Expanded Bonus Web Edition
From Site Selection magazine, May 2007
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The Quest
For a Sure Thing

New locations emerge as choice sites for biomedical R&D.

Moffitt Cancer Center and Research Institute
Jack KoloskyJack Kolosky (right), executive vice president and COO of the H. Lee Moffitt Cancer Center and Research Institute (above), says the presence of the University of South Florida in Tampa was a factor in the city's selection for the $150- million M2GEN cancer research venture by Moffitt and Merck & Co.
hen Jack Kolosky talks about the four- year- long process that culminated in Merck & Co. investing $95 million into a new cancer research venture in Tampa, he almost seems exhausted.
   "It was the culmination of a lot of hard work," says the executive vice president and chief operating officer of the H. Lee Moffitt Cancer Center and Research Institute. "It was not a sure thing by any means."
   In the end, Tampa beat out Pennsylvania and other Florida locations to land the crown jewel of research facilities: the $150- million M2GEN project, teaming the world's second- largest drug maker with the renowned cancer hospital to develop customized treatments for patients.
   The 50,000- sq.- ft. (4,645- sq.- m.) facility will create 165 jobs averaging $80,000 in annual wages. The project will receive $43.5 million in state and local incentives. In addition, at least six biotech firms have expressed interest in moving to the Tampa Bay Area to work with the project, bringing an estimated 140 additional jobs.
   The story of how Merck and Moffitt came together to form a groundbreaking partnership parallels the story of how second- and third- tier communities are emerging as competitive locations for top- dollar R&D projects in the life sciences sector.
   As drug and biotech companies look for new solutions to humanity's health problems, communities around North America are stepping up to provide innovative ideas and new alliances.
   Ten years ago, top R&D facility projects would consider perhaps a handful of locations:
San Diego, the San Francisco Bay Area, Boston, Pennsylvania, New Jersey, Maryland or the Research Triangle in North Carolina.
   Today, armed with new sources of venture capital and government incentives, other locations are emerging to compete with the "gold- standard" locations. Places like Tampa, Kannapolis, N.C., and West Lafayette, Ind., are competing for – and winning – some of the biggest projects in biomedical R&D.
   But it's not easy. Just ask Kolosky, who spent much of the past four years wondering if all the hard work in Tampa would ever pay off.
   "It started about four years ago when Dr. Bill Dalton came back to Moffitt as the CEO," Kolosky tells Site Selection. "He came back with a fresh perspective about where we would want to be going in the next 10 years. We came up with about four or five major initiatives. Clearly, one of them was total cancer care, but it had more vision than shape."
   Moffitt worked with Ernst & Young to develop a business plan and give shape to the vision. "The question was, how would we go build something in a practical way and how would we fund it?" says Kolosky. "We came up with the Merck deal."
   Moffitt approached Merck, Pfizer and other drug companies with the idea of a partnership that would pursue large- scale, tissue- gathering analysis and produce cancer patient profiles. "The tissue bank resonated a lot with Merck," notes Kolosky. "Merck agreed to fund the second and much larger phase of this."
   Even the local municipalities around West Central Florida didn't know the identity of the company being recruited for the partnership, code- named Project Bold. But that didn't stop the communities from trying to win it.
   Pasco and Hillsborough counties were selected as the two finalist sites for the deal, based upon their overall support and ability to fund the project.
   "We were looking for a site where the scientists could work collaboratively and collegially," Kolosky says. "The site of the building came from that process. The team originally was serious about selecting Pasco County just north of Tampa, but two things happened. Toward the very last minutes, we were looking for some clarifications from Pasco County government, and they were either not responsive or the answers were not what we wanted on such things as site development fees, impact fees, etc. The second thing was that Hillsborough County came back to us and said they would do whatever it takes to keep the project in Hillsborough."

Pfizer's New Research Building
The New Research Building (NRB) will be a four- story, 330,000- square- foot, addition to Pfizer's Chesterfield, Mo. facility. Pfizer owns and operates four buildings on the site. The NRB will be situated on the northwest area of the campus and connected to an existing building by a four- story glass curtain wall link hallway.
A Turkey Day Eve Deal
   The final decision on the site was made on the Wednesday afternoon before Thanksgiving of 2006. "We had a conference call, we leaned over toward Hillsborough, and we developed an agreement with them," Kolosky says.
   The actual project site is about a mile south of the main Moffitt campus in a light industrial area near Busch Gardens in north Tampa. The county agreed to acquire land formerly owned by Tampa General Hospital and deed it over to the project.
   Among other factors, Kolosky says proximity to a major research university, the University of South Florida in Tampa, was a key part of the deal. "For example, a company that manufactures cancer vaccines is located in the USF incubator," he adds.
   Joseph Milano, senior real estate associate for Merck in Lebanon, N.J., tells Site Selection that the Global Real Estate Services group of Merck "has not been involved in this transaction. It is my understanding … that this is strictly a licensing agreement with the cancer center and not a real estate matter. If it was, our group would be involved."
   Still, the real estate is very real and will commence construction soon, bringing with it more than 300 direct and indirect jobs in life sciences R&D to the Tampa Bay Area.
   Corporate real estate executives and site consultants with experience in
conducting R&D location searches say that Tampa's story is part of a larger trend. As biomedical companies become ever more specialized, new locations are cropping up to compete for their prized, high- wage jobs.
   John Rhodes, a Sarasota, Fla.- based site consultant with Moran Stahl & Boyer, says "the answer is not to simple" to choosing the best locations for biomedical R&D centers, mainly because the life sciences sector is now such a broad industry.
   "It's actually an array of industries – there is no single list of top locations for R&D activity," he says. Instead, he notes, each company must apply its own site criteria, considering such important factors as university R&D activity within the area; local quality of life for attracting the top talent; industry presence; and air access.
   Among other rising communities in this sector, Rhodes says, are Oklahoma City; Seattle; Phoenix; Denver; Kansas City; Edmonton, Alberta; Blacksburg, Va.; Athens, Ga.; Auburn, Ala.; State College, Pa.; and Gainesville, Fla.
   Betty McIntosh, site consultant with Cushman & Wakefield in Atlanta, says that the usual locations – like Boston, New Jersey and San Francisco – are "getting saturated." As a result, she notes, "the two most important criteria for these operations are quality and availability of labor, which is driven significantly by quality of life, and university research availability."
   McIntosh cites Kannapolis, N.C., as an emerging location for biomedical R&D, particularly in
North Carolina Research Campus
The $750- million North Carolina Research Campus continues to take shape in Kannapolis.
food- related life science research.

An Emerging 'Biopolis'
   One person who agrees with her is Clyde Higgs, vice president of business development for Castle & Cooke North Carolina LLC, the company managing the growth of the new $750- million North Carolina Research Campus (NCRC) in Kannapolis.
   Founded by California billionaire David H. Murdock, chairman, CEO and owner of Dole Foods, the 350- acre (142- hectare) campus about 30 miles (48 km.) north of Charlotte is envisioned as a "biopolis" that may one day create 35,000 jobs (see Site Selection cover story, November 2005).
   On April 18, the NCRC celebrated its rapid progress by topping off its new 125,000- sq.- ft. (11,613- sq.- m.) Nutrition Research Facility, the result of a unique partnership between UNC Chapel Hill, UNC Greensboro, UNC A&T and UNC Central.
   The centerpiece of the project – the 311,000- sq.- ft. (28,892- sq.- m.) Core Lab Facility – is mostly bricked in now and will be finished by November, says Higgs. Duke, UNC, UNC Charlotte and N.C. State together will occupy more than 350,000 sq. ft.
Clyde Higgs
Clyde Higgs
(32,515 sq. m.) of R&D space on the campus, he adds.
   "To grow a true science and technology economy, you need four things," Higgs says. "You need real estate infrastructure including wet lab space; a high concentration of research universities in your park or campus; a strong training component so that companies looking at you know they will be able to hire trained employees; and access to early- stage risk capital for some of these nascent biotech and life science companies."
   Angiogen, a small biotech firm that makes a new cancer therapeutic, announced in March that it would make NCRC its home. Higgs says the goal is to bring at least 100 such firms to the campus upon buildout.
   "Our over- arching vision is to make this the epicenter of health and nutrition research, including agriculture," he says. "We are targeting companies that fit on the value chain of the whole life science industry. We also have one of the highest concentrations of medical device companies in this region. We are even talking to software companies because they have an important role to play on the bio- informatics side."
   Nationally known site consultant Mike Mullis says the key location ingredients for biomedical companies are a qualified work force, quality of life, an advanced education system and a proven network of research funding.
   In addition to San Diego and Denver, which are both fairly established markets for biotech, Mullis says companies should consider emerging markets like Indianapolis, Baltimore and Palm Beach County, Fla.


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