New York City Takes Big Step Into Biotech With Developer for East River Science Park

Alexandria Real Estate Equities of Pasadena, Calif., will develop a 870,000 square foot facility on the Bellevue Hospital Center on the east side of Manhattan as a carrot to nurture biotechnology in the city.

The announcement of Alexandria's association with the East River Science Park was made at a press conference yesterday here in the city.

While New York has a concentration of biotechnology-related companies and top-tier academic institutions, the city has not risen to the level of Boston, San Diego, San Francisco, Phoenix, the Research Triangle, or Seattle as a magnet for a biotech industry. I know. I live in the city and over the last three years I have reported extensively from all of these locations.

The city recently received a top-tier ranking as a biotech center, but this in no way represents the reality. The city is an expensive place to live and work. One of the many cost-of-living calculators available on the Internet shows that if you make a $60,000 a year salary in San Diego, you would have to make $103,000 a year in Manhattan.

Real estate in Manhattan is also at a premium with asking prices for Class A mid-town office space renting for nearly $60 per square foot as of December, according to an article in The Real Deal, a publication covering real estate in New York. In the mid-town south area, with an 11 percent vacancy rate in December, asking rents for Class A space is $30.

The Bellevue hospital area, where I spent last weekend in an apartment high-rise near the new facility, is a place where you can see the sun rise, no trivial matter in this city of towers.

The neighborhood has upscale apartments set close to a concentration of low-income housing. There are plenty of restaurants, shopping, and movie theaters but it is on the outside edge of the east side of Manhattan, and accessibility by public transportation is limited as the No. 4, 5, and 6 subway lines are long cross-town blocks away.

Groundbreaking for the science park is slated for 2006 and the campus will be developed in two phases.

The first phase encompasses the building of two laboratory and office towers approximating 542,000 square feet of space. The first building will include 14 floors comprised of a spectrum of life science uses, including laboratory/office space for life science entities at all stages of growth, a state-of-the-art digital conference center, convergence cafe, space for clinical drug operations and other translational uses.

A second building will include laboratory and office space, as well as street-level retail. The plan also calls for a glass-enclosed Winter Garden and 43,000 square feet of publicly accessible open space, including a riverfront esplanade. The project's second phase calls for an approximately 330,000 square-foot laboratory/office building located on a parcel of land north of the site.

Alexandria brings experience to the table and is in a unique position to develop this area. The firm is a partner in Accelerator Corp., an biotech incubator in Seattle aligned with the Institute of Systems Biology. [Click here to read New Biology Economy coverage of Accelerator}

I visited the Accelerator last summer and found a huge facility with office space and managers and two startup companies – VieVax and VLST. Today, there are four companies located in the 20,000 square foot lab and office-space facilities.

Alexandra Real Estate, MPM Capital, ARCH Venture Partners and Versant Ventures partner with Lee Hood's Institute for Systems Biology to provide the space and some $15 million in venture capital to support the companies that are accepted into the space. Each company that passes muster can expect some $2 million in initial support.

There are two things that are key to Accelerator – the relationship with ISB, and the venture capital. And, those are keys to how this New York facility will do. There needs to be a scientific mentor-company relationship, a place where science park startups might be able to conduct microarray studies, or proteomics research, or simply get scientific feedback.

Additionally, there has to be access to funds, engineers and sophisticated computational power. [See recent New Biology Economy coverage of national venture capital funding.]

This facility will have $10 million to attract tennants, provided by the New York City Investment Fund.

This is an exciting start.

Read a recent speech about biotech in New York given by Russell Bissette, executive director of the New York State Office of Science, Technology and Academic Research.

Additionally, read an article on biotech in the city by Mitchell Moss, professor of urban policy planning at the Robert Wagner Graduate School of Public Service at New York University.