Can 2 biotech hubs coexist? Seattle, Bothell attract different types of tenants

BOTHELL — Biotechnology and biomedical companies seeking real estate in the region have flocked to Canyon Park, a spot between Interstates 5 and 405 that is home to Icos, Seattle Genetics, Sonosite and others.

Roger Belanich, a property developer who was involved in Canyon Park's growth during the mid-1980s, remembers the site's transition from a rural zone to a biotech park near Bothell and his excitement at starting the county's biotech corridor.

"I always felt I was on a mission to help a company that might do something big, a company that might find a cure for cancer," he said.

But as the University of Washington and Paul Allen's company, Vulcan, break ground on six or seven biotech office buildings at the south end of Seattle's Lake Union, biotech firms considering a move to the state have more real-estate choices.

Real-estate agents and economic-development professionals in Snohomish and King counties say the Lake Union projects won't pit the counties against one another in the state's race to win more biotech business. They say the two biotech hubs appeal to different types of tenants.

"There's so much collaborative effort right now to make Washington state a biotech hub," said Ruth Scott, president of the Washington Biotechnology and Biomedical Association.

"When you look at Canyon Park, many of the companies are more than early-stage startups. They're more advanced."

Bill Neil, a broker who handles biotech real estate for Insignia Kidder Mathews in Bellevue, said: "Some people just have their eye on one area or another. People have unbelievable preconceived ideas about where they want to be."

He called Nastech Pharmaceutical's move from New York state to Snohomish County a "no-brainer" because the firm's chief executive officer had previously worked in Canyon Park. He said other companies, however, want to be in Seattle — and that he knows of one New York firm that would consider Snohomish County only if the wait for Seattle space was too long.

"The only reason they'd consider Snohomish County or Bothell is the time to get the space," he said, noting that he's aware of 100,000 square feet of available space in Canyon Park but that there's a wait for space in Seattle.

"If we market biotech, we talk about Puget Sound (as a region)," said Richard Chapman, vice president of corporate advisory services at the Economic Development Council of Seattle & King County.

"If we leave out Bothell, that's a huge chunk" of land.

About Seattle, Chapman said, "We're trying to pitch not so much the manufacturing side as research and development. We can't compete (with Snohomish County) on manufacturing on the Seattle side."

The South Lake Union projects will provide space for companies that need an urban corporate headquarters and proximity to the University of Washington — which is expected to lease 750,000 square feet of space there — and the nearby Fred Hutchinson Cancer Research Center. Merck and the Seattle Biomedical Research Institute have already signed on as tenants.

Vulcan will build nearby housing, and employees can live and work in the same area.

"Lake Union will be complementary to Snohomish County," said Michael Cade, vice president of development at the Snohomish County Economic Development Council.

"When it comes to Puget Sound, we view this as a region in the state where we can grow biotech. All those companies in Canyon Park are not going to leave and go to Lake Union."

Snohomish County, on the other hand, might be more appropriate for larger companies that are less reliant on relationships with the UW or the Hutchinson center.

The county offers cheaper real estate, a benefit for companies beginning the manufacturing process. Employees who already live in the county wouldn't have to fight Seattle traffic. In addition, companies in the county would be able to avoid an intellectual-property tax under consideration in Seattle.

"Snohomish County is obviously looking to draw tenants from King County," said Derek Heed, a senior vice president at Colliers International. However, Heed said, he believes that companies try to stay where they are, even as they grow.

Michael Martino, chief executive officer of Sonus Pharmaceuticals and board chair of the Washington Biotechnology and Biomedical Association, said more than half of the association's member companies originated through work at the Hutchinson center or the UW, and that those sorts of companies would likely want to work from Lake Union.

Yet Martino said his 38-person company, which has a 30,000-square-foot office at Canyon Park, hasn't been tempted to move to Lake Union.

Though the Seattle development is closer to the Hutchinson center and the UW, Sonus works with neither, and its employees rarely need access to Seattle-Tacoma International Airport.

"That doesn't hold up for us," Martino said. "Being 20 minutes away (from Seattle) doesn't make any difference to us."

Belanich said he owns 6 acres in Canyon Park where he'd intended to build a 100,000-square-foot office building in 2000.

"I'm hoping to still build a biomedical building here," he said. "There's extremely tough competition now."

But though he would prefer to see biotech firms choosing Snohomish County, he has a regional mind-set.

"It doesn't make any difference, macro-economically, where the companies go," he said.

Jane Hodges: 425-745-7813 or jhodges@seattletimes.com