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Elk Run research park has big ambitions

Before the leaves start to turn this fall, the people of Pine Island can expect to see the first vestiges of a world-class biotechnology research park rise from this city’s rolling dairy land.

Construction is set to begin this spring on an estimated $5 to $7 million laboratory and office building in the sprawling Elk Run development along U.S. 52 about 15 miles north of Rochester.

Ultimately planned for 2,300 acres of offices, laboratories, businesses and homes, the Elk Run project promises to bring some of the greatest bioengineering minds to southeast Minnesota and transform this city of 2,300 to a paragon of planned development.

"We have asked ourselves over and over, ‘What do you want to be in 20 years?’" said Abraham Algadi, Pine Island’s city manager and a champion of the Elk Run project.

"We’re getting the potential to put Pine Island on the map in terms of being a center for bio-business research and commerce," Algadi said.


Toss in spin-off industries, like hotels, restaurants and small shops, and Algadi envisions a transformation of Pine Island that will set the city on a path to steady growth and low unemployment for decades.

California-based Tower Investments, the development company tapped to design and build Elk Run in Pine Island, is set to open the first building, the Outrun Biobusiness Park, by the end of August.

The park is planned to be a 50,400-square-foot facility that will house office and laboratory space with technology sufficient to accommodate the world’s most sophisticated bioengineering research companies.

"The biotechnology frontier represents the next American revolution … to create new products and new things that we haven’t ever dreamed of," said Abraham Algadi, Pine Island’s city manager and a champion of the Elk Run development.

Pine Island was picked for its proximity to the Mayo Clinic and the Twin Cities, in addition to the alignment of development plans with goals of the city council, Algadi said.

"You can only mine the things you have," Algadi said. "We have great minds (at Mayo) that we can mine."

Money for Elk Run has come from a combination of local, state and private investment money, with the largest chunk set to come from Burrill and Co., San Francisco-based financiers of biotechnology start-ups. CEO and founder Steven Burrill has visited Minnesota several times as he works to raise the money.

Planning started in earnest in 2006 when former Gov. Tim Pawlenty pledged millions of state dollars to bolster Minnesota’s biotechnology sector and authorized the creation of Biotechnology and Health Science Zones, which give industry preferential tax treatment.


Tower and Burrill eventually jumped.

By the end of this January, Tower already had chipped in about $1.2 million — and the state $600,000 — for upgrades to Pine Island’s municipal water and sewer infrastructure, Algadi said.

Burrill has committed to somewhere between $250 and $500 million, a drop from its original pledge to put up more than $1 billion, but still an affirmation of Elk Run’s ambitions.

Elk Run has seen its share of skeptics and naysayers, with some locals worried that taxes will increase and the city’s rural way of life will evaporate, Algadi said.

A handful of residents will never be persuaded of Elk Run’s benefit to Pine Island, Algadi said, but "the minute you see the first building go up, the skepticism in the minds of people on the fence will go away."

The slumping economy and tumbling housing market that set in during the end of the last decade — as Tower mapped out Elk Run’s construction timeline — imposed a series of fundraising and construction delays.

Algadi said the setbacks fueled local criticism of Elk Run but weren’t enough to deter investors.

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