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Biotech approved with millions in city perks: Foster City gets $1.85 million bonus, estimated $50 million in taxes from Illumina and Biomed
October 21, 2015, 05:00 AM By Samantha Weigel Daily

An artist’s rendering of the future Illumina Inc. campus on Lincoln Centre Drive in Foster City.

Having spent nearly a year negotiating the terms for a more than 20-acre biotech campus that could generate millions in taxes for Foster City, the council approved a development agreement after Biomed Realty Trust and Illumina sweetened the deal with another $1.85 million payment officials would like to see fund affordable housing programs.

The City Council met Monday night to review Biomed’s and Illumina’s request for a long-term deal that would give them 16 years to construct the Life Sciences Research Campus and exempt the biotech giant from city permitting or impact fees for up to seven years.

The deal will have the city reimburse Illumina an estimated $4.5 million in fees via the taxes generated by the redevelopment — officials are anticipating a substantial increase in property taxes as well as sales taxes from the biopharmaceutical company agreeing to headquarter its sales offices in Foster City. In total, the city is expected to reap an estimated $50 million over the term of Illumina’s up to 26-year lease with property owner Biomed, according to Community Development Director Curtis Banks.

The council unanimously approved the deal which is anticipated to bring financial benefits to the city, land owner and biotech firm.

“I’ve always felt one of the problems of government is they never make an investment, they give away money, but they don’t really invest in the future,” Councilman Charlie Bronitsky said, according to a video of the meeting. “This is the true nature of an investment in our future. We’re willing to invest in the future success of Illumina so they can come here and we can succeed together.”

As the company is expected to bring up to 1,600 employees to Foster City, the council urged Illumina and Biomed to come up with innovative solutions to address impacts to traffic, schools and housing.

Illumina returned with an offer of $1.85 million toward a Community Benefits Program which the council can use as it sees fit.

It’s “a community benefits package that says ‘we’ve taken a hard look, a close look at the issues facing the community and we responded,’” said Salil Payappilly, senior director with Biomed. “Biomed and Illumina are committed to being here for the long term and being a strong and responsible member of the community.”

While the specifications of the program will be refined after further council consideration, the majority supported the concept of allocating $1 million toward a homebuyer assistance program.

The city will consider working with the county and the Housing Endowment Regional Trust, or HEART, to establish a program in which those working in Foster City could receive around a $50,000 or $75,000 loan toward the down payment on a home in the city, according to a staff report.

The city used to have a homebuyer assistance program it ran through its former redevelopment agency before Gov. Jerry Brown dissolved these affordable housing funding mechanisms statewide in 2012. As the funds from this new program wouldn’t be restricted to benefit low-income individuals, a wider range of people could participate — from safety personnel like police and firefighters to the employees Illumina is slated to bring to Foster City, according to the report.

Illumina’s contribution could also be used to study traffic improvements along State Route 92, assist with environmental initiatives like installing electric vehicle charging stations or bike path upgrades, fund programs to support youth as well as seniors, support special city events and more, according to the report.

Other ways Illumina and Biomed sought to address the impacts of building at the 25-acre site off Lincoln Center Drive included a robust transportation demand management plan.

Illumina is required to reduce vehicle trips by 21 percent through a range of programs, including shuttle services from transit hubs to the project, as well as from the East Bay — of particular interest to the council as the city’s key entry points are often congested by traffic coming from State Route 92 and the San Mateo-Hayward Bridge. Other measures include offering services on site, providing bike lockers as well as showers and guaranteeing rides home for commuting employees facing an emergency by paying for a taxi.

“We really welcome you, we look forward to working with you specifically as a community partner. That’s one of the things we really look for when new businesses come to town, because we, the city, can’t do everything ourselves and we need to have folks help us out and a couple things that you came forward with was your traffic mitigation,” Councilman Steve Okamoto said. “It’s really good that you are using a lot of shuttles, one of the things that’s a big problem here in town, if you ask anybody, is the traffic.”

Illumina will spend an additional $1.19 million to mitigate its effects on the community and environment such as funding the shuttle program, contributing school impact fees and assisting with traffic improvements at intersections on Foster City and the bordering San Mateo, according to the report.

With entitlements in hand, Biomed can construct 555,000 square feet of office and lab space spread between three buildings, a 40,000-square-foot two-story building to house employee amenities and three parking structures with nearly 1,800 spaces. Biomed bought the site for $37 million then agreed to the build-to-suit campus redevelopment slated to cost $149 million and ideally open in 2017.

Although the council challenged the biotech and real estate company to think more creatively on how to address impacts to the Bayfront city, the $1.85 million ultimately satisfied city officials.

“Thank you for being creative,” Bronitsky said. “What you did was directly find a way to begin to address an issue that’s significant for us. No one expected you to solve it, but you took a step.”

(650) 344-5200 ext. 106



Tags: illumina, million, biomed, council, program, community,

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