Breaking News: 2005 Off to a Good Start, with Two Huge Announcements

The good news is that San Francisco’s unemployment rate is continuing to decline – from 6.0% to 5.3% from Nov. ’03 to Nov ‘04 -- and the better news is that actual job growth is now occurring. In final quarter of 2004 alone, well over 3,000 jobs were added to area payrolls, registering a strong growth spurt ***.

As we enter a new year, the stage has been set for a vital economic resurgence. And on Wednesday, January 5th, two important announcements were made indicating that the action has already begun:

First Biotech Company Coming Soon, Bioscience Payroll Tax Exclusion Cited as Key Reason

While it has yet to be announced officially, Mission Bay is poised to win its first actual bioscience company. FivePrime Therapeutics is expected to occupy a floor at the J. David Gladstone Institutes building recently dedicated at Mission Bay. There the company will continue its efforts to identify therapeutic treatments for ailments including cancer, autoimmune disorders, and diabetes.

Comments SFCED executive director Dennis Conaghan, “Five Prime’s move into San Francisco will be a win for the entire city. It will bring jobs, new revenues, and provide more proof that the San Francisco bioscience cluster is set to flourish.”

What was the decisive factor in attracting FivePrime to San Francisco? Clearly the attractions of Mission Bay and the Gladstone Institutes’ facility played a primary role. But Five Prime Therapeutics CEO Gail Maderis cited the Bioscience Payroll Tax Exclusion as being a “watershed event” for the city that enabled her to cinch her case to the company’s Board that San Francisco would be a good location.

Over the summer 2004, Supervisor Alioto-Pier introduced the payroll tax exemption legislation, that was later passed by the Board of Supervisors, exempting bioscience companies from the payroll tax for 7.5 years.

This was enlightened economic policy for the city. Because San Francisco has no significant bioscience companies to speak of, providing the exemption cost very little. But with Five Prime – and later others – moving in, the city will be able to collect its foregone payroll tax revenues through the much higher property taxes that bioscience companies have to pay on their expensive facilities.

Welcome to Five Prime!

Alexandria to Build “Best of Breed” Facility

In the latter half of 2004, Alexandria Real Estate Equities, Inc. purchased two parcels at Mission Bay which will support approximately 1.4 million square feet of built space. These purchases represented a huge step toward realizing Mission Bay’s dreams of hosting a strong cluster of private bioscience firms.

On Wednesday, July 5th, Alexandria announced at a press conference what it plans for the first structure it will build at Mission Bay-- and the plans are very promising.

As the nation’s largest biotech real estate investment trust (REIT), Alexandria will draw upon its proven successes in other biotech hubs such as Cambridge, Seattle, and San Diego to fashion a unique “best of breed” facility. This facility promises to be a linchpin for the success of Mission Bay biotech as it will be for highly adaptable multi-disciplinary life science uses.

Alexandria’s initial five-story, 165,000 square foot structure will include a wellness center, a unique Science Hotel concept pioneered in Cambridge, MA, an innovation center, and other facilities. With ground-breaking occurring later this year, the building is expected to be operational by mid-2006.

Alexandria’s Chief Executive Officer stated, “The Mission Bay life science cluster…is destined to become the paradigm for life science cluster creation.”

Dr. Keith Yamamoto, Executive Vice Dean of UCSF’s School of Medicine commented, “The scope of…the whole complex could range from premier fundamental studies of life processes, to the development of novel treatments and cures for disease, to the delivery of first-rate health care to patients.

Finally Brooke Byers, Partner of Kleiner, Perkins, Caufield & Byers, noted that biosciences is a slow, steady growth field that does not result in the dramatic booms and busts of industries such as dot com and telecommunications.

Welcome to Alexandria!

For more information, please contact tewing@sfced.org.

*** [Note: figures for job growth refer to SF metropolitan statistical area, source Employment Development Department]