Behind the deal: Mayo Clinic, ASU to lead development of biotechnology corridor in north Phoenix
Mayo Clinic and Arizona State University officials have been talking about building a biotechnology corridor in north Phoenix since at least 2013, and the project is now closer to fruition.
Mayo Clinic was the winning bidder in an Arizona State Land Department public auction, paying $139 million for a 228-acre parcel next to its Phoenix campus on Dec. 15.
Currently dubbed Discovery Oasis, this biotechnology corridor has been a long time coming.
But the timing is right, ASU President Michael Crow told the Business Journal.
“This becomes one of the most important sites on the planet — literally on the planet,” Crow said. “It becomes one of the most important sites for the future of health solutions.”
Dr. Richard Gray, who became CEO of Mayo Clinic Arizona in May 2019, said a lot of things have come together over the past several years to bring the project to this inflection point.
“When the Arizona State Land Department was ready to bring this forward, Mayo Clinic was ready to step in and try to acquire the land,” Gray said.
Gray said he intends to work jointly with ASU on this huge project that could eventually bring thousands of jobs to the area.
“While Mayo Clinic was the purchaser of the land and will help to drive all this forward, we have for many years been interacting with ASU and President Crow about plans for this and look forward to collaborating with the university ranked No. 1 for innovation on furthering innovation in health care on this land.”
Holding the project together
Back in 2013, when ASU and Mayo officials begin envisioning the project, the plan was for New York-based KUD International LLC to buy 225 acres of land owned and managed by the Arizona State Land Department to develop a $1 billion biotech corridor next to Mayo Clinic’s Phoenix hospital campus near 56th Street and Loop 101.
But when state land Commissioner Vanessa Hickman resigned in 2015, the state land auction was delayed, causing concern for KUD, which had already invested about $2 million into the effort.
“This is a scary moment,” KUD President and CEO Marvin Suomi said at the time. “We’ve spent a lot of money to not know whether we’re in purgatory, heaven or hell. Our question is how do we proceed and who do we proceed with?”
As the years wore on, KUD eventually stepped away from the project — but Crow and then Mayo Clinic Arizona President Dr. Wyatt Decker didn’t give up hope.
Decker turned his attention to a $648 million expansion to double the Phoenix hospital campus and pave the way for more than 2,000 high-paying health care jobs to add to its existing 9,013 employment base in Arizona.
Even when Decker retired in December 2018, he said plans were still in the making.
Time to ramp up
When Gray was named as Decker’s replacement, he was focused on the expansion project but maintained a commitment to the biotech corridor.
This time around, Mayo and ASU will lead the development, and will select a developer instead of the developer driving the project, Crow said.
“We’ll find the developers to work with,” he said. “Those developers will be working toward certain objectives as opposed to developers acquiring land to find a recovery for the purchase of land.”
Crow said he expects the project to begin moving forward quickly.
“Planning will accelerate into full tilt rapidly,” he said.
Earlier this year, four huge cranes graced the skyline over Mayo Clinic’s hospital campus for what morphed into s $748 million expansion project.
Part of that expansion includes a 150,000-square-foot, $131 million education and research building that is expected to break ground in the second quarter of 2022, next to ASU’s $80 million Health Futures Center.
The Phoenix life science sector is gaining national attention based on its strengths in research and clinical excellence, said Joan Koerber-Walker, president and CEO of the Arizona Bioindustry Association.
“Mayo Clinic’s commitment to our community and their vision for the Discovery Oasis will continue to drive the growth of Arizona’s life science and health care sector,” she said. “As Arizona’s biomedical sector continues to grow, there is a need to expand beyond the lab and engage with partners to move discoveries into development so that they can ultimately benefit patients. Mayo’s vision recognizes the need to expand bio-manufacturing capacity in Arizona and, with this investment, is laying a foundation for new opportunities in the future.”
Focus on collaboration
Gray said this project will be an investment over a long period of time that will continue to grow and mature.
“Some of this land we will need for future Mayo Clinic growth across all our shields of patient care, research and education,” Gray said.
Plans call for working with other partners from discovery science to bio-manufacturing on the campus, he said. There will be a lot of behind-the-scenes work in 2022 as partners and collaborators are selected, Gray added.
“We expect to see very strong growth within Mayo Clinic for many years to come, but through the partnerships we will expect there to be hundreds and perhaps someday thousands more really important jobs that aren’t even Mayo Clinic jobs, that are from our collaborators and partners; those that are working alongside us to produce those solutions in the future. We have a big palette to paint on over many years.”
The parcel extends from 56th Street to 64th Street, south of State Route 101.
“Right now, our plans are all around collaborations rather than selling any of the land or doing something like that,” Gray said. “We obviously are going to be working with developers and working with other companies. There will be a lot of different structures to how that may play out in actually locating people on this land.”
The goal, he said, is to create an ecosystem to produce new health care solutions and deliver those solutions globally.
There have been a number of biotech companies from around the world that already are reaching out to Mayo and ASU to become part of this new campus, Gray said.
“They really span from innovative medical research solution type companies to bio-manufacturing to medical device companies,” he said.