CALIFORNIA. VINCENT P. BERTONl AICP DAVID H. J. AMBROZ DIRECTOR PRESIDENT. ll Jl ERIC GARCETTI (213) (213)

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1 DEPARTMENT OF CITY PLANNING City of Los Angeles CITY PLANNING COMMISSION CALIFORNIA VINCENT P. BERTONl AICP DAVID H. J. AMBROZ DIRECTOR PRESIDENT RENEE DAKE WILSON ll Jl VICE-PRESIDENT ROBERT L. AHN CAROLINE CHOE RICHARD KATZ JOHN W. MACK SAMANTHA MILLMAN VERONICA PADILLA-CAMPOS DANA M. PERLMAN EXECUTIVE OFFICES 200 N. Sping Steet, Room 525 Los Angeles, CA % s wt (213) KEVIN J. KELLER, AICP DEPUTY DIRECTOR (213) \ USA M. WEBBER, AICP OEPUTY DIRECTOR ERIC GARCETTI (213) MAYOR JAN ZATORSKI JAMES K. WILLIAMS DEPUTY DIRECTOR COMMISSION EXECUTIVE ASSISTANT (213) (213) Novembe 4, 2016 Honoable Membes of the City Council City Hall, Room N Sping Steet Los Angeles, CA RE: CF Depatments of City Planning and Economic and Wokfoce Development Repot on Notheast Los Angeles Biomedical Technology Industy Cluste A Septembe, 2014 City Council Motion (CF ) highlighted pevious effots on the pat of the City and the to establish a specialized industy cluste fo the biomedical technology industy in Notheast Los Angeles, and instucted the Depatment of City Planning (DCP) and Economic and Wokfoce Development Depatment (EWDD) to evisit these initiatives and povide a epot on the following: 1. Povide an analysis of oppotunity sites; 2. Povide a peliminay analysis of land use and case pocessing incentives to encouage biomedical technology uses within the defined study aea; 3. Povide potential economic development initiatives, and incentives to captue investment inteest and establish a biomedical technology coido within the defined study aea. Pevious eseach conducted by the Mayo s Office, the CRA/LA and the County of Los Angeles has emphasized that the biomedical technology industy secto has emeged as an essential umbella industy leading advancements in medicine, engineeing, and technology. The following epot, which examines an existing industial coido that uns though the Notheast Los Angeles neighbohood of El Seeno, povides a desciption of existing oppotunities and challenges. This epot intends to build on pevious thinking focused on the establishment of a biomedical technology coido, and includes a eview of past epots and initiatives. Pevious eseach and epoting is included in this epot as Appendix Study Aea Oveview & Oppotunities The aea unde consideation is an appoximately 2.5-mile industial coido located between the Los Angeles County/USC Medical Cente (LAC/USC) and the Cal State Univesity Los Angeles (CSULA) campus. The industial coido aligns with both Valley Boulevad and an active feight ail line, connecting the Los Angeles Basin to the San Gabiel Valley. Industial tacts ae clusteed along both sides of this coido adheing to the ail line, although most uses pesent today ae no longe seviced by it. The San Benadino Feeway (I-10) uns just south of the coido poviding convenient access fom much of the egion. The 1-10 Feeway also seves as the oute fo the Los Angeles Meto Busway with stations at both 1

2 ends of the coido located nea the LAC/USC and CSULA. A Metolink station located at the CSUSLA campus also povides access fo ail commutes aiving fom the San Gabiel Valley o Los Angeles Union Station. Despite these tansit connections, thee is geneally a lack of pedestian oiented infastuctue making pesent day connections to and fom tansit somewhat unpleasant. Simila constaints exist with the vehicle oad netwok. The aea is lagely hemmed in between Valley Boulevad, the feight ail coido, and the 1-10 Feeway, limiting suface steet connections to suounding neighbohoods. Access to the industial lots south of the ail coido ae often cut off fo extended peiods while long feight tains pass though the valley at gade. Hillsides noth and south of the coido also seve to limit points of access fom the adjacent neighbohoods of El Seeno, Boyle Heights and East LA. Fo these easons the coido elies heavily on Valley Boulevad as its main atey. Along the coido thee exists 137 aces of industial land, yet this land is not entiely contiguous. Two clustes of industial land exist along diffeent sections of the coido. The lage of the two stetches fom Soto Road and spawls south of Valley Boulevad and acoss the City s bode with the County whee it abuts the 1-10 Feeway. This cluste contains appoximately 56 aces of industial land within the City s limits and oughly double that amount falling within the County s juisdiction. Close poximity to the LA County + USC Medical Cente make this aea the most obvious location fo any expansion of campus eseach and development facilities to occu. The aea is made up of a mix of waehousing and light manufactuing facilities. Buildings include lage tilt-up concete waehouses, a numbe of metal sheds and hangas, and seveal bick buildings dating fom the 1940s. Because the ail line uns between Valley Road and much of the industial land located to the south of the coido, access is limited to just two cossing points. Along this stetch the industial facilities pimaily font Medfod Steet to the south. The entie aea is cuently designated fo Light, Medium, and Heavy Industial use in the Notheast Los Angeles Community Plan, with a mix of CM, MR1, MR2, M2, and M3 zoning, all of which pemit medical laboatoies, medical facilities, and eseach and development centes. The second cluste of industial land found along the coido is located at the easten edge nea the Long Beach Feeway (1-710). This aea contains appoximately 40.5 aces of industial land set atop a small hill is aleady the location of a majo phamaceutical eseach and development company, Gifols Biologicals. Much of the site is occupied by the lage complex of laboatoy and office buildings that make up the Gifols facility, while othe buildings and business that shae the fo wholesale and distibution. The aea is located to the noth of the Cal State LA campus and to the west of a lage undeveloped piece of land that had been cleaed in anticipation of the extension of the 710 Feeway nothwad. Access to the industial complex is faily estictive because of its hilltop location and single, winding access oad fom Valley Boulevad. Connections to the site fom the noth ae completely seveed by a wide ail ight of way which fans out into 13 ail lines with no oad cossings, setting but it is not a site that would easily allow uses to integate with its suoundings. This aea is zoned MR1, which, again, pemits laboatoy uses and limited manufactuing. All of the oppotunity sites found along the coido cuently possess the Geneal Plan land use designations and zoning that would be equied to pemit biomedical eseach and development facilities as well as the manufactuing of medical devices. A significant amount of industial land located along the coido possesses the potential fo futue development of consolidated eseach campuses. Thee ae also a lage numbe of existing concete building that could potentially be etofitted fo use as laboatoy space. The coido is located in an aea with excellent connections to the 1-10 and feeways and is nea seveal Meto Busway stations and a Metolink station whee oppotunities fo pedestian and oadway infastuctue impovements exist. Thee ae significant challenges to connectivity due to the baies caused by the at-gade feight ail line unning though the middle of the coido in addition to the valley topogaphy limiting noth/south access. Fo the coido to function cohesively these connectivity issues would need to be addessed. Nevetheless, the coido has ample land aea with the appopiate planning and zoning fo the evolution of a majo biomedical cluste. 2

3 The table below shows the total aceages fo each Land Use Designation found within the coido. Land Use Designation Aces Limited Manufactuing Light Manufactuing 11.7 Heavy Manufactuing 11.8 Total Industial 137 Geneal Commecial 36.6 Public Facilities 13.8 TOTAL Ml «s m! LNj s i 1 % / % ii fttw'.n iv *t faiewkvi n Htw c if T L_ i s n i s ""I j*e?j t 2 * f?a f 5 j 'L T J & nghuhcu * 7 vf «mc (C \*.ii*' [t: if* \ 1l,id> -/ :i\v. jjp* $ ceacoai" 'VEBCE Vi AUVOCK X p 2h. a i s *! Figue i: Study Aea except fom ZIMAS: Industially designated popeties ae shown in blue. Soto Steet is the majo nothsouth steet shown towad the left ofthe figue, and Valley Boulevad is the majo east-west steet. 2. Land Use & Case Pocessing Incentives As discussed above, the vast majoity of the study aea has been designated fo a ange of light to heavy industial uses in the Notheast Los Angeles Community Plan, and is zoned with a ange of industial zones (CM, MR1, MR2, M2, and M3), all of which pemit medical laboatoies, medical facilities, and eseach and development centes. Fom an entitlement standpoint, biomedical technology uses ae allowed by-ight within the subaea. Individual pojects that exceed 50,000 squae feet would be equied to undego Site Plan Review, pe LAMC Fom a land use entitlement standpoint, thee ae few baies that would pevent a biomedical use fom locating within the study aea. 3

4 3. Economic Development Initiatives Thee ae seveal citywide initiatives that apply to the study aea. The New Business Tax Holiday exempts any new business fom paying the City of Los Angeles goss eceipts business tax duing its fist thee yeas of opeation. The Use Tax Rebate Pogam povides paticipating businesses a ebate of 20% on the additional State collected use tax (67.5%) emitted by the business. The City of Los Angeles Clean Tech Coido in downtown between the Los Angeles Rive and Alameda Steet offes a ange of incentives fo clean tech companies. This pogam is the conestone of the City s geen economy stategy. Simila applicable incentives could be utilized within a biomedical technology coido. Moeove, an Enhanced Infastuctue Finance Distict (EIFD) to finance specified types of impovements with tax incement could aid a specialized industy cluste fo the biomedical technology industy in within the study aea. An economic development tool such as an EIFD could help undewite the cost of land acquisition, infastuctue, development o epai of industial buildings, Bownfield estoation and othe envionmental mitigation as well as pojects implementing a Sustainable Communities Stategy o altenative geenhouse gas emission eduction stategy. EIFDs ae a elatively new land use and economic development tool ceated following the dissolution of the Community Redevelopment Agency. Pesently, the Economic and Wokfoce Development Depatment (EWDD) has engaged a consultant to examine the feasibility of establishing the City s fist EIFD along the Los Angeles Rive, including aeas within a 1.5 to 2 mile adius of the ive. As an independent place-based authoity established by SB628 and AB313, an EIFD has the potential to poduce significant evenue to finance pojects within the distict. Moeove, EWDD has woked with advisos to daft the City of Los Angeles EIFD Establishment Policy in futheance of tapping into this potential funding souce. In addition to the possible fomation of an EIFD, thee ae seveal statewide initiatives that could be leveaged to assist in captuing develope inteest within the study aea: 1. The Fanchise Tax Boad povides the Califonia Reseach Cedit to educe the income o fanchise tax of those taxpayes who engage in qualified eseach activities in Califonia. It is a 15% cedit ate fo excess expenditues ove a base. 2. The Califonia Enegy Commission povides the Enegy Efficiency Financing Pogam to povide low inteest loans on pojects that have poven enegy and/o capacity savings. The maximum loan amount is $3 million. 3. The Califonia Ai Resouces Boad povides the Ai Quality Impovement Pogam as a voluntay incentive pogam to fund clean vehicle and equipment pojects, eseach on biofuels poduction and the ai quality impacts of altenative fuels, and wokfoce taining. 4. The Goveno's Office of Business and Economic Development povides the Califonia Competes Tax Cedit to businesses that want to locate in Califonia o stay and gow in Califonia. $200 million is available in each fiscal yea though Leading bioscience egions have a numbe of incentives that attact businesses and that may be woth consideing in ode to captue investment inteest in the study aea: The City of San Diego woks closely with oganizations to assist high-tech companies with vaious issues. Fo example, BIOCOM (a egional association fo many biotechnology, medical device, and bio-agicultue companies) poactively addesses significant business and legislative issues, educates the geneal public, and develops pogams to help these companies opeate efficiently and economically. The Massachusetts Life Sciences Cente povides the Acceleato Loan Pogam which offes up to $750,000 fo ealy-stage life sciences companies to help leveage additional souces of capital. The New Yok City Bioscience Initiative is a patneship with the State/City of New Yok and wold-class eseach institutions, business leades and the investment community. It has ceated a

5 $15 million loan pogam that is available fo bioscience companies looking to establish headquates and pincipal opeations at the East Rives Science Pak in Manhattan. 4. The State of Mayland s Biotechnology Investment Incentive Tax Cedit povides an income tax cedit equal to 50% of an eligible investment in a Qualified Mayland Biotechnology Company up to $250,000 fo each Qualified Mayland Biotechnology Company pe fiscal yea. Sinceely, Vincent P Betoni, AICP Diecto of Planning Depatment of City Planning S' Jan Pey Geneal Manage Economic and Wokfoce Development Depatment 5

6 APPENDIX The following section summaizes findings fom pevious eseach initiates and epots conducted by USC, the Mayo s Office, and the CRA/LA: Adelante-Eastside Biomedical Technology Coido Backgound Reseach SUMMARY: The State of Los Angeles Bioscience Industy The Los Angeles Region is home to one of the County s leading egions fo the bioscience industy and it continues to be a gowing secto and economic dive fo Los Angeles County. The bioscience industy s impotance as a pimay dive of innovation and economic gowth ove the next centuy has compelled many of the nation s foemost cities to compete heavily to attact and cultivate the industy in ode to secue bioscience as a foundation of thei egional economy. Los Angeles' status as a cente fo the bioscience industy is based pimaily on its majo eseach institutions, such as USC and UCLA, which ae a significant souce of talent and eseach, collectively geneating moe gaduates with bioscience elated degees than any othe egion. The Los Angeles Region is also home to seveal majo biotech fims, including Amgen based in Thousand Oaks, which is the wold's lagest biotech company. Howeve, Los Angeles lags behind othe cities with top pefoming biotech clustes in impotant factos such as industy gowth, cohesion, ventue capital investment and commecialization. The top egions fo bioscience industies include San Fancisco, Boston and San Diego, all of which ae attacting moe pivate investment, have a highe elative concentation of biotech jobs and ae attacting moe employees, innovatos and stat ups than Los Angeles. Despite Los Angeles' enviable pool of gaduates with bioscience-elated degees, the egion continues to lose educated gaduates and stat-up companies due to the lack of a dynamic biotech cluste locally, and moe oppotunities fo collaboation and commecialization elsewhee. Additionally, the LA Region's few lage established biotech fims ae not contibuting to the gowth of the industy locally because they ae insula, isolated, and don't function as pat of an agglomeation that suppots a cultue of inte-fim collaboation, spin-offs and stats ups, which ae the magnetic qualities of the leading biotech clustes in San Fancisco, Boston, and San Diego. Ultimately, while Los Angeles possesses many of the essential ingedients fo igniting a obust biotech cluste, the wide geogaphic dispesion of the industy and its eseach institutions acoss a lage egion has failed to ceate the conditions needed to cultivate an ecosystem of stat-ups and emeging companies that is so essential to leading innovation and industy gowth, and attacting top management talent, ventue capital investment and aspiing gaduates. Commecial Lab Space: One Missing Ingedient An impotant missing link is the availability of commecial bioscience lab space, and a commecial bioscience eal estate maket fo that matte due to the high upfont investment needed to fit-out bioscience wet laboatoy space, which the commecial maket is hesitant to do on a speculative basis consideing the assumed lack of demand locally. Altenatively, it is consideably isky and budensome fo an emeging stat-up to invest the significant capital necessay to constuct a specialized bioscience wet lab befoe a company has become established. The available inventoy of bioscience wet lab space being leased in the leading bioscience egions is a majo eason why many emeging companies and ventues leave the LA Region. Thee ae seveal impotant featues of commecial bioscience facilities that go beyond the technical fit-out specifications, these include poximity to univesity and academic medical cente scientific esouces as well as othe bioscience companies. This is why the industy has favoed the multi-tenant eseach paks and complexes that ae anchoed by majo eseach institutions which seve as impotant intesections of complementay talents, fom bioscience eseaches to bioscience company manages to technicians. The unique hudles that exist fo pivate commecial developes and emeging companies when developing capital intensive lab space often equies assistance fom local govenments to ovecome. Many state and local govenments have patneed with eseach univesities and majo medical centes to povide the necessay laboatoy and office space in the fom of multi-tenant bioscience paks and complexes in ode to attact emeging bioscience companies and cultivate the envionment that will allow the industy to thive. The glaing lack of commecially available laboatoy space and bioscience complexes in the Los Angeles Region is a majo disadvantage that needs to be esolved if the egion hopes to etain the talent its 6

7 univesities ae poducing and benefit fom the potential commecialization of much of the innovation that is taking place at its existing academic medical institutions. PAST INITIATIVES AND REPORTS: USC s Biomedical Reseach Pak Feasibility Study (2001) - USC Analyzed the feasibility of a poposed biomedical eseach pak of 80 to 100 aces adjacent to USC s Health Sciences Campus. The epot concluded that in ode to accommodate the 100+ ace eseach pak, the County would need to elocate the Juvenile Hall, public woks yad, County-USC hospital facility, and othe ancillay facilities ove the next few yeas. Building a Biotech/Medical Device Hub in Los Angeles (2007) - Mayo s Office Analysis the state of LA s biotech industy and ecommended a numbe of actions. These included: ceating a fomal netwok of key leades dedicated to building the biotech sectos, seek state and fedeal funding, ceate fast-tack pemit pocess, build stakeholde suppot, maket LA as biotech hub, develop a small business development office to suppot development of new bioscience fims, and establish a dedicated incubato space that would be closely linked to univesities. Biomedical/Technology Focus Aea Study (2009) - CRA/LA Analysis the entiety of the Adelante CRA/LA Redevelopment Aea and the Whiteside LA County Redevelopment Aea. Identifies undeutilized aeas of industial land, incompatible land-uses, and infastuctue and mobility issues. Poposes majo infastuctue and access impovements and public/pivate development of bioscience campus. 7