BALTIMORE — A joint venture between Forest City Enterprises’ Science + Technology Group and a development consortium last week celebrated the completion of a $54 million building, the first structure in a planned 1.1 million-square-foot life-sciences park located adjacent to the Johns Hopkins medical campus in the city’s long-depressed East Baltimore section.
The joint venture, called the Forest City-New East Baltimore Partnership, now has the challenge of luring life-sciences businesses to fill the remaining 1 million square feet of its Science + Technology Park, which is part of a $1.8 billion neighborhood revitalization project that includes housing, stores, and a hotel.
So far Forest City, a 75-percent partner in the venture, said it has leased about half the 278,000 square feet at the just-completed first building, located at 855 North Wolfe St. And 99,000 of those 126,500 spoken-for square feet have been leased by Johns Hopkins School of Medicine’s Institute for Basic Biomedical Sciences, which carries out interdisciplinary research programs linking the school’s nine basic science departments.
Forest City said the success of its project will be less dependent on Johns Hopkins filling space outright — it has promised to lease no more than half the space — than on the school serving as a draw for business and nonprofit tenants eager to develop new collaborations or strengthen existing ones with researchers at the adjacent Johns Hopkins medical campus.
To date three of the building’s tenants fit that bill: The cancer diagnostics company Cangen Biotechnologies, which conducts some of its research at Hopkins, has agreed to lease 12,000 square feet at Science + Technology Park; The Howard Hughes Medical Institute Biomarker Strategies, a nonprofit biomedical research and science education institute, will occupy 5,600 square feet; and BioMarker Strategies, a developer of cancer diagnostics and medical devices, will take 1,200 square feet.
Those leases mark some early and small successes for Forest City as it seeks to fill Science + Technology Park. But such tenants weren’t the developer’s original business plan.
Forest City saw the Park as being a campus for drawing big pharma seeking large blocks of space with lab facilities designed for corporate giants. But as the pharma industry continues to wobble on drying pipelines, falling revenue, and massive layoffs, Forest City was forced to shift its leasing strategy and pursue more smaller, earlier-stage life-sciences companies, Scott Levitan, vice president and director of development for Science + Technology Park at Johns Hopkins, told BioRegion News last week.
“Because pharma has changed its strategy and is now looking to buy or collaborate with smaller startup companies, they don’t want to lease big blocks of space,” Levitan said. “So we have a building that has overcapacity for what emerging companies need.”
In addition to that challenge, Forest City has to deal with the presence across town in West Baltimore of another life-science campus further along in its plan to develop 1.2 million square feet over the next decade. On March 31 The University of Maryland, Baltimore, and developer Wexford Science + Technology celebrated the completion of the 238,000-square-foot second building at its UMB BioPark, 801 West Baltimore St., and a ceremonial groundbreaking for a third building of 180,000 square feet [A report on UMB BioPark will appear in next week’s BRN — Ed.].
“Rather than try to cannibalize the Baltimore market between the University of Maryland BioPark and the East Side we decided to price our buildings the same,” Levitan said. “We don’t want to eat their lunch, and we don’t want the reciprocal to happen. We want tenants to choose their location on the East or West Side based on where the best collaborative science is going to occur with the sponsoring institution.”
Not to mention itself. The developer will occupy 8,700 square feet for a marketing center for the biocampus and the broader 88-acre redevelopment project, dubbed New East Side.
Tenants at the biocampus will have fee-for-service access to nearby Johns Hopkins medical core facilities, including its vivarium. A vivarium may be built at the Science + Technology Park depending on tenant demand, and the results of talks with two prospective builders of such facilities, Levitan said.
“We’re pretty sure that once we start to build additional buildings, there will be a vivarium in the park,” Levitan said.
The faster Forest City fills the first building, the sooner it will start on building a second one across the street, also of about 280,000 square feet. Levitan said the second building won’t break ground until Forest City fills at least 75 percent of 855 North Wolfe and signs “a few” tenants to leases at the second building.
The shift in tenant focus has also forced Forest City to lower its asking rent at the life-science campus, Levitan said, from the high-$30-per-square-foot range to the low-$30-per-square-foot range, not including tenant improvement expenses for interior space.
Notwithstanding the competition for leases, Forest City expects UMB’s BioPark to ultimately help its East Baltimore campus by creating a critical mass of potential tenant businesses and research institutes, Frank Wuest, president of Forest City’s Science + Technology Group, told BRN.
“We want Baltimore to build its own biotech cluster, so we want UMB to succeed. We look at them as another one of our partners,” Wuest said.
Baltimore is one of two East Coast cities where Forest City is working on projects; the other is New Haven, Conn., where Forest City was selected in February through a request for proposals process [BRN, Sept. 17, 2007] for a mixed residential-commercial project on 7.3 acres owned by Science Park Development Corp. and previously occupied by a rifle factory that shut down in 2006.
Forest City Science + Technology is the division of Cleveland-based Forest City Enterprises that oversees more than 2 million square feet of life science space, including University Park at MIT in Cambridge, Mass., and Illinois Science + Technology Park, the redevelopment of a former Pfizer campus in Skokie, Ill. [BRN, Jan. 21].
Wuest would not comment on Forest City’s interest in acquiring the soon-to-close Pfizer campus in Ann Arbor, Mich., the subject of recent local news reports.
Room for Two
Levitan said Baltimore has room for both Forest City’s project and UMB’s both campuses can succeed in Baltimore because of what he termed the area’s pent-up demand for new lab space, and until now a dearth of such space near Johns Hopkins. While declining to identify prospective tenants, he added: “We’re talking to both institutional and commercial users. We’re talking to people who want to fill floors. A lot of them are also emerging companies who want a smaller amount of space.”
For about the past two decades, Maryland’s life-science industry has largely grown a half-hour’s drive south of Baltimore to Montgomery County, given its proximity to federal research centers such as the National Institutes of Health and the Food and Drug Administration, as well as the availability of spacious, wooded office and lab campuses within the suburban county.
|
“Rather than try to cannibalize the Baltimore market between the University of Maryland BioPark and the East Side we decided to price our buildings the same.” |
Cangen’s headquarters had been in the Montgomery County community of Bethesda, Md., before taking temporary offices in Baltimore in anticipation of its move to the Forest City project. And a would-be tenant in talks with Forest City is based west of Baltimore, in Columbia, Md.
Forest City isn’t competing with Montgomery County on price, since its space will be newer and thus costlier than the county’s existing lab space. Levitan said the developer hopes to draw companies not only through proximity to Johns Hopkins but through the campus’ location within a new neighborhood that has only begun to rise from what has long been one of Baltimore’s poorest sections.
Plans for the New East Side include more than 2,100 new housing units for residents with a mix of incomes, 100,000 square feet of retail space, a new K-8 school, and parcels of open space. Some 23,000 square feet of the retail space will be built within Science + Technology Park, where about 2,500 square feet will be leased by the Harbor Bank of Maryland, whose president and CEO Joseph Haskins, Jr., said at the event his bank’s new branch would be the first by any lender in East Baltimore in a half century.
Since the first plans emerged earlier this decade, Maryland and Baltimore officials have joined with the redevelopment’s developers and civic leaders seeking to build a consensus for redeveloping East Baltimore. Those efforts haven’t always succeeded: Last year, the community group the Save Middle East Community Action Committee boycotted a ceremony marking the midpoint of construction on 855 North Wolfe, to protest what they said was the "death of our way of life" — namely the development of mostly rental housing in a neighborhood where hundreds of residents were forced to move from homes they owned to make way for the life-science campus and the rest of New East Side.
John (Jack) Shannon, Jr., president of East Baltimore Development, a nonprofit group created to manage the redevelopment project, told BRN that as of April 11, his group has acquired all 916 of the properties comprising the 31-acre first phase of development — which includes the biocampus as well as the retail space and 850 of the housing units. Of the 916 properties, 278 were occupied by 396 families, all of whom have been relocated, either within Baltimore, or outside the city.
“Seventy percent of the properties in East Baltimore were vacant before we even began our work,” Shannon said. “A number were privately-owned, but some were city-owned, some were in tax arrearage. It was a mix, and it was a very complicated mix in terms of assemblage.”
Another 1,000 properties comprising 57 acres — most of that residential land — will need to be acquired by EBDI and assembled for the project’s second phase, a task Shannon said has begun. The second phase may include a hotel with some conference capability, depending on the outcome of talks with would-be developers now in progress.
“It’s probably going to be double branded: A short-term suite hotel and a longer-term suite hotel,” Levitan said. “There are 1.4 million patient visits to Hopkins and (the nearby) Kennedy Krieger (Institute, focusing on children with brain and spinal cord disorders) per year, so there’s a transient trade that’s obviously there. There are conferences, there are doctors who come to visit, all sorts of professional visits that take place.”
To ensure more residents of the old East Baltimore could move into the new neighborhood, Shannon said, Johns Hopkins and several foundations — including the Annie E. Casey Foundation and the Abell, Goldseker, and Harry and Jeanette Weinberg foundations — last year tripled the subsidy to longtime residents seeking to buy new homes in New East Side, to $153,000 from the $50,000 typically available through the federal government.
The residential consortium also stepped up work on for-sale housing units: Later this year, renovation of 20 older homes will be completed, and a 50-unit townhouse project is set to break ground, as will a 500-bed, 267-apartment residence for Johns Hopkins medical students and the second life science building.
Late last year, a 74-unit senior apartment complex and a 78-unit complex of “workforce” housing were completed; the workforce units are available to families making between 51 and 150 percent of the region’s area median income — between $40,000 and $120,000 in annual income for a family of four. Housing in the first phase will be split among market-rate, workforce and cheaper “affordable” units for residents making 50 percent or less of AMI, Shannon said.
And to address community concerns about jobs going to outsiders, EBDI has launched a program to train community residents for jobs in the life sciences and other tech fields. New East Side is projected to generate 6,000 total jobs, 4,000 of them at the life sciences campus.
The plan has won the support of Save Middle East Community Action Committee, and no community protests were evident at last week’s completion ceremony, at which a key religious leader joined a chorus of officials and developers in praising the redevelopment effort: “This effort will rebuild a challenged community in an ethical and socially responsible way,” said Frances Murphy (Toni) Draper, pastor of the of the John Wesley AME Zion Church in East Baltimore since 2002, leading the ceremony’s opening prayer.
“This project must succeed, and it will succeed,” Draper added.
Draper was among speakers who joined with Maryland Gov. Martin O’Malley, Baltimore Mayor Sheila Dixon, City Council president Stephanie Rawlings Blake, two US representatives, community leaders, a partner in the development consortium Presidential Partners, and the benefactor namesake of 855 North Wolfe St. in cutting a ceremonial ribbon to mark the building’s completion.
The building is named for John G. Rangos Sr., a waste disposal entrepreneur and pioneer credited with first converting ash from incinerated waste into a component of cinder blocks, anti-skid material for roads, and other uses. A member of the Johns Hopkins Medicine Board of Visitors and longtime Johns Hopkins medical school benefactor, Rangos’ family charitable foundation donated $10 million toward basic science research at IBBS’ new facility at the life sciences campus.
Rangos, 78, told BRN his support for the Science + Technology Center, as with his previous support to Johns Hopkins, began with the skill of three of its doctors — Francis Milligan, Horst Schirmer and a doctor who has since died — in treating him for an illness four decades ago: “I don’t want to put another hospital down, but I came here 40 years ago, and it was the smartest thing I ever did. It probably saved my life. But that’s not the only reason I’m doing what I’m doing.”
He said he was also drawn by the project’s commitment to renewing the neighborhood surrounding the Johns Hopkins medical campus, to the benefit of its longtime residents as well as the new life science arrivals to come.
“I like what I see in the inclusion of people in the neighborhood, to use research, money, academia and industry to bring things together,” Rangos said. “This is a big lesson on how to bring America together.”