BALTIMORE — The University of Maryland, Baltimore, is considering plans to grow its BioPark research campus by building a taller fourth building than currently planned, though the added cost would require the school to abandon its plan to build it on-spec, the life-science campus’ top executive told BioRegion News last week.
The disclosure came a few days after developer Wexford Science + Technology broke ground on the project’s third building, a 180,000-square-foot facility that will rise on a campus planned for 1.2 million square feet of life sciences space.
“We’re looking at amending our plans to go up as high as eight to 12 stories,” making it the tallest of the four BioPark structures, with between 300,000 and 400,000 square feet of space, Jim Hughes, president of the UMB BioPark, said during a tour of the just-completed second building. Current plans for the fourth building, as with the first three buildings developed till now, limit height to six stories.
“There are a couple of possibilities we’re pursuing now,” he added, though any plan UMB pursues would require amendments from the city government to BioPark’s development plan. According to UMB, the idea to enhance the fourth building came from city planning officials.
A taller building offers the advantage of creating more open space between completed and new buildings while accommodating tenants needing greater space.
“When we actually break ground on [the fourth building] will depend on how quickly building three leases up,” Hughes said. “The ideal scenario is that we reach the 50-percent point and be ready to break ground on building four.”
But because the fourth building would be larger — and therefore more costly to build — than the other three BioPark structures, UMB would have to lease at least 20 percent of it before breaking ground. Until now, BioPark has started construction of each building on spec.
Hughes spoke at the end of a week that saw UMB celebrate the groundbreaking of the third building and the completion of BioPark’s $75 million, six-story, 240,000-square-foot second building. The third building, slated to start construction in September and be completed in September 2009, should cost about as much to build as the second: $40 million for the core and shell and $35 million for tenant improvements.
The first building, completed in October 2005, is a six-story, 120,000-square-foot structure completed along with an adjacent 638-space garage for BioPark tenants. Within six months from its opening, Building One was fully leased to a variety of tenants that include FASgen, a Johns Hopkins technology licensee that develops drugs for cancer infectious diseases, obesity, and diabetes.
Other tenants include SNBL Clinical Pharmacology Center, a 96-bed subsidiary of a Japanese-owned company; biopharmas Alba Therapeutics and Irazu Biodiscovery; and Acidophil, a life-science invention and intellectual property-development company founded by two Nobel laureates: Sydney Brenner and Philip Goelet.
The second building, which has an 8,500-square-foot incubator, has already attracted a mix of academic, research, and commercial tenants that have committed to leasing two-thirds of the building’s space; BioPark said it is in lease talks with undisclosed prospective tenants for 20 percent of the remaining space. If taken, the building will be left with 60,000 square feet of available space, Hughes said.
BioPark’s leasing pace stood last year at 80,000 square feet per year, well above the initial annual projection of 30,000 square feet. The pace allowed UMB to expand on its original plan of building a succession of 120,000-square-foot buildings. The two completed buildings lease to a tenant base that is 75 percent commercial and 25 percent academic research.
But this year, given the wobbly economy, the pace of leasing has slowed. “It’s a little softer today than it was two or three years ago. But we’re still having good success,” Hughes said. “It’s hard to predict two or three years from now what the biotech community is going to be looking at.”
Asking rent for the second building sought by UMB and Wexford is in the range of low $30 per square foot with a “tenant improvement” allowance of up to $150 per square foot. Amenities at the second building include a 100-seat auditorium, a conference room for tenants, and a 14,000-square-foot basement vivarium.
Tenants include Paragon BioServices, a contract research and manufacturing company that will operate a 22,000-square-foot GMP manufacturing suite when it relocates from nearby Johns Hopkins Bayview Research Campus; Westat, a health research firm headquartered in Rockville, Md.; and the Institute for Genome Services, an 80-person genomics research institute run by UMB. It is also the building’s largest tenant with a combined 54,000 square feet on the fifth and sixth floors. Within the building’s incubator, dubbed the BioInnovation Center, tenants include biotech startup Gliknik, a UMB spinout.
“You grow your own [big pharma]. That’s still what’s happening, and the space gets filled up as you grow your own. Small firms get bigger. Bigger firms get bigger.”
Also, later this year or in early 2009, Baltimore City Community College will move into 38,000 square feet within the second building, which will be used by its Life Sciences Institute to train existing industry employees and students at a science-oriented public high school pursuing biotechnology careers.
The institute will use its labs and other facilities in part for custom-training programs developed for area companies — the purpose for which UMB was awarded a $282,000 US Small Business Innovation Research grant announced March 26. UMB and BCCC are pursuing another $310,000 in unspecified tax credits toward the total $6 million they are seeking to raise from all sources to pursue their programs, which includes training students at the nearby Vivien T. Thomas Medical Arts Academy headed for entry-level life-sciences jobs. BCCC also plans to award associate degrees and certificates in life-sciences occupations, such as laboratory technicians.
Another goal of the institute is to help cement a relationship between UMB and its surrounding community, reflected partially in the $60,000 donated by the university each year to a community-improvement fund. Among beneficiaries is the medical arts academy, which last year received $30,000 for new lab equipment. By the time BioPark is completed and begins drawing revenue from additional tenants, UMB is expected to raise its annual donation to $300,000.
In addition, once completed the BioPark plans to step up its outreach to additional high school and middle-school students interested in pursuing life-science careers. Indeed, during the groundbreaking of the third building, UMB announced a collaboration between it and the Maryland Business Roundtable for Education designed to link these students with professionals from tenant companies.
UMB doesn’t foresee leasing any space, however, at Building Three, which will rise at the corner of West Baltimore and North Poppleton Streets. Speaking with BRN last summer, Hughes said UMB green-lighted construction of the building after seeing better-than-expected demand by biotech companies and research centers for space at the campus [BRN, June 25, 2007].
That demand also explains why buildings 2 and 3 are larger than the originally planned 120,000 square feet. UMB had planned to build 10 buildings over approximately a decade.
As with Building Two, William Gaudreau Jr. of Gaudreau Inc. is project architect for Wexford, with Whiting-Turner Contracting Company serving as construction manager, and the commercial real estate brokerage Colliers Pinkard serving as leasing agent.
Catty-corner to the third building will be a five-story, 100,000-square-foot facility to be entirely occupied by Maryland’s Office of Chief Medical Examiner. Gilbane will serve as general contractor for the State of Maryland Forensic Medical Center, which the state would own.
The new forensic center will replace a 40-year-old Baltimore facility at 111 Penn St. that the state’s Office of the Chief Medical Examiner has contended it has long outgrown. In a description of the project submitted as part of the fiscal year 2006 budget and available here, the office cited “structural deficiencies and lack of space” that threatened its accreditation with the National Association of Medical Examiners following a 2005 inspection visit.
Among problems that the new building is intended to address: Lack of administrative office space, inadequate space for storage of tissue samples and medical records, inadequate refrigeration, a weak ventilation system that cannot prevent fumes from recirculating into nonclinical areas, a lack of parking — only 20 spots are now available for the office’s 76 employees — and the lack of a secure waiting area for visitors.
“These deficiencies compromise working conditions as well as limit the office’s ability to respond in the event of a mass fatality incident,” the ME office stated.
Even without that building breaking ground, Maryland has already played a key role in subsidizing BioPark, as have the city of Baltimore and the federal government. In 2003, for instance, the state awarded $4 million toward tenant improvements for office and lab space at the first building, $2 million for traffic improvements, and a $1 million, 10-year no-interest loan issued in January by the state-created, quasi-public Maryland Technology Development Corp. to help build/outfit the incubator.
From Washington, DC, BioPark received $15 million in federal new market tax credits and another $2 million secured by US Rep. Elijah Cummings (D-Baltimore); the BCCC program benefits from $600,000 in federal funds. And from the city government, UMB received the 10-acre BioPark site.
While UMB is seeking additional land, Hughes said the university has ruled out asking the city to use its eminent-domain power to condemn the land of unwilling sellers. “For an extra 8,000 to 10,000 square feet, it’s not worth it,” he said.
The policy is one way Hughes said UMB has worked to build community support. Another is setting aside 35 percent of construction contracts for minority- and women-owned businesses, more than double the city’s 15-percent set-aside rule.
The state forensic building is slated for completion in early 2010. By then, Wexford will have decided whether to exercise an option to develop BioPark’s fourth building. If the enlargement plan passes city and state requirements, UMB would seek developers through a formal request for proposals. Wexford won the development contracts for the first three buildings through RFPs [BRN, Dec. 31, 2007].
Life-Science on the Chesapeake
UMB is one of two life sciences campuses taking shape in Baltimore. Across town, Forest City Science + Technology Group has teamed up with the city-based development consortium Presidential Partners to complete the $54 million, 278,000-square-foot first building at their Science + Technology Park at Johns Hopkins. The park is adjacent to the Johns Hopkins medical campus and part of a $1.8 billion, 88-acre redevelopment of the city’s long-depressed East Baltimore section [BRN, April 14].
“Ultimately, [Science + Technology Park] is very helpful. It’s going to make Baltimore more of a destination, and give it a bigger reputation for biotech as we start building a critical mass here,” Hughes said.
At the same time, he acknowledged, “we are competing with them for specific companies. There will be some companies that we’ll chase, and they’ll get, and hopefully, more that we get.”
Forest City is downplaying the potential for tenant competition, with Scott Levitan, vice president and director of development for Science + Technology Park at Johns Hopkins, telling BRN earlier this month his project has set its asking rent at the same low-$30s range as BioPark: “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.”
Of the companies eventually to spawn from UMB, Hughes said that “almost all of them, I think, will locate here, and the ones founded by Hopkins faculty will locate there [at Forest City’s campus]. I think that’s a pretty clear distinction.”
BioPark said it has so far generated a total $129 million in capital investment and created 200 jobs. When completed, the first three buildings of BioPark are projected to generate 1,000 jobs. A report prepared for Wexford concluded BioPark would generate a total 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.
Like Science + Technology Park, UMB BioPark is looking to attract many of the life-sciences businesses that comprise a new generation of the industry in Maryland.
For two decades starting in the mid-1980s, the state capitalized on the presence of federal agencies like the US National Institutes of Health and the US Food and Drug Administration by nurturing startup life-sciences companies, many of which have matured into biotech and biopharma giants including MedImmune, based in Gaithersburg, Md., which was acquired by AstraZeneca for $15.6 billion last year.
“You’re at a different stage of evolution, as the bioscience industry has matured in Maryland,” said Walter Plosila, senior consultant to the technology partnership practice of the Battelle Memorial Institute, the global R&D and laboratory-management organization headquartered in Columbus, Ohio. “Now that you have acquisitions and mergers, now you’ve got to make sure you don’t lose the parent company as you take the child and move it somewhere. And as a lot of people get wealthy from mergers and acquisitions, they invest it in new startup enterprises in the same location.”
Plosila, who spoke last month after retiring as vice president for Battelle’s tech-partnership practice [BRN, March 24], served as president of the non-profit Suburban Maryland Technology Council, now the Technology Council of Maryland, parent of the state’s life sciences-industry group MdBio. There, he helped fuse Maryland’s concentration of federal agencies, biotech businesses, and research institutes into a top-five life-science cluster.
“When I started in Maryland in 1986, I heard all these nay-sayers that told me, ‘The only way that Maryland [has] a chance to have a bioscience industry [is] to attract a large pharmaceutical company.’ They never attracted a large pharmaceutical company. They grew one, but they never really attracted one,” Plosila said. “You grow your own. That’s still what’s happening, and the space gets filled up as you grow your own. Small firms get bigger. Bigger firms get bigger.”