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HomeMy WebLinkAbout2018-01-09; City Council; ; First Amendment to the Lease Agreement with Bio, Tech, and Beyond, LLCBTB serves as a highly visible sign of Carlsbad's commitment to life science research, and as a hub for life science start-up companies in both Carlsbad and the north county region. BTB further supports efforts to bolster economic development and educational goals within the region. BTB provides a public benefit to the city of Carlsbad in that they provide an otherwise unavailable option for North County scientists to incubate small start-up science businesses. BTB's Agreement further demonstrates the city's commitment to the flourishing life science cluster, and solidifies Carlsbad's role as one of two San Diego science hubs. On October 17, 2017, the City Council approved the Real Estate Strategy Plan, whereby the Plan recommended city staff negotiate a nominal annual rent increase that covers all or at least some of the city's landscape maintenance costs and all of the trash charges for the property. Subsequent to the Plan's approval, BTB formally requested to exercise the first one-year extension in the Agreement. Staff negotiated the following amendments to the Agreement: 1) Trash Fees: BTB will transfer trash service to their sole responsibility, saving the city an estimated $1,524 per year in trash expenses. 2) Rent: The Agreement will increase annual rent from $1.00 per year to $8,820 per year ($735/month) over the duration of the lease term. 3) Term: As consideration for the increase in rent, the Agreement will be amended to consolidate the two, one year extension terms into one, two year extension term. The lease would now expire on January 28, 2020. Fiscal Analysis According to the end of the year 2017 Co-Star report, the average lease rate in the area for similar properties is approximately $0.95 per square foot per month. This market rate includes smaller facilities, lab and flex space, and often reflects tenant improvements and fully maintained facilities. BTB currently is leasing the Property for $1.00 per year, which is far below market rates. Staff is recommending the city increase the lease rate to $0.12 per square foot, or $735 per month, for an annual total rent of $8,820. The total amount collected in rent will offset the annual city expenses related to BTB's operations at the Property. In addition, the city will realize an annual reduction in expenses of approximately $1,524 once BTB transfers the trash service into their name. Next Steps BTB and city staff will .continue to carry out the terms of the Amended Agreement. Environmental Evaluation (CEQA) The proposed action is exempt from the Cal ifornia Environmental Quality Act (CEQA) per State CEQA guidelines 15301 -Existing Facilities. Section 15301 exempts the leasing of property involving negligible or no expansion of use beyond that existing at the time of the agency's determination. January 9, 2018 Item #2 Page 2 of 26 Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the meeting date and time. Exhibits 1. City Council Resolution. 2. Original Lease Agreement. January 9, 2018 Item #2 Page 3 of 26 RESOLUTION NO. 2018-001 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE LEASE AGREEMENT WITH BIO, TECH, AND BEYOND, LLC AT 2351 FARADAY AVENUE AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT. EXHIBIT 1 WHEREAS, on January 29, 2013, the city entered into a five year lease agreement (Agreement) with Bio, Tech, and Beyond, LLC, to lease and operate a community laboratory to serve as both a life science start-up company incubator and as a science education center located 2351 Faraday Avenue by Resolution No. 2013-029; and WHEREAS, Bio, Tech, and Beyond has requested to exercise the first of their two, one year extension options; and WHEREAS, the city countered with an offer to amend the original extension term in the Agreement from two, one year extensions to one, two year extension; and WHEREAS, as consideration for increasing the duration of the extension term from one year to two years, the city and Bio, Tech, and Beyond agreed to increase the annual rent from $1.00 to $8,820 annually ($0.12 per square foot), bringing the revised monthly rent due over the term of this two year extension to $735 per month; and WHEREAS, the city and Bio, Tech, and Beyond agree to transfer the responsibility of trash service to the Property from the city to Bio, Tech, and Beyond; and WHEREAS, the market lease rate in the area for similar properties is approximately $0.95 per square foot per month; and WHEREAS, there is an economic development need to support the burgeoning life sciences industry that stems from the strong presence of major life sciences companies in Carlsbad and more specifically in the Carlsbad Research Center in which the property is located; and January 9, 2018 Item #2 Page 4 of 26 WHEREAS, regional educational institutions support the presence of a biotechnology incubator to serve and expand educational resources and life sciences businesses in the Carlsbad community; and WHEREAS, the City has determined that it is necessary and appropriate to enter into the Agreement and extend the use of the building for life sciences incubation and community science purposes in order to further support the life sciences industry and the biotechnology and science education programs; and WHEREAS, the continued commitment by the City of Carlsbad towards the life science cluster provides a public benefit to the city of Carlsbad by providing a local option for North County scientists to launch small businesses. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows that: 1. The above recitations are true and correct. 2. The city is entering into this Agreement at a below market lease rate of $0.12 per square foot per month because there is a public benefit to the use. Bio, Tech, and Beyond provides a local option for North County scientists to launch small businesses which supports the life sciences industry. In addition, Bio, Tech, and Beyond provides for biotechnology and science education programs. Bio, Tech, and Beyond supports the city's established economic development & educational goals. 3. That the City Manager is hereby authorized to execute the Amended Lease Agreement with Bio, Tech, and Beyond, LLC, attached hereto as Attachment A, and to act on behalf of the City of Carlsbad in all future decisions and actions necessary to implement the Amended Lease Agreement with Bio, Tech, and Beyond, LLC for use of city owned facilities January 9, 2018 Item #2 Page 5 of 26 located at 2351 Faraday Aveune, and to do so in full compliance with the terms and conditions expressed in the aforementioned Agreement and to the satisfaction of the City Attorney. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 9th day of January 2018, by the following vote, to wit: AYES: NOES: ABSENT: Hall, Blackburn, M. Schumacher, Packard. C. Schumacher. None. M~ ATTEST: BARBARA {SEAL) January 9, 2018 Item #2 Page 6 of 26 Premises, including (without limitation) trash collection, water, gas and electricity, and any and all utility hook-up fees, connection fees, including sewer connection fees, and service and other charges for the availability of any such utilities and services, supplied to or consumed in or upon the Premises from and after the Effective Date and continuously thereafter throughout the Term, directly to the supplier of such utilities and services. The City agrees to pay for landscaping charges for the term of the Lease. Upon City's request, Lessee shall deliver to City copies of all bills for utilities supplied to the Premises for the past twelve (12) month period within thirty (30) days after City's request. 5. Unless otherwise defined, or the context otherwise indicates, the terms as used herein have the meaning defined in the Agreement. The provisions of this First Amendment shall control over any inconsistent provisions of the Lease. 6. All provisions in the Agreement that are not addressed and amended in this First Amendment shall remain in full force and effect, and are hereby ratified and reaffirmed. 7. The individuals executing this First Amendment each represent and warrant that they have the legal power, right, and actual authority to bind Lessee to the terms and conditions of this First Amendment. IN WITNESS WHEREOF, the parties hereto for themselves, their heirs, executors, administrators, successors, and assigns do hereby agree to the full performance of the covenants herein contained and have caused this First Amendment to be executed by setting hereunto their signatures on the day and year respectively written herein below. "CITY" CITY OF CARLSBAD APPROVED AS TO FORM: By~~~ City Attorney "LESSEE" BIO, TECH, AND BEYOND, LLC By: ~r,i~ .. w--=-v-,-k (A-----..,c..~~ul:+--- Name: __ J ________ (J,1--,l ~ ....... e ..... p_h.~S~et~e,~\A_5~V~n By: ___________ _ Name: ___________ _ Title: _------.....,.l--+,,~ .......... (.,..._) ___ _ Title: ------------- Date: ~}~/_L-+-/_l __....,.._~ __ _ Date: NOTARY ACKNOWLEDGEMENT OF LESSEE'S SIGNATURE(S) MUST BE ATTACHED 2 January 9, 2018 Item #2 Page 8 of 26 \ CITY OF CARLSBAD LEASE AGREEMENT PREMISES: 2351 Faraday Avenue Carlsbad, CA 92008 Lessee: Bio, Tech, and Beyond LLC TERM: Five (5) Years EXHh31T ::L January 9, 2018 Item #2 Page 11 of 26 CITY OF CARLSBAD LEASE AGREEMENT INDEX 1. DEFINITION OF TERlvfS ...................................................................................... 1 2. TERM ..................................................................................................................... 1 3. TERMINATION OF LEASE .................................................................................. 2 4. OPTIONS TO RENEW .......................................................................................... 2 5. VACATION OF PREMISES .................................................................................. 3 6. RENT ...................................................................................................................... 3 7. COST OF LIVING ADJUSTMENT. ...................................................................... 3 8. SECURITY DEPOSIT ............................................................................................. 3 9. UTILITIES PAYMENTS ........................................................................................ 3 10. TAXES, ASSESSMENTS, AND FEES ................................................................. 4 11. ACCEPTANCE AND MAINTENANCE ............................................................... 4 12. ALTERATIONS ........................................... ; ......................................................... 5 13. USE ......................................................................................................................... 5 14. OCCUPANCY, ASSIGNMENT AND SUBLETTING ....................................... ~ 15. LESSEE'S GOALS ................................................................................................. 6 16. BENCHMARKING AND REPORTING ............................................................... 6 17. CONDUCT .............................................................................................................. 7 18. PETS .............................................................................................................. : ........ 7 19. NOTICES ................................................................................................................ 7 I 20. RIGHT OF INSPECTION .................................................................................. :.1-7 21. AUDIT ................ · .................................................................................................... 8 22. RIGHT TO SHOW PREMISES ............................................................................. 8 23. INSURANCE .......................................................................................................... 8 I 24. INDEMNIFICATION ......................................................................................... I 09- 25. NONDISCRIMINATION ........................ ; ..... : ...................................................... 10 26. HAZARDOUS AND/OR CONT AMINA TED SOIL AND MATERIAL ............ 10 27. LAW TO GOVERN; VENlJE .............................................................................. 10 28. SPECIAL PROVISIONS .................................................................................. 11-l{} 29. AMERICANS WITH DISABILITIES ACT (ADA) ........................................ 11.W ii January 9, 2018 Item #2 Page 12 of 26 LEASE AGREEMENT This Agreement is made this 29 day of January, 2013. Between: City of Carlsbad And: a chartered municipal corporation 1200 Carlsbad Village Drive Carlsbad, California 92008 ("City") Bio, Tech, and Beyond LLC a limited liability company 2351 4647 Park Drive Carlsbad, CA 92008 ( 11Lessee") WHEREAS, City desires to rent to Lessee and Lessee desires to rent from City certain public property located at 2351 Faraday Avenue in the City of Carlsbad, for the purpose of operating a community laboratory to serve as both a life science start-up company incubator and as a science education center. The Premises is defined below and fully described in Exhibit "A," which is incorporated by this reference. NOW THEREFORE, it is mutually agreed by and between City and Lessee as follows: 1. DEFINITION OF TERMS. The following words in this Lease Agreement shall have the significance attached to them in this clause unless otherwise apparent from their context. a. "Lease" means this Lease Agreement. b. ··Premises" means 2351 Faraday A venue, Carlsbad, California, which includes a 6,000 square foot building and parking as more fully described in Exhibit "A." c. "Lessee" means the Bio, Tech, and Beyond LLC and does not include its heirs, assigns, or successors-in-interest. d. "Invitees" means any individual or organization who enters the Premises at the express or implied invitation of Lessee. 2. TERM. The term of this Lease shall be five (5) years, commencing on February 1, 2013. 1 January 9, 2018 Item #2 Page 13 of 26 3. TERMINATION OF LEASE. 3. l Each party shall have the right to terminate this Lease without cause for any reason by giving ninety (90) days prior written notice to the other party. 3.2 City shall have the right to terminate this Lease by giving seven (7) business days prior written notice to Lessee for any of the following events: 3.2.1 Lessee's failure to comply with the folJowing cJauses in this Lease: Acceptance and Maintenance, Paragraph 11 Alterations, Paragraph 12 Use, Paragraph 13 Occupancy, Assignment and Subletting, Paragraph 14 Conduct, Paragraph 17 Insurance, Paragraph 23 Americans with Disabilities Act (ADA), Paragraph 29 3.2.2 If the City discovers at any time during the lease term that the Lessee or any other party has used, is using, or will use the Premises in an unlawful manner or for an unlawful purpose, or in any manner that is inconsistent with any provision of this Lease. 3.2.3 The Municipal Property Manager is authorized to terminate this Lease for the City upon City Council direction. 4. OPTIONS TO RENEW. Lessee shall have two (2) one (1) year options to renew this Lease upon City's written consent. If Lessee desires to renew this Lease, Lessee shall provide written notice to City of Lessee's intent to renew not less than sixty (60) days prior to the expiration of the initial _ Lease term or first renewal year. City shall respond to Lessee's renewal request in writing within thirty (30) days of receiving such notice. City reserves the right to modify the rent rate for each renewal year at the City Council's discretion. 2 January 9, 2018 Item #2 Page 14 of 26 5. VACATION OF PREMISES. 5.1 Upon termination of this Lease for any reason, Lessee shall peaceably vacate, and shall cause its Invitees to peaceably vacate, and deliver the Premises to City in the same condition as Lessee found them upon its acceptance of the Premises hereunder, excepting ordinary wear and tear, conditions caused by acts of God and improvements made in accordance with Section 12 herein. 5.2 Upon such termination, Lessee shall immediately: 5.2.1 Arrange and pay for the disconnection of all utilities and services ordered by Lessee; 5.2.2 Provide a written statement to the Municipal Property Manager of Lessee's new address for purpose of refunding monies, if any due Lessee under this Lease, and forwarding mail; and 5.2.3 Deliver any keys for the Premises to the Municipal Property Manager or send said keys by certified mail to the address stated in Paragraph 19 below. 6. RENT. In consideration of the possession and use of the Premises, Lessee shall deliver and pay rent to City during the term of this Lease in the amount of One Dollar ($1.00) per year. 7. COST OF LIVING ADJUSTMENT. Not applicable to this lease. 8. SECURITY DEPOSIT. Lessee shall deposit with City the sum of one thousand dollars ($1,000) receipt of which is hereby acknowledged by City, as security for any damage caused to the Premises during the term of this Lease. Such deposit shall be returned to Lessee, without interest, and less any set off for damages to the Premises upon the termination of this Lease. 9. UTILITIES PAYMENTS. For the first year of this Lease, City agrees to pay for electricity, gas, landscaping and trash charges (not to include hazardous materials). The City's payment shall be capped at two thousand five hundred dollars ($2,500) per month and thirty thousand dollars ($30,000) 3 January 9, 2018 Item #2 Page 15 of 26 total. Effective on the first anniversary of the Lease, City will terminate assistance with the payment of electric and gas bills and Lessee will be solely responsible to pay for these utilities and services necessary for the occupancy of the Premises. The City agrees to pay for landscaping and trash charges for the term of the lease. Trash charges will be capped at $100 per month, and will not include the disposal of hazardous materials. 10. TAXES, ASSESSMENTS, AND FEES. 10.1 The terms of this Lease may result in the creation of a possessory interest. If such a possessory interest is vested in Lessee, Lessee may be subjected to the payment of personal property taxes levied on such interest. Lessee shall be responsible for the payment of, and shall pay before delinquent, all taxes, assessments, and fees assessed or levied upon Lessee, on said Premises or any interest therein, on any buildings, structures, machines, appliances, or other improvements of any nature whatsoever, or on any interest therein. 10.2 Lessee further agrees not to allow such taxes, assessments, or fees to become a lien against said premises or any improvement thereon. Nothing herein contained shall be deemed to prevent or prohibit Lessee from contesting the validity of amount of any such tax, assessment, or fee in any manner authorized by law. 11. ACCEPTANCE AND MAINTENANCE. 11.1 Lessee hereby acknowledges that Lessee has inspected the Premises, that Lessee accepts said Premises "as is" and "where is," that the Premises are in a good and sanitary order, condition, and repair. Lessee hereby accepts the Premises as such, except for maintenance to the building to be performed by the City within sixty (60) days of the commencement of this Lease. 11.2 Lessee agrees to take good care of the Premises and all improvements, alterations, fixtures, and appurtenances thereon. Lessee agrees to provide for maintenance and upkeep of the Premises, as necessary to preserve the Premises in good order and condition, except that City shall provide for maintenance and repair of all landscaping, grounds, roof, electrical and HV AC. Said repairs and maintenance shall be made in a good and professional manner, and at least equal to the condition and quality of the repaired items at the inception ofthis Lease. Lessee agrees to be solely responsible for all costs of maintenance and repair except as noted above. 11.3 In the event Lessee fails to properly maintain the premises as required by City, then City may notify Lessee in writing of said failure. In the event Lessee fails to perform said maintenance within thirty (30) days after such notice by City, City may immediately terminate this Lease, pursuant to Paragraph 3.2 above. 4 January 9, 2018 Item #2 Page 16 of 26 12. ALTERATIONS. 12.1 Lessee shall make the alterations and improvements to the Premises, at Lessee's sole cost and expense, that Lessee reasonably believes are necessary to operate said community laboratory. Any and all alterations and improvements made to the Premises must first be approved in writing by the Municipal Property Manager. 12.2 Any improvements made with the consent of the Municipal Property Manager shall become a fixture to the realty and shall remain on and be surrendered with the Premises upon termination of this Lease. 12.3 Noncompliance by Lessee or its Invitees with any provision of this clause shall be cause to terminate this Lease for the City pursuant to Paragraph 3.2 above. 12.4 Before making any improvement that require a City and/or other jurisdictional permit(s), the Lessee is responsible for obtaining all such jurisdictional permit(s) from the City or other agency with jurisdictional authority at their sole cost and expense and that the written approval by the Municipal Property Manager as described in Section 12.1 above does not negate the need to obtain such required City or other jurisdictional agency permit(s). 13. USE. Lessee agrees to use the Premises as follows: 13.1 To create a center that will serve as a life science start-up company incubator, a lab space where lay and professional scientist members can conduct research and business activities and where science education groups can teach classes and host science events. 13.2 Lessee shall not use, nor permit the use of, the Premises other than as described in Paragraph 13 .1 above. In any case where Lessee is, or should reasonably be, in doubt as to the propriety of any particular use, Lessee may request, and will not be in breach or default if Lessee abides by, the written determination of the Municipal Property Manager that such use is or is not permitted. 13.3 Noncompliance by Lessee or its Invitees with any provision of this clause shall be cause to terminate this Lease for the City pursuant to Paragraph 3.2 above. 13 .4 All uses shall be in compliance with the City codes, the underlying Specific Plan for the Carlsbad Research Center and the Covenants, Conditions and Restrictions for the Premises. 5 January 9, 2018 Item #2 Page 17 of 26 14. OCCUPANCY. ASSIGNMENT AND SUBLETTING. The Premises shall only be occupied by Lessee and Lessee's Invitees. Lessee agrees to require its Invitees to utilize the premises in accordance with the Lease Agreement. Lessee shall not assign this Lease or any interest therein without the prior written consent of the Municipal Property Manager. Any such assignment without the City's consent shall be void and shall, at the option of City, terminate this Lease. Noncompliance by Lessee or its Invitees with any provision of this clause shall be cause to terminate this Lease for the City pursuant to Paragraph 3 .2 above 15. LESSEE'S GOALS. In consideration for the letting of the Premises and amenities provided by the City, Lessee agrees to use its best efforts to accomplish the following objectives in order to provide a public benefit: 15.1 Create community space where like-minded lay and professional scientists can go to share ideas, get help and access the tools they need to innovate. Sign up 50 paying members in the first 2 years. 15.2 Develop a vibrant start-up company incubator. Be instrumental in launching at least 8 start-up companies within the incubator in the first 2 years, with the start-up companies to be licensed in the City of Carlsbad 15.3 Become a leading local center for science education and outreach. Offer at least 4 science courses a year at the facility in partnership with San Diego science groups. 15.4 Build a lean, low cost organization, staffed primarily by volunteers and managed by scientist-members. Hire at least one full time staff member by middle of year 2. 15.5 Create a functional cell and molecular biology lab within 6 months of inception. 15.6 Develop revenue streams from membership fees, corporate sponsors, crowdfunding, direct donations, event fees, course fees and grants. 16. BENCHMARKING AND REPORTING. During the duration of this Lease term, Lessee agrees to provide the Municipal Property Manager with semi-annual reports on December 31st and June 30th of each year for the incubated companies to include the following: • Number of jobs created by the Lessee and by any incubated companies; 6 January 9, 2018 Item #2 Page 18 of 26 (760) 434-2893 joseph.j ackson@gmail.com joe .garuba@carlsbadca.gov 20. RIGHT OF INSPECTION. City reserves the right for its agents. or employees to enter upon and inspect the Premises at any reasonable time to ascertain if Lessee is complying with the provisions of this Lease. 21. AUDIT. City reserves the right for its agents or employees to conduct financial audits, not more than once yearly, of Lessee's financial records that are in any way associated with the Premises. City shall provide at least three (3) business days advance notice to Lessee of City's intent to inspect such records. 22. RIGHT TO SHOW PREMISES. City resen1es the right, during the last sixty (60) days of this Lease, or any extension thereof, to conduct an "open house" of the Premises in order to facilitate re-renting or selling the Premises. Said "open house" shall not exceed four hours total duration (maximum of two separate days), and when possible, be scheduled from 3:00 p.m. to 5:00 p.m., Monday through Friday. 23. INSURANCE. Lessee will obtain and maintain for the duration of this Lease and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with the occupancy or use of the Premises by Lessee or its Invitees, visitors, agents, representatives, employees or subcontractors. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rating of not less than "A-:VI111 OR with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers (LESLI) with a rating in the latest Best's Key Rating Guide of at least "A:X". 23.1 Coverages and Limits. Lessee will maintain the types of coverages and minimum limits indicated below, unless the City Risk Manager approves a lower amount. These minimum amounts of coverage will not constitute any limitations or cap on Lessee1s indemnification obligations under this Lease. City, its officers, agents and employees make no representation that the limits of the insurance specified to be carried by Lessee pursuant to this Lease are adequate to protect Lessee. If Lessee believes that any required insurance coverage is inadequate, Lessee will obtain 8 January 9, 2018 Item #2 Page 20 of 26 such additional insurance coverage, as Lessee deems adequate, at Lessee's sole expense. 23.2 Commercial General Liability Insurance. $1,000,000 combined single-limit per occurrence for bodily injury, personal injury and property damage. If the submitted policies contain aggregate limits, general aggregate limits will apply separately to the work under this Lease or the general aggregate will be twice the required per occurrence limit. 23.3 Workers' Compensation and Employer's Liability. Workers' Compensation limits as required by the California Labor Code. Workers' Compensation will not be required if Lessee has no employees and provides, to City's satisfaction, a declaration stating this. 23.4 Additional Provisions. Lessee will ensure that the policies of insurance required under this Lease contain, or are endorsed to contain, the following provisions: 23.4.1 The City will be named as an additional insured on Commercial General Liability which shall provide primary coverage to the City. 23.4.2 Contractor will obtain occurrence coverage. 23.4.3 This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without thirty (30) days prior written notice to City sent by certified mail pursuant to the Notice provisions of this Lease. 23.5 Providing Certificates of Insurance and Endorsements. Prior to City1s execution of this Lease, Lessee will furnish certificates of insurance and endorsements to City. 23.6 Failure to Maintain Coverage. If Lessee fails to maintain any of these insurance coverages, then City will have the option to declare Lessee in breach, or may purchase replacement insurance or pay the premiums that are due on existing policies in order to maintain the required coverages. Lessee is responsible for any payments made by City to obtain or maintain insurance and City may collect these payments from Lessee. 23.7 Noncompliance by Lessee or its Invitees with any provision of this clause shall be cause to terminate this Lease for the City pursuant to Paragraph 3.2 above. 9 January 9, 2018 Item #2 Page 21 of 26 24. INDEMNIFICATION. Lessee shall defend, indemnify, and hold harmless City, its officers, agents, volunteers and employees from and against any and all claims, demands, and liabilities for loss of any kind or nature which City, its officers, agents, volunteers or employees may sustain or incur or which may be imposed upon them or any of them for injury to or death of persons or damage to property as a result of, arising out of, or in any manner connected with this Lease or with the occupancy and use of the Premises by Lessee, its Invitees, visitors, or any other persons whatsoever. Lessee further agrees to pay any and all costs and expenses, including, but not limited to, court costs and reasonable attorney's fees incurred by City on account of any such claims, demands, or liabilities. However, the provisions of this Lease shall not be , construed to indemnify City for claims or acts arising from City's sole negligence. 25. NONDISCRIMINATION. Lessee herein covenants that this Lease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of physical or mental disabilities, race, color, creed, religion, sex, marital status, national origin or ancestry in the use, occupancy, tenure or enjoyment of the leased premises. Lessee shall not establish or permit any such practice of discrimination or segregation with reference to the selection, location, number, or use of occupancy by customers, tenants, invitees or vendees in the leased Premises. 26. HAZARDOUS AND/OR CONTAMINATED SOIL AND MATERIAL. Lessee will not place or permit to be placed materials and/or contaminated soils on the Premises which under federal, state, .or local law, statute~ ordinance, or regulations require special handling in collection, storage, treatment, and/or disposal. Lessee also hereby covenants and agrees that, if at any time it is determined there are materials and/or contaminated soils located on the Premises which under any environmental requirement require special handling in collection, storage, treatment, or disposal, Lessee shall notify City. Within thirty (30) days after written notice to City or from City, Lessee shall commence to take and thereafter diligently complete, at Lessee's sole expense, such actions as may be necessary to comply with environmental requirements. 27. LAW TO GOVERN; VENUE. This Lease Agreement shall be interpreted, construed and governed according to the laws of the State of California. In the event of litigation between the parties, venue in state trial courts shall lie exclusively in the County of San Diego, North County Branch. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Southern District of California, in San Diego. 10 January 9, 2018 Item #2 Page 22 of 26 28. SPECIAL PROVISIONS. Lessee hereby acknowledges that Lessee waives all rights to any form of relocation assistance provided for by local, state, or federal law to which Lessee may be entitled by reason of this Lease. 29. AMERICANS WITH DISABILITIES ACT (ADA). It is the duty of the Lessee while operating under this Lease to comply with all local, state, and federal laws, including, but not limited to, the Americans with Disabilities Act and to indemnify City from any violation of any such law. Failure by Lessee or its Invitees to comply with a provision of local, state, or federal law is grounds for immediate termination of this Lease by the City pursuant to Paragraph 3.2 above 11 January 9, 2018 Item #2 Page 23 of 26 Christie Marcella, Economic Development Manager Jan. 9, 2018 Bio, Tech and Beyond 2017 Annual Update Metrics Current Tenants Company Field of Research Full Time Employees Aomics Cancer drug antibody conjugates 2 Sand Hill Crane Diagnostics Smart Phone Diagnostic Tools 2 EcoFeedstock Green waste recycling 5 Elliptical Therapeutics Anesthetic topical drug delivery 1 ChemoTactics Genome editing CRISPR 3 GPB Scientific Rare cancer cell diagnostics 5 Triangulim Biosciences Chemistry CRO 3 Pure Graft LLC Fat Stem Cell Transplant 2 S.H.E. Analytical GC/HPLC testing services 1 Tinoro PCR 3 Prodrome Sciences Biomarkers and Natural Products 3 Biomarker Profiles Pain biomarker discovery 1 Dapcell Inc.Cytokines 1 Proactive Diagnostics Inc In Vitro Diagnostics 2 Dodo OmniData Inc DNA Storage 7 UST Inc.Next generation DNA sequencing 4 Librede Yeast genetic engineering 2 Stemnext Wound Healing 2 2017 Metrics •18 current tenants (31 former tenants) –6 new tenants, 16 jobs in 2017 •1 full-time Bio, Tech and Beyond employee •2017 gross revenue: $210K •$1M in supplies and services 2017 Highlights •OmniDodo Data Inc.:featured in SDBJ, angel investment from Illumina Founder Jay Flatley •Tinoro:Additional financing and employee hire •Elliptical Therapeutics:Additional investment for animal trial •City met with tenants about support services •9 major outreach events throughout the year Overall Economic Impact •Total tenants •50 active jobs (as of Dec 2017) •Jobs impact –18-20 tenants, each averages 2 FTE –Avg. research scientist position $5- 6K/month –$200K salary/month, $2.4M annually direct Overall Economic Impact •Over $200K in equipment investment and upgrades •$90K to day in building improvements and infrastructure upgrades •Total capital secured by all Bio, Tech and Beyond occupants estimate $20-25M Additional Benefits •Supports startup ecosystem through outreach and education events at least quarterly •Furthers cooperative Innovate78 regional program through company movements along or into north county corridor •Contribute to Carlsbad as regional start-up leader Graduate Stories 1.Biospyder:early tenant 2013-2014, grown to 30 employees $10M series C financing, resides in Carlsbad 2.Neofluidics:moved to Bio, Tech and Beyond from Texas, expanded to Vista (Lab Trader), $2-4M in financing 3.Ascus Biosciences:located to BTnB from San Francisco, expanded to Vista (Lab Trader) Company Testimonial How has BTnB helped your company progress? Lucas Fornace, Puregraft LLC: Our company is beyond just R&D and has sales in the few millions. Parent company is based in Solana Beach, but we use BTnB for a “start-up” arm of the company that is developing a new product line Company Testimonial How has BTnB helped your company progress? Jason Poulous, Liberde Inc: •Amount of funding raised: ~$500k, recommended for funding on a Phase II grant for ~$1.5M (waiting on official notice). •Two (2) FTEs looking to expand to four •Burn rate: ~$15k/month; looking to take this to ~$40k-$50k/month in the near future 2018 Goals 1.Maintain full capacity of 20 start-up companies (on average) 2.Host at least one educational event each quarter 3.Participate in Startup Week 2018 4.Expand/obtain additional space for graduating companies outgrowing the lab All Receive -Agenda Item # a, For the Information of the: CITY COUNCIL ACM L CA V cc ../ Date~ City Manager J January 9, 2018 To: From: Via: Council Memorandum {city of Carlsbad Re: Honorable Mayor Hall and Members of the City Council Gary T. Barberio, Assistant City Manager t Marisa Lundstedt, Chief Operations Officer ~ Supplemental Information for Agenda Item 2 -Bio, Tech, and Beyond At the City Council briefing on January 8, 2018, questions were raised regarding the estimated trash fees, annual city expenses at the entire Farmers property, current market lease rates, and performance metrics for Bio, Tech, and Beyond. Responses are provided below: Topic: Trash fees. Per the proposed new Agreement, trash service for the incubator building will now be transferred to and paid directly by 8TB. Currently, trash service for the entire Farmers property (8TB building and the larger office building) is in the city's name and is paid by the city at a rate of $1,524 per month. With the new Agreement, the city will be relieved of the portion of the current $1,524 monthly trash fee associated with the BTB building. The city will continue to be responsible for trash service at the larger office building and will pay the monthly trash fee for that property. Topic: Annual City Expenses at the Farmers property. The annual city expenses for the entire Farmers property total $131,400, which includes current annual expenses of $8,953.13 for the BTB building. With the new Agreement, the tenant will cover the annual $8,953.13 expenses for the 8TB building, reducing the annual city expenses for the Farmers property to $122,446.87. Annual expenses include costs associated with utilities, trash, security, window washing, landscape maintenance, and CRC dues (see attachment). Topic: Current Ma~ket Lease Rates. The current lease rate of approximately $.95 per square foot per month utilized in the staff report was generated by staff from readily available comparable data. A formal valuation/appraisal process was not completed. In this case, an end of year 2017 Co-Star Report, as well as a quick review of similar properties currently for lease and advertised on Loop-Net, were utilized to generate the $.95 per square foot per month current lease rate estimate. Given the age, construction type, and level of tenant improvements,.the 8TB building would be considered a Class C/Class B lndustrial/R&D building, City Manager's Office City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 t January 9, 2018 Page.2 and recent comparable lease rates for similar type properties fall in the range of $.85 -$1.10 per square foot per month. Topic: Performance metrics for Bio, Tech, and Beyond. BTB currently has 18 tenants. Over the past five years, BTB has successfully incubated 31 companies, including six in 2017. Specific data on where the 31 incubated companies are currently located is not available, but some are located in Carlsbad and in the SD region. In addition, BTB hosts at least one educational event each quarter, hosting nine events in 2017, and approximately 80 events over the past five years Attachment: Farmers Property Expenses cc: Kevin Crawford, City Manager Celia Brewer, City Attorney Debbie Fountain, Community and Economic Development Director Chrjstie Marcella, Economic Development Manager Curtis Jackson, Real Estate Manager All Receive -Agenda Item # .et_ For the Information of the: CITY COUN,,CIL / ACM,/v'CA v' cc~ Date l /q !'8 City Manager 7 CA Review 0,{_ CITY COUNCIL Staff Report Meeting Date: To: From: Staff Contact: Subject: April 11, 2017 Mayor and City Council V Kevin Crawford, City Managef Kevin Pointer, Management Analyst-Community & Economic Development kevin.pointer@carlsbadca.gov or 760-602-4620 Receive an annual program update from Bio, Tech and Beyond Life Sciences Incubator Recommended Action Receive an annual program update from the founders of Bio, Tech and Beyond, the organization responsible for the city's life sciences incubator in fulfilment of the requirement within their lease agreement. Executive Summary In February 2013, the City Council approved a five year lease with Bio, Tech and Beyond for the city-owned building located at 2351 Faraday Avenue for the purposes of operating a life sciences incubator. As required by the lease agreement Bio, Tech and Beyond must provide regular reports to the city on its benchmarks, including number of jobs created, gross and net revenues, local suppliers and support services used. This summary program update is the fourth annual report to the City Council on the incubator. Discussion The goals of the incubator are to: create new life sciences companies and jobs in Carlsbad; help Carlsbad become a national leader in the citizen science movement, strengthening the life sciences cluster; add Carlsbad's core technology base, resulting in new development and new invention patents; and serve as a key source for regional science education outreach efforts. The incubator founders Joseph Jackson and Kevin Lustig will be presenting an update of current activities and results. The following table includes the reporting measures established in the lease with Bio, Tech and Beyond and reports progress to date. Additional highlights of the lessee's performance are included in the presentation from Bio, Tech and Beyond, which is attached. Item #7 April11,2017 Page 1 of 21 Item #7 April 11, 2017 Page 2 of 21 Benchmarking/Reporting Measure Performance to Date Number of jobs/companies created • Created 50 jobs • Helped create 47 startup companies (25 successfully incubated) Amount of salaries paid $80,000 (1 FTE) Gross and net revenues earned Gross: 2013 $ 10,000 2014 $ 60,000 2015 $ 160,000 2016 $ 200,000 TOTAL $ 430,000 Lessee unable to provide net revenue for incubated businesses Amount of any investment in the Fluctuates. company and list of investors Recent examples: • Biospyder-$10 million in Series C financing • Neofluidics-$2-4 million in financing Local suppliers/support services used 32-see Exhibit 1 ($1 million annually) Total amount of gross sales outside $20-40 million (market cap estimate) the city This is the fourth annual update to City Council on the facility and incubator program and includes next steps related to meeting the benchmarks outlined in the five year lease agreement with the city. Fiscal Analysis There is no fiscal impact to the city for receiving an annual program update. Next Steps Bio, Tech and Beyond is in its fifth and final year of the agreement with the city, which expires on January 31, 2018. As such staff and the lessee are in exploratory discussions on the future of the city's life sciences incubator and are discussing lease renewal options. Per the lease, the incubator has two one-year options to renew upon the city's written consent. Environmental Evaluation (CEQA) Pursuant to Public Resources code Section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. Public Notification None. Exhibits 1. PowerPoint presentation for Bio, Tech and Beyond program-2017 Annual Update Item #7 April 11, 2017 Page 3 of 21 2017 Annual Update n BIO, TECH ANO BEYOND Joseph Jackson Kevin Lustig April 2017 2351 Faraday Ave, Carlsbad, CA Item #7 April 11, 2017 Page 4 of 21 BTNB Carlsbad's Start-Up Lab Incubator 0e (;)BTn B BIO, TECH AND BEYOND North San Diego's Life Science Incubator I OW COST LAS SPACE .. fl· SCHEDULE A VISIT SHARED LAB EQUIPMENT .. COMMUNITY OF ENTRl=PAENEl/RS • J 20 Current Companies Tinoro C!> tinoro Vanadis Labs Tinoro Is a startup company engaged in the design and rnanuractunno or breaklhrough devices ror lhe medil:al and research industries. Vanad1s Labs is a technology company whose primary focus rs in the area of protein chemistry and irnmunology with an emphasis on ~urveying products for late,. anl1genic proteins_ Cascade Biosciences Cascade 81osystem·s rnission is lo provide the world with CASCADE B IOSYSTEMs :~de:~rc,-,'~;~::·arl~=~~~~i~:ble technoloyy for ONA Bio,narker Profiles Biornarker Proliles develops loots/services Lo discover b1omar1<ers at a laster rate and lo help others discover bioma, kers. Kolib.ir Scr,;nces Exohg.in Koliber Sciences specializes in statrslically-guided design of experiments, modeling and ad..,onced dat.:i analy1ics fn the fieto of synthetic biology The mission ol EJCel1gen Scienlihc is to envision. lu=ocN •!:ZC •c ~~~~::\ aqnuda:~~p~:~~ 1 ~1c engmef.!'nng products anti Item #7 April 11, 2017 Page 5 of 21 The Transformation of 2351 Faraday Ave Mar 2013 ~ July 12 2013 -. Dec 2013 ~ Dec 2014 ~ Dec 2016 Vacant, unused office building Unoccupied for 10 Years A Grand Opening! 400+ Attendees New floor New sinks New water New alarm New electrical A startup incubator community center New benches New culture lab Lab equipment Offices Conference rooms Wi-Fi A life science incubator 10 life science start-ups A thriving life science incubator 20 current start- ups; 20 companies have graduated Item #7 April 11, 2017 Page 6 of 21 Current Tenants (22) new in red Company Field of Research Full Time Employees Aomics Cancer drug antibody conjugates 2 Sand Hill Crane Diagnostics Smart Phone Diagnostic Tools 2 EcoFeedstock Green waste recycling 3 Elliptical Therapeutics Anesthetic topical drug delivery 1 Exeligen Scientific Genome editing CRISPR 3 GPB Scientific Rare cancer cell diagnostics 6 " August Therapeutics Obesity, Appetite regulation 1 Pure Graft LLC Fat Stem Cell Transplant 2 S.H.E. Analytical GC/HPLC testing services 1 Tinoro PCR 2 Nasseo, Inc Dental Medical Implant 2 Biomarker Profiles Pain biomarker discovery 1 Dapcell Inc. Cytokines 1 Phyllom Bioproducts Natural pesticides 2 Dodo OmniData Inc DNA Storage 4 UST Inc. Next generation DNA sequencing 4 Librede Yeast genetic engineering 2 Magothy Consulting Analytica Chemistry Instrument Calibration 2 Stemnext Wound Healing 1 Persilience LLC Biofuel Butanol Production 2 Item #7 April 11, 2017 Page 7 of 21 Current Tenants (22) new in red Company Field of Research Full Time Employees Azolla Biotech BioFuel Production 2 Chemotactics Cytokine. Cancer reagent manufacture 3 ,, '" ,,,, Item #7 April 11, 2017 Page 8 of 21 Former Tenants (25) • Catacco • Aastrom Biosciences • Biospyder • Orphi Therapeutics • Ze Resource • Ascus Bioscience • Viking Scientific • Lab Fellows • Crosslife Technologies • Neofluidics • ProtoMedex • Mesa Tech • Cell Store LLC • lsoCell Dx • Koliber Biosciences • Cilbun • Zymi • Soludot • Qbisci • Cascade Biosystems Lumira Vanadis Labs Reo Labs Trinity Cenomics, Allostere Item #7 April 11, 2017 Page 9 of 21 Finance Update Expenses Utilities (Electric, Water, Gas) Wi-Fi Alarm System Waste Disposal Janitorial CO2 Gas Insurance License Fees Taxes Salary and Benefits Building Upgrades, Equipment and Lab Improvements July-Dec 2016 Revenue and Assets Current Monthly Memberships $14,000/month $12,000 $1000/month for Internet) $18,000/month Item #7 April 11, 2017 Page 10 of 21 Outreach Events Date Event Attendees July 16 Biotech in Space Visit 8 July 28 CEMSU In Vitro Devices Seminar 12 Aug26 lllumina Instrument Demo 8 Aug29 Flow Cytometry Demo (Elveflow) 7 Sept? Trinet HR Luncheon/Seminar 20 Sept 22 Argonaut Happy Hour 24 Sept 26 Xconomy Reception 120 Oct 11 Thermofisher Design Group 10 Dec 21 BTNB Holiday Potluck 15 Item #7 April 11, 2017 Page 11 of 21 Diverse and Growing Online Membership (1,562 Members) - San Diego, CA Founded Feb 18, 2011 Citizen Scientists 1.562 Group reviews 12 Upcoming 3 Meetups Past Meetups 60 Our calendar ~ Help support your Meetup Chip In Organizers: Joseph P Jackson, Kevin LustiH, Richard Sportsman DIYbio San Diego is the DIY bio meetup group for San Diego County. We do not have our own mailing list yet, so join the discussions on the SoCal DIYBio Google Group ( groups.google.com/group/socal-diybio ). I Inspired by the DIY science of the Hackerspace movement. and other DIY bio groups like BioCurious ( www.BioCurious.org) and SoCal DIYbio ( www.meetup.com/SoCal-DIYBio/), DIYbio San Diego aims to gather like-minded science geeks from the Greater San Diego area. We believe that if Bio Tech is to be as revolutionary in the 21st century as the personal I computer and the automobile were in the 20th, that it needs to reach beyond the walls of Academia and Industry to the hobbiest and the self-starter. In a field were a PhD is often taken as minimum requirement. we want to throw open the doors to everyone with a kitchen sink and a desire to learn. We believe that if we as a society are to meet the challenges of the new millennium, everyone must understand the basics of the scientific method. Science is not an occult art, practiced only by eggheads in lab-coats, but a way of looking at the world around us that every one is capable of. To quote our sister organization, BioCurious: I "Whether you are a professional scientist or merely curious, BioCurious has a spot for you to learn, play and work. We are a community of people who thrive off of sharing ideas and building tools. If you've got MacGyver instincts and a desire to impact the world, you're our ~ kind of person!" ~ -Brett Bowman and Todd Charney I • Item #7 April 11, 2017 Page 12 of 21 2016 Goals Update ../ Maintain full capacity of 20 start-up companies (achieved) ../ Host at least one educational event each quarter (achieved) ../ Increase SBIR applications and success rate (partially achieved) ../ Expand hands-on mentorship program for tenants (achieved) ../ Host and run Demo Day for top tenants (delayed to 2017) Item #7 April 11, 2017 Page 13 of 21 2017 Proposed Goals • Maintain full capacity of 20 start-up companies • Host at least one educational event each quarter • Expand mentorship program for tenants • Host and run Investor Showcase for top tenants Item #7 April 11, 2017 Page 14 of 21 BTNB Company Highlights in 2016 • GPB -Bridge financing obtained from manufacturing partner • Reo Labs -$300K seed financing • Tinoro -$350K seed financing • UST Corp. -$600K Series A (est.) Item #7 April 11, 2017 Page 15 of 21 Economic Impact Summary+ 4 Year Total Impacts Analysis Item #7 April 11, 2017 Page 16 of 21 Economic Impact Summary ./ 50 "Active" Jobs in Dec 2016 ./ 20 Current Startups (20 Former Tenants) ./ 1 BTNB FTE ($BOK) ./ 2016 Gross Revenue of $200K ./ $20-40M Combined Market Cap Estimate ./ $1.2M in 2016 Funding/Contracts ./ $1M+ Per Year on Supplies and Services Item #7 April 11, 2017 Page 17 of 21 Jobs created Summary 22 Tenants Avg 2FTE, Avg Research Scientist Position 5-Gk per month. 44 x 5K=220K monthly=2.6M Annual job creation impact. 25 Former Tenants (2013-2016) = Avg 50 jobs annually. Some expanded to Carlsbad, Vista, 30 new employees (BioSpyder 2013-2014) Item #7 April 11, 2017 Page 18 of 21 Total Direct Investment and Gross Revenue 90K capital equipment 2013-2014 launch period, 10-15K annual equipment upgrades= 130K to date Building improvements, infrastructure upgrades 15-20K annually (80K to date). 2013 10K gross revenue 2014 60K gross revenue 2015, 160K 2016, 180K ., Total capital secured by BTnB current/past occupants estimated 20-25M Item #7 April 11, 2017 Page 19 of 21 Select Examples 1. Biospyder early tenant Sept 2013-0ct 2014, grown to 30 employees $10M series C financing, resides in Carlsbad, Loker Ave. 2. Neofluidics, moved to BTnB from Texas, expanded to Vista (Lab Trader). 2-4M in financing 3. Ascus Biosciences located to BTnB from San Francisco, expanded to Vista (Lab Trader) Item #7 April 11, 2017 Page 20 of 21 Local Suppliers Used by BTNB SDG&E TWG FUZE Electric Waste Management Fire Department AT&T ADT Security ADT Keycard Entry Door Systems Inc. Jan Pro Cleaning Services Kleen and Greene Water Works Inc. lngenium Inc. Praxair VWR Recycled Labs BioSurplus Occupational Services Inc. (OSI) Environmental Health and Safety FMO Advisors Inc. Good and Roberts CRB CoreFocus Herich, John Technical Safety Services Collaborative Drug Discovery (CDD) Life Technologies Neptune Scientific/BioTixx BioCom Institute Mo-Bio Sustainable Surplus Furniture Environments Item #7 April 11, 2017 Page 21 of 21 BTNB Supports Local Strategic Initiatives Capitalize on R&D Capabilities • Serves as highly visible sign of Carlsbad's commitment to life science research • Serves as a hub for life science start-up companies in Carlsbad • Creates new high paying jobs that attract other high paying jobs • Solidifies Carlsbad's role as one of two San Diego science hubs 0 Harness Local Innovation • Dramatically lowers the barrier for formation of life science research companies in Carlsbad • Connects and empowers Carlsbad scientists interested in diverse areas of research • Makes it easy to access sophisticated life science technologies and experts • Educates next generation of Carlsbad scientist entrepreneurs 2017 Annual Update Joseph Jackson Kevin Lustig April 2017 2351 Faraday Ave, Carlsbad, CA BTNB –Carlsbad’s Start-Up Lab Incubator 20 Current Companies The Transformation of 2351 Faraday Ave Mar 2013 Dec 2016July 12 2013 Vacant, unused office building Dec 2013 A Grand Opening! A startup incubator community center New floor New sinks New water New alarm New electrical New benches New culture lab Lab equipment Offices Conference rooms Wi-Fi 400+ AttendeesUnoccupied for 10 Years A life science incubator 10 life science start-ups Dec 2014 20 current start- ups; 20 companies have graduated A thriving life science incubator Current Tenants (22) new in red Company Field of Research Full Time Employees Aomics Cancer drug antibody conjugates 2 Sand Hill Crane Diagnostics Smart Phone Diagnostic Tools 2 EcoFeedstock Green waste recycling 3 Elliptical Therapeutics Anesthetic topical drug delivery 1 Exeligen Scientific Genome editing CRISPR 3 GPB Scientific Rare cancer cell diagnostics 6 August Therapeutics Obesity, Appetite regulation 1 Pure Graft LLC Fat Stem Cell Transplant 2 S.H.E. Analytical GC/HPLC testing services 1 Tinoro PCR 2 Nasseo, Inc Dental Medical Implant 2 Biomarker Profiles Pain biomarker discovery 1 Dapcell Inc.Cytokines 1 Phyllom Bioproducts Natural pesticides 2 Dodo OmniData Inc DNA Storage 4 UST Inc.Next generation DNA sequencing 4 Librede Yeast genetic engineering 2 Magothy Consulting Analytica Chemistry Instrument Calibration 2 Stemnext Wound Healing 1 Persilience LLC Biofuel Butanol Production 2 Current Tenants (22) new in red Company Field of Research Full Time Employees Azolla Biotech BioFuel Production 2 Chemotactics Cytokine, Cancer reagent manufacture 3 Former Tenants (25) •Gatacco •Aastrom Biosciences •Biospyder •Orphi Therapeutics •Ze Resource •Ascus Bioscience •Viking Scientific •Lab Fellows •Crosslife Technologies •Neofluidics •ProtoMedex •Mesa Tech •Cell Store LLC •IsoCell Dx •Koliber Biosciences •Gilbun •Zymi •Soludot •Qbisci •Cascade Biosystems Lumira Vanadis Labs Reo Labs Trinity Genomics, Allostere Finance Update Expenses Revenue and Assets Utilities (Electric, Water, Gas) Wi-Fi Alarm System Waste Disposal Janitorial CO2 Gas Insurance License Fees Taxes Salary and Benefits Building Upgrades, Equipment and Lab Improvements July–Dec 2016 $14,000/month Current Monthly Memberships $18,000/month $12,000 $1000/month for Internet) Outreach Events Date Event Attendees July 16 Biotech in Space Visit 8 July 28 CEMSU In Vitro Devices Seminar 12 Aug 26 Illumina Instrument Demo 8 Aug 29 Flow Cytometry Demo (ElveFlow)7 Sept 7 Trinet HR Luncheon/Seminar 20 Sept 22 Argonaut Happy Hour 24 Sept 26 Xconomy Reception 120 Oct 11 ThermoFisher Design Group 10 Dec 21 BTNB Holiday Potluck 15 2016 Goals Update ✓Maintain full capacity of 20 start-up companies (achieved) ✓Host at least one educational event each quarter (achieved) ✓Increase SBIR applications and success rate (partially achieved) ✓Expand hands-on mentorship program for tenants (achieved) ✓Host and run Demo Day for top tenants (delayed to 2017) 2017 Proposed Goals •Maintain full capacity of 20 start-up companies •Host at least one educational event each quarter •Expand mentorship program for tenants •Host and run Investor Showcase for top tenants BTNB Company Highlights in 2016 •GPB –Bridge financing obtained from manufacturing partner •Reo Labs -$300K seed financing •Tinoro -$350K seed financing •UST Corp. -$600K Series A (est.) Economic Impact Summary + 4 Year Total Impacts Analysis Economic Impact Summary ✓50 “Active” Jobs in Dec 2016 ✓20 Current Startups (20 Former Tenants) ✓1 BTNB FTE ($80K) ✓2016 Gross Revenue of $200K ✓$20-40M Combined Market Cap Estimate ✓$1.2M in 2016 Funding/Contracts ✓$1M+ Per Year on Supplies and Services Jobs created Summary 22 Tenants Avg 2FTE, Avg Research Scientist Position 5-6k per month. 44 x 5K=220K monthly=2.6M Annual job creation impact. 25 Former Tenants (2013-2016) = Avg 50 jobs annually. Some expanded to Carlsbad, Vista, 30 new employees (BioSpyder 2013-2014) Total Direct Investment and Gross Revenue 90K capital equipment 2013-2014 launch period, 10-15K annual equipment upgrades= 130K to date Building improvements, infrastructure upgrades 15-20K annually (80K to date). 2013 10K gross revenue 2014 60K gross revenue 2015, 160K 2016, 180K Total capital secured by BTnB current/past occupants estimated 20-25M Select Examples 1.Biospyder early tenant Sept 2013-Oct 2014, grown to 30 employees $10M series C financing, resides in Carlsbad, Loker Ave. 2.Neofluidics, moved to BTnB from Texas, expanded to Vista (Lab Trader). 2-4M in financing 3.Ascus Biosciences located to BTnB from San Francisco, expanded to Vista (Lab Trader) Local Suppliers Used by BTNB SDG&E TWG FUZE Electric Waste Management Fire Department AT&T ADT Security ADT Keycard Entry Door Systems Inc. Jan Pro Cleaning Services Kleen and Greene Water Works Inc. Ingenium Inc. Praxair VWR Recycled Labs BioSurplus Occupational Services Inc. (OSI) Environmental Health and Safety FMO Advisors Inc. Good and Roberts CRB CoreFocus Herich, John Technical Safety Services Collaborative Drug Discovery (CDD) Life Technologies Neptune Scientific/BioTixx BioCom Institute Mo-Bio Sustainable Surplus Furniture Environments BTNB Supports Local Strategic Initiatives ●Serves as highly visible sign of Carlsbad’s commitment to life science research ●Serves as a hub for life science start-up companies in Carlsbad ●Creates new high paying jobs that attract other high paying jobs ●Solidifies Carlsbad’s role as one of two San Diego science hubs ●Dramatically lowers the barrier for formation of life science research companies in Carlsbad ●Connects and empowers Carlsbad scientists interested in diverse areas of research ●Makes it easy to access sophisticated life science technologies and experts ●Educates next generation of Carlsbad scientist entrepreneurs Capitalize on R&D Capabilities Harness Local Innovation Kevin Pointer, Management Analyst 4/11/17 Bio, Tech and Beyond Annual Update Goals •Create new life sciences companies and jobs •National leader in citizen science •Strengthen life sciences cluster •Add to core technology base •Regional source for science education outreach