By Meghan Hall
Bayer, one of the largest pharmaceutical companies in the world, has solidified its future in Berkeley. In a unanimous vote Tuesday night, the City Council approved a development agreement that will allow for a significant expansion of Bayer’s West Berkeley Campus, a move which could bring up to 1,000 new jobs to the city.
Bayer has a healthy history in Berkeley. The company signed its first development agreement with the City back in 1992. Under the new development agreement and environmental impact report reviewed this week, Bayer would make community benefits payments to Berkeley over the course of 30 years, totaling $33.1 million. Bayer will begin with an $800,000 payment in 2022, and payments will rise by two percent each year, reaching $1.46 million by 2052, according to City documents.
“Life-science innovation belongs in West Berkeley & I am proud of our city’s diverse, inclusive workforce,” said Councilmember Terry Taplin in a statement. Taplin, along with Berkeley Mayor Jesse Arreguin, worked to negotiate with Bayer on the benefits package and terms of development.
The majority of the funding–48.5 percent–will go towards education programs, student internships and technical career education. 20 percent will be allocated towards Berkeley’s Affordable Housing Trust Fund. An additional 20 percent will back grants distributed by the West Berkeley Community Resilience Fund. 7.5 percent will fund public art while four percent of Bayer’s payments will fund childcare.
“In short, this agreement will bring more jobs to Berkeley while dramatically increasing Bayer’s investment in local education, the West Berkeley community, affordable housing, childcare, and even the arts,” said Arreguin Tuesday night.
In return, Bayer will be able to expand its campus. Currently, the campus consists of about 46 acres. Under the project proposal, 276,000 square feet of space would be demolished to make way for 12 new structures that will cater to a mix of production, laboratory and office uses. Surface parking will be replaced with two new parking structures. Renovations and expansions to existing buildings–used for manufacturing–are also anticipated.
“Building on its strong foundation in biologics development and biomanufacturing in Berkeley, Bayer plans to diversify operations,” the company states on its website. “The company will be investing in new facilities and technologies that speed the development and launch of specialty medicines.”
In all, the agreement will allow Bayer to build out to as much as 1.738 million square feet. Currently, the campus is developed with about 1.18 million square feet of space.
Bayer says that right now, the property is mostly used for manufacturing. However, the new campus will be used to meet the evolving needs of specialty medicine. The firm also hopes that the modern campus and amenities will attract top talent. In addition to working on medicines for Hepatitis A, which is what the campus currently focuses on, Bayer intends to expand its research into Parkinson’s Disease, Cardiovascular Disease and various cancers.
The project is expected to have a healthy impact on Berkeley’s economics. A recent analysis by the Bay Area Council Economic Institute showed that for every job Bayer brings to Berkeley, another is created in the region. For every 10 Bayer employees that reside in Berkeley, another nine jobs are supported in the city.
The Bay Area Economic Council also notes that the company’s direct spending in Berkeley amounts to about $8 million annually. This includes employee and contingent labor wages, as well as expenses for suppliers and vendors. Annually, the company creates $14.8 million in economic impact for the city of Berkeley. By 2052, with the expansion of the campus, its economic impact is expected to reach $29.1 million, an increase of 96.8 percent.
Bayer also has a significant impact in the region beyond Berkeley. It is estimated that the company spends $180.7 million annually across the nine regional counties, and that the company generates $353.2 million in economic impact. Like Berkeley, Bayer’s economic impact region-wide is expected to rise; by 2052, the firm will generate $613.1 million in economic impact, an increase of 73.6 percent.