Over the years, Berkeley’s largest for-profit employer has contributed $20 million to the city, created hundreds of jobs, developed paid science training programs for youth and invested in a community foundation to support key health and education programs.
Yet Bayer HealthCare Pharmaceuticals, said Councilwoman Susan Wengraf earlier this week, “may be one of the best kept secrets in Berkeley.”
Wengraf, and other council members, spoke glowingly Tuesday evening about Bayer’s many community contributions at a special meeting to receive a report outlining the past 20 years at Bayer’s Berkeley site. The report was required due to a 30-year agreement forged between Bayer and the city in 1992 to streamline the development permit process and guarantee benefits for the city.
Councilman Max Anderson applauded Bayer’s “continuous show of good will,” and Councilwoman Linda Maio described “a culture of connection with the community.”
Councilman Darryl Moore summed it up: “I can’t think of a better corporate partner we’ve had.”
The council members’ remarks followed a presentation by Trina Ostrander, associate director of public policy and communications for pharmaceutical giant Bayer, which has manufacturing operations in Berkeley and Emeryville that brought the company $2.8 billion in 2011. (Global headquarters, with sales of $22.1 billion last year, are based in Germany.)
Bayer moved into Berkeley in 1974 when it purchased plasma producer Cutter Laboratories (est. 1897) then unveiled a blood clotting agent to help treat hemophilia. Bayer, then Miles, Inc., “could have gone anywhere in the world, but it came to Berkeley,” said Ostrander, drawn by local hemoglobin expertise and the city’s educated workforce. [Watch a video about the history of Bayer and the Cutter Laboratories in Berkeley.]
In 1992, the company signed the development agreement with city officials with the goal of making Berkeley its global center of biotech operations, said Ostrander.
Currently, according to Bayer, the company is the second largest biotech employer in the Bay Area, with 1,600 employees working across Berkeley, Emeryville and San Francisco. (Last year, Bayer union workers clashed with company management over contract negotiations.)
Ostrander described Bayer as a partner to the city in education, environment, economic development and safety. The company’s 45-acre site is located in West Berkeley, expanded from the original 30 acres with the 1999 purchase of land formerly owned by Colgate. It’s bounded by Dwight Way to the north, and Grayson Street to the south, between Seventh Street and the railroad tracks.
The development agreement, the only one in Berkeley, was the result of more than a year of public meetings and negotiations. (Wengraf and Anderson said they were on the Planning Commission when the deal was approved.) The goal of such an agreement is to encourage “long-term, major investments by giving companies security that land use policies will not change over time,” according to Ostrander’s presentation.
Bayer received several key perks in the deal: allowable build-out of 1.17 million square feet, rather than the 670,000 permitted at the time; a building height of up to 80 feet (45 was the max at the time); and use permits for building expansions up to 40,000 square feet (larger buildings would require Zoning Adjustments Board approval).
Since 1992, the company has built out more than 1 million square feet for its facilities, spending nearly $300 million, said Ostrander.
That’s in addition to nearly $4 million for street and traffic improvements; money (pending) for storm system improvements; more than $300,000 for Aquatic Park improvements; $100,000 for a bicycle boulevard; and more than $20,000 in landscaping projects. Bayer also paid nearly $900,000 into the city’s Housing Trust Fund to mitigate a demand for new housing that would arise from its growth in Berkeley.
(These fees were set as part of the negotiations that took place between the city and Bayer in the early 90s as mitigation for impacts Berkeley would face from the company’s growth.)
The company’s contributions that seemed to be among those most appreciated by the City Council Tuesday night were the ones aimed at the Berkeley’s youth.
Bayer has invested more than $5 million in a biotechnology education program for Berkeley students (grades 9 through college), as well as adults who are unemployed or underemployed. The program involves student stipends and paid internships, a high school career day and a summer training program for Berkeley High teachers.
The Biotech Partners program involves 70-80 students per year from Berkeley High and Oakland Tech, and has funded 343 paid internships from 1992-2011. Of 142 students who graduated from the program, 94 were hired into biotech jobs, including 48 by Bayer itself. (The program, which was launched by Bayer alone, is now run in conjunction with a range of biotech companies, foundations and public entities such as the city of Berkeley.)
Councilman Anderson called the program “one of the most rewarding things I’ve ever been associated with.”
In 2010, the Bayer USA Foundation announced a three-year $540,000 grant to build on the Biotech Partners model and establish a regional center to improve science in the Bay Area, especially for women and minority students.
The company also has invested more than $300,000 in projects for grades K-8 to “encourage basic education in areas related to biotechnology,” according to Tuesday’s presentation.
Ostrander also described the West Berkeley Foundation to city officials; the foundation, an independent non-profit, has spent more than $1 million helping launch a capital campaign to build Rosa Parks Elementary, and investing in programs such as Berkeley Youth Alternatives, the Center for Independent Living and the Family Violence Law Center.
(The last grants were paid in 2008, and program funds are nearly depleted, according to the report.)
In May, Bayer opened a childcare center for children ages six weeks to kindergarten-ready. It’s open to Bayer employees and other community members as well.
The company also has made strides in sustainable growth, and invested in historic preservation and public art, said Ostrander. Earlier this year, Bayer built the city’s largest solar installation in its main employee parking lot. (Learn more in this PDF of her presentation.)
Other achievements included the development of computer software to limit the need to use animals for lab research, and the removal of animals from the Berkeley site in 2008.
In 2010, Bayer paid $23.3 million in taxes, and spent $227 million with Bay Area vendors for a range of needs, from construction and public utilities to metal works and facilities services.
Councilman Laurie Capitelli said Ostrander’s report was proof the company had gone “way beyond” anything required by the development agreement.
Looking to the future
The development agreement sets terms for 30 years, and requires regular reports to city officials. Council members said they hope that, once the agreement ends, that doesn’t mean programs and other mitigations will run dry, citing Bayer’s deep commitment to corporate social responsibility.
Mayor Tom Bates noted that part of Bayer’s current land holdings are not covered by the development agreement, and asked Ostrander if, in the future, that area might be incorporated. Bayer reps met the suggestion with optimism and said it was under discussion already.
Councilman Gordon Wozniak asked if it might be helpful to Bayer to have additional biotech companies located nearby in West Berkeley to help spur innovation. Ostrander replied: “The synergy of capital and resources is totally important.” She noted that the benefits of proximity were already playing a role at Bayer’s Mission-based R&D operations in San Francisco.
This year, she said, Bayer’s Berkeley site will add 64 new jobs and, due to product demand, has reopened a manufacturing facility that had been closed. Bayer HealthCare’s best-selling products in 2012 are made in Berkeley and Emeryville.
Ostrander said the biotech industry is “changing fast” and becoming “increasingly competitive in a global marketplace.”
Despite this, she said, Bayer is “quite optimistic” about the future, and “committed to keeping the Berkeley site efficient, safe and cost-competitive into the future.”
Said Ostrander in conclusion: “That’s all we know.”
See the complete 20th anniversary development agreement report here.
Bayer unveils Berkeley’s largest solar installation [05.30.12]
Activists accuse Bayer of killing bees, protest in Berkeley [05.17.12]
Dozens speak out about controversial West Berkeley plan [05.02.12]
Bayer Healthcare employees reject contract [09.01.11]
Laid-off Bayer workers still fighting for their jobs [08.31.11]
Biotech Academy students get hands-on education [08.17.10]
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