If you’re searching for reasons why CBRE ranked the City of Phoenix among the top five emerging bioscience markets, try these numbers on for size:
- More than $3.25 billion in bioscience and healthcare projects currently under construction or awaiting permits;
- More than 4.5 million sq. ft. of new biotechnology facilities expected to be underway by the end of 2022;
- Up to 8,000 jobs coming to those projects in the years ahead.
In other words, many of the 20 or so cranes currently at work downtown are engaged with some facet of life sciences. The catalyst for much of the activity is the $70 million Wexford Phoenix Biomedical Campus (PBC) from national innovation district developer Wexford Science + Technology. Wexford has developed 15 innovation ecosystems in partnership with institutional partners across 11 states, with projects in key urban centers including Baltimore, Chicago, Durham, Miami, Philadelphia, Pittsburgh, Providence, Sacramento and St. Louis.
Phoenix joins the race for life sciences leadership at a furious pace. The PBC — a collaboration among the City of Phoenix, the Arizona Board of Regents and Arizona’s three public universities — will encompass 6 million sq. ft. across seven unique buildings that will feature the highest concentration of research scientists and complementary research professionals in the region driving translational discovery. The focus is not only on advancing the bioscience ecosystem, but improving population health across the Greater Phoenix region. At full build-out the PBC is anticipated to generate an economic impact of $2.1 billion annually.
“The PBC and its three state universities are the focal point of a central Phoenix health and bioscience ecosystem that includes five major hospital systems, four of which have a physical presence on the campus,” says David Krietor, executive director of the Phoenix Biomedical Campus. “This marriage of university education, research and clinical providers is a powerful economic driver. With the advent of the ASU-Wexford partnership we are moving into a new phase that is adding over 1.5 million square feet focused on growing and attracting entrepreneurial activity.”
Wexford is partnering with the Center for Entrepreneurial Innovation (CEI), which will operate and program the Innovation Labs. CEI is a part of the Maricopa Community College District and has run a successful incubator program on the Gateway Community College campus for the past eight years. Krietor calls CEI “our region’s premier provider of business incubation services.” It also incubates well-trained, hands-on professionals. “CEI’s Lab Force program is focused on training technicians for health and life science companies on or near the PBC,” he explains.
Among the newest projects to launch at the campus is Wexford Innovation Labs at 850 PBC, 34,500 sq. ft. of flexible lab, office, and lab support facilities specifically designed to meet the rigorous needs of growing life science companies.
“Having these lab and office spaces purpose-built for entrepreneurs, in the midst of the density of intellectual capital and discovery taking place on the PBC, puts Phoenix in a league with other leading bioscience clusters around the country,” said Dr. Steve Potts, CEO of Oncomyx; a company founded on breakthrough research conducted at Arizona State University. “Having this much dedicated laboratory space and board rooms 10 minutes from an international airport that flies direct everywhere in the country is a major advantage to the location here, it makes it easy to combine in house labs and teams here with other team members or board members from elsewhere. It is close to a number of strong translational and clinical research groups, including Barrow Neurological Institute, Mayo Clinic, Dignity Health, ASU and U of A Medical campuses, Banner, and Phoenix Children’s Hospital.”
Q&A With a Thought Leader
Tom Osha, senior vice president, Innovation + Economic Development, for Wexford Science + Technology, guides the implementation of the company’s “Knowledge Community” strategy globally. An innovation advisor to Canada’s Department of Foreign Affairs and International Trade, NATO and the Brookings Institution, Osha recently took some time to speak to me about life sciences, Phoenix, and larger trends in innovation.
The Phoenix Biomedical Campus was first envisioned in 2004. These things take time.
What circumstances coalesced to create the opportunity for Wexford in Phoenix?
Tom Osha: Look at places like UCity in Philadelphia, which has taken 15 years of development. Cortex in St. Louis has taken 10 to12 years. These innovation districts — or what we call knowledge communities — are years if not decades in the making through multiple business cycles. In Philly, Winston-Salem, St. Louis, Baltimore and other places we have been working throughout the recession, the pandemic, good times and bad. That makes partners all the more important. We are blessed to have strong partners in Arizona and the city coming together during the pandemic. They’ve never seen higher demand in life sciences activity than they’re seeing right now.
I intentionally came to Phoenix as I looked at where we want to grow and the kinds of market opportunities that are in good alignment with our skills and what we do well. I keep a model of 75 cities around North America, and Phoenix kept popping up more and more. I’d been there a couple times personally, and even spent my honeymoon there. It happened to be the third day of Christine McKay, the head of economic development for the City of Phoenix. She and I hit it off very well. Her enthusiasm was coupled with the growth of the research enterprise at Arizona State University, the growth of the medical zone and the Translational Genomics Research Institute.
There were a number of items coalescing. There was capital. There was Arizona BIO. A base of companies for an innovation ecosystem was emerging. There was the political will of the city in then-councilwoman and now mayor Kate Gallego and President Michael Crow at ASU.
The planets were aligning. It was apparent to me early on, in 2015, that Phoenix would be a good market for Wexford. It was obvious it would be the Phoenix Biomedical Campus downtown.
Universities are important partners for Wexford. In Phoenix you are working with three of them. Describe how you navigate the politics of academia to get things done.
Tom Osha: In our building we have two institutions. At the first building at 850 PBC, the anchor is ASU, and the other is Maricopa Community College’s CEI, and their Lab Force program, a workforce training program specifically for lab techs. Then on the larger biomedical campus, you have the U of A, and Northern Arizona University. It’s the only place in the state where all three public institutions are co-located in the same spatial geography.
We also understand universities move at their own cadence, and can be difficult sometimes to navigate. An advantage for us is President Crow is visionary in how ASU can lead in development. We’re very partnership oriented. As you’re doing things for 15 years — we’re already in design for buildings 2 and 3 for Phoenix — it takes that partnership to get through. Everybody is thinking about how we blend university research, entrepreneurial engagement, corporate engagement and inclusion. That is a really good sign, and helps differentiate Phoenix from a number of other markets around the country.
In Phoenix Wexford is working with Maricopa Community College district as well as Bioscience High School, part of the Phoenix Union High School District. Describe the evolving role of community and technical colleges and even high schools in cultivating a successful life sciences hub in Phoenix or elsewhere.
Tom Osha: We believe very strongly — and I say it often — that talent is the currency of innovation. Nothing substitutes for it and everything follows it. If you’re going to grow any cluster, particularly life sciences, you have to have those talent pipelines. If you really look deep into a medical or life sciences distinction, you’re going to find 25% to 35% of the jobs don’t require a traditional four-year education. Technicians are the ones you need to scale a company or scale research. In that role, an organization like CEI is exceptionally important. If you don’t have those technicians, your market has a ceiling on what it can be.
The life sciences high school serves a different role. We do a number of internships with those students, and in some instances have exposed those students to a life sciences career. Most of those kids go on to traditional four-year colleges, so it’s not necessarily a feeder like in other markets. The high school is such a high-performing high school. They might pursue careers in life sciences and at some point in their career return to Arizona.
Each serves a very unique role, and the fact they’re all mixed is even better. It’s a more diverse, richer ecosystem.
What are some specific facets you’ve discovered in other districts that you’d hope to export to a district like Phoenix?
Tom Osha: Some are already in Phoenix. One thing we’ve learned over the years is the importance of having central gathering places. In the past, the buildings were meant to get you from the front door to the elevator. If you walk in our front door, you’ll see a lobby a lot like a hotel, with an articulated staircase and gathering places, where you can fit up to 200 people in intimate, with intimate seating or a café. It is meant to bring people out of their labs and offices. As we look at buildings 2 and 3, another important element is the ability to blend exterior and interior spaces. Public plazas have that pedestrian realm that makes it a comfortable place with a porous first floor. Look in and see a lab and it demystifies the science. New knowledge comes from bumping people into each other, intentionally and serendipitously.
Even in this COVID time of ours, we are really seeing this desire of people to connect, but with the knowledge it can be flexible and adaptable to conditions. Probably 70% of the Wexford portfolio includes academic medical centers, so we were already skilled in life science buildings, air exchanges and other aspects that contribute to healthy buildings today. All of our buildings remained open during the pandemic. We have the benefit that lab buildings happened to work that way anyway.
When you scout a community, what are you looking for?
Tom Osha: I look at about 35 different dynamics. I look at movement of different generations — Baby Boomers, Gen Xers, Gen Z, Millennials. I look at gross regional product. But I’m particularly looking at proxies. The lists I build are built out of things like the frequency of coffee shops, bikeability and walkability scores. What is the kind of environment that is starting to come around? If you think about knowledge communities as places where people connect and cluster, then what I’m looking for tends to be more urban, connected, walkable and bikeable. And it features ground-floor kinds of amenities. Who are the populations that use those? In terms of universities, I look at their research portfolio, who they work with, institutional IP and innovation infrastructure. For the city, there are other dynamics. Every year or so, I reorder the list.
Phoenix has been on the rise anyway, and has been accelerating through COVID. One trend accelerating that rise is this affordability crisis that has started to hit cities like San Francisco, San Diego, Cambridge and New York. Then couple that with the lockdowns for the pandemic, and people are starting to say, “I need something other than 600 square feet with three roommates.” That’s driven some of Gen Z back to college or back to where they were born. Phoenix is not a gateway or superstar city, but it has 90% of what it takes. It has a cool vibe, dominated by a university. Millennials whose children are getting to school years are now looking for walkable places, and it brings them to ring suburbs. Companies are now looking at secondary cities coming into their own.
Phoenix is just exploding, and has a good density of what California had. There are more engineers and life scientists, and its affordability is more friendly. Austin has been in that positon for a number of years, but is hitting its own challenges. Sacramento, Charlotte, Winston-Salem, all are markets that have a premier university driving that IP, and a good quality of life. Phoenix also has an awful lot to like about it.
As Phoenix grows so fast, is there already a concern about those same affordability issues that are striking other cities?
Tom Osha: At some point there may be, but one thing I think is giving us confidence: If you were to stand at our building and turn around 360 degrees, you would see 7,000 to 8,000 units of housing within about a half-mile. The housing has actually preceded some of the commercial development. So you’re getting at that affordability pinch, and you’re avoiding gentrification. The light rail helps. Other markets like Austin where transportation has not kept up with its growth, there is traffic and there are challenges in the urban core. Those places may have a shorter runway. Phoenix will be strong for quite some time.
