Seven years after partnering with the city and the University, the developer of Science Park at Yale has quietly agreed to sell the property, leaving the city and members of the complex’s nonprofit board of directors to learn the news from a newspaper brief.
Lyme Properties, which took charge of redeveloping the biotech incubator site in 2000, had struggled to fill vacancies and remodel buildings in the 80-acre complex before it agreed to sell the property to a realty trust last week. But the company never consulted with or even notified the city or the business park’s board, leaving officials puzzled by Lyme’s sudden exit — especially since the company needs permission to sell the property, located at the site of the former Winchester gun factory adjacent to Science Hill.
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In 2000, the non-profit Science Park Development Corporation entered into an exclusive development agreement for the site with Lyme, although the SPDC retained ownership of the land and two buildings there, both of which are mostly occupied today. Lyme, in turn, promised to develop the remainder of the complex over the next decade at a projected cost of over $200 million, pledging to add about 2.5 million square feet of new and renovated mixed-use space. Lyme’s sale of the properties, announced last week, was first reported as a one-paragraph business brief in the Boston Globe — and that’s how it came to the attention of SPDC and city officials.
“The development agreement requires that the Science Park board give its consent to any sale, and they haven’t asked yet for that consent, and that consent has not yet been given,” said David Silverstone, chairman of the SPDC. “At the appropriate time, we will be scrutinizing the issue and making a decision with regard to that … all I know about this transaction is what I read in the press release or the Boston Globe article.”
San Diego-based BioMed Realty Trust has agreed to pay $511 million for Lyme’s portfolio of life science real estate, including Science Park and sites in Cambridge, Mass., and Houston, according to a BioMed press release. Officials at both companies did not return phone messages Thursday.
Because the sale includes all of Lyme’s properties and not just Science Park, it should not be viewed as Lyme giving up on Science Park or the Elm City, Silverstone said, but more likely as a broader business decision by the company. And while the SPDC can always veto the sale, the board only wants what’s best for the business park and the city, he said.
“BioMed is a large, publicly traded real estate investment trust that appears to have a fairly good track record,” Silverstone said. “Our goal is to get Science Park fully developed, and if after we sit down and talk about it these guys can go forward expeditiously, that works for us.”
Yale Vice President for New Haven and State Affairs Bruce Alexander said the University has very little information on the sale, although he said BioMed is a “very strong player” in the biotech real estate market. There is a clear demand for biotech space in New Haven despite the sale, he said. The biotech center at 300 George St. is virtually full, and 40 biotech companies are doing business in and around the city.
Lyme, based in Hanover, N.H., renovated one facility — the 266,000-square-foot Building 25 — at a cost of about $30 million, although the building is still partially vacant. The rest of the company’s holdings at Science Park, including over one million square feet of space in what used to be part of the Winchester facility, remain vacant and largely in disrepair.
At Science Park, located in the Newhallville neighborhood, the biotech boom to which New Haven so enthusiastically latched itself has come slowly. Originally born in 1982 as a collaboration between the city, the state, Yale and Winchester’s parent company, the site struggled to attract science-related startups, ran into financial troubles and remained largely empty for years.
In the 1990s, the University contributed over $2 million to help keep Science Park running, and the SPDC ultimately concluded that a professional developer would best be able to build up and market the facility. Science Park had lost money in every year of its operation at the time Lyme joined the project. In an October interview, Lyme managing partner David Clem said the company had struggled to attract tenants and overcome the site’s reputation as a rusted relic of the city’s manufacturing past. But at the time, he said that with the proper vision, Science Park still could become a bustling, mixed-use space — perhaps just not as quickly as his company initially envisioned.
BioMed stock closed up 11 cents to $30.91 on the New York Stock Exchange on Thursday.