Monday, March 09, 2015

California's Stem Cell Agency Needs New Home by This Fall; Faces $1 Million in New Costs

The California stem cell agency isn’t quite at the stage of “Ain’t Got No Home,” the title of the immortal hit song from 1956.  But the search for a new roost for the research effort is intensifying.

And it will likely add another $1 million or so to the agency’s annual operating costs. 

The $3 billion agency now operates out of free digs in San Francisco in a gentrified neighborhood that was a tad gritty back when the agency moved in a decade ago. Today the area is much tonier. Even the Happy Donuts shop down the street (open 24 hours) has cleaned up its signage, and a chichi pizza parlor is located on the ground floor of the stem cell agency’s building.

Come next fall the agency will be moving out of its roomy offices that were built to its custom orders. No more free rent – a benefit valued at about $1 million annually by the agency’s auditor. Gone will be the free parking, a matter of great import in San Francisco.

The free office space came as the result of a $17-$18 million package put together by San Francisco to entice the agency to the city. 

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, is looking for about 12,000 to 18,000 square feet(see specifications list below). On Nov. 14, 2005, when the agency moved into its current space, it had about 20,000 square feet with 18 window offices, 17 internal offices and 19 cubicles, according to a CIRM document.  That was for about 25 to 30 employees. Those employees currently number in the mid-50s, not a large number to be handling $3 billion.

In December, the governing board’s Governance Subcommittee briefly discussed what the agency is seeking. The specifications call for a facility that could accommodate the meetings of its board of directors, which would be a major change. CIRM would like a room that could handle 50 to 75 people. Twenty-nine persons sit on the board. The space would appear to be large enough to handle normal public and staff attendance but fall short of the space needed for the few occasions when large crowds appear. 

Board meetings have generally involved rented conference rooms at hotels. The hope is that a meeting room within CIRM offices could defray meeting costs.

Office space costs have skyrocketed in San Francisco over the last several years, pushed upward by the booming tech industry. According to one office space expert, 12,000 square feet of Class A office space in the city of San Francisco could run as much $900,000 a year with additional parking costs of up to $450 a month per stall. If the agency wants 18,000 feet, the cost climbs to roughly $1.4 million.

Given that situation, CIRM has expanded its search to include cheaper locations across the bay from San Francisco, including Oakland, where California Gov. Jerry Brown has a home, and Emeryville, a city once known as Butchertown because of its slaughterhouses. Today Emeryville businesses include the Pixar Studios. CIRM was also housed in Emeryville in 2005 while it waited for its offices in San Francisco.

At the December governance meeting, Art Torres, vice chairman of the agency, said that the city of South San Francisco is also on the list of possible locations. Genentech has its headquarters there and sponsored a sign declaring the city as the “Birthplace of Biotechnology.”

During the Governance Subcommittee meeting, one board member, Al Rowlett of Sacramento, pressed for consideration of other cities. Torres, who was leading the discussion, rebuffed him, according to the transcript of the meeting. Torres said that the four locations are being considered because the staff lives in them or nearby. He continued,
“I would just hate to move to an entirely different new city and then people have to make very difficult decisions on whether they could do so or just leave CIRM. At this critical stage of our development, I would feel that would be a burden that would be very heavy for us.”
Torres also said he is working with the city of San Francisco to see if it can persuade landlords to ease rent or provide some other kind of support.

Randy Mills, CEO of CIRM, told directors in January that the office move could lead to some disruptions in its activities. The agency last week reported no major new developments in the office space search. In 2009, the agency considered the possibility of use of a nonprofit to own the office space, given the legal cap on CIRM's operational budget. However, that possibility has not surfaced publicly in recent years. 

For those who want to know more about the inimitable Clarence "Frogman" Henry, who wrote and sang "Ain't Got No Home," here is a link to his Web site.

Here is the list of specifications discussed by directors in December.
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