Tuesday, January 20, 2009

WBJ: ARE Pulls Plug on GMU Lab Deal

WBJ has a story in its most recent edition about the lab situation at GMU...

Friday, January 16, 2009

Developer drops plans for George Mason University lab space expansion
Washington Business Journal - by Vandana Sinha Staff Reporter

One formal request for proposals and several months of negotiations later, George Mason University finds itself right back where it started — with no new available lab space on the horizon.

The project’s lead developer and winning bidder, Alexandria Real Estate Equities Inc., unexpectedly pulled out of discussions about a much-needed lab expansion at GMU’s Prince William County campus, according to university officials.

The parties had been negotiating the terms for a contract that would have added 30,000 square feet of wet labs to the university’s depleted supply.

The project — a coup for Prince William County — also would have brought an extra 50,000 square feet of speculative lab and incubator space to the county’s otherwise slim pickings for biotech startups.

GMU said Alexandria Real Estate cited the worsening economy when it backed away from the partnership before the papers were signed. Now the anticipated 2010 finish line for the lab building has been stretched out by at least two years. Alexandria Real Estate officials declined to comment.

Like most real estate companies, the Pasadena, Calif.-based life sciences developer felt the effects of the crumbling real estate market. It disclosed earlier this month that its chief executive officer would take a 33 percent pay cut for this year.

“We were caught by surprise by the decision,” said Vikas Chandhoke, dean of GMU’s College of Sciences. “Now we have put everything back on the drawing board.”

High up on that drawing board are the other bidders who answered the university’s request for lab proposals in late 2007. Seven developers submitted responses, five in and around the desired Innovation@Prince William Park.

GMU will also appeal to the county and state to help back a lab expansion, though that is likely to be a rocky path, thanks to mounting multimillion-dollar budget deficits.

Although GMU and Alexandria Real Estate had not arrived at a total cost estimate for the project, the university said its portion would roughly cost $300 to $400 per square foot to build out, totaling up to $12 million for the 30,000 square feet.

Prince William County officials have said they need new, smaller pieces of lab space to attract biotech companies otherwise drawn to Montgomery County’s lab-heavy mecca.

Prince William lost one GMU spinoff, Theranostics Health LLC, to Rockville in 2007 for that reason. And a second, Ceres Nanosciences LLP, is being temporarily squeezed into a GMU research building in Innovation park until it can find a permanent home.

A minimum two-year delay for new lab space won’t help the county’s efforts.

“Having wet lab space available is good for the community,” said Jason Grant, a spokesman for Prince William County’s Department of Economic Development. “How the time frame affects that will be speculative. Are there opportunities that we’d be missing out on because of that? We don’t know.”

GMU worries about stunting its research programs while it waits for new lab space.

University officials will be able to muster roughly 8,000 square feet of temporary lab space for their 40 scientists while new building plans are drafted, but Chandhoke said those are only short-term fixes to a crunch created by a doubling research budget and 120 percent capacity at GMU’s 45,000 square feet of lab space in Fairfax and Manassas.

“Our needs are real. They’re getting more acute,” he said. “In the long term, there is really no way to resolve this thing without having new additional space. The longest we can wait is probably two years by these measures we’re taking. But again, the whole growth is going to be stymied.”

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