July 22, 2008

Palm Beach County, Fla., Commission to Vote on Donation for Research Group

By Stephen Pounds, The Palm Beach Post, Fla.

Jul. 22--The Palm Beach County Commission will vote today on a plan to give almost $87 million to the Max Planck Society in return for 135 high-wage jobs and a giant research partner for Scripps Florida.

The Munich, Germany-based research institution plans to build its first U.S. center, a 100,000-square-foot "bio-imaging" facility, just west of Scripps in Jupiter.

Max Planck operates 80 research centers employing 12,600 people in Europe, mostly in Germany, on a budget of $2.2 billion. It boasts 17 Nobel laureates since its founding in 1948.

While Scripps got its $190 million within two years of signing its contract with the county, Max Planck will have to wait a while longer for its money. It will get $39.4 million from the county in 2008, $15.6 million in 2011, $13.1 million in 2013, $13.4 million in 2015 and $5.3 million in 2017. All of the grant money is being financed through revenue bonds.

As much as $60 million will be spent on building construction; the rest is for operations, including $4.1 million for equipment alone.

"The $4.1 million, they'll get upfront, for the temporary facility," said Assistant County Administrator Shannon LaRocque.

For its part, the state came to an agreement in March with Max Planck for $94 million, and has disbursed $10 million from Florida's Innovation Incentive Fund.

Max Planck is still negotiating with Florida Atlantic University to obtain a 50-year lease for 6 acres of land on its Jupiter campus.

Under the deal, it must operate the research center for 15 years in Palm Beach County, with 70 percent of its employees remaining in the county for at least 10 years.

"The negotiations went very satisfactorily. It was very smooth," Max Planck President Peter Gruss said Monday. "There was a hurdle here and there, but it worked out well, and we look forward to getting the votes (today)." LaRocque said the county's negotiations were less bumpy than with Scripps two years ago because Max Planck's proposal didn't carry the political and environmental baggage that the Scripps deal did. Environmentalists successfully stared down Scripps on its first site selection, Mecca Farms, and a new site had to be found.

"By the time we got to Scripps (negotiations), everybody had had enough. It was so controversial. Scripps was very emotional," she said. "There was no emotion with Max Planck. It was very professional, a two-way discussion." Also in contrast to Scripps is Max Planck's commitment of royalties. Scripps made no royalties pledge at all, but Max Planck has agreed to spend 3 percent of its royalties on education programs in Palm Beach County for 10 years, and reinvest the rest in the local Max Planck institute for 20 years.

"All of Max Planck's royalties will remain in Palm Beach County," LaRocque said, unlike its normal procedure of giving a third each to the local institute, the scientists and the Max Planck parent organization.

Gruss said it was no easy decision to keep Max Planck's royalties in Florida and to commit part of them to school programs here. But it may serve as a carrot for commission approval.

"We had to think very hard. We were forgoing our organizational one-third," Gruss said. "The money will stay with the institute here to generate more stipends. Then, there's the 3 percent of royalties. We hope that will allow them to vote for it." In other provisions, Max Planck will be required to establish mentoring programs for students in grades K-12; start an internship program for high-school and community-college teachers; and hold a career day for middle- and high-school students.

It also must put in place hiring practices that strive to give preference to low-income county residents for jobs and implement a policy of spending up to 15 percent of its operating budget on equipment and supplies from local businesses.

Perhaps most important for economic-development officials, Max Planck must help recruit other biotechnology institutes and companies to move or expand here.

Scripps helped lure the Torrey Pines Institute for Molecular Studies and the Burnham Institute for Medical Research to Florida, but neither landed in Palm Beach County, preferring Port St. Lucie and Orlando, respectively.

"Palm Beach County will gain international exposure," said Kelly Smallridge, president of the Business Development Board of Palm Beach County. "Max Planck has agreed to be part of our marketing outreach. This is a role that they want to play, and it strengthens the economic return on this investment. Their name will open doors." In the meantime, Scripps has grown to 271 scientists and technicians at its temporary quarters at FAU, where Max Planck will house its scientists until its buildings are constructed. Scripps' permanent campus of three laboratory buildings is three to four months away from completion.

"We'll actually start moving in October, and it will take the better part of three months to complete the move," Scripps spokesman Keith McKeown said. "We should finish in early January." After the initial announcement almost five years ago that Scripps was expanding to Florida from its headquarters in La Jolla, Calif., the life-science business cluster is finally showing signs of growth, LaRocque said.

Scripps has spun off its first company, Xcovery Inc. A new biotech incubator owned by Alexandria Real Estate Equities has opened in Jupiter and found its first occupant, Cytonics Inc. And economic development officials are negotiating with an unidentified Melbourne agriculture-bioscience firm to relocate here.

"Max Planck wouldn't even have talked to us if not for Scripps," LaRocque said.


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