Chandler authorizes $5.7 million to establish bioscience incubator

September 25, 2009

By hammersmith

Call it Extreme Makeover: High-Tech Edition.

For five years, a former Intel Corp. facility in suburban Chandler has stood empty, producing nothing but dust and cobwebs. But next May, when the City of Chandler completes a $5.7 million renovation of part of the building, it will be reborn as the “Innovations Technology Incubator,” a bioscience and high-tech business incubator, one of the most important missing pieces in Arizona’s biosciences infrastructure.

Chandler’s plan, approved by the City Council Thursday, calls for the city to lease about one-third of the 120,000 square-foot building and retrofit the space into wet labs and research space to accommodate up to 30 startup companies.

Although the facility already has some of the industrial utilities typically required by bioscience companies, many other specialized features–such as redundant power supplies, security systems, and separate heating, air-conditioning, and exhaust systems for each laboratory unit–will need to be added.

Such amenities usually drive up lease rates substantially, and according to Arizona’s Bioscience Roadmap, bioscience startup firms find it exceptionally difficult to secure affordable, adequately equipped facilities. The Chandler incubator will remove that obstacle for its tenants; the city expects to charge around $18 per square foot per month, one-fourth the market rate, according to Christine Mackay, director of the city’s economic-development endeavors.

“Why would a city do this? Because we’re the only ones who can,” Mackay said in the Republic.

Chandler believes that the “Innovations” incubator will serve as a powerful economic-development tool that will decrease the failure rate of startup firms and increase the likelihood that they will generate jobs locally. A host of young high-tech companies would complement established giants in the city like Intel and Covance Inc.

“This is kind of an adventure, but it is important in terms of our future,” said Mayor Boyd Dunn in the Republic. “Incubator space like this is missing in the Valley, and we need it to bring in small companies and help them get their feet on the ground so they can grow and stay in the city.”

“Generally, these jobs are going to be well-paying. We want them to locate in Chandler,” said Pat McDermott, a Chandler assistant city manager, in the East Valley Tribune.

Saundra Johnson, executive vice president of the Flinn Foundation, which commissioned Arizona’s Bioscience Roadmap, applauded Chandler’s move.

“This is an exciting development that addresses head-on one of the most challenging gaps identified in the Roadmap,” Johnson said in the Republic. “For young bioscience firms to grow and thrive, they must have low-cost, fully equipped lab space to develop their technology and reach viability. The incubator is an important addition that will boost Arizona’s capacity to attract and retain innovative bioscience firms.”

Hired to assist Chandler in identifying, selecting, and supporting incubator tenants will be ThirdBiotech, a nonprofit organization focused on strengthening Arizona’s biotechnology industry. ThirdBiotech’s founder, Jeff Morhet, is also president and CEO of Scottsdale-based InNexus Biotechnology, Inc. Morhet will be moving ThirdBiotech’s offices into the incubator space.

Morhet said in the Republic that he was surprised at the “explosion of interest” among potential tenants, including from beyond Arizona.

Among potential tenants is the University of Arizona, considering locating a branch of the McGuire Center for Entrepreneurship at the incubator.

“It’s exciting to see the University of Arizona want to be in Chandler,” Mayor Dunn said in the Republic.

Chandler is not alone in adopting the incubator model; a variety of institutions have recognized the unique needs of the young bioscience sector that Arizona is nurturing.

In Flagstaff, the Northern Arizona Center for Emerging Technologies has been open since November, 2008. GateWay Community College in Phoenix, the City of Surprise, and UA are all actively developing incubator space.

And along with ThirdBiotech, organizations like Catapult Bio are stepping forward to provide the business education, mentoring, and technical assistance that can make the difference between success and failure for young firms.

Until recently, Chandler had considered locating the incubator at an alternative site, one formerly occupied by Motorola. But that 152-acre property, although located in the Price Road corridor, where the city is aiming to cluster high-tech companies, lacked some of the Intel facility’s advantages.

“It doesn’t lend itself as well to being split up into smaller spaces,” McDermott said of the Motorola site, in the Tribune.

For more information:

Chandler council approves 3 key development projects,” Arizona Republic, 09/25/2009

Chandler eyes new site for biotech incubator,” East Valley Tribune, 09/22/2009

Chandler set to provide lab facilities for startups,” Arizona Republic, 09/18/2009