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Wednesday, March 5, 2003 - Page updated at 12:00 AM

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UW eyes South Lake Union site to house biotech

Seattle Times staff reporters

The University of Washington is working with Paul Allen's company, Vulcan, to create a six- or seven-building campus in the South Lake Union area of Seattle. Proponents say the plan would transform the area into "the center of the universe" for biotech research and a major driver for the region's struggling economy.

Under the plan, Vulcan would develop about 750,000 square feet of office and lab space for the university, much of it over the next five years, on property Vulcan owns south of Mercer Street.

The UW would tap private sources for an estimated $60 million it would need to begin leasing the buildings, said Jeff Brotman, a university regent and chairman of Costco.

"I can't stress the enormity of the opportunity," Brotman said. "The possibility of doing something that will completely transform the city is extremely high."

Not to mention South Lake Union, where Allen, the billionaire co-founder of Microsoft, owns about 50 acres. Allen is moving forward with ambitious plans to redevelop the property — and the neighborhood — with a mix of commercial and residential buildings.

A new satellite campus would go a long way toward creating the biotech hub Vulcan wants in the neighborhood. The company is building research space for pharmaceutical giant Merck and the Seattle Biomedical Research Institute.

"Cities around the world are spending billions to compete for these jobs, and this is further validation that the vision is becoming a reality (in South Lake Union)," Vulcan spokesman Michael Nank said.

Seattle officials are paving the way for development in South Lake Union with plans to improve roads, utilities and transit, including a proposed streetcar line through the area.

The UW, facing a research-space crunch, has eyed South Lake Union as the ideal place to expand its biotech programs, given its proximity to the main campus and to the Fred Hutchinson Cancer Research Center and ZymoGenetics. The proposal with Vulcan is the first indication of the scope of its plans for the area.

"From an economic development standpoint, this is huge, just huge, to have the university stake out South Lake Union as a research center," said Mary Jean Ryan, director of the city Office of Policy & Management.

The school has scientists working in the Vulcan-owned Rosen building. The Board of Regents recently approved leasing laboratory space from Vulcan in the renovated Blue Flame building at Mercer Street and Eighth Avenue North. The building is the former headquarters of Washington Natural Gas. Details of the 22-year lease are being worked out.

The Blue Flame building and a potential second building on the property would anchor the proposed campus and provide most of the estimated 1 million square feet of new research space the university says it will need in the next few years.

But the campus — the brainchild of Paul Ramsey, UW vice president for medical affairs — is far from a done deal. Much of it will depend on whether the university can maintain its position as one of the nation's top recipients of grant money for scientific research — and whether the school can raise enough private money to start the development.

The UW's medical school received $431 million in grants last year from the National Institutes of Health — its major benefactor — a 17.5 percent increase over 2001. Over the past decade, funding from the NIH has grown an average of more than 10 percent a year.

But school officials worry that those grants would stop if the school runs out of research space.

"Biomedical-research funding is moving so rapidly now," Ramsey said. "Therefore, we felt the need to move forward to construct facilities to compete for the awards."

Congress is expected to scale back increases in NIH funding in the coming years, but Ramsey said the school's strength in bioengineering and genomic sciences should keep it competitive.

Brotman has started meeting with area business and civic leaders to drum up interest in the campus project. It will cost about $10 million a building to finish the interiors, buy equipment and furniture and pay for the initial costs of the lease, he said. The UW believes it will be faster and easier to raise private money than to ask for state government support.

"We can talk to (state) government until we are blue in the face, but they aren't going to help us," Brotman said. "This will come from businesses and individuals."

Mayor Greg Nickels has signaled his support for building up the biotech industry in the South Lake Union area, predicting that the neighborhood will be home to thousands of new jobs that would "cure disease and save lives."

"If we bring these (development) pieces together with strategic city investments, there's an incredible opportunity for a healthy 21st century job base," Nickels said. "That's why I have put so much emphasis on the (UW) and how we treat it."

The city's hopes are driven, in part, by a Vulcan study that estimates the amount of development that could occur in the South Lake Union area: 11 million square feet of commercial space. The study said 35 percent of the space could be dedicated to biotechnology.

Brotman sees a university research campus as key to helping Seattle compete for a greater piece of the biotech pie.

"We could have all of this built out in four or five years," Brotman said. "The momentum you would create would be incredible. This would be the center of the universe for biotech research."

Seattle is considered one of the country's top five biotechnology centers, largely due to the UW and the Hutch, according to a report last year by the Brookings Institution, a Washington, D.C., think tank.

But while Seattle occupies a coveted position as a biotech center, it is a second-tier city, lagging far behind Boston and San Francisco. And the competition is getting fierce as cities and states are spending billions to become biotech hubs.

Forty-one states are working to attract and develop biotech companies, according to a survey last year by the Biotechnology Industry Organization, a national trade group. Sixteen are spending money from the tobacco lawsuit settlement on programs aimed at nurturing the biotechnology industry, with Michigan making the biggest commitment of public money — $1 billion over the next 20 years.

J. Martin McOmber: 206-464-2022 or mmcomber@seattletimes.com;

Bob Young: 206-464-2174 or byoung@seattletimes.com

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