Novato City Council Agenda Staff Report Date: ______________ File No. ____________

1 cc14_078.docx; 5/8/2014

STAFF REPORT MEETING DATE: May 13, 2014 TO: City Council FROM: Christopher L. Stewart, Economic Development Manager SUBJECT: NOVATO AND NORTH BAY LIFE SCIENCE MARKETING AND

BUSINESS / JOB RECRUITMENT CAMPAIGN PLAN DEVELOPED AND PRESENTED BY CHEMPETITIVE GROUP

REQUEST Receive and share comments on Chempetitive Group’s proposed Novato and North Bay Life Science Marketing and Job Recruitment Campaign Plan. RECOMMENDATION

Receive report. BACKGROUND CITY COUNCIL STRATEGIC GOAL C – “Create a Thriving Business Environment”: One of the City Council’s top strategic goals was to develop and fund programs that would:

o Attract and grow high paying industries and jobs;

o Strength and expand the City’s economy and tax base; In February 2013, the Economic Development Manager presented an Economic Development Work Plan that aims to achieve these strategic objectives through three main focuses:

1. Economic Sustainability and Delivery of City Services by Increasing Sales Tax Revenue

2. Business Retention and Recruitment

3. Image and Quality of Life That same month the Economic Development Manager began meeting with Rob Eyler at the Marin Economic Forum, Mary McEachron at the Buck Institute and together they began meeting

922 Machin Avenue Novato, CA 94945

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with economic development and life science industry professionals and educators located in the four North Bay counties to explore the potential of creating a joint marketing and recruitment campaign to grow the number of life science companies and jobs in Marin, Sonoma, Napa and Solano counties. It was clear that Novato and Marin could only accommodate and grow a limited amount of life science research companies and jobs since we have very limited land on which to build new research facilities. To attract life science companies, Novato and Marin recognized the need to partner with Sonoma, Napa and Solano so we could offer life science companies the complete supply chain of services from research to clinical trials, manufacturing, packaging, warehousing and distribution facilities. After meeting for seven months, public and private sector representatives of the four counties agreed to work together to form the “North Bay Life Science Alliance”. It was clear that without funding and the development of a specific marketing and recruitment campaign plan to attract companies and jobs to the North Bay Area, the “goodwill” of everyone wanting to and willing to work together was not going to materialize or be put into action. Following meetings and discussions with Michael Frank, Cathy Capriola, Mary McEachron and Rob Eyler, Novato’s Economic Development Manager proposed that the City of Novato, the Marin Economic Forum and the Buck Institute initially fund the selection of an experienced life science marketing firm to develop a branding and marketing strategy for Novato, Marin and the four county North Bay Areas. With a specific marketing plan and job growth goals it would be easier for other cities and counties to see the benefits of participating and helping fund a regional marketing and recruitment effort. On September 24, 2013, the Novato City Council approved $292,000 to hire a marketing firm to develop and help implement a Novato, Marin and North Bay Life Science marketing and business recruitment campaign. Novato’s Economic Development Manager pulled together a number of the members of the North Bay Alliance to interview and select the best firm to lead this marketing and recruitment effort. The Selection Committee contributed over 208 hours interviewing 12 nationally and internationally recognized marketing firms and finally selecting Chempetitive Group in December 2013. The City of Novato finalized Chempetitive Group’s contract in January and they began their first phase of the contract by doing interviews, research and a SWOT analysis which was completed in March 2014. Based on their research and analysis, the Chempetitive Groups spent April and May finalizing the Novato, Marin and North Bay branding and marketing plan to attract new companies and investment to grow the life science industry and jobs in the North Bay. In parallel, the Marin Economic Forum was working on and completed their “State of the Life Science Industry Report” for Novato and the North Bay in February 2014 and numerous publications including the North Bay Business Journal and the Marin IJ ran articles on the study’s findings – see attached articles. The Study’s findings were also used by the Chempetitive Group to produce a fundraising brochure (see attachment) to help us raise the $1.5 million from other counties, cities and private sector organizations and developers. Steve Johnson, Partner from the Chempetitive Group, will be attending the meeting to present the marketing and job recruitment plan to Council.

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FISCAL IMPACT City Council has previously approved and allocated $292,000 to develop and help implement the Novato, Marin and North Bay Life Sciences marketing and recruitment campaign. ATTACHMENTS 1. Articles on the “State of the Life Science Industry in Novato and the North Bay 2. North Bay Life Science Alliance Fundraising Brochure

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Tuesday, March 4, 2014, 4:24 pm

North Bay groups collaborating on building biotech sector

The Buck Institute for Research on Aging in Novato is key to the cluster of North Bay biotech

and life sciences companies that has developed in the past decade.

NOVATO — Biomedical business have been proliferating in Marin County — Novato, in

particular — for the past decade, significantly boosting the local economy, and growth is

something business boosters from around the North Bay are actively trying to replicate,

according to a new report.

By extension, the greater North Bay — Sonoma, Solano and Napa counties — stands to benefit

from Marin’s recent success in maintaining a cluster of biotech that brings with it a highly

educated workforce and high wage earners, according to a 48-page report “Life Sciences

Industry Characteristics, Economic Impacts and Possibilities” by the Marin Economic Forum for

the city of Novato.

Drawing on what’s happening in Marin, economic development agencies and life sciences

officials across the North Bay are collaborating to draw more biotechnology companies to the

region, spurred by recent efforts from the city of Novato and the study by the Marin Economic

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Forum that found Marin County’s economy has benefited significantly from the industry. That

has led to the formation of the North Bay Bio/Life Science Alliance, according to the report.

The newly formed alliance recently received $325,000 in contributions from The Buck Institute

and city of Novato, and that will support a three-year, $1.5 million branding, marketing and

recruitment campaign, the report said. Chicago-based marketing firm Chempetitive was selected

to lead the campaign, which is set to begin by the end of this quarter and produce a draft

branding plan by June.

200-plus Marin life sciences companies

Life sciences employment

Year Bay Area Marin Napa Solano Sonoma 2001 112,651 727 257 1,462 11,025

2002 105,755 796 164 136 8,748

2003 101,021 836 452 1,628 7,072

2004 95,306 869 177 1,836 6,789

2005 93,191 922 306 2,007 5,397

2006 92,667 1,020 314 2,076 4,925

2007 77,725 977 173 2,288 4,316

2008 102,230 1,077 236 2,188 4,659

2009 95,545 1,157 287 2,151 4,196

2010 95,305 1,343 312 2,313 3,797

2011 96,638 1,456 334 1,984 4,173

2012 110,809 1,590 131 2,922 4,054

2013* 110,337 1,703 131 2,926 4,047

Source: California Employment Development Department. Data through the first quarter of

2013.

That sector in Marin has grown to 1,700 employees and wages of about $248 million in 2012,

according to the report. Home to more than 200 life sciences businesses, the 255,000-resident

county has more such companies per capita than any other California county, the study found.

The study was presented by the city of Novato, The Buck Institute and Novato Chamber of

Commerce to about 120 economic development, business and biotech leaders on Feb. 27. The

report found that the cluster of life science companies has steadily increased since 2001, when

there were just 727 positions, driven largely by expansions of The Buck Institute and BioMarin

Pharmaceutical Inc., easily the county’s biggest biotech employer, which had $500 million in

2012 product revenue.

The bulk of biotech employees are in San Rafael and Novato, with 700 and 900, respectively,

according to the study. BioMarin is based in San Rafael but has a large production plant in

Novato. BioMarin spinoffs Raptor Pharmaceutical and Ultragenyx Pharmaceutical as well as The

Buck Institute are all in Novato.

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But while those institutions account for a large share of Marin’s biotech workforce, the sector is

predominantly made up of smaller companies. Ninety-four percent of all local biotech companies

have fewer than 25 employees, the study said.

Biotech workers are an attractive demographic, often highly educated and well-compensated. In

Marin County, for example, the average annual wage for the industry was about $60,500 at

medical labs to $198,000 for pharmaceutical research staff, according to the study.

North Bay Bio/Life Science Alliance

In early 2013, the city of Novato and economic development officials from four North Bay

counties — Marin Economic Forum, Sonoma County BEST, Napa Chamber of Commerce and

the Solano County Economic Development Corporation — discussed potential benefits of jointly

marketing the region to biotech and biomedical companies.

Subsequently, numerous potential stakeholders were brought into the discussion. Among them

were Sonoma State University, University of California at Davis, College of Marin, U.S.

Department of Commerce and a number of North Bay cities. Also part of the mix were

established businesses and institutions.

“By joining forces the North Bay leaders recognized that the four-county area offered bio/life

companies a full range of supply-chain services from research and development at The Buck

Institute, BioMarin and UC Davis, to manufacturing facilities like Genentech in Solano County

and a machine equipment supplier, Biosearch Technologies in Petaluma,” the report said.

The North Bay as a whole has a significant cluster of biomedical and biotech companies.

Sonoma County, though, has a higher concentration of medical-device makers such as a large

presence by Medtronic, but Marin is unique in several respects, according to the study.

For one, Novato is home to The Buck Institute, “where grant and foundation funding share risk,”

the study said.

“The normal chain of financing is that local research draws in grant funding to finance the initial

R&D toward product development and not rely solely on venture or loan funding to move

research from idea to marketplace,” the study said.

The Buck also “acts like a university-like environment for scientists in new firms, a unique asset

that Marin County holds that other counties in the Alliance do not have,” the study said.

A committee overseeing the branding campaign and the alliance includes Cynthia Murray, CEO

of North Bay Leadership Council; Carolyn Stark, CEO of Sonoma County BEST; Sandy Person,

CEO of Solano Economic Development Corp.; Rob Eyler, Marin Economic Forum; Mark Wood,

former BioMarin senior vice president of human resources and corporate affairs; Travis Miller,

BayBio director of communications; and Christopher Stewart, Novato economic development

manager.

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Challenges to growth in Marin

Yet there are challenges in Marin, making the regional North Bay effort all the more important,

according to the study. Marin has a much smaller share of needed industrial commercial real

estate than the greater Bay Area, particularly the East Bay and the South Bay and potentially

parts of the Central Valley.

“Demand for space, created by marketing and business attraction through the North Bay Bio/Life

Science Alliance, may convert currently used space to life-science occupancy because these

firms pay larger rents than current occupants,” the report said.

The North Bay Alliance said it recognized that industries companies in San Francisco and the

broader Bay Area “are increasingly being forced to look for new, more affordable locations with

the growth of the high-tech companies and increased competition for labor and space.” It also

notes that many of the large Bay Area companies “are completely unaware of the breadth and

depth” of such companies and institutions across the North Bay.

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Why we should • Why we can • What we’re doing about it

Accelerating growth in our life-science sector.

North Bay Life Science Alliance

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High-value life science industries have been steadily growing in

the North Bay region since 2000. Underpinned by established

hubs in the East Bay, the South Bay and the Peninsula, Marin

County is now home to more life science companies per

capita than any other county in California.

Now with a foothold in the North Bay, the sector is poised to

expand across the region. Invigorated by access to critical

resources—including research capabilities, manufacturing

infrastructure and collaborative institutions—momentum is

building. Supportive tax structures add to the region’s appeal.

To capitalize on this opportunity, North Bay Life Science

Alliance was established by economic development and life

science professionals, educators and public leaders across the

region. Backed by an initial investment by the City of Novato

and the Buck Institute for Research on Aging, the initiative will

promote the region’s capabilities for advancing life sciences.

North Bay Life Science Alliance

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Members of North Bay Life Science Allianceu Public and private representatives of the counties of

Marin, Sonoma, Napa and Solano

u Public and private representatives of the cities of Novato, Petaluma, San Rafael

u Private and public economic development partnerships, such as Marin Economic Forum, Solano Economic Development Corporation, Sonoma County BEST, Sonoma County Economic Board, Novato Economic Development Commission

u Buck Institute for Research on Aging

u University of California, Davis

u Sonoma State University

u College of Marin

u BayBio

u U.S. Department of Commerce

u North Bay Leadership Council

u Ultragenyx Pharmaceutical

u Mark Wood Consulting

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Few industries generate opportunity like life sciences. Research, development and commercialization of new therapies draw on a vast network of suppliers and human resources, giving rise to growth across a host of industries.

Some local workers will be directly employed in well-paid jobs. Many others will benefit through associated spikes in construction, research, development and manufacturing. A robust tax base created by new and growing companies will sustain continued improvement of public infrastructure and services.

Acc elerating growth in life sciences. Why we should.

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An intellect-intensive industry, life sciences will create fresh opportunities for our many tertiary-qualified locals. Stimulating and rewarding careers will be available right here, where they live, while growing demand for highly educated workers will continue to attract top talent to the region.

With a vast workforce, drawn from diverse educational backgrounds, life sciences create a broad array of employment prospects. From research through manufacturing, employees are highly skilled and well remunerated—with salaries 50 percent higher than the national average. Pharmaceutical researchers are already among Marin County’s best-paid professionals.

Keep our brightest

Upward mobility

vs.51%of local residents have a bachelor’s degree (Marin County)

of the rest of California have a

bachelor’s degree

31%

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More than$60,000

Medical lab worker income

Average $140,000

Pharmaceutical researcher income

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300

200

100

300 life-science jobs Means 503 jobs across all industries

200 life-science jobs Means 382 jobs across all industries

100 life-science jobs Means 182 jobs across all industries

Inventing, developing, testing and manufacturing drugs are intensive processes that require specialized, high-quality infrastructure and a range of support services. When life sciences flourish, growth comes to a variety of aligned industries.

Planned expansion at the Buck Institute, for example, is forecast to generate $49 million in revenue and support about 300 construction jobs. Staffing the new facilities would employ another 287 people and bring an estimated $47 million per year into the region.

Economic modeling shows precisely how jobs in life sciences lead to jobs in other areas.

Good for business

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200 life-science jobs Means 382 jobs across all industries

100 life-science jobs Means 182 jobs across all industries

High-grossing industries, specialized real estate and strong salaries all create more revenue for local and regional governments. Corresponding investment in public utilities and services will continue to boost quality of life for residents and businesses, attracting even more interest to the North Bay region and continuing to grow the tax base.

A healthy economy

==300life science jobs

$142min new business

$4min state and local revenue

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Life sciences improve quality of life and productivity around the world. It’s a fulfilling industry that attracts bright, passionate people. The breakthroughs emanating from the North Bay would continue to put the region on the map and give locals extra reason to be proud of the work that’s done here.

Feeling good

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Life sciences have proliferated in the North Bay over the past 15 years, as organizations have recognized the advantages our region shares with the East Bay, the South Bay and the Peninsula.

The number of life-science jobs in Marin County alone has ballooned 240 percent since 2000. As local organizations prosper, they are laying down infrastructure to support the arrival of new companies. The entire region is now geared to support growth in life sciences—from R&D right through commercialization.

Critically, the region does not tax gross receipts, which allows young companies to accept non-profit grants and enter research collaborations without incurring financial penalties.

Acc elerating growth in life sciences. Why we can.

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Almost 60% of California’s patent activity occurs in the Bay Area.

Marin has the most life science companies per capita in California.

California attracts 3X more life science venture capital than any other state.

For years, we’ve been adjacent to one of the country’s biggest innovation engine rooms. And now, in 2014, we are one of California’s most concentrated life science hubs.

* Highest ratio in California.

Geography

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Anchored by the Buck Institute for Research on Aging and BioMarin, the North Bay is home to more than 200 life science organizations and hundreds of acclaimed researchers. In 2012, the Buck Institute alone attracted $40 million in national grants and the region drew in more than $10 million in National Institute of Health (NIH) grants.

Growing reputation

Marin County life-science revenues passed $750 million in 2013.

Toward $1B in our county

Life science launch padCritically, the North Bay can support startups and spinoffs through every stage of their life cycle.

The Buck Institute already houses six tenants and is planning to add another 65,000 square feet of laboratory and office space, giving new startups more options than ever.

Getting startedLease world-class lab space from the Buck Institute to conduct early-stage research without intensive capital risk.

Scaling upOutsource pre-clinical and clinical functions to specialist service providers in the North Bay and surrounding areas.

ExpansionThe North Bay’s real estate portfolio allows companies to house their whole pipeline here—from administrative offices and labs to manufacturing and distribution facilities.

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With its proximity to urban culture and beautiful natural playgrounds, the North Bay is an attractive residence for discerning life-science professionals, making it an ideal location for companies who want to attract top talent.

Where life meets style

1 hrNeighbors

Sonoma State

Mission Bay

Biosearch

Buck Institute

Genentech Manufacturing

UC Davis

UC Berkeley

Dominican University

College of Marin

Stanford University

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Infrastructure and partnership opportunities exist across the North Bay, from the Buck Institute and BioMarin for R&D, to Biosearch Technologies for equipment and various others for manufacturing. Plus, the region provides local companies with ready access to important life-science resources across the entire Bay Area and beyond.

Collaborators

2 hrsNear Neighbors

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California is the top destination for venture capital in life sciences, attracting more than the next eight ranked states combined. Not surprisingly, the industry is expanding beyond its traditional strongholds in the East Bay, the South Bay and the Peninsula. Providing access to the same resources as our neighbors, the North Bay has already emerged as an attractive alternative.

More than 200 companies have chosen to base themselves in the region. In Marin County, life-science revenues are surging past $750 million and associated jobs are climbing toward 2,000. That activity is expected to grow and spread west on the basis of local success stories like these.

The North Bay region’s credentials

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Founded in 1997 (backed by $1.5 million investment).

In the past 10 years, BioMarin has brought four remarkable drugs to market.

BioMarin employs 1,000 worldwide, generates $500.7 million in annual revenue and has already yielded a spinoff.

Raptor Pharmaceutical (established 2005) PROCYSBI® on the market. Three therapies in clinical development and a further two

in preclinical.

Opening its doors in 1999, the Institute has grown to incorporate 22 specialized labs that consistently deliver breakthroughs on disease and aging. In 2012, they attracted almost $40 million in grants.

Parkinson’s A novel, preclinical stem cell therapy was successfully used to treat disease in rodents.

Huntington’s Researchers corrected the genetic mutation responsible for disease in rodents.

Breast cancer Researchers redefine the four main breast cancer classes and identify molecular pathways.

Heart disease New treatment found to reverse heart disease in elderly mice, without typical side effects.

Aging Created drug compositions that appear to have anti-chronic disease and anti-aging properties.

Case Study:

Case Study:

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$

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Working with $250,000 from the City of Novato and $50,000 of in-kind support from the Buck Institute, North Bay Life Science Alliance is delivering a strategy to promote life sciences in the region. Research and positioning are already underway.

Industry report A 48-page report was prepared identifying the drivers that were critical to life science growth in neighboring Bay Area locations. Based on that insight, we have assessed the strengths, weaknesses, opportunities and threats for bioscience in the North Bay.

Strategy recommendations Drawing from the above-mentioned report—Life Sciences Industry Characteristics, Economic Impacts, and Possibilities—we have outlined key strategies to bolster the region’s appeal as a life-science destination. These include initiatives to optimize the local real estate offering and to create stronger connections with the venture capital community.

Market research and positioning Specialist life-science marketing agency, Chempetitive Group, is conducting qualitative research with bioscience companies to supplement our understanding of the North Bay’s perceived strengths and weaknesses. These interviews will form the basis of our positioning, allowing the North Bay Life Science Alliance to identify promotional messages that will resonate with our target market.

Marketing plan North Bay Life Science Alliance has partnered with Chempetitive Group to design and implement an integrated marketing campaign to promote the North Bay to all aspiring life science organizations in the vicinity.

Join us in breathing new life into the North Bay. Contact Chris Stewart at +1 415.899.8902 or Robert Eyler, Ph.D. at +1 415.483.9332.

Accelerating growth in life sciences.What we’re doing about it.

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North Bay Life Science Alliance

Get involvedTo support us in bringing new opportunities to the region, please get in touch.

Robert Eyler, Ph.D.

T +1 415.483.9332

C +1 707.318.0348

Chris Stewart

T +1 415.899.8902

C +1 415.858.9221

NorthBayLifeScienceAlliance.comPage 25