Sunday, February 06, 2005

CIRM Landlord Says It Linked to Chiron

The California stem cell agency's new landlord, Wareham Development, says it has links to Chiron Corp., one of whose founders is vice chairman of the state stem cell agency, Ed Penhoet.

The relationship to Chiron is touted on Wareham's web site and was discovered as part of research by the California Stem Cell Report.

Wareham's web site, on its "about" page, says, “Our history of fostering the newer, smaller, incubating company is exemplified in our relationship with Chiron Corporation, which began in the 1980s when we became one of Chiron's first landlords.”

Robert Klein, chairman of the California Institute for Regenerative Medicine, said last week, however, that Wareham “is not connected to him, to any committee member or to any entity that might benefit from the stem cell grant money,” according to a report by Terri Somers in the San Diego Union Tribune.

Penhoet sits on Chiron's board and owns more than $1 million in Chiron stock, according to filings with the state.

While the statement on Wareham's site appears to indicate there is some sort of current financial link between it and Chiron, that could be marketing rhetoric based on past landlord-tenant relationships.

Nonetheless it seems likely that top management at Chiron, which is based in Emeryville, and Wareham, located across the bay in San Rafael, have an ongoing connection, given the Internet display of their history.

CIRM announced its decision last week to move into a Wareham site this coming Friday in Emeryville in the East Bay area of San Francisco. For the first seven months, CIRM will pay no rent on the lease of 7,416 square feet of office space. After that it will pay market rates on a month-to-month basis, according to a report by Judy Silber in the Contra Costa Times. Another report in the San Diego Union Tribune says, however, the rates will be below market. Furniture and building improvements will be also provided free, according to the San Diego Transcript (no link available).

The decision to house the agency temporarily in Emeryville does not mean that Wareham or Emeryville will have an edge in the tussle for the permanent headquarters, according to CIRM officials.

However, inertia can always play a factor in relocation decisions. It is time-consuming and expensive to move. Beyond that, Wareham has a track record with state agencies and should be comfortable in dealing with CIRM officials and with the state's legal requirements regarding office space.

The suitors for CIRM are waging an energetic courtship. San Diego is considering a $5 million pool to help with the “moving, housing and other costs” to bring stem cell super stars to its area, according to a report by Somers in the San Diego Union Tribune. Increasing the density of top researchers presumably would make the area more attractive as a headquarters location as well.

Something along those lines is likely to be offered by other competitors, given the extreme housing costs in California, which are among the highest in the nation. In fact, San Diego was recently ranked as one of the most least affordable places in the nation to buy a home. The Bay Area is not much better.

Klein and other CIRM directors have made it clear they are expecting major incentives from cities seeking the headquarters, which will house up to 50 employees. Likely to play a significant role as well are the preferences of the top candidates for the CEO position at CIRM (see the previous item on this blog called "CEO Reality" Jan. 27). Selection of that person is also underway as well.

So far the following areas have been mentioned in the media as potential locations for the headquarters: San Francisco, San Diego, San Jose, Los Angeles, Sacramento, the Central Valley and Riverside County.

The agency is working rapidly to decide on the location. It had plans to issue an RFP this week and make a selection next month.

Cities are keeping the details of their bids confidential lest they tip off competitors. But some information has emerged.

Here is a look at what has surfaced.

San Francisco – The package focuses on Townsend Center, a building at 650 Townsend St. owned by Bernard Osher, according to a report by Daniel S. Levine in the San Francisco Business Times. He said Osher contributed $250,000 to the Yes on Prop. 71 campaign. California State Sens. Carole Migden, Don Perata and Jackie Speier and U.S. Sen. Diane Feinstein support either the Bay Area or San Francisco, according to Levine.

San Diego – Few details of the San Diego proposal have emerged except for the $5 million fund plan.

Sacramento – The city is offering 15,000 square feet of space at no charge for a certain period in a building on the Sacramento River in Old Sacramento, close to the state Capitol, according to a report by Dale Kasler in The Sacramento Bee. Discounted rates would apply thereafter. The building at One Capitol Mall is controlled by the Tsakopoulos family, which is very well connected in Democratic politics.

Little has been reported about bids by other areas.
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