Scottsdale struck a tentative deal for a piece of the much-sought-after biotech research industry growing in the Valley.
The city plans to invest $3 million, in the form of a loan, toward a biomedical research facility to be built at Mayo Clinic Scottsdale, 13400 E. Shea Blvd.
The 100,000-square-foot building will house a Translational Genomics Research Institute’s biomedical research facility, which will be called Translational Drug Development. Mayo Clinic also will use part of the building.
The institute's planned Scottsdale operation will be called TD2 and is slated for completion before the end of 2004.
The City Council is scheduled to vote on the agreement Tuesday.
"This is one of those steps that is going to put Scottsdale on the map for technical research,'' said Virginia Korte, CEO and president of the Scottsdale Area Chamber of Commerce. She said a $3 million loan would be a "small investment for a huge return.''
The rest of the building will be rented to similar businesses, possibly for laboratory space, said Dave Roderique, general manager for Scottsdale's Economic Vitality Department.
Local officials said they expect the project will attract coveted knowledge and technical workers to high-paying jobs in the environmentally clean biotech industry.
Groups such as Arizona State University’s Morrison Institute for Public Policy, the Scottsdale Area Chamber of Commerce and the council have issued reports aiming to steer Scottsdale toward the biotech industry.
Scottsdale's been relying on the tourism industry too much, said Rebecca Gau, a Morrison Institute senior research analyst who contributed to the landmark March 2002 "Which Way Scottsdale?'' report.
"We recommended that Scottsdale think more strategically about being a part of the high-tech future so this would definitely fit into that,'' Gau said.
The new research facility alone is expected to draw 200 employees, 30 to 40 of them for TD2, said Roderique. The TD2 operation will focus on cancer drugs.
Valley developer Tom Hornaday plans to build the new facility on Mayo Clinic Scottsdale’s land at cost for $25 million and lease about 25 percent of the building to the institute over a 12-year period. At the end of that term, the space will be given to the institute, according to Scottsdale’s tentative agreement. "This is moving extremely quickly,'' Roderique said. "Timing is real critical here.''
TD2 must be built and occupied by the end of 2004 to maintain the developer’s offer to build the structure at cost. In return, the developer would receive certain tax benefits.
TD2 will be affiliated with the estimated $45 million Phoenix Bioscience Center at Copper Square, an institute project under construction in downtown Phoenix, said Galen Perry, institute communications director.
The institute is nonprofit, funded with state, tribal, federal, foundation and private money.
The institute and the International Genomics Consortium will be headquartered in a 168,000-square-foot building in Phoenix, scheduled to be completed by fall 2004, Perry said.
Arizona's three state universities, Phoenix and other parties formed a task force in 2002 under the direction of former Gov. Jane Hull to bring biotech industries to the state.
TD2 will serve as a catalyst for what's expected to come in Scottsdale: High-paying jobs, sustainable businesses and recognition in the biotech industry, said Scottsdale Mayor Mary Manross.
"It's definitely part of our long-term economic development strategy,'' she said. "I certainly hope the council will see wisdom in this. It's for the future.'
Under the Scottsdale proposal, the institute would repay the city $3 million plus interest over seven years. "We are excited about moving forward on this project with Mayo Clinic in Scottsdale," the institute's chief operating officer Richard Love said. "TD2 will provide expert drug evaluation services to (institute) researchers and biotech/pharmaceutical companies who are developing new anticancer drugs."
Mayo Clinic Scottsdale will provide the land for the project. Scottsdale also agreed to waive up to $85,000 in building permit fees other other standard development costs, the proposal states.
Daniel D. Von Hoff, an internationally recognized leader in cancer drug development, will be involved in the center. Already at Mayo Clinic Scottsdale is an 80,000-square-foot research center and a 420,900-square-foot Mayo Clinic outpatient facility. TD2 will be its third main building.
The project also will allow Mayo Clinic Scottsdale to enhance its research presence, as outlined in the clinic's recently adopted 40-year master plan, said Anne Tewksbury, Mayo Clinic spokeswoman.
Mayo Clinic also operates a hospital in nearby northeast Phoenix and in total employs a combined 4,000 people.
"We are very pleased to be involved in this project," Dr. Victor F. Trastek, chairman of Mayo Clinic's board of governors, said in a prepared statement. While Scottsdale would not receive direct tax revenue from its $3 million investment in the facility, the benefit will be seen in new jobs — estimated to pay an average of between $75,000 and $100,000 annually, said Roderique.
"The spin-off benefit is these people go out and buy goods and services in the community. They buy housing here,'' Roderique said. "This is exactly what we want.''
The chamber's leader called the project a great start. "It's just the beginning to attract other pharmaceutical partners to our city,'' Korte said.