Venture capitalist Steve Burrill of San Francisco has reached a formal agreement with Tower Investments to develop the Elk Run project, and to establish a private equity fund that would be used to back startups interested in launching, or relocating, to southeastern Minnesota.
Burrill is a major name in bioscience startups. According to a statement from Tower, Burrill manages nearly $1 billion in equity, venture capital and other investments.
Republican Gov. Tim Pawlenty said this afternoon, Burrill is a serious and successful investor, and he's glad to see him involved in Elk Run.
"They have a long ways to go before they are prepared to finally announce or commit to something, but they certainly have a good team in place," said Pawlenty. "They have a promising concept, and now they have to go out into the marketplace and put the financing together. Steve Burrill's addition to the team will help increase their chances that that will happen."
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Investors reportedly have committed $1 billion to invest in the Elk Run project.
Right now, the site is home to a 2,200 acre elk farm. The development would include residential, retail, office space, schools and a hospital when fully built.
The state has already committed $2 million for infrastructure improvements like sewer and water lines. Rep. Tim Mahoney of St. Paul, who chairs the House bioscience committee, has introduced a bill that would send another $2 million in state funding to the project for site development.
Mahoney describes Elk Run as a solid investment for the state. He says bioscience companies are selling for pennies on the dollar right now.
"So you can really garner $4 billion worth of companies for $1 billion. And the jobs that go with that are scientific jobs, scientific research," said Mahoney.
Tower and Burrill hope to relocate lots of bioscience startups to southeast Minnesota. They indicate they want to put money behind local startups as well.
In a statement released today, Tower cites the Mayo Clinic and the University of Minnesota as two potential recipients of investment dollars for new biotech startups.
Mayo Clinic spokesman Adam Brase says he can't confirm what the clinic may or may not do at Elk run, but Mayo has spun off a few startups.
"Mayo has very extensive research activites which occur in Rochester and elsewhere in Minnesota. Some of those have led to development of bioscience activities and other projects that we have been involved in," he said.
"The partnership that is going to come out of this has the potential to create a real prosperous future."
Brase acknowledges that Mayo Clinic leadership has met with Tower Investments, but he says he cannot say what Mayo's relationship will be with Tower and Burrill once the project gets off the ground.
"Mayo has had ongoing dialogues with Tower for the past few years as they work to develop Elk Run. As part of that we've been asked to participate in some of their planning activities. Generally, Mayo Clinic is supportive of plans to expand bioscience development in Minnesota," said Brase.
Most political leaders contacted by MPR News are supportive, too. U.S. Rep. Tim Walz, who represents the district in Congress, has also been in talks with investors.
"The partnership that is going to come out of this has the potential to create a real prosperous future," said Walz. "Our role in this is to make sure that we are providing the infrastructure, and the things that the state of Minnesota is able to do, to attract these types of businesses."
Walz says he is looking for ways to help fund infrastructure improvements in and around Elk Run. One priority would be to build a full-fledged highway interchange on Highway 52 for the area. Currently the exit ramp off the highway to Elk Run is a two-lane side street.
If it's successful, the project could be a huge boost not just to Pine Island, but to the entire state, bringing perhaps thousands of well-paying jobs to Minnesota.
Existing biobusiness centers, like the Mission Bay campus in San Francisco, employ more than 10,000 people and have spun off dozens of medical startups. The Tech Square campus near Boston generates more than $1 billion of research spending annually.