University of Maryland, Baltimore, is moving ahead with its third of 10 planned buildings at its $500 million BioPark research park next to the university’s West Baltimore campus, following stronger-than-expected demand from prospective tenants.
UMB on June 18 issued through a development entity a formal request for proposals from developers interested in constructing the third building. Developers have a choice of submitting plans for a single six-story structure of 210,000 square feet or two structures totaling 220,000 square feet.
Developers can meet with UMB officials at a pre-proposal conference and site visit set for July 10, from 2 to 4 p.m. The deadline for RFP submissions is Aug. 15 at 4 p.m. (See contact information in sidebar below). The following month the UMB Health Sciences Research Park Corporation will hear oral presentations from finalists for the project.
“We’re looking to make that decision in October, and hope that something’s in the ground as soon as possible after that. We’d like to have the building open 18 months after we choose the developer,” said Jim Hughes, UMB’s vice president for research and development. The university expects to break ground on the third building early next year and complete it by the summer of 2009.
“The University of Maryland, Baltimore, does not currently intend to lease any space in Building Three,” UMB stated in its RFP.
The corporation has awarded contracts to build the previous two buildings to Wexford Science + Technology. Hughes insisted Wexford’s earlier contracts won’t place the developer at an advantage over other firms.
Strong Demand for Space
UMB green-lighted the third BioPark building after seeing better-than-expected demand by biotech companies and research centers for space at the campus, Hughes said.
The university projected it would lease an average 30,000 square feet per year, but Hughes said that UMB has been averaging about 80,000 square feet, “and we’d expect that that will continue.”
As a result UMB changed its original plan to make the third building a five-story, 100,000-square-foot facility to be entirely occupied by Maryland’s Office of Chief Medical Examiner. That building — officially the State of Maryland Forensic Medical Center — will now be the fourth building to be developed.
BioPark completely leased its first building of six stories and 120,000 square feet at 800 West Baltimore St. within six months of its opening in October 2005, and has already begun to fill the second building, a six-story, 240,000-square-foot structure at 801 West Baltimore St., which will open this August. There, UMB itself has agreed to lease 40,000 square feet of labs and instructional space for a new school of public health, and is finalizing a deal to take another 50,000 square feet for a new research center for UMB School of Medicine’s Institute of Genome Sciences.
The genomics institute has already recruited nine principal investigators and expects to carry out $20 million worth of research in its first year. The institute’s director is Claire Fraser-Liggett, who joined the university in April after serving since 1998 as president and director of the Institute for Genomic Research, since absorbed into the J. Craig Venter Institute.
UMB is also in talks with would-be tenants seeking a combined 90,000 square feet in the second building, Hughes said.
“It’s not full yet, but it’s well under way, and we’d expect that building to be full by early 2008,” Hughes said.
The second building will also include 10,000 square feet of incubator space, as well as a restaurant and conference space, all to be occupied in February 2008.
At BioPark, about 25 percent of the space at the campus has been leased to research groups connected with UMB and headed by faculty members specializing in translational medicine.
Most tenants at BioPark are private, early-stage companies spun out of local universities such as Alba Therapeutics, a UMB spinoff, and FASgen, a spin-off of Johns Hopkins University, located some three miles east of BioPark. In addition to Alba and FASgen, tenants in the first building include the SNBL Clinical Pharmacology Center, the University of Maryland Center for Vascular and Inflammatory Diseases, Irazu Discovery, Acidophil, the life science practice of the law firm Miles & Stockbridge, and a branch of Harbor Bank.
A Second Project in Baltimore
With its earlier start, BioPark has fared better so far in attracting tenants than another large biotech campus taking shape in East Baltimore. Forest City Science + Technology Group to date has announced a single lease for its first building now under construction within the Science + Technology Park at Johns Hopkins.
Johns Hopkins Medicine's Institute for Basic Biomedical Sciences will occupy 100,000 square feet within the eight-story, 277,000-square-foot 855 North Wolfe St. When it opens next spring, it will be the first component in a $800 million, 31-acre mixed-use campus to include five research buildings totaling 1.1 million square feet — 1 million square feet of labs, 100,000 square feet of class A office space — as well as 850 rental and for-sale homes and 80,000 square feet of retail and restaurant space comprising the first phase of a redeveloped neighborhood, the New East Baltimore Community.
The 80,000 square feet of retail includes 17,000 square feet within 855 North Wolfe St.
Forest City is building its East Baltimore science park with Presidential Partners, a partnership of four local builders — Banks Contracting, Doracon/Lambda Development, Legacy Harrison Enterprises, and the Wilkinson Group.
“The whole idea is to lease to both established companies and emerging companies spinning technologies out of Johns Hopkins,” said Gayle Farris, president of the University, Bioscience and Technology Group of Forest City in Boston. “This will be an anchor for technology transfer and creating a cluster in Baltimore itself, together with the University of Maryland project.”
Asked when the park’s second building would rise, she said: “As soon as we have sufficient leasing in the first building and interest in the second building, we will go forward.”
Scott Levitan, senior vice president and development director with Forest City’s science and technology group, said two more leases totaling 20,000 square feet are close to completion; he declined to name the tenants. As for the remaining space, all but 75,000 square feet is under negotiation for lease by other potential tenants.
Another 15,000 to 25,000 square feet will be incubator space for Johns Hopkins spin-offs and other potential tenants. “We have 18,000 square feet of tenants that want to be in there now,” Levitan said.
“We’re very optimistic about building three. If it leases up even more quickly [than projected], we’ll speed the process. If we get a lull in the market, we might slow it down.”
Levitan and Hughes said their projects can co-exist because the two combined will bring about 100,000 square feet to market each of the next few years – just enough new space, Levitan said, to satisfy biotech business and institutions. It has also helped, he added, that a key criterion for tenants deciding where to move has been proximity to research programs at UMB or Johns Hopkins.
The two projects are asking tenants for rents in the $30 range per square foot “triple net;” tenants must also pay taxes, utilities, and maintenance costs. Also, the more tenants seek in the build-out of their interior space, the higher the rent.
“The first thing we’re trying to create is a viable location for biotech companies,” Hughes said, “With two projects in the area, that helps to put Baltimore on the map, which is very advantageous to us.”
Generating Local Jobs
UMB has yet to disclose what it hopes to spend on the third BioPark building pending the RFP results. Hughes said building costs have ranged up to $250 per square foot for the “core-and-shell” structures of the first two buildings, plus an average $200 per square foot for improvements to tenant space. That would bring the cost of the third building to a potential high of $52.5 million, with the developer expected to privately finance the cost.
UMB will negotiate a 60-year ground lease with the developer of the third building as it has with Wexford for the first two.
In a report prepared for Wexford, Richard Clinch, director of economic development at the Jacob France Institute of the University of Baltimore – like UMB part of the state University System of Maryland — projected that BioPark, when fully developed, will have generated for Baltimore 5,220 construction jobs resulting in $550 million in economic activity, as well as 4,145 jobs creating $841 million in “direct” activity — company and university revenues — toward a total $1.3 billion in economic activity.
Employment projections for Forest City’s project have ranged as high as 8,000 jobs when all five buildings are completed.
Clinch told BioRegion News last week that “We might be a little high on the job estimates” at present since most BioPark tenants to date have been early-stage research businesses, not companies in manufacturing stages that produce more jobs. While projections called for one job per 350 square feet, he said, BioPark is more typical of wet labs that create one job per 450 square feet.
“It’s a question of the phase of development of these companies. As they mature, the employment may be more intensive than what I’m predicting. It would be more intensive than the use now,” said Clinch, who has prepared economic reports on BioPark for lender Harbor Bank and studied the total economic impact of UMB for the city’s Empowerment Zone.
Clinch said his job and economic activity estimates would not drop as Forest City builds out its research park project. He noted Johns Hopkins’ traditional strength in securing federal research dollars, while UMB’s research budget has quadrupled under current president David Ramsey, to $380 million in sponsored research in FY 2006, $40 million of that in corporate-sponsored research.
“They’re going to lease up whether it takes 10 or 20 years. The question is, how do you make sure the city accrues benefits from all this?” Clinch said.
While Forest City has answered that question by citing its redevelopment of the city’s depressed East Baltimore neighborhood, UMB has cited teaming up with the Biotechnical Institute of Maryland on a program to train inner-city residents with basic math skills for jobs as lab technicians.
The RFP requires the developer to include a facility within the third building “That
will significantly impact the community surrounding the BioPark. Possibilities include locating a Charter School, Child Care Center, or Job Training Center.”
Baltimore’s City Council in 2004 rezoned the 10-acre, state-owned BioPark site for 10 life sciences buildings totaling 1.2 million square feet.
For each new building at BioPark, UMB will issue a separate request for proposals from developers. The exception is the new facility for Maryland’s medical examiner’s office, which the state will finance and oversee through a general contractor; an RFP is to be issued this fall, Hughes said.
That plan won’t preclude construction of a fourth building at about the same time if tenant demand for biotech space stays strong.
“It looks like about every two years, just as one building becomes finished, we’ll launch the effort for the next building,” Hughes said. “We’re very optimistic about building three. If it leases up even more quickly [than projected], we’ll speed the process. If we get a lull in the market, we might slow it down.”