Biotech park group restructures with name change, revised plan

Houston Business Journal

A new biotech incubator is part of a revised business plan for BioHouston, which is revamping itself as it heads into the new year.

Formerly known as the Southeast Texas BioTechnology Park, BioHouston unveiled plans in February 2001 for a $633 million biotech park to help develop Houston”s life sciences industry. A coalition of Texas Medical Center institutions, biotech companies, professional organizations and government entities announced plans for a 64-acre complex that would encompass 15 biotech buildings over the next 20 years.

John Walsh, BioHouston”s president, says the non-profit organization is now considering establishing an incubator for start-up companies in addition to the biotech park. Executives are looking at leasing 20,000 square feet inside an existing building, and esta lishing smaller lab spaces for rent. “There”s a real shortage of low-cost laboratory space for startup companies,” Walsh says. “There are several buildings we”re looking at.”

Earlier plans to purchase land for the biotech park have not come to fruition, so the real estate component of the project is now being thought of as an association of property owners, Walsh says.

BioHouston is still trying to buy 18 acres near the Texas Medical Center that contain two military reserve centers. However, the remainder of the 60 or so acres will continue to be owned by The University of Texas M.D. Anderson Cancer Center and the University of Texas Health Science Center at Houston, he says.

Any entity that wants to construct a facility in the biotech park would have to agree to certain deed restrictions, roadways, architectural designs and common standards, Walsh says.

“It would have the appearance of, and function as, an integrated park,” he says.

M.D. Anderson has already begun construction on the first building – a 127,000-square-foot structure costing $33 million. Several other buildings are under discussion, Walsh reports.

BioHouston officials are busy establishing a new corporate structure for the organization.

Bruce LaBoon will take charge of BioHouston, replacing E. Ashley Smith as chairman of the organization”s board. The BioHouston board elected LaBoon on Nov. 27, and he will start his term during the first quarter of this year. LaBoon, a partner with the law firm of Locke Liddell & Sapp, is also the outgoing chairman of the Greater Houston Partnership.

Smith, who is president and CEO of TIRR Systems, was recently appointed by Gov. Rick Perry to head a state commission on science and technology. That appointment has the former state legislator spending one day a week in Austin, Walsh says.

BioHouston is in the process of electing a new board of directors for its corporate structure. Half of the 20 board members are from academia and the other half are businesspeople.

The corporation itself consists of members and associates. Members are non-profit entities like universities and medical institutions, while associates are for-profit participants, Walsh says.

BioHouston currently has 18 members and 30 associates, with more expected to be added in the future. All participants will pay dues to fund the organization”s $525,000 in annual estimated operating expenses, Walsh says. The amount of annual dues required will vary depending on the size of the institution.

The members and associates have contributed more than $300,000 to the biotech park over the last 20 months, Walsh says, in amounts ranging from $2,500 to $25,000.

“They all provided funding to defray expenses of getting it to this point,” says Walsh, who estimates an additional $500,000 was donated through pro bono services.

The biotech park seems to be aligning itself more with the Houston Technology Center these days, but officials say the two organizations were connected from the start. In fact, a 1999 study conducted for HTC suggested that separate “accelerators” be established for the life sciences and space sciences industries, Walsh says.

“We”re working almost hand and glove with HTC,” Walsh says. “We”ll actually be located in their building.”

Paul Frison, HTC”s president and CEO, says his job is to help accelerate the business side of technology. The specialized groups, such as BioHouston, will focus on acceleration in their particular fields.

“We”re not the scientists. We don”t have the laboratories,” Frison says. “It was necessary for the medical center to come up with the incubation of the technology.”

BioHouston”s goal is to assist tech start-up companies; develop a data base to document Houston”s biotech companies, resources and research; and promote Houston as a good place for other companies to set up shop.

Another priority, Walsh says, is to keep Houston”s four publicly-traded biotech companies from leaving town.

“That”s a very important part of what we”ll do,” he says. “We have basically lost a lot more companies formed here than we”ve kept.”

BioHouston wants to develop tax abatements, low-interest loans and various financial incentives that are currently available in other states that cater to biotech companies, Walsh says.

“You have to tailor your financial incentives to fit their needs; to be competitive with California, Michigan, North Carolina and everywhere else,” Walsh says. “Lots and lots of states have very progressive approaches to it.”

The city of Houston”s financial incentives will have to be modified, he says. They are structured around natural resources, but need to focus on intellectual property.

And Smith, BioHouston”s outgoing chairman, will be able to help make some necessary changes to state laws that will help these biotech companies, Walsh says.