The University of Florida last week announced plans to join Alexandria Real Estate Equities to develop an 80,000-square-foot building on its Gainesville campus as a way to attract companies outgrowing the school’s nearby Sid Martin Biotechnology Incubator.
At UF’s Gainesville campus, Alexandria will construct two buildings totaling 160,000 square feet on a site south of UF’s Cancer & Genetics Research Building, near the intersection of Archer Road and Gale Leerand Drive. The buildings, which the school has dubbed Innovation Center, will consist of laboratory and office space for life sciences and other high-tech startups.
UF referred a question on the project’s cost to Alexandria, whose spokeswoman told BRN it would not disclose that cost. David Day, director of UF’s office of technology licensing, said the center would be similar to Alexandria’s 157,340-square-foot digs, completed earlier this year at 1700 Owens St. at its Mission Bay development within the University of California San Francisco.
The developer has begun planning for the 80,000-square-foot building that will comprise the Innovation Center’s first phase. Alexandria and UF expect to break ground in the early fall of 2008, and complete construction in 2010. The university contemplates starting work on the second building in “several” years, depending how quickly the first one fills up.
The project will require approval by UF’s board of trustees as well as by Gov. Charlie Crist and members of his cabinet, Day said.
Day told BioRegion News the buildings will be divided into wet- and dry-lab space, offices for investors and serial entrepreneurs, space for university functions and even retail space for stores serving people working at the center and nearby research buildings.
At least one UF office, Day’s, will be based at the Innovation Center. The center will rise near UF’s 285,000-square-foot cancer and genetics research center, now the state’s largest research building, and a new 150,000-square-foot Emerging Pathogens Institute, for which the university is set to break ground next year.
“We’re going to create a more robust growth than we already have,” Day said. “As the research base grows and as our pipeline of startup companies grows, we see that level continue to grow. We don’t think it’s a steady thing. We think it’s going to get bigger. We’re becoming successful in attracting investment capital from the East Coast and West Coast into these companies, and they’re pushing through incubation into the next phase quickly.”
Unlike at Sid Martin, Day said, tenants at the Innovation Center will have to build out their own lab space. And the center won’t have the same concentration of life sciences equipment that exists at the incubator, which offers its own animal vivarium and greenhouse.
Headquartered in Pasadena, Calif., Alexandria is a publicly traded REIT eager to expand its presence in Florida just as the Sunshine State is looking to increase its concentration of biotech employers — in no small measure through multi-million-dollar economic-development subsidies.
On the other side of Florida, in Jupiter, Alexandria is a few weeks away from opening a 46,000-square-foot incubator, the Alexandria Innovation Center, at 555 Heritage Drive. The Jupiter facility is designed to attract startups seeking to be close to the Scripps Florida Research Institute, which is currently under construction about 2 miles southwest. [BioRegion News, Oct. 22
“We believe there is a unique opportunity in aligning ourselves with the University of Florida to help further the development of a highly focused science and technology engine in Gainesville,” Alexandria CEO Joel Marcus said in UF’s announcement of the project on its website. “We were attracted to University of Florida because of its proven success and outstanding track record of moving technology from the laboratory to the marketplace.”
Last year, UF scientists spent about 65 percent, or $377 million, of $580 million in state funds, on biomedical research. That total $580 million is more than double the $279.8 million UF recorded for 1997-98
UF’s tech-commercialization effort earned the university a favorable article in Business Week’s May 21 issue that administrators often cite as a sign the university can more than hold its own against powerhouses like MIT, the California Institute of Technology, and the University of California system.
According to the Association of University Technology Managers’ US Licensing Activity Survey
for the 2006 fiscal year, UF finished with $459 million in licensing revenue, compared with $411 million for CalTech, $1 billion for MIT, and just over $3 billion for the UCal system.
In addition, over the past two months seven UF startups have closed on a combined $56 million in venture capital, more than the $45 million recorded for biopharmaceutical startups in Gainesville and the rest of northern Florida for the first three quarters of 2007, according to Ernst & Young and VentureOne. For all of 2006, the figure was $25 million. And each year, UF spinoffs lease an estimated 35,000 to 40,000 local square feet of lab space.
Holding Onto Companies Longer
By developing the Innovation Center, UF is positioning itself to hold onto more of the growing life sciences startups it nurtures through Sid Martin for a longer period.
“We’re trying to hold on to them, and it’s being done with private developers. Any landlord, any REIT if you will, is going to try to hold onto the business and have them grow within their walls,” Day said. “Our role is to do what’s best for the University of Florida. So we’ll worry a little less about how these projects affect each other, and a little bit more about how to better stimulate the commercialization of intellectual property out of UF.”
Sid Martin sits 15 miles north of UF’s Gainesville campus, within the 200-acre Progress Corporate Park, now home to several Sid Martin graduates among the roughly two dozen tenants that fill the park’s current approximately 200,000 square feet in 10 buildings.
“It’s full. It’s bursting at the seams. We’re having to turn away companies that are applying to be in it.”
On Nov. 19, Sid Martin cut a ceremonial ribbon for a 3,600-square-foot office annex within the park. The annex sits across from Sid Martin’s main 40,000-square-foot facility, fully occupied by 12 startups.
“It’s full. It’s bursting at the seams. We’re having to turn away companies that are applying to be in it,” Day said. “You get a more robust business creation from science when you locate it very close to campus, very close to the scientist, and when you affiliate some seed, early-stage, A-round venture money with it.”
To that end, Day told BioRegion News, UF and Alexandria have agreed to create a $25 million business acceleration fund to co-invest with private venture capitalists in Innovation Center companies ready to spin out of UF. The fund is similar to the Accelerator Corporation established by Alexandria and a group of VC firms in Seattle to nurture startups. A similar fund is needed by UF, he said, because Gainesville’s concentrations of life science entrepreneurs and venture capitalists aren’t as large as those of top-tier clusters such as Boston-Cambridge, Mass., and the San Francisco Bay Area.
“It’s a model that we think is well-suited for areas that are not as well stocked in management as Boston and San Francisco and New York,” Day said.
The growth of UF startups from Sid Martin has prompted the partners who own the corporate park to capitalize on it by building new office and lab space. The most recent example came Nov. 28, when principals of owner Innovation Partners Limited broke ground on an expansion of Progress Corporate Park, whose cost they have declined to disclose.
Construction has begun on a pair of 32,000-square-foot buildings, as well as a roughly 4,000-square-foot building to be occupied by a local Caribbean restaurant. The expansion is projected to be completed in April 2008.
While no leases for the new space had been signed at deadline, talks are in progress with several prospective tenants, including a number of UF spinout companies.
“The growth spurt of biotech companies is definitely a reason for the expansion of the park,” Sandy Burgess, manager of Progress Corporate Park, told BioRegion News via e-mail. “The other key factor is the current owner/developer of the park. They are a group of local investors who are hands on and very willing to work with these companies.”
The expansion groundbreaking follows by seven months the completion in May of a 33,000-square-foot, build-to-suit lab-office building. Tenants there include AxoGen, a developer of nerve repair and regeneration products that outgrew its space at Sid Martin. AxoGen licenses technologies from UF’s McKnight Brain Institute and other institutions. Another Sid Martin graduate, the publicly traded biopharmaceutical company Oragenics, built its own building within Progress Corporate Park, at 13700 Progress Blvd.
Another Progress occupant, Regeneration Technologies, grew from a UF spinout into a publicly traded company that employs 350 employees. The developer of transplantation tissue is based at its own 100,000-square-foot headquarters, one of 10 at the research park.
Last year UF generated $60 million from selling Regeneration stock, some of which it used toward the cancer genetics building.
Day said the expansion of Progress Corporate Park will address the region’s short supply of life sciences space, benefiting UF and its community by allowing many of its spinout companies to remain in the region rather than move away.
The tech park and UF can coexist, Day added, because many researchers live in a bedroom community situated between both: “A lot of people who live there prefer the more suburban setting of the office park and prefer not to come downtown to the campus. It’s almost a matter of personal preference.”