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BUSINESS PLAN 2012 - 2017 Creating The Future Building The Infrastructure For Opportunity

MISSION STATEMENT

To lead in building a 21st century globally competitive New Orleans economy based on the biosciences by actively supporting and facilitating public and private research partnerships, encouraging entrepreneurship and recruiting outside investment and biopharmaceutical companies within a sustainable built environment.

Table of Contents
MISSION STATEMENT EXECUTIVE SUMMARY SECTION 1: ABOUT BIODISTRICT NEW ORLEANS SECTION 2: CHANGING INDUSTRY LEADS TO OPPORTUNITIES SECTION 3: VALUE PROPOSITION SECTION 4: FIVE YEAR PLAN AND PROFORMA SECTION 5: ORGANIZATIONAL FRAMEWORK 1 3 7 9 12 18 23

SECTION 6: STEPPING INTO THE FUTURE BUIDLING THE INFRASTRUCTURE FOR OPPORTUNITY 25 APPENDICES APPENDIX A. BIODISTRICT ECONOMIC IMPACT ANALYSIS DR. JAMES A. RICHARDSON APPENDIX B: BIODISTRICT MARKETING PLAN APPENDIX C: UNIVERSITY STRENGTHS AND WEAKNESSES APPENDIX D: BOARD OF COMMISSIONERS AND ADVISORY COMMITTEES APPENDIX E: STRATEGIC ACTION PLAN 27 28 29 30 31 33

EXECUTIVE SUMMARY BioDistrict New Orleans Coordinating The Effort

BioDistrict New Orleans acts to foster collaboration and interaction among bioscience researchers, industry leaders, entrepreneurs, investors, community leadership (civil, social and philanthropic) and institutions across the community. BioDistrict New Orleans is focused on building alliances across the state and industry sectors to educate the public and advocate for sound policies to strengthen the growth of Louisianas bioscience industry. The BioDistricts underlaying mission and goals is the recruitment and retention of bioscience companies and do not overlap with those of other economic development agencies such as GNO, Inc. and the New Orleans Business Alliance. Market Segment

District Creation BioDistrict New Orleans, formerly the Greater New Orleans Biosciences Economic Development District (GNOBEDD), was created by Act 487 of the 2005 regular session of the Louisiana State Legislature and amended in 2008 and 2010. The District is composed of the area bounded by Earhart Boulevard, Carrollton Avenue, Loyola Avenue and Iberville Street, spanning 1,500 acres in the downtown and mid-city areas of New Orleans.

Based on the comprehensive analysis of the research strengths of our university partners, government business inducements and public & private investments, the BioDistrict will concentrate our economic development activities on four general sectors; Industrial, Informatics, Medical and Environmental. We believe there is the potential for substantial growth in these segments and they align with existing and planned community assets.

BioDistrict New Orleans: A business model for tomorrows innovation

 4 As this business plan is being offered, there are fewer companies, less capital available, and academia along with the biopharmaceutical industry are being told to do more with less. We will see diminished resources from traditional reliable government funding sources as the process of discovering, developing and gaining approval of drugs becomes increasingly lengthy, expensive and riskier. Typically it takes an average of 15 years and $1.2 billion to bring a new drug to market. The investors in biopharmaceutical companies are concerned about the risk reward ratios. Consequently, company executives and more importantly their investors now realize that their industrialized innovation model is unsustainable. This is partly being driven by the science itself as many believe low-hanging fruit may have been harvested, and todays scientific challenges are consequently more complex than those involved in developing earlier generations of biotech technologies and products. For biopharmaceutical companies and their investors, this points to a future in which they will face even more downward pressure on prices and demands as they try to demonstrate the comparative effectiveness and efficiency of their new products. This will require more data and increased development costs. More broadly, these trends are part of the shift to an outcomes-focused healthcare system of the future.
Reasons Why States and Regions Are Seeking to Grow Their Bioscience Sectors According to the Biotechnology Industry Organization (BIO), the biosciences stand as a unique growth driver for states and regions because: The biosciences are composed of rapidly growing industry sectors. According to the latest Bureau of Labor Statistics over the 10year period ending in 2010, the bioscience industry will average annual increases of 2.9%, nearly double the overall employment growth projection of 1.6% annually. The biosciences offer high-paying, quality jobs across a range of occupations from lower-skilled technicians and manufacturing workers to high-skilled research scientists and medical doctors. In 2003, bioscience workers, on average, were paid at least $18,600 more than the overall national average wage. The biosciences not only involve a diversity of markets but also cut across manufacturing, service, and research activities. The biosciences contribute to the growth of other technology sectors, such as information technology, electronics, optics, and advanced manufacturing.

All of this points to new technologies (known and Investment in the biosciences can lead to unknown), new techniques and environments where benefits for a states citizens in terms of sustaining innovation at higher than historical improved health care, cleaner levels can be met. To sustain innovation, it is even environments, and healthier foods. clearer that something has to give and that we will need to Innovate Innovation. The challenge as we Adapted from BIO, Laboratories of Innovation: State Bioscience Initiatives, build the BioDistrict is understanding the change and 2006. spotting the immediate and long-range trends. Our mission is to develop the research collaborations, partnerships, and the ecosystem within a sustainable built environment that attracts and supports seed and first-round venture capital that will be in search of the nextgen emerging markets. Sustaining Innovation through Innovation So how can the BioDistrict be sustained as a next generation biocluster and be a change agent within a changing industry sector that itself has to innovate to grow? Thats the question on which we have concentrated for more than a year. During our Master Planning work, we have

 5 investigated various other bioclusters, new and old, to determine what is the appropriate mix and size. We studied our scientific strengths and aligned our programmatic plans to the long-range plans of the local universities, the Board of Regents, and Louisiana Economic Developments Blue Ocean Strategy. We also learned that healthcare and biotech industries are in the early stages of a sweeping transformation that will result in revolutionary, outcomes-focused ecosystem acting as the root system for the so-called knowledge based economy of the 21st century. From the need to make health care sustainable will come the age of new technologies (e.g., mobile health, e-health, digital health records, infectious disease modeling, genome mapping, and translational medicine.) These technologies will not only enable new solutions that will have the potential to make health care more sustainable and accessible, it will create new opportunities for BioDistrict New Orleans, provided we market our assets to the industry. To be successful in this area, we need not topple or be bigger than other established bioclusters; we need to offer a coordinated BioDistrict with programmatic support activities that will result in us leapfrogging others into the position of being designated as a premier biocluster. Budget This budget assumes expenses with appropriated funds but no expenses will be incurred until the funds are in hand. We assume a calendar year commencing in January 2012, and also assume that the President will be the primary employee through the summer of 2012. There are three potential sources of reoccurring revenue: 1) levying of a special New Construction Impact Fee; 2) a state appropriation; and/or, 3) fees for services including rental income and event sponsorships, and BioDistrict provided services where there will be cost savings from the district wide application of services such as insurance, waste management, personnel, and operational services to member institutions and affiliated biosciences organizations. We examine below the impact of each including a combined State Appropriation and Construction Impact Fee. We believe there is a strong case to be made for the implementation of a 1.5% New Construction Impact Fee within the two designated Sub Districts as outlined below.

There is ample precedent for a special construction impact fee to proactively support new and sustained development; when it is correctly applied, the revenues derived from the fees

 6 will provide for new opportunities and thereby maximize the economic growth potential. Dr. James A. Richardsons Economic Impact Analysis on the BioDistrict wherein he states, The size and breadth of the construction required of the BioDistrict creates substantial impacts on the local and state economy. More significantly, however, are the consequent activities that are enabled by the construction of new infrastructure and buildings. This activity yields sustained economic activity, and where successful, this kind of activity can motivate even more construction, which can lead to additional ongoing economic activities. This creates a development cycle that provides for a secure, sustainable, and dynamic economic environment in a locality or region. Targeted growth when part of an overall economic development strategy and holistically supported with activities such as workforce development, small business enterprise development, public policy and capital sources is good and will pay for itself. Conclusion With the catalytic construction of the new University Medical Center (UMC) and Veteran Affairs (VA) hospitals and the other specialized facilities like the BioInnovation and Cancer Research Centers, New Orleans has an opportunity to create a biocluster that should be capable of creating $24 Billion in terms of employment, personal earnings, and new state and local tax collections, over the course of the next 20 years. Construction employment alone is substantial; however, the employment associated with the ongoing activities of the BioDistrict is ultimately larger. Including both construction impacts and the subsequent ongoing operations, there will be 18,787 jobs after five years of activities, 21,832 after 10 years of activities; and 36,215 after 20 years of operations. The essence of the business plan to follow, is to: 1) Evaluate how in the changing market segment BioDistrict New Orleans and its member institutions can prosper and be competitive in the current biopharmaceutical business; 2) introduce the role, management structure and sustainable funding requirements of the BioDistrict; 3) demonstrate the return on investment in real dollars to the city, the state and the taxpayers of New Orleans and Louisiana; and finally, 4) the steps that have and will be taken to succeed. We believe the investment is sound, and will result in measurable advancement for the city, region and the state.

SECTION 1: ABOUT BIODISTRICT NEW ORLEANS

The BioDistrict is dedicated to promote and develop New Orleans as a premier location for bioscience research, education and industry development. BioDistrict New Orleans believes in fostering collaboration and interaction among bioscience researchers, industry leaders, entrepreneurs, investors, community leadership (civil, social and philanthropic) and institutions across the state. The BioDistrict acts as a research park in an urban setting. In 2008, Battelle stated that:1 Research parks have a positive impact on the economy by: Generating high-quality, high-paying jobs; Stimulating the formation of new technology-based Companies; Accelerating the growth rate of young technology Companies; Promoting the commercialization of new innovations, products, and processes; Attracting research-intensive industries. Statutory Responsibilities of BioDistrict New Orleans: 1) Facilitating the creation of high paying jobs by assisting the biomedical institutions and employees in the district with development of bioscience facilities and programs; 2) Acting to acquire and develop real estate needed to grow the academic research institutions within the district (receiving public and private funds for such purpose); 3) Assisting with increasing research and training dollars for institutions within the district (receiving public and private funds for such purpose); 4) Assisting with increasing research dollars for health-related research and training; 5) Increasing basic and clinical research and the health and bioscience workforce; 6) Working to bridge commercialization opportunities from research developed within the district; 7) Enhancing interdisciplinary biosciences; and, 8) Acting as a link to private sector life sciences companies in the state, all with a view toward job growth in the district.

BioDistrict New Orleans is one of the emerging new models within the paradigm shift towards the knowledge-based economy recognizing the importance of university driven innovation as the essential ingredient. To be successful we must create a cohesive strategically planned community that unites local university research strengths including transfer and commercialization of technology with entrepreneurialism, capital, workforce development and training programs to assist in the attraction of outside investment and the development and retention of new companies and corporate expansions in the New Orleans bioscience community.

1Battelle Technology Partnership Practice. 2008. Characteristics and Trends in North American Research
Parks: 21st Century Directions.

 Timeline

Historical Support for BioDistrict New Orleans

Year 2002 Purpose Beginningofthe organizedeffort tocreateanEDO alignedwith university partners Creationof District RPCStudy BoardSeatedand BylawsAdopted StrategicMaster Planningto analyzeandmake recommendations ontheeconomic andmarket advantagesof entireDistrict Assistedinthe improvementof economic development opportunities withinthe biosciencecluster MasterPlanning oftheDistrict Toassistinthe improvementof educationand economic development opportunities throughthe creationofnew initiatives Namechangeto BioDistrictNew Orleansand additionof2 community membersto Board Source BusinessCouncil,Chamber CityofNewOrleans,GNOInc., LED,LSU,Tulane,Xavierand theGovernorsoffice LouisianaLegislature Samestakeholdersasin2002 N/A LouisianaRecoveryAuthority OfficeofCommunity Development Amount N/A

2005 2007 2008/2009 2010

N/A $167,000+InKind N/A $2.4million

2010

CityofNewOrleans CooperativeEndeavor Agreement

$50,000

2011 2011

LouisianaRecoveryAuthority OfficeofCommunity Development CityofNewOrleans CooperativeEndeavor Agreement

$50,000 $50,000

2011

LouisianaLegislature

N/A

SECTION 2: CHANGING INDUSTRY LEADS TO OPPORTUNITIES

BioDistrict plan is develop an infrastructure of opportunity and as the biopharmaceutical industry changes grab -- Early Mover Advantage. The current $360 Billion biopharmaceutical industry R&D model is broken and everyone from the lab to the patient knows it. Getting drug approval now requires unaffordably large, laborious, lengthy trials with absolutely no guarantee of success. The biopharmaceutical industry is in an outdated system of risk filled innovation cycles and a drug trial system that leads everyone to realize we are using the wrong tools to do the wrong things targeting the wrong audiences. Meanwhile patients ask: What does all this mean for the medicines I need? In an era where drug shortages are almost routine occurrences, this is very bad news. But it could actually be good news for those innovators recognizing the need for change and who are willing to pursue the opportunity! The BioDistrict has an integrated plan to recruit new partners, investors, collaborators, biopharmaceutical companies and invite them to the city, providing them with the information and connections to quickly and seamlessly understand our strengths and assist them in making the decision to invest in New Orleans based on the strengths of our university partners and the sustainable built environment. To do this the BioDistrict plan implementation, will challenge us to rethink the whole concept of biopharmaceutical innovation and position ourselves for what Richard Barker; the Director of the Centre for Accelerating Medical Innovation at OxFord University in part cites four "Grand Challenges": 1. Where will tomorrow's discovery research be doneacademia, medical charities, Small and Medium Size Enterprises (SMEs), traditional biopharmaceutical companies, or creative combinations of all four? 2. What role can the BioDistrict play in building a new innovation model that escapes today's burdensome development and regulatory paradigms? 3. How will future innovations be marketed, in an era of outcomes-focused value assessment? 4. Will biopharmaceutical companies (the Who) take full advantage of new technologies to drive and track patient access, optimum use, and desired outcomes? How we answer these questions and position ourselves will determine the When, or whether we will ever benefit from the Early Mover Advantage as the biopharmaceutical industry enters what will be a new era of prosperity. There is no downside for us, as change is going to occur one way or another. The question is we could be seen as one of the innovators of the change as a biocluster that learned to Innovate Innovation or a lower tier market.

 10 Where will tomorrows research be done? In drug discovery, the biopharmaceutical industry has invested so much in the Henry Ford model of 'industrial production' of research. Think of the big internal labs on remote campuses secure, idyllic settings and controlled environments. It is hard to imagine the culture as any other than being insular. To truly be innovative, the environment needs to be open, a place where multiple ideas from multiple outsiders are shared, with an investment in creativity and time to make the new relationships and new products work. Despite the many consortia and think-tank proposed, practical examples of progress and streamlining development are few and far between and mostly clustered around just a few university centers. Even fewer have incorporated biopharmaceutical companies, investors and regulators, to openly discuss each others aversion to risk. The BioDistrict has been designed to address the critical urban planning design issues and create what will be one of the next generation premier biocluster locations where interdisciplinary innovation will be encouraged and supported by programming and propinquity that will ensure collaboration through proximity and familiarity. The role of the BioDistrict is to lead effort in recruiting new and retaining existing partners who are willing to invest Our role is clear, go make deals that will growth the research base, attract new researchers, partners, investors, collaborators and industry. On a limited scale we are seeing biopharmaceutical companies\partners who actively investing in the new discovery models, embedding researchers in academic groups, working to spin out product portfolios with venture capitalists, and co-developing products with research charities and academics. Our efforts are based on the first pilot programs, which tended to be centered in the larger successful bioclusters of Boston, Silicon Valley and San Diego. We will see further changes in where programs are sourced, as the NIH funding is reduced and major academic medical centers lacking the funds to invest in discovery themselves, will turn to these outside sources of revenue. Within the BioDistrict, our university partners have created consortiums exploring the advancement of tools needed to reshape the process for the new era of more focused, stratified personalized medicine. We also have local companies are either in development or deployment that will incorporate value measurement in clinical trials, new clinical data informatics and data warehousing, genome mapping, infectious disease modeling and real-world data collection and connectivity in the so-called Translational Medicine Model. Point in fact, in the post Katrina rebuild of New Orleans, the City has built 88 new neighborhood clinics designed to accommodate the real time connectivity. Establishing collaborative partnerships, multi-party consortiums, and multi-institutional institutes are the likely means in which we will access new investments. We have already successfully established powerful collaborations including the Louisiana Cancer Consortium, the Louisiana Vaccine Center, and the Minority Health & Health Disparities Research Center and will be looking to do more in the coming year. But someone needs to tell the story and sell our strengths. With the proper leveling of funding, we will develop an even more aggressive program to become a distinction of choice based on the strength of our science, new facilities, built environment and agreeable public policy.

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Marketing Informatics and Digital Media Applications to lead the biotechnology Boom One of our key opportunities is to focus our marketing on companies/investors who see the opportunities in the rapid advances in IT will drive the uptake of biopharmaceutical innovation. The advances are in its earliest stages of development, and for which we have a huge tool in our arsenal to be very competitive the Digital Media Tax Credit. Of course, person-to-person communication will always have a role, with governments, healthcare provider agencies, healthcare systems managers, and the doctor patient prescribers. But advances in the types of technology should be taking place in companies located within Louisiana enabling them to take advantage of the very aggressive Digital Media Tax Credit. This tax credit of 35/25% can be applied to anything from digital gaming to software development and simulation training. The BioDistrict plans to capitalize on the great incentives we have to offer to biotech companies before others catch up. Academia, government and the biopharmaceutical industry are embracing the new tools of mobile health, social networking and content analytics. We have all witnessed the early interactive websites, Twitter feeds, mobile patient education videos, and medication alerts to mobile phones are doing well. In New Orleans, we have three companies that arrange for clinical trials nationwide using these channels and target marketing to a specific clientele. This is the future, getting the right medicine in the right dose to the right patient at the right time. The old guard is doing wide broadcast to the consumer through advertising where the warnings of the side effects are the longest part of the commercial. We need to respond to the profound changes that are under way at all stages of the biopharmaceutical industry's value chain. Who will lead the next Revolution and take full advantage of new technologies? The goal of the BioDistrict is to recognize the changes in the traditional development paradigm and be part of the creation of a new more dynamic global system. Changing this paradigm will require greater patient access and engagement, statistical innovations, ethical rebalancing, new IP approaches, support infrastructure, workforce and community engagement, legal and policy reevaluationall necessary for eventual public and political acceptance of urgently needed change. The key now is how targeted medicines that are designed around defined populations can be brought to the right patients swiftly and at an affordable price. All of this must occur in an open innovation environment. In the current economically pressured yet instantaneous environment, digital tools to prompt good health behaviors, educate patients, issue medication reminders and track outcomes have huge potential. As we discussed about we are positioned to be a leader if not THE leader. Biopharmaceutical companies are already using digital technology as a strategy for the future; they are just not doing it here. Doing what academia does well, i.e., writing studies about the innovation model and actually getting into the industry of fast patient access to affordable and accessible innovation are two very different things. Implementation of the latter requires a new set of collaborations and relationships between government, industry, academic researchers, heathcare provider agencies, and the healthcare delivery service we are the connective tissue between all parties and are prepared to begin an aggressive campaign to sell our strengths.

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SECTION 3: VALUE PROPOSITION BioDistrict as the Coordinating Entity at the District Level
The BioDistrict value proposition is to coordinate the mix of individual entities, services being performed at the individual level into a biocluster where the environment for collaboration, and cooperation are optimized at the District level. A list of services and activities to be provided include project development, Public Private Partnerships (P3s) project financing, bond issuance, industry recruitment and retention, marketing, operations including optimization of traffic and transportation, parking, workforce training and development, small business recruiting, building management, emergency preparedness, sustainability (water, power, waste, in particular hazardous waste), open space planning and management, constituent services, policy and advocacy, communications, purchasing and contracts, and database development. The graphic below demonstrates the ecosystem of the biocluster approach in attracting new investment whether they are home grown start-ups or established bioscience companies.

As noted in our Master Planning works, bioclusters are generally heterogeneous entities, in geographically defined regions of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions, varying widely in structure, where different types of organizations interact for research, innovation, and economic growth. Bioclusters offer employment, innovation, and productivity and particularly important they offer proximity or regular face-to-face interactions and trust in order to be effectively communicated. The subtleties of science require these frequent interactions facilitate formal and informal knowledge transfer and encourage the formation and efficiency of collaboration between principal investigators, administrators, and institutional leadership with complementary assets and skills. The critical mass effect attracts further companies, investors, services, and suppliers

 13 into the cluster, and creates a pool of skilled labor. There are a number of academic, government and commercial relationships that come into play within a regional biocluster. How a biocluster is designed and functions matters a great deal. People and companies have choices and are most likely to go where they find the conditions suitable for long term success. Issues that effect productivity and cutting edge innovation determines who will enjoy the recruiting and retention advantage.

BioDistrict has the components of a successful biocluster STRENGTHS

1) Strong science base. The BioDistrict completed a thorough analysis and grouping of the research specialties and institutional associations of close to 100 of the regions current top award-winning researchers, the assets of the university partners, government business incentives and public & private investments led us to the four general areas we should concentrate our economic development activities in, namely; Industrial, Informatics, Medical and Environmental. We believe there is the potential for substantial growth in these segments and they are aligned with existing and planned community assets. Within the medical area there are specific research areas that appear to be unique strengths to this region and could potentially become drivers for the BioDistrict.

BIO\Battelle cite in part these conditions: Strong science base Ability to attract and or train a skilled workforce Strong base of companies Connectivity Effective marketing of scientific and business networks Effective financing mechanisms and incentives Strong infrastructure and business support services Conducive intellectual property environment Supportive Policy, Advocacy and Regulatory Environment Investment in technology transfer and commercialization mechanisms Entrepreneurial culture Sustainable Built Environment & Operating Efficiency

 14 These areas of strength are listed below and are defined by the prevalence of specific Medical research specializations, the associated institutional infrastructure and funding history, and their local, national, and international context. Cancer Research in the areas of genetic instability, immunology, signaling pathways, and endemic cancer health disparities in local minority populations. HIV/AIDS Related Research on AIDS related opportunistic infections, drug and alcohol mediation of HIV pathogenesis, primate models for vaccine and prophylactic development, international research affiliations, and health disparities. Infectious Disease Research as a focus of the regions research in biodefense and vaccine development, mechanisms of drug delivery, primate models, sexually transmitted disease, and global health initiatives. Cardiovascular Disease, Renal Disease and Hypertension as obesity comorbidities in local and national minority populations Neuroprotection & Rehabilitation of Traumatic Brain Injury patients as it relates to the goals of the new VA medical center

2) Ability to attract and or train a skilled workforce. This will surprisingly turn out to be one of our strengths. The inclusion of Xavier University which is #1 in graduating Pre Med students who actually attend medical school and African American Biologists and Chemists. We are also fortunate to have Delgado Community College, ranked 24th in the country in the graduation of allied health professionals, gives us a unique advantage over other bioclusters. To further ensure that industry will see our commitment to workforce supply, the BioDistrict is recommending the expansion of Delgado and the building of a shared campus devoted to biotech\healthcare professions. 3) Connectivity. We have great Internet capacity and new data collections and warehousing systems being build. We believe this a big strength and one that will set us apart. We also believe connectivity in the use of informatics, data warehousing and content analytics in at its earliest stages of development. To that end, BioDistrict New Orleans has been in negotiation with IBM to deploy IBMs patented Academic Research Collaborative Analytics software.

 15 BioDistrict New Orleans will be the first biocluster to host this technology that aims at increasing inter and intra connectivity among researchers at universities and within the biopharmaceutical industry with a long-range goal of increasing collaborations. This software has the propensity to benefit the community as well as our member institutions, and will be a game changer for recruitment, increased investment and productivity all keys to the development of the next gen biocluster. 4) Effective marketing of scientific and business networks. As the principal advocate for bioscience policy matters and the changes in the marketplace noted earlier, BioDistrict New Orleans has developed and started implementing a Marketing Plan (Appendix B) to build alliances amongst regional bioscience communities, academia, government, business, philanthropy, community, entrepreneurs and investors. In order to grow the bioscience industry by bringing people together, the BioDistrict maintains social media sites on Twitter (810 followers), Facebook (101 Likes) and our own LinkedIn group (183 members). We publish a biweekly newsletter that current goes out to 2,930 direct subscribers with an above average industry open and click on rate with indirect links to over 250,000 people in the biotech\healthcare industries. We also sponsor social events to promote networking, including an annual Biotech Luncheon, and a quarterly Meet the Industry series. This past November, we hosted the 25th Annual Association of University Research Parks International Convention with more than 250 parks worldwide represented. As host, we received unprecedented exposure to the membership, suppliers and supporters of the university research community. We plan to continue to use the assets of the hospitality industry to host more and bigger shows and conventions. We also plan to continue to partner with the Convention Center and the Convention and Visitors Bureau to recruit more shows and conventions to New Orleans and add value to those in which are already in rotation. We have made countless presentations to business development discussion groups, economic development groups, associations, parent teacher groups and others to provide an opportunity to impart information about the potential impact the District holds on employment, taxes and opportunities. We also plan to attend major conventions sponsored by BIO, Burrill, Pharma and JP Morgan in the coming year. 5) Effective financing mechanisms and incentives. Louisiana has created a number of programs and business incentives, including: The Research and Development Tax Credit Technology Commercialization Tax Credit The Digital Media Tax Credit The Angel Investor Tax Credit Program

Unique to the BioDistrict is the authorization to enter into Public Private Partnerships (P3s). This ability is self-governed and provides us with the opportunity to generate revenues and creative ways to respond to potential biopharmaceutical industry recruitment and development needs.

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6) Strong infrastructure and business support services. One of the underlying strengths of New Orleans is our intermodal system of the port, the railways, the airport and for manufacturing the Foreign Trade Zones. When combined with the research of LSU, Tulane and Xavier we have an incredible combination of talent and resources that few bioclusters anywhere can match. Now the development of a strong infrastructure will be key to controlling the direct and indirect benefits of these institutional investments. As an example, we need to establish an industry specific locally based supply chain, to make it easy for companies to buy and ship their supplies. We are currently aggressively addressing this issue on two fronts today and will soon be adding a third layer. First, the Meet the Industries Series is designed to introduce locals to the supply chain needs; and second, working with the Mayors Office of Supplier Diversity to meet with companies and individuals at sponsored events. Amongst other inducements to locate in the BioDistrict, we plan to institute a purchasing consortium to provide all tenants with access to group buying prices on lab equipment and office supplies while establishing a strong base for local suppliers, thereby maximizing the local job creation amongst small business enterprises. 7) Conducive intellectual property environment. Business development and investment is the main focus of the BioDistrict. The District will continue to recruit and support entrepreneurs by coordinating business development workshops, seminars, conferences, one on one cold calling, and discussion groups, which may include bench-to-business workshops, quality control and regulatory affairs workshops, drug discovery seminars and clinical trial design seminars. 8) Supportive Policy, Advocacy and Regulatory Environment. The BioDistrict New Orleans monitors legislation and policy at the local, state and federal levels, and routinely assesses the impact of policy on the District and institutional members. The Staff works to develop position papers and recommends appropriate actions to the board and the community through letters, testimony, media, editorial boards, legislator meetings and other advocacy methods. The BioDistrict will continue to work to develop and support laws, regulations and tax policies that

 17 foster an expansion of the bioscience industry in the District and throughout Louisiana. We will also coordinate with the Commissioners, member institutions and the state as a whole to educate policy makers about the specific bioscience industry needs and the significance of the industry to local and regional economies. 9) Investment in technology transfer and commercialization mechanisms. The New Orleans BioInnovation Centers (NOBIC) activities include a Commercialization Committee that promotes research and commercialization at universities and to a lesser degree the private sector. By connecting university technology transfer employees with entrepreneurs through networking events, NOBIC will support entrepreneurs who are interested in research commercialization. The BioDistrict Value Proposition requires a mix of activities including supporting NOBICs mission in the incubation of new companies which by its nature is a slow process that requires coordination, collaboration, and cooperation. 10) Entrepreneurial culture. Much has been written about the surge of activity emanating from post Katrina New Orleans. In reality the roots of this surge goes back five years prior to Katrina to the creation of the Idea Village. The founders of the Idea Village recognized these traits and formalized their non-profit in 2002 to identify, support and retain the entrepreneurial talent necessary to revive the city in one of her darkest periods. The mantra of trust your crazy ideas is indicative of a can-do attitude and desire to find and develop innovators. Following Katrina, the enduring characteristics that have given New Orleans her unique disposition are now the essence of what people are drawn to in our recovery phase. These emotional qualities are bred out of circumstance, a desire to pioneer, and the will to survive. What we learned throughout is that communities that support successful entrepreneurship have all exhibited similar characteristics -- this bodes well for our continued growth.

WEAKNESSES
1) Strong base of companies. Our biggest weakness, however, with the recent announcements of the City and State becoming better known as business friendly, this could rapidly change. There are a great number of start-ups being launched in New Orleans, which brings positive energy and the improved rankings of the city as a place that one can do serious business. We are also hearing from a great number of ex-pats looking to return home either in established corporate positions or for some once the jobs are established. Our job is to continue the trend through active recruiting activities. 2) Sustainable Build Environment and Operating Efficiency What cannot be overstated are the importance and the performance of the built environment for recruitment and retention of the biopharmaceutical industry. There is an absolute relationship between the continued management of the environment and the results that are achieved. A key role for the BioDistrict is to establish itself as an EcoDistrict.

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SECTION 4: FIVE YEAR PLAN AND PROFORMA

This budget assumes expenses as though the funds were appropriated but no expenses will be incurred until the funds are in hand. There are three potential sources of reoccurring revenue: 1) levying of a special New Construction Impact Fee; 2) a state appropriation; and/or, 3) fees for services including rental income and event sponsorships, and BioDistrict provided services where there will be cost savings from the district wide application of services such as insurance, waste management, personnel, and operational services to member institutions and affiliated biosciences organizations. We examine the impact of each below including a combined State Appropriation and Construction Impact Fee. Personnel, marketing, accounting, rent, utilities, telephone, internet, office supplies and office equipment expenses assume that the organization is located in a professional office building environment within the BioDistrict legal boundaries. We believe there is a strong case to be made for the implementation of a 1.5% New Construction Impact Fee within the two designated Sub Districts as outlined below.

There is ample precedent for a special construction impact fee to proactively support new and sustained development, when it is correctly applied, the revenues derived from the fees will provide for new opportunities and thereby maximizing the economic growth potential and more importantly, enhancing property values in the impact areas. Who Pays? Realizing that the political climate we are in today and that the collective memory of taxpayers is short lived and further, the absolute need to encourage more development in the BioDistrict not less, we believe it would not be feasible to levy a construction fee on residential property

 19 development. The fee levels currently being sought while not detrimental to new residential construction could slow down the rate of investment in the residential portion of the BioDistrict. Like existing permitting fees and local exaction fees, construction impact fees and CBAs are nominally regarded as a tax on new development by government, and are in fact, computed into the price of new construction. Developers and builders routinely pay impact fees at either subdivision or building permit stage depending on the jurisdiction. Further, like any other tax or fee associated with the production of building the cost of materials, labor, regulatory impacts and excise taxes go into the price and impact fees get shifted forward to the end user. This is not the case for commercial developers, who have come to expect similar exaction and/or impact fees in the region, and also realize there is scarcity of developable land and the growing market demand. We are starting to see low inventory drive up the price of raw land and finished lots throughout the BioDistrict. The effect of local permitting fees and taxes on the value of raw land, which historically has made a substantial difference, is becoming less obvious. Availability has overtaken as a key factor. In most instances, developers pay impact fees up front, and therefore treat them as a cost of development to be passed along. Are We Paying Our Own Way? When there is true demand and fees are not onerous, a case can be made that they are truly the cost of doing business. In the late 80s San Francisco was faced with a huge housing shortage while there was an unmet demand for office space that the development community was more that willing to supply. There was also a need to balance what was viewed as the greater good of the community. If somehow office development could also finance new home construction there would be a win-win. More inner city residential meant more demand for retail and the cycle of livable community would begin. Hence, San Francisco adopted a construction impact fee that provided for a compliment of residential units per 1,000 sq. ft. of new office construction.

The answer to most keen observers is that targeted new commercial development does in fact pay for itself. A point discussed in Dr. James A. Richardsons Economic Impact Analysis on the BioDistrict wherein he states, The size and breadth of the construction required of the BioDistrict creates substantial impacts on the local and state economy. More significantly, however, are the consequent activities that are enabled by the construction of new infrastructure and buildings. This activity yields sustained economic activity, and where successful, this kind of activity can motivate even more construction, which can lead to additional ongoing economic activities. This creates a development cycle that provides for a secure, sustainable, and dynamic economic environment in a locality or region. Targeted growth when part of an overall economic development strategy and supported holistically with activities such as workforce development, small business enterprise development, public policy and capital sources is good and will pay for itself. What Then If Not Impact Fees? Around since the Forties and active in the Seventies, impact fees are still relatively new in terms of infrastructure financing and one that is met with misconceptions about the potential to be a drag on real estate development a concept promoted by the development community. Most jurisdictions still rely on sales and property tax revenues, debt financing (general obligation

 20 bonds), user charges, and other types of taxes to keep pace with need. In many respects impact fees have become a multifaceted tool for local governments. As part of their managed growth policies, impact fees have become an alternative for raising funds for expansion, while keeping a lid on property taxes. Coupled with zoning restrictions, to manage the market, impact fees have become an excellent vehicle to sustain growth. Most politicians realize that growth must continue at some pace in order to fund government. A number of local governments in this region (East Baton Rouge and St. Tammany Parishes) have recognized the need for balance and are accepting the construction impact fee approach for funding. There are a number of public/private funding alternatives commonly used around they country that are now being deployed throughout Louisiana that were studied by the BioDistrict but rejected for one reason or another. They are: 1) Special Financing Districts, where revenues are raised in specific districts to pay for special services and capital improvements; 2) Special Assessment Districts, formed to provide additional infrastructure and services through extra fees or taxes to fund road improvements, upgrade storm water management facilities, or provide other amenities; 3) Tax Increment Financing Districts or TIFs have no special fees or taxes levied on its residents because the funds are generated by diverting sales tax. The tax increment is the difference between the total tax revenues after development and the baseline tax revenues prior to development. The tax increment, whole or in part, is diverted from the taxing jurisdictions general fund revenues and used to service revenue bonds to finance infrastructure within the TIF. The Non-Renewable Resource Is There An Answer? There are no guarantees but with focus on the bioscience industry, supported by a holistic approach and process towards sustained economic development we can achieve our stated goals. In many ways, New Orleanians suffer from a crisis of confidence, which will surely deepen if nothing is done to promote more predictability in the deliverables. Smart Growth and other worthy growth management goals will never be achieved unless there also smart process. Multiple stakeholders came together to statutory create the BioDistrict with vesting rules and public private partnership development agreement legislation.

Today, most jurisdictions appear to be drawn to the simple answer impact fees and excise taxes, letting the other guy pay, approach. The real estate industry will tell you that impact fees, on a scale of unreasonable to less unreasonable, are the preferable route. Theyre simple, generally not too outrageous and have rules. Impact fees when properly administered, not only give you something for your money, it is in fact the cause of the demand that provides for the opportunity meaning that we have to deliver on our promised deliverables. We must avoid, as witnessed in some instances over the past few years, the failure to deliver on economic opportunities in part because of the lack of focused effort and continued public support for supportive services be it workforce training and development, supply chain development or other services. When calculating the new cost of doing business today, taking all the fees and exactions into consideration, there are still no guarantees. If we are to levy impact fees, there must be a quid pro quo -- there must be predictability and demand created for which the development community can respond to. And above all, there must be transparency.

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SECTION 5: ORGANIZATIONAL FRAMEWORK

Staff The Board of Commissioners hired a President and CEO, who will be the primary employee of BioDistrict New Orleans until funds are available to recruit additional support staff. As the organization grows, personnel will expand to include, In House Counsel, a Development Director, a Director of Business Development, a Director of Operations, a Director of Policy and Legislative Affairs, a Chief Science Officer, a Director of Small Business, Workforce and Community Engagement and a Director of Finance. Areas of responsibility for additional staff will be project development, industry recruitment and retention, operations including optimization of building management, emergency preparedness, sustainability and open space planning and management, constituent services, communications, purchasing and contracts, and database development. The positions will be phased in as funds become available. Several will be grant driven and depending on funding may be short term or contract for services. The team will be outcome driven bringing an unusual sense of entrepreneurship to the performance of our duties. Clear goals, objectives and performance measures will be adapted to manage throughout the year.

Proposed Organizational Structure

President and CEO

In House Counsel and VP

Development Director Director of Business Development Director of Operations Director of Policy and Legislative Affairs Director Of Finance Director of Sm Bus., Workforce and Community Engagement

Chief Science Officer

 24 CoreTeam President and CEO, is responsible for the operation, management and performance of the agency, a permanent employee funded through recurring revenue. Responsible for all communications and constituents relations. Reports to the Chairman of the Board of Commissioners. In house Counsel and Vice President, is second in command with the added duty of regulatory compliance and management of outside counsel, if necessary. A permanent employee funded through recurring revenue, reporting to the President and CEO. Director of Finance, is responsible for the financial condition of the district including reporting of finances, audit and contract compliance. A permanent employee funded through recurring revenue, reporting to the President and CEO. Director of Business Development, is responsible for the marketing, selling and deal making for the district. A permanent employee funded through recurring revenue or grant revenue from biopharmaceutical companies, reporting to the President and CEO. Director of Operations, responsible for the daily operations including optimization of building management, emergency preparedness, sustainability and open space planning and management, purchasing and contracts, and database development. A permanent employee funded through recurring revenue generated from the operation of district properties, reporting to the President and CEO. Phased In Team Members Director of Policy and Legislative Affairs, focused on national, state and local issues relative to the bioscience industry, district operations, and grant opportunities. Position to be funded by grant administration fees, reporting to the President and CEO. Development Director, focused on the physical development of the district and management of any public private partnership agreements. A permanent employee funded through project management fees or alternative revenue sources, reporting to the President and CEO. Chief Science Officer, likely to be a graduate student, fellow or retired researcher with a strong background in the biosciences and interest in public health, economic development or healthcare administration, reports to the Director of Business Development. Director of Small Business, Workforce and Community Engagement, focused on outreach to the BioDistrict community and surrounding areas with the ability to work closely with workforce development programs and agencies throughout the City. Position to likely be funded from grant revenue or partnerships formed with philanthropic interests, reporting to the President and CEO.

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SECTION 6: STEPPING INTO THE FUTURE BUIDLING THE INFRASTRUCTURE FOR OPPORTUNITY
The most important thing is to start thinking at the district scale for all issues that will attract new capital and to anticipate what will be required for new projects/developers at the parcel/building scale to be successful -- then we can address what can be achieved profitably at the larger district scale. This is a 180 change in the way real estate developments has occurred in the past. There are plenty of examples where sharing can reduce costs, improve services and the BioDistrict can earn fees at the same time. Truly these will be win-win for all parties. One example would be a shared bus system between campuses run on Biogas created from food waste. The entire Copenhagen mass transit system runs on biogas created from food waste that doesnt go into the landfill any longer [Cost Savings: Fee Opportunity] We will propose to achieve much higher sustainability performances to improve the quality of life within the BioDistrict and to make money doing it, if we address core sustainability issues at the District scale first and then define the responsibility and role of each building or site within that District to support the effort. As we discussed, the demand for new medicines, innovations and solutions within the biopharmaceutical sector is not going to abate. Emerging infectious diseases continue to present new challenges, while a substantial volume of longstanding diseases such as cancer, diabetes, neurodegenerative diseases, psychiatric diseases, and immunological diseases continue to demand novel treatments and improved therapeutics which are being researched at the BioDistricts institutional partners. Goals and Objectives The raison dtre of the BioDistrict is to facilitate the creation of new jobs and economic opportunities within the biosciences industry by building the infrastructure for opportunity. Our post Katrina analysis of the university strengths and review of the biopharmaceutical industry has lead to the master plan design and industry strategy discussed in this report. The BioDistrict is critical to the economic advancement of New Orleans and is designed to create the 21st century environment that individuals and companies are in search of. We are in an era of intense global competition with other countries increasingly seeking to attract technologically sophisticated R&D intensive companies in the biopharmaceutical sector. The benefit for New Orleans is that having a strong business environment for the biopharmaceutical sector will pay significant economic dividends for decades to come. As Dr. James A. Richardsons economic impact analysis cited in this document shows, the economic impact of the combined construction activities and ongoing operations in the BioDistrict at over $24 Billion can be summarized in terms of employment, personal earnings, and net new state and local tax collections, Appendix A in Table 5. Construction employment is substantial; however, the employment associated with the ongoing activities of the BioDistrict New Orleans is ultimately larger. Including both construction impacts and the subsequent ongoing operations, there will be 18,787 jobs after five years of activities, 21,832 after 10 years of activities; and 36,215 after 20 years of operations. The economic impact of the construction and the subsequent ongoing activities are (Appendix A Figure 2). After 5 years of investment personal earnings will sum to over $1 billion and state and

 26 local tax collections will amount to over $140 million; after 10 years personal earnings will sum to over $1.5 billion and state and local taxes will sum to almost $200 million; and, after 20 years of investment personal earnings related to the construction activity will sum to almost $2.2 billion and state and local tax collections to over $280 million. These figures show the sustainable path that is expected to be associated with the continued development of jobs, personal earnings, and state and local tax collections. Implementation As in any successful business endeavor, the BioDistrict has developed a number of action steps that we will undertake. The action plan (Appendix E) utilizes a 20-year planning horizon, recognizing that project phasing is a fluid construct impacted by a host of factors, among them identifying a reoccurring funding source, local, regional and national market conditions, bioscience competition and the success of early-phase development. This section outlines the projects and actions described in the preceding Recommendations section, and identifies the key areas, the specific action item, the entity or agency responsible for leading the effort and the phase in which the specific action is to occur. The Strategic Action Plan is organized around the following key areas of focus: Economic Development Policy & Land Use Urban Design Catalytic Projects and Development Transportation Utilities The BioDistrict will coordinate its activity with the following agencies (abbreviations) that will be responsible parties within the construct of the entire initiative: City of New Orleans City BioDistrict New Orleans BDNO Downtown Development District DDD Greater New Orleans, Inc. - GNO Greater New Orleans Foundation GNOF Louisiana Department of Transportation and Development - LADOTD Louisiana Economic Development - LED New Orleans Business Alliance - NOLABA New Orleans Public Schools Parish Orleans Parish - NOPS New Orleans Regional Planning Commission - RPC New Orleans Regional Transit Authority - RTA State Historic Preservation Office SHPO Ernest Morial Convention Center EMCO

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APPENDICES

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AppendixA.BioDistrictEconomicImpactAnalysisDr.JamesA.Richardson

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AppendixB:BioDistrictMarketingPlan

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AppendixC:UniversityStrengthsandWeaknesses

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AppendixD:BoardofCommissionersandAdvisoryCommittees

BioDistrict New Orleans Board of Commissioners

Dr. Gene DAmour, Interim Chairman of the BioDistrict Board of Commissioners, is Senior Vice President for Resource Development at Xavier University of Louisiana. The designee of Dr. Norman Francis, Dr. DAmour is serving a six-year term under the appointing agency of Xavier University. Mr. Nolan Marshall, Secretary/Treasurer of the BioDistrict board, is the Associate Director of Common Good. He is serving a six-year term under the appointing agency of the Governor of Louisiana. Ms. Yvette Jones, Vice Chairwoman of the BioDistrict Board of Commissioners, is Executive Vice President for University Relations and Development at Tulane University. She is serving a six-year term as the designee of Dr. Scott Cowan, under the appointing agency of Tulane University. Mr. Harold Gaspard, a member of the BioDistrict board and of the Finance Committee, is the Interim Vice Chancellor of Academic Affairs for Delgado Community College. He is serving a six-year term under the appointing agency of the Delgado Community College. Dr. Robert Savoie is a member of the BioDistrict board and of the Finance Committee. He is the President of Geocent, LLC. He is serving a two-year term under the appointing agency of the Governor of Louisiana.

Mr. Harold Gaspard, a member of the BioDistrict board and of the Finance Committee, is the Interim Vice Chancellor of Academic Affairs for Delgado Community College. He is serving a six-year term under the appointing agency of the Delgado Community College. Mr. Hal Brown is a member of the BioDistrict board and of the Finance Committee. He is the President of Fortune Development, LLC. He is serving a six-year term, following an initial twoyear term, under the appointing agency of the Mayor of New Orleans representing GNO, Inc. Mr. Roger Ogden is the owner of Ogden Consulting, LLC, is serving a four-year term under the appointing agency of the Governor of Louisiana. Dr. Wayne Riley is the President and CEO of Meharry Medical College in Nashville, Tenn. He is serving a four-year term under the appointing agency of the Mayor of New Orleans, representing the New Orleans Chamber of Commerce. Mr. Andrew Kopplin is the First Deputy Mayor of the City of New Orleans. He is serving a four-year term, representing the Mayor of New Orleans at large.

Dr. Larry Hollier is Chancellor of the Louisiana State University Health Sciences Center. He is currently serving a six-year term as a Commissioner of the BioDistrict under the appointing agency of Louisiana State University. Mr. Henry Hays is a Commissioner of the BioDistrict board serving a six-year term under the appointing agency of the Governor of Louisiana. Dr. Patrick Quinlin is the CEO of Ochsner Health System. He is currently serving at the pleasure of the Governor of Louisiana in a four-year term, under the appointing agency of Louisiana Economic Development (LED). Mr. John C. Hope III is retired banking executive now serving the community on a variety of civil, cultural and business interest boards. He is serving a six-year term, under the appointing agency of the Mayor of New Orleans representing the New Orleans Business Council.

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Advisory Committee(s)
ExecutiveCommittee FinanceCommittee

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AppendixE:StrategicActionPlan