to get funding committed to the US 52 interchange" — told the Beacon that "competition was stiff" for the $30 million dollars awarded under the grant program, which reviewed 13 applications for $154 million in funding.

Murphy said Cannon Falls had to be near the top five, but "unfortunately, there was only enough money to do three." Murphy said that "doesn't mean the project is dead," and that the state will have more money available for road projects through an increased gas tax and licensed tab fees on vehicles.

Murphy told the newspaper that while MnDOT's criteria may "need to be firmed up," it was the first year for the process, and "in the future we'll be able to do a better job."

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In Tower's statement, however, Murphy expressed support for state funding for the Elk Run interchange: “Everyone involved recognizes the clear economic development potential of Elk Run and its first-phase Biobusiness Park. That’s why you’ve seen officials at every level collaborating to support Elk Run and to make the necessary investments that will attract investors and tenants.”


Pittsfield, Mass., Officials Still Confident in Future of William Stanley Business Park, Despite Lack of Progress

Eleven years since General Electric agreed to turn 52 acres of its former transformer facility over to the quasi-public Pittsfield (Mass.) Economic Development Authority for redevelopment as an office-lab campus, plans for the William Stanley Business Park remain on the proverbial drawing board.

Mayor James Ruberto and William Hines Sr., PEDA's interim executive director, recently told the Berkshire Eagle of Pittsfield that they understood the anxiety by other officials and residents over the lack of development at the business park.

"Nobody's more frustrated than the two guys in this room," Ruberto said during a joint interview with Hines. "Nobody's more frustrated than me. But I truly believe that we are going to be creating the kinds of partnerships that are going to be necessary to make that site eminently successful."

Added Hines, who at PEDA earns $5,000 a month supplied by GE: "I think maybe we've done a poor job in overselling the time factor of getting all this transition done and turning this into a park. And I think we've done a bad job in aligning expectations with reality."

Since Hines — the retired CEO of Pittsfield-based Interprint — replaced Thomas Hickey Jr. as PEDA's executive director on an interim basis in February, Ruberto told the newspaper, the board has developed subcommittees designed to make it easier for information about the business park to reach the public.

PEDA also has released a new marketing and communications plan, along with a new Web site, williamstanleybusinesspark.com, that are designed to make the business park more visible., according to the Eagle.

But the development suffered another setback last November, when Nuclea Biomarkers backtracked on earlier plans to relocate within Pittsfield to the vacant business park by 2011. Instead, Nuclea moved most of its operations out of the city and into Worcester, Mass.

In an interview last week, Nuclea President Patrick Muraca, told the Eagle that talks between his company and PEDA ended because his company would have been required to sign a 99-year lease and construct a building it could not afford.

"It looked as though there were a lot of infrastructure issues, and that it would cost $5 million to build a building," Muraca said. The cost, he said, reflected "certain restrictions that PEDA was putting on you. You had to have a certain look, you had to have a certain building. They didn't want to have it look like a hodgepodge of different buildings, but it added a significant cost to the work."

Hines denied that Nuclea or any other company was required to sign a 99-year lease at the park, but told the Eagle companies can lease parts of their structures amid time limits that are open to interpretation. And while PEDA doesn't require businesses to put up a specific kind of building, Hines added: "We have expectations. You just don't throw up an old building without enhancements."

Plans for the business park also called for a 30,000-square-foot incubator building, for which $6.5 million in funding was included in the $1 billion, 10-year Life Sciences Act enacted last year by Gov. Deval Patrick.

But funding for the incubator building, Hines told the newspaper, is tied up in the state legislature because Massachusetts was unable to find investors to purchase bonds to finance any of the projects set to be funded: "With [the] economy now in the state, I think we would be hard-pressed to get that money released with or without a bond for this park."

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PEDA has also sought $7.7 million in funding from the $787 billion American Recovery and Reinvestment Act toward the project's first development phase, which entails creating five ready-to-develop building sites. Work would include demolition and removal of pavements, walls, railroad tracks, and surface features; abandonment of underground manholes, vaults, conduits, and "aged utility features;" and construction of an erosion control system, water and sewer systems [BRN, April 17].

The business park, almost equidistant between Boston and New York, was where William Stanley, Jr., built a power plant in 1890 that GE acquired 13 years later, when it bought Stanley Electric. GE built transformers and other components used for generating electricity until it shuttered the plant in 1986.

Following the closing, Pittsfield formed PEDA to redevelop the site, envisioned for up to 595,000 square feet of industrial, or "flex" space capable of accommodating R&D and office as well as industrial uses, according to a 2004 master plan prepared by PEDA.


Targeted Genetics Warns It May Shut Seattle Headquarters as Funds Continue to Lag

Targeted Genetics said it may terminate the lease for its Seattle headquarters at the end of August because its current funds can't keep the company running beyond next month. The termination would be the second for struggling Targeted, which earlier in July ended its lease at a Bothell facility that was never used for its intended purpose of manufacturing drugs for clinical trials of the company's gene-therapy treatments.

Targeted announced amendments to its lease that allow the company to pay reduced rent from June through August for its 38,000-square-foot headquarters, at 1100 Olive Way. The company may terminate the lease on Aug. 31, releasing it from approximately $4 million in lease obligations, if it pays a $45,000 termination fee and completes the reduced rent payments for this summer.

Targeted Genetics has shrunk from about 70 full-time-equivalent employees last September to approximately 15 employees. The company still maintains a 5,000-square-foot administrative office next door to its HQ.

"Even with the significant reduction in operating costs we have achieved, it is imperative that we execute on one or more cash-generating transactions in order to either continue our operations or enable continued development of AAV-based gene therapeutic products through another entity," Targeted President and CEO Susan Robinson said in a statement. "We continue to evaluate the best way to maximize value for our shareholders."


Dow AgroSciences to Expand Indianapolis Biotech Research Operations

Dow AgroSciences will expand its biotechnology research operations in Indianapolis with a new facility providing research space for 100 new biotechnology scientists.

The company has signed a 15-year lease on an 80,000 square-foot building it said will accommodate its laboratories and offices, and will be constructed adjacent to Dow AgroSciences' global headquarters in northwest Indianapolis.

The Indiana Economic Development Corporation offered Dow AgroSciences up to $2.4 million in performance-based tax credits and $120,000 in training grants based on the company's job creation plans.

Dow AgroSciences develops technologies used for crop protection, pest and vegetation management, seeds and agricultural biotechnology. Dow AgroSciences was created in 1989 as DowElanco, a joint venture between the agricultural products business of the Dow Chemical Company and the Elanco plant sciences business of Indianapolis-based Eli Lilly and Co. In 1997, Dow acquired 100 percent ownership in the business and changed the name to Dow AgroSciences. The company employs more than 1,200 associates at its Indiana headquarters and 5,400 globally.


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Monsanto Plans $15M in Infrastructure for Two Canadian Facilities

Monsanto said that it will spend $15 million over the next two years on two Canadian infrastructure projects.

One will be a new $12 million breeding center to be located adjacent to a planned Canadian head office at the SmartPark Research and Technology Park, on the University of Manitoba campus in Winnipeg.

The other consists of $3 million in upgrades and an expansion to Monsanto's Crop Technology Research Centre in Saskatoon.

At the breeding center — whose price tag includes $2 million in capital costs — many of the canola hybrids developed by the breeding group will be tested and advanced, while all canola trait development and field testing will be managed from the CTRC.

"Canola is a key strategic commercial imperative for Monsanto's Canadian business and a significant crop for Western Canadian farmers," company spokesperson Ryan Baldwin told CBC News.

"The investment at SmartPark will allow us to increase synergies between the breeding, product development, supply and commercial aspects of our business to ensure we deliver on the pipeline of new, beneficial crop technologies for our farm customers," he added.

About 40 staffers involved in line development breeding, breeding support functions, and the canola breeding management team will work at the Winnipeg site, which will also include laboratory facilities for all canola quality analytics, double haploid breeding (tissue culture), and plant pathology.

Construction will begin immediately with an anticipated completion date of June 2010. Monsanto expects the new facility to be fully occupied by December 2010.


Sacramento State Wins $350,000 Earmark for New Cell Analysis Laboratory

The College of Natural Sciences and Mathematics at California State University, Sacramento, will receive $350,000 secured by US Rep. Doris Matsui (D-Sacramento) to purchase equipment for a new Advanced Cell Analysis Laboratory for Sacramento State's College of Natural Sciences and Mathematics. The new lab is intended to provide students with a strong foundation in advanced technologies in the biological sciences and chemistry fields.

The money was included in an appropriations bill for the US departments of Labor and Health and Human Services.

The new equipment "will be a tremendous benefit to students studying cellular and molecular biology and to graduate students in our new professional science masters in stem cell research," Jill Trainer, dean of the College of Natural Sciences and Mathematics, said in the release. "They will now have the tools they need to learn advanced techniques and conduct research — skills essential for success in today’s scientific workplace."

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Sacramento State graduates more than 700 students each year in the fields of science, technology, engineering and mathematics, according to the Sacramento Business Journal.


Eager to Tap Seattle's Biotech Labor Force, AVI Biopharma Relocating HQ to Bothell, Wash.

AVI Biopharma will shift its headquarters staff and some research work from Portland, Ore., to the Seattle suburb of Bothell, Wash., where it plans to tap into Seattle's biotech labor force, according to Xconomy Seattle.

AVI, a developer of RNA-based drugs, will move into a new, 19,000-square-foot office and lab complex that will host executive offices, administration, discovery research, chemistry, clinical, and regulatory operations. The company, which has about 85 total employees, plans to keep its biodefense research and manufacturing facility in Corvallis, Ore., while moving executive offices, administration, discovery research, chemistry, clinical and regulatory operations to new offices in Bothell, the online news site reported.

"It's important for us to be in Seattle because the competitive environment in life sciences is important to the tone and productivity of a company, and, if you're looking to recruit someone, it's important to be in a labor pool of significant size like there is in Seattle," CEO Les Hudson told Xconomy.

AVI has burned through $250 million in investment cash since 1980 without gaining an approval. But under Hudson, who joined the company in February 2008, AVI has more than tripled its stock price to $2.30 a share at the close on July 31, and advanced its research into experimental treatments for Duchenne Muscular Dystrophy, and against potential bioterrorist agents that conventional drugs can’t stop, such as Ebola and Marburg virus.


Pfizer Taps CB Richard Ellis for Overseas Facilities Management Services Assignment

CB Richard Ellis Group has been selected by Pfizer to provide facilities management services across 10 of Pfizer's offices in nine European cities. The initiative is aimed at establishing top-flight operating practices throughout Pfizer's real estate portfolio, through direct integration with CBRE's European facility management infrastructure.

"CBRE's engagement with Pfizer reflects this innovation and represents another important step in the evolution our European facilities management business. We continue to see strong demand from the world's largest occupiers to leverage our outsourcing platform in order to drive down costs and streamline operating processes," Matthew Pullen, head of CBRE global corporate services in Europe, the Middle East, and Asia, said in a statement.

CBRE was selected by Pfizer "following a structured market evaluation process conducted over the last nine months," the real estate firm said in the statement.


The Scan

Booster Push

New data shows a decline in SARS-CoV-2 vaccine efficacy over time, which the New York Times says Pfizer is using to argue its case for a booster, even as the lower efficacy remains high.

With Help from Mr. Fluffington, PurrhD

Cats could make good study animals for genetic research, the University of Missouri's Leslie Lyons tells the Atlantic.

Man Charged With Threatening to Harm Fauci, Collins

The Hill reports that Thomas Patrick Connally, Jr., was charged with making threats against federal officials.

Nature Papers Present Approach to Find Natural Products, Method to ID Cancer Driver Mutations, More

In Nature this week: combination of cryogenic electron microscopy with genome mining helps uncover natural products, driver mutations in cancer, and more.