12.14.10 | Thomas Lee

Will God save the Elk Run BioBusiness Park project in Minnesota?

“There are two things that we know about the universe,” Abraham Algadi said. “We can only control the things we can control. The rest, we leave to a higher power.”

Algadi is not a priest or philosopher, at least professionally. Algadi, the city administrator for Pine Island, Minnesota, was referring to the fate of the much maligned, often delayed Elk Run BioBusiness Park.

You really can’t blame Algadi for appealing to the Almighty. Four years after Tower Investments floated the idea of a medical device/biotechnology mecca creating hundreds of jobs in rural Minnesota, the only thing Pine Island has today is construction equipment and some dug-up dirt. A $1 billion fund from San Francisco investor Steve Burrill has yet to materialize. Tower says it’s signed up tenants but has not said who they are.

Tower has delayed (again) construction of the first building to March 2011. But does it really matter? There’s already been plenty of ink spilled (especially from this reporter) about the wishful thinking, the lack of accountability, the broken promises, the missed deadlines.

No, at this point, we should ask ourselves: what’s Plan B?

And that’s the real problem. There is no Plan B. It’s biotech or bust.

“Given the money and time that has [gone] into this project, the only thing we can do is wait,” Algadi said.

Giving up now would be a waste of money, said Rep. Tim Mahoney (D-St. Paul), the former chairman of the now defunct House Biosciences and Workforce Development Committee. Minnesota already has spent nearly $2 million in infrastructure improvements for Elk Run. Another $30 million-to-$40 million in federal highway money and state bonds will build an interchange off Highway 52.

Reasonable people can disagree, but I suspect that face saving, not economic wisdom, is what’s driving Elk Run now. No one wants to admit failure. After all of the posturing, money and effort expended these past few years, we gotta build something.

And something will be built. It just won’t be anything remotely near what Tower and Burrill originally sketched out. A few medical/biotech companies might even move in, though no one outside Tower and the BioBusiness Alliance of Minnesota really knows.

Algadi sounds like he doesn’t even want to know. “As long as it’s not a coffee shop or something like that,” he said.

As long as it’s not a coffee shop? Boy, we’re setting the bar r-r-r-e-a-l-l-l low, these days.

Elk Run has been a major distraction, said former Sen. Kathy Saltzman (D-Woodbury), a major architect of the state’s new $60 million angel investment tax credit.

Instead of focusing on more promising, practical economic development projects, “we’re wringing our hands every time Elk Run is delayed,” she said. “Was Elk Run ever going to work?”

The only one who knows the answer to that question does not live among us mortals.

And He ain’t talking.

Thomas Lee

Thomas Lee was the Minnesota Bureau Chief for MedCityNews.

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Tags: Elk Run BioBusiness Park, Kathy Saltzman, Minnesota, Steve Burrill, Tim Mahoney, Tower Investments

Comments Post a comment

Hello Tom:

I think I was the one talking to you on the phone today and not your imagination. You obviously either do not understand the simple development process, the scale of the project, or the resources it takes to get something like this off the ground. OR you deliberately chose to ignore the facts that I shared with you. You left out an important part and that is this project is a go despite you speculations from the sidelines. This project builds on the medical and bio-tech knowledge base that we have in Minnesota, this project is NOT a McDonald’s fast food joint. I mentioned to you even building a McDonalds (something we have replicated in this country tens of thousands of times) still it takes over three years or more from inception before you could see anything. I mentioned other important facts to you such as; Tower donated 260 acres of land to the State of Minnesota for FREE. Tower as of today is the largest investor in the project to the tune of tens of millions more than what the State of Minnesota invested in it. You under the guise of your title as a reporter chose to ignore all that to fit the one outcome you so badly want to see. It is unfortunate that some within the Great State of MN that often decries the heavy burden of doing business in the state want so bad to drive away investments from the state. It more unfortunate in my eyes to have some like you who listen to the whole story but chose for whatever god forsaken reason to tell one half. The half that fits in their little minds.

Comment by Abraham Algadi — December 14, 2010 @ 5:48 pm

I am president and ceo of Tower Investments. An incredible amount time, money and professional expertise has been spent on this project. We have massive support from public officials – why, because they see the tremendous addition to the community with a bio-tech park in their community. Yes, timetables have been delayed and Tower has been under serious confidentiality agreements with prospective users and tenants. if you believe that there are not seriously interested parties to be part of a new bio-tech park 12 miles from Mayo and less than an hour to Uof Minn, you are badly mistaken. This is a multi-year project. The support from the constituients and stakeholders has been overwealming. Frankly, if the public listened to your negative reports, there would be no growth in SW Minnesota along the line of bio-tech, a very strong field. We have continuous meetings with top experts in the field, and the stars must align, size, type space, financing, timing and negotiations over the past 3-4 years in Elk Run. It is my expectation that, unless your goal is roadblocks so you can “i told you so”, why you try to try to support a potential bio-tech park with prospectively several thousand workers over time, then if i were you i would try to help the project, not sandbag it with untrue facts and toal speculation on your part. Join our groups of hundreds that are enthousiastic about the future, In a perfect world, we have the precise space of Stanford Research Park in Palo Alto, which took years to develop. Rather than try to tear Elk Run down (which accomplishes nothing for the citizens), whi don’t you take a common courtesy approach to the hard working developers and stakeholders that have worked tirelessly for several years, and give the some slack.

Comment by steve marks sr — December 15, 2010 @ 3:51 am

if you think we are neophites trying to create something out of nothing, i suggest you review our websites: http://www.towerinv.com and burrill company. burrill is worldrenowned and we are extremely fortunately that he has taken a serious likeing to this project. Burrill travels worldwide continually, just returning from the middle east, russia and south Korea – you check his bio before you throw him under the bus in your narrative. Don’t pass us off as lightweights with no credibility. So it takes longer to get a biotech park right, so be it, would you prefer to run Elk Run off and go back to corn fields? Have you ever funded and managed such an endeaver. You have embarassed us both by your article. This is ludicrous and i feel you owe Steve Marks and Steve Brurrill an apology. This project may or may not succeed, but wih the team and support in place, it is likely to succeed, which is going to make you look like an ass.

Comment by steve marks sr — December 15, 2010 @ 4:04 am

Thomas,

I am disappointed, but not surprised, by Mr. Algadi and Mr. Mark’s comments. Unfortunately they are reflective of the typical reponses of the developer for this project.

These appear to be the facts:
1. A developer bought a bunch of land and stated they would build a large biotech development several miles from the nearest town (no infrastructure, etc.).
2. The developer had apparently never done anything like this before so after a couple years they recruit a known biotech expert.
3. The expert stated they had a “billion in a pile” (Post Bulletin). Subsequent reporting showed this was not the case.
4. Tens of millions of dollars in taxpayer subsidies have been requested and/or obtained by the developer (TIF district, bonding bill(s), MnDOT, DEED, etc).
5. The developer has stated for years that they have tenants that they can’t discuss and although there are 4 journalists working the beat (Finance&Commerce, MedCity News, MPR, Star Tribune) none have written anything that confirms this claim.
6. The developer has stated for years that the University and Mayo Clinic are involved but there is still no published evidence to support this claim.
7. Investigative journalism by Finance&Commerce revealed improper activity by the developer, city council, etc. that called into question the integrity of the development.
8. A recent city survey showed only 24% of residents agree that they know everything they want to know about the Elk Run development, suggesting the overwhelming majority of residents want to receive more information.

The developer hasn’t built anything, repeatedly missed deadlines, all while asking for more taxpayer money and extensions. Then when someone (citizens, public officials or reporters) question the status of the development, they label them “an ass”.

As a taxpayer I am sure glad to have Thomas Lee looking out for my best interest. Keep up the good work!

Anon2

Comment by Anon2 — December 15, 2010 @ 1:06 pm

I thought objectivity was a basic tenet of news reporting. I see none of that here.

Comment by Jane Citizen — December 15, 2010 @ 1:10 pm

Anon 2 you are a coward. if you have an ounce of decency you will at least state you name other wise you are yelling FIRE in a cowded theater.

Comment by Abraham Algadi — December 15, 2010 @ 1:32 pm

Mr. Marks,
The bio sicence building in downtown Rochester right next door to the Mayo complex is half empty. Do you really think you are going to have more sucesss 15 miles away. Try to get grip on reality. I think you might want to try using spell check also.

Comment by farmer Bob — December 15, 2010 @ 6:01 pm

Farmer Bob, you are incorrect. The BioBusiness Center in downtown Rochester is not half empty. Titan Development, St.Scholastica and Think Bank are moving in to the TIF funded space, which should fill that space nicely.

Comment by Melman — December 15, 2010 @ 6:17 pm

Love this story. What facts is Mr. Algadi concerned haven’t been covered by you here or previously? That an interchange doesn’t require 260 acreas – only about 25? Are the 260 acres all owned by Tower? Or did they include some of the Elmer and Judy Stock property that Tower project manager Geoff Griffin brokered without a license while representing both buyer and seller for a $382,000 fee? You remember – the property they had to buy back at a Sheriff’s sale after Tower failed to pay them for their property?

The interchange application promised 495 high paying biotech jobs in the first year. MnDOTs Terry Ward said the interchange required “significant progress” on a building and Burill’s $1 billion fund. Later that was modified to 182 jobs and a ground breaking party. Now, it requires?? a promise for something in the future. Mr. Marks- did you forget that Tower said there would be a building under construction in 2007, 2008, 2009 and 2010. No one forced Tower to say that, these were your own self proclaimed deadlines.

What part of this project “is a go”? The part funded by tax payers. Mr. Mahoney – more retail space than the Mall of America and more office/lab space than 2 IDS Towers??? Really?? You bought into that?? According to the DEED grants administrator, if Elk Run never gets built, this would not be the first MN tax payer funded sewer and water extension to no-where. You think we should also build the Chronic Wasting Interchange? It was a waste of money before the first few million in tax dollars. Stop the bleeding now.

Mr. Marks – are you looking for an apology for you or Steve Jr.? I read Burill’s bio and also heard him speak in person. I was treated to the following Burill gems: we should all be micro-chipped; death will become optional; biotech will solve all the world’s major problems; a dead patient is a cheap patient; Americans are too hung up on data privacy – we should publish all our medical records on the internet.

I think Mr. Lee’s scepticism is more than justified. Pine Island, MnDOT, Mahoney – when you’re in a hole stop digging.

Comment by King Julien — December 15, 2010 @ 9:22 pm