County's downturn could have upside in luring biotech firms

By Jeff Ostrowski Palm Beach Post Staff Writer

As Palm Beach County works to build a biotech hub, labs run by Scripps Florida and Max Planck Florida are the main attraction for CEOs looking for a place to call home.

But those two research institutes aren't the only draw. Palm Beach County also can boast of being a cheap place to do business, at least compared with other biotech hubs.

The Boyd Co., a location consulting firm in Princeton, N.J., calculated the costs of running a biotech business in 35 metro areas in the U.S. and Canada.

It found annual costs ranged from $18.8 million in New York to $12.6 million in Sioux Falls, S.D. Palm Beach County ranked 23rd, at $14.1 million, just behind Vancouver, B.C., and just ahead of Cincinnati. Boyd's estimates are based on the bill to operate a 60,000-square-foot facility with 150 workers, including scientists.

"In the corporate relocation field, costs are ruling the process," said Jon Boyd, head of The Boyd Co. "Palm Beach County shows very well."

Palm Beach County as a cheap place to operate a company?

That's a novel notion, especially after the costs of living and doing business in Palm Beach County inflated during the real estate boom.

But those costs have deflated during the bust. That means economic boosters once again can tout factors such as the lack of a state income tax and home prices that are cheaper than in the Northeast and California.

"I was pleasantly surprised," Mike Jones, president of the Economic Council of Palm Beach County, said of the study. "With the downturn in the economy, the reduction in housing prices, the reduction in rents across the board, we're looked upon more favorably."

But do costs really matter in the biotech world, where pricey areas such as San Francisco, Boston and San Diego are the bustling hubs that cheaper rivals hope to emulate? Maybe, maybe not.

When the leaders of Envoy Therapeutics decided to locate their start-up company in Jupiter, costs were a secondary concern, said Chief Executive Brad Margus. Envoy was drawn mainly by the brainpower already setting up shop at Scripps Florida and Max Planck Florida in Jupiter.

"By far the most important thing is the people," Margus said. "Can you find the junior-level scientists in the area that can work in your labs?"

He noted that San Francisco and Boston have remained biotech hubs despite their stratospheric costs. That's because those areas offer a wealth of scientists, lab space and investors, all of which are crucial to upstart science firms.

While it doesn't hurt that Palm Beach County is cheaper than competing biotech centers, it's far from the only concern for biotech CEOs.

"You can recruit somebody here and tell them there's no state income tax," Margus said. "But is that really the deciding factor in where you go? No."

But Boyd said his discussions with executives lead him to believe that costs are taking center stage.

"The trend is to smaller, more manageable, less costly markets," Boyd said.

If that trend holds, it could be good news for Palm Beach County.

The region's biotech market already has been buoyed by the arrival of Scripps Florida and Max Planck Florida in Jupiter and the Torrey Pines Institute for Molecular Studies in Port St. Lucie, Boyd said.

Those labs came because they were offered tax dollars that totaled hundreds of millions of dollars. Now, economic boosters aim to attract for-profit companies that won't demand public handouts.

"You're early on the curve, but you primed the pump," Boyd said. "In many of these other locations, it took a few decades to get where you've gotten in a few years. You seized the moment. These were trophy projects."