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High Tech Edges Out Biotech in Mission Bay

Before it even had a chance to grow up, San Francisco's nascent life sciences hub is being pushed out. 

 

Back in the Pleistocene—2005, to be exact—Mayor Gavin Newsom led a delegation to Fresno, a backwater to which he likely had to bring his own L’Oréal hair gel. His aim was to persuade the California Institute for Regenerative Medicine, a voter-created grant-making agency that doles out millions of dollars in biotech funding, to follow him home.

While blithely interrupting the chairman of the hearing at least twice, our former mayor played up San Francisco’s international laurels, its superior transportation, and the well-larded gift basket that he would lay at the biotech institute’s feet: 46,000 square feet of labs “unencumbered by federal restrictions, at our own San Francisco General Hospital”; 2,600 free hotel rooms; seven conference facilities. “We’re sitting here to guarantee you not only the convention and visitors’ bureau status as it relates to access to these, but we have our Moscone Center,” Newsom continued. “We have Bill Graham Civic Auditorium, our own City Hall. And, most importantly, the international airport—SFO—will give up its conference facilities as you engage in trying to get people in and out of the city in an expeditious manner.”

Sold. The CIRM set up shop, rent-free for 10 years, across the street from the ballpark on the edge of Mission Bay. Its arrival was heralded as the dawn of this aspirational neighborhood’s transformation into the Detroit of biotech. To an extent, it was: San Francisco’s inventory of biotech companies, per the Mayor’s Office of Economic and Workforce Development, surged from a couple in 2004 to some 230 today. According to the California Life Sciences Association, a biotech advocacy group, around 107 are housed in Mission Bay.

But come next year, the CIRM won’t be among them—it’ll have moved across the bay to Oakland, where it will pay less than half the rent it would have shelled out in San Francisco. “We’re the canaries in the coal mine,” says Jeff Sheehy, a longtime CIRM board member. “That’s the fundamental change taking place in this city. We’re selling out to the highest bidder.” And right now, the highest bidder is, reliably, a high-tech company.

In the not-too-distant future, Uber will be erecting a gargantuan new office complex in Mission Bay (two, in fact, connected by sky bridges). With a partner, it bought the lots for $125 million from Salesforce, which was land-banking here. “Nobody saw tech coming. Nobody saw Uber coming,” says David Prowler, project manager for Mission Bay’s redevelopment under Mayor Willie Brown. “Nobody even saw cell phones coming.”

Not even two decades ago, the documents used to map out Mission Bay’s future, Prowler notes, were saved onto floppy disks and disseminated by bike messengers. Now, however, the established tech fiefdom of SoMa is inexorably expanding its borders south. Successful tech companies have cash on hand and—unlike biotech firms—don’t have to spend billions of dollars and wait a decade to garner FDA approval. Robert Sammons, Northwest regional research director for the real estate services firm Cushman & Wakefield, notes that the commercial vacancy rate for Mission Bay stands at an unambiguous 0.00 percent. The Uber site, he continues, was originally earmarked for biotech. Uber will join high-tech neighbors like Cengage Learning and Cisco.

The fact that high-tech firms, many of which create inane apps and thrive financially by reducing jobs to gigs, are supplanting biotech firms, which cure disease and provide scientists with live-in-the-city-caliber jobs, is profoundly unsettling to biotech stalwarts. “Free enterprise is free enterprise,” says Bill Rutter, cofounder of biotech firm Chiron. “But I believe, personally, that the city should pay attention to its sources of greatness and do whatever it can to foster them. The city is small. It can’t do everything. It ought to do a few things well.”

But serving as a cradle of high-tech firms is something that San Francisco does exceedingly well—so well, in fact, that latecomer firms have begun seeking their cradle in the hinterlands of Mission Bay.

The good news is that the biotech firms they displace, unlike so many entities squeezed out of this city, often land on their feet—and not far away. “It’s certainly true that the life-sciences community has options,” affirms Sara Radcliffe, president and chief executive officer of the California Life Sciences Association. Her outfit is headquartered in South San Francisco—which, for all the talk of Mission Bay as the hub of American biotech, sports around 125 biotech firms to Mission Bay’s 107. And, as Radcliffe points out, “there’s always Oakland.”

  
Originally published in the November issue of
San Francisco

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