HX_Guy |
Apr 3, 2011 5:54 PM |
This looks promising...
Quote:
Staff requests the Downtown, Aviation and Economy Subcommittee recommend City Council authorization to enter into Agreements with The Boyer Company (Boyer) for the private development and financing of a laboratory research facility on the Phoenix Biomedical Campus (PBC).
THE ISSUE
In January 2010, City Council authorized Community and Economic Development Department (CEDD) staff to issue a Request for Proposals (RFP) and to negotiate business terms for the private development of a laboratory and research facility on the PBC.
In June 2010, staff issued the RFP for a private research laboratory facility to be located on an approximately 24,000 square foot City-owned site located east of 5th Street between the TGen/IGC headquarters and Arizona Biomedical Collaborative (ABC) I facilities. Staff received two proposals in response to the RFP. The review panel, which included representation from the Arizona Board of Regents, the private development community and CEDD, unanimously recommended The Boyer Company.
In March 2011, a Letter of Intent (LOI) with Boyer was executed for the private development, financing, leasing and management of an approximately 150,000 square foot, six-story biomedical research facility. Because the City’s TGen/IGC headquarters facility is 100 percent leased, there is no existing opportunity on the PBC for companies like TGen, IGC, VisionGate and St. Joseph’s Hospital / Barrow Neurological Institute to expand downtown, or for new businesses requiring a wet lab building to locate on the PBC.
This project will meet that need and allow for bioindustry expansion in Phoenix. Additionally, the overall construction cost of this facility is anticipated to be in the $40 to $50 million range, creating approximately 400 to 500 construction-related jobs and up to 400 sustainable, high-wage biomedical jobs when the facility opens. Bioscience workers in Arizona earn an average annual salary of $57,360, about 36 percent higher than average private-sector wages.
OTHER INFORMATION
Terms of the LOI include the City leasing its property as described above for 50 years with a 10-year renewal option. Rent will be abated the first eight years, then begin at $40,000 annually, growing 10 percent every fifth year. During the initial terms, City revenues will be approximately $2.5 million and over $3.3 million if the option is exercised. In addition, the City would retain fee title ownership of the land, and the improvements would revert to the City at no cost upon expiration of the lease. As City-owned property, no property taxes would be assessed, though after the eighth year of the lease term, a Payment In Lieu of Taxes (PILOT) would be phased in, reaching $2 per gross square foot of the facility and increasing 10 percent every fifth year for the life of the lease.
At least 40 percent of the building must be research space, including wet labs for biomedical research. Boyer must provide the City with construction documents, evidence of financing and pre-leasing commitments by April 1, 2012 and construction is to commence by October 1, 2012. The facility must be open by July 1, 2014. If these milestones are not met, the City may terminate the lease and reclaim the property, subject to one six-month extension to finalize sufficient pre-leasing commitments.
This project will inject significant private capital onto the PBC, expanding the City’s economic base while creating hundreds of construction and biomedical jobs, as well as additional tax and rent revenue. The facility will be privately funded with no City financial assistance. Additionally, this development will be compatible with the campus as a whole, enhancing collaboration and complimenting adjacent facilities, like the TGen/IGC headquarters, ABC I and the Health Sciences Education Building.
RECOMMENDATION
Staff requests the Downtown, Aviation and Economy Subcommittee recommend City Council authorization to enter into Agreements with The Boyer Company for the private development and financing of a laboratory research facility on the Phoenix Biomedical Campus.
|
|