A Florida developer of decontaminants and other products — recently threatened with a shutdown of its Louisiana office by local officials for operating without a permit — wants to transform an 80-acre site between New Orleans and Baton Rouge, La., into a billion-dollar biomedical campus able to capitalize short-term on its location near several colleges, and long-term on its proximity to a regional transportation center now in planning stages.
Red Reef Laboratories International of Deerfield Beach, Fla., would build its proposed campus of about 1.5 million square feet in Labadieville, La., within Assumption Parish. Officials of the parish have received from Red Reef and its consultants a proposed master plan for the campus, the second of two conceptual master plans worked on by its consultant in recent months.
Red Reef has hired the Baltimore architectural and engineering firm Whitney Bailey Cox and Magnani as architect and designer for the $4.4 billion project. Jack Turner, vice president of WBCM, told BioRegion News Red Reef would anchor at least the first phase of the research campus, which he said would include a 300,000-square-foot building allowing the company to research potential cystic fibrosis treatments.
“I think that could be in place within a year and a half to two years,” Turner said.
Red Reef President Claus Wagner-Bartak said the company turned its attention to cystic fibrosis after being “approached by an organization that has been concerned about specific medical research … and related concerns.
“After a review of the infrastructure and also the economic potentials in the said area, we have decided to establish a model to combine our specific interests and structured a preliminary plan for a comprehensive research and development campus, comprising facilities and amenities for a unique business venture,” Wagner-Bartak said.
Cystic fibrosis research would be a new area of interest for Red Reef, which till now has focused on developing its BioClear family of biological compounds intended to combat mold, mildew, algae, and contaminants for use in homes, hospitals, schools, nursing homes, and even food processing plants. The company has seen growth potential in decontamination, especially in Louisiana given the damage wrought by hurricane Katrina in 2005.
“Red Reef Labs acquired this property primarily as headquarters for a full-service remediation and emergency response division,” the company said in a Feb. 23 statement announcing its sell-off of some of the land it acquired in Labadieville for residential development. “This location is a strong-hold for existing hurricane damage that presents the opportunity for Red Reef products to be [help advance] existing protocols and issues in this hard hit area of our country.”
That announcement included a quote from Wagner-Bartak: “It is foolhardy and risky to send first responders into a zone laden with bacteria, viruses, and spores without first decontaminating the area to make it less hazardous. Current protocols and methods have resulted in broad spread of Katrina Cough, as yet incurable. We may be able to curtail the risk.”
Turner said the CF research would not preclude basing on campus Red Reef’s previously announced environmental remediation business.
While biomedical space would account for most of the square footage in the plans designed by another WBCM vice president, Kevin Nikiel, the campus would also include a hotel with a restaurant, retail space, and housing. Details have yet to be decided.
The hotel would be “probably a suites-type hotel that would support the continuing research on the campus” by allowing extended stays for guests working on the campus, Turner said, while the housing would include a mix of multi-story apartments, condominiums, and single-family homes.
The campus would include a 20-acre man-made lake, to be surrounded on three sides by the buildings comprising the campus. The fourth side would overlook housing. The lake was initially conceived as “in the neighborhood of three to five” acres in the first master plan, then expanded after more topsoil was removed, necessitating a second master plan, Turner said.
Turner said Red Reef will develop relationships with area colleges and universities in hopes of drawing their startup businesses as well as more mature companies as tenants at the campus. Red Reef hopes to take advantage of its location between the state’s two principal generators of biotech spinout companies, Louisiana State University in Baton Rouge and Tulane University in New Orleans.
The closest college to the proposed Red Reef campus, Nicholls State University, is a 20 minutes away in Thibodeaux, La. NSU, part of the LSU system, offers a masters program in marine and environmental biology.
At 1.5 million square feet, Red Reef’s proposed campus would be larger than the two existing campuses available to early-stage biomedical companies in Baton Rouge. The larger of the two is Louisiana Technology Park in the Bon Carré Business Center, created in 2001 within a renovated mall on Florida Boulevard.
LTP has 120,000 square feet of commercial space mostly occupied by Internet and e-commerce businesses within a 223,000-square-foot facility. LTP houses one biotech company. Celgene Cellular Therapeutics, the stem-cell research subsidiary created after Summit Lake, NJ-based Celgene, acquired a tenant business, Anthrogenesis, for a reported $70 million. Additional biotech companies are welcome, LTP spokesman Stephen Loy said.
The smaller of the two, the 22,000-square-foot Louisiana Emerging Technology Center in Baton Rouge, is home to eight tenants, six of which are biotech- and pharma-related startups. The remaining two tenants are medical device companies serving the life sciences markets. Tenants are split between LSU spinoffs and companies where a researcher from LSU’s system is a principal.
“If [Red Reef] is looking for early-stage start-ups, it’s going to be hard. If they’re looking at later stage [companies] where you’ve got people who are in production, there may be a possibility,” ETC executive director Arthur Cooper said in an interview. “I don’t know what their business plan is.”
ETC is one of three incubators that the state created in 2002 under a $30 million program. The other two are BioSpace 1, an $8.8 million, 65,000-square-foot facility in Shreveport, opened in 2005; and the $60 million, 65,000-square-foot New Orleans BioInnovation Center, construction of which has been delayed due to Katrina.
Most of the New Orleans BioInnovation Center will be an incubator for startups from New Orleans-area universities — not only Tulane and LSU but Xavier and the University of New Orleans as well. But 11,000 square feet will be occupied by the Louisiana Gene Therapy Research Consortium for its planned Good Manufacturing Practices laboratory, a biomanufacturing facility.
“We’re currently under design right now, and we’re going to be starting construction probably the first of the year, and hoping to occupy it by late 2009,” said Aaron Miscenich, executive director of the private, nonprofit center, in an interview.
In the meantime, Miscenich said, the center this fall will open a temporary 4,500-square-foot office facility a block and a half from its planned permanent home that will offer programs to its first tenants, but won’t have wet labs.
Red Reef purchased its Highway 1011 site last year for an undisclosed sum from L-1011 and AltFuels, adding to its product lines a technology for nitrogen-enriched bagasse, the fiber remaining from the milling of sugar canes, which can be used to absorb oil spills.
“Red Reef Labs had hoped for an opportunity to showcase and utilize its proprietary surface decontamination products and systems in this region since Hurricane Katrina,” Wagner-Bartak said in announcing the acquisition in October 2006. The combined intelligence of our companies presents us with just such an opportunity.”
In addition to its location between Baton Rouge and New Orleans, the property was attractive because “it was an area that looked like it could be improved at a reasonable cost. It just is going to help that whole community,” Turner said.
Red Reef then sold off undisclosed portions of the Highway 1011 site, and formed a development venture with JDM Capital, a New York-based firm specializing in real estate investment and asset management. Turner said WBCM got involved with Red Reef through JDM, which will serve as asset manager and arrange financing for the research campus.
WBCM has carried out master planning for a commercial campus in Canton, Md., a section of Baltimore, at Canton Crossing II, where developer Hale Properties has completed a 470,000-square-foot, 17-story 1st Mariner Bank Tower as the first of a planned 1 million square feet of class A office space at the mixed-use, project, to include 250,000 square feet of retail space, a 450-unit luxury hotel, and 500 condominiums. Drawings for the 12-story, “above” 500,000-square-foot second building are half-completed.
Red Reef first said in April it would accelerate its plans for developing the Highway 1011 site, citing plans nearby for a regional transportation venue that would accommodate cargo traffic by air, sea, highway, and rail, and would include warehouse and distribution space.
Transportation Center Eyes 2009 Start
The planned Louisiana Transportation Center would spread over 25,000 acres in Assumption, as well as Ascension and Iberville parishes, within the towns of White Castle, Donaldsonville, and Belle Rose. Some 8,000 acres would be developed in the project’s first phase, with the remainder to be built out over the following 40 years.
The 2004 Louisiana Airport Master Plan studies two development scenarios for the LTC. The one closest to the current plan called for a 12,000-foot runway, a commuter passenger terminal, 1.3 million square feet of air cargo space, and 1.1 million square feet of aviation-related facilities. The other called for three runways, 200,000 square feet less air cargo space, and the same amount of aviation-related space.
Both scenarios envision a veritable warehouse-distribution city with 30 million square feet of distribution and logistics space, 8.2 million square feet of multi-purpose space, 4.2 million square feet of light-manufacturing space, another 4.2 million square feet of industrial facilities, 1.6 million square feet of unspecified community service facilities, a barge-docking center, and an intermodal rail yard.
“Warehouses and distribution centers served by truck and intermodal surface freight modes are expected to be the primary facility development opportunity at the LTC,” according to the master plan. “Growth is expected to start slowly with 100,000 square feet developed in 2010, ramping up to 600,000 square feet added per year by 2015 and 1.1 million square feet added per year by 2020.”
The center is being co-developed by the Louisiana Airport Authority and Canadian Commercial Corporation, an entity of the Canadian government. CCC brought in a private developer partner, SNC-Lavalin.
“We’re hoping around 2009 to begin something of the construction. It may be the end of 2009, ‘cause we still have a lot of work to do,” Glenda Jeansonne, executive director of the Louisiana Airport Authority, said in an interview.
Earlier this year SNC-Lavalin identified major categories of commodities the LTC would be instrumental in moving: automobiles and auto parts; office and data-processing machinery; petrochemical production and refining machinery; aerospace electronics; medical appliances and machinery; and seafood and meat products.
SNC-Lavalin also identified four major potential groups most likely to locate near a cluster of transportation modes: integrated carriers, big-box retailers, freight forwarders, and long-haul and heavy-lift carriers.
The facility would be 35 miles south of Baton Rouge and 67 miles northwest of downtown New Orleans. Jeansonne said the authority considered both cities for the LTC project. But the existing Baton Rouge airport was ruled too small, with expansion possible only through the neighboring city of Baker.
A New Orleans waterfront site was deemed too costly to develop even before Katrina, when more than 10,000 people lived there.
Yet as late as May, three top aides to Gov. Kathleen Babineaux Blanco — the state’s transportation secretary Johnny Bradberry, economic development secretary Michael Olivier and commissioner of administration Jerry Luke LeBlanc — urged the authority to reconsider the now state-owned New Orleans site. They cited the site’s deep-draft port facilities and close proximity to interstate highways.
If [Red Reef] is looking for early-stage start-ups, it’s going to be hard. If they’re looking at later stage [companies] where you’ve got people who are in production, there may be a possibility.”
The authority requested state funds to complete the project’s “preparation” phase, and state authority to begin acquiring property. Last month the state Legislature agreed to set aside $150 million for the LTC — half of what the authority sought — by transferring that money from the Louisiana Economic and Port Development Infrastructure Fund to the new Louisiana Mega-Project Development Fund [House Bill 615].
The measure defines mega-projects as projects that provide 500 or more jobs in the state; contain $100 million or more in investment by private entities or the federal government through creation of a new facility or expansion of an existing one; and a “substantial return” on state spending based on tax revenues.
Also approved by the Legislature was another $2.3 million in capital funding intended for carrying out planning, investment, and environmental studies. Jeansonne said the authority will re-examine the steps, then decide if any changes are needed. Absent changes, the tasks would proceed concurrently, so the studies would be completed by year’s end.
The work would build on the master plan and other studies completed in 2004. According to The Economic Impact of the Louisiana Transportation Center: A First-Stage Analysis, the transportation center would create statewide 66,018 jobs during its first 40 years in operation, as well as generate $174.8 billion in business sales and $2.2 billion in taxes. During the center’s first five years, it would create 3,974 jobs, as well as $2 billion in business sales and $27.8 million in taxes.
The study projected even higher numbers in the event the center were to expand into a $6.4 billion project that included a regional passenger airport: 70,879 new jobs, $194.9 billion in business sales, and more than $2.5 billion in taxes.
The authority is no longer pursuing the regional passenger airport plan following opposition from the Baton Rouge Area Chamber of Commerce and business group Baton Rouge Area Foundation, both of which raised concerns about the project’s effect on the city’s existing airport.
Baton Rouge Metropolitan Airport has pursued development of its own warehouse/industrial space: Last April, a Coca-Cola Bottling Company entity broke ground on a bottling plant to rise on 112 acres to be leased from the airport, in part with $60 million in Louisiana Public Facilities Authority bonds. The plan will replace a 36-year-old facility that was expanded six times since it opened.
Among groups awaiting similarly detailed studies about Red Reef’s biomedical campus is the Assumption Area Chamber of Commerce.
“We haven’t weighed in on it. We’re interested in knowing what it’s all about,” said Ella Metrejean, the chamber’s executive director.
Red Reef plans to build its $4.4 billion, 1.5 million-square foot biomedical campus in Assumption Parish, but the company has gotten off on the wrong foot with its officials.
Red Reef announced in April that it had opened an office within a former warehouse on its property, the former Supreme Sugar refinery at 244 Highway 1011, “to provide initial support to establish a headquarters for environmental remediation.” The property has four warehouse buildings totaling 55,000 square feet.
The company applied for an “occupational” license allowing it to conduct business in Assumption, listing the nature of its business as real estate development. But representatives of Red Reef failed to appear at a meeting of the parish’s governing body, the Police Jury, to discuss the application. The jury on June 27 authorized parish Sheriff Mike Waguespack to shut down the company’s office if any activity were visible.
At deadline no activity had been seen taking place there, so the sheriff did not padlock Red Reef’s Labadieville office, Kim Torres, the police jury’s secretary-treasurer, told BioRegion News.
“They’ve never shown up for a meeting to discuss what exactly they are carrying on at that location, and that’s what we’re trying to find out — what’s going on. So [the police jury] is not giving their application any further consideration. We have not approved their occupational license,” Torres said.
Red Reef President Claus Wagner-Bartak told BioRegion News via e-mail last week that his company will soon discuss the project with the parish jury.
“We have meetings set up with the parish jury in the near future and are most interested to work closely with the parish to come up with an acceptable development plan, beneficial for the community and our company,” Wagner-Bartak said.