Demand is key to success of west-side biotech park

Whether city can attract enough companies to fill new space is questioned

May 24, 2002|By Julie Bell | Julie Bell,SUN STAFF

The success of a proposed business park for biotechnology companies on the University of Maryland, Baltimore campus will depend almost solely on the answer to an obvious question: What's the demand?

It is a question made all the more urgent as the city moves ahead with a proposal for an east-side biotech park adjacent to the Johns Hopkins University's medical complex - one that could contain up to 2 million square feet of space.

The answer right now is that no one knows.

Nationally, the biotechnology industry is growing explosively, thanks in part to the recent sequencing of the human genome. So voluminous are the discoveries to be vetted for potential new medical treatments that one recent study projects the industry - which employs more than 16,000 in private companies alone in Maryland - will double in just five to eight years.

"The next 10 to 20 years will be the biotech golden age," said Anthony R. Moreira, chairman of the Council of Biotech Centers at the Biotechnology Industry Organization, a trade group.

But while Maryland as a whole already has done a good job of capitalizing on that growth, Baltimore has been lagging. The city contains just 26, or 9 percent, of the 275-plus biotech companies in the state, according to MdBio Inc., a nonprofit group that promotes the industry in Maryland.

The demand for biotech space in Baltimore is so uncertain that even a study completed in February for UMB raises questions about whether there is enough to fill a much smaller project on campus - a business "incubator" that would provide subsidized space for startup biotech companies in a single building.

The study notes that the city has been "unsuccessful in attracting new start-up companies or relocating companies" in the industry. It did not attract a new pharmaceutical company in the 1998-2000 period the study analyzed.

"Low levels of firm start-up and attraction and real estate absorption may indicate limited external demand for new space in the proposed UMB incubator," the report said.

Bruce Lessler, a Trammell Crow Co. consultant who is analyzing present and future demand for biotech space in Maryland, said yesterday that he believes the area has less than 40,000 square feet of ready-to-use space and unknown demand.

Economic development officials backing the UMB biotech project and the one near Hopkins are doing so without really knowing what the demand is, he said. "I don't think they understand what the size of the market is [now] in Baltimore," Lessler said, "and they don't know what the size of the market will be."

UMB hopes to get some idea of the demand by doing a feasibility study for the park, which is planned for a two- to three- block stretch west of Martin Luther King Jr. Boulevard and north of Baltimore Street. A large swath of the land is city-owned, and much of it is vacant.

The university also hopes to get a reading on demand by developing the incubator and a contiguous "collaboration" center. The concept calls for 10,000 to 15,000 square feet of space for startup companies founded with scientific ideas licensed from UMB. That would be the incubator portion of the project. The rest of the 30,000 square feet would be devoted to the collaboration center, a concept that mimics a biotech park on a very small scale.

In the center, employees from companies that are actively collaborating with UMB researchers would have offices and access to labs. "It really is the same concept as a research park," said James L. Hughes, UMB's vice president for research and development. The miniconcept would allow the university to "build up some experience" that it then could apply to the biotech park.

UMB is negotiating for the collaboration center and plans to develop it east of Martin Luther King Jr. Boulevard and west of Howard Street, Hughes said. As for the park, UMB likely will develop it a piece at a time in collaboration with a private developer, should the city approve the park on the land it now owns.

"We're very enthusiastic" about the park, Hughes said, "but we're not going to overbuild."

The university likely would build in chunks of about 150,000 square feet at a time, but only after at least half the space is pre-leased, Hughes said.

The city, however, will wait for the feasibility study before deciding whether to give, sell or lease its land to the university, said Laurie B. Schwartz, deputy mayor for economic development.

The city has committed $15,000 toward the cost of the study, with the state's Department of Business and Economic Development committing another $105,000.

And yesterday, the board overseeing the city's empowerment zones pledged $36,000 for the study and an analysis of the job prospects it would create for neighborhood residents.

The empowerment program is a federally funded revitalization program for decaying areas in the city's eastern, western and southern neighborhoods - including Poppleton, where the UMB park would go.

Staff writer Eric Siegel contributed to this article.

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