The Center of Research, Technology and Entrepreneurial Exchange in St. Louis is on track to receive approval next week to obtain $15 million in tax credits to help it build and populate a $200 million life-sciences space in the region over the next several years.
The expected approval by the Missouri Development Finance Board would clear a key hurdle for the Exchange, better known as Cortex, to build its 1 million-square-foot space and expand an anchor of the region’s life-sciences cluster, or “BioBelt.” Cortex plans to use the tax credits to obtain $30 million in private financing, as well as to help a regional incubator expand.
“We anticipate that we will be complete with our reviews in time to get it on the March 18 board meeting agenda, and make a final recommendation for participation approval at that time,” Robert Miserez, the finance board’s executive director, told BioRegion News last week.
Cortex still needs to secure local approvals to build the space, which would be located within the so-called Cortex life science research district, Miserez said. Consortium members include Saint Louis University, Washington University, BJC HealthCare, the Missouri Botanical Garden, and the University of Missouri-St. Louis.
Approval for the financing would come a month after Cortex president and CEO John Dubinsky led a group of life-sciences and economic-development professionals in presenting the request to the board.
At that meeting, Dubinsky laid out Cortex’s vision of developing 1 million square feet of new life sciences space within its 246-acre district, in the midtown section of St. Louis, just west of the city’s downtown. Click here and here to see maps of the district.
The space, which would comprise several buildings to be developed over the next five years, would be leased by businesses and academic and research institutions, Dubinsky told the board.
He said Cortex was in talks with several prospective tenants for large blocks of the expansion space. Without disclosing their names, Dubinsky identified the would-be tenants as:
- A Fortune 500 biotech seeking to build a $200 million, 300,000-square-foot facility within the campus;
- A Fortune 500 company interested in developing a 100,000-square-foot production facility and a research facility of between 30,000 and 50,000 square feet;
- A US government medical research facility of 30,000 square feet; and
- A national disease research group interested in moving its offices from New York.
Dubinsky was unavailable last week to discuss the expansion plan with BRN.
Nurturing an Incubator
The 1 million square feet Cortex wants to develop would be in addition to the two buildings totaling 330,000 square feet that the consortium has developed to date. The consortium has redevelopment rights for 185 acres within the district, which includes 180 acres owned by Cortex. The consortium also owns nine other parcels totaling 34 acres for future development.
The finance board will approve $10 million of the $15 million in tax credits for Cortex, which will use the cash for future development needs over the next five years, which could include acquiring more land or building additional infrastructure.
Cortex will use the remaining $5 million to construct a new 60,000-square-foot building for the life-science-friendly incubator Center for Emerging Technologies. The incubator is pursuing public and private funds to help reach the $28.5 million cost of building the new facility, which would house laboratories in about 60 percent of its space, or about 36,000 square feet.
The new facility would be CET’s third. The center now occupies 92,000 square feet in two buildings.
In addition to the MDFB credits, CET is pursuing a tax-increment financing plan from the city of St. Louis, private contributions, private bonds, and a federal grant.
“If we can solidify those funding sources over this year, we will break ground this year, and we’re figuring about a year of construction,” CET president and CEO Marcia Mellitz told BioRegion News.
“At Cortex, you’ll have more human health and animal health science companies that are probably further along. They’ve got their angel funding.”
The Cortex expansion, she said, would likely draw tenants to the new CET facility. “The more you can build a cluster in the life-science arena, the more you get on people’s radar screens,” Mellitz said. “The more we’re known and the more we’re attracting and growing companies here, we’re enabling Cortex to attract companies because of our presence.
“Our primary thrust has been medical companies — therapeutics, diagnostics, instruments and devices,” Mellitz. “We just have a strong need to have a lot more lab space available for companies that do need labs, so that’s why we’re building this new building.”
If a company comes to the region to locate here, “we can point out all the other resources that are here,” Mellitz added, which include proximity to the Washington University School of Medicine and Saint Louis University School of Medicine and the headquarters of life-science giant Sigma-Aldrich.
Today CET is home to 15 companies, including C2N Diagnostics, a Washington University School of Medicine spinout focused on tracking Alzheimer’s disease progression; VirRx, a Saint Louis University spinout focused on designing genetically engineered vectors for use as cancer drugs; and Lickenbrock, which is based in Troy, NY, but seeking a St. Louis-area presence. Lickenbrock develops image-processing algorithms and associated software for medical and defense customers.
In the fourth quarter of 2007, the latest available figure, CET had 12 base tenants that employed a combined 97 people and generated a combined $2.6 million in revenues, or $3.1 million from all funding sources.
“Probably our dominant research institution here is Washington University, although we do see some things coming out of Saint Louis University, and potentially UM-St. Louis,” Mellitz said. “Previously, we’ve had a lot of companies that have started from people who either came out of industry or whatever, or had an idea, and wanted to be here to collaborate with Washington University faculty. There’s an extensive amount of collaboration that goes on between our companies and the university. But in recent times, we’re seeing many more companies being formed from technology out of the university.”
She added that some CET companies come from outside St. Louis, hoping to collaborate with Washington University or secure financing from one of the local venture capital funds.
CET is one of two incubators in the St. Louis region. The other is the Nidus Center for Scientific Enterprise, which fills a 41,000-square-foot building within the Monsanto Company world headquarters campus in the St. Louis suburb of Creve Coeur. Nidus has nurtured 21 startup companies raising more than a combined $140 million between 2000, when the center signed its first tenant, GenChemics, and 2007.
“We’ve competed with CET for quite some time, and we’ve done quite well under the circumstances in the past, so I don’t see [the Cortex expansion] changing things very much,” Nidus founding CEO and president Robert Calcaterra told BRN last week. “It just depends on what the entrepreneur is looking for.”
Last month, Nidus graduated three of those 21 companies: parasite-control product developer Divergence, drug discoverer Apath, and medical information system-developer Graphic Surgery. The three raise to nine the number of graduates of the Nidus incubator. Another four companies failed, leaving eight companies as current Nidus tenants.
Divergence, Apath and Graphic Surgery were among companies shepherded by Calcaterra, who has announced plans to retire later this year, once Nidus’ board selects a successor [BioRegion News, Dec. 3, 2007].
The new CEO would oversee its move to a 17,000-square-foot space within a new $36.1 million, 118,000-square-foot life-sciences building being developed across the street from its current facility, on the campus of the Donald Danforth Plant Science Center, by developer Wexford Science + Technology of Hanover, Md. Louis Kiang, a vice president at Wexford, told BRN last fall the new building was designed to attract companies that, as with Cortex, have outgrown incubator sites but aren’t large enough to afford their own facility [BioRegion News, Oct. 29, 2007].
Nidus has not yet signed a lease with Wexford, and talks are in progress with several undisclosed would-be tenants, according to incubator spokesman Rob Rose.
The new building is expected to house researchers from a collaboration announced last month between Danforth and Metabolix, a maker of bioplastics and biopolymers headquartered in Cambridge, Mass.
A formal groundbreaking ceremony marking the start of construction took place March 4. While Wexford and Danforth said in January that construction on the 17,000-square-foot space would be completed in the summer of 2009, the developer “seems to think that things are moving along so well that maybe it will be the spring,” Rose said.
Rose and Calcaterra said their respective projects and early-stage business facilities were unlikely to lose tenants if Cortex expands as planned.
“The tenants that will be in Cortex will be more mature, farther along, and less focused on plant science,” which typically requires less lab space than animal or human science companies, Rose said.
“At Cortex, you’ll have more human health and animal health science companies that are probably further along. They’ve got their angel funding,” Rose added. “They’ve come out of an incubator like CET, and now they’re looking for not just space, but more office space, bigger lab space.”