City pursues private developer for Biomedical Campus facility

August 6, 2010

By hammersmith

The downtown Phoenix Biomedical Campus would be one of the most attractive locations in Arizona for a bioscience institution to locate, except for one problem–the No Vacancy sign. With the arrival of the advanced imaging firm VisionGate Inc., which is in the process of relocating from Seattle, the existing facilities on the campus are now full.

The good news is that the campus still has substantial land available for development, and that land’s owner, the City of Phoenix, is eager to see new space come on line. On July 29, the city announced that it was inviting developers to submit proposals to build on a site located between the facility that is home to the Translational Genomics Research Institute and the International Genomics Consortium and the Arizona Biomedical Collaborative 1 (ABC-1) building. The site is just a stone’s throw from the University of Arizona College of Medicine-Phoenix.

The city is seeking a proposal for a privately financed and operated facility of at least 100,000 square feet, with at least 40 percent of the building committed to laboratory space, and with an overall use plan consistent with the campus’s emphasis on the biosciences. The new facility would also meet the city’s stated interest in dense development of the campus; the building’s footprint would be a maximum of 25,000 square feet. Whether the building houses one major tenant or a dozen smaller ones would be a decision for the facility’s owner.

“Our hope is that there’s a lot of venture capital and real estate investment trust money waiting for an opportunity like this,” said Jeremy Legg, program manager for the city’s Community and Economic Development Department, in the Phoenix Business Journal. “We think if there are these large national and international developers that have money and have been waiting for the right project to come along, and also know people in the biomedical community they can recruit to the Phoenix Biomedical Campus, it will be a win-win.”

The Request for Proposals by the city is available on the City of Phoenix’s website. Proposals for the first round of review are due Sept. 3.

“For some time, we’ve been getting lots of requests for lab space,” said Jason Harris, deputy director of downtown development for the Community and Economic Development Department. “The time is right to seek a privately developed biomedical facility.”

Harris said that despite difficult economic circumstances, growth on the Biomedical Campus is proceeding. In addition to the current construction of the College of Medicine’s 268,000-square-foot Health Sciences Education Building (HSEB), UA is continuing to plan for expansion of the Arizona Cancer Center to the campus. And once the Arizona Board of Regents lifts a self-imposed moratorium on new university building projects in September, 2011, the Arizona Biomedical Collaborative 2 building will likely be near the front of the line.

Robert Green, president and CEO of the Arizona BioIndustry Association, applauded the move by the city.

“While so many industries have contracted during this difficult economic time, the biosciences continue to expand,” he said in the Business Journal. “Bioscience work depends upon specialized facilities. The city of Phoenix understands this and knows that to maintain the growth of the biosciences, it must plan for and build additional facilities.”

The particular site for the privately-financed facility now being sought was something of a budgetary accident. Harris said that original design plans for the HSEB included development stretching from 5th Street to 7th Street, just north of the medical school’s existing buildings. When the Arizona Legislature scaled back the funding it was willing to authorize for the HSEB, planners adjusted that building’s size, leaving open the prime parcel on 5th Street between TGen and ABC-1.

As with the number of tenants and the exact size of the facility, the lease rates for tenants will be a matter of choice for the building developer, Harris said, but the city will base its selection of a developer in part on how plausible the developer’s plan is for filling the building. One of the challenges in developing research facilities is that the specialized equipment that laboratories require tends to make them expensive to construct compared with standard commercial buildings, but startup and small bioscience firms are seldom able to afford the high lease rates that would typically accompany expensive construction.

Sharon Harper, president and CEO of the Plaza Co., said that her company, which has developed numerous medical and research facilities, is considering whether or not to submit a proposal.

“We are excited to see that the Phoenix Biomedical Campus is continuing to grow and expand, and will create even more of a positive impact for the Valley in the future,” she said in the Business Journal.

For more information:

City of Phoenix seeking developer for new biomedical building,” Phoenix Business Journal, 08/06/2010

City Seeks Proposals for Biomedical Research Lab,” City of Phoenix news release, 07/30/2010