Developers 'stabbed in back' over £24m of public cash for BioQuarter

Published on Saturday 12 December 2009 13:31

THE head of a Scottish property company has described a decision by the Holyrood and Westminster governments to pay for a £24 million facility at Edinburgh's BioQuarter as a "stab in the back" for private developers operating within the Edinburgh Science Triangle.

The comment comes from Iain Mercer, group managing director of Edinburgh-based Cosmopolitan Investments, which has spent more than 3m of private money creating Discovery Terrace, an office and research development on the Heriot-Watt Research Park.

Mercer said: "Cosmopolitan and other developers have poured considerable finance and resources into this location and have had a good measure of success. However, attracting new occupiers has been very difficult over the last 18 months and the last thing we need is 24m of competition financed by public money."

The bio-incubator building is to be jointly funded by Westminster's Department for Business Innovation and Skills through the Strategic Investment Fund, and by Scottish Enterprise. The facility, it is said, will be completed in 2012 and targeted at start-up and spin-out biotechnology companies, creating a projected 200 jobs over five years.

Mercer said the 100,000sq ft project would probably become a "white elephant". He added: "Already an investment by the US property firm Alexandria Real Estate Equities Inc – much trumpeted by Scottish Enterprise – has so far not materialised. In the current recession how can the UK government, let alone Scottish Enterprise, justify ploughing this much money into a location which is, as yet, unproven?"

He said the failure of Scottish Enterprise to attract new investment was in sharp contrast to Discovery Terrace and other privately funded developments within the Science Triangle. Since being launched five years ago, Discovery Terrace has attracted Weir LGE, a major arm of the Weir Group plc, and companies such as Fulcrum Pharma and New Wave Broadband, a provider of broadband services to remote maritime sites such as oil platforms.

Discovery Terrace comprises two pavilions of 9,500sq ft with planning permission in place for a third pavilion. Mercer said: "Obviously, in the current economic circumstances it will not be possible to develop the third site without a whole or part pre-let. How are we expected to achieve this when two organisations funded by the taxpayer decide to build a subsidised facility with 24m of public money?

"If Scottish Enterprise wishes to see the Science Triangle grow they would achieve much more by talking to proven developers rather than throwing public money at projects whose value for money seems debatable."

A spokesperson for Scottish Enterprise said: "The bioincubator is an essential component of the wider strategy to unlock the full economic potential of the life sciences cluster in Edinburgh and Scotland.

"The global recession has meant that private sector developers are unlikely to raise capital for a specialised speculative development of this nature, and given there continues to be strong industry demand for accommodation of this type, there is a clear case for public sector support."