PHOENIX IN TALKS FOR LAB; CITY WANTS TO EXPAND ITS BIOSCIENCE DISTRICT
BYLINE: Ken Alltucker, The Arizona Republic
Phoenix is negotiating a deal with a private developer to expand downtown's biomedical cluster with an $80 million lab and office building.
The goal? Attract more research and bioscience companies to the city's core.
Peoria-based Plaza Cos. would build the development, which would be across the street from the Translational Genomics Research Institute and Phoenix's downtown medical school.
Once built, it would be the city's largest lab space for private research companies.
The privately owned office and lab development is significant because Arizona's bioscience interests have identified the lack of such space as one barrier to growing the state's research-based economy.
"That is the motivation for doing this," Phoenix City Councilman Greg Stanton said Wednesday.
"I consider our investment in biotech to be a long-term investment that will pay long-term dividends in health care, jobs and economic development."
State and city leaders and downtown business interests have been working to expand the area's bioscience industry for the past several years. Officials courted the International Genomics Consortium and worked to bring TGen downtown, and have partnered with Arizona State University and the University of Arizona on a college campus and the medical school.
Efforts are also under way to locate a new research hospital in the area, and Phoenix Mayor Phil Gordon has proposed creating a mile-long biomedical district that would allow multiple hospitals, specialty clinics and research institutions to expand or locate in the city's core.
Phoenix's downtown development office said this week that it had agreed to basic terms with Plaza Cos., although some elements still need to be worked out.
Under the deal, the city would purchase the company's 2.6 acres at the northeast corner of Seventh and Van Buren streets and lease the site back to the developer. City staff is also recommending an eight-year, 100 percent property-tax abatement. Other terms, including the land purchase price and the value of the tax abatement, will be finalized and made public in the coming weeks. A City Council committee is scheduled to hear details about the project on June 13, said Jason Harris, acting deputy director of the city's downtown development office.
In return, Plaza plans to build a 270,000-square-foot building with a mix of office, lab, lab support and incubator space that would be rented to researchers, medical users and other private companies.
The developer said demand from corporate users and scientists will dictate the exact mix of lab and office space as well as construction timeline.
"This location really makes this the right place to build on the existing momentum of the biosciences," said Peter Spier, Plaza Cos. vice president of development. "There is so much great activity downtown with TGen, the medical school and all the hospital excitement."
Even though Arizona will spend $1.4 billion over a decade to build a bioscience economy, there is little room for small research companies to start a business. Arizona's bioscience interests and economic development leaders long have said a lack of rentable "wet lab" space complete with water lines and proper ventilation systems have discouraged companies from starting operations or relocating to the Valley. At least four companies have bypassed the Valley altogether because of a lack of such space, according to the Greater Phoenix Economic Council.
Plaza Cos. proposed the office and lab building while responding to the city's request for research lab proposals. Two other research projects, which have been floated by GateWay Community College and Iasis Healthcare, are not as detailed or as far along as Plaza's proposal, Harris said.
Spier said his company has control of the entire site via contracts signed with three landowners, including Ribomed Biotechnologies.
Ribomed occupies an older lab and technology incubator on the tract that would be bulldozed to make way for the new building. Ribomed would be a tenant in the new building.
Ribomed CEO Michelle Hanna said she long envisioned a state-of-the-art research building at the site because of its location and proximity to other downtown research.
The Phoenix building would be the second major new lab to rise in the Valley. San Diego developer Lee Chesnut is building the Papago Gateway Center in Tempe near Papago Park.
Chesnut said he will spend $80 million to $100 million to build a seven-story building and 930-space parking garage. The developer hoped to land the prestigious La Jolla Institute for Molecular Medicine to Tempe, but that deal fizzled because of a lack of community fundraising support.
He is still searching for tenants.