Hoping to persuade technology companies to expand in the state, Maryland lawmakers agreed yesterday to spend $9 million to help launch major university-affiliated research centers in Baltimore and College Park.
The state Legislative Policy Committee, made up of the General Assembly's ranking members, approved $4 million for a health sciences research park at the University of Maryland, Baltimore.
The money would go toward the first of eight buildings planned on 4.6 vacant acres on West Baltimore Street, west of Martin Luther King Boulevard. The research park could provide a boost to the Poppleton neighborhood, which it would adjoin.
At the University of Maryland, College Park, lawmakers approved $5 million to help purchase land for a 130-acre technology research center near the College Park Metro station. At 2.8 million square feet, the center would be the largest of its kind in the state, officials said.
Maryland economic development officials said construction of the two facilities would allow the state to compete for well-paid jobs and benefit from a strategy used successfully by universities elsewhere.
"This puts us in the game," said Vernon J. Thompson, deputy secretary of the Department of Business and Economic Development. "We have been challenged by lack of available space to locate companies that had relationships with universities. This puts us in the business of having something to sell, rather than having a dilemma to overcome."
The state money comes from the Sunny Day fund, which provides investments to businesses for job growth and expansion. Typically, the state lends money to a corporation, which repays it. But officials said the agreements approved yesterday are the first of their kind: investments with no timetable for repayment.
Economic development officials said they expect to recoup their investment by receiving proceeds as the research parks are constructed and occupied.
State funds provide only part of the money needed for the projects.
In College Park, the university is negotiating with a development team composed of Manekin LLC, Corporate Office Properties Trust, the Ken Michaels Co. and the Presidents' Round- table, which would contribute $18 million toward the $35 million needed to buy the land. The total construction cost, to be paid by private developers, is estimated at $375 million.
For the Baltimore project, the city is expected to donate land worth $1.4 million, and private companies would invest up to $30 million.
In Baltimore, state money will directly benefit up to a dozen biotech companies that agreed to move into the first building in the park, a school official said. The groundbreaking for the first 120,000-square-foot building is expected in the fall, and it is expected to open by the end of next year.
"The Sunny Day money is being used very specifically to build lab space and office space for tenants as they move into the building. The shell of the building is being privately financed and we're in negotiations with developers now," said James L. Hughes, vice president of research and development at University of Maryland, Baltimore.
"For instance, if a biotech company wants 10,000 square feet of space, it will take $650,000 to build that space. It's expensive to build lab space," he said. "Early-stage biotech companies have limited resources and they'll be able to get good-quality lab space and have the state pick up the initial cost for that."
The companies will pay the money back to the state once they are generating revenue. That could take one to eight years, Hughes estimated.
In return, the state will add high-paying jobs and the university will get an outlet for research conducted by its faculty and students, as well as positions for them, he said. Start-up companies also can help a university attract top-flight "star" researchers, a study done last year for UMB said.
An economic-impact study conducted for the university projects that when completed in the next decade, the park will generate 3,000 jobs and infuse $290 million into the economy. The first building is expected to produce 350 to 400 jobs if it lives up to expectations.
The city has another biotech park under development adjacent to the Johns Hopkins University medical complex on the east side. Hughes thinks there is enough business to go around.
As they praised the concept - House Speaker Michael E. Busch, an Anne Arundel County Democrat, called the public-private partnerships involving universities "the wave of the future" - lawmakers expressed some concern with the risk involved.
Sen. Thomas M. Middleton, a Charles County Democrat and chairman of the Senate Finance Committee, said he hopes state and university officials will work on coordination among the technology parks.
"We've got all these stand-alone projects," Middleton said. "Where are we going to go with coordinating them? That's something I'm going to be looking at."