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(This article by Barbara Fox was published in U.S. 1 Newspaper on

December 2, 1998. All rights reserved.)

Getting Cozy with Rutgers

Propinquity can be important. Or as those in the real

estate business like to say: What’s vital is "location, location,

and location."

That’s also true for the New Jersey Economic Development Authority,

which happens to be in the real estate business. It owns a 50-acre

research park, Technology Centre of New Jersey (TCNJ), located on

Route 1 South in North Brunswick, practically adjacent to Rutgers’

Cook Campus. When the EDA took over this property, there were some

existing buildings, and the EDA is building more. It leased the first

new building to Merial Ltd, but it needs tenants for a 60,000

square-foot

building now under construction.

"We recognize that these companies can become the Microsofts of

tomorrow," says Gualberto Medina, commerce commissioner.

So in an effort to attract tenants to its high tech campus, the EDA

is playing to its strength — the nearness of the Technology Center

to Rutgers University. Emerging technology businesses that are tenants

at the center, says the EDA’s director Caren Franzini, can tap

the resources of Rutgers on a fee-for-use basis. In other words, they

can use laboratories, libraries, and scientific equipment, and they

can also interact with Rutgers researchers.

EDA’s announcement about this, made at a press conference in October,

sounds enticing. Francis L. Lawrence, the president of Rutgers,

talked about how productive partnerships between Rutgers, government

agencies, and the New Jersey business community "are important

to the health and vitality of the state economy and to our ability

to help educate the highly skilled work force of the future."

The flaw in this hoop-de-lah is that partnerships between Rutgers

and high tech businesses are already in place. You don’t have to be

a tenant at EDA’s campus to get Rutgers to work with you. The flaw

was illustrated by the fact that the three poster-child companies

featured at the press conference were not Tech Centre tenants but

were trotted out as examples of the kind of benefits that they are

already getting from Rutgers:

Photosynthetic Harvest Inc. is based in Willingboro but

collaborates with the laboratory of Ilya Raskin of Rutgers

Biotech

Center to discover and manufacture biologically active compounds from

live plants (609-835-1600).

NUCON Systems Inc. of New York City is collaborating with

Rutgers’ Center for Ceramic Research to find ways to safely contain

high-level radioactive waste in five-inch thick cylinders without

seams. Matthew J. O’Connor, president and CEO of NUCON, is

paying

Rutgers $500,000 for two years of consultations and is considering

a move to New Jersey.

Metacrine Sciences Inc., an early stage biopharmaceutical

drug discovery company based in Bridgewater, has its labs at Cook

Campus under the direction of Jeffrey D. White, president and

chief scientific officer, and Gordon Ramseier, of the Sage Group

as board chairman. It has seed capital from Ronald R. Hahn of

Early Stage Enterprises LP, based on Route 206. It is developing drugs

with applications in endocrine and metabolic type diseases, such as

obesity and diabetes.

Admittedly, the nearness of the Tech Centre will make

linking with Rutgers much easier. With the campus so close,

transportation

will be easier for interns and grad students to work at a tenant firm,

and tenants can take advantage of continuing education programs,

cultural

events, and conferences. Tenants would be able to rent such high tech

equipment as electron microscopes and magnetic resonance imaging

equipment,

and they could tap into animal health care services. Though anyone

can use the walk-in resources of the libraries, tenants could get

support from the professional librarians. They might find an

opportunity

to do contract research jointly with university faculty.

More tangible benefits of being at the Tech Centre include base rent

of $25 per square foot plus a $100 per foot improvement allowance

and a Payment in Lieu of Taxes (PILOT) program. This program aims

to control the rate of growth in property taxes that the tenants pay.

Tenants can also vie for NJEDA’s bond financing, loan guarantees,

direct loans, and such financial incentives as preferential, lower

interest rate financing for second stage companies with products and

services to sell but little traditional collateral.

For instance, the Technology Funding program offers loans of from

$100,000 to $3 million, with banks providing 75 percent of the loan

at market rate and the EDA providing the rest at a below-market fixed

rate. It can also guarantee up to 50 percent of the bank’s monies.

A $3 million Seed Capital Program offers loans of $25,000 to $200,000

to first-stage companies with a product that has a good chance for

commercialization. The five-year loans have a fixed interest of 5

to 7 percent, and part of the flexible repayment terms can be

royalties

and warrants.

Again, any company anywhere in New Jersey can apply for these

programs,

but it is safe to say that if you are a NJEDA tenant your application

would probably rest on the top of the pile. Recall that other favorite

saying: "it’s not what you know but who you know."

— Barbara Fox


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