Science City

Along San Francisco's waterfront, a gutsy developer and a world-renowned university are teaming up to create a one-of-a-kind biotech cluster
August 11, 2010

Something special is happening along San Francisco's southeast waterfront. Just south of PacBell Park, home to baseball's Giants, a daring developer and a renowned medical-research university are combining to create one of the nation's premier biotech R&D clusters. The 303-acre development, called Mission Bay, melds academic and private-sector life-science research labs, high-tech offices, much-needed apartment buildings, retail space, a hotel, and parks to form a virtually self-sufficient "science city" that may someday serve as a model for future biotech cluster developments everywhere.

"Most successful biotech clusters have three essential elements — a world-class university, nonprofit research institutes, and small biotech companies," says Sean McArdle, associate VP of development with Catellus Urban Development Group, San Francisco. "It's the small biotech firms clustering around the university that eventually attract the bigger firms."

What sets Mission Bay apart from other such biotech clusters are the added amenities like retail shopping, housing, and parks, to create a total environment where scientists can "live, work, play, and discover," in the words of the Catellus marketing materials.

"The biotech cluster in South San Francisco, for instance, has just one restaurant nearby, and you have to drive to it," says McArdle. "Within a small radius of Mission Bay, there are more than 150 restaurants and coffee shops."

The public-private development is the collective vision of Catellus, the city, and the University of California, San Francisco (UCSF). The 20-year master plan laid out by Los Angeles-based architect Johnson Fain Partners encompasses up to 7.6 million sq. ft. of laboratory, lab support, and office space; 6,000 subsidized residential units on 17 acres; 50 acres of parks; a 500-room hotel; a fire station; and a primary school.

All talk, no action

Founded in 1984 as the real-estate arm of Santa Fe Pacific Railroad, Catellus (then called Santa Fe Pacific Realty) acquired the 303-acre parcel from its parent company. Overrun with dilapidated warehouses and abandoned rail yards, the site was a remnant of the city's past life as a major industrial seaport.

Plans for Mission Bay were talked about for years, "everything from big-box retail to single-family housing," says McArdle. But it wasn't until 1996, when newly hired Catellus CEO Nelson Rising met with then UCSF chancellor Joseph B. Martin and San Francisco mayor Willie L. Brown, Jr., that the idea of using the land for a biotech park started to evolve. The university, with its huge employment base, was threatening to locate its new research campus outside the city. In a countermove, Mayor Brown asked Rising to donate 30 acres contiguous to 13 acres that UCSF held for a new biomedical research and teaching campus.

Rising jumped at the chance, knowing that Catellus would get a high-tech anchor to support a mixed-use complex. For the university, the city, and the developer, "it was a win-win-win situation," says McArdle.

UCSF's master plan for its new 43-acre campus at Mission Bay calls for 20 new buildings to be erected over the next 15-20 years, doubling the size of its current campus, with the potential of creating 9,100 new jobs.

"The university had been handcuffed from expansion for so long that once the land deal came through, money already in the [university's] coffers allowed for this explosion of activity," says McArdle.

Phase one, which broke ground in 1999, consists of seven structures, including a behavioral science building by Cesar Pelli, a community center by Ricardo Legoretta, and a cancer research building by Rafael Viñoly — "architects the private sector can't afford," says McArdle.

"It's just amazing how the university has managed to put together enough money through donations and campus funds to build these enormous buildings," says William L. Diefenbach, principal-in-charge with Detroit-based SmithGroup, design architect for the $223 million, 434,000-sq.-ft. Genentech Hall, the first structure to be completed at Mission Bay. "It was initially thought that the first phase would only be three buildings, and they've been able to expand it to seven. It's outrageously successful as a development."

Other structures under construction as part of phase one of the UCSF campus include a $100 million, 152,000-sq.-ft. headquarters for the California Institute of Quantitative Biomedical Research, designed by Bohlin Cywinski Jackson, Pittsburgh; a $112 million, four-building housing complex for 750 students, designed by Skidmore, Owings & Merrill, Chicago; and a parking/retail mixed-use structure, designed by UC Berkeley professor and San Francisco architect Stanley Saitowitz.

While construction on UCSF's side of the block is moving ahead at a torrid pace, the slow economy has put a damper on much of Catellus's plans. Of five million sq. ft. of high-tech lab and office space and 6,000 housing units entitled for the development, only 1,000 apartment units and 460,000 sq. ft. of labs and offices are committed at various stages of construction.

"It's really just a drop in the bucket at this point," says McArdle. "But we believe this is a 20-year project, and we're only in year five."

The company's first planned office campus, a nine-acre site along the southeast side of Mission Bay, has room for 1.3 million sq. ft. of office space. The only taker so far is clothing retailer Gap, which is leasing a six-story, 283,000-sq.-ft. building from Catellus.

The office space doldrums at Mission Bay are no surprise, given the horrid market in the entire Bay Area. Catellus has wisely avoided building speculative office buildings, instead offering land-lease, land-sale, and build-to-suit deals to prospective commercial tenants.

Adjacent to the UCSF's new research campus, Catellus's own nine-acre life-science campus eventually will accommodate 950,000 sq. ft. of laboratory and research space in five buildings. The only taker so far is the J.D. Gladstone Institute, a nonprofit research institute with close ties to the university. The institute will consolidate 100,000 sq. ft. of offices scattered throughout UCSF's existing campus into a five-story, 180,000-sq.-ft. lab facility designed by NBBJ Architects, Seattle. The land was purchased from Catellus.

Two additional laboratory buildings — a two-story, 85,000-sq.-ft. facility and a five-story, 155,000-sq.-ft. lab — have been designed and are awaiting tenant signatures.

Catellus has had its share of interested biotech and pharmaceutical companies and organizations, including local genomics research firm EOS. However, all besides Gladstone have opted for locations outside of the city. Still, McArdle remains confident that transactions will start to solidify as the first phase of the UCSF campus nears completion.

"The key [to a successful biotech cluster] is to be tied with a university whose heart has been beating for 20 years or more," says McArdle. "We're essentially building a university campus from scratch, trying to attract biotech companies to a heart that is just now starting to beat."

The residential and retail components have fared much better, due mainly to San Francisco's outrageously expensive housing market. Six projects are either completed or under construction, including a $295 million, 595-unit high-rise apartment building nearing completion. Three of the developments incorporate retail and office components on the bottom floors. Tenants include Starbucks, Safeway, and Borders Books.

While Catellus remains years away from realizing its lofty vision of creating the next great science city, where corporate and academic worlds meld in the name of creativity and innovation in research, McArdle acknowledges that realizing such a dream will take time.

"What we're selling here is a lot of dirt and vision," he says. "We're in this for the long haul."