Project could cost $800M if it gets city planning approval

Baltimore Business Journal - by Julekha Dash Staff

Leaders of Baltimore’s west side biotechnology park are plotting a major expansion to include three 10- to 14-story office towers that would make the project three times bigger — and more costly — than originally planned.

The University of Maryland, Baltimore BioPark will take its revised master plan to city planning officials in the fall after meeting with members of the West Baltimore community. The $800 million plan calls for 2 million square feet of commercial space, potentially making it larger than the biotech park in Baltimore City’s east side. That project near Johns Hopkins Hospital calls for 1.2 million square feet of life sciences and retail space.

UM’s plans are not final. They still require approval from the city’s planning department, but the city’s lead architect, Robert Quilter, already favors UM’s expansion plan. So do some members of the nearby Pigtown neighborhood, who say expanding the project could boost the value of real estate in the area.

By expanding the UM BioPark, its leaders said they hope to create a critical mass of companies in Baltimore that rivals the biotech hubs of Boston and San Francisco.

Biotech executives looking for a home want to know there are plenty of other companies with whom they can collaborate and attract talented scientists.

The expansion comes as Maryland begins pushing its initiative to grow its $29 billion life sciences industry. The state’s Bio 2020 plan calls for about $1.3 billion to be invested in the industry during the next decade.

But the biopark project also comes during an economic downturn that has been especially unkind to biotech. Investors are wary of investing nowadays in biotech, as it can take a decade or more for a company to produce any revenue. Many Maryland biotechs have scaled back research and laid off employees.

Meanwhile, Forest City Enterprises, the developer of the Science + Technology Park at Hopkins on the east side of town may scale back the size of the next planned building because of the downturn. Parts of that project also are behind schedule.

UM BioPark executives realize their move is risky. They also know that for the plan to become reality they need the support of the community and a developer with the cash for the privately funded biopark. Right now, the cash for such a large project is hard to come by.

The UM BioPark already has had a setback, too. Two research buildings at the research project are complete, but leasing of a third planned building has been stymied by the credit crunch. Still, UM executives said they believe they can fill the buildings with small to midsize biotech companies once the recession ends.

“Time will tell if the market will support a 12-story building,” said James Hughes, UM’s vice president for research and development. “We’re optimistic that over the next 10 years we’ll be able to accomplish it.”

Some local industry experts say the prospect is good. They point to the state’s Bio 2020 plan, which calls for opening new biotech resource centers in Baltimore and Rockville as well as increasing the state’s biotech tax credit from $6 million to $24 million by 2020.

And Baltimore is not oversaturated with biotech research lab space, said Matt Brady, a vice president at Rockville real estate leasing firm Scheer Partners Inc. Baltimore currently has less than 100,000 square feet on the market, compared with seven times that amount in Montgomery County. So economic development leaders and biotech experts say there is space for 3 million square feet of new space on the city’s east and west sides.

“If you’re looking 10 years down the road, biotech is going to keep growing,” Brady said.

Expanding the biopark also could help UM hang onto small companies once they decide to expand, said Richard Zakour, executive director of MdBio, an industry advocacy group. If UM does not have the space, growing biotechs may decide to relocate to another research park, he said.

UM plans to issue a request for proposals to build the next phase of the project. While evaluating prospective developers, UM officials will evaluate their financial stability, Hughes said.

Hanover’s Wexford Science + Technology has developed UM’s biopark buildings so far, and it recently joined the development team for a research park project in Winston-Salem, N.C.

The company has a reputation for getting financing, said Walter Plosila, an Ohio biotech consultant who was instrumental in growing biotech in Montgomery County.

In the short-term, however, even the best developer will have a tough time getting cash in this market, Plosila said.

Wexford executives could not be reached for comment.

Tenants at the UM BioPark include Alba Therapeutics Corp., Gliknik Inc., Paragon Bioservices Inc., Fasgen Inc., SNBL Clinical Pharmacology Center and the University of Maryland Institute for Genome Sciences. Some have ties with UM, others are founded by Johns Hopkins University researchers. Many of them are creating vaccines and treatments to fight infectious diseases.

Biopark leaders hope to lure similar companies in the future.