News Room
Field of biotech dreams
By Thomas Lee - Star Tribune
November 18, 2007
A developer envisions a bioscience park on an elk farm along Hwy. 52 near Pine Island. All it needs now are state backing and tenants.
Can an elk farm ignite a biotech boom in southern Minnesota? best replica watches
Tower Investments, a California-based real estate investment firm, is planning an ambitious 1.7 million-square-foot biotech research and manufacturing facility on an elk farm off Hwy. 52 near Pine Island, about 15 minutes north of Rochester. Construction of the bioscience park, the first of its kind in Minnesota, is scheduled to begin in mid-2008.
Tower executives and state and local officials say such a facility, part of a massive multiuse development called Elk Run, could help establish a biotech corridor along Hwy. 52, which connects the Mayo Clinic, the University of Minnesota Rochester, and IBM Life Sciences research and development labs with the U's Twin Cities campus and the major medical companies in the metro area.
As envisioned by the developer, companies could test and manufacture biotech products such as medical devices, pharmaceuticals and animal vaccines at Elk Run.
Elk Run "will provide a home to [bioscience] businesses that are coming to Minnesota," said John Pierce, a Tower vice president.
While some are skeptical that a real estate development is the best way start a biotech boom, the city of Pine Island has applied for a $175,000 grant from the Department of Employment and Economic Development. Tower, in turn, will spend $1.25 million on the facility. The city will also request that the state approve a $3.25 million bond next year for infrastructure improvements, including water and sewer lines.
The 1,170-acre Elk Run development also envisions a healthy living campus, residential homes, hotels, retail, office space, schools, and an assisted-living facility.
But success is far from certain. Since purchasing the land in 2006, Tower has yet to sign any tenants for the biobusiness park, and one expert wonders if the state's nascent biotech market justifies the project.
"To start with, a real estate proposition for a biobusiness park may not be realistic," said Randy Olson, general manager of University Enterprise Laboratories, a St. Paul-based bioscience incubator. "So many factors have to be present for bioscience companies to be launched and evolve, such as the caliber of technology, the experience of the management team, and access to capital. It's challenging in a [metro] market of this size for bioscience companies to be founded and can be an even tougher sell in a rural market."
Although Tower is not working directly with Mayo and the university, the two institutions play key selling points in the company's plan to attract tenants. A Tower brochure states the biotech park will be "developed in cooperation with a local major medical center and the University of Minnesota." A Mayo spokesman says the hospital has held discussions with Tower but "there is no formal partnership." A U spokesman said the school is not involved with the project.
Bioscience was Plan B
Founded in 1989, Tower Investments is owned and operated by the Marks family of Northern California. The company invests its own capital and manages a diverse portfolio of real estate and debt instruments secured by real estate in the United States and Canada, according to the Tower website.
Tower's portfolio includes 100 real estate projects, including a 100,000-square-foot office building in Little Rock, Ark., a 280-acre equestrian ranch in Elk Creek, Calif., and a waterfront community in Nashville.
Building a bioscience facility wasn't initially part of Tower's plan to build homes, retail and office space. The land, which sits opposite of Pine Island on Hwy. 52, is mostly known for the 350 elk that still roam the property formerly owned by brothers John and Karl Hoehne. The elk will remain on the land.
After purchasing the property in August 2006, Tower unsuccessfully lobbied the state for infrastructure improvements, said Rep. Tim Mahoney, DFL-St. Paul, chair of the state Biosciences and Emerging Technology Committee. Tower's project also comes at a time when developers are finding it tougher to obtain financing because of the weak credit markets.
What [Tower] needed were sewer and water lines, but they ran into some opposition," Mahoney said. "They retooled [the plan] to include bio manufacturing."
Pierce of Tower says the company's thinking on a biotech facility "evolved after we saw the property."
The idea has met with enthusiasm from some of the state's biggest biotech supporters.
"It doesn't take a great deal of imagination to think about the potential," said Dale Wahlstrom, chief executive of the BioBusiness Alliance of Minnesota, which is working with Tower to court tenants. "The University of Minnesota and Mayo Clinic knock out a lot of intellectual property. We need to develop a private sector to support them. That's the piece that's missing right now."
Pierce of Tower says the company's thinking on a biotech facility "evolved after we saw the property."
The idea has met with enthusiasm from some of the state's biggest biotech supporters.
"It doesn't take a great deal of imagination to think about the potential," said Dale Wahlstrom, chief executive of the BioBusiness Alliance of Minnesota, which is working with Tower to court tenants. "The University of Minnesota and Mayo Clinic knock out a lot of intellectual property. We need to develop a private sector to support them. That's the piece that's missing right now."
Mahoney, who supports the project, says there is a "good chance" the state will approve the bond.
A 2006 report commissioned by the BioBusiness Alliance concluded that Minnesota lacks the ability to commercialize the technology developed by its academic and research sectors.
"The lack of competitive strength in commercialization (translating inventions into new start-up companies within Minnesota) may be our most disturbing finding," the report said. "To compete long term, in addition to a strong academic sector, Minnesota needs to have a base of private-sector employment in life sciences devoted to research and development that is at least commensurate with a state of our size."
U-Mayo biotech partnership
Earlier this year, state officials, the Mayo Clinic and the University of Minnesota inaugurated a $25 million, three-story genomics research facility at a Mayo building in Rochester. The collaboration, called the Minnesota Partnership for Biotechnology and Medical Genomics, hopes to speed the research and commercialization of projects like anti-cancer drug development and treatments for heart disease, pancreatic cancer, neuromuscular diseases, auto-immune diseases, transplant rejection, drug addiction and tuberculosis.
"We're trying to bridge the gap between research and discovery and where the market wants to receive it," said Bob Nellis, a spokesman for the U-Mayo partnership. "Ideally, we want to have these technologies manufactured and developed in the state. The more you can keep the biotech in the state, the better for the state."
The city of Rochester is also helping to build a 140,000-square-foot downtown BioBusiness Center. The Mayo Clinic Office of Intellectual Property will lease space in the building to house potential start-up companies.
Elk Run is "something that could be in partnership with and the University of Minnesota or could be healthy competition," Rep. Mahoney said.
Pierce of Tower Investments stressed Elk Run will not compete with the institutions but rather complement them. The developer intends to recruit established, out-of-state companies that will use the facility for research and manufacturing, he said.
"We're very anxious to start speaking to [potential] tenants and users," Pierce said.
Those tenants could potentially manufacture technology coming from Rochester, said Abraham Algadi, Pine Island city administrator. He said the town is talking to two "established bioscience companies" but declined to name them.
"It's a no-brainer," Algadi said. "We have the talent and the resources. When products become ready for production, Elk Run will be a suitable place to turn the prototypes into reality."
A 2006 report commissioned by the BioBusiness Alliance concluded that Minnesota lacks the ability to commercialize the technology developed by its academic and research sectors.
"The lack of competitive strength in commercialization (translating inventions into new start-up companies within Minnesota) may be our most disturbing finding," the report said. "To compete long term, in addition to a strong academic sector, Minnesota needs to have a base of private-sector employment in life sciences devoted to research and development that is at least commensurate with a state of our size."
U-Mayo biotech partnership
Earlier this year, state officials, the Mayo Clinic and the University of Minnesota inaugurated a $25 million, three-story genomics research facility at a Mayo building in Rochester. The collaboration, called the Minnesota Partnership for Biotechnology and Medical Genomics, hopes to speed the research and commercialization of projects like anti-cancer drug development and treatments for heart disease, pancreatic cancer, neuromuscular diseases, auto-immune diseases, transplant rejection, drug addiction and tuberculosis.
"We're trying to bridge the gap between research and discovery and where the market wants to receive it," said Bob Nellis, a spokesman for the U-Mayo partnership. "Ideally, we want to have these technologies manufactured and developed in the state. The more you can keep the biotech in the state, the better for the state."
The city of Rochester is also helping to build a 140,000-square-foot downtown BioBusiness Center. The Mayo Clinic Office of Intellectual Property will lease space in the building to house potential start-up companies.
Elk Run is "something that could be in partnership with and the University of Minnesota or could be healthy competition," Rep. Mahoney said.
Pierce of Tower Investments stressed Elk Run will not compete with the institutions but rather complement them. The developer intends to recruit established, out-of-state companies that will use the facility for research and manufacturing, he said.
"We're very anxious to start speaking to [potential] tenants and users," Pierce said.
Those tenants could potentially manufacture technology coming from Rochester, said Abraham Algadi, Pine Island city administrator. He said the town is talking to two "established bioscience companies" but declined to name them.
"It's a no-brainer," Algadi said. "We have the talent and the resources. When products become ready for production, Elk Run will be a suitable place to turn the prototypes into reality."