The incoming president and CEO of Philadelphia’s University City Science Center said he plans to create a strategy aimed at encouraging the center’s tenant startups to commercialize more new technology.
Stephen Tang, who takes the helm of the nation’s oldest and largest urban science campus on Feb. 4, told BioRegion News he also plans to continue reaching out to overseas businesses and expanding campus programs, two initiatives begun by his predecessor.
“I think it’s a matter of defining the community, setting priorities and finding a way to work together. Those are the challenges ahead,” Tang told BRN. “Perhaps we needed a catalyst or a way to align interests better. That’s hopefully the basis of the leadership that I will bring to the SC and to the region.”
Tang spoke a few days after UCSC’s board elected him president and CEO over interim president Dean Lewis, who has been the center’s chief financial officer since 2006, and other candidates.
Tang is the fourth person in as many years to run the 15-building, 1.7 million-square-foot science center, which employs around 7,500 people among 100 companies. The center is owned and operated by 32 academic and medical research institutions. Its main campus stretches 17 acres along Market Street in the city’s West Philadelphia section, and it oversees a smaller campus at the five-building, 250,000-square-foot Delaware Technology Park in Newark, Del.
A 25-year resident of the region, Tang has an MS and PhD in chemical engineering from Lehigh University. He also has an MBA from the Wharton School of the University of Pennsylvania.
Since 2005, Tang has served as group vice president and general manager for US operations of Olympus America, the $1 billion subsidiary of Japanese-owned Olympus Corp.
Richard Jaffe, chairman of the science center’s board, said it chose Tang because he promised to strengthen not only the center, but the region’s life science sector in general. As of 2004, the Greater Philadelphia area employed more than twice as many life-science workers than the national average, according to Battelle statistics published last year by Pennsylvania Bio. During that period the region was home to 703 life sciences businesses employing a total 42,074 people, which grew by less than 1 percent since 2001.
Key among the regional life science industry’s concerns is stepping up the commercialization of new technologies developed at its research institutions. Last October, CEO Council for Growth, a group of more than 70 business leaders in Philadelphia and 10 nearby counties, issued a report contending the region doesn’t generate the volume of commercial tech activity, including biotech startups, that it could considering the area’s concentration of academic institutions and pharmaceutical companies.
The University City Science Center “will provide, hopefully, a hub which will bring more dollars in and be more nurturing to these companies as they get spun out of the universities,” said Jaffe, whon is also a partner in the Philadelphia office of the law firm Ballard Spahr Andrews & Ingersoll.
“I’m actually pleased that the CEO council has looked at it as a need to focus on,” he said. “One of the obstacles has been a lack of serial entrepreneurs. We’re just starting to see more of them come and stay in Philadelphia.”
Attracting serial entrepreneurs represents one way the science center can boost tech commercialization in the region, said Russel Kaufman, chair of the CEO council’s venture capital working group.
Tang, the incoming president, “brings a level of commitment, a level of energy, and a level of passion to meet this particular need,” said Kaufman, who is also a member of the science center’s board of directors. “What I sense is someone who has a very broad understanding of this commercialization pipeline, and the role that an incubator can play in that.”
“What I see Dr. Tang being able to do is bring all the stakeholders together to help each of them understand the mission of the science center and how we can help,” Kaufman added. “Engaging us is going to be one of the most important things that he does.”
Tang, who describes his management style as “community building,” told BRN that the nature and need of his current employer, Olympus America, to engage numerous, far-flung stakeholders brought home to him the importance of communicating clearly and working across operational borders.
“I see that as good background for the challenges ahead for the science center, which crosses the academic sector into the industry and public sectors as well,” said Tang. “Hopefully it has made me well prepared.”
’Have a Beer’
Another priority for the science center will be managing two key programs launched during the tenure of the last permanent CEO, Pradeep Banerjee.
In February 2006, Banerjee announced a $600 million plan to more than double the center’s space by adding 1.8 million square feet among five new buildings. The center and a joint venture development partner, Wexford Science + Technology, are completing the first of those buildings: the $80 million, 150,000-square-foot lab structure rising at 3711 Market St.
According to Jaffee, that building, slated for completion late in the first quarter with occupancy planned for April or May, will include street-level retail space, a 500-car garage, and lab and office space intended to support companies that grew in the center’s incubator but that want to remain on campus.
Those companies have a hard time finding such space at the science center today since its occupancy rate is 98 percent, Jaffe said. In addition, the center has largely filled its 46,000 square feet of incubator space between two sites, the third and fourth floors of its headquarters at 3701 Market St. and the fifth floor east of 3624 Market St.
At 3701, rents for space range from $800 per month for a cubicle to $1,325 per month for an office; the fourth floor allows larger corner offices leasing for $1,625 a month, up to a wet lab suite for $10,000 a month. At 3624, rents range from between $1,500 and $1,950 per month for an office, to between $2,250 and $7,500 per month for wet labs.
That’s cheaper than the $20 per square foot asking annual rent for several available office spaces at 3401, 3624, and 3700 Market St., according to online availability listings by the center’s leasing agent, Cushman & Wakefield. That asking rent rises to $30 per square foot for all or any of the 10 floors that will become available at 3601 Market St. in December 2009; and drops to $12 per square foot for four small blocks of class B office space at 3508 Market St., according to C&W.
The next building to break ground after 3711 Market St will be 3737 Market St., a 14-story, 350,000-square-foot building with more than 300,000 square feet of office and lab space, the rest retail and/or medical space. Construction is set to start “in late 2008 or early 2009,” with completion envisioned for 2010, Jaffe said.
By then, the center hopes to have at least broken ground on a 120-room, 300,000-square-foot hotel on Filbert Street, three blocks north of the Sheraton University City hotel at 3549 Chestnut St.
“We want to create this environment where people don’t just leave at the end of the day. They can have coffee, have a beer, and have a meal. And this goes back to the issue of creating community, which we believe is necessary to help foster and nurture innovation.”
Other buildings the science center envisions constructing include a 500,000-square-foot medical building set to rise on 38th and Market streets, This will be followed by two Market Street buildings near 34th Street — a 440,000-square-foot building with 380,000 square feet of lab and office space, the rest retail and medical space; and a 300,000-square-foot structure that will include 270,000 square feet of lab and office space, the rest retail space.
“We’re looking for mixed-use buildings where there’s some retail. We’ve talked about residential. We’ve talked about hotels,” Jaffe said. “We want to create this environment where people don’t just leave at the end of the day. They can have coffee, have a beer, and have a meal. And this goes back to the issue of creating community, which we believe is necessary to help foster and nurture innovation.”
If Tang can develop a hotel within the science center, he will succeed where the science center’s management failed more than a generation ago. In 1970 University City announced plans to build a “Science Center Hilton” conference center and hotel complex on 38th Street, just south of Market Street, but never advanced beyond planning stages.
Some new lab space planned for the five-building expansion could become additional incubator space, but “that’s going to be a function of demand,” Jaffe said. “We’d like it to grow, but also, with incubators, you don’t want the companies to stay there forever. You want them to incubate, commercialize, and move to larger quarters.”
Tang said it was too early for him to comment on any possible tweaks or changes to his predecessor’s expansion strategy. Miller, on the other hand, said that Tang “will review the strategy with the board and management team [with a view to potentially] partnering with our shareholder institutions to commercialize their technologies along with managing current successful programs like Soft Landing.”
Founded in early 2006 with $2.25 million in grants from the US Commerce Department’s Economic Development Administration, Soft Landing is the science center’s effort to encourage foreign companies to become tenants.
According to University City spokesman Richard Miller, since its debut, Soft Landing has signed four tenants: Spanish-owned Integromics, an information-technology company serving the life-sciences industry; Innovation Development International Services, a French-owned consultancy for small and midsize biotech, healthcare, and IT companies seeking to expand overseas; ActMinds, a consortium of three Brazilian IT services providers to the healthcare industry; and a company whose name the center will not disclose.
The science center hasn’t limited its public support to the federal government. Pennsylvania has designated the science center both a Keystone Opportunity Zone and a Keystone Innovation Zone. KOZ allows companies to reduce to zero their state corporate net income taxes, capital stock and foreign franchise tax, personal income tax, sales and use tax; as well as local real property taxes, earned income tax, net profits tax, business gross receipts tax, business occupancy tax, business privilege and mercantile taxes, and sales and use tax.
KIZ allows pre-revenue start-up companies tax credits of up to $100,000 per year, as well as “priority review” for state financing, training and investment programs offered by Pennsylvania’s Department of Community and Economic Development.
The zones also allow four partner schools — UPenn, Drexel University, University of the Sciences in Philadelphia, and Thomas Jefferson University — to receive state grants to help them transfer internally developed research technology to companies based in these zones. UPenn and Drexel have campuses adjacent to science center.
Jaffe said science center executives will soon meet with Philadelphia’s new mayor, Michael Nutter, to discuss what if any aid the city government can provide.
“Whether the budget is there from a city perspective to provide funds, it’s uncertain at this point,” Jaffe said. “But we can look at the city to help with the marketing and to make the science center and the role it plays more central.”
Tang was rejected in 2004 when the science center board chose Banerjee to succeed Jill Felix as president. During seven years in office, Felix straightened out the center’s real estate — drawing on her experience as an associate of Willard Rouse 3rd, the developer of the Pennsylvania Convention Center, the Kimmel Center for the Performing Arts, and other major regional civic projects.
Like Tang, Banerjee became CEO with expectations of boosting its tech-commercialization effort.
“When it comes to pharmaceuticals, life sciences, and biotechnology, I want the Philadelphia area to be the first city that comes to mind. That’s my number one goal,” Banerjee said in the press release announcing his appointment in 2004. “We can achieve this by returning the Science Center to its original vision, which is to make Philadelphia the Mid-Atlantic epicenter of science and technology, by creating a launch pad where talent, capital, collaboration, and opportunity fuel the world’s best environment for commercializing great ideas.”
Just over two years later, in February 2007, Banerjee resigned as CEO and left the science center for reasons neither he nor the science center have ever disclosed. The departure made Lewis interim CEO.
Banerjee, now the chairman and CEO of The Banerjee Group, a Princeton, NJ, consultancy, did not return an e-mail message from BioRegion News.
Jaffe said the science center board maintained ties with Tang over the past three years, and approached him about the position soon after it became available last summer, even as it conducted a national search for prospective CEOs.
“We thought he was a great candidate the last time and an even better [one] now that he’s had the experience of working with a global company in the life science area and brings even more seasoning as an executive,” Jaffe said. “He’s better able to help us execute on our strategy.”
“I saw this as an opportunity to bring many elements of my experience together, from academia to industry to government, and really focus on things I‘m very passionate about: Innovation and commercialization on the one hand, and economic development on the other,” Tang said. “There aren’t very many times in life when things come together so nicely.”