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Calif. Budget Woes, Economy Delay Construction of CIRM Projects at UC Santa Cruz, Buck Institute

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By Alex Philippidis

California's budget squeeze and the ongoing economic slump have delayed two of the 12 facility projects for which the state's stem-cell agency approved a total $271 million in grants last year — at the University of California, Santa Cruz, and the Buck Institute for Age Research — though one of the projects has raised enough money to have just started pre-construction work, and the other hopes to break ground next year.

The updates were disclosed this week in a status report on projects funded by the California Institute for Regenerative Medicine's Major Facilities Grants program. The status report was submitted to CIRM's governing board, the Independent Citizens Oversight Committee, in advance of its meeting Aug. 19-20.

At Santa Cruz, site-preparation work has begun for its $12.9 million CIRM Institute for Biology of Stem Cells, following a delay in work wrought by the Golden State's financial mess, Tim Stephens, a spokesman for UCSC, told BioRegion News this week.

The institute, which has won about $7.2 million in CIRM grant funding, would occupy the fourth floor of a five-story, 92,000-square-foot Biomedical Sciences & Engineering Facility. The remainder of funding for the institute is expected to come from the state.

But when the California Department of Finance imposed a freeze on capital funding in December 2008 due to the state's widening revenue shortfall, the action delayed construction of the project for months.

The state solicited bids, but did not award its construction contract until earlier this month, when UC bought $199.9 million in general obligation bonds, at 3.183 percent interest, from the state in a "private placement" transaction, in which the bonds were offered only to UC.

Proceeds from the bond sale will be used toward expanding telemedicine services and building facilities at eight UC campuses — including UC Santa Cruz, where about $64.4 million of the proceeds have been set aside for constructing the biomedical building.

As a result of the delay, Stephens told BRN, the estimated completion date for the building has been pushed back to October 2011. Previously, occupancy had been projected for December 2010, then April 2011.

More than 100 miles north in Novato, Calif., the Buck Institute for Age Research has yet to break ground on its planned $41.4 million new laboratory and support building. While the institute received a $20.5 million CIRM grant toward construction of the 65,708-square-foot facility, it will not know for several weeks how much of the remainder it will need to raise through a fundraising campaign.

That answer will come after the Buck Institute learns whether it will receive all or part of the $15 million it is seeking for the project through a facilities grant program within the $787 billion American Recovery and Reinvestment Act, the economic stimulus measure enacted in February by President Obama.

"We hope to hear something later in the year,” Kris Rebillot, a spokeswoman for the Buck Institute, told BRN. “Depending what happens with that will [determine] how much other money we'll need to raise to finish the building off."

The institute originally envisioned breaking ground in September 2008 for the lab/support building, designed as an addition to Buck’s existing 185,000-square-foot research facility [BRN, June 6, 2008]. But as the financial markets soured last fall, Buck, as with many institutions planning facility projects, found it harder to raise the funds it needed for a groundbreaking, and began talking with partners about alternatives [BRN, Oct. 6, 2008].

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The Buck Institute and UCSC projects were the only two to have been delayed in the 15 months since the ICOC approved $271 million in major facilities grants to 12 California research institutions. At the time, CIRM projected its grants would leverage an additional $1.1 billion in public and private funds toward construction of the facilities [BRN, May 12, 2008].

According to the status report, all 10 other projects receiving major facilities grants funding are set to open over the next two years, with most now under construction and the rest scheduled to be soon.

The costliest of those 10 projects is the $200 million, 200,000-square-foot Lorry I. Lokey Stem Cell Research Building taking shape at Stanford University. According to the report, "the project is on schedule with occupancy of the facility expected in July 2010" — although "additional expenditures for equipment and campus‐related costs will be incurred toward the end of the construction," since about 86 percent of the budgeted project construction funding had been expended or committed as of March. CIRM awarded about $43.6 million for the project.

Next costliest, at $100 million, is the 100,000-square-foot Sanford Consortium for Regenerative Medicine being built by the San Diego Consortium, an umbrella group formed by the Burnham Institute for Medical Research, the Salk Institute for Biological Studies, the Scripps Research Institute and the University of California, San Diego.

The consortium's facility is to be located on North Torrey Pines Road at a site near the member institutions. CIRM awarded $43 million toward the project, which is slated for occupancy in November 2010.

To keep the San Diego project within its budget, the report disclosed, "the project was also redesigned to include a concrete structure rather than the originally planned steel structure." Yet the consortium still requires interim financing, which it is addressing by working with CIRM, the report stated.

The Stanford U and San Diego projects are two of seven larger-scale "CIRM Institutes" projects that qualified for up to $50 million in funding from the stem-cell agency.

The other five CIRM Institutes:

• UC San Francisco — The $95 million, 75,000-square-foot Eli and Edythe Broad Center of Regeneration Medicine and Stem Cell Research being built at UCSF's Parnassus campus "is on schedule and is expected to be occupied in June 2010," the report stated. CIRM awarded almost $34.9 million toward the project, with the Eli and Edythe Broad Foundation committing $25 million in 2008. As of June 30, about 32 percent of the budgeted project construction funds have been spent.

• UC Irvine: The $60.9 million, 61,600-square-foot Sue and Bill Gross Stem Cell Research Center, now under construction within UCI’s Biomedical Research Center, in the school's Health Sciences complex, "is on schedule with occupancy planned for July 2010," according to the report. CIRM awarded $27.2 million for the project, which has spent about 40 percent of its budgeted construction funds.

• University of Southern California — The $80 million, 87,500-square-foot Eli and Edythe Broad CIRM Center for Regenerative Medicine and Stem Cell Research at USC "is on schedule and is expected to be occupied in July 2010," the report stated, adding that part of the space will be completed as shell space and built out for occupancy at a later date. As of March, the campus spent about $18 million of its project budget, which was boosted when CIRM approved a nearly $27 million grant for the project, a year after the Eli and Edythe Broad Foundation committed $30 million.

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• UC Davis — Work is expected to begin in September on the $61.8 million, 92,000-square-foot Institute for Regenerative Cures, which will occupy most of a 109,000-square-foot existing building on the school's 140-acre former state fairgrounds campus in Sacramento; the remaining 17,000 square feet is occupied by the school's Clinical and Translational Science Center. The institute, for which CIRM has awarded a roughly $20.1 million grant, represents about half of the total space in the converted building. The project is set to be completed in May 2010, according to the report.

• UC Los Angeles — The $41.9 million, 21,000-square-foot Eli and Edythe Broad Center of Regenerative Medicine and Stem Cell Research at UCLA will occupy one story of the five-story, 133,000-square-foot Biomedical Sciences Research Building, which opened in 2007. CIRM's $19.9 million grant paid for just under half the cost of construction and equipment for the center, with the Eli and Edythe Broad Foundation donating $20 million to the project — funding specifically restricted from being used for construction of the building itself, though part of the money was among several funding sources for equipment being used in the facility. The center has been scheduled for May 2010 occupancy.

One of the dozen major facilities projects shares the Buck Institute project's status as a CIRM "Center of Excellence," eligible for up to $25 million in grant funding from the stem cell agency.

UC Berkeley will host an $80.6 million, 75,000-square-foot Stem Cell Center within the new $160 million, 200,000-square-foot Li Ka Shing Center for Biomedical Health Sciences, a five-story-with-basement building being built at the major western entrance to the campus. CIRM awarded a nearly $20.2 million grant to help pay for the project; the remainder comes from institutional funds. Of the project total, $73.2 million paid for building costs, with $7.4 million committed to equipment.

"The project is on schedule with occupancy projected for June 2010," the report stated.

Another two of the dozen major facilities projects shares the UCSC project's status as a CIRM "Special Program," eligible for up to $10 million in grant funding.

• UC Merced — A $6 million, 5,420-square-foot Stem Cell Instrumentation Foundry is under construction and set to be completed in October 2010. Before work started, however, the campus changed its original plans to keep within its budget by moving the facility onto its campus, at the Science and Engineering Building, rather than leasing an off-campus site at Castle Air Force Base as originally planned, the report said. That's a different reason than offered last March in a letter to faculty by Vice Chancellor and Provost Keith Alley, who said the original location lacked sufficient utility services, electric power backup systems and other infrastructure, according to the Merced Sun-Star. CIRM awarded about $4.4 million for the foundry, which, according to the report, "will be a shared resource available to stem cell researchers throughout the state."

UC Santa Barbara — The Laboratory for Stem Cell Research and Engineering, now under construction, "is on schedule and is to be completed in March 2010," the report stated. The campus has spent about 18 percent of its construction budget. CIRM awarded $3.2 million for the $6.3 million renovation project, which involves remodeling about 16,600 gross square feet in the existing seven-story Biological Sciences 2 building.

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