A proposal by Gavilan College’s Small Business Development
Center hopes to entice biomedical technology companies to Morgan
Hill and spur economic development in the area.
A proposal by Gavilan College’s Small Business Development Center hopes to entice biomedical technology companies to Morgan Hill and spur economic development in the area.
But before the city opens its arms to biotech, members of the city’s Community and Economic Development Committee agreed to conduct a feasibility study to determine if start-up biotech companies would have an interest in the mushroom city.
The committee, composed of Councilmen Greg Sellers and Larry Carr, and Business Assistance and Housing Services Director Garrett Toy, enlisted the help of Gavilan College’s Small Business Development Center to conduct a biotech business feasibility study, which will cost the city about $10,000. The study is estimated to take 60 to 90 days to complete.
“Morgan Hill is an absolutely excellent location for expanding opportunities in the biomedical and technology field,” SBDC’s Richard Gillis said while discussing the benefits of developing Morgan Hill as an incubator in the budding biotech industry. The SBDC and the Economic Development Committee discussed the idea at a meeting last week.
Gillis hopes the city will establish a facility that would provide support services to small and start-up biomedical and bioagricultural businesses. Support services would include infrastructure and clerical support to several biotech businesses that could save money by sharing administrative support costs, rent and maintenance expenses of a facility.
Gillis is looking at a 30,000 sq. ft. space that is currently empty at DePaul Health Center, on Cochrane Road and U.S. Highway 101. That portion of the building used to be the in-patient bed and intensive care unit of the former Saint Louise Hospital, Gillis said.
The approximately 100,000 sq. ft. hospital building was purchased by the Daughters of Charity about five years ago. The hospital was moved to Gilroy, and a portion of the building, about 30,000 sq. ft., now houses medical offices. The rest of the building is empty.
Gillis, who is also a member of the Morgan Hill’s Economic Development Advisory Board, said the city is looking for ways to encourage businesses to relocate to Morgan Hill in an effort to improve the local economy and provide job opportunities for residents. He indicated the former hospital building would make an ideal site for what he termed, “a business incubator facility.”
“It costs a lot for a business to build a site and pay for clerical services and the like,” Gillis said. “The building is empty, has two floors and can provide water and heat. It would provide a large enough space so rents are paid by several businesses who need help, stability, not just start-up support. But the administrative support and the consulting and business support the SBDC could provide would benefit them.”
He said the National Incubator Association offers grants for such facilities as long as they range between 20,000 to 30,000 sq. ft. Generally, start-up businesses prefer locations close to population centers, but the DePaul building, which is located east of U.S. 101, would be good for biotech businesses, which are mostly engaged in research and development.
“Morgan Hill would be an ideal location, especially for high-growth industry of which biotechnology is one that pays a livable wages for entry level technology technicians to go into this field,” Gillis noted. “The Daughters of Charity organization is very interested in pursuing the idea to see if it works.”
City officials indicated the influx of biotech industry into Morgan Hill could be a good move for the city.
“An (business) incubator would produce a cluster effect. Companies will come in that are working in some way with biotechnology, wanting to be close, it could be advantageous,” said Sellers, who also chairs the Community and Economic Development Committee.
“We should look for the opportunity to make the building work. It offers a golden opportunity for the city to utilize space in a building that’s just sitting there,” Gillis said. “I think there are a lot of opportunities for Morgan Hill to expand.”
The committee discussed the possibility of biomedical technology conflicting with the Daughters of Charity’s religious principles. The Catholic organization opposes some aspects of biomedicine, particularly stem cell research.
“The Daughters of Charity are oriented with taking care of people and not focused on controversy,” Gillis said. “Our interests would not be diametrically opposed to theirs. We are not interested in creating controversy. The city is focused on economic development, job retention and the creation of jobs.”
“We think it’s a great idea and it will be good for Morgan Hill. It’s the opportunity to use a space that is otherwise vacant,” said Andrew Barna, director of Strategic Development at O’Connor Hospital, which manages the property for the Daughters of Charity Health System. “We’re a big Catholic organization and we do have to abide by the ethical and religious directions agreed upon by the bishops. But we don’t think there would be much conflict with the work that will be done in the building. We are comfortable with the direction Rich Gillis and the city of Morgan Hill is taking for the use of the building.”
Barna said the organization is willing to devote 30,000 sq. ft. of vacant space to biotechnology. The organization also plans to open an urgent care office at the site in November. The walk-in clinic will have extended hours for community members in its single suite in the DePaul center.
“We are focusing on the medical office building primarily and as many services as we can develop contingent on the Coyote Valley development,” said Barna. “The limited population from Morgan Hill supports the medical offices and basic services, but this surely could increase with growth in Coyote Valley.”
Barna said the organization also sees establishing a biotechnology site for research and development as a positive direction for the city.
“We think it would be a great opportunity and would love to be able to work with the city in this direction,” said Barna.
According to Gillis, now is the time to capitalize on the growing biotech industry.
“There is so much going on in biomedicine. We need to take a hard look at what’s going on…. There are significant strides being made with medicine and agriculture,” Gillis said.
The committee will inform the city council about the SBDC feasibility study at the next council meeting, which is set for Aug. 24. Sellers said the goal is to have the study completed by the end of the year.
Gillis told the committee the study would be exhaustive, and would determine if there is community support and adequate infrastructure to support biomedical/technology businesses in Morgan Hill. One-on-one interviews will be conducted with community leaders and the study will seek to identify positive and negative impacts the biotech industry may have on the city and surrounding region.
Gillis and committee members were positive at the prospect of creating a biomedical technology incubator in the community.
“You can’t be better situated geographically for it,” said Gillis.
