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Florida Bets House On Oregon While Short-Changing Its Own

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The Tampa Tribune

Published: January 27, 2008

Florida universities are considering layoffs, tightening admissions and raising tuition because of the state's budget crisis. Meanwhile, state leaders are giddy about their $118 million incentive package that lured an outpost lab from the Oregon Health & Science University to Port St. Lucie.

Does anyone see something wrong with this picture?

It's unconscionable that at the same time Florida's universities are facing the worst fiscal crisis in a generation that taxpayers' dollars would go to another state's public university.

The prestigious journal "Nature" declared the arrangement an "unprecedented move" and noted it is believed to be the first time a state has financed a research facility for another state's university.

Certainly, that's not a distinction for which state leaders should be proud.

But as it turns out, this unprecedented deal is far more complex and muddy than what it might seem. And the clumsy nature in which key information is being disclosed to the public that's footing the bill speaks volumes about the willy-nilly nature of Florida's biotech investment.

Thursday a St. Lucie County economic development official revealed to us that there are secret negotiations going on between Oregon officials and at least two Florida universities to bring them in as partners in the venture. But this disclosure came only after news that Florida would be pumping money into another state's venture was greeted with outrage.

The Florida Board of Governors wasn't told about these talks, nor was it briefed during more than six months of negotiations between Florida officials and Oregon that there might be a role for Florida universities. Such briefings have been routine in other Florida deals with private biotech companies.

That's no way to handle a major scientific investment in Florida, and certainly no way to assure the public that their dollars are being spent wisely.

If anything, it shows that creating a nexus between Florida's university research efforts and these public giveaways has become an afterthought. And that does not bode well for Florida's interests.

It is perhaps most troubling that the Oregon Health & Science University's Vaccine and Gene Therapy Institute was recruited to Port St. Lucie because of its research relationship with Torrey Pines Institute for Molecular Studies, which has already set up shop there, thanks to $80 million in state and local incentives.

The money for the incentive package comes not from education funding, but from tax dollars set aside for economic development. About $60 million comes from state coffers, the remainder from local government in Port St. Lucie in the form of $53 million in infrastructure and additional tax and impact fee rebates.

Economic development officials predict the creation of OHSU's VGTI-Florida will generate 1,466 jobs over 20 years. The facility and spinoff ventures will produce $4.2 billion in economic activity in Florida. The laboratory plans on studying immunity issues that come with aging, with Florida providing a vast supply of retirees to study.

No one is going to quibble that's not worthy research, and if the economic predictions hold true, it's not a bad return on investment.

But it will be Oregon officials who create this company, hire the scientists and chart the direction for this new venture. It will be for years to come, an Oregon outpost financed by Florida.

By law, Florida universities can't tap into that incentive fund and instead have a separate source of funding for scientific ventures called the Centers for Excellence program. But a Florida university could have done exactly what Oregon did - spin off a private, non-profit company that would be awarded the funds - had it been given the opportunity.

Larry Pelton, president of the Economic Development Council of St. Lucie County and a key negotiator in this and Florida's other biotech incentive awards, says no money from Florida will revert to Oregon and any spinoff companies that emerge out of the laboratory will stay in Florida.

But Oregon still stands to benefit.

It will earn yet-to-be determined royalties from any discoveries made by a new lab. Pelton says any royalties or licensing income that goes back to Oregon will be negotiated on a case-by-case basis when new discoveries go to market.

But consider the stakes: The state's most famous university-led discovery, Gatorade, alone brings in $9 million a year and helped put the University of Florida on the map. The glaucoma drug Trusopt, also discovered at UF, brought in another $20 million annually.

The biggest royalty pay day was at Florida State University, where the cancer-fighting drug Taxol was developed. FSU earned more than $210 million in royalties from Taxol.

People in Oregon weren't thrilled with the idea of their public institution establishing a satellite lab across the country, but they were placated by the caveat that they will benefit from the royalties.

As it stands now, the benefit for Florida in this economic deal is one that continues to cast the state in a subservient economic role. For now, the boost for Florida is in the construction and service industries - the exact same model that has us in such deep financial trouble.

The Oregon deal reveals how too many leaders - and that includes Gov. Charlie Crist, Senate President Ken Pruitt (whose home district is Port St. Lucie) and Port St. Lucie officials - appear to view Florida as a desperate biotech wannabe. They are eager to attract innovative ventures from elsewhere but not willing to commit the investment necessary to nurture home-grown operations.

Taxpayers should be outraged that state leaders are looking to the Pacific Northwest for innovation, when we should be able to do the same work ourselves. And they should be furious that when tens of millions of tax dollars are in play, key institutions are left out of the loop and the public is kept in the dark.

Perhaps the deal will eventually prove a good investment for Florida. But as things stand, it comes off as a $118 million vote of no confidence in Florida.

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