Jun. 30–Even the most ardent boosters of Portland’s proposed high-rise housing and research complex on the riverfront below Oregon Health & Science University say the city is unlikely to becomea national leader in biotechnology.<\/p>\n
But that doesn’t matter, they say. Companies specializing in bioscience will still become anchors of the complex — which is to be linked to OHSU by an aerial tramway — and bring thousands of high-paying jobs to the Portland area.<\/p>\n
“We can’t be the top,” said Portland Mayor Vera Katz, a fierce proponent of urban renewal funding to support growth of the biotechnology industry. “We don’t have the (biotech) history, we don’t have the venture capital, we don’t have the federal funding.”<\/p>\n
Others, however, think Portland will never attract or develop the thousands of jobs anticipated by local biotech boosters, even with OHSU’s massive medical research program as a draw. They say the city lacks some of the basic ingredients needed to make Portland an important biotech center.<\/p>\n
The debate gained significance this month when the Portland Development Commission, OHSU and Pearl District developer Homer Williams unveiled plans for the first phase of a massive riverfront redevelopment project in the North Macadam urban renewal district. That phase, which would include nearly 400 apartments and condominiums and up to 400,000 square feet of research and medical space, would be built on a 31-acre parcel just south of the Ross Island Bridge.<\/p>\n
Planners envision, eventually, a $1.7 billion project that includes 5,000 condominiums and apartments and more than 1.5 million square feet of research and medical space in North Macadam. Bioscience companies, combined with an expansion of OHSU, would anchor the project.<\/p>\n
The Portland City Council has scheduled a July 10 public hearing to consider public investments of $72 million over four years to help pay for streets, streetcars, sewers and an aerial tram to launch the first phase of development.<\/p>\n
Biotechnology is the combination of engineering and technology with traditional biology, the study of living cells and their molecular components. Bioscience includes biotechnology, medical devices, diagnostic tools and related technologies. Many people include bioscience when they use the term biotech.<\/p>\n
Joe Cortright, an economist with Impresa Consulting of Portland, agrees that Portland is not headed for the top tier. Biotech companies locate where there already are biotech companies, he said, and Portland has already missed that boat.<\/p>\n
A study he completed last year found nine top-tier biotech communities in the United States, including Seattle, San Francisco and San Diego. Portland wasn’t close to making the list. Cortright is among the most vocal of those who believe biotech will not bring economic salvation to Portland.<\/p>\n
“Our studies show not just that the industry is concentrated, but that it is becoming more concentrated over time,” he said. “The fact that everybody wants to be the next biotech Mecca says more about the herd instinct of the economic development fraternity than it does about the technology of biotech.”<\/p>\n
Ralph Shaw, a Portland venture capitalist, doubts that biotech is the answer for Portland. For one thing, he said, biotech is “incredibly cash demanding,” with huge investments needed before payoff begins.<\/p>\n
Furthermore, said Cortright, Portland officials err when they think biotech industry has the potential to explode in the next decades in the same way the high-tech industry did in past decades. Cortright says the biotech sector will grow far more slowly than the high-tech sector.<\/p>\n
“I think what is going on here is people are making a semantic connection between high-tech and biotech. The idea is that in the next decade, biotech will be for the nation what high-tech was over the last two decades. It’s not true.”<\/p>\n
It is true, however, the biotechnology industry has grown in recent years. The industry more than doubled in revenue from 1993 to 1999, when biotech companies directly produced more than 150,000 jobs and generated revenues of $20 billion. OHSU officials say the bioscience industry will grow by more than $100 billion during the next decade. If Portland is able to capture 1 percent of that growth, they say, that’s $1 billion.<\/p>\n
“We don’t think our success or failure should be measured by whether we are the leading bioscience center in the country, but by whether we are getting our fair share of what will be a growing industry,” said Steve Stadum, OHSU’s general counsel and the institution’s point man on North Macadam. “We want to get to the point where it is contributing to the economy. We think it is a reasonable bet.”<\/p>\n
Obstacles abound Stadum said the North Macadam project will succeed even if Portland does not become a biotech leader. He said housing and OHSU facilities will carry the North Macadam urban renewal district, even if private biotech doesn’t develop strongly.<\/p>\n
OHSU pressed for a $200 million state bond in 2000 to expand scientific research at the institution. That money, called the Oregon Opportunity Program, is being used to construct a 240,000-square-foot research building on OHSU’s main campus and to hire researchers and administrators. Passage of the bond, OHSU officials said, would ensure the addition of 6,000 jobs at the institution. OHSU now employs 11,500.<\/p>\n
Dan Dorsa, vice president of research at OHSU, said the major obstacles to development of biotech in Portland are a lack of local venture capital firms that back biotech companies, a lack of executives with biotech experience and a lack of incubator space for biotech companies to occupy.<\/p>\n
Portland venture capital firms are important because, Dorsa and others said, biotech executives need to establish relationships with financiers. Venture capital firms are more likely to invest in companies that are nearby because they are easier to monitor.<\/p>\n
A pool of knowledgeable biotech executives is key because the industry is notoriously risky. A talented executive who might not risk relocating to manage a biotech startup would be available to a local company.<\/p>\n
“We don’t have anyone near that level of knowledge that will lead biotech companies,” Dorsa said.<\/p>\n
Dorsa says if commercialization efforts in Portland focus on things such as medical devices and diagnostic tools — and not just on new drugs, which are enormously expensive to develop and take a decade or more to get regulatory approval — bioscience can play an important role in Portland’s economy.<\/p>\n
“What everyone in the country agrees on is the single most important factor in driving a bioscience sector is the presence of a well-funded research institution that can compete with the other top institutions for federal funding to carry out the research,” he said.<\/p>\n
Katz said the combination of undeveloped land near OHSU and the promise of an expanding biotech industry is too good for Portland to ignore.<\/p>\n
“We won’t be passing Boston and other (biotech) places in the country, but we are establishing our science and technology quarter,” she said. “It will be a center of excellence.” =<\/p>\n
—–<\/p>\n
To see more of The Oregonian, or to subscribe the newspaper, go to http:\/\/www.oregonian.com<\/p>\n
(c) 2003, The Oregonian, Portland, Ore. Distributed by Knight Ridder\/Tribune Business News.<\/p>\n","protected":false},"excerpt":{"rendered":"
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