State Stem Cell Agency Facilities Working Group Transcript 4/4/08

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California State Stem Cell Agency

REGULAR MEETING 4-4-08

BEFORE THE

SCIENTIFIC AND MEDICAL FACILITIES WORKING GROUP

INDEPENDENT CITIZENS' OVERSIGHT COMMITTEE

TO THE CALIFORNIA INSTITUTE FOR REGENERATIVE MEDICINE

ORGANIZED PURSUANT TO THE

CALIFORNIA STEM CELL RESEARCH AND CURES ACT

LOCATION:

THE WESTIN SAN FRANCISCO

1 OLD BAYSHORE HIGHWAY

MILLBRAE, CALIFORNIA

DATE:

APRIL 4, 2008

2:30 P.M.

REPORTER:

BETH C. DRAIN, CSR

CSR. NO. 7152

BRS FILE NO.:

79838

SAN FRANCISCO, CALIFORNIA; FRIDAY, APRIL 4, 2008

2:30 P.M.

CHAIRMAN LICHTENGER: GOOD AFTERNOON. MY NAME IS DAVID LICHTENGER. I'D LIKE TO CALL THE MEETING TO ORDER. MY NAME IS DAVID LICHTENGER. I'M THE CHAIR OF THE CALIFORNIA INSTITUTE FOR REGENERATIVE MEDICINE FACILITIES WORKING GROUP. AT THIS POINT I'D LIKE TO HAVE RICK KELLER, SENIOR OFFICER OF THE SCIENTIFIC AND MEDICAL FACILITIES WORKING GROUP AND PRINCIPAL PERSON FOR THE WORKING GROUP, TO CALL THE ROLL.

MR. KELLER: MARCY FEIT. DEBORAH HYSEN.

MS. HYSEN: HERE.

MR. KELLER: ED KASHIAN.

MR. KASHIAN: HERE.

MR. KELLER: STUART LAFF.

MR. LAFF: HERE.

MR. KELLER: DAVID LICHTENGER.

CHAIRMAN LICHTENGER: HERE.

MR. KELLER: JOAN SAMUELSON. DAVID SERRANO-SEWELL. JEFF SHEEHY. JANET WRIGHT.

DR. WRIGHT: HERE.

MS. PACHTER: WE HAVE A QUORUM FOR THE INSTITUTE.

MR. KELLER: BECAUSE WE HAVE RECUSALS ASSOCIATED WITH THE INSTITUTES, THE QUORUM CONSTITUTES -- SIX WOULD CONSTITUTE A QUORUM.

MR. KLEIN: LET THE RECORD SHOW, RICK, THAT I'M ALSO PRESENT. BOB KLEIN.

MR. KELLER: EXCUSE ME, MR. CHAIRMAN.CHAIRMAN LICHTENGER: SO I'D LIKE TO WELCOME THE MEMBERS OF THE WORKING GROUP TO THIS IMPORTANT MEETING OF THE FACILITIES WORKING GROUP AND ALSO WELCOME CIRM PRESIDENT ALAN TROUNSON TO THE MEETING.

BEFORE WE HAVE INTRODUCTORY COMMENTS, RICK,WOULD YOU INTRODUCE THE OTHER MEMBERS OF THE CIRM TEAM THAT ARE HERE TODAY IN SUPPORT OF OUR EFFORTS?

MR. KELLER: WELL, BOB KLEIN IS HERE. FIRST, ON MY LEFT, RAY GROOM IS A PLANNER, A GENERALIST, WHO WORKED IN HIGHER EDUCATION AND ASSISTED ME IN THE STAFF REVIEWS. HIS BIO IS INCLUDED IN YOUR PACKET UNDER RESOURCES. AND TO HIS LEFT IS STEVE COPENHAGEN, WHO IS OUR LAB PLANNER EXPERT, WHO IS WITH CANNON COPENHAGEN. HE IS ALSO AN ACCREDITED PROFESSIONAL IN LEED'S AND WOULD OFFER ANY ADVICE. VERY PLEASED TO HAVE HAD THE OPPORTUNITY TO WORK WITH THESE TWO INDIVIDUALS IN THE PREPARATION OF THE MATERIALS FOR YOUR MEETING HERE TODAY.

ALSO WITH US TODAY TO MY RIGHT IS GENERAL COUNSEL, TAMAR PACHTER; OF COURSE, THE PRESIDENT, ALAN TROUNSON; SCOTT TOCHER, COUNSEL; AND JAMES HARRISON, COUNSEL. AND ON THE FAR TABLE MELISSA KING, JENNA PRYNE, AND BETH DRAIN IS OUR TRANSCRIBER TODAY. ALSO WITH US TODAY FOR THE FIRST TIME AT A WORKING GROUP, I BELIEVE, IS THE NEW CHIEF SCIENCE OFFICER, MARIE CSETE. ALONG WITH HER IS PAT OLSON AND DON GIBBONS. SO THAT'S ABOUT IT.

CHAIRMAN LICHTENGER: THANK YOU, RICK. SO, DR.TROUNSON --

MR. KELLER: I FORGOT THE TABLE BACK HERE. LET ME JUST GET ONE MORE. SOME OF OUR SUPPORT STAFF THAT ARE HELPING US PUT TOGETHER ALL OF THIS MATERIAL, VERY MUCH APPRECIATE ALL OF THEIR HELP, PAT BECKER, HEATHER BALDRY, CYNTHIA SCHAFFER IS OUR PARALEGAL, AND DOUG IS ALSO OUR TECHNICAL ASSISTANT.

CHAIRMAN LICHTENGER: IS THAT EVERYONE? WELL, RICK AND ALL THE OTHER MEMBERS OF CIRM, I'D LIKE TO THANK YOU FOR AN UNBELIEVABLE JOB PULLING THIS TOGETHER AND ALL THE MATERIALS THAT YOU'VE SENT TO EVERYONE, THE FACILITIES WORKING GROUP, AND YOU'VE INTERACTED WITH ME IN PULLING TOGETHER. I THINK YOU'VE JUST DONE AN AMAZING JOB. THANK YOU.

NOW I'D LIKE TO HAVE DR. TROUNSON SAY A FEW WORDS AND ADDRESS THE WORKING GROUP WITH SOME INTRODUCTORY COMMENTS.

DR. TROUNSON: THANKS, DAVID. AND I WILL BE BRIEF BECAUSE YOU'VE GOT QUITE A TASK IN FRONT OF YOU. SO THANK YOU VERY MUCH TO THE WORKING GROUP. I ACTUALLY KNOW WHAT VOLUME OF MATERIALS YOU'VE BEEN SORT OF SUBMERGED UNDER BECAUSE I SAW STACKS OF IT GO OUT. AND WE REALLY APPRECIATE EVERYTHING YOU'RE DOING IN THIS INCREDIBLY IMPORTANT PROGRAM.

THIS IS REALLY BUILDING INFRASTRUCTURAL INSTITUTIONAL CAPACITY IN CALIFORNIA. AND I THINK IT'S ONE OF THE -- IT IS PROBABLY THE MOST IMPORTANT INGREDIENT IN THE SCIENCE PROGRAM. YOU REALLY NEED THESE KIND OF CENTERS AND INSTITUTES AND PROGRAMS IF YOU WANT TO BRING TOGETHER THE HIGH-POWERED SCIENTISTS AND ACTUALLY GET THEM WORKING IN COORDINATION. I KNOW BECAUSE THAT'S WHAT I'VE BEEN DOING IN MY LIFE, BRINGING SCIENTISTS TOGETHER TO WORK IN CENTERS. AND ABILITY TO CROSS-FERTILIZE IDEAS IS ABSOLUTELY CRITICAL.

THIS IS THE LARGEST SINGLE INFRASTRUCTURAL CONTRIBUTION IN THE WORLD IN STEM CELLS. IT IS THE LARGEST INFRASTRUCTURAL COMPONENT THAT HAS EVER BEEN PUT UP IN THE WORLD. SO I THINK THAT'S SOMETHING VERY SPECIAL AND VERY CALIFORNIAN. AND I THINK IT UNDERLIES THE LEADERSHIP THAT THE CALIFORNIANS HAVE TAKEN IN PROPOSITION 71. AND I'M A JOHNNY COME LATELY REALLY TO THE WHOLE PROGRAM. I'VE ONLY BEEN HERE THREE MONTHS, BUT I'M ASTONISHED AT THE PACE AND THE CAPACITY THAT'S BEEN GENERATED BY THIS.

AND AS DON GIBBONS WILL DEMONSTRATE CONTINUOUSLY FOR US ALL, THE PRODUCTIVITY THAT'S COMING FROM THESE INVESTMENTS IS ALREADY ASTONISHING. THERE IS A STORY ABOUT TO COME OUT WHICH WILL PROBABLY LEAD TO THE CURE OF A VERY SERIOUS DISEASE, ALL DONE WITHIN 12 MONTHS. AND THIS IS WHAT WE'VE BEEN WORKING FOR. SO IMAGINE IF YOU BRING SCIENTISTS TOGETHER IN THE KIND OF INSTITUTES THAT YOU HAVE IN FRONT OF YOU WHAT YOU MIGHT EXPECT.

I THINK THE INSTITUTE PLANNING IS FANTASTIC. I'D LIKE TO EMPHASIZE TO THE WORKING GROUP THAT IT IS ALSO A HUMAN ENVIRONMENT. ONCE WE PACK SCIENTISTS AT ONE TIME INTO SMALL ROOMS, SMALL LABS, CLOSE THE DOOR, AND SAY GET ON WITH IT, THAT'S NOT HOW SCIENCE IS DONE ANYMORE. IT'S AN INTERACTIVE ENVIRONMENT. WE WORK TOGETHER WITH COLLEAGUES. WE HAVE PEOPLE COME TO TALK TO US AT CONFERENCES WITHIN THE FACILITY. WE HAVE VISITORS WORKING WITH US. AND THIS IS THE WAY -- THIS IS THE WAY SCIENCE ACTUALLY WORKS THESE DAYS. SO THE HUMAN ENVIRONMENT IS AS IMPORTANT AS THE ACTUAL LABORATORIES.

I WANT TO EMPHASIZE THAT TOO BECAUSE I THINK SOME OF THESE PLANS HERE REALLY GOT IT RIGHT. AND YOU CAN'T JUST LOCK SCIENTISTS IN A SINGLE ROOM AND EXPECT THEM TO COME OUT WITH WHAT YOU WANT. YOU WILL IF YOU PROVIDE AN ENVIRONMENT FOR THEM TO WORK THROUGH NEW IDEAS, PICK UP THE ENERGY FROM ONE ANOTHER, AND ACTUALLY SUCCEED.

SO IT'S GREAT SCIENCE THAT'S INVOLVED IN THIS, AND WE'RE NOT TALKING ABOUT THE SCIENCE AT THIS TIME, BUT THEY'RE GREAT BUILDINGS. SO YOU'VE GOT A TERRIBLY HARD CHORE IN FRONT OF YOU TO SOMEHOW REDUCE THE 22-PERCENT DIFFERENCE BETWEEN WHAT HAS BEEN REQUESTED AND WHAT'S AVAILABLE. AND I HOPE YOU ARE ABLE TO DO THAT WITH THE INFORMATION THAT YOU GOT.

AND I WISH YOU THE VERY BEST AND HOPE THAT YOU WON'T FEEL STRESSED IN DOING THIS. I THINK I WOULD BECAUSE IT'S SUCH AN IMPORTANT ACTIVITY. IT IS REALLY ONE OF THE HIGHLIGHTS, I THINK, OF THE START OF THE WHOLE CIRM AND PROPOSITION 71. SO THANK YOU VERY, VERY MUCH FOR YOUR TIME, AND WE REALLY APPRECIATE EVERY MOMENT.

CHAIRMAN LICHTENGER: THANK YOU, DR. TROUNSON. AND SO WE HAVE QUITE A BIT TO DO OVER THE NEXT DAY AND A HALF. SO BEFORE WE GO TO AGENDA ITEM 4, I WANT TO PROVIDE SOME CONTEXT FOR TODAY'S MEETING.

OUR WORK TODAY WILL FOCUS ON THE EVALUATION OF THE LARGEST REQUEST FOR APPLICATIONS OR RFA THAT CIRM HAS ISSUED TO DATE. THE ICOC, THE INDEPENDENT CITIZENS OVERSIGHT COMMITTEE, THAT GOVERNS CIRM HAS APPROVED $262 MILLION FOR THIS RFA. WE MUST REALIZE THAT THERE ARE TWO IMPORTANT REASONS WE NEED THESE NEW FACILITIES. SCIENTIFIC ORGANIZATIONS ARE OUT OF SPACE, AND THEY ALSO LACK THE NECESSARY EQUIPMENT TO ADVANCE THIS SCIENCE TO THE NEXT LEVEL. MOST OF THE ORGANIZATIONS HAVE STEM CELL SCIENTISTS IN BORROWED, SHORT-TERM SPACE THAT IS SPREAD THROUGHOUT THE CAMPUS IN A NUMBER OF DIFFERENT DEPARTMENTS IN A FRACTURED WAY THAT DOESN'T FACILITATE THE HIGH DEGREE OF INTERACTION AND TEAMWORK NECESSARY TO MOVE THIS FIELD TO THE NEXT LEVEL OF SUCCESS.

REGARDING THE ELECTION IN NOVEMBER, WE NEED TO BE AWARE THAT EVEN WITH THE UPCOMING CHANGE IN THE PRESIDENCY, THERE ARE MAJOR ISSUES AT THE FEDERAL LEVEL. THERE'S A LACK OF FUNDS. EVEN IF THERE IS A CHANGE IN THE PRESIDENTIAL STANCE ON STEM CELL RESEARCH, THERE WILL BE ISSUES IN TERMS OF THE AMOUNT OF FUNDING AVAILABLE IN MOVING THINGS THROUGH CONGRESS.

AT THIS POINT, I WANT TO ASK THE CHAIRMAN OF THE ICOC, BOB KLEIN, TO SAY A FEW THINGS.

MR. KLEIN: TO PROVIDE ADDITIONAL CONTEXT FOR THE STATEMENT RELATED TO FUTURE CAPACITY AND THE ABILITY TO HAVE THAT CAPACITY AUGMENTED THROUGH THE FEDERAL GOVERNMENT, I'D LIKE TO BRING THREE MAJOR POINTS TO YOUR ATTENTION. ONE IS, GIVEN THE STATUS OF THE NIH BUDGET, WHICH HAS BEEN AT 28 BILLION, ESSENTIALLY FLAT, 28-29 BILLION FOR FIVE YEARS, IF YOU ASSUME THAT INFLATION IN THE MEDICAL ENTERPRISE AREA IS 8 TO 10 PERCENT A YEAR, THEY EITHER HAVE FUNDS THAT ARE 40 PERCENT DISCOUNTED FROM WHAT THEY WERE FIVE YEARS AGO OR 50 PERCENT DISCOUNTED FROM WHAT THEY WERE FIVE YEARS AGO.

SO IN THE NIH BUDGET THERE ISN'T FUNDING FOR NEW BUILDINGS THAT WOULD BE BUILT TO CREATE THIS CAPACITY. AND IF THAT FUNDING CAME AT THE END OF 2009, IT WOULD BE FOR 2010. IT WOULD CAUSE EXTREME DELAY TO THE CAPACITY THAT'S NEEDED. AND AS DAVID LICHTENGER HAS SAID, MANY OF THESE SCIENTISTS ARE HOUSED TEMPORARILY IN OTHER DEPARTMENTS WHERE THE SPACE HAS TO BE RETURNED TO THOSE DEPARTMENTS ON A SCHEDULE. SO THESE INSTITUTIONS DESPERATELY NEED THAT SPACE.

IN ADDITION, IN TERMS OF NEW FUNDING FOR THE RESEARCH ITSELF, OR ANY OTHER APPROPRIATIONS, CONGRESS IS, OF COURSE, TREMENDOUSLY BURDENED BY THE COST OF THE WAR IN IRAQ, AND IT WILL BE VERY DIFFICULT TO GET ANY APPROPRIATIONS THROUGH. YOU WILL COUNT EVERY VOTE TO DO SO. AND FOR THE U.S. SENATE, UNLESS THERE ARE 60 SENATORS THAT ARE PREPARED TO VOTE FOR CLOTURE, YOU CANNOT GET AN APPROPRIATION BILL THROUGH THE U.S. SENATE. SO YOU HAVE TO HAVE 60, NOT ONLY FOR EMBRYONIC STEM CELL RESEARCH ON PROGRAMS THAT INVOLVE EMBRYONIC STEM CELLS, BUT 60 PREPARED TO STAND UP AND VOTE FOR CLOTURE, WHICH IS A DIFFERENT ISSUE.

THAT'S GOING TO BE VERY DIFFICULT TO ACHIEVE EVEN IN THE ELECTIONS THIS FALL. SO ALTHOUGH YOU MAY HAVE MAJORITIES IN BOTH CONGRESSES, YOU HAVE AN EXTRAORDINARY BATTLE OVER FUNDING AND AN INABILITY POTENTIALLY TO GET CLOTURE IN THE SENATE. THEREFORE, THESE FACILITIES AND THE FUNDING OF THESE FACILITIES ARE CRITICAL COMPONENTS THAT THE STATE OF CALIFORNIA CONTINUES TO PROVIDE AS A STABLE BASE THAT WE REALLY HAVE PROBLEMS LOOKING TO THE FEDERAL GOVERNMENT FOR, AND WE HAVE PROBLEMS LOOKING TO THE FEDERAL CONGRESS. HOWEVER COMMITTED BY MAJORITIES IN BOTH HOUSES TO CHANGING THESE RESTRICTIONS, THEY HAVE INSTITUTIONAL BLOCKAGES TO CHANGING THE DICKIE-WICKER AMENDMENT AND OTHER CONSTRAINTS ON FUNDING THAT WOULD INVOLVE FUNDING IN FACILITIES THAT ACCOMMODATE EMBRYONIC STEM CELL RESEARCH.

IT IS A UNIQUE CONTRIBUTION, THEREFOR, THAT CAN BE MADE. AND I'D REMIND EVERYONE THAT WE'RE USING LESS THAN 10 PERCENT HERE OF THE $3 BILLION APPROVED BY THE VOTERS, SO 90 PERCENT IS GOING INTO RESEARCH, 10 PERCENT IS GOING INTO BUILDINGS, PHYSICAL BUILDINGS. THIS ROUND INVOLVES A SMALL AMOUNT, $35 MILLION, OF EQUIPMENT FUNDING, WHICH IS CONSIDERED A CONTRIBUTION TO THE RESEARCH BUDGETS. AND IN FUTURE RESEARCH GRANTS, THOSE INSTITUTIONS WOULD NOT, THEREFORE, NEED THAT EQUIPMENT IF WE FUND IT IN THIS ROUND.

CHAIRMAN LICHTENGER: THANK YOU, BOB. WE'VE SPENT THE BETTER PART OF THE LAST YEAR PREPARING FOR THIS MEETING. WE BEGAN THE CONCEPT APPROVAL BY THE ICOC LAST MARCH. WE DECIDED THAT IT WAS IMPORTANT TO HAVE PUBLIC INPUT ON THE RFA. THE FACILITIES WORKING GROUP HELD FOUR PUBLIC MEETINGS OVER THE SUMMER IN SAN FRANCISCO, SACRAMENTO, LOS ANGELES, AND SAN DIEGO WHERE WE HEARD EXTENSIVE TESTIMONY FROM POTENTIAL APPLICANTS AND THE PUBLIC. THIS WAS EXTREMELY HELPFUL AS WE THEN DEVELOPED THE PROCESS FOR THE RFA.

IN AUGUST 2007 THE ICOC DEVELOPED A TWO-STEP REVIEW PROCESS WITH PART 1 APPLICATIONS TO BE REVIEWED BY THE GRANTS WORKING GROUP ADDRESSING THE SCIENTIFIC MERIT FOLLOWED BY THE ICOC REVIEW AND APPROVAL OF THE APPLICANTS QUALIFIED TO SUBMIT AN APPLICATION FOR PART 2.

AT THIS MEETING THE ICOC ALSO APPROVED THE CRITERIA, THE DEFINITIONS, THE EVALUATION STANDARDS THAT WERE DEVELOPED BY THE WORKING GROUP. THE ICOC REVIEWED 17 APPLICATIONS AT ITS JANUARY MEETING. TWELVE OF THE APPLICATIONS WERE APPROVED FOR CONSIDERATION FOR PART 2.

PART 2 APPLICATION INSTRUCTIONS WERE ISSUED IN JANUARY WITH APPLICATIONS DUE TO CIRM AT THE END OF FEBRUARY. THAT BRINGS US TO THE CURRENT STATUS OF THE EFFORT WITH OUR MEETING TODAY TO REVIEW THE TWELVE APPLICATIONS AND PREPARE FOR RECOMMENDATIONS TO THE ICOC TO BE CONSIDERED AT THEIR MAY 6TH AND 7TH MEETINGS IN LOS ANGELES.

BEFORE I ASK RICK TO BEGIN HIS PRESENTATION ON THE REVIEW PROCESS, I WANT TO DRAW YOUR ATTENTION TO THE SLIDE WE PREPARED THAT I THINK SUMMARIZES OUR GOAL TODAY.

THANK YOU, RICK. STARTING ON THE RIGHT, THIS CHART SHOWS THAT THE BUDGET OF $262 MILLION IN CIRM FUNDS IS ABOUT A THIRD OF THE FUNDS PROPOSED BY THE APPLICANTS TO BE SPENT ON THESE PROJECTS. THEIR REQUESTS TOTAL ABOUT 336 MILLION, WHICH IS 74 MILLION OVER OUR BUDGET. MATCHING FUNDS CONSTITUTE THE NEXT FUNDING SOURCE AND, FINALLY, LEVERAGE. THE APPLICANT'S CONTRIBUTION TO THE PROJECT IN EXCESS OF THE REQUIRED 20-PERCENT MATCHING FUNDS CONSTITUTES ABOUT HALF OF THE TOTAL FUNDING.

THE USE OF FUNDS ON THE LEFT INDICATES THAT THE SPACE PROPOSED FOR RESEARCH TO HOUSE THE TEAMS OF INVESTIGATORS AT THESE INSTITUTIONS ACCOUNTS FOR MORE THAN HALF OF THE FUNDING PROPOSED. CORE LABORATORIES ARE NEXT. TYPICALLY THESE ARE SPECIALIZED LABORATORIES THAT ARE SHARED AMONGST MANY USERS. APPLICANTS HAVE PROPOSED SPACE FOR A VARIETY OF SUPPORT USES THAT INCLUDE ADMINISTRATIVE SUPPORT AND CONFERENCE SPACE.

FINALLY, THE RESEARCHERS NEED EQUIPMENT TO PERFORM THEIR WORK, AND THAT IS PART OF THE USE OF FUNDS PROPOSED BY THE APPLICANTS.

I WANT TO DRAW YOUR ATTENTION BACK TO THE MIDDLE OF THE COLUMN ON THE RIGHT. WE'LL BE SPENDING THE NEXT DAY AND A HALF WORKING ON DEALING WITH THE AMOUNT THAT IS REQUESTED THAT IS IN EXCESS OF THE CIRM FUNDED AMOUNT.

AT THIS POINT, ARE THERE ANY QUESTIONS FROM THE FACILITIES WORKING GROUP MEMBERS?

MR. KLEIN: MR. CHAIRMAN, I'D JUST LIKE TO POINT OUT THE SLIDE THAT YOU'RE BRINGING TO OUR ATTENTION SHOWS THAT THE CIRM BUDGET OF $262 MILLION IS ONLY SUFFICIENT TO EFFECTIVELY FUND THE HARD SCIENCE LABS AND THE PI OFFICES. SO WHATEVER OTHER ADMINISTRATIVE FACILITIES OR FACILITIES THAT WILL CREATE CONFERENCES AND BE ENHANCEMENTS TO THE SCIENTIFIC OUTREACH IN THESE FACILITIES, THOSE ARE GOING TO BE PAID FOR OUT OF LEVERAGE FUNDS. SO IT'S IMPORTANT, FROM A PUBLIC PERSPECTIVE, WE UNDERSTAND WE'RE ONLY FUNDING THE HARD SCIENTIFIC LAB SPACE; AND THE OTHER FACILITIES, WHILE CONTRIBUTIONS TO THE MISSION ARE EFFECTIVELY NOT BEING FUNDED OUT OF TAXPAYER FUNDS, BUT OUT OF THE INSTITUTION'S DONORS AND INSTITUTIONAL COMMITMENT FUNDS.

CHAIRMAN LICHTENGER: THANK YOU.

MS. SAMUELSON: YES, MR. CHAIRMAN. CAN SOMEONE EXPLAIN THE DIFFERENCE BETWEEN MATCH AND LEVERAGE?

CHAIRMAN LICHTENGER: RICK, I THINK YOU ARE PROBABLY MOST QUALIFIED TO ANSWER THIS QUESTION.

MR. KELLER: THE RFA REQUIRED THE APPLICANTS TO PROVIDE A 20-PERCENT MATCH. ANYTHING IN EXCESS OF THAT, RATHER THAN CALL THAT EXTRA MATCH, WE JUST COINED LEVERAGE AS IT WOULD BE AN IDENTIFIER FOR THE AMOUNT OF FUNDS THAT THEY PROVIDE IN EXCESS OF THE REQUIRED MATCH.

MS. SAMUELSON: GREAT. THANK YOU.

CHAIRMAN LICHTENGER: ANY OTHER QUESTIONS OF THE FACILITIES WORKING GROUP?

DR. WRIGHT: IT'S NOT A QUESTION, BUT A COMMENT. AND I MEANT TO SAY IT EARLIER. I JUST WANT TO ON BEHALF OF THE BOARD AND THE OTHER MEMBERS OF THE FACILITIES WORKING GROUP THANK OUR REAL ESTATE EXPERTS. THE AMOUNT OF DATA THAT YOU SIFTED THROUGH AND GUIDED US ON AND WILL INVOLVE HERE IN THE CONVERSATIONS FOR THE NEXT HOURS TODAY ARE GOING TO HELP GIVE SCIENCE A HOME IN CALIFORNIA. AND WE APPRECIATE YOUR EXPERTISE AND YOUR VOLUNTEER SPIRIT.

CHAIRMAN LICHTENGER: THANK YOU. SO OUR AGENDA CALLS FOR PUBLIC COMMENTS AT THIS TIME. WE WILL BE ALLOWING TIME FOR PUBLIC COMMENTS DURING THE REVIEW OF EACH APPLICATION. HOWEVER, IF THERE'S ANYONE WHO WISHES TO MAKE ANY GENERAL COMMENTS, PLEASE COME FORWARD NOW TO THE PODIUM. PLEASE IDENTIFY YOURSELF AND WHO YOU ARE AFFILIATED WITH. AND OUR PROCEDURE ALLOWS THREE MINUTES PER SPEAKER. IS THERE ANYONE THAT WOULD LIKE TO SPEAK NOW AT THIS POINT? OKAY. SO NO PUBLIC SPEAKERS AT THE BEGINNING OF THE MEETING. WE'RE STARTING OFF STRONG.

SO THANK YOU. SO OUR NEXT AGENDA ITEM IS ITEM 5, CONSIDERATION OF RECOMMENDATIONS FOR THE PROPOSED AMENDMENTS TO FACILITIES GRANTS ADMINISTRATION POLICY. I UNDERSTAND THAT WE'LL TAKE THIS UP AT A LATER TIME WHEN WE'LL BE ABLE TO INCLUDE OTHER WORKING GROUP MEMBERS WHO ARE CURRENTLY NOT IN ATTENDANCE.

MOVING ON IS ITEM 6, WHICH IS THE REVIEW OF THE PART 2 APPLICATIONS FOR RFA 07-03. I'LL ASK RICK KELLER TO START US OFF IN THE REVIEW.

MR. KELLER: THANK YOU. I HAVE A FEW SLIDES TO GO OVER ON THE LEFT, TO YOUR RIGHT, RATHER, JUST TO PROVIDE SOME CONTEXT ON THE ACTUAL REVIEW PROCESS. AND THEN WE SET THE ROOM UP WITH A VARIETY -- WITH SOME FLEXIBILITY TO PROVIDE YOU WITH DISPLAYS AS WE GO THROUGH THE REVIEW PROCESS IF YOU NEED MULTIPLE COMPARISONS.

SO FIRST OF ALL, I WANT TO REMIND YOU OF THE SPECIFIC OBJECTIVES OF THIS RFA. CLEARLY CAPACITY OF STEM CELL RESEARCH IN CALIFORNIA IS KEY, AND THAT INCLUDES SPACE, THE TECHNICAL RESOURCE CAPABILITIES, SUCH AS THE CORE LABS, AND THE OPPORTUNITY TO CREATE MULTIDISCIPLINARY FACILITIES. IT ALSO ESTABLISHED CLEARLY COLLABORATION AS A CIRM PRIORITY. AND WE DISCUSSED BOTH THAT THIS SPACE IS FREE OF FEDERAL FUNDS, AND WE'LL BE INVESTING $262 MILLION.

THE CHAIRMAN OUTLINED BRIEFLY THE PROCESS OF THE WORKING GROUP. WE ALSO DID SOME WORK TO ISSUE THE PART 1 APPLICATION AT CIRM. THE GRANTS WORKING GROUP REVIEWED THAT AND MADE THE RECOMMENDATIONS TO THE ICOC. THERE WAS APPROVAL OF THOSE THAT WERE JUDGED MERITORIOUS TO GO FORWARD TO THE PART 2, AND THEN WE ISSUED THE PART 2 APPLICATIONS. SO OUR LAST TWO BOXES TO CHECK HERE AT THE BOTTOM OF THE SLIDE IS TO REVIEW AND MAKE THESE RECOMMENDATIONS AND THEN SUBMIT THOSE RECOMMENDATIONS TO THE ICOC NEXT MONTH.

I WANT TO REMIND YOU OF KIND OF THE STRUCTURE OF THE RFA IN TERMS OF THE FUNDING PLAN. OF THE TWELVE APPROVED APPLICATIONS, THERE ARE SEVEN IN THE CATEGORY OF CIRM INSTITUTES, WHICH CONSTITUTE AWARDS UP TO $50 MILLION. IN ESTABLISHING A TENTATIVE FUNDING LEVEL FOR THE INSTITUTES, THE ICOC APPROVED 214.9 MILLION, WHICH IS A DERIVATION FROM THE MIDPOINT OF THE PREVIOUS RANGE FOR FUNDING IN THE INSTITUTES.

THE CENTER OF EXCELLENCE CATEGORY INCLUDES TWO PROPOSALS WITH REQUESTS UP TO 25 MILLION. BOTH ARE FOR $25 MILLION WITH 28.7 AVAILABLE.

AND THE SPECIAL PROGRAMS ALLOCATED BASED ON THE MIDPOINT IS 18.4, AND WE HAVE THREE PROJECTS IN THAT CATEGORY.

AND THAT'S HOW THE $262 MILLION IS ESTABLISHED TENTATIVELY, BUT YOU HAVE THE ABILITY TO MAKE ADJUSTMENTS LATER ON, AND THAT WILL BE TOMORROW.

THE REVIEW PROCEDURE WILL TAKE PLACE IN TWO MAJOR SESSIONS TODAY, AND HOPEFULLY WE CAN FINISH TODAY. THE TECHNICAL REVIEW IS TO APPLY THE CRITERIA THAT YOU ADOPTED AND THE ICOC APPROVED THAT DEAL WITH THE SPECIFIC APPLICATION'S VALUE, LEVERAGE, URGENCY, SHARED RESOURCES, AND FUNCTIONALITY.

TOMORROW THE RECOMMENDATIONS WOULD BE FORMULATED BASED ON THE TECHNICAL REVIEW AND OTHER CONSIDERATIONS AND THE POINT VALUES THAT YOU'RE VERY FAMILIAR WITH.

AND ON THE ACTUAL PROCESS FOR THE REVIEW, THE RESOURCES THAT YOU HAVE AVAILABLE, WE PREPARED THE STAFF ANALYSIS. AND PER THE DISCUSSIONS THAT WERE HELD LAST YEAR AND THIS YEAR IN FORMULATING A PROCESS, WE FOCUSED ON FACTS AND NUMERICAL DATA, AND WE ALSO SECURED SERVICES OF MR. COPENHAGEN AS AN OUTSIDE EXPERT REVIEWER TO OFFER HIS OPINION ON BOTH VALUE AND FUNCTIONALITY OF THE PROPOSALS.

WE'VE ORGANIZED THE APPLICATIONS, THEN, BY THE THREE GROUPS THAT I MENTIONED. AS WE GO INTO EACH GROUP, I WILL OR MR. GROOM, WE'VE SPLIT THEM UP, WILL SUMMARIZE THE STAFF ANALYSIS FOR YOU WHEN WE GO THROUGH THAT. THERE'S ALSO IN THE PACKET AN APPLICANT RESPONSE TO THE DRAFT STAFF ANALYSIS SINCE THAT WAS A COMPONENT THAT YOU

ASKED US TO INCLUDE IN THE REVIEW. AND THERE'S A SEPARATE -- WE'VE COLOR-CODED THESE PAGES IN YOUR BOOK SO YOU KNOW SPECIFICALLY WHICH SOURCE OF INFORMATION YOU'RE GETTING.

AND ONCE YOU'VE REVIEWED THOSE -- ONCE WE'VE SUMMARIZED THOSE, THEN THE REAL ESTATE MEMBERS HAVE BEEN ASSIGNED BOTH PRIMARY AND SECONDARY REVIEW ASSIGNMENTS SO THAT THEY CAN, BASED ON THEIR PROFESSIONAL BACKGROUND AND KNOWLEDGE IN THEIR FIELD, DISCUSS THE STRENGTHS AND WEAKNESSES OF THESE PROPOSALS AND GIVE THEIR GENERAL IMPRESSIONS.

I'M HAVING A LITTLE TROUBLE WITH THE SLIDES STICKING TO WHERE THEY'RE SUPPOSED TO BE.

THEN AFTER YOU HAVE HAD THE OPPORTUNITY TO DISCUSS THE APPLICATIONS, THE PROCEDURE CALLS FOR THE OPPORTUNITY FOR PUBLIC COMMENTS, AS MENTIONED BY THE CHAIR. AND THEN AT THAT POINT, YOU WOULD RECORD A TENTATIVE SCORE FOR EACH -- IN EACH OF YOUR SCORE BOOKS. AND FOR THOSE THAT HAVE RECUSALS, THE SCORE BOOK SO INDICATES. YOUR SCORES ARE TENTATIVE UNTIL THE COMPLETION OF ANY CATEGORY OF FUNDING.

SO FOR THE INSTITUTES, IF YOU WANT TO GO BACK AND MAKE CHANGES, WE'RE NOT GOING TO COLLECT THOSE UNTIL WE COMPLETE THE ACTUAL COMPLETE CATEGORY. THEN WE WILL CALCULATE THE AGGREGATE SCORE FOR THESE AND THEN PRESENT THEM TO YOU IN CHART FORMAT. AND THAT'S THE FIRST -- THAT WOULD BE IN THE PROGRAMMATIC REVIEW. IN THAT SESSION YOU MAY CONSIDER PRINCIPLES AND GUIDELINES THAT YOU WISH TO ADOPT THAT WOULD BE APPLIED IN YOUR EVALUATION OF THE SCORES. AND THEN YOU WOULD MAKE RECOMMENDATIONS FOR EACH APPLICATION BASED ON THE TENTATIVE TARGET FUNDING LEVEL AVAILABLE IN THAT CATEGORY.

IF YOU FIND THAT YOU WANT TO RECOMMEND FUNDING AT OR BELOW THAT AMOUNT INITIALLY, WE RECOMMEND THAT YOU ESTABLISH FUNDING AT OR BELOW; BUT IF YOU WANT TO REVISE THE SPECIFIC AMOUNTS APPROVED, THEN YOU CAN DO SO AS WELL. THAT WOULD ALSO BE A RECOMMENDATION THAT WOULD BE SUBMITTED TO THE ICOC FOR CONSIDERATION AT THEIR MAY MEETING.

I ALSO WANT TO GO THROUGH JUST A COUPLE DEFINITIONS BECAUSE WE GET INTO THE COURSE OF USING A BIT OF VOCABULARY THAT NOT EVERYBODY IS FAMILIAR WITH AND THE DISTINCTIONS THAT WE MAKE. I WAS GOING TO SAY THAT THIS IS A LABORATORY FACILITY, BUT IT COULD BE A LABORATORY, WHICH IS SOMETHING THAT'S SOUTH OF THE EQUATOR. BUT THESE ARE LABORATORY FACILITIES, THE SPACES THAT ARE ACTUALLY ASSIGNED TO THE PI'S AND THEIR TEAMS, AND THEY ALSO INCLUDE SUPPORT SPACE THAT IS OFTEN SHARED AMONG SEVERAL GROUPS.

WHEN WE REFER TO THE CORE FACILITIES, WE'RE REFERRING TO THOSE AREAS THAT GENERALLY HAVE A VERY SPECIALIZED USE. AND BY VIRTUE OF THE FACT THEY HAVE EITHER SPECIALIZED CAPABILITIES OR EXPENSIVE EQUIPMENT, THAT THOSE COSTS ARE GENERALLY SHARED AMONG THE USERS AND DISTRIBUTED USUALLY THROUGH A RATE CALCULATION.

IN SEVERAL OF THE DISPLAYS THAT YOU WILL SEE TODAY, WE TALK ABOUT THE NUMBER OF PRINCIPAL INVESTIGATORS. WE COULD HAVE ALSO SAID THE NUMBER OF RESEARCH TEAMS BECAUSE PRINCIPAL INVESTIGATORS ARE EXACTLY THAT. THEY'RE PRINCIPAL AND THEY HEAD A RESEARCH TEAM THAT HAS MULTIPLE PEOPLE. IT CAN VARY FROM JUST TWO OR THREE INDIVIDUALS TO GROUPS OF AS HIGH AS 18 OR 20. SO WE ESTABLISHED THE NUMBER OF PRINCIPAL INVESTIGATORS BASED ON THE PART 1 APPLICATION; AND THEN IN THE COURSE OF REVIEWING THE PART 2 APPLICATIONS, WE FOUND THAT PART OF THE FACILITY PLAN AND PART OF THE SPACE PLAN FOR THESE FACILITIES ALSO INCLUDED ADDITIONAL CAPACITY THAT NEEDED TO BE ACCOUNTED FOR IN THE REVIEW. SO WE'VE HIGHLIGHTED THAT IN ADDITIONAL DISPLAYS.

SO WITH THAT, WE'LL BEGIN OUR REVIEW SESSION. AGAIN, WITH THE INSTITUTES FIRST, WITH CENTERS OF EXCELLENCE, AND THEN SPECIAL PROGRAMS. AND WITHIN THE CATEGORY, THE ORDER OF REVIEW IS ON YOUR LEFT. AND WE HAVE ESTABLISHED AN ORDER THAT WOULD HAVE THE SIX INSTITUTIONS AND THEN THE ONE PROPOSAL THAT'S A CONSORTIUM AS THE SEVENTH APPLICATION TO BE CONSIDERED AMONG THE INSTITUTES.

I'M GOING TO JUST BRIEFLY GO THROUGH THE SLIDES BEFORE I START WITH THE FIRST REVIEW.

SO WE PREPARED A NUMBER OF CHARTS THAT ARE IN YOUR PACKET, AND I JUST WANT TO GO BRIEFLY THROUGH THESE, AND THEY'RE APPEARING ON YOUR RIGHT. THE FIRST ONE, CHART 1, DEALS WITH THE FACT THAT AN IMPORTANT ELEMENT OF THE PROPOSALS IS THE EFFICIENCY OF THE BUILDING, AND THAT'S EXPRESSED IN ASSIGNABLE AND GROSS SQUARE FEET. SO WE PREPARED A CHART THAT THE SHORTER BAR IS THE ASSIGNABLE, THE TALLER BAR IS THE GROSS SQUARE FEET, WITH A BULLET THAT USES THE SCALE ON THE RIGHT TO ESTABLISH THE EFFICIENCY.

SO YOU CAN SEE THAT THESE PROPOSALS RANGE FROM A LOW OF 61 TO A HIGH OF 72-PERCENT EFFICIENCY, WITH OBVIOUSLY THE HIGHER THE EFFICIENCY, THE BETTER USE OF THE GROSS SQUARE FEET.

THE CHART 2 IS AN EXPRESSION OF THE ASSIGNABLE SQUARE FEET PER PRINCIPAL INVESTIGATOR. AND GOING BACK TO MY DEFINITION, THIS IS LABORATORY SPACE. SO IT DOES NOT INCLUDE THE CORE FACILITY SPACE. IT'S BASICALLY SAYING HOW MANY PEOPLE ARE GOING TO BE ACCOMMODATED WITHIN THE LAB SPACE AND HOW MUCH SPACE IN THOSE TEAMS --

HOW MUCH SPACE IS BEING AVAILABLE IN EACH CASE. AND THEN THAT PRINCIPAL INVESTIGATOR IS BASED ON THE PART 1 APPLICATIONS.

THIS IS TO TRY TO DELINEATE SO THAT YOU CAN SEE VISUALLY THAT IN SOME CASES, AS MENTIONED EARLIER, THAT SOME OF THE SPACE IS FOR THE LAB AND LAB SUPPORT SPACE. THE CORES ARE IN THE MIDDLE MEDIUM COLOR, AND THEN THE DARKER COLOR AT THE TOP ARE THE OFFICES AND OTHER SPACES THAT SUPPORT THE OVERALL OBJECTIVES OF THE PLAN. AND THEN WE'VE INTERLACED, THE BLUE ARE THE INDIVIDUAL PROPOSALS AND THE GREEN ARE THE AVERAGES FOR THE INSTITUTES, AND THE AVERAGES FOR THE CENTERS AND THE AVERAGES OVERALL.

CHART 4 IS THE COST CHART THAT TAKES THE INSTITUTES AND CENTERS AND LOOKS AT THEIR CONSTRUCTION COSTS. AND THEN AS MENTIONED EARLIER, THERE'S A COMPONENT OF FUNDING THAT IS FOR EQUIPMENT. THE BOTTOM PORTION OF THE BAR IS THE CONSTRUCTION, AND THEN THE TABLE AT THE BOTTOM SHOWS THE PRELIMINARY PLAN WORKING DRAWING AND CONSTRUCTION, OR PWC, COST FOR THE SPECIFIC REQUESTS IN THE TWO CATEGORIES. EQUIPMENT VARIES, AND ALSO THE AVERAGES ARE SHOWN IN THE MORE COPPER COLOR.

CHART 5 IS A STRAIGHT EXPLANATION OF THE AMOUNT OF FUNDS THAT HAVE BEEN REQUESTED FROM CIRM AND LOOKING AT IT FROM THE STANDPOINT OF THE AMOUNT OF FUNDS PER INVESTIGATOR.

ON THE FAR RIGHT, IF YOU TOOK THE AMOUNT OF MONEY THAT IS TENTATIVELY ESTABLISHED BY THE ICOC AND DIVIDED BY THE TOTAL NUMBER OF INVESTIGATORS, YOU WOULD GET 1.7 AS A BUDGET.

CHAIRMAN LICHTENGER: BOB KLEIN HAD A COMMENT.

MR. KLEIN: RICK, ON CHART 5, HAS THAT BEEN nREVISED TO INCORPORATE THE VISITING PI'S?

MR. KELLER: WE HAVE PROVIDED -- AS I SAID, WE HAVE THE CHARTS PREPARED INITIALLY WITH THE PART 1 NUMBER OF PI'S, AND THEN WE HAVE A SEPARATE SET THAT I WANTED TO GO THROUGH THAT DEALS WITH THAT. WHEN I GET TO 8, IT WILL TRANSITION.

MR. KLEIN: THANK YOU.

MR. KELLER: CHART 6, AGAIN, TAKES A LOOK AT HOW MUCH MONEY IS COMING FROM THE CIRM FUNDING AND HOW MUCH FUNDING IS COMING FROM THE APPLICANT. AND IN LOOKING AT THAT, IT ESTABLISHES AT THE BULLET THE PERCENTAGE OF APPLICANT FUNDING BASED ON THE SCALE THAT'S ON THE RIGHT.

FINALLY, IN CHART 7, PROJECT COST PER PI, BOTH THE CIRM AND APPLICANT FUNDS, AND THE AVERAGES ARE SHOWN IN THE LIGHTER COLORS.

AND THEN MOVING TO ANSWER THE QUESTION POSED BY BOB KLEIN, WE --

MR. KLEIN: I THINK THE ONE YOU JUST CLOSED WAS THE ONE YOU'RE LOOKING FOR.

MR. KELLER: SO CHART 8 WAS WE WERE TAKING THE ORIGINAL ASSIGNED RESEARCHERS IN THE PROPOSAL, AND I WANTED TO SHOW THE UPDATE THAT WAS INCLUDED IN YOUR PACKET, AND THAT'S THE ONE THAT I NEED TO SHOW YOU. SORRY ABOUT THAT. I APOLOGIZE.

AS POINTED OUT, WE HAD SEVERAL CATEGORIES OF USE THAT WENT BEYOND THE PART 1 PI COUNTS. AND THOSE BASICALLY DEALT WITH VISITING AND PART TIME AND OTHER POTENTIAL USE OF THE SPACE. AND SO IN THIS DISPLAY WE'VE INCLUDED THOSE, AND WE'VE ALSO INCLUDED SIMILAR CHARTS. WHEN WE GET TO EACH APPLICATION, WE CAN DISPLAY BOTH THE INFORMATION SETS THAT DEAL WITH THE PART 1 PI COUNT. AND IN EACH CASE THE INSTITUTION HAS PROVIDED ADDITIONAL INFORMATION ABOUT HOW THESE PARTICULAR PI'S INCORPORATE INTO THE OVERALL OBJECTIVES OF THE PROJECT. SO WE CAN DISCUSS THOSE WHEN WE GET TO EACH ONE OF THEM.

MR. KLEIN: RICK, YOU HAD ONE MORE UPDATE OF THAT CHART.

MR. KELLER: YES, I DID.

MR. KLEIN: MAYBE YOU COULD JUST PRINT IT FOR EVERYONE SO THAT WE DON'T HOLD YOU UP HERE, BUT YOU HAVE ONE ADDITIONAL UPDATE ON THAT CHART.

MR. KELLER: RIGHT. AND THE CIRCUMSTANCES THAT I JUST PICKED UP ON 619, THE ORIGINAL 15 ALSO INCLUDES THREE ADDITIONAL PI'S. AND THAT'S JUST MY MISTAKE, SO WE'LL PICK THAT UP WHEN WE GET TO THE USC.

SO WITH THAT, I THINK WE ARE READY TO BEGIN THE SPECIFIC REVIEWS OF THE APPLICATIONS.

CHAIRMAN LICHTENGER: THANK YOU, RICK.

MR. KELLER: THE FIRST ONE ON YOUR ORDER IS 609. THIS IS A REQUEST WITHIN THE INSTITUTE CATEGORY THAT REQUESTS $50 MILLION. IT'S FOR CONSTRUCTION OF A FOUR-STORY BUILDING. THIS PROJECT WOULD CO-LOCATE THE INSTITUTE'S KEY STEM CELL RESEARCHERS IN A PROJECT OF APPROXIMATELY 130,000 ASSIGNABLE SQUARE FEET AND 200,000 GROSS SQUARE FEET. THE TOTAL COST OF THE PROJECT IS $200 MILLION.

AT OCCUPANCY IT WOULD HOUSE 24 RESEARCH TEAMS OF WHICH 12 WILL BE NEW. THE FACILITY INCLUDES ADDITIONAL BENCHES FOR ADDITIONAL VISITING FACULTY OF UP TO 12, AND THAT'S PART OF THE DISPLAY THAT I JUST SHOWED YOU. THE PROPOSAL ALSO INCLUDES VIVARIUM SPACE AND SPECIALIZED CORE FACILITIES, AND IT IS PROPOSED TO BE COMPLETED IN JULY OF 2010.

THE LAB PLANNING SCORE, AS I MENTIONED AT THE INTRODUCTION, STEVE COPENHAGEN EVALUATED EACH ONE; AND BASED ON HIS JUDGMENT OF BOTH FUNCTIONALITY AND VALUE, HE ASSIGNED A SCORE. IN THIS CASE THE FUNCTIONALITY SCORE IS B MINUS AND THE VALUE SCORE IS B PLUS. HE NOTES THAT A PORTION OF IT IS VERY DENSE, AND THE BUILDING MAY BE TOO LOW ON THE AMOUNT OF INTERACTIVE OR SOCIAL SPACE.

I'D ALSO NOTE THAT IN FOLLOWING UP ON THAT COMMENT, I DID DISCUSS WITH THE APPLICANT THAT ISSUE. AND THEY HAD COMPLETED A RECENT SURVEY OF SOME OF THEIR FOOD SERVICE IN THE GENERAL REGION OF THIS BUILDING AND FOUND THAT THEY WERE OVER -- THERE WAS AN OVERSUPPLY. AND, THEREFORE, THAT'S WHY THE BUILDING DEPENDS ON EXISTING FOOD SERVICE AND GATHERING SPACES AND OUTDOOR SPACES RATHER THAN HAVING THEM IN THE BUILDING.

SO WITH THAT, I'LL TURN IT OVER TO THE REVIEWERS. THE PRIMARY REVIEWER ON THIS IS MEMBER KASHIAN AND THE SECONDARY REVIEWER IS CHAIRMAN LICHTENGER.

CHAIRMAN LICHTENGER: THANK YOU, RICK. SO, ED, YOU CAN LEAD THE DISCUSSION SINCE YOU'RE THE PRIMARY REVIEWER, AND I'LL CHIME IN HERE AND THERE.

MR. KASHIAN: THANK YOU. THANK YOU. I'D LIKE TO ADD MY VOICE TO THANKING STAFF OF THE CIRM AND THEIR CONSULTANTS. BUT MOST OF ALL, I'D LIKE TO THANK THE APPLICANTS. ALL OF THE HARD WORK THAT WENT INTO THIS AND AT THE END OF THE DAY, ALL OF THIS MISSION DEPENDS ON YOU. IT'S YOUR JOB TO IMPROVE THE HEALTH STATUS OF THE PEOPLE OF CALIFORNIA AND I BELIEVE THE REST OF THE WORLD. THANK YOU VERY MUCH FOR ALL YOUR HARD WORK.

THIS APPLICATION WAS REALLY A PLEASURE FOR ME. THE PROFESSIONALISM, THE DEDICATION TO MISSION WAS OUTSTANDING. OBVIOUS TO ME WAS STANFORD'S COMMITMENT TO MEDICAL RESEARCH. AND THEY ADHERED TOTALLY, IN MY MIND, TO THE VISION OF THE CIRM AND THE REQUIREMENTS OF PROPOSITION 71.

I'LL GO THROUGH A SHORT LIST OF OBSERVATIONS THAT I MADE. ONE, I FELT LIKE THE SHARED RESOURCES WERE VERY STRONG, BOTH INTERNALLY AND EXTERNALLY WITH OTHER INSTITUTIONS.

FUNCTIONABILITY WAS A LITTLE BIT OF A QUESTION, AND I AGREED WITH -- NOT AGREED, I SUPPORTED MR. COPENHAGEN'S POINT OF VIEW. I FEEL LIKE IT'S REALLY IMPORTANT TO HAVE THESE PEOPLE WORK IN AN ATMOSPHERE THAT'S RELAXING, AND I DON'T VIEW THEM AS ROBOTS WORKING IN A SMALL SPACE WITH NOTHING TO DO BUT COME AND GO TO WORK EVERY 18 HOURS.

IT WAS VERY APPARENT TO ME THAT STANFORD HAS MADE A TOTAL COMMITMENT. THEY'VE LOCATED THE SITE OF THE BUILDING, THEY'RE IN THE PROCESS OF CLEARING IT. THE MAJORITY OF THE INFRASTRUCTURE IS IN AND COMPLETED, AND THE SITE WORK IS UNDERWAY, WHICH IS EQUALLY IMPORTANT. AND BECAUSE THIS IS NOT A PUBLIC AGENCY, THE ENTITLEMENTS ARE ALL IN PLACE, INCLUDING ENVIRONMENTAL REPORT, AND THEY HAVE THE TOTAL COOPERATION OF THE GOVERNMENTAL AGENCY THAT IS IN JURISDICTION IN THEIR AREA.

THE EQUIPMENT SCHEDULE, MY LIMITED KNOWLEDGE OF IT, LOOKED GOOD. AND THE EXTERNAL -- THE INTERNAL APPROVAL PROCESS IS FOCUSED AND CONCISE. REALLY IMPRESSED ME WAS THEIR PROJECT TEAM WAS IN PLACE, THE PEOPLE IDENTIFIED, AND WORKING. IT IS VERY DIFFICULT TO BUILD A BUILDING OF THIS SIZE AND THIS QUALITY IN THIS SHORT OF TIME.

THE COST BREAKDOWN FOR ME WAS DETAILED, COMPETITIVE, AND EXECUTABLE. THE BUILDING SCHEDULE WAS SOUND AND, I BELIEVE, FEASIBLE. AND THE BUILDING EFFICIENCY WAS, FROM MY POINT OF VIEW, EXCELLENT.

THE TOTAL BUDGET WAS COMPETITIVE. AND LASTLY, THEIR LEVERAGE OF THEIR TOTAL COST IS SOMETHING CLOSE TO $200 MILLION, AND THEY'RE ASKING US FOR 50 MILLION, SO IT'S A THREE-TO-ONE LEVERAGE.

AND I CAN'T TELL YOU HOW IMPRESSED I WAS WITH THIS APPLICATION. I WHOLEHEARTEDLY RECOMMEND ITS APPROVAL, AND I'D BE HAPPY TO ANSWER ANY QUESTIONS AFTER THE SECONDARY REVIEW.

CHAIRMAN LICHTENGER: THANK YOU, ED. EXCELLENT REVIEW. THANK YOU.

SO I THOUGHT THE APPLICATION WAS EXCELLENT IN PRETTY MUCH ALL REGARDS. BUT TO SPECIFICALLY COMMENT ON OUR AREAS THAT WE'RE GOING TO HAVE TO PLACE SCORES, SINCE ED BROUGHT UP LEVERAGE LAST, I'LL COMMENT ON THAT. I ALSO THOUGHT THAT WAS EXCELLENT.

MR. KELLER: IF I MIGHT, I NEGLECTED TO BRING UP ONE ISSUE HERE THAT I WANTED TO JUST ALERT YOU TO BECAUSE THIS IS GOING TO COME UP ON ALL OF THESE REVIEWS. IS THAT ONE OF THE THINGS THAT WE IDENTIFIED IN THE LATE REVIEW WAS THAT WERE SOME INCONSISTENCIES IN THE WAY WE HAD TREATED UTILITY COSTS. SO WHAT WE DID IS WE ASKED THE APPLICANTS, AND THIS SPECIFICALLY RELATES TO THE FACT THAT SOME OF THESE BUILDINGS ARE SUPPLIED WITH CENTRAL UTILITY SERVICES. AND WHEN WE DISCUSSED THIS, WE SAID WE CAN ASK THEM, AND EVERY APPLICANT TURNED THIS AROUND IN LESS THAN A DAY, TO ADVISE US WHAT IS THE INVESTMENT THAT THE INSTITUTIONS MADE IN CENTRAL UTILITY. THAT INCLUDES STEAM, CHILLED WATER, AND ELECTRICAL GENERATION OR COGENERATION BECAUSE WE FELT THAT THAT WAS AN IMPORTANT LEVELING OF THE PLAYING FIELD INVESTMENT.

SO THE CHART ON THE LEFT HERE TAKES EACH APPLICANT, AND WE'VE ADDED THE AMOUNT -- IT SHOWS THE AMOUNT THAT EACH APPLICANT INDICATED THEY HAD IN THAT. AND THERE'S ALSO OTHER ADJUSTMENTS AS WE GET TO EACH REVIEW I'LL BE DISCUSSING. BUT FOR THE STANFORD PROPOSAL, THEY HAD AN INVESTMENT OF $4.8 MILLION THAT'S BASICALLY NOT PART OF THE $200 MILLION BUDGET IN ORDER TO -- THAT'S THE APPORTIONED PART OF THE CENTRAL UTILITIES. AND SO THAT WOULD ACTUALLY ADD .10 TO THE LEVERAGE AND BRING IT UP FROM 2.79 TO 2.89.

MR. KLEIN: I HAVE A QUESTION, MR. CHAIRMAN. WHILE, AS YOU KNOW, RICK, I'M AN ADVOCATE FOR CAPTURING THESE UTILITY LEVERAGES BECAUSE THESE CENTRAL PLANTS OFFER CERTAIN OPERATING EFFICIENCIES LONG-TERM WHICH CONTRIBUTE TO SUSTAINABILITY, WHEN WE GET TO UCSF, IF YOU WILL BREAK THAT DOWN FOR US BECAUSE I CAN UNDERSTAND THE PROPORTIONALITY OF THE OTHER UTILITY ALLOCATIONS. I'M A LITTLE AMAZED AT THE LEVEL OF UTILITY ALLOCATION THERE OF UCSF. AND I'M WONDERING WHETHER, IN FACT, IT INVOLVES SOME OTHER OFFSITE COSTS THAT THEY HAD AS WELL AS UTILITIES.

CHAIRMAN LICHTENGER: CAN WE LEAVE THAT TO WHEN WE GET TO UCSF, BOB?

MR. KLEIN: EXACTLY.

CHAIRMAN LICHTENGER: THANK YOU. SO MOVING BACK TO THE APPLICATION AT HAND, WHICH IS 00609-1, STANFORD, JUST TO -- SO LEVERAGE, THEY HAD THE HIGHEST LEVERAGE OUT OF ANY APPLICANT BY FAR. SO I THOUGHT THAT WAS A VERY EASY ONE TO EVALUATE. SO I DON'T THINK THERE'S ANY QUESTION THAT THEY WERE OUTSTANDING IN THAT AREA.

IN TERMS OF URGENCY, WHICH ED KASHIAN MENTIONS AS WELL, I THOUGHT THEY HAD A VERY DETAILED PROGRAM, AND THEY QUALIFIED FOR COMPLETION WITHIN THE TWO YEARS. SO I FELT THEY HAD A GOOD TEAM IN PLACE, AND I FELT THEY, AGAIN, HAD A STRONG, STRONG PROPOSAL IN TERMS OF URGENCY.

AS FAR AS SHARED RESOURCES, YOU KNOW, IF YOU WILL TAKE A LOOK AT PAGE 4 IN THE BLUE, THEIR STEM CELL PROGRAM AT THIS INSTITUTION HAS 200 PI'S. AND, YOU KNOW, THE NUMBER OF CORES ARE NUMEROUS. SO I THOUGHT, AGAIN, IN THIS PARTICULAR CATEGORY OF SHARED RESOURCES, TREMENDOUS, TREMENDOUS SHARED RESOURCES AVAILABLE FOR THIS APPLICATION.

AS FAR AS FUNCTIONALITY, I THOUGHT ACTUALLY IT WAS QUITE INNOVATIVE AND VERY FUNCTIONAL HOW THE DESIGN WORKED IN TERMS OF LEVERAGING, YOU KNOW, 60 BENCHES INTO THE FACILITY SO IT WOULD ACCOMMODATE 15 TO 20 VISITING FACULTY. SO I THOUGHT THAT, AGAIN, IT WAS VERY, VERY FUNCTIONAL AND EXCELLENT IN THAT CATEGORY AS WELL.

AND THEN, FINALLY, I GUESS, JUST IN TERMS OF MY PERSPECTIVE ON VALUE, WHICH KIND OF INCORPORATES THE COST STRUCTURE AS WELL AS RETURN TO THE TAXPAYER, I THOUGHT IT WAS EXCELLENT. RICK, DID THEY QUALIFY FOR SILVER LEVEL ON THE LEED CERTIFICATION? AND THEY HAD, AGAIN, QUITE A FEW INNOVATIVE IDEAS HERE ABOUT LAB BENCHES AND HOW TO ACCOMMODATE PRECLINICAL AND TRANSLATIONAL RESEARCHERS WHO WERE AT THE CAMPUS, BUT NOT HOUSED WITHIN THE BUILDING. SO THEY HAD A VIVARIUM ALSO THAT WAS GOING TO BE UTILIZING PLASTIC RECYCLABLE CAGES, WHICH I THOUGHT WAS A GREAT USE OF THE GREEN CONCEPT IN ELIMINATING NEED FOR WATER AND ENERGY.

MR. KELLER: IT IS A SILVER.

CHAIRMAN LICHTENGER: SO, AGAIN, I THINK IN ALL THE CATEGORIES, THIS APPLICATION WAS DEFINITELY EXCELLENT. I DIDN'T REALLY HAVE ANY CONCERNS IN ANY OF THE CATEGORIES AT ALL.

SO ARE THERE ANY DISCUSSION OR QUESTIONS THAT THE MEMBERS WOULD LIKE TO HAVE REGARDING ANY OF THE CATEGORIES? BOB.

MR. KLEIN: IN TERMS OF THE FUNCTIONALITY SCORE ON THIS APPLICATION OR GRADE, AS APPROPRIATE --

CHAIRMAN LICHTENGER: YOU MEAN STEVE COPENHAGEN'S SCORE?

MR. KLEIN: YEAH. THERE'S A B MINUS ON THIS. AND WHAT I'D LIKE TO SAY IS THAT WHILE UNDERSTANDING THE ISSUE WITH INTERACTIVE SPACE, WHICH I THINK IS A GREAT CONTRIBUTION, I THINK THERE'S LEGITIMACY IN THE FACT THAT IN THIS IMMEDIATE AREA OF THIS CAMPUS, THERE ARE CERTAINLY LARGE AMOUNTS OF INTERACTIVE SPACE WITH THE BUILDING X PROJECT AND OTHER PROJECTS THAT THEY COULD HAVE INTERACTION WITH. BUT THERE ARE SOME INNOVATIVE FEATURES I THINK YOU ALLUDED TO, INCLUDING THE 60 TRANSLATIONAL RESEARCH BENCHES WITHIN THE PI SPACES TO PROMOTE THE INTERACTION BETWEEN THE CLINICAL SCIENTISTS AND THE BASIC SCIENTISTS, THAT I THINK REALLY CONTRIBUTE TO THE MISSION AND CONTRIBUTE TO THE FUNCTIONALITY.

SO PERSONAL POINT OF VIEW IS THAT FROM A FUNCTIONAL POINT OF VIEW, WHEN YOU LOOK AT THE INTERACTION THEY HAVE WITHIN THE PI SPACES, WHICH I THINK ARE THE LARGEST, IN FACT, OF THE ONES REVIEWED, THEY HAVE SOME TREMENDOUS SPACE TO WORK WITH PEOPLE ON AN INTERDISCIPLINARY BASIS THAT IS GOING TO PROMOTE FUNCTIONALITY. AND I WOULD PROVIDE MY PERSONAL VIEW WOULD BE A MUCH HIGHER SCORE.

CHAIRMAN LICHTENGER: THANK YOU, BOB. I WANT TO REITERATE SOMETHING THAT MAYBE WE DIDN'T MAKE AS CLEAR AS WE SHOULD HAVE EARLIER ON, THAT MAYBE, RICK, YOU CAN GO INTO THIS, THAT CIRM HAD RETAINED STEVE COPENHAGEN TO GIVE A FUNCTIONALITY AND A VALUE SCORE TO ALL THE APPLICANTS. BUT THIS IS HIS OWN OPINION, AND THE MEMBERS OF THE FACILITIES WORKING GROUP CAN MAKE THEIR OWN JUDGMENTS. ALTHOUGH I RESPECT STEVE, I DIDN'T AGREE WITH HIM EITHER ON THIS PARTICULAR POINT. SO EVERYONE -- ALL THE MEMBERS ARE ABLE TO MAKE THEIR OWN JUDGMENTS AND ASK STEVE ANY QUESTIONS THEY LIKE, IF THEY HAVE ANY, DURING THE PROCESS. BUT, AGAIN, I WOULD AGREE WITH BOB KLEIN ON THIS PARTICULAR ONE. I GAVE IT A MUCH, MUCH HIGHER SCORE ON FUNCTIONALITY.

SO DO ANY MEMBERS OF THE FACILITIES WORKING GROUP HAVE QUESTIONS OR COMMENTS?

MR. KASHIAN: DAVID, I AGREE WITH YOUR STATEMENT TOTALLY. I DON'T FEEL IT'S OUR FUNCTION TO MICROMANAGE -- I AGREE WITH OUR CHAIRMAN. WHAT MR. COPENHAGEN AND MR. KLEIN AND MYSELF OR YOU THINK ABOUT, I JUST DON'T BELIEVE IN MICROMANAGING THE INDIVIDUAL SYSTEM. THEIR CONCEPT TO ME IS EXTREMELY FUNCTIONAL, AND I WOULD ECHO AND AGREE WITH YOUR POINT OF VIEW.

CHAIRMAN LICHTENGER: THANK YOU, ED. ANY OTHER QUESTIONS OR COMMENTS BY ANY MEMBERS? SO AT THIS POINT, I'D LIKE TO INVITE THE INSTITUTION TO COME UP AND SPEAK. DO WE ALLOW THREE MINUTES OR FIVE MINUTES?

MR. KELLER: THREE MINUTES.

CHAIRMAN LICHTENGER: THREE MINUTES, NOT COUNTING ANY QUESTIONS THAT THE MEMBERS MAY HAVE. SO IF STANFORD WOULD LIKE TO COME UP AND MAKE A COMMENT, THEY'RE WELCOME.

MR. SHAY: GOOD AFTERNOON. MY NAME IS CHRISTOPHER SHAY. I'M WITH STANFORD UNIVERSITY SCHOOL OF MEDICINE. THIS IS MY COLLEAGUE, LANG ANH PHAM, ALSO WITH STANFORD SCHOOL OF MEDICINE, THE REGENERATIVE MEDICINE INSTITUTE. WE'D LIKE TO THANK YOU FOR THE OPPORTUNITY TO PRESENT OUR APPLICATION. WE'D LIKE TO OPEN UP TO ANY QUESTIONS YOU MIGHT HAVE FOR OUR INSTITUTION.

CHAIRMAN LICHTENGER: ANY, BOB?

MR. KLEIN: DO YOU HAVE A NUMBER IN TERMS OF THE TOTAL RESEARCHERS THIS BUILDING WILL SERVE SEPARATE FROM THE PI NUMBER?

MR. SHAY: WE BELIEVE THAT COUNT -- WE'RE JUST GOING THROUGH THE SPACE ASSIGNMENT PROCESS RIGHT NOW. WE BELIEVE THAT COUNT FOR TOTAL RESEARCHERS, NOT INCLUDING THE 20 TO 25 PERCENT THAT'S RESERVED FOR CORES WITHIN THE BUILDING, WILL BE SOMEWHERE CLOSE TO 607 TO 612 PEOPLE.

MR. KLEIN: THANK YOU VERY MUCH. I THINK THAT'S A VERY IMPORTANT PIECE OF INFORMATION AS WE GO FORWARD BECAUSE THESE BUILDINGS ARE NOT NECESSARILY PROVIDING THE SAME AMOUNT OF SPACE PER PI, SO THERE MAY BE DIFFERENT SIZE PI TEAMS, RESEARCH TEAMS, THAT WE'RE ACCOMMODATING. AND WE NEED TO REMEMBER THAT WHEN WE'RE LOOKING AT THE COST PER PI, IT'S REALLY A MUCH LARGER NUMBER OF RESEARCHERS THAT WE ARE ACCOMMODATING AND CREATING CAPACITY FOR THAN THE NOMINAL NUMBER OF PI'S. SO I THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: RICK, I HAVE A QUESTION BEFORE I ASK THE APPLICANT. SO IN THEIR APPLICATION, ON EXISTING EQUIPMENT THAT THEY'RE RELOCATING TO THIS BUILDING, HAVE WE COUNTED THAT IN LEVERAGE?

MR. KELLER: THE WAY THAT THE EQUIPMENT WAS HANDLED WAS AS FOLLOWS. ANYTHING THAT WAS PURCHASED BY THE APPLICANT AFTER THE RFA WAS ISSUED IN AUGUST AND IS EXPECTED TO BE LOCATED IN THE BUILDING AS PART OF THE INITIAL COMPLEMENT OF EQUIPMENT WAS IDENTIFIED AS LEVERAGE. HOWEVER, IN A NUMBER OF CASES, THERE'S EXISTING EQUIPMENT THAT RESIDES IN THE LABORATORIES OF EXISTING PI'S THAT ARE RELOCATING. WE HAVE NO WAY OF VERIFYING THE VALUE OF THAT, AND SO WE NOTED IT IN THE ANALYSIS, BUT THAT CADRE OF EQUIPMENT IS NOT INCLUDED.

CHAIRMAN LICHTENGER: CAN YOU TELL US WHAT THAT NUMBER IS OFFHAND OR ASK STANFORD TO TELL US THAT NUMBER? THE AMOUNT OF EQUIPMENT THAT WILL QUALIFY FOR LEVERAGE.

MR. SHAY: IT WOULD TAKE US A SHORT AMOUNT OF TIME TO PUT THAT NUMBER TOGETHER FOR YOU, BUT WE'D BE HAPPY TO PUT THAT TOGETHER FOR YOU.

CHAIRMAN LICHTENGER: THAT WOULD BE FINE.

DR. PHAM: MAY I ASK FOR CLARIFICATION ON WHAT NUMBER YOU'RE LOOKING FOR?

CHAIRMAN LICHTENGER: I'M LOOKING FOR THE AMOUNT OF EQUIPMENT THAT YOU INTEND ON MOVING INTO THE CIRM SPACE THAT DOESN'T TECHNICALLY QUALIFY FOR LEVERAGE ACCORDING TO THE DEFINITION.

MR. SHAY: THE WAY STANFORD CALCULATED OUR EQUIPMENT COST IS WE PROVIDED AN EXTREMELY CONSERVATIVE NUMBER OF JUST NORTH OF $4 MILLION. AND THAT WAS INTENDED TO GIVE YOU JUST THE INFORMATION THAT MET CIRM'S REQUIREMENTS, BUT WE DO INTEND TO MOVE A LOT OF EQUIPMENT AS WELL AS PURCHASE A LOT OF EQUIPMENT THAT DOES NOT QUALIFY. I'D BE HAPPY TO PROVIDE BOTH THOSE.

CHAIRMAN LICHTENGER: I'D BE CURIOUS ABOUT WHAT THAT NUMBER IS AS BEST YOU CAN GET THAT TO US. ALTHOUGH IT CAN'T COUNT TECHNICALLY IN LEVERAGE, IT WOULD HELP FOR THE FACILITIES WORKING GROUP TO BE AWARE OF THAT NUMBER.

MR. SHAY: I'D BE MORE THAN HAPPY TO.

CHAIRMAN LICHTENGER: ANY OTHER QUESTIONS FOR THE APPLICANT? THANK YOU VERY MUCH FOR COMING. AND I'M SORRY. WE HAVE ANOTHER QUESTION.

MS. SAMUELSON: COULD YOU SPEAK BRIEFLY JUST IN RESPONSE TO THE ANALYSIS AND THE B MINUS SCORE? I'M SEEING AN EXTREMELY IMPRESSIVE APPLICATION, HEARING THAT IS SO, AND VERY IMPRESSED WITH THINGS LIKE, FOR EXAMPLE, THE LAST REFERENCE TO INNOVATIVENESS AND THE INTEGRATION OF TRANSLATIONAL RESEARCHERS IN WITH BASIC SCIENTISTS. THAT'S WONDERFULLY IMPORTANT, IT SEEMS TO ME, AND I CAN'T LOSE ANY SLEEP HONESTLY OVER THE FACT THAT THERE AREN'T ENOUGH CHAIRS IN THE CAFE SO THAT FOLKS MIGHT TAKE A CUP OF COFFEE BACK INTO THE LAB.

MR. SHAY: I'D LIKE TO START BY SAYING THAT I HIGHLY RESPECT STEVE COPENHAGEN'S WORK, AND I DON'T TAKE GRIEVANCE AT WHAT HE WROTE WITHIN THE EVALUATION. I THINK THERE'S A SEPARATION BETWEEN THE TWO ISSUES. I DO NOT THINK THAT HE WAS JUDGING THE FACT THAT WE HAVE THESE TRANSLATIONAL BENCHES WHERE WE'RE BRINGING IN CLINICAL FACULTY MEMBERS TO WORK DIRECTLY BY THE HARD SCIENCE FACULTY MEMBERS. I THINK THAT'S A SEPARATE ISSUE.

WHERE STEVE IS CONCERNED, AND WE'RE ALWAYS OPEN TO DISCUSSING THAT, IS HOW MUCH SCIENCE WE PACK INTO A BUILDING BEFORE WE HAVE A PROBLEM OF PEOPLE FEELING LIKE THEY DON'T HAVE A WELCOMING PLACE TO WORK IN THE SPACE. FOR HAVING WORKED ON THIS PROGRAM FOR THE LAST FOUR YEARS, I CAN TELL YOU THAT WE TAKE THAT ISSUE VERY SERIOUSLY. AND WHAT WE DO AT STANFORD IS TO MAKE SURE WE GET THE MOST SCIENCE OUT OF OUR BUILDINGS AND STILL PROVIDE A WONDERFUL PLACE TO WORK AS WE TAKE ADVANTAGE OF THE BENIGN CLIMATE IN PALO ALTO TO BE ABLE TO PROVIDE SPACE OUTSIDE THE BUILDING AS WELL AS A LIMITED AMOUNT OF SPACE, BUT VERY HIGHLY THOUGHT-OUT SPACE AND LOCATED SPACE WITHIN THE BUILDING. THIS BUILDING IS MORE CLOSELY RELATED TO OUR BECKMAN BUILDING, WHICH IS INTRICATELY DESIGNED VERY SMALL SPACES NEAR THE RESEARCHERS.

THERE'S NOT A LOT OF GRAND SPACE, THERE'S NOT A CAFETERIA WITHIN THE BUILDING, BUT WITHIN THE SURROUNDING AREA WE DO HAVE 13 DIFFERENT VENDORS THAT DO PRODUCE FOOD, AND YOU CAN EAT THAT IN INDOOR CAFETERIAS IN OTHER BUILDINGS OR IN OUTDOOR CAFETERIAS IN OTHER LOCATIONS. SO WE TAKE THAT VERY SERIOUSLY. WE JUST TAKE ADVANTAGE OF THE BENIGN CLIMATE TO SOLVE THAT. I THINK THAT -- I'D OPEN UP TO STEVE IF THAT'S THE CONCERN RATHER THE TRANSLATIONAL BENCHES.

MR. COPENHAGEN: YES. THERE'S NO QUESTION. IT WAS NOT THE TRANSLATIONAL MEDICINE. THE INTEGRATION OF THE SCIENCE AT THE BENCHES IS DEFINITELY NEAR. IT WAS JUST THE SPACE OUTSIDE THE LAB WHERE THE PEOPLE COULD GET TOGETHER. IT'S JUST YOU'RE DOING IT IN THE BENIGN CLIMATE AS OPPOSED TO WITHIN THE BUILDING SHELL ITSELF.

CHAIRMAN LICHTENGER: GREAT. THANK YOU AGAIN FOR COMING AND ANSWERING OUR QUESTIONS. IF YOU CAN GET THAT INFORMATION TO RICK. RICK, YOU HAD A COMMENT.

MR. KELLER: MR. CHAIRMAN, ON PAGE 2 OF THE STAFF ANALYSIS, THESE ALL KIND OF RUN TOGETHER, BUT WE DO MENTION -- I THINK THIS IS DIRECTLY OUT OF THE APPLICATION, THAT EXISTING EQUIPMENT VALUED AT 9 TO $12 MILLION WILL BE RELOCATED TO THE FACILITY. AND THAT WAS IN THEIR APPLICATION.

MR. SHAY: RICK'S GONE RIGHT TO THE PAGE I WAS GOING TO RUN BACK TO MY SEAT TO LOOK AT.

CHAIRMAN LICHTENGER: SO IF WE UNDERSTAND IF IT'S NINE OR 12, THAT WOULD BE HELPFUL. GREAT. THANK YOU AGAIN.

SO IF THERE ARE NO OTHER QUESTIONS, I'D LIKE TO MOVE ON TO THE NEXT APPLICATION.

MR. SHAY: THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: SO THE NEXT APPLICATION WOULD BE, I GUESS, APPLICATION 00611-1

MR. KELLER: HAS ALL THE MEMBERS HAD AN OPPORTUNITY TO SCORE?

CHAIRMAN LICHTENGER: THAT'S RIGHT. WE CAN TAKE A TIME, A MINUTE OR SO NOW FOR US TO RECORD OUR PRELIMINARY SCORES. WE WILL NOT -- THESE SCORES WILL ALLOW A TIME AT THE END OF THE REVIEW OF ALL THE APPLICANTS IN EACH SECTION IN THE CIRM INSTITUTE SECTION FOR US TO RECORD OUR FINAL SCORES.

MR. KELLER: I'M ADVISED THAT THERE ARE PENCILS AT EACH OF YOUR PLACES SO THAT IF YOU WISH TO RECORD THEM IN PENCIL. YOU MAY THEN CHANGE THEM LATER AS OPPOSED TO PUTTING THEM IN SOMETHING MORE PERMANENT. AT THE END THEY HAVE TO BE IN INK.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: OKAY. RICK, PLEASE.

MR. KELLER: JUST A BIT OF HOUSEKEEPING. BETH DRAIN HAS REQUESTED TO REMIND EVERYONE TO PLEASE SPEAK INTO THE MICROPHONE BECAUSE SHE'S HAVING SOME DIFFICULTY HEARING YOU. AND SO I'M JUST REITERATING HER INITIAL REQUEST SO THAT WE CAN HAVE A TRANSCRIPT THAT WILL BE ACCURATE.

CHAIRMAN LICHTENGER: SHE CAN'T READ OUR LIPS BY NOW?

MR. KELLER: THE NEXT APPLICATION, 611, THIS PROJECT IS A RENOVATION OF A SINGLE-STORY HIGH-BAY WAREHOUSE THAT'S GOING TO BE CONVERTED TO LABORATORY USE, AND A PORTION OF IT WILL BE STEM CELL RESEARCH SPACE.

THE CIRM-FUNDED PROJECT CONSTITUTES ABOUT 38,947 ASSIGNABLE SQUARE FEET. A PORTION OF THIS HAS ALREADY BEEN RENOVATED AND IS USED AS A CLINICAL AND TRANSLATIONAL SCIENCE CENTER THAT IS PART OF A NATIONAL CONSORTIUM THAT FACILITATES NEW WAYS TO ENHANCE CLINICAL AND TRANSLATIONAL RESEARCH. THE REMAINING 37,600 GROSS SQUARE FEET WILL BE BUILT OUT IN A FUTURE PHASE OF DEVELOPMENT, AND IT MAY ALSO BE USED AS A MAJOR LECTURE SPACE TO SERVE THE CAMPUS.

THE GOAL OF THE PROJECT IS TO CO-LOCATE THE INSTITUTE'S KEY STEM CELL RESEARCHERS AND TO PROVIDE NEW CORE FACILITIES IN SUPPORT OF THE STEM CELL RESEARCH.

THE TOTAL PROJECT COST IS 61.8 MILLION WITH CIRM FUNDING OF $26,059,275. AT OCCUPANCY THE FACILITY WILL HOUSE 14 PRINCIPAL INVESTIGATORS; AND BASED ON ADVICE RECEIVED FROM THE APPLICANT, THE 17 PART-TIME PI'S WILL ALSO BE ACCOMMODATED AND THEY WILL OCCUPY SPACE THAT'S EQUIVALENT TO SPACE THAT WILL BE DEVOTED TO THREE FULL-TIME PI'S AND THEIR TEAMS.

KEY CORE SPACES ARE A CELL BANK AND A SIX-STATION GMP, GOOD MANUFACTURING PRACTICE, FACILITY WHICH HAS SOME INTERESTING ELEMENTS IN ITS DESIGN. AND THE COMPLETION OF THE PROJECT IS SCHEDULED FOR JULY 2010.

I WANTED TO BRING OUT THE POINT THAT WHEN WE INITIALLY REVIEWED THIS PROPOSAL, THERE WERE CONCERNS ABOUT THE AMOUNT OF UTILITY COST THAT HAD BEEN ASSIGNED AS PART OF THE PROJECT AND PART OF THE LEVERAGE. AND WHEN WE DISCUSSED THIS WITH THE APPLICANT, IT WAS CLEAR THAT THE AMOUNT NEEDED TO BE PRORATED BETWEEN THE PORTION THAT THEY HAVE ALREADY SPENT ON UPGRADING THE BUILDING AND HOW IT SHOULD BE DISTRIBUTED EVENLY BETWEEN THE CIRM-FUNDED SPACE AND SPACE THAT IS YET TO BE OCCUPIED OR IS ALREADY OCCUPIED BY OTHER PROGRAMS.

THE ADJUSTMENT RESULTED IN A DOWNWARD ADJUSTMENT IN THE LEVERAGE OF ABOUT $7 MILLION. THEN I DRAW YOUR ATTENTION TO THE TABLE, AGAIN ON YOUR RIGHT, WHERE APPLICATION 611, UC DAVIS, THE AMOUNT FOR CENTRAL SERVICES IS ABOUT 4.6 MILLION, SO IT WENT DOWN SEVEN AND UP 4.6. SO THAT'S THE NET. AND WE HAVE THE TABLE THAT'S IN YOUR ANALYSIS. WE'VE UPDATED THOSE TO INCLUDE THESE UTILITY ADJUSTMENTS, AND THEY'RE ON YOUR LEFT ON THE SCREEN ON YOUR LEFT WHERE THE BLUE BARS ALSO HAVE THE LIGHT BLUE AT THE TOP. SO IN THIS CASE 611 IS THE FIFTH ONE OVER FROM THE LEFT, STANFORD BEING THE ONE ON THE LEFT. AND YOU CAN SEE THAT INCREMENT RIGHT THERE.

CHAIRMAN LICHTENGER: CAN WE GET THAT PRINTED OUT FOR THE FACILITIES WORKING GROUP?

MR. KELLER: WE CAN GET IT AT A BREAK.

CHAIRMAN LICHTENGER: THAT WOULD BE GREAT. BEFORE WE DO OUR FINAL SCORES, I'D LIKE THAT DISTRIBUTED.

MR. KELLER: THAT IS THE LEVERAGE THAT WAS IN YOUR BOOK, AND THEN THIS IS THE ADDED LEVERAGE BASED ON THE UTILITIES.

CHAIRMAN LICHTENGER: THE BLUE IS THE ADDED LEVERAGE?

MR. KELLER: THE LIGHT BLUE.

CHAIRMAN LICHTENGER: WHAT'S THE PERCENTAGE?

MR. KELLER: THE LAB PLANNER SCORE WAS A FUNCTIONAL SCORE OF B AND A VALUE SCORE OF C PLUS, NOTING THAT THE BUILDING IS SHORT ON COMMUNAL SPACE NECESSARY FOR INTERACTION. AND BENCH SPACE APPEARS TO BE AT ABOUT 1 TO 1.08 RATIO WITH SUPPORT SPACE WITH A SIGNIFICANT NUMBER OF TISSUE CULTURE AND EQUIPMENT ROOMS. THIS IS THE HIGHEST RATIO OF ALL APPLICANTS.

THE PRIMARY REVIEWER IS MEMBER HYSEN AND THE SECONDARY REVIEWER IS CHAIR LICHTENGER.

CHAIRMAN LICHTENGER: RICK, I HAVE ONE QUESTION BEFORE DEBORAH STARTS HER REVIEW. ON THIS PI ISSUE, ARE WE NOW COMPARING, WHEN WE PUT IN THESE PART-TIME PI'S, ARE WE NOW SHOWING THE FACILITY AT FULL OCCUPANCY AND CAPACITY?

MR. KELLER: WE HAVE PREPARED AND I COULD SHOW YOU FOR THIS APPLICATION -- MELISSA, IF YOU COULD CHANGE THAT ONE TO THE CHART WHICH IS CHART 5 FOR PI. SO THE SAME CHARTS, WE'VE UPDATED THEM, SO YOU CAN SEE THE RELATIVE RANKING OF THESE BASED ON THE CHANGE IN THE PI'S THAT ARE SHOWN HERE. SO, FOR INSTANCE, AT DAVIS, THE BASE CHARTS BASED ON PART 1 ASSUMED THAT THE NUMBER OF PI'S WAS 14; AND BASED ON THE IDENTIFICATION OF THREE ADDITIONAL FTE CAPACITY, THE CHART NOW SHOWS 17 PI'S. SO THE CHART THAT SAYS ADDED -- CHART 5 IS WITH ADDED PI'S INDICATES THE COST PER PI THERE.

CHAIRMAN LICHTENGER: I GUESS WHAT I'M ASKING YOU IS IF WE ADD THESE ADDITIONAL PI'S, ARE WE NOW REFLECTING THESE FACILITIES AT CAPACITY?

MR. KELLER: YES.

CHAIRMAN LICHTENGER: OKAY. GREAT. I JUST WANT TO MAKE SURE BECAUSE THEY COULD CONCEIVABLY BE TWO DIFFERENT ANSWERS.

MR. KLEIN: DAVID, MY UNDERSTANDING IS HE'S DOING IT AS FTE'S, FULL-TIME EQUIVALENT. SO IF THEY'RE PART TIME, HE'S CONVERTING THEM TO FULL-TIME EQUIVALENT, SO IT'S AN EQUAL STANDARD.

MR. KELLER: WE ASKED THE APPLICANTS TO GIVE US THAT.

MR. KLEIN: DOES THIS CHART REFLECT THE CHANGE TO THE ONE INSTITUTION WHERE YOU DIDN'T HAVE THE ADDITIONAL PI'S IN?

MR. KELLER: YES.

MR. KLEIN: THIS CHART DOES REFLECT THAT ADJUSTMENT?

MR. KELLER: YES. I CHECKED IT.

MR. KLEIN: OKAY. GREAT.

MS. HYSEN: THANK YOU. WELL, I FELT THIS PROPOSAL WAS VERY SOLID. I THANK RICK FOR ANSWERING A LOT OF THE QUESTIONS THAT I WAS GOING TO ANSWER IN THE EARLIER SECTION. I WOULD LIKE TO AGAIN ECHO THE COMMENTS OF MY FELLOW WORK GROUP MEMBERS. THE STAFF ANALYSIS HAS BEEN ABSOLUTELY INSTRUMENTAL IN HELPING EVALUATE THESE PROPOSALS. AND PARTICULARLY TO MR. COPENHAGEN FOR PUTTING SOME FLOURISHING TOUCHES ON THE DESIGNS. I FOUND THEM VERY INTERESTING.

RICK MENTIONED A LOT OF THE STATISTICS ABOUT THIS FACILITY. I FELT THAT THIS FACILITY ON VALUE, IT WAS ONE OF THE HIGHER COSTS FOR FACILITIES, BUT IT WAS, I FELT, EASILY EXPLAINED BY THE TYPES OF FACILITIES THAT THEY WERE BUILDING WITH THE GMP AND THE VIVARIUM. AND I FELT THAT THAT WAS WELL EXPLAINED.

THE LAB AND PRINCIPAL INVESTIGATOR SPACE COSTS,71 PERCENT OF THE AVERAGE, I FELT THAT THAT WAS QUITE APPROPRIATE.

THE QUESTION WAS RAISED BY STAFF EARLY ON AS TO WHETHER OR NOT IT WOULD BE APPROPRIATE TO SPLIT SOME OF THE INFRASTRUCTURE COSTS. AND FORTUNATELY UC DAVIS ACKNOWLEDGED THAT IT WOULD, IN FACT, BE APPROPRIATE. AND RICK MENTIONED THAT EARLIER.

I THINK FROM A SUSTAINABILITY STANDPOINT, IT'S REALLY APPROPRIATE TO IDENTIFY OPPORTUNITIES TO TIE INTO A CENTRAL PLANT. IN THAT REGARD, ALSO, THEY WERE ABLE TO FREE UP SOME ASSIGNABLE SQUARE FOOTAGE IN THE MAIN BUILDING BY BUILDING A NEW UTILITY BUILDING. SO IT REALLY ALLOWED US TO GET EVEN MORE SQUARE FOOTAGE IN THE BUILDING, WHICH I THINK I HAVE THE NUMBER RIGHT AT 54,000 GROSS SQUARE FOOT BUILDING.

MR. KELLER: THE OVERALL BUILDING IS A HUNDRED NINE.

MS. HYSEN: THIS SECTION. THIS IS THE RENOVATION OF AN EXISTING FACILITY.

I SAW IN HERE ALSO SOME NOTATION IN HERE THAT THE ASSIGNABLE SQUARE FEET WAS FOR THE 14 FULL-TIME, 17 PART-TIME. I THINK MY QUESTION WAS ARE THOSE 17 PART-TIME BASICALLY LITERALLY 50-PERCENT INDIVIDUALS? IS THAT HOW YOU CONVERTED IT?

MR. KELLER: NO. THE APPLICANT DID A VERY DETAILED ANALYSIS. AND BECAUSE WHEN WE TALK ABOUT A PI, WE'RE TALKING ABOUT A RESEARCH GROUP. SO WHEN THEY LOOKED AT THE PART-TIME, SINCE THOSE PEOPLE ARE GENERALLY NOT IN A RESEARCH GROUP, MANY PART-TIMERS CAN BE ACCOMMODATED WHERE YOU MIGHT -- SO IF YOU THINK ABOUT A SPACE THAT WOULD ACCOMMODATE THREE RESEARCH TEAMS AND AT EIGHT TO ONE, THAT MIGHT HAVE 25 TO 30 PEOPLE WORKING IN IT, THEY THINK 17 PI'S PART TIME COULD USE THAT SPACE. SO IT'S THREE -- THE EQUIVALENT TO THREE FTE PI'S.

MS. HYSEN: THANK YOU. THE PROPOSAL NOTED THAT IT WAS AVERAGING $899 DOLLARS PER GROSS SQUARE FOOT, WHICH APPARENTLY IS LOWER THAN THE AVERAGE OF 938 GROSS SQUARE FEET, SO I FELT THAT THAT WAS IN LINE.

SO I FELT THE VALUE WAS VERY GOOD ON THIS, AND IT WAS INTERESTING BECAUSE MR. COPENHAGEN GAVE IT A C PLUS. AND LET ME JUST GO TO HIS. HE RAISED SOME QUESTIONS, WHICH I WOULD LIKE TO HAVE UC DAVIS ANSWER AT SOME POINT. AND THAT WAS HE NOTED THAT ON A VALUE BASIS THAT THE BENCH SPACE WAS THE HIGHEST RATIO. I'M JUST CURIOUS WHY THERE WOULDN'T BE VALUE ASCRIBED TO THAT.

CHAIRMAN LICHTENGER: CAN WE HEAR FROM STEVE ON THIS ISSUE?

MR. COPENHAGEN: WE KNOW THIS ONE WORKS. IN LOOKING AT THE APPLICANT, I THINK THE REASON I PUT A C PLUS ON VALUE WAS THAT THE AMOUNT OF LAB SPACE THAT YOU WERE GETTING, THE OVERALL BUILDOUT HAD A LOT OF VERY EXPENSIVE SPACE IN IT. TRYING TO SAY THAT IT'S NEEDED FOR THE RESEARCH THAT IS GOING ON, SO THAT YOU ARE GETTING VALUE FOR IT, BUT IT'S VERY EXPENSIVE SPACE. SO IT WAS KIND OF LIKE IT WASN'T AS MUCH BENCH SPACE FOR THE BENCH SCIENCE. I WAS TRYING TO WEIGH THAT AGAINST THESE OTHER CRITICAL CORES THAT THEY ARE PROVIDING, WHICH SHOULD -- ON ONE HAND THAT'S OF GREATER VALUE. ON THE OTHER HAND, I THOUGHT IT WAS A LITTLE BIT MAYBE LOWER IN THE AMOUNT OF BENCH SPACE THAT THEY WERE PROVIDING IN THE OVERALL PACKAGE OR BUILDOUT.

CHAIRMAN LICHTENGER: SO YOU WERE MAKING A JUDGMENT AS TO THE VALUE OF THE VIVARIUM AND THE GMP VERSUS THE BENCH SPACE?

MR. COPENHAGEN: JUST RECOGNIZING THAT WHAT YOU WERE BUILDING OUT WAS VERY EXPENSIVE SPACE, OR THERE'S A LOT OF DOLLARS GOING INTO THAT SPACE.

MR. KLEIN: IF I CAN ASK, I THINK, DEBORAH, THAT HIS POINT IS THAT IT'S HARD TO CARRY GMP AND VIVARIUM SPACE IN A SIGNIFICANT AMOUNT UNLESS YOU HAVE A LARGE VOLUME OF BENCH SPACE. AND THIS HAD TO BE SPREAD OVER RELATIVELY SMALLER VOLUME OF BENCH SPACE, WHICH RESULTED IN THE HIGHER COST. BUT MY UNDERSTANDING IS THE COST IS STILL BELOW THE INSTITUTE AVERAGE. SO AREN'T WE ON A COMPARATIVE BASIS?

MR. COPENHAGEN: BETTER VALUE BECAUSE YOU ARE GETTING MORE TYPE OF SPACE, COULD BE.

MS. HYSEN: THAT WAS MY -- THAT WAS WHERE I WAS THINKING WE WANTED TO HEAD. SO WHEN I SAW THE C PLUS, I FELT LIKE THAT ACTUALLY WOULD NET OUT AND PROBABLY RAISE THAT LEVEL. SO THAT WAS MY CONCERN THERE.

ON A LEVERAGE BASIS, THEY'RE RANKED FIVE OF SEVEN IN THIS CATEGORY. AND I FELT THAT IT WAS A FAIRLY GOOD AMOUNT OF LEVERAGE.

BENEFICIAL OCCUPANCY IS TARGETED FOR MAY 26, 2010. AND SOMETHING WAS RAISED BY ANOTHER -- A QUESTION ON AN EARLIER APPLICATION AND WAS ANSWERED BY THE STAFF, AND IT MADE ME QUESTION ALL OF THESE IN GENERAL. WE TALK ABOUT BENEFICIAL OCCUPANCY, BUT I GUESS I'M WONDERING AT WHAT POINT DO WE UNDERSTAND IF THEY HAVE THE FULL CAPACITY OCCUPIED? BENEFICIAL OCCUPANCY COULD BE ONE PERSON INSIDE THERE, AND I DON'T KNOW IF THAT'S IMPORTANT TO ALL OF YOU. BUT SOMETIMES YOU OCCUPY JUST TO LET PEOPLE KNOW YOU'RE OPEN FOR BUSINESS, BUT IT DOESN'T NECESSARILY MEAN YOU'RE FULLY OCCUPIED AND UP AND RUNNING. SO IT'S NOT SPECIFIC TO THIS APPLICATION, BUT I GUESS I'M CURIOUS WHEN WE SAY BENEFICIAL OCCUPANCY, WHAT DOES THAT MEAN?

CHAIRMAN LICHTENGER: DEBORAH, I THINK RICK HAS A DEFINITION.

MR. KELLER: WE HAD SOME DISCUSSION OF THIS PRIOR WHEN THE APPLICANTS ASKED QUESTIONS ABOUT THE RFA IN WHAT WE CALLED THE INTERESTED PARTIES MEETING BEFORE THEY WROTE IT. AND WHAT WE ESTABLISHED WAS THAT BENEFICIAL OCCUPANCY IS AT THE POINT IN TIME WHEN THE FACILITY IS READY TO HAVE MOVABLE OR LOOSE EQUIPMENT INSTALLED. AND AS YOU STATE, IT COULD BE THAT ONLY ONE PERSON IS IN THERE, BUT WE WANTED EVERYBODY TO USE KIND OF THE SAME POINT. SO WE THOUGHT EQUIPMENT INSTALLATION WAS A GOOD WAY OF GETTING EVERYBODY TO UNDERSTAND THAT'S WHEN THE CONTRACTOR IS NOW EITHER SIGNED OFF AND ALLOWED ACCESS TO THE BUILDING SO THAT THE APPLICANT CAN BRING THEIR PEOPLE IN AND START DOING SOME OF THE INSTALLS.

MS. HYSEN: I UNDERSTAND THAT'S IMPORTANT FROM A FACILITIES STANDPOINT BECAUSE WE ALWAYS LIKE TO SEE BENEFICIAL OCCUPANCY SO WE CAN BREATHE A SIGH OF RELIEF. BUT I WOULD THINK FROM THE SCIENTIST STANDPOINT, THEY WANT TO KNOW WHEN ARE YOU UP AND RUNNING AND PRODUCING, BUT THAT'S NOT MY QUESTION TO ANSWER.

I FELT THE TEAM HAD A CONSIDERABLE AMOUNT OF EXPERIENCE. THEY OUTLINED WHO THE STAFF WERE, AND THEY OUTLINED THEIR EXPERIENCE.

AND SO FROM AN URGENCY STANDPOINT, I FELT LIKE THEY COULD PROBABLY MEET THE TARGETS THAT WERE OUTLINED. THAT'S QUESTIONABLE IN OTHER CASES IN MY OPINION, BUT IN THIS PARTICULAR CASE, I FELT THAT THEY HAD A BUILDING, THEY'VE ALREADY GOT THEIR PLUMBING, THEIR DOMESTIC WATER SYSTEM UNDER CONSTRUCTION. THEY HAVE BEEN ABLE TO DEMONSTRATE A PRETTY LOW CHANGE ORDER RATE, SO THE CHANCES ARE THEY'RE GOING TO KEEP GOING WITHOUT HAVING TO MAKE SOME MODIFICATIONS THAT COULD SLOW IT UP.

I NOTICED THEIR CM TEAM. I'M REALLY IMPRESSED WITH THAT PARTICULAR ORGANIZATION. I THINK THEY'RE VERY WELL QUALIFIED.

AND SO I THINK FROM AN URGENCY STANDPOINT, THEY CAN CERTAINLY MEET THE SCHEDULE THAT CIRM HAS ESTABLISHED.

SHARED RESOURCES, THEY DID IDENTIFY A NUMBER OF SHARED PROGRAM OPPORTUNITIES. AND THEY ALSO HAVE ACCESS TO OTHER FACILITIES ON SITE. AND ONE OF THE THINGS THAT THEY DID PROVIDE TO CIRM AS PART OF THIS APPLICATION IS THEY PROVIDED FORMAL MOU'S, WHICH WOULD SHOW THE COLLABORATION BETWEEN OTHER INSTITUTIONS. AND I FELT THAT THAT WAS IMPORTANT TO DEMONSTRATE, MEMORIALIZE THAT THEY ACTUALLY HAVE THESE OPPORTUNITIES AVAILABLE.

FUNCTIONALITY, I THINK IT'S A VERY GOOD DESIGN. CANNON INDICATED THAT IT WAS HIGHLY EFFICIENT, VERY OPEN LABORATORIES, HIGH CEILINGS, WHICH, OF COURSE, FACILITATE A LOT OF FLEXIBILITY IN UTILITY SYSTEMS.

STEVE DID RAISE A FEW QUESTIONS WHICH HOPEFULLY UC DAVIS CAN ANSWER. HE QUESTIONED WHETHER OR NOT THE BENCHES WERE FIXED OR MOVABLE IN TERMS OF ADAPTABILITY. I THINK THAT'S AN IMPORTANT QUESTION. AND HE DID MENTION THAT BECAUSE THEY'RE SUCH LARGE LABS, HE'S CONCERNED ABOUT THE NOISE LEVELS AND THE DISTRACTIONS. AND WHILE LARGE LABS FACILITATE GOOD COMMUNICATION AND INTERACTION, THEY CAN ALSO BE A DISTRACTION. SO I'M WONDERING IF UC DAVIS CAN ADDRESS THOSE ISSUES AS WELL.

I THINK THEY HAD A REALLY GOOD DESCRIPTION OF HOW THEY SEPARATED THEIR SPACES TO AVOID CONTAMINATION AND EXPOSURE. THAT WAS VERY INTERESTING, THEIR DISCUSSION OF TOTAL SYSTEMS.

SO OVERALL I FOUND THIS TO BE A VERY SOLID PROPOSAL.

CHAIRMAN LICHTENGER: GREAT. THANK YOU, DEBORAH. EXCELLENT REVIEW. SO I'M THE SECONDARY REVIEWER ON THIS APPLICATION.

SO ON URGENCY I THOUGHT THE APPLICANT DID AN EXCELLENT JOB GIVEN IT'S AN EXISTING BUILDING AND ALTERATION, VERY EXPERIENCED TEAM, AND I FELT A VERY STRONG SCORE IN THE URGENCY, EXCELLENT.

SO, YOU KNOW, ON LEVERAGE I GUESS THEY WERE SOMEWHAT BELOW AVERAGE. SO THAT WAS A LITTLE DISAPPOINTING TO ME IN TERMS OF THEIR LEVERAGE.

I WAS VERY PLEASED -- I GUESS I FEEL LIKE I'M GOING TO BE DISAGREEING WITH OUR LABORATORY PLANNER. I THOUGHT ACTUALLY IT WAS QUITE FUNCTIONAL. AND I THOUGHT IT WAS VERY FLEXIBLE, AND I REALLY DIDN'T HAVE ANY CONCERNS ABOUT IT. SO I PROBABLY WOULD HAVE DONE HIGHER THAN A B.

SO IN TERMS OF SHARED RESOURCES, I DO HAVE A COUPLE OF QUESTIONS FOR THE DAVIS TEAM WHEN WE HAVE THEM MAKE THEIR COMMENTS. OVERALL, THEY HAD QUITE A FEW CORES AND FACILITIES THAT THE CIRM SPACE WOULD BE ABLE TO SHARE AND USE, BUT I WANT TO UNDERSTAND A LITTLE BIT MORE ABOUT THEIR AGREEMENTS AND HOW THEY'RE GOING TO INTERACT WITH OTHER INSTITUTIONS. THAT'S A QUESTION I HAVE FOR THE DAVIS TEAM.

I THOUGHT IT WAS, YOU KNOW, ON THE COST SIDE, IT WAS INTERESTING. I TOOK IT THAT ACTUALLY THE COSTS OVERALL WERE SOMEWHAT BELOW THE AVERAGE, AND THEY'RE PUTTING THE MOST EXPENSIVE SPACE IN THERE IN GMP AND VIVARIUM. SO ACTUALLY I THOUGHT IN THE COST CATEGORY OF VALUE THEY SCORED QUITE WELL BECAUSE THESE ARE THE MOST EXPENSIVE TYPES OF SPACE TO BUILD. SO OVERALL I THOUGHT IT WAS A VERY GOOD TO EXCELLENT VALUE FOR THE TAXPAYER.

I GUESS THE AREA THAT I WAS SOMEWHAT DISAPPOINTED WOULD BE IN THE LEVERAGE CATEGORY. AND AT THIS POINT I'D LIKE TO ASK FOR ANY COMMENTS OR QUESTIONS OF ANY OF THE FACILITIES WORKING GROUP, AND THEN WE'LL HAVE DAVIS COME UP AND MAKE COMMENTS.

MR. KLEIN: I'D JUST LIKE TO SAY THAT WHEN DAVIS MAKES THEIR COMMENTS, IF THEY COULD ADDRESS DEBORAH'S QUESTION BECAUSE I THINK THEY DID LAY OUT A FAIRLY DETAILED STRATEGY FOR FULL UTILIZATION OF THE BUILDING. IT WOULD BE GOOD FOR US TO GO THROUGH THAT IN SUMMARY.

BUT MY QUESTION, RICK, GOES TO THE ISSUE OF THEIR ORIGINAL APPLICATION AMOUNT, THEY SAID, WAS 56 MILLION. THE REVISED AMOUNT WAS 48. I UNDERSTAND IT'S GONE UP BY A LITTLE OVER FOUR MILLION. WHAT IS IT THAT'S BEEN EXCLUDED FROM THE LEVERAGE COST THAT THEY PROPOSED?

MR. KELLER: THE LEVERAGE COST, AS I MENTIONED, WAS THAT 50 PERCENT OF THE VALUE OF IMPROVEMENTS TO THAT BUILDING ACCRUE AND WILL BE USED FOR SPACE THAT IS CURRENTLY NOT OCCUPIED OR OCCUPIED BY OTHER THAN THE CIRM-FUNDED PROGRAMS.

MR. KLEIN: SO THAT'S THE ONLY NET EXCLUSION AT THIS POINT?

MR. KELLER: THAT'S THE ONLY NET EXCLUSION. AND THEN WHEN WE ADDED THE GENERATING CAPACITY, WE GOT ABOUT FOUR AND A HALF OF THAT BACK.

MR. KLEIN: GREAT. THANK YOU.

CHAIRMAN LICHTENGER: I'D LIKE TO MAKE ONE CORRECTION TO MY COMMENT ON LEVERAGE AFTER GETTING THIS CHART. THANK YOU, RICK. THIS HELPS ME. SO I WOULD LIKE TO SAY THAT I VIEW, AFTER SEEING THIS ADJUSTMENT, THEIR LEVERAGE IS SLIGHTLY ABOVE AVERAGE. SO, AGAIN, IT WOULD BE ABOVE AVERAGE WHEN COMPARED TO THE OTHER INSTITUTES.

MS. HYSEN: I FORGOT. I HAVE REALLY MESSY NOTES HERE. I FORGOT ONE THING. RICK MENTIONED IT EARLIER, BUT I FELT THAT BECAUSE THEY ALSO HAVE THE FUTURE GROWTH SPACE FOR PHASE III AND IV, 37,000 SQUARE FEET, I FELT THAT THAT WAS AN OPPORTUNITY TO CONTINUE TO GROW THE PROGRAM. I THOUGHT THAT WAS IMPORTANT.

CHAIRMAN LICHTENGER: ANY OTHER?

MR. KASHIAN: DEBORAH, I MIGHT HAVE MISSED WHAT YOU SAID. DID YOU COMMENT ABOUT IN THE VALUE CATEGORY ABOUT SUSTAINABILITY AND INNOVATION?

MS. HYSEN: I THINK THIS IS THE ONE THEY'RE GOING TO SEEK LEED CERTIFICATION. AND THE FACT THAT THEY'RE USING THE COGEN AND THAT THEY'RE RENOVATING AN EXISTING FACILITY, I THINK THEY'LL BE ABLE TO MEET THE LEED CERTIFICATION.

MR. KASHIAN: HOW ABOUT INNOVATION?

MS. HYSEN: FROM A BUILDING DESIGN STANDPOINT, I FELT THAT IT WAS PRETTY STANDARD ALONG WITH THE OTHER DESIGNS. BECAUSE THEY'RE RENOVATING AN EXISTING FACILITY, IT'S NOT AS INNOVATIVE IN ARCHITECTURE. I DON'T KNOW THAT I CAN SPEAK TO SOME OF THE UNIQUE INNOVATION OF THE SCIENCE, ALTHOUGH I FELT THEY DID A REALLY INTERESTING JOB OF DESCRIBING HOW THEY WERE REALLY GOING TO SEPARATE AND CONTAIN THE AREAS THAT COULD POTENTIALLY BE AREAS OF CONTAMINATION. THEY REALLY DESCRIBED THAT PROCESS QUITE WELL, I THOUGHT.

MR. KASHIAN: I'D LIKE MR. COPENHAGEN AND MR. GROOM TO COMMENT ON THE INNOVATION PORTION OF VALUE.

CHAIRMAN LICHTENGER: INNOVATION?

MR. KASHIAN: INNOVATION PORTION IN THE VALUE SECTION.

MR. GROOM: THE INNOVATION IN THIS BUILDING IS PRETTY LIMITED BECAUSE YOU'RE BACKING INTO A BUILDING THAT'S ALREADY THERE. THE SUPER STRUCTURE IS THERE. SO THE INNOVATION WOULD BE MORE IN THE DESIGN OF THE LAB, THE DESIGN OF THE CORE SPACE, ETC. THAT'S WHERE THE VALUE OF INNOVATION COMES IN. IS IT SIGNIFICANTLY DIFFERENT THAN MANY OTHER RENOVATIONS? NO.

MR. COPENHAGEN: I SAW THERE WASN'T A LOT OF NEW TECHNOLOGIES BEING APPLIED. THEY WERE APPLYING VERY SOLID TECHNOLOGY TO THE BUILDING AND USING WHERE THEY COULD THE COGEN TO GIVE THEM ENERGY CREDITS FOR SUSTAINABILITY. PROBABLY IF THEY GO AFTER LEED UNDER AN EXISTING BUILDING CATEGORY, THEY OUGHT TO BE ABLE TO OBTAIN A SIGNIFICANT LEED RATING, MORE THAN JUST A CERTIFICATION.

MR. KELLER: COULD I JUST ADD ONE THING TO ANSWER ED'S QUESTION? ONE THING THAT I WANTED TO MENTION IS THIS IS AN APPLICATION WHERE THE DESIGN OF THE GMP FACILITY DOES TAKE INTO ACCOUNT SOME VERY SPECIFIC INNOVATIVE WAYS OF DEALING WITH SOME OF THE MECHANICAL AIR HANDLING ASPECTS, WHICH THESE FACILITIES ARE VERY EXPENSIVE TO OPERATE. AND I JUST WANTED TO ACKNOWLEDGE, SINCE YOU BROUGHT THAT SPECIFIC ISSUE, THAT THIS WAS -- A COMPONENT OF THEIR PROJECT WAS VERY CAREFUL DESIGN CONSIDERATIONS ABOUT THE GMP.

MR. KASHIAN: THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: RICK, I HAVE JUST A QUESTION. HOW DO WE COMPARE THIS UC POLICY ON GREEN BUILDING DESIGN AND CLEAN ENERGY STANDARDS TO THE LEED CERTIFICATION? HOW DO THOSE EQUATE?

MR. KELLER: THE UC POLICY IS THAT IT'S AT LEAST CERTIFIED, I BELIEVE. THERE'S SEVERAL PEOPLE HERE THAT CAN CORRECT ME IF I'M WRONG.

CHAIRMAN LICHTENGER: AS A MINIMUM.

MR. KELLER: IT'S MINIMUM.

CHAIRMAN LICHTENGER: FINE. GREAT. SO ARE THERE ANY OTHER QUESTIONS OR COMMENTS OF THE FACILITIES WORKING GROUP BEFORE WE HAVE THE APPLICANT MAKE THEIR COMMENTS? GREAT. AT THIS TIME I'D LIKE TO ASK IF THE APPLICANT WOULD LIKE TO STEP TO THE PODIUM AND MAKE SOME COMMENTS, UP TO THREE MINUTES. WE WON'T COUNT YOUR COMMENTS WITH OUR QUESTIONS WITHIN YOUR THREE MINUTES.

MR. ROMNEY: MARK ROMNEY WITH UC DAVIS HEALTH SYSTEM, RESEARCH FACILITIES PLANNER, ALONG WITH DR. JANNOLTA, WHO'S THE DIRECTOR OF STEM CELL PROGRAM.

CHAIRMAN LICHTENGER: THANK YOU FOR COMING.

MR. ROMNEY: BE HAPPY TO ANSWER ANY QUESTIONS.

CHAIRMAN LICHTENGER: SO YOU HAVE NO COMMENTS OTHER THAN ANSWERING QUESTIONS?

MR. ROMNEY: JUST TO THANK THE REVIEWERS AND THE BOARD FOR THE OPPORTUNITY.

CHAIRMAN LICHTENGER: THANK YOU. SO I HAD A QUESTION ON SHARED RESOURCES. MAYBE YOU COULD JUST GO INTO IT BRIEFLY. I SEE YOU HAVE QUITE A FEW CORES ON CAMPUS, BUT TELL US A LITTLE BIT ABOUT YOUR CONCEPT ABOUT TEAMING UP WITH OTHER INSTITUTIONS.

DR. NOLTA: SO I WOULD LIKE FIRST TO POINT OUT THAT THE IMMUNODEFICIENT -- THE MOUSE CORE IS NOT JUST A VIVARIUM. IT'S A VERY SPECIALIZED IMMUNE-DEFICIENT MOUSE CORE WHERE WE'RE TESTING SPECIFICALLY HUMAN STEM CELLS, INCLUDING NEWLY DERIVED EMBRYONIC STEM CELLS, USING TECHNIQUES THAT ARE VERIFIED BY THE FDA TO LEAD TOWARD CLINICAL TRIALS. AND THIS IS THE SOLE PURPOSE OF THAT VIVARIUM. IT'S NOT REGULAR TRANSGENIC MICE. THOSE ARE HOUSED ELSEWHERE ON CAMPUS. WE HAVE AN OUTSTANDING PROGRAM OUT ON THE MAIN CAMPUS FOR THAT.

THIS VIVARIUM IS SPECIFICALLY TO TEST HUMAN STEM CELLS LEADING TOWARD CLINICAL TRIALS, WHICH WILL BE DONE IN OUR GMP FACILITY. DR. GERHARDT BAUER, WHO IS DIRECTOR OF GMP FACILITY, AND I HAVE WORKED TOGETHER FOR 15 YEARS. WE HAVE PARTICIPATED IN OVER 18 CELLULAR THERAPY TRIALS. AND SO WE ARE HELPING OTHER RESEARCHERS AND OTHER INSTITUTIONS TO ACTUALLY GET FDA APPROVAL FOR THEIR TRIALS. AND THAT IS OUR SPECIALTY.

AND SO THAT'S THE POINT OF THIS VIVARIUM AND THIS GMP FACILITY IS TO TEST THE STEM CELLS IN AN FDA-APPROVED MANNER, GET THEM INTO CLINICAL TRIALS, AND THEN PERFORM THEM IN THOSE SIX WEEKS IN THE GMP FACILITY. THERE IS, OF COURSE, NO PLACE ELSE ON CAMPUS OR IN OUR REGION WHERE THIS CAN BE DONE.

CHAIRMAN LICHTENGER: OKAY. IN TERMS OF MY QUESTION ON SHARED RESOURCES WITH OTHER INSTITUTIONS, COULD YOU ADDRESS THAT?

DR. NOLTA: SO SHARING CORES OR FACILITIES?

CHAIRMAN LICHTENGER: DO YOU HAVE ANY FORMAL AGREEMENTS AND UNDERSTANDINGS WITH OTHER RESEARCH INSTITUTIONS TO SHARE?

DR. NOLTA: SO THOSE ALL FOCUS ON THEM USING OUR MODELS, OUR SYSTEMS TO WORK TOWARDS A CLINICAL TRIAL. WITHIN UC DAVIS WE HAVE 126 FACULTY MEMBERS IN THE STEM CELL PROGRAM, AND WE ARE WORKING IN 12 DISEASE TEAMS. THE MOU'S FOCUS ON OTHER MEMBERS THAT WE NEED FOR ADDED EXPERTISE WITHIN THOSE DISEASE TEAMS TO GET THE CURES TO FRUITION, INTO A CLINICAL TRIAL. AND THAT'S WHAT THE MOU'S ARE FOCUSED ON.

CHAIRMAN LICHTENGER: WHAT ABOUT OTHER INSTITUTIONS?

DR. NOLTA: WILL WE SHARE THEIRS, YOU MEAN?

CHAIRMAN LICHTENGER: DO YOU HAVE ANY --

DR. NOLTA: WE HAVE SPECIFIC EXAMPLES, FOR INSTANCE, WITH THE BUCK INSTITUTE. THEY HAVE SOME CLINICALLY RELEVANT EMBRYONIC STEM CELL LINES THAT WE WILL THEN TEST IN OUR MOUSE MODELS AND GO INTO THE GMP FACILITY. WE HAVE OTHERS THAT ARE JUST FORMING FOR THAT SPECIFIC PURPOSE WITH OTHER INSTITUTIONS. AND WITH, FOR INSTANCE, THE VA HOSPITAL, WE'RE DOING CLINICAL TRIALS WITH THEM.

MR. KLEIN: COULD YOU ALSO ADDRESS DEBORAH HYSEN'S PREVIOUS POINT IN TERMS OF YOUR GEARING OR RAMPING UP PLAN, HOW QUICKLY WILL YOU UTILIZE ALL THE PI SPACE IN THE FACILITY? BY THE TIME THIS FACILITY IS PREPARED TO BE ONLINE, WHAT PORTION OF THE FACULTY HIRES DO YOU THINK WILL BE IN PLACE?

DR. NOLTA: THAT'S A GOOD QUESTION. WE'RE CURRENTLY EXTREMELY CROWDED FOR SPACE, OF COURSE, SO WE CANNOT HIRE ALL OF THE FACULTY MEMBERS THAT WE WILL BE ACCRUING. I WOULD SAY THAT WE WILL BE AT ABOUT 80 TO 90 PERCENT CAPACITY AT MOVE-IN ALREADY BECAUSE WE'RE FINDING NICHES WHERE WE CAN PUT PEOPLE TEMPORARILY IN BORROWED SPACE.

CHAIRMAN LICHTENGER: MEMBER KASHIAN.

MS. HYSEN: I WANTED JUST A COUPLE QUESTIONS THAT I HAD EARLIER.

CHAIRMAN LICHTENGER: DEBORAH, MEMBER KASHIAN HAD A QUESTION FIRST.

MR. KASHIAN: I'M NOT GOING TO --

MS. HYSEN: WERE THE BENCHES FIXED OR MOVABLE, ONE OF THOSE CONCERNS THAT WAS RAISED IN TERMS OF ADAPTABILITY?

MR. ROMNEY: SO THE BENCHES ARE MODULAR BASICALLY DEVISED ON A CORE WHICH ALLOWS THE USERS WITHOUT GETTING FACILITIES BACK OUT THERE TO RENOVATE TO REMOVE COUNTERS, BENCHES. THEN WE DO HAVE MOBILE CASE WORK AS WELL, SO IT'S A MIXTURE OF MODULAR AND MOBILE.

MS. HYSEN: THEN WHAT WAS ALSO RAISED WAS THE EQUIPMENT NOISE ISSUES, THAT IT MIGHT BE DISTRACTING GIVEN THE OPEN LARGE LABORATORIES. I KNOW YOU CAN'T DO A LOT OF SOFT SOUND ABSORBING SERVICES, BUT HAVE YOU THOUGHT OF HOW TO ACOUSTICALLY ADDRESS THAT?

MR. ROMNEY: WE SURE DID. IN THE PLAN BASICALLY WE'VE ISOLATED ALL THE HEAVY NOISE AND HEAT GENERATING EQUIPMENT IN EQUIPMENT ROOMS. SO IN OUR WIDE COMPONENT, YOU'VE GOT A WHOLE LARGE EQUIPMENT ROOM FOR THE MINUS 80 FREEZERS, CENTRIFUGES, AND ALL THE HIGH HEAT AND NOISE GENERATING. AS WELL IN OUR X COMPONENT WE HAVE A THOUSAND SQUARE FEET OF FREEZER AND HIGH NOISE HEAT GENERATING EQUIPMENT SPACE ISOLATED FROM THE OPEN LAB.

MS. HYSEN: MY LAST QUESTION. THEY INDICATED THAT THE BUILDING WAS SHORT OF COMMUNAL SPACE. AND I NOTICE THAT PHASE III AND IV HAD A LOT MORE OF THAT. IS THAT WHERE YOU'RE INTENDING TO ADDRESS SOME OF THAT INTERACTIVE SPACE?

MR. ROMNEY: ACTUALLY IN THE EXISTING CTSC SPACE, THEY HAVE A LARGE LECTURE AREA AS WELL AS A GATHERING AND BREAK AREA. AND WE WILL DO EXPANDED AREAS AS PHASE III AND IV COME ON, BUT WE DO HAVE COMMUNAL AREA EXISTING IN THE BUILDING. AND WE WILL HAVE FIXED SEATING IN THE CORRIDOR AS WELL FOR INTERACTION. WE WANTED TO BE LEAN AT LEAST AND GET THE MOST BENCH AREA. AND THE OUTDOOR SEATING.

DR. NOLTA: WE HAVE A PRETTY NICE CLIMATE TOO.

MS. HYSEN: I KNOW. I LIVE THERE.

MR. KASHIAN: I KNOW THAT DAVIS HAS AN EXCELLENT VETERINARIAN SCHOOL. AS A MATTER OF FACT, MY DOG WAS TREATED THERE FOR CANCER. YOU LIST THE VETERINARIAN SCHOOL AND YOUR TREATMENT OF ANIMALS AS A SHARED RESOURCE. AND THIS IS NOT A REAL ESTATE QUESTION, BUT HOW DO YOU VIEW THE INTERACTION BETWEEN THE VETERINARIAN SCHOOL AND THE CIRM RESEARCH?

DR. NOLTA: YES. WE'RE ACTIVELY COLLABORATING WITH THE FACULTY IN THE SCHOOL OF VETERINARY MEDICINE. WE'RE USING STEM CELLS FROM DOGS, CATS, AND HORSES TO TREAT THEIR OWN AFFLICTIONS. WHILE IT'S NOT EXACTLY WHAT WE WILL BE DOING IN THIS BUILDING, WHICH IS TESTING SPECIFICALLY HUMAN STEM CELLS IN IMMUNE-DEFICIENT MOUSE AND OTHER XENOGRAPHED ASSAYS, THIS PROVIDES A MODEL WHERE THERE IS A FULL IMMUNE SYSTEM. WE CAN TEST THEIR CELLS. THERE ARE EMBRYONIC STEM CELLS FOR SOME ANIMALS. WE HAVE AN OUTSTANDING NONHUMAN PRIMATE FACILITY WHERE HUMAN CELLS CAN BE TRANSPLANTED INTO THESE NONHUMAN PRIMATES. EMBRYONIC STEM CELLS CAN BE TESTED FOR DIFFERENT DISEASES.

WITH THE VETERINARY SCHOOL, WE HAVE VERY CLOSE INTERACTIONS. WE MEET TOGETHER WITH OUR STUDENTS EVERY TWO MONTHS WITH THE DIFFERENT DISEASE TEAMS, WITH THE BONE TEAM AND THE EQUINE TEAM THAT ARE WORKING ON TENDON AND LIGAMENT INJURIES. AND SO WE HAVE CLOSE INTERACTION EVEN THOUGH WE'RE SEPARATED OVER THE CAUSEWAY.

MR. KASHIAN: I'M NOT SURE I TOTALLY UNDERSTAND THIS, AND I'M NOT SURE I'M CAPABLE OF UNDERSTANDING IT, BUT DO YOU INTEND TO DEVELOP DOG STEM CELLS TO EXPERIMENT WITH THAT ISSUE?

DR. NOLTA: RIGHT NOW WE'RE USING THEIR OWN AUTOLOGOUS STEM CELLS. IF YOU START TO USE OTHER ANIMAL STEM CELLS, IT NEEDS GO THROUGH USDA AND FDA TESTING, FOR THE HORSES AT LEAST. BUT FOR THE DOGS, WE'RE ACTUALLY ISOLATING THEIR OWN STEM CELLS.

CHAIRMAN LICHTENGER: DO WE HAVE ANY OTHER QUESTIONS?

MR. KASHIAN: THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: BOB.

MR. KLEIN: SO I THINK YOU'RE THE ONLY NONHUMAN PRIMATE LAB IN CALIFORNIA. SO IN TRYING TO MOVE TO FDA TRIALS WHERE THEY REQUIRE NONHUMAN PRIMATES, AND THEY WON'T IN ALL CASES, THIS IS A REALLY UNIQUE ASSET TO HAVE THERE AT THAT FACILITY. SO IT'S A CONTRIBUTION TO THE OVERALL STATEWIDE ABILITY TO MOVE FORWARD INTO CLINICAL TRIALS WHERE THAT'S GOING TO BE A REQUIREMENT.

DR. NOLTA: ABSOLUTELY. THAT HAS LONG BEEN A SHARED FACILITY FOR PEOPLE TO COME AND WORK THERE AND APPLY TO WORK THERE. THREE OF OUR DISEASE TEAMS ARE ACTUALLY NOW TESTING HUMAN EMBRYONIC STEM CELLS, WILL SOON BE TESTING HUMAN EMBRYONIC STEM CELLS IN THE FETAL MONKEYS.

CHAIRMAN LICHTENGER: OKAY. ANY OTHER QUESTIONS OR COMMENTS? THANK YOU FOR COMING AND ANSWERING OUR QUESTIONS. SO WE'LL TAKE A MINUTE OR SO FOR US TO RECORD OUR PRELIMINARY SCORES FOR APPLICATION 00611-1.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: SO, RICK, LET'S MOVE ON. MR. KELLER: THE NEXT ONE IS APPLICATION 612, UC IRVINE. AND RAY GROOM WILL BE REVIEWING THE STAFF ANALYSIS FOR YOU.

MR. GROOM: THIS APPLICANT PROPOSES A NEW THREE-STORY STEM CELL RESEARCH FACILITY. IT CONSOLIDATES BASIC AND DISCOVERY RESEARCH, PRECLINICAL RESEARCH, PRECLINICAL DEVELOPMENT, AND CLINICAL RESEARCH PROGRAMS WITHIN ONE FACILITY.

THE STEM CELL -- IT ALSO HAS A STEM CELL CULTURE CORE, A VIDEOCONFERENCING CENTER, CLINICAL AND HUMAN PERFORMANCE FACILITY, AS WELL AS A REGULATORY DEPARTMENT THAT INCLUDES AN OUTPATIENT CLINIC. IT HAS 38,970 ASSIGNABLE SQUARE FEET AND 661,557 GROSS SQUARE FEET. ALSO HAS A SHELLED FACILITY VALUED AT ABOUT 2.6 TO $3.5 MILLION.

A PORTION OF THE APPLICANT'S STEM CELL TEAM IS CURRENTLY LOCATED OFF CAMPUS IN LEASED FACILITIES, SO THIS WILL GIVE THEM A PERMANENT HOME ON CAMPUS. AT OCCUPANCY IT WILL HOUSE 16 RESEARCH TEAMS, OF WHICH SIX WILL BE NEW TO THE INSTITUTION. THE APPLICANT ALSO NOTES IT HAS SPACE FOR TEN VISITING RESEARCHERS.

IT HAS A SUBGRADE LEVEL SHELL SPACE, AS I NOTED, WHICH WILL BE USED TO ACCOMMODATE FUTURE EXPANSION NOT INCLUDED IN THE CIRM PROPOSAL. COMPLETION OF THE PROJECT IS JULY 2010. IT IS SCHEDULED TO -- IT CURRENTLY QUALIFIES FOR A LEED SILVER, BUT THEY ARE TRYING TO GET A GOLD. AND IT WILL DEPEND ON THEIR BID. DOLLARS AND CENTS WILL MAKE THAT DECISION.

THE MOST SIGNIFICANT ISSUE THAT WE IDENTIFIED IN THE PROPOSAL IS THAT THIS PROPOSAL HAD THE SECOND LOWEST LEVERAGE AMONGST THE APPLICANTS IN THIS CATEGORY.

THE LAB PLANNER SCORE, FUNCTIONALITY WAS B, VALUE SCORE B. THE LAB PLANNER DID NOTE THAT THE MIXING OF X, Y, AND Z RESEARCH TEAMS ON THREE FLOORS. THE CRITICAL MASS OF 16 PI'S IN THE INTERACTION SPACE ARE STRATEGICALLY LOCATED AT THE OFFICE LAB INTERFACE, ENHANCING GOOD COMMUNICATIONS ACROSS THE RESEARCH TEAMS.

THE INNOVATION CONCEPT FOR THIS PROJECT IS FOCUSED ON THE CAMPUS' MODIFIED DESIGN-BUILD DELIVERY PROCESS AND THE ACCOMPANYING ECONOMIES DUE TO THE SPEED OF CONSTRUCTION.

WITH THAT, I'LL TURN OVER THE DISCUSSION TO MEMBER LAFF AS THE PRIMARY REVIEWER AND TO MR. KASHIAN AS THE SECONDARY REVIEWER.

MR. LAFF: THANK YOU VERY MUCH. I WOULD LIKE TO ECHO THE OTHER MEMBERS' THANKS TO BOTH THE STAFF, WHO PUT AN INCREDIBLE AMOUNT OF WORK IN PUTTING ALL OF THIS TOGETHER, AND TO ALL OF THE INSTITUTIONS THAT ALSO PUT A LOT OF WORK AND A LOT OF THOUGHT BEHIND THEIR PACKAGES. SO THANK YOU VERY MUCH. AND FOR US WE HAD TO READ THEM ALL.

I THOUGHT THAT UC IRVINE'S PROPOSAL WAS VERY GOOD AND VERY STRONG. I THOUGHT IN TERMS OF VALUE, WHILE THEY LOOK AT THE DESIGN-BUILD AS INNOVATIVE, I THINK IT'S A GOOD PROCEDURE. THEY'RE ONE OF THE FEW INSTITUTIONS THAT'S USING IT. YET IT IS FASTER AND IT IS LESS EXPENSIVE, WHICH LED ME TO TRY AND UNDERSTAND THEIR BUDGET A LITTLE BIT.

THEY HAVE A VERY STRONG INTERNAL TEAM. THEY USED AN ESTIMATING FIRM TO DO THEIR BUDGET. THEY WERE RELUCTANT TO SAY BECAUSE THEY HAD NOT SELECTED THEIR DESIGN-BUILD TEAM YET. I WOULD HAVE LIKED TO HAVE SEEN A CONTRACTOR'S VIEW OF THAT BECAUSE I THINK PRICING HAS CHANGED A GREAT DEAL IN THE LAST SIX MONTHS.

AS IT WAS MENTIONED, THEY ARE GOING FOR A SILVER LEED CERTIFICATION. I THINK THAT THERE'S NOTHING INNOVATIVE ABOUT HAVING SHELL SPACE, BUT I THINK IT'S A REALLY GOOD IDEA BECAUSE ONE OF THE QUESTIONS I HAVE IS SO WHAT HAPPENS WHEN WE HAVE ONE MORE RESEARCHER THAN A FLOOR OR A BUILDING HAS? HOW ARE THEY GOING TO HANDLE THAT? AND SO THEY'RE GOING TO HANDLE IT BY HAVING EXPANSION SPACE, AND I THOUGHT THAT WAS QUITE INTELLIGENT.

I WAS SOMEWHAT DISAPPOINTED IN THEIR LEVERAGE MODEL. AND WHILE IT'S COME UP SIGNIFICANTLY BECAUSE OF THE CENTRAL UTILITY PLANT, IT IS STILL IN THE SAME CATEGORY, BEING THE SECOND LOWEST OF EVERYBODY IN THEIR CATEGORY, ALBEIT BETTER.

THEY HAVE AN EXCELLENT INTERNAL TEAM. THEY HAVE -- IN THEIR PROPOSAL THEY LISTED EIGHT PROJECTS THAT THEY HAVE DONE SIMILAR TO THIS PROJECT THAT THEY HAD BEEN ON TIME AND IN SOME CASES UNDER BUDGET. I THINK THAT'S REALLY GOOD, BUT I DON'T KNOW WHETHER THE BUDGET IS BASED ON WHERE OUTSIDE ESTIMATORS DID IT OR WAS ESTIMATED BY THE CONTRACTORS THEY USED. MAYBE THEY COULD ANSWER THAT.

BUT THEY CLEARLY DEMONSTRATED TO ME THAT THEY HAVE THE ABILITY TO COMPLETE THIS PROJECT ON TIME AND ON BUDGET.

ONE OF THE THINGS THEY'RE DOING, WHICH IS HELPING THEM IN THIS, IS THIS IS GOING TO BE CLOSE TO A DUPLICATE OF A BUILDING THEY'VE JUST COMPLETED. THEY'RE GOING TO MAKE SOME REFINEMENTS, BUT THEY'RE GOING TO FOLLOW THOSE BUILDING PLANS PRETTY CLOSELY. I THOUGHT THAT WAS A PRETTY GOOD IDEA.

IN TERMS OF SHARED RESOURCES, THEY TALKED IN THEIR PROPOSAL ABOUT THE FACT THAT THEY HAVE -- AND I THINK THESE ARE INFORMAL. IF THEY'RE HERE AND THEY COME UP -- I KNOW THEY'RE HERE. I FLEW UP WITH ONE -- THEY COULD TELL ME. IT'S MY UNDERSTANDING THAT THEY ARE GOING TO SHARE THIS SPACE WITH MANY LOCAL ORANGE COUNTY INSTITUTIONS AND MAKE THAT SPACE AVAILABLE TO THEM.

I THINK THE BUILDING IS WELL-PLANNED AND WELL-ORGANIZED. AND ONE OF THE QUESTIONS I GUESS I WOULD HAVE TO ASK OUR LAB PLANNER, WHAT'S AN A? HOW DOES SOMEBODY GET AN A?

MR. COPENHAGEN: I THINK THE A GRADES WERE WHEN THE TOTAL PACKAGE RAISED THE BAR. I THINK I GAVE ONE OR MAYBE TWO OF THE APPLICANTS AN A. THEY WERE REALLY DOING SOMETHING DIFFERENT WITH THE FACILITY, MAKING IT MUCH MORE CREATIVE SPACE OR INSPIRING SPACE FOR THE RESEARCHERS THAN WHAT I WOULD SEE HERE. THEY HAVE A -- IRVINE HAS A VERY SOLID BUILDING PLAN, TRIED AND TRUE, TESTED, HIGH UTILIZATION. IT'S GOT ALL THE RIGHT COMPONENTS, BUT THERE'S NOTHING SPECIAL OR ABOVE.

MR. LAFF: THERE'S NO WOW. IS THAT WHAT YOU'RE SAYING?

MR. COPENHAGEN: IT'S WOW AND IT'S KIND OF WHAT'S NEXT.

MR. LAFF: OKAY. I THOUGHT THE BUILDING WAS WELL-PLANNED, IS VERY FUNCTIONAL, AND WILL SERVE THE RESEARCH THAT'S GOING TO GO ON IN THAT FACILITY WELL.

CHAIRMAN LICHTENGER: THANK YOU, STUART. SO NOW THE SECONDARY REVIEW WILL BE ED KASHIAN.

MR. KASHIAN: THANK YOU. I CONCUR IN MOST OF WHAT STUART HAD TO SAY. I HAPPEN TO BE A STUDENT OF -- WHAT'S HER NAME, JANET MASON, IS IT THAT ADVOCATES DESIGN-BUILD. I KNOW THE UC SYSTEM OPERATES AT A SNAIL'S PACE, AND SHE HAS MADE THAT THING WORK, AND AS HAVE THE REST OF STAFF THERE. THERE'S NO QUESTION IN MY MIND THAT THEIR PLAN IS EXECUTABLE GIVEN THE STAFF AND THE COMMITMENT TO WHAT THEY'RE DOING. NONE, NONE AT ALL.

THE ONLY WEAKNESS IN THIS APPLICATION FOR ME IS I GAVE IT A FAIRLY LOW SCORE FOR LEVERAGE. THAT BEING SAID, I THINK IT'S BEEN CORRECTED, BUT I DISAGREED WITH THE STAFF ANALYSIS ABOUT NOT COUNTING VISITING LAB SPACE, AND I INCLUDED IT IN MY ANALYSIS.

CHAIRMAN LICHTENGER: YES, RICK.

MR. KELLER: I WANTED TO CLARIFY THAT EXACT POINT THAT MEMBER KASHIAN IS BRINGING UP IS THAT THE DATASET, NOW WE HAVE UC IRVINE AT 16 AND THEN 10 VISITING. AND THEN I WANTED TO POINT YOUR ATTENTION TO THE CENTRAL UTILITY TABLE, AND IT'S A LITTLE BIT -- I MISLABELED IT BECAUSE IT SHOULD BE CENTRAL UTILITY AND OTHER LEVERAGE ADJUSTMENTS.

FOR UC IRVINE ABOUT THREE MILLION WAS IDENTIFIED BY THE CAMPUS AS THEIR INVESTMENT IN CENTRAL UTILITY CAPACITY THAT WAS ATTRIBUTABLE TO THIS SPACE. IN ADDITION, IN THE APPLICATION THEY IDENTIFIED THE SHELL SPACE AS BEING 100 PERCENT FUNDED BY THE CAMPUS AND HAD NOT INCLUDED IT AS PART OF THE LEVERAGE.

AND SO IN CONFIRMING, AND WE DIDN'T REALIZE THAT THAT WAS EITHER BECAUSE THEY DID NOT WANT TO COMMIT THAT SPACE TO STEM CELL RESEARCH OR WANTED TO MAINTAIN FLEXIBILITY. AND AFTER FOLLOW-UP, THEY INDICATED THAT THAT SPACE IS INDEED COMMITTED TO STEM CELL RESEARCH EVEN THOUGH IT'S SHELL SPACE. AND SO THAT NUMBER, THE 16 MILLION 055 INCLUDES BOTH UTILITY AND THE CATCH-UP FOR THE SHELL SPACE. SO THE LEVERAGE MOVES UP.

CHAIRMAN LICHTENGER: SO THE LEVERAGE PREVIOUSLY, RICK, IF I UNDERSTAND YOU CORRECTLY, WAS 16,507 AND NOW IT'S 22 --

MR. KELLER: 562.

CHAIRMAN LICHTENGER: SO DO WE HAVE A NEW CHART?

MR. KELLER: IT'S RIGHT UP THERE ON THE RIGHT.

CHAIRMAN LICHTENGER: SO IS THAT THE ONE THAT WAS HANDED OUT OR NO?

MR. KELLER: THAT HAPPENS TO BE THE ONE THAT WAS HANDED OUT. SO THIS IS THE RIGHT ONE.

MR. KASHIAN: I UNDERSTAND YOUR POINT OF VIEW.I'M EXPLAINING MINE. I COUNTED IT IN MY SCORING.

THE ISSUE THAT IT SORT OF BRINGS UP IS FROM A REAL ESTATE POINT OF VIEW ALWAYS A GOOD ISSUE IS TO CREATE THAT SHELL SPACE IN THE INFRASTRUCTURE FOR THE FUTURE. AND I'M NOT SURE HOW IT FIGURES WITH THE LEVERAGE AND THE REST OF IT, BUT FROM A REAL ESTATE POINT OF VIEW, IN THE FUTURE I THINK IT'S ALWAYS A GOOD IDEA TO INCLUDE IT. I'M HOPING MY COLLEAGUES WILL PROVIDE SOME RELIEF FROM THE LEVERAGE SCORE TO HELP FACILITATE THIS PROGRAM.

CHAIRMAN LICHTENGER: THANK YOU, ED. ANY OTHER QUESTIONS OR COMMENTS REGARDING UC IRVINE?

MR. KLEIN: I WOULD LIKE TO ECHO ED KASHIAN'S COMMENTS, PARTICULARLY BECAUSE THIS IS A REPEAT OF A PRIOR BUILDING, AS INDICATED BY THE APPLICATION, THEY SHOULD HAVE A VERY GOOD HANDLE ON THE SPACE. BUT I'D LIKE TO ASK, STUART, WERE YOU THINKING THAT PERHAPS COSTS HAD GONE DOWN AS COMPARED TO THE PRIOR BUILDING WITH YOUR COMMENT ABOUT CHANGES OF COST IN THE LAST SIX MONTHS? OR WERE YOU THINKING THAT THE COST HAD GONE UP IN THE LAST SIX MONTHS?

MR. LAFF: WELL, COSTS HAVE NOT GONE UP IN THE LAST SIX MONTHS. ONE, I DON'T REMEMBER WHEN THE ESTIMATE BY THE ESTIMATING FIRM, THEY DID USE AN OUTSIDE FIRM.

MR. GROOM: CUMMINGS CORPORATION WAS USED, AND THE DATE ON THE ESTIMATE WAS FEBRUARY 18, 2008, SO IT'S PRETTY CURRENT.

MR. LAFF: PRETTY CURRENT.

MR. KLEIN: WITH THE ADVANTAGE OF DUPLICATING AN EXISTING BUILDING THEY HAD RECENTLY FINISHED, I WOULD THINK THEY'D BE PRETTY CLOSE.

I WOULD LIKE IN THE APPLICANT'S COMMENTS FOR THEM TO ADDRESS THE RATIO OF 10 VISITING FACULTY TO 16 FACULTY THAT ARE PART OF THEIR PERMANENT STAFF. I DO UNDERSTAND THAT THERE ARE MANY SITUATIONS WHERE YOU CAN GET EXTRAORDINARY ADVANTAGE OUT OF FACULTY FROM OTHER STATES OR OTHER COUNTRIES, BUT I'D JUST LIKE TO UNDERSTAND THE SIGNIFICANCE OF THAT RATIO.

AND I WOULD LIKE TO SAY THAT FROM A CLINICAL POINT OF VIEW, THE USE OF OR THE INCLUSION OF CLINICAL SPACE IN THE FACILITY WHERE YOU HAVE A POTENTIAL FOR THE INTERSPACE BETWEEN THE SCIENTIFIC RESEARCHERS AND PATIENTS IN TRIALS APPEAR TO BE AN INNOVATIVE FEATURE NOT IN OTHER APPLICATIONS THAT WAS AN INTERESTING POINT.

CHAIRMAN LICHTENGER: GREAT. THANK YOU, BOB. I HAD A FEW QUESTIONS, RICK. SO IN TERMS OF THIS, I WANT TO MAKE SURE I'M CLEAR ON THIS. IN TERMS OF THE SHELL BASEMENT, IS THIS COUNTED IN LEVERAGE?

MR. KELLER: IT IS NOW. ON THE CHART THAT WAS DISTRIBUTED, BUT NOT COUNTED IN THE CHART THAT'S IN YOUR PACKET.

CHAIRMAN LICHTENGER: IT IS NOW?

MR. KELLER: YES.

CHAIRMAN LICHTENGER: OKAY. WHY DON'T WE HAVE UC IRVINE COME UP UNLESS THERE ARE ANY OTHER COMMENTS OR QUESTIONS TO STAFF OR STEVE COPENHAGEN BEFORE WE BRING UP UC IRVINE. OKAY. UC IRVINE CAN COME UP. WE'LL ASK YOU TO LIMIT YOUR COMMENTS TO THREE MINUTES, NOT INCLUDING QUESTIONS.

DR. DONOVAN: MY NAME IS PETER DONOVAN. I'M THE CO-DIRECTOR OF THE STEM CELL RESEARCH CENTER AT UC IRVINE. I'D LIKE TO THANK YOU FOR ALL YOUR WORK AND INTRODUCE THE OTHER MEMBERS OF THE TEAM HERE.

MS. LOCK: LESLIE LOCK, STEM CELL RESEARCHER AND DIRECTOR OF THE STEM CELL TECHNIQUES COURSE.

MS. GLADSON: REBECCA GLADSON, CAMPUS ARCHITECT.

MS. MASON: JANET MASON, DIRECTOR OF CAPITAL PLANNING.

DR. KIERSTEAD: HANS KIERSTEAD. I AM THE OTHER CO-DIRECTOR OF THE CENTER. ALSO I'D JUST LIKE TO EXTEND A THANKS TO THE REVIEWERS.

MS. GLADSON: I'D LIKE TO ADDRESS THE ISSUE OF BUDGET AND THE DESIGN-BUILD. THE WAY THAT THE BUDGET WAS ESTABLISHED WAS WITH AN INDEPENDENT COST ESTIMATOR. THIS PROJECT IS ALSO CONSISTENT WITH A PROJECT THAT WE JUST TOOK A BID ON ABOUT FOUR WEEKS AGO, SAME SIZE BUILDING, VERY, VERY SIMILAR PROGRAM. AND THIS COST IS REFLECTIVE OF EVEN THAT BID. SO ALTHOUGH IT MAY BE A LITTLE BIT LOWER THAN WHAT SOME OF THE OTHER ONES ARE, IT DOES REFLECT WHAT WE'RE ABLE TO DO UTILIZING DESIGN-BUILD AND THE WAY WE USE STRUCTURAL SYSTEMS FOR EXTERIOR CLADDING, ETC., WHICH IS IN YOUR DOCUMENTS.

SO IT HAS BEEN VETTED WITH THE DESIGN CONSTRUCTION COMMUNITY AS WELL AS INDEPENDENT COST ESTIMATING.

CHAIRMAN LICHTENGER: RICK, I HAVE A QUESTION. I'M NOT SURE. YOU MAY HAVE ADDRESSED IT. SO ON EQUIPMENT, I KNOW THERE WAS A QUESTION I HAD EARLIER IN TERMS OF EQUIPMENT BECAUSE IT WAS LOW RELATIVE TO THE OTHER PROPOSALS, BUT THEN THEY WERE GOING TO BE RELOCATING. AND JUST IN FAIRNESS WITH THE OTHER APPLICATIONS, DO WE HAVE EQUIPMENT CLASSIFIED UNDER LEVERAGE, AND IS THERE OTHER EQUIPMENT THAT, AGAIN, MAY NOT TECHNICALLY QUALIFY THAT IS SUBSTANTIAL THAT WE MIGHT WANT TO BE AWARE OF?

DR. KIERSTEAD: THE CAMPUS HAS COMMITTED SO FAR $1.5 MILLION IN EQUIPMENT THAT IS IN ADDITION. AND --

CHAIRMAN LICHTENGER: IS THAT COUNTED IN OUR LEVERAGE CATEGORY OR NOT?

DR. KIERSTEAD: NO, IT IS NOT.

CHAIRMAN LICHTENGER: SO IT IS AN ADDITIONAL 1.5 MILLION.

DR. KIERSTEAD: IT'S AN ADDITIONAL 1.5. AND THE CAMPUS HAS ALSO COMMITTED SIX FTE'S, WHICH WILL COME WITH START-UP PACKAGES, SO WE EXPECT THAT THE EQUIPMENT ALLOCATION IS GOING TO BE QUITE A TREMENDOUS ADDITION TO THAT. THAT'S A $17.5 MILLION COMMITMENT TO COVER ALL OF THOSE SIX FTE'S DEDICATED TO THIS PROGRAM. THERE WILL BE AN EQUIPMENT COMPONENT IN THERE.

CHAIRMAN LICHTENGER: SO 17.5 PLUS --

DR. KIERSTEAD: 1.5.

CHAIRMAN LICHTENGER: SO 19 MILLION ADDITIONAL THAT'S NOT COUNTED IN LEVERAGE.

DR. KIERSTEAD: THAT'S CORRECT.

MR. KLEIN: MR. CHAIRMAN, I THINK HE'S REFLECTING THE 17.5 IS FOR HIRING OF FACULTY, BUT WE NEED TO FIND OUT. HE'S ALSO INDICATING THAT IT'S SIGNIFICANT. IS IT A PORTION OF THE 17.5 THAT GOES TO EQUIPMENT, OR IS THAT IN ADDITION TO THE 17.5?

DR. KIERSTEAD: A PORTION OF THE 17.5 WILL GO TO EQUIPMENT.

MR. KLEIN: IS THERE AN ESTIMATE OF WHAT PORTION IS?

MR. DONOVAN: THERE IS AN ESTIMATE. THE START-UP PACKAGES THAT GO TO FACULTY DEPEND ON MARKET FORCES AND COMPETE WITH OTHER CAMPUSES. SO IT COULD BE ANYWHERE FOR ASSISTANT PROFESSOR FROM HALF A MILLION TO A MILLION DOLLARS TO AN ASSOCIATE PROFESSOR OUT FROM THERE AND A FULL PROFESSOR.

MR. KLEIN: I THINK WE CAN ONLY WORK WITH YOUR BUDGET TARGET FOR EQUIPMENT. SO IF YOU CAN TELL US THAT NUMBER, THAT WILL GIVE US SOME POINT TO WORK WITH.

CHAIRMAN LICHTENGER: SO IF YOU DON'T HAVE ANOTHER -- WE CAN'T CONSIDER IT AS PART OF LEVERAGE, BUT IT IS INFORMATION THAT THE FACILITIES WORKING GROUP WANTS TO BE AWARE OF. SO WE'VE GOT 1.5 THAT YOU KNOW IS PART OF THAT, AND YOU'RE SAYING SOME PORTION OF THE 17.5, BUT UNDEFINED.

DR. KIERSTEAD: THAT'S CORRECT. I'M SORRY. IT'S VERY HARD TO PUT A NUMBER ON THAT.

CHAIRMAN LICHTENGER: ALL RIGHT. THAT'S FINE. THAT'S AN HONEST ANSWER. I LIKE THAT. SO WERE THERE ANY OTHER QUESTIONS FOR UC IRVINE?

MR. KLEIN: I HAD A QUESTION, MR. CHAIRMAN. IF SOMEONE COULD EXPLAIN THE TEN VISITING PI'S RATIO TO THE 16 PI'S THAT ARE ON PERMANENT FACULTY, WHAT'S THE STRATEGY THERE? AND WHY IS YOUR RATIO OF VISITING TO PERMANENT AS HIGH AS IT IS? WHAT SPECIAL CONTRIBUTION ARE THEY TRYING TO CAPTURE THERE?

DR. DONOVAN: AS DR. TROUNSON MENTIONED AT THE BEGINNING, THIS TYPE OF RESEARCH IS BECOMING MUCH MORE MULTIDISCIPLINARY AND OFTEN TRANSNATIONAL. AT UCI WE ALREADY HAVE ABOUT FIVE OR SIX PROJECTS FUNDED FROM THE UNITED KINGDOM. WE HAVE BY THE DEPARTMENT OF TRADE AND INDUSTRY COLLABORATIVE PROJECTS ON STEM CELL RESEARCH. WE REALLY FEEL THAT'S SOMETHING THAT WE NEED AND WILL BRING VALUE TO THE BUILDING, BRINGING NEW INTELLECT AND NEW RESOURCES INTO THE BUILDING.

THE UK GOVERNMENT AND THE FRENCH GOVERNMENT HAVE BEEN VERY INTERACTIVE WITH US IN TERMS OF PUSHING COLLABORATIVE PROJECTS WITH THEIR SCIENTISTS. WE HAVE COLLABORATIVE EFFORTS WITH RIVERSIDE, WHO SIGNED A MEMORANDUM OF UNDERSTANDING FOR OUR SHARED RESEARCH LAB, AND WE CONTINUE TO TRAIN THEIR SCIENTISTS, AND THEY WANT TO COME TO OUR FACILITY. WE HAVE LOTS OF PEOPLE REALLY KNOCKING ON OUR DOOR. WE FEEL THAT IF WE CAN PROVIDE THEM THE SPACE, IT REALLY ADDS TO OUR RESEARCH ENTERPRISE. WE'RE GETTING THEIR BRAINS INTO OUR BUILDING, SO WE WANTED TO PROVIDE SPACE FOR THAT.

I SHOULD SAY THAT IF IT DOESN'T GET FILLED, AS MOST OF THE ACADEMICS HERE KNOW, THERE WILL BE PEOPLE WITH CLIPBOARDS WALKING AROUND THE BUILDING LOOKING TO FILL THE SPACE. AND HANS AND I, AS CO-DIRECTORS, I THINK WE ALWAYS HAVE RESEARCHERS ON CAMPUS WANTING SPACE FOR STEM CELL RESEARCH. SO THAT WILL GET FILLED, BUT WE'RE PRETTY CONFIDENT THAT WE HAVE VISITORS WANTING TO COME AND USE THE SPACE.

CHAIRMAN LICHTENGER: THANK YOU. GREAT. ARE THERE ANY OTHER QUESTIONS FOR UC IRVINE? GREAT. WELL, YOU WANT TO MAKE A COMMENT?

MS. GLADSON: WELL, THERE WAS A QUESTION EARLIER, MAYBE A STATEMENT REGARDING THE LEED'S AND THE GOLD AND ENERGY SUSTAINABILITY. AND THIS PROJECT WILL EXCEED TITLE 24 BY OVER 30 PERCENT, CLOSER TO 35 PERCENT. HOW YOU CALCULATE THAT IS THERE ARE LOTS OF FORMULAS, BUT THAT IS WHAT IT WILL ULTIMATELY BE.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. THANK YOU FOR COMING.

DR. KIERSTEAD: THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: RICK, I DON'T KNOW. IF STANFORD HAS THAT ADDITIONAL INFORMATION, HOW DO WE TECHNICALLY HANDLE THAT?

MR. KELLER: INFORMATION ON EQUIPMENT?

CHAIRMAN LICHTENGER: ARE THEY JUST GOING TO PROVIDE --

MR. KELLER: THEY HAVE PROVIDED A RANGE IN THE APPLICATION. AND JUST AS IT WAS TESTIFIED TO A MOMENT AGO, THESE INVESTMENTS ARE VERY DIFFICULT TO PREDICT BECAUSE THEY DEAL WITH THE SPECIFIC RECRUITMENTS. AND SO I THINK A RANGE IS ALL YOU'RE REALLY GOING TO BE ABLE TO ASCERTAIN ON SOMETHING THAT'S THEORETICAL AS HOW MUCH IS YOUR FUTURE EQUIPMENT BUDGET FOR RECRUITMENTS.

CHAIRMAN LICHTENGER: SO WE DON'T HAVE ANY NEW INFORMATION?

MR. KELLER: I'LL ASK CHRIS.

MR. SHAY: IT'S NOT NEW INFORMATION.

MR. KELLER: IT WAS SEVEN TO NINE AS I RECALL.

CHAIRMAN LICHTENGER: SO IT IS THAT RANGE.

MR. SHAY: SEVEN TO NINE --

MR. KLEIN: THEY HAVE TO COME TO THE MIC.

MR. SHAY: CHRIS SHAY WITH STANFORD UNIVERSITY. SO FROM OUR GRANT APPLICATION, WE HAVE INDICATED THERE WILL BE NINE TO $12 MILLION WORTH OF EXISTING EQUIPMENT THAT WILL BE DETAILED OUT LATER AND BE ABLE TO BE AUDITED. AND THEN FROM THAT WE REPORTED, 4.4, THAT MEETS THE STRICT CRITERIA THAT CIRM HAS PUT FORWARD. AND THEN WE ESTIMATE THAT THERE WILL BE SEVEN MILLION PLUS FOR NEW EQUIPMENT FOR NEW FACULTY MEMBERS, BETWEEN SEVEN TO 15 MILLION, SO THE CONSERVATIVE NUMBER WOULD BE $20.4 MILLION THAT WILL BE GOING INTO THE BUILDING. AND THAT'S THE LOW END OF THE RANGE THAT WE ESTIMATE.

CHAIRMAN LICHTENGER: THANK YOU. SO I'M GOING TO ALLOW THE MEMBERS A MINUTE, BUT WE'RE GOING TO KIND OF ADJOURN NOW FOR A TEN-MINUTE BREAK SO EVERYONE CAN HAVE A LITTLE BREAK.

(A RECESS WAS TAKEN.)CHAIRMAN LICHTENGER: I'D LIKE TO CALL THE MEETING BACK TO ORDER. SO BEFORE WE MOVE ON TO THE NEXT APPLICATION, I WANT TO ASK IF THERE ARE ANY PUBLIC COMMENTS. PLEASE IDENTIFY YOUR NAME AND AFFILIATION.

MR. REED: DON REED, CALIFORNIANS FOR CURES. I DO NOT ENVY YOU YOUR TASK. THESE ARE TREMENDOUS APPLICANTS ONE AND ALL. THE ROMAN REED SPINAL CORD INJURY RESEARCH ACT HAS FUNDED RESEARCH AT SEVERAL OF THESE INSTITUTIONS, BUT ONE IN PARTICULAR STANDS OUT. OF COURSE, THAT'S UCI. UCI WAS THE FIRST USE OF THE PRESIDENTIALLY FUNDED STEM CELL -- EMBRYONIC STEM CELL LINES, THE FIRST STATE-FUNDED EMBRYONIC STEM CELL RESEARCH IN THE NATION. THEY ARE GOING FOR THE FIRST HUMAN TRIALS IN EMBRYONIC STEM CELL RESEARCH.

BUT THE THING THAT STRIKES ME THE MOST IS THE TREMENDOUS ENERGY OF THE PLACE. I VISITED ABOUT MAYBE 12 TIMES. AND ONE THING THAT I KNOW ABOUT THEIR COLLABORATION IS THAT THEY HAVE ONE LAB WHERE THERE'S NO WALLS. AND THE PEOPLE ARE CONSTANTLY AWARE OF WHAT EVERYBODY ELSE IS DOING. SO BASICALLY WHAT THEY ARE IS THEY'RE BUSTING AT THE SEAMS. ALL THEY NEED IS THE ROOM, AND I SINCERELY HOPE THAT YOU GUYS GIVE THEM WHAT THEY NEED. THANK YOU.

CHAIRMAN LICHTENGER: THANK YOU.

MR. REED: I HAVE TO SAY ONE MORE THING. ONE THING THEY DID NOT MENTION WAS THEY TALK ABOUT THE ANIMAL MODELS AT UC DAVIS, WHICH IS A FANTASTIC THING. ROMAN REED ACT HELPED PAY FOR THAT. NOW, ONE THING THAT UC IRVINE HAS, WHICH I DON'T THINK ANYBODY IN THE WORLD HAS, AND THAT'S CHRONICALLY INJURED RATS. RATS, IT'S VERY HARD TO MAINTAIN A RAT. AND THERE ARE RATS THAT HAVE A SPINAL CORD INJURY THAT ARE TWO YEARS OLD. NOW, THAT MEANS THAT CHRONICALLY INJURED PEOPLE, THAT WOULD BE A DIRECT MODEL TO WORK FOR, WHICH NOBODY ELSE HAS THAT. SO IT'S A TREMENDOUS EXAMPLE OF THE KIND OF FORETHINKING THAT THEY DO. THEY'RE EXCELLENT.

CHAIRMAN LICHTENGER: THANK YOU.

MR. SIMPSON: JOHN SIMPSON FROM THE ORGANIZATION THAT'S NOW KNOWN AS CONSUMER WATCHDOG. WE'VE CHANGED OUR NAME FROM THE FOUNDATION FOR TAXPAYER AND CONSUMER RIGHTS, SO THE TRANSCRIPTIONIST HAS A SHORTER THING TO ENTER.

JUST VERY QUICKLY WANTED TO COMMEND ALL OF YOU ON THE WAY THIS IS PROCEEDING AND NOT SLOW IT DOWN BY TALKING AND MORE THAN SAYING THIS IS VERY GOOD. IT'S OPEN, IT'S BEING DONE IN PUBLIC THE WAY IT SHOULD BE. THANK YOU VERY MUCH.

CHAIRMAN LICHTENGER: THANK YOU. SO, RICK, IF WE COULD MOVE TO THE NEXT APPLICATION.

MR. KELLER: NEXT APPLICATION IS UNIVERSITY OF CALIFORNIA LOS ANGELES, AND RAY GROOM IS GOING TO GIVE YOU THE OVERVIEW OF THE STAFF ANALYSIS.

MR. KLEIN: MR. CHAIRMAN, IF THE OTHER INSTITUTIONS COULD PROVIDE RICK, IF THEY HAVEN'T ALREADY, THE TOTAL NUMBER OF RESEARCHERS AT CAPACITY THEY THINK THEY WILL SERVICE IN THEIR FACILITY, I THINK THAT'S GOING TO BE A USEFUL NUMBER.

CHAIRMAN LICHTENGER: I THINK WE HAVE THAT, BOB.

MR. KLEIN: RICK, DO WE HAVE THAT NUMBER?

MR. KELLER: WE HAVE IT IN CHART FORM HERE ON THE TYPICAL RESEARCH TEAMS, AND I'M GETTING THAT COPIED.

MR. KLEIN: NOT THE TYPICAL RESEARCH TEAMS, BUT WHAT THEY ACTUALLY EXPECT AT CAPACITY, RICK. SO, FOR EXAMPLE, STANFORD GAVE US A NUMBER. AND IF THE OTHER INSTITUTIONS HAVE A NUMBER, IT WOULD BE HELPFUL.

MR. GROOM: THE NEXT PROPOSAL IS FOR A NEW FACILITY. IT'S A 176,596 GROSS SQUARE FOOT FACILITY, FIVE STORIES, OF WHICH 20.1 PERCENT WILL BE ASSIGNED TO CIRM. THE CIRM PROJECT CONSISTS OF ONE FLOOR, WHICH IS 21,114 ASSIGNABLE SQUARE FEET, AND 34,587 GROSS SQUARE FEET.

THE COST FOR THIS PROJECT, AT LEAST THE PORTION THAT CIRM IS CONSIDERING, IS 41,834,478, OF WHICH THE CIRM REQUEST IS A LITTLE LESS THAN $30 MILLION, 29,646,274.

THIS BUILDING IS AN INTERDISCIPLINARY PROGRAM INVOLVING FACULTY FROM VARIOUS LIFE SCIENCES DEPARTMENTS. IT INCLUDES CORE LABORATORIES, COMPUTATIONAL BIOINFORMATICS, ANALYSIS OF STEM CELLS, ADVANCED STEM CELL SEPARATION TECHNOLOGIES, BIOENGINEERING FOR STEM CELL GROWTH, INCLUDING ORGAN SCAFFOLDS, ADVANCED VITAL MICROSCOPY, AND ADVANCED MOUSE GENETICS AND VECTOR PRODUCTION. IT WILL HOUSE AT OCCUPANCY 15 RESEARCH TEAMS OF WHICH NINE WILL BE NEW RECRUITS.

INCLUDED IN THAT SPACE IS SPACE FOR YOUNG FACULTY DEVELOPMENT FOR WHICH THREE OR FOUR OF THE CANDIDATES WILL BE FILLING THAT SPACE. THAT WILL BE YOUNG FOLKS THEY'RE TRYING TO BRING UP.

THE CORE FACILITIES ARE TO COMPLEMENT EXTENSIVE EXISTING CORES AVAILABLE TO THE STEM CELL RESEARCH THAT ARE IN THE LOCAL AREA. COMPLETION OF THE PROJECT IS SCHEDULED FOR MAY 2010. IT IS CERTIFIED. THEY ARE ATTEMPTING FOR SILVER.

WE IDENTIFIED SEVERAL ISSUES. THE GROUP II EQUIPMENT COSTS ARE MORE THAN TWICE THE AVERAGE OF OTHER PROJECTS ON A SQUARE FOOTAGE BASIS. THIS AMOUNT INCLUDES OVER 6.2 MILLION IN CORE FACILITIES. THESE CORE FACILITIES ARE IN A BUILDING IN WHICH THE CIRM ELEMENT IS APPROXIMATELY 20 PERCENT OF THE BUILDING, AND THE COST OF EQUIPMENT PER SQUARE FOOT IS MORE THAN DOUBLE THE AVERAGE FOR OTHER INSTITUTES.

ALSO OF NOTE IS THE PLANS AND SPACE PROGRAM IDENTIFIES A RELATIVELY SMALL AMOUNT OF SPACE PER PI AND A LACK OF INTERACTIVE SPACES. THIS LIMITED LAB SPACE PER PI AND THE LIMITED INTERACTIVE SPACE MAY IMPACT THE POTENTIAL TO ACHIEVE THE CIRM MISSION.

THE LAB PLANNER'S SCORE WAS FUNCTIONALITY C, VALUE C. HE DID NOTE THAT POSSIBLY DUE TO THE DENSITY, THERE IS A LOW RATIO OF INTERACTION SPACE TO LAB SPACE. THE INTERACTION SPACE IS MINIMAL.

WITH THAT, I TURN OVER THE DISCUSSION OF THE APPLICATION TO MEMBER HYSEN, THE PRIMARY REVIEWER, AND MR. LAFF AS THE SECONDARY REVIEWER.

MS. HYSEN: THANKS. I THINK THERE'S A CORRECTION. I THOUGHT THE VALUE SCORE FOR THIS WAS C PLUS.

MR. GROOM: YOU'RE RIGHT.

MS. HYSEN: GIVING YOU THAT EXTRA PLUS THERE, UCLA. I THOUGHT THIS WAS A GOOD PROPOSAL THE WAY IT WAS STRUCTURED. SOME OF THE THINGS THAT THE STAFF IDENTIFIED ARE SOME CONCERNS THAT I HAVE AS WELL. AND THEY PARTICULARLY ARE IN THE VALUE CATEGORY.

THERE ARE 15 PI'S FOR THIS LOCATION. AS THE STAFF NOTED, IT IS NOW ONLY THE LOWEST ASSIGNABLE SQUARE FOOT PER PI, NOT ONLY LOW, BUT APPARENTLY IT IS THE LOWEST ASSIGNABLE SQUARE FEET PER PI. THAT WAS OF CONCERN.

THE EQUIPMENT COSTS ARE AT $272 PER GROSS SQUARE FEET, WHICH IS TWICE THE AVERAGE. AGAIN, A CONCERN IN TERMS OF VALUE.

MR. COPENHAGEN NOTED THAT THERE IS GOOD DENSITY, BUT THE FEAR OF HAVING THAT LEVEL OF DENSITY COULD ACTUALLY NEGATIVELY IMPACT THE SCIENCE. AND UCLA DID RESPOND TO THAT IN ITS WRITTEN REMARKS, INDICATING THAT THE DESIGN WAS, IN FACT, FOCUSED ON MAXIMUM EFFICIENCY AND INTERACTIVE SPACE. SO WHILE MR. COPENHAGEN REMARKED THAT THE DENSITY COULD BE PROBLEMATIC, UCLA DID RESPOND THAT THAT WAS A PURPOSEFUL DESIGN TO ACHIEVE MAXIMUM EFFICIENCY.

THE THING THAT I WAS CONCERNED WITH IS THAT THERE'S NO CONTINGENCY SET-ASIDE. THAT'S AWFULLY BRAVE. BUT I'VE SEEN THE TEAM THAT'S DOING THIS WORK.

CHAIRMAN LICHTENGER: EXCUSE ME, DEBORAH. RICK HAS A COMMENT TO THAT.

MR. KELLER: I JUST WANTED TO INDICATE THAT WE DID RECEIVE ADDITIONAL INFORMATION WITHIN THE LAST FEW DAYS THAT THERE IS. INDEED, THE CONTINGENCY HAD BEEN ROLLED INTO THE CONSTRUCTION AMOUNT.

MS. HYSEN: OKAY. THAT MAKES SENSE, BUT I DO THINK IF ANYONE COULD HAVE PULLED IT OFF, IT WOULD BE THIS TEAM.

THE COSTS PER SQUARE FEET ARE GENERALLY CLOSE TO THE INSTITUTE AVERAGE, SO THAT WAS GENERALLY IN LINE. I THINK THEIR ARCHITECTURAL TEAM DID A REALLY GOOD JOB WITH THIS BUILDING. IT INDICATES THAT IT MEETS THE LABS FOR 21ST CENTURY STANDARD. AND I THINK, AS STAFF MENTIONED EARLIER, THEY ARE ONE POINT SHY OF LEED SILVER, AND THAT'S PRETTY REMARKABLE. I'M HOPING THAT THEY STRIVE TO GET THAT EXTRA POINT. I KNOW THAT'S HARD.

SO FROM A VALUE STANDPOINT, AGAIN, C PLUS, I FELT THAT IT WAS -- THAT WAS ACTUALLY PROBABLY A LITTLE GENEROUS GIVEN SOME OF THE CONCERNS WITH THE EQUIPMENT AND THE ASSIGNABLE SQUARE FEET PER PI.

THE LEVERAGE AMOUNT, IT IS THE LOWEST OF THE SEVEN APPLICANTS IN THIS CATEGORY, AND THAT IS OF CONCERN. UCLA DID RESPOND ON THIS ISSUE; AND WHEN THEY GET UP TO TESTIFY, I'D LIKE THEM TO ANSWER THE QUESTION BECAUSE IT APPEARS THAT THERE MAY BE SOME SUPPLEMENTAL THINGS IN THE LEVERAGE CATEGORY THAT WE SHOULD AT LEAST TRY AND UNDERSTAND.

URGENCY, I FELT THAT THEY RATED VERY HIGH IN THIS CATEGORY. THEY'VE ALREADY STARTED THE SHELL CONSTRUCTION LAST YEAR. CURRENT INDICATORS SUGGEST THAT THEY'RE AHEAD OF SCHEDULE. IN MY MIND, THEY'VE MITIGATED A LOT OF PROJECT RISKS ALREADY. AS I SAID EARLIER, THEY HAVE A VERY PROVEN TRACK RECORD. THERE'S A LOT OF CONSTRUCTION GOING ON ON THE UCLA CAMPUS, AND I THINK THEY'RE DOING A REALLY GOOD JOB KEEPING IT ON TRACK. IT LOOKS TO ME THAT THE CIRM SPACE WILL ACTUALLY START PLANNING IN '08 AND WILL BE DONE BY MAY OF '10, AND I HAVE EVERY CONFIDENCE THAT THEY'LL, IN FACT, MEET THAT SCHEDULE.

AND THE SHARED RESOURCES CATEGORY, THEY HAVE ESTABLISHED A RECORD OF COLLABORATION. THEY DO HAVE SOME COLLABORATION, I THINK, WITH CALTECH. THEY HAVE CENTRALIZED FUNCTIONS WHICH ENCOURAGE SHARED RESOURCES. THEY HAVE A SIGNIFICANT INVESTMENT IN EQUIPMENT AND FACILITIES THAT ARE GOING TO BE MADE AVAILABLE TO CIRM PROGRAMS WITHOUT ADDED COST. THAT'S MY NOTE AT LEAST. AND THAT INVESTIGATORS OUTSIDE OF UCLA WILL BE INVITED TO APPLY FOR SPACE AND THAT SPACE ASSIGNMENTS WILL BE MADE THROUGH A FORMAL PROCESS. SO I FELT THAT THEY REALLY ANTICIPATED WHAT IS THAT PROCESS FOR ALLOWING THAT COLLABORATION TO OCCUR.

ON FUNCTIONALITY I THINK THE SPACE WAS DESIGNED FLEXIBLY AND EFFICIENTLY. THEY DID HAVE A LIMITED AMOUNT OF INTERACTIVE SPACE, AS WAS MENTIONED EARLIER. AND UCLA'S RESPONSE, I THOUGHT, WAS RATHER APPROPRIATE. THEY FELT THAT THEY WERE AVOIDING DUPLICATION OF INDIVIDUAL LABS AS PART OF THEIR EFFORT TO ENCOURAGE INTERACTION. I THINK THAT THEIR FLEXIBILITY ALSO IS IN THEIR MOVABLE AND VERTICAL ADJUSTED CASE WORK AND THEIR OVERHEAD UTILITIES. SO I THINK THEY DID A REALLY GOOD JOB ON FUNCTIONALITY.

AGAIN, THEY MENTIONED THE FACT THAT THEY HAVE DEDICATED SPACE FOR DEVELOPMENT OF YOUNG FACULTY. I THINK THAT WAS VERY IMPORTANT. ONE OF THE REVIEWERS I NOTICED ON THE SCIENCE SAID THIS WAS AN OUTSTANDING PROPOSAL. AND SO THAT WAS, I THINK, IMPORTANT FOR ME TO UNDERSTAND HOW THE SCIENTISTS LOOKED AT THIS DESIGN.

THE THING THAT I THINK IS -- WHEN I LOOK AT THIS OVERALL, I THINK I'M STILL SOMEWHAT ALARMED BY SOME OF THE VALUE ISSUES. AND SO OVERALL I THINK THAT THIS PROPOSAL REALLY NEEDS TO ADDRESS THOSE VALUE ISSUES OR I GUESS IT STANDS ON ITS OWN MERIT.

CHAIRMAN LICHTENGER: THANK YOU, DEBORAH. STUART, YOU'RE THE SECONDARY REVIEWER FOR UCLA.

MR. LAFF: WELL, YOU KNOW, ON THE VALUE ASPECT, BEING ONE POINT SHORT OF SILVER, I THINK, HAVING DONE A NUMBER OF THESE MYSELF, THEY WILL BE ABLE TO FIND ONE POINT, I'M SURE.

I TOO WAS BOTHERED BY THE TWICE THE AVERAGE OF THE GROUP II EQUIPMENT. I LOOKED AT THIS BECAUSE THEY'RE GOING IN A BUILDING THAT'S ALREADY BEEN DESIGNED, I STARTED THINKING ABOUT THIS MORE AS AN INTERIOR JOB THAT THEY ARE PUTTING THIS AREA INTO, AND I'M NOT SURE THE BUILDING WAS DESIGNED SPECIFICALLY TO HAVE EMBRYONIC STEM CELL RESEARCH. I DON'T KNOW IF THAT'S VASTLY DIFFERENT, AND THAT'S WHAT LED YOU TO THE LOWER FUNCTIONALITY RATINGS.

MR. COPENHAGEN: I THINK THE LOWER FUNCTIONALITY RATE WAS SIMPLY WHEN I LOOKED AT THE DENSITY OF THE NUMBER OF FACULTY THEY WERE PUTTING INTO IT, AND THEN I DIDN'T SEE WHERE -- THE GOOD SIDE IS THAT THEY HAD A LOT OF DIFFERENT PEOPLE TOGETHER IN ONE SPACE, A LOT OF VERY SENIOR PEOPLE, BUT THERE WAS NO PLACE FOR THE SENIOR PEOPLE TO MEET OUTSIDE OF THEIR LAB SPACE. ALL OF THE SPACE, IT LOOKED LIKE THEY WERE JAMMING A LOT INTO THE FLOOR.

MR. LAFF: IS THAT BECAUSE OF THE CORE FACILITIES THAT ARE ALSO JAMMED ON THAT FLOOR?

MR. COPENHAGEN: THEY ARE ACCOUNTING FOR THEIR CORES AS WELL AS ALL OF THEIR RESEARCH LABS ALL IN THAT ONE FLOOR SPACE. AND JUST THAT THEY HAD A LOT OF DIFFERENT TEAMS ON THERE.

ONE OF THE THINGS THAT THEY MENTIONED WAS THE BRINGING ALONG JUNIOR FACULTY. WHAT HAPPENS WHEN THEIR PROGRAMS BECOME SUCCESSFUL? WHERE DO THEY GO? HOW DO THEY GROW? THEY WERE ALREADY -- IT LOOKED LIKE THEY WERE VERY TIGHT ON THE FIT INTO THE FLOOR OF THE BUILDING.

MR. LAFF: ONE OF MY CONCERNS IS EXACTLY THAT. WHAT HAPPENS WHEN THEY GROW? AND I KNOW --

MR. COPENHAGEN: WE ALL HOPE THEY'RE GOING TO BE VERY SUCCESSFUL.

MR. LAFF: WE ALL WANT THEM TO BE VERY SUCCESSFUL. AND SO WHAT IS THEIR PLAN TO GIVE MORE SPACE TO EMBRYONIC STEM CELLS? THAT WAS ONE OF THE QUESTIONS THAT I HAD.

ONE OF THE INTERESTING THINGS, I THINK, ABOUT THESE LARGE INSTITUTIONS, WE DON'T NECESSARILY VALUE LAND IN THIS CURRENT MARKETPLACE. BUT WE DO ALLOW LAND AT COST AS PART OF LEVERAGE. AND THERE WERE A NUMBER OF THESE INSTITUTIONS, INCLUDING UCLA, ALSO UC IRVINE, THAT DIDN'T LOOK AT THAT AT ALL. I WAS JUST VERY CURIOUS WHY THEY DIDN'T. AND I FORGOT TO ASK IRVINE, SO I GUESS I'LL ASK UCLA.

MR. KELLER: FOR THE APPLICANTS WE SAID THAT FOR LAND COST TO BE CONSIDERED, IT WOULD HAVE TO BE AN OUT-OF-POCKET EXPENSE SINCE ALL OF THE INSTITUTIONS RELATIVE TO UNIVERSITIES ARE EITHER UC CAMPUSES OR THE TWO PRIVATE CAMPUSES WITH ESTABLISHED, WELL-ESTABLISHED LONG-RANGE DEVELOPMENT PLANS OR GENERAL PLANS. YOU'RE ABSOLUTELY RIGHT. THAT LAND IS A FUNDAMENTAL ELEMENT OF THE RESOURCE BASE, AND IT'S NOT REALLY PARSED THE WAY IT IS IN A MORE BUSINESS-ORIENTED WAY.

THEREFORE, YOU HAVE THE CIRCUMSTANCE WHERE BOTH THE BUCK INSTITUTE AND THE CONSORTIUM, BY VIRTUE OF THE FACT THAT THEY ARE NOT UNIVERSITIES AND ARE RESEARCH INSTITUTIONS UNDER THE NONPROFIT 501(C)(3) CODE, THAT ENTERS INTO THE PICTURE. WE'LL DISCUSS THAT PROBABLY AT LENGTH IN A FEW MINUTES.

MR. LAFF: I'LL BET AT LENGTH. OKAY.

THE OTHER THING IS THAT I WAS WORRIED ABOUT STEPPING AWAY FROM THE NUMBER. LET'S GO BACK TO THE DENSITY. WHILE I REALIZE THAT, YOU KNOW, SOME OF THE AMENITIES THAT ARE BEING BUILT IN A NUMBER OF THESE BUILDINGS ARE IMPORTANT, I DON'T SEE THAT HERE. AND THAT REALLY DISTURBS ME BECAUSE I THINK ALMOST AS IMPORTANT AS THE NUMBER OF PI'S AND OTHER RESEARCHERS THAT WE GET IN IS THE AMENITIES AND THE PLACE THAT WE GIVE THESE RESEARCHERS TO WORK IN. AND I BELIEVE STRONGLY THAT SOME OF THESE AMENITIES ARE ALMOST AS IMPORTANT TO MAKING THESE RESEARCHERS SUCCESSFUL AS HAVING ONE MORE RESEARCHER. THAT BOTHERED ME AGAIN ABOUT THIS.

OUTSIDE OF THAT, THE OTHER THING I COULDN'T FIGURE OUT, AND IF UCLA IS HERE, MAYBE THEY CAN ANSWER THIS QUESTION. I WAS LOOKING AT THE SITE IMPROVEMENTS THAT THEY WERE CHARGING CIRM. I COULDN'T MAKE THE NUMBERS GO TOGETHER WITH WHAT THEY WERE SAYING. OKAY. THEY WERE TALKING, WAS IT SIX MILLION OR WHATEVER, OR AM I MIXING UP?

MR. KELLER: IT IS A PART OF A LARGER PROJECT, IN MY REVIEW, OF HOW THEY MOVED, AND THERE WAS AN EXPLANATION THAT HELPED ME FROM THE CAMPUS, WAS THEY PRORATED. AND THIS HAD TO DO WITH THE ISSUE OF WHEN WE WERE CLEARING UP THAT THE CONTINGENCY WAS ACTUALLY PART OF THE CONSTRUCTION AMOUNT, I THINK THEY PRORATED THE COSTS OF THE MAJOR FACILITY INTO THE CIRM SPACE, AND THEN THERE WAS AN ADDITIONAL INVESTMENT FOR GROUP I EQUIPMENT OF $1.4 MILLION. THAT'S THE INSTALLED EQUIPMENT. THAT GETS ROLLED INTO THAT.

SO PART OF THE CONTRIBUTION HERE. BUT ALL OF THE COSTS OF THE MAJOR BUILDING WERE PRORATED AT 20.1 PERCENT.

MR. LAFF: 20.1. OKAY. ALL RIGHT.

ONE OF THE STRONGEST PARTS OF THIS IS THAT I THINK THAT THERE IS VERY LITTLE RISK ON THEIR ABILITY TO DELIVER THIS IN A TIMELY MANNER. IT IS A VERY STRONG TEAM THAT HAS ACTUALLY WORKED ON THIS CAMPUS SEVERAL TIMES. THE CONTRACTOR HAS BUILT THREE OR FOUR DIFFERENT FACILITIES ON THIS CAMPUS. SO I'M PRETTY CONFIDENT IN THEIR NUMBERS AND THEIR ABILITY TO DELIVER THIS IN A TIMELY MANNER.

CHAIRMAN LICHTENGER: THANK YOU, STUART. ANY QUESTIONS THE FACILITIES WORKING GROUP HAS FOR STAFF OR THE PRIMARY OR SECONDARY REVIEWER?

RICK, ONE JUST GENERAL QUESTION I HAVE FOR YOU WITH ALL OUR CHARTS AND NUMBERS. SO DO WE HAVE A NEW CHART HANDOUT AFTER TAKING INTO ACCOUNT THE VISITING PI'S ON A CIRM COST PER PI ADJUSTED AFTER THE VISITING PI'S?

MR. KELLER: I'M TRYING TO GET ORGANIZED HERE. SO REQUESTED CIRM FUNDS OR DOLLARS?

CHAIRMAN LICHTENGER: ACTUALLY, I'M SORRY, RICK. I MISSPOKE. BECAUSE WE HAD A COMPARISON OF COST PER PI, RIGHT?

MR. KELLER: YES.

CHAIRMAN LICHTENGER: SO HAVE WE ADJUSTED THAT NOW TO ACCOMMODATE THE VISITING PI'S, THAT CHART?

MR. KELLER: COST PER PI, AND IT'S CHART 7 IN YOUR BOOK WITH THE ADDED PI'S WOULD GIVE RISE TO THIS CHART. AND IT'S AT THE APPROPRIATE NUMBER FOR THESE AS REFLECTED, INCLUDING USC AT 18.

MR. KLEIN: YOU HAD ANOTHER CHART THAT ACTUALLY SHOWED AT THE BOTTOM THE DOLLAR AMOUNTS, SO IT'S NOT JUST GRAPHICALLY, BUT NUMERICALLY REPRESENTED. IT'S ABOUT THREE CHARTS BACK, RICK.

MR. KELLER: I KNOW I HAD IT BY GROSS SQUARE FOOT. IT'S NOT PER PI. I CAN DO THAT.

CHAIRMAN LICHTENGER: CAN WE DISTRIBUTE THAT?

MR. KLEIN: THAT'S PER SQUARE FOOT, BUT IT WOULD BE GREAT --

CHAIRMAN LICHTENGER: I WANT THE COST, THE NEW ADJUSTED COST PER PI.

MR. KELLER: WE CAN THAT DO.

CHAIRMAN LICHTENGER: THAT WOULD BE HELPFUL. SO AT THIS POINT I'D LIKE TO ASK UCLA TO COME UP AND MAKE COMMENTS AND ANSWER QUESTIONS.

MR. OLSON: THANK YOU, MR. CHAIRMAN. I'M STEVE OLSON. I'M VICE CHANCELLOR FOR FINANCE AND CAPITAL PROGRAMS AT UCLA. I HAVE WITH ME STEVE PECKMAN WITH THE BROAD STEM CELL CENTER AT UCLA. I'M OPEN TO YOUR QUESTIONS.

CHAIRMAN LICHTENGER: WELL, I THINK, DEBORAH,YOU HAD SOME QUESTIONS.

MS. HYSEN: MY QUESTION IS WHEN THE STAFF ANALYSIS WAS PREPARED, THEY ASKED A FEW QUESTIONS. AND I THINK THEY WERE, FOR THE MOST PART, ANSWERED TO MY SATISFACTION. I WAS A LITTLE UNCLEAR ON THE LEVERAGE ISSUE.

THE QUESTION THAT WAS RAISED BY THE STAFF WAS HOW WILL THIS WORKING GROUP WEIGH THE RELATIVELY LOW LEVERAGE FOR A FACILITY OF MODEST SIZE THAT OFFERS LESS SQUARE FOOTAGE PER PI THAN OTHER PROPOSALS? AND YOU RESPONDED, AFTER THE CHART THAT LISTED THE SUPPORT OF STEM CELL-RELATED RESEARCH ON CAMPUS, AND I WASN'T SURE IF THAT WAS INTENDED TO BE ADDED TO THE 6.2 MILLION OF ALLOWABLE LEVERAGE NOW. BECAUSE THERE'S ONE NOTE THAT THERE'S AT LEAST 768,000 THAT MAY BE ABOVE AND BEYOND THAT, BUT I COULDN'T TELL IF THE REST WERE AS WELL.

MR. OLSON: I WOULD HAVE TO DEFER TO THE FACILITIES WORKING GROUP AND YOUR STAFF TO DETERMINE WHAT COULD OR COULDN'T BE COUNTED AS LEVERAGE. I THINK THE BROADER AND MORE PERTINENT ISSUE, RATHER THAN INDIVIDUAL ITEMS, IS OUR OVERALL STRATEGY, WHICH HAS BEEN TO POSITION THIS FACILITY DIRECTLY ADJACENT TO THE RECENTLY COMPLETED BIOLOGICAL SCIENCES RESEARCH BUILDING, WHICH WAS DEDICATED LAST AUGUST AFTER A CAMPUS INVESTMENT OF $80 MILLION. IT'S THE HOME OF THE BROAD STEM CELL INSTITUTE. IT HOUSES 26 PRINCIPAL INVESTIGATORS THAT ARE STEM CELL INVESTIGATORS, AND IT'S DIRECTLY ACROSS THE STREET FROM THE SITE AT WHICH THE CONSTRUCTION IS CURRENTLY UNDERWAY.

SO WE DID NOT BELIEVE THAT IT WAS APPROPRIATE TO INVEST IN A COMPREHENSIVE STAND-ALONE FACILITY THAT HAD ALL OF THE AMENITIES TO WHICH MR. LAFF REFERRED TO. IT IS LABORATORIES, IT IS FLEXIBLE DESIGN, IT HAS LABORATORIES, CORE FACILITIES. AND, NO, IT DOESN'T HAVE CONGREGATING SPACE. THERE IS A HEADQUARTER -- ADMINISTRATIVE HEADQUARTERS THAT INCLUDES A CONFERENCE ROOM ACROSS THE STREET, PLUS THE SPACE THAT IS AVAILABLE IN THAT BUILDING, AND THERE'S A LOT OF INTERACTION THAT WILL TAKE PLACE BETWEEN THOSE FACULTY AND THE NEW FACULTY THAT WILL GO INTO THIS PARTICULAR FACILITY.

I'D ALSO LIKE TO ADD TO WHAT OUR COLLEAGUES FROM STANFORD HAD TO SAY ABOUT THE WAY IN WHICH ISSUES LIKE FOOD SERVICE FACILITIES. IF THERE IS ONE PLACE IN CALIFORNIA THAT HAS A BETTER CLIMATE THAN STANFORD, IT'S WESTWOOD. THE WAY THAT WE DO SCIENCE AT UCLA IS WE EAT LUNCH OUTSIDE. THE COURT OF THE SCIENCES, THE BOMB SHELTER FACILITY IS A TWO-MINUTE WALK FROM ALL OF THESE FACILITIES. WE'RE PREPARING TO MAKE A $15 MILLION INVESTMENT TO UPGRADE THAT FACILITY. THAT'S NOT COUNTED AS LEVERAGE. DIRECTLY ADJACENT TO THE LIFE SCIENCES REPLACEMENT BUILDING, WHICH IS THIS PROJECT, WE'RE INVESTING ANOTHER $23 MILLION IN HERSHEY HALL. FOR OTHER LIFE SCIENCES DEPARTMENTS, THERE IS A COURTYARD BETWEEN THE TWO BUILDINGS THAT WILL BE A CONGREGATING SPACE FOR THE FACULTY. NONE OF THIS IS COUNTED AS LEVERAGE OR COUNTS FOR QUALITY POINTS THE WAY THAT THE PROCESS HAS BEEN SET UP.

ASIDE FROM WHAT YOU CAN COUNT AS LEVERAGE AND YOU CAN COUNT AS VALUE, I HOPE YOU WILL TAKE ALL OF THESE FACTORS IN CONSIDERATION WHEN YOU ASSIGN OVERALL VALUE TO THIS PROJECT. WE BELIEVE THAT IT IS A VERY SOUND, VERY TARGETED INVESTMENT ON VERY LARGE INVESTMENTS THAT UCLA IS ALREADY MAKING.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. ED, YOU HAD A QUESTION?

MR. KASHIAN: YOU DON'T MENTION ANY OTHER INSTITUTIONS IN THE AREA THAT YOU ARE COLLABORATING WITH. IS THERE ANY OTHER COLLABORATION GOING ON?

DR. PECKMAN: ACTUALLY OUR APPLICATION INCLUDES A COLLABORATION WITH CALIFORNIA INSTITUTE OF TECHNOLOGY. THIS IS OUR PRIMARY COLLABORATOR.

CHAIRMAN LICHTENGER: ANY OTHERS?

DR. PECKMAN: WELL, OUR STEM CELL RESEARCH IS VERY COLLABORATIVE. THE APPLICATION ALSO REFERS TO SPECIFIC SCIENTIFIC COLLABORATIONS; FOR EXAMPLE, ONE ONGOING WITH UC IRVINE. AND OUR SHARED RESEARCH LABORATORY, WHICH WAS AWARDED BY THIS GROUP LAST YEAR, INCLUDED SEVERAL COLLABORATIONS AS WELL. AND SO UCLA PRIDES ITSELF ON ITS COLLABORATIVE ENVIRONMENT AND THE INTENT OF ITS INVESTIGATORS.

CHAIRMAN LICHTENGER: JUST FOR THE MEMBERS,BECAUSE I DON'T HAVE A PHOTOGRAPHIC MEMORY, SO UC IRVINE, WHO ELSE?

DR. PECKMAN: CALTECH, CAL STATE NORTHRIDGE, AND WE ALSO HAVE ONGOING COLLABORATIONS WITH INSTITUTIONS INVOLVED IN STEM CELL SCIENCE OUTSIDE THE STATE AS WELL, INCLUDING UNIVERSITY OF CONNECTICUT.

MR. KLEIN: SO LET ME UNDERSTAND THIS. SO THE BROAD CENTER IS ACROSS THE STREET, AND THAT HAS 26 PI'S IN IT?

MR. OLSON: THERE ARE 26 INVESTIGATORS THAT ARE STEM CELL INVESTIGATORS IN THAT BUILDING.

MR. KLEIN: SO I'M TRYING TO UNDERSTAND THE TERMINOLOGY. TWENTY-SIX PI'S OR RESEARCHERS?

DR. PECKMAN: I GUESS THE QUESTION IS WHAT'S THE DIFFERENCE BETWEEN AN INVESTIGATOR AND A RESEARCHER?

MR. KLEIN: HOW MANY TOTAL RESEARCHERS ACROSS THE STREET? IN OTHER WORDS, IF YOU HAVE A PI TEAM --

DR. PECKMAN: YOU TALKING ABOUT THE RESEARCH TEAMS?

MR. KLEIN: ARE YOU SAYING THERE'S 26 RESEARCH TEAMS ACROSS THE STREET?

DR. PECKMAN: I'LL GIVE YOU AN EXAMPLE. SO WE'VE JUST RECRUITED SIX VERY TALENTED JUNIOR FACULTY FROM ALL OVER THE COUNTRY, HARVARD, MIT, JOHNS HOPKINS, UC SAN FRANCISCO, UNIVERSITY OF MICHIGAN, AND ROCKEFELLER. ONE OF THOSE TEAMS HAS TEN STAFF, TECHNICAL STAFF WORKING WITH HER. SHE'S A JUNIOR INVESTIGATOR. YOU COULD HAVE A SENIOR INVESTIGATOR IF YOU HAVE 20 TO 40 TO 50 PEOPLE WORKING WITH THEM ON THEIR RESEARCH. AND SO TO TALK ABOUT TEAMS, I THINK THAT WAS ARTICULATED EARLIER, IS AN EXTREMELY FLEXIBLE CONCEPT DEPENDING, ONE, ON THE TYPE OF RESEARCH YOU'RE DOING AND THE LEVEL AT WHICH YOU ARE AS AN INVESTIGATOR AND THE KIND OF WORK YOU'VE ALREADY DONE.

SO, FOR EXAMPLE, ONE OF THE CORES WE ARE PROMOTING IN THIS SITE IS A BIOINFORMATICS CORE, WHICH IS MOSTLY COMPUTERS AND HARDWARE. THERE WON'T BE A LOT OF PEOPLE IN THOSE TEAMS WORKING IN THAT AREA. BUT YET IN ANOTHER AREA, SO, FOR EXAMPLE, OWEN WITTE, WHO'S THE DIRECTOR OF OUR STEM CELL CENTER, IS ALSO AN HHMI INVESTIGATOR AND MEMBER OF THE NAS AND THE IOM. HE HAS 26 MEMBERS OF HIS RESEARCH TEAM THAT ARE CURRENTLY WORKING IN HIS HHMI LABORATORY, AND THAT'S NOT COUNTING THE PEOPLE WHO ARE GOING TO BE WORKING IN THE STEM CELL AREA.

SO IT'S HIGHLY VARIABLE DEPENDING ON THE LEVEL AT WHICH THE INVESTIGATOR IS AT OR FACULTY MEMBER OR PRINCIPAL INVESTIGATOR.

MR. KLEIN: NO. I REALIZE IT'S HIGHLY VARIABLE. IN FACT, YOU HAVE A COMMENTARY IN YOUR APPLICATION THAT TALKS ABOUT IN THIS BUILDING HAVING JUNIOR INVESTIGATORS WITH SMALL TEAMS, YOUNG FACULTY WITH LARGER TEAMS, AND SENIOR INVESTIGATORS WITH STILL LARGER TEAMS. IN TERMS OF THE TOTAL NUMBER OF RESEARCHERS AT CAPACITY IN THIS BUILDING, DO YOU HAVE AN ESTIMATE FOR THAT FIGURE?

DR. PECKMAN: YES. IN FACT, RICK HAD SENT AN E-MAIL OUT EARLIER IN THE WEEK ASKING FOR AN ESTIMATE OF THAT NUMBER. AGAIN, I THINK WE NEED TO LOOK AT THIS IN TERMS OF HOW WE ARTICULATE PRINCIPLES AND THE PARADIGM IN WHICH WE'VE STRUCTURED THIS IS THAT WE'RE NOT LOOKING AT WALLED CITY STATES FOR INVESTIGATORS OR PRINCIPAL INVESTIGATORS OR RESEARCHERS. WE'RE LOOKING AT HIGHLY FLEXIBLE SPACE WITHOUT WALLS THAT ARE ASSIGNED TO PEOPLE DEPENDING ON THE PROJECTS THAT THEY'RE DOING THAT ARE RELATED TO THE SUCCESSFUL INTENT OF THE CENTER AND THE KIND OF RESEARCH WE WANT TO ACCOMPLISH FROM VERY BASIC BENCH RESEARCH ALL THE WAY TO APPLIED CLINICAL TRIALS.

AND SO THE TOTAL NUMBER, TAKING INTO ACCOUNT FROM JUNIOR TO SENIOR, ONE MORE POINT I THINK NEEDS TO BE MADE HERE IS THAT IN TERMS OF OCCUPATION PER SQUARE FOOT, I DON'T KNOW OF ANY LABORATORY SITE THAT HAS CONSTANT OCCUPATION OF ANY FACILITY. MOST LABS ARE RUN ON A 24-HOUR BASIS. AND SO WHEN YOU THINK ABOUT THE LABORATORY IN TERMS OF WORKING DURING THE REGULAR WORKDAY, THE ESTIMATE WOULD BE SOMEWHERE BETWEEN 40 TO 50 ON OUR FLOOR.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. MR. KLEIN: THANK YOU VERY MUCH. AND THEN THE OTHER QUESTION IS THAT CLEARLY THERE'S A VERY PUBLIC GRANT THAT ELI BROAD GAVE FOR 20 OR $25 MILLION.

MR. OLSON: TWENTY.

MR. KLEIN: SO IS THAT GRANT, DID IT GO TO FACULTY COMMITMENT AND RECRUITMENT? OR THE QUESTION IS WHY DOESN'T THAT LEVERAGE SHOW UP HERE? WHERE IS THAT FUNDING GOING?

MR. OLSON: IT'S GOING FOR INNOVATION AWARDS, THERE'S EQUIPMENT, TECHNICAL SUPPORT, AND SEED GRANTS. IS THE EQUIPMENT COUNTED AS A MATCH IN OUR APPLICATION?

DR. PECKMAN: SOME OF IT, YES.

MR. OLSON: SOME OF IT IS COUNTED AS THE MATCH IN THE APPLICATION.

MR. KLEIN: WHAT I'M UNDERSTANDING IS THAT A PORTION OF THAT 20 MILLION IS REALLY GOING TO ADVANCE THIS MISSION, BUT --

MR. OLSON: THAT'S CORRECT. IT'S NOT RELATED TO THE FACILITY, AND WE CAN'T COUNT IT FOR THAT REASON.

DR. PECKMAN: IT'S NOT RELATED TO THE STRUCTURE OF THE FACILITY, BUT IT'S DEFINITELY GOING TO SUPPORT ALL THE RESEARCH -- THE BROAD GIFT, THE VERY GENEROUS GIFT OF $20 MILLION, AS STEVE ARTICULATED, IS GOING TO BE USED FOR A LOT OF DIFFERENT EFFORTS, OF WHICH IT WILL BE EXPENDED ON RESEARCH THAT WILL OCCUR IN THE FACILITY. SO, FOR EXAMPLE, WE WILL BE PROMOTING INNOVATION AND SEED GRANTS FOR STEM CELL SCIENTISTS UP TO $250,000 A YEAR USING A PORTION OF THIS GIFT OF WHICH AWARDEES WILL BE WORKING IN THE FACILITY. THAT'S NOT AN ALLOWABLE LEVERAGE ACCORDING TO THE RFA.

MR. KLEIN: AND YOU IDENTIFIED SOME OTHER GRANTS THAT WERE NOT ALLOWABLE LEVERAGE IN YOUR RESPONSE LETTER. SOME OF THEM WERE NOT NECESSARILY COMPLETELY CLEAR ON THEIR FACE. THE BSCRC, 20 MILLION OVER FIVE YEARS, PART OF IT'S GOING INTO CONSTRUCTION.

MR. OLSON: NO, IT'S NOT. THESE ARE INSTITUTIONAL COMMITMENT TO THE PROGRAM. THAT PARTICULAR 20 MILLION IS A COMMITMENT FROM THE CHANCELLOR OF OUR UNIVERSITY FOR SUPPORT OF FACULTY AND FOR THE ADMINISTRATIVE INFRASTRUCTURE OF THE STEM CELL INSTITUTE.

MR. KLEIN: BECAUSE ONE OF THE SUBCATEGORIES UNDER THAT WAS INFRASTRUCTURE CONSTRUCTION AND EQUIPMENT.

MR. OLSON: I'M SORRY. THERE IS -- IT'S NOT A LARGE PART OF IT. I THINK IT'S UNDER A MILLION. UNDER A MILLION OF THAT REPRESENTS EQUIPMENT PURCHASES. THE PURPOSE OF THIS WAS TO DEMONSTRATE THE LEVEL OF OVERALL INSTITUTIONAL SUPPORT IN A WAY THAT DOESN'T NECESSARILY ALIGN WITH YOUR REQUIREMENTS OF WHAT CAN COUNT AS LEVERAGE FOR THE FACILITY ITSELF.

MR. KLEIN: I KNEW -- I RECOGNIZE THAT THOSE WERE THERE, BUT THAT ADDITIONAL DETAIL IS HELPFUL.

CHAIRMAN LICHTENGER: SO RELATED TO BOB'S QUESTION, ON THIS -- IN YOUR RESPONSE LETTER, THE $266 MILLION, NONE OF THAT IS GOING TO BE DIRECTLY -- THERE'S NO INFORMATION HERE THAT WE DON'T HAVE COUNTED IN OUR LEVERAGE, CORRECT, RICK?

MR. OLSON: THAT'S CORRECT.

CHAIRMAN LICHTENGER: ANY OTHER QUESTIONS BY THE MEMBERS? GREAT. THANK YOU VERY MUCH. AND WE'LL TAKE PUBLIC COMMENT FROM ANYONE ELSE WHO WOULD LIKE TO COMMENT BEFORE WE DO OUR SCORES. THANK YOU VERY MUCH.

MR. KLEIN: RICK, IF I CAN ASK ONE ADDITIONAL QUESTION ON EQUIPMENT. THIS HIGH DOLLAR AMOUNT OF EQUIPMENT, COULD YOU COMMENT ON WHAT THAT'S BUYING AND WHAT THE VALUE IS?

DR. PECKMAN: THE MAJORITY, AT LEAST 50 PERCENT, ACTUALLY MORE THAN THAT, IS GOING TO CORE RESOURCES, WHICH, AS THE PART 1 REVIEW SAID, WERE OUTSTANDING. SO THE CORE RESOURCES ARE PRETTY UNIQUE. ONE IS ADVANCED MOUSE GENETICS, WHICH ACTUALLY IS GOING TO END UP SAVING A TREMENDOUS AMOUNT OF MONEY WITH A DRAMATIC DECREASE IN TIME NECESSARY TO CREATE AND EVALUATE MUTANT MICE, AND CERTAINLY TO RESULT IN SIGNIFICANT REDUCTION IN TERMS OF MOUSE BREEDING AND HOUSING COSTS, PROBABLY OVER 25 PERCENT.

ALSO MICROARRAY AND CGH CORE RESOURCE WHICH WILL EXAMINE THE GENOME OF HUMAN EMBRYONIC STEM CELLS AND IDENTIFY GENETIC DIFFERENCES, WHICH ACTUALLY WE JUST PUBLISHED AN ARTICLE ABOUT THAT. SO THIS WILL BE ABLE TO IDENTIFY AND CONTROL INDIVIDUAL TRAITS AND DEFINE SUSCEPTIBILITY.

WE ALSO ARE ONE OF THE PIONEERS IN THE AREA OF MICROFLUIDICS WHERE WE'VE BEEN ACTUALLY USING MICROFLUIDIC TECHNOLOGY NOW FOR SEVERAL YEARS. SO THERE ARE DIFFERENT AREAS WITHIN OUR CORES THAT REQUIRE INNOVATIVE AND NEW EQUIPMENT THAT ACTUALLY, WHEN IT'S NEW EQUIPMENT, IS GOING TO COST MORE MONEY.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. THANK YOU FOR ANSWERING OUR QUESTIONS.

SO AT THIS POINT, IF THERE ARE ANY PUBLIC COMMENTS. NO. OKAY. NO PUBLIC COMMENTS. SO WE'LL TAKE A MOMENT NOW FOR US TO RECORD OUR PRELIMINARY SCORES.

VICE CHAIRMAN SERRANO-SEWELL: WHILE THAT'S HAPPENING, MR. CHAIRMAN, I WANTED TO MAKE A GENERAL STATEMENT. AND THAT IS, IT'S NOT SPECIFIC TO THIS APPLICANT, BUT IT WAS PROBABLY NOTED WHEN YOU OPENED THE MEETING, THAT WE HAD A LOT OF PUBLIC HEARINGS. AND WE STROVE TO COME UP WITH DEFINITIONS FOR EACH CRITERION. WE HAVE TO LIVE WITH THOSE DEFINITIONS. AND EITHER THE INSTITUTION'S SORT OF VALUE SYSTEM ALIGNS WITH IT OR IT DOESN'T. THAT'S REALLY THE CHALLENGE, I THINK, EACH ONE OF US ARE FACING IS HOW DO WE DEAL WITH IT? AND FOR ME PERSONALLY IT'S ONLY TO ACCEPT AND LIVE WITH THE DEFINITIONS THAT WE'VE AGREED UPON IN ASSIGNING A SCORE IN EACH CATEGORY.

SO I RECOGNIZE AND APPRECIATE THE GOOD WORKS THAT EACH INSTITUTION IS DOING; BUT IF IT DOESN'T FIT OUR DEFINITION, AT LEAST FOR ME, I HAVE TO SCORE WITHIN THE CONFINES OF OUR DEFINITION. AND THE OTHER INFORMATION IS HELPFUL, BUT DOESN'T NECESSARILY SWAY ME ONE WAY OR THE OTHER.

CHAIRMAN LICHTENGER: THANK YOU, MR. VICE CHAIR.

(PAUSE IN PROCEEDINGS.)

MR. KELLER: BEFORE WE BEGIN THE NEXT REVIEW, WE DISTRIBUTED TWO GRAPHS WHICH YOU REQUESTED. AND I WANTED TO JUST BRIEFLY REMIND YOU OF ITS COMPOSITION.

THE GRAPH THAT'S ON YOUR RIGHT, WHICH IS THE NUMBER OF PRINCIPAL INVESTIGATORS SHOWING BOTH THE FULL TIME PART 1 AND THE VISITING PART TIME AND OTHER HAS BELOW IT A CHART THAT WAS DERIVED FROM INFORMATION RECEIVED FROM THE APPLICANTS AND REVIEWED BY STEVE COPENHAGEN LOOKING AT THE TYPICAL RESEARCH TEAM. AND RATHER THAN RELY UPON WHAT WE THOUGHT WERE VERY SQUISHY KINDS OF CIRCUMSTANCES OF SOME OF THE THINGS THAT STEVE PECKMAN POINTED OUT ABOUT WHAT SORT OF ASSUMPTIONS ABOUT FTE OR OCCUPANCY LEVELS, WE DECIDED TO USE A GRADING OR A SYSTEM OF DIVIDING THEM UP SO THAT ONE CIRCLE WITH A STAR IS A CIRCUMSTANCE WHERE THE PI TO STAFF RATIO IS UNDER 1 TO 6; TWO IS 1 TO 6 TO 1 TO 10; THREE, 1 TO 10 TO 1 TO 14; AND FOUR BULLETS WOULD BE 1 TO 14 OR OVER.

SO WE THOUGHT THAT THAT WAS THE BEST WE COULD DO BECAUSE OF THE NATURE OF THE INFORMATION HAVING BEEN SECURED IN VERY SHORT TIMEFRAME AND ALSO HAVING A CHECK AGAINST WHAT WE THOUGHT WERE ON THE DRAWINGS. BASED ON AN EVALUATION, WE ELECTED TO PROVIDE THAT SORT OF RANGE.

CHAIRMAN LICHTENGER: THANK YOU, RICK.

MR. KELLER: THEN THE OTHER CHART THAT WAS DISTRIBUTED IS THE ONE YOU REQUESTED, WHICH IS CHART 7. AND SINCE WE MODIFIED -- PART OF THE ADVANTAGE THAT WE WERE TRYING TO ACHIEVE HERE TODAY WAS TO BE ABLE TO MAKE SOME ADJUSTMENTS ON THE FLY, AND SO WE ADDED AT THE BOTTOM THE DATA TABLE THAT WOULD SHOW YOU THE APPLICANT'S FUNDS FOR PI. IN SOME CASES I SEE IT MAY HAVE BEEN TRUNCATED IN A CELL, BUT THAT'S PART OF WHAT WE DEAL WITH. AND THE CIRM FUNDS PER PI. SO I THINK THAT WAS WHAT YOU HAD ASKED FOR, MR. CHAIRMAN, AS TABLE 7 WITH THE CIRM PROJECT COST PER PI.

CHAIRMAN LICHTENGER: YES, THANK YOU. SO IF IT'S OKAY, RICK, I'D LIKE TO MOVE ON TO THE NEXT APPLICANT.

MR. KELLER: UC SAN FRANCISCO, AND RAY GROOM IS GOING TO GIVE YOU THE OVERVIEW OF THE STAFF ANALYSIS.

MR. GROOM: THIS IS A NEW BUILDING THAT WILL CONSOLIDATE STEM CELL RESEARCHERS AND EXPAND THE RESEARCH OF STEM CELLS AT THIS CAMPUS. IT HAS SIGNIFICANT CORE FACILITIES TO AUGMENT THE CONSIDERABLE CORES THAT ALREADY EXIST ON THE CAMPUS. HAS 46,286 ASSIGNABLE SQUARE FEET AND 74,832 GROSS SQUARE FEET.

THE TOTAL COST OF THE PROJECT IS $94,514,740, AND THE REQUESTED CIRM FUNDING IS $40 MILLION.

UPON OCCUPANCY IT WILL HOUSE 25 RESEARCH TEAMS OF WHICH SEVEN WILL BE NEW RECRUITS. IT ALSO HAS AN ADDITIONAL 18 PART-TIME RESEARCHERS AS NOTED ON THIS CHART. I'M SORRY I STUMBLED THERE. THOSE ARE GOING INTO BACKFILLED SPACE THAT WAS REFERENCED IN THE RFP, THE RESPONSE TO THE RFP.

THE SPACE BEING VACATED, THAT'S THE 25,000 SQUARE FEET, WILL BE USED FOR NEW STEM CELL RESEARCHERS, WHICH IS THE 18 THAT WE DISCUSSED A SECOND AGO. COMPLETION OF THE PROJECT IS SCHEDULED FOR JULY 2010. IT'S CURRENTLY SLATED TO ACHIEVE A SILVER LEED.

WE IDENTIFIED SEVERAL ISSUES. THE APPLICANT NOTED THAT THEY WILL TRANSFER $5 MILLION IN EQUIPMENT AND $17 MILLION IN INFRASTRUCTURE COST FROM THE PROJECT AND $14 MILLION AVOIDED BY THE CENTRAL PLANTS INVESTMENT THAT WERE NOT INCLUDED IN THEIR LEVERAGE CALCULATION, WHICH RESULTS IN OUR CHANGE IN SOME OF THOSE CHARTS. ALSO NOTED WAS THE APPLICANT'S INVESTMENT IN A VIVARIUM VALUED AT $9.8 MILLION, WHICH WAS NOT BUILT WITH CIRM INVESTMENT. COMBINING THESE ASSETS EQUATE TO ABOUT $45 MILLION IN VALUE.

THE ASSIGNMENT OF SPACE PER RESEARCHER IS APPROXIMATELY HALF THE AVERAGE FOR THE INSTITUTES. SO IT HAS A LOW ASSIGNMENT PER RESEARCHER. THE APPLICANT COMMITS TO USING THE 25,000 SQUARE FEET OF SPACE BY THE PROJECT TO FUTURE REGENERATIVE MEDICINE RECRUITS. THIS IS THE ONLY PROPOSAL THAT MADE SUCH A COMMITMENT OF REINVESTING VACATED SPACE AS RESEARCHERS MOVED INTO THE NEW FACILITY SPECIFICALLY FOR REGENERATIVE MEDICINE.

THE LAB PLANNER GAVE AN UNUSUAL FUNCTIONAL SCORE OF A AND A VALUE SCORE OF A. SO HE BELIEVES IT TO BE A RELATIVELY STRONG PROPOSAL. HE DID NOTE THE INNOVATIVE SPLIT LEVEL DESIGN ALLOWS FOR EASY FLOW BETWEEN LABS, AND THE DOUBLE STACKING OF THE OFFICES OVER THE LABS WITH ADJACENT BREAK ROOMS AND CONFERENCE ROOMS IS THE PERFECT EXAMPLE OF HOW A BUILDING DESIGN CAN ENHANCE INTERACTION.

WITH THAT, I TURN OVER THE DISCUSSION OF THE APPLICATION TO MEMBER LICHTENGER, THE PRIMARY REVIEWER, AND MEMBER HYSEN, THE SECONDARY REVIEWER.

CHAIRMAN LICHTENGER: THANK YOU. SO FIRST OF ALL, I'D LIKE TO SAY I THOUGHT THE APPLICATION WAS VERY STRONG OVERALL. YOU KNOW, I DO HAVE SOME QUESTIONS ABOUT SOME OF THESE RECLASSIFICATIONS IN A MINUTE, RICK. LET'S TALK ABOUT SOME THINGS THAT, I THINK, ARE PRETTY STRAIGHTFORWARD.

I THOUGHT JUST ON FUNCTIONALITY I ACTUALLY AGREED WITH OUR LABORATORY PLANNER ON THIS ONE. I THOUGHT IT WAS REALLY A QUITE EXCELLENT INNOVATIVE APPROACH, INTERACTIVE, YOU KNOW. SO, YOU KNOW, NEW ADJACENT VIVARIUM, EXTENSIVE CORES ON CAMPUS. I JUST THOUGHT IT WAS VERY FUNCTIONAL.

I THINK THEY HAD A DESIGN-BUILD TEAM, CORRECT, ON THIS? AND, AGAIN, ON URGENCY, THEY SEEM TO MEET THE TWO-YEAR REQUIREMENT. IT'S AN AGGRESSIVE PLAN, BUT I THINK THEY CAN DO IT. THEY DO HAVE A VERY EXPERIENCED TEAM THERE.

SHARED RESOURCES, MANY, MANY, MANY CORES FOR SHARED RESOURCES AT UCSF. I'D LIKE TO ASK THE APPLICANT A LITTLE BIT ABOUT ANY AGREEMENTS AND SHARING THEY HAVE WITH OTHER INSTITUTIONS TO UNDERSTAND THAT A LITTLE BETTER, BUT, AGAIN, EXCELLENT ON SHARED RESOURCES.

IN TERMS OF VALUE, I WANT TO TALK -- I DO HAVE A FEW QUESTIONS ABOUT LEVERAGE BEFORE I TALK ABOUT VALUE, AND I'LL TURN IT OVER TO DEBORAH. RICK, CAN YOU EXPLAIN TO ME THE CHANGES WITH LEVERAGE? I KNOW WE HAD TALKED ABOUT THIS.

MR. KELLER: AS RAY MENTIONED, FIRST OFF, THAT IN THE APPLICATION, THE DISCUSSION, THE INSTITUTION COMMITS TO USE THE VACATED SPACE, WHERE OTHER INSTITUTIONS HAVE BORROWED SPACE AND ARE TURNING IT BACK TO THE DEAN OR RETURNING IT TO ITS PREVIOUS USE OR LEASED

FACILITIES THAT ARE NO LONGER GOING TO BE USED FOR REGENERATIVE MEDICINE, THIS IS THE CASE WHERE THE SPACE BEING VACATED WAS COMMITTED. AND, THEREFORE, THAT WAS PART OF THE LEVERAGE, AT LEAST IN TERMS OF UNDERSTANDING -- I'M SORRY. THAT'S PART OF THE PI'S ON THE RIGHT.

FOR THE LEVERAGE THERE ARE TWO COMPONENTS TO $31 MILLION IN ADJUSTMENTS. THE FIRST IS THE UTILITY CENTRAL GENERATING CAPACITY, WHICH WOULD HAVE TO BE BUILT IN THIS BUILDING, THE VALUE OF WHAT WOULD HAVE TO BE BUILT IN THE BUILDING TO REPLACE WHAT WAS ACTUALLY COMMITTED BY THE INSTITUTION FOR STEAM, CHILLED WATER, AND OTHER CENTRAL UTILITIES. THAT WAS ABOUT $14 MILLION. IN THE APPLICATION THERE WAS $17 MILLION OF SITE DEVELOPMENT, AND THE SITE FOR THIS BUILDING IS UP AGAINST MT. SUTRO. IT REQUIRES EXTENSIVE EXCAVATIONS, AND THAT SITE DEVELOPMENT AND LANDSCAPING COST HAD NOT BEEN INCLUDED IN THE ORIGINAL PROPOSAL. AND IN LEVELIZING THE OVERALL LEVERAGE CALCULATIONS, THAT $17 MILLION WAS IDENTIFIED AS LEVERAGE.

CHAIRMAN LICHTENGER: SO THIS TOTAL OF 31 MILLION QUALIFIES UNDER CIRM'S GUIDELINES FOR LEVERAGE, CORRECT?

MR. KELLER: YES.

MR. KLEIN: MR. CHAIRMAN, $14 MILLION FOR UTILITY ALLOCATION IS SUBSTANTIALLY OUT OF LINE WITH UTILITY ALLOCATIONS ON THE OTHERS. I REALIZE I'M ONE OF THOSE PEOPLE WHO HAS ADVOCATED LOOKING AT UTILITY ALLOCATIONS, BUT HOW DOES THIS RECONCILE TO THE UTILITY ALLOCATIONS ON THE OTHER PROJECTS?

MR. KELLER: IT'S QUITE A BIT HIGHER. WE RECEIVED THESE AND HAVE NOT HAD A CHANCE TO ANALYZE THEM IN DETAIL. THEY ARE HERE AND CAN EXPLAIN -- WE WERE NOT GIVEN MUCH TIME TO --

CHAIRMAN LICHTENGER: I THINK WE NEED TO EXPLORE THIS WITH THE APPLICANT. SO ACTUALLY I WAS PLANNING ON IT. THANK YOU, BOB.

SO JUST -- SO THIS NEW INFORMATION IN TERMS OF LEVERAGE, I GUESS WE'LL HAVE TO MAKE A DETERMINATION ON THE 31 MILLION, HOW MUCH OF THAT IS ACTUALLY ELIGIBLE UNDER OUR OWN GUIDELINES. BUT CERTAINLY ON THE 17 MILLION, IT SOUNDS LIKE THAT WOULD BE ELIGIBLE A HUNDRED PERCENT, CORRECT, RICK?

MR. KELLER: FOR SITE DEVELOPMENT, UTILITIES, YES, IT'S THE SAME. I'M SORRY. FOR THE SITE DEVELOPMENT AND LANDSCAPING, IT WOULD BE CONSISTENT WITH WHAT YOU'RE INCLUDING IN OTHER PROJECTS, YES.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. SO I GUESS IN TERMS OF THE VALUE, I CAN -- I THINK THERE'S -- VALUE IS VERY GOOD TO EXCELLENT DEPENDING ON WHAT I FIND OUT ABOUT THE FACILITIES BECAUSE THAT DOES AFFECT HOW I VIEW VALUE.

THE ONE CONCERN I HAD ABOUT THIS PROPOSAL WAS THEIR COSTS WERE HIGHER THAN -- I DON'T KNOW IF THEY WERE THE HIGHEST PER SQUARE FOOT. BUT IF WE LOOK AT IT ON A PI COST BASIS, IT LOOKS LIKE THEY'RE ABOUT AVERAGE; IS THAT CORRECT?

MR. KLEIN: I THINK THEY WERE ONE OF THE LOWER PI COSTS.

CHAIRMAN LICHTENGER: ON AN ADJUSTED PI BASIS, THEIR COSTS ARE SUBSTANTIALLY LOWER, IT LOOKS LIKE, ON THIS NEW CHART HERE. LOOKS LIKE THEY'RE BELOW AVERAGE. SO IT WAS KIND OF MITIGATED BY THEIR DESIGN. EVEN THOUGH THEIR PER SQUARE FOOT PRICE AND THEIR TOTAL COST WAS VERY HIGH, IF WE LOOK AT IT ON THE PI COST, THEIR COST WAS, LOOKS LIKE, WELL BELOW AVERAGE. SO THAT MITIGATED THE COST FOR ME.

AND, AGAIN, LOOKING AT THE OVERALL -- ALL THE OTHER FACTORS IN TERMS OF INNOVATIVE ELEMENTS AND CONSERVATION OF RENEWABLE RESOURCES, IT LOOKS LIKE, AGAIN, THE VALUE PROPOSITION IS QUITE HIGH IN MY PERSPECTIVE FROM VERY GOOD TO EXCELLENT.

MS. HYSEN: WELL, I'M A HUGE FAN OF ARCHITECTURE, AND THIS BUILDING HAS THE WOW FACTOR. AND FOR THE UCSF FOLKS, I WANT TO VISIT THIS WHEN IT'S DONE BECAUSE IT'S AN INCREDIBLE DESIGN. I DON'T KNOW HOW IT FACILITATES NECESSARILY THE HIGHEST LEVEL OF INTERACTION, BUT TO DO THIS SPLIT LEVEL WITH THE OFFICES OVERLOOKING THE LABS IS JUST FASCINATING TO ME. I'M JUST REALLY CURIOUS HOW IT WORKS OUT. BUILDING IT OVER A CLIFF, ALL THESE THINGS, I THINK THE COST IS HIGH. IT LOOKED LIKE THE HIGHEST PER SQUARE FOOT, 1164 PER SQUARE FOOT, WHICH IS VERY HIGH. I THINK IT PROBABLY COULD HAVE BEEN HIGHER IF YOU HADN'T FIGURED OUT THE STRUCTURAL PIECES. IT'S JUST AN INCREDIBLY BEAUTIFUL BUILDING.

WHEN YOU'RE DOING SOMETHING AS INNOVATIVE AS STEM CELL RESEARCH, TO HAVE A BUILDING THAT YOU CAN BE PROUD OF TO GO TO WORK IN EVERY DAY AND BE SO UNUSUAL, I THINK REALLY IS SYMBOLIC OF THE KIND OF WORK THAT GOES INTO THAT BUILDING, SO I WAS VERY IMPRESSED.

EQUIPMENT COSTS, THEY WERE LOW. I THINK THEY'RE ONE OF THE LOWEST, $99 A SQUARE FOOT, MAINLY BECAUSE THEY ARE RELOCATING ABOUT FIVE MILLION WORTH OF EQUIPMENT. SO WHILE THE BUILDING COSTS ARE HIGH, I THOUGHT THE EQUIPMENT COSTS WERE LOW.

THE FACT THAT THEY'RE GOING TO TURN OVER 25,000 SQUARE FEET TO CIRM RESEARCH, I WASN'T SURE IF I PUT THAT IN THE LEVERAGE CATEGORY OR THE VALUE CATEGORY BECAUSE ESSENTIALLY YOU'RE GETTING 25,000 SQUARE FEET FOR FREE. AND SO IN MY MIND I WANTED TO APPLY THAT TOWARDS REDUCING THE OVERALL COST PER SQUARE FOOT BECAUSE YOU'RE ACTUALLY GAINING AN ADDITIONAL 25,000 SQUARE FEET. SO FROM MY PERSPECTIVE, IF IT'S OKAY WITH STAFF, I'D LIKE TO VIEW THAT IN THE VALUE CATEGORY IN TERMS OF REDUCING THE OVERALL SQUARE FOOTAGE COST BECAUSE I SEE THAT AS GAINING 25,000 SQUARE FEET, QUITE FRANKLY.

I NOTICED THERE WAS NO VIVARIUM, BUT IT APPEARS THAT YOU ARE LOCATING ONE NEARBY. AND, AGAIN, I THOUGHT THAT INCREASED THE VALUE RATIO BECAUSE YOU DON'T HAVE TO BUILD SOMETHING THAT'S QUITE EXPENSIVE.

THE LEED CERTIFICATION, I KNOW THEY'RE GOING TO TRY AND DO A STRETCH GOAL TOWARDS SILVER. I'M SURPRISED THEY NEED TO STRETCH BECAUSE TO DO THE GREEN ROOFS, TERRACED, HOW THEY'RE LOCATING THE BUILDING TO MAXIMIZE OR MINIMIZE THE AMOUNT OF SUN EXPOSURE, I JUST FOUND THAT BE A REALLY FASCINATING PART. I THINK THIS IS GOING TO BE ONE OF THOSE BUILDINGS THAT IS GOING TO GET RAVE REVIEWS IN THE ARCHITECTURAL COMMUNITY AND IS REALLY GOING TO BE A NICE ADDITION TO CALIFORNIA'S ARCHITECTURE.

ON THE LEVERAGE I NEED CLARIFICATION SINCE THERE'S ALL KINDS OF TALK ABOUT LEVERAGE. THE ORIGINAL LEVERAGE THAT THEY INDICATED WAS $41 MILLION? AND SO IF THEY'RE ADDING THIS OTHER $31 MILLION, DOES IT STILL PUT THEM IN THIRD PLACE IN TERMS OF THE CATEGORIES?

MR. KELLER: THE REVISED CHART IS TO YOUR LEFT AND SO THE --

CHAIRMAN LICHTENGER: THIRD PLACE, YES.

MS. HYSEN: SECOND. SO THAT COULD BUMP THEM UP.

MR. KELLER: SECOND IN INSTITUTES.

MS. HYSEN: IF THIS OTHER DISPUTED LEVERAGE IS CONSIDERED, IT BUMPS THEM UP A PLACE, BUT GENERALLY THEY WERE IN THE THIRD-PLACE CATEGORY FOR LEVERAGE IS WHAT I'M READING. SO I THINK THAT THEY WERE IN GOOD SHAPE BEFORE THIS ADDITIONAL LEVERAGE WAS CONSIDERED.

MR. KELLER: IF YOU LOOK AT THE DARK BLUE, THESE WERE ALL IN FAIRLY CONSISTENT LEVEL, AND THEN THIS IS SAN FRANCISCO WITH THE ADDED AMOUNT.

MS. HYSEN: AGAIN, I THINK THE FUNCTIONALITY, MR. COPENHAGEN GAVE THEM AN A. IT SEEMS TO ME IT'S AN A PLUS, AND MAYBE IT'S BECAUSE I DON'T UNDERSTAND SCIENCE. BUT JUST THE WAY IN WHICH THEY'VE ORIENTED THE BUILDING, I THINK IT REALLY MAXIMIZES THE ABILITY TO HAVE THAT INTEGRATED, CROSSCUTTING APPROACH TO RESEARCH. SO I FOUND THE DESIGN, PROBABLY OF ALL THE DESIGNS, TO REALLY ENHANCE OR AT LEAST ADDRESS THE POTENTIAL FOR ENHANCED FUNCTIONALITY. MAYBE YOU DON'T GIVE A PLUSES, BUT I WAS TEMPTED TO ADD A PLUS HERE.

MR. COPENHAGEN: I AGREE. THE STRUCTURE OF THE BUILDING, THE FLOW THAT YOU GET FROM ONE END OF THE BUILDING, THERE WAS NO BOUNDARIES BETWEEN THEM OF ANY KIND.

MS. HYSEN: IT'S REALLY HARD WHEN YOU'RE IN A MULTISTORY BUILDING. IT SEEMS LIKE WHEN YOU'RE ON ANOTHER FLOOR, IT REALLY IS KIND OF A PAIN TO GO DOWN TO THAT OTHER FLOOR UNLESS IT'S AN OPEN STAIRCASE SETTING. AND SO NOT ONLY DID YOU ADDRESS THAT, BUT YOU'VE KIND OF DONE THE OLD 1950 STYLE SPLIT LEVEL, AND I GUESS THERE'S SOME VALUE TO THAT CONCEPT. I WAS SO IMPRESSED WITH THIS DESIGN.

SHARED RESOURCES I THOUGHT WERE -- I HAVE HERE A LOWER ALLOWANCE OF SQUARE FEET PER PI. IT'S 1851 SQUARE FEET VERSUS THE 3,345 SQUARE FOOT AVERAGE. I DON'T KNOW IF THAT'S A CONCERN. I DON'T KNOW IF YOU HAD THAT CONCERN, DAVID. BUT I JUST NOTED THAT AS AN AREA OF CONCERN.

CHAIRMAN LICHTENGER: I WASN'T REALLY CONCERNED BECAUSE THERE'S SO MUCH CORE CONNECTED BY THE BRIDGE.

MR. COPENHAGEN: THAT'S RIGHT. UCSF HAS AN EXTENSIVE AMOUNT OF CLOSE-BY CORES, AND THEY WENT TO THE EFFORT OF BUILDING THE BRIDGE TO MAKE SURE THAT THEY COULD GET TO THOSE CORES EASILY.

MS. HYSEN: I THOUGHT IT REALLY FACILITATED A HIGH LEVEL OF INVESTIGATORS AT THIS LOCATION. SO I WAS REALLY IMPRESSED WITH THIS APPLICATION. I THOUGHT IT WAS EXTREMELY STRONG.

ON THE URGENCY, IT LOOKS LIKE THE BRIDGING DOCUMENTS ARE DONE. THEY'RE GOING TO USE DESIGN-BUILD. IT'S A PROVEN METHOD FOR FAST TRACKING. I THINK THE TEAM HAS AN EXCELLENT TRACK RECORD WITH RECENT CONSTRUCTION. THERE'S AN INTERESTING THING THAT THEY'RE DOING HERE. I'VE SEEN IT DONE IN ONE OTHER CASE. THEY'RE USING TWO DESIGN-BUILD TEAMS TO KIND OF COMPETE AGAINST EACH OTHER AND SEE WHO HAS THE BEST DESIGN. AND THERE'S A LOT OF INNOVATION THAT COME OUT OF THAT EFFORT, AND THAT'S ANOTHER FASCINATING ELEMENT OF THIS. AND THEY HAD A PROJECT SCHEDULE, AND I LIKE TO SEE PROJECT SCHEDULES SO I AT LEAST SEE HOW THEY'VE CHARTED OUT HOW THIS IS GOING TO PROGRESS. SO I GIVE IT AN A PLUS.

CHAIRMAN LICHTENGER: THANK YOU, DEBORAH. ANY OTHER QUESTIONS BY ANY MEMBERS BEFORE WE HAVE UCSF COME UP AND SPEAK? BOB.

MR. KLEIN: THE SMALL SQUARE FOOTAGE IS AN ISSUE FOR ME. I'D LIKE TO SEE THE RESPONSE FROM THE APPLICANT BECAUSE, WHILE I AGREE THAT THIS IS A GREAT BUILDING AND THEY'RE WORKING OFF THE CORES THAT ARE CONNECTED BY THE BRIDGE, I DON'T KNOW. I'D LIKE TO KNOW HOW MANY CORES ARE DIRECTLY CONNECTED BY THAT BRIDGE.

AND WHEN YOU HAVE 754 SQUARE FEET FOR THE LAB AND SUPPORT VERSUS 1500 OR 2,000 SQUARE FEET IN SOME OF THE OTHER APPLICATIONS, YOU ARE GOING TO GET MORE RESEARCHERS THAT WE'RE ACTUALLY GETTING VALUE FOR. AND SO I'D LIKE TO FIND OUT HOW MANY -- I KNOW HOW MANY PI'S, BUT I'D LIKE TO UNDERSTAND AT CAPACITY WHAT THE FACILITY IS GOING TO PROVIDE IN TERMS OF TOTAL RESEARCHERS HERE BECAUSE THAT SMALL SQUARE FOOTAGE IS A SIGN TO ME THAT WE'RE NOT GOING TO GET THE SAME CAPACITY.

CHAIRMAN LICHTENGER: WHY DON'T WE ASK THE APPLICANT.

MR. KELLER: BEFORE THAT, JUST A CLARIFICATION IS THAT WHEN WE PRODUCED THE CHART THAT ADDED THE 18 PI'S, THE 25 -- BECAUSE WE DIDN'T WANT TO SKEW THE COST PER SQUARE FOOT, YOU ARE GETTING 25,000 FEET FOR NO INVESTMENT, THAT DIDN'T INCLUDE THE SQUARE FOOTAGE. SO THIS IS MORE -- IF WE LOOK AT JUST THE BUILDING, BASED ON THE 24 PI'S THAT ARE GOING TO RESIDE IN THE BUILDING, THE AMOUNT OF SQUARE FOOTAGE PER PI IS 1267, WHICH IS STILL BELOW SEVERAL, BUT MORE COMPARABLE.

MR. KLEIN: IN TERMS OF THE 18, THIS IS THE BACKFILL SPACE?

MR. KELLER: I'M SAYING, AS DEBORAH WAS SAYING, IF YOU ADD THE BACKFILL SPACE, THEN IT SHOULD REALLY DRIVE THE COST PER SQUARE FEET DOWN. THAT'S THE WAY YOU'RE LOOKING AT IT BECAUSE YOU AVERAGE IT ACROSS. THAT'S ONE WAY TO LOOK AT IT. WE DIDN'T INCLUDE THAT WHEN WE DIVIDED THE PI'S INTO THE SQUARE FEET.

MR. KLEIN: BUT THE 18, THAT'S WHAT THAT REPRESENTS, THE BACKFILL SPACE?

MR. KELLER: YES.

MR. KLEIN: DID WE ASK ALL THE OTHER APPLICANTS IF THEY WERE GOING TO COMMIT THE BACKFILL SPACE?

MR. KELLER: WE ASKED IN THE APPLICATION TO DISCUSS THE USE OF SECONDARY EFFECTS OF THESE PROJECTS.

MR. KLEIN: I THINK WHILE IT SHOULD GET A VALUE CREDIT, IT'S NOT COMPARABLE TO THESE OTHER APPLICATIONS BECAUSE IT'S NOT IN THE SAME BUILDING. IT'S NOT IN THE SAME FACILITY. SO THESE 18, THEY'RE BACKFILLING THEM. WE DON'T KNOW IF OTHER INSTITUTIONS ARE GOING TO BACKFILL. AND UNLESS WE SPECIFICALLY ASKED THAT QUESTION, HOW DO WE JUDGE THAT 18? IT'S A VALUE, BUT I THINK --

CHAIRMAN LICHTENGER: I DON'T THINK -- I THINK WE ASKED THE QUESTION IN THE APPLICATION, AND PEOPLE RESPONDED HOW THEY SAW FIT. AND UCSF RESPONDED DIFFERENTLY THAN THE OTHERS.

MR. KLEIN: WE ASKED THE QUESTION IN THE APPLICATION IF THEY WERE GOING TO COMMIT THE BACKFILL SPACE?

MR. KELLER: WE ASKED THEM TO DISCUSS THE BACKFILL.

MR. KLEIN: WE DIDN'T ASK IF THEY WOULD COMMIT THE BACKFILL SPACE.

MR. KELLER: THAT WAS THEIR DISCRETION.

CHAIRMAN LICHTENGER: BUT UCSF WAS THE ONLY APPLICANT TO DISCUSS THIS, CORRECT, RICK?

MR. KELLER: CORRECT. I'M FINE WITH LEAVING IT OUT IF YOU WANT TO LEAVE IT OUT. IT'S A POLICY DECISION.

MR. KLEIN: THIS IS JUST AN INDIVIDUAL POINT OF VIEW. THIS IS A WHOLE COMMITTEE.

CHAIRMAN LICHTENGER: SO I ACTUALLY -- I THINK UCSF DESERVES KUDOS ON THIS IN THAT THEY'RE THE ONLY ONE THAT ACTUALLY COMMITTED THAT SPACE TO CIRM AND TO THE RESEARCHERS. AND WE DID ASK THE QUESTION, AND PEOPLE INTERPRETED THE QUESTIONS HOW THEY WANTED TO. I'D LIKE TO HAVE THE APPLICANT COME UP.

MR. KASHIAN: DAVID, I HAVE A QUESTION OF YOU. WHAT IS YOUR EVALUATION OF THE UCSF PROPOSAL IN TERMS OF, YOUR EVALUATION, IN TERMS OF SHARED RESOURCES?

CHAIRMAN LICHTENGER: YOU KNOW, WELL, THEY HAVE A LOT OF CORES AND THEY HAVE QUITE A FEW RESEARCHERS AND PI'S ON CAMPUS. AND ACTUALLY THAT IS A QUESTION I'M GOING TO ASK THE APPLICANT IN A MINUTE ABOUT WHAT SHARING OF RESOURCES THEY HAVE WITH OTHER INSTITUTIONS.

MS. HYSEN: I HAVE MY NOTES HERE. PERHAPS I FAILED TO MENTION IT. I MADE A NOTATION THEY HAVE OVER 80 TECHNOLOGY CORES OUTSIDE THE FACILITIES, AND THAT PRIORITY WILL BE GIVEN TO THE RESEARCHERS HOUSED IN THIS BUILDING TO UTILIZE THOSE. AND IN PARTICULAR, THEY INCLUDED THE VIVARIUM AND THE GMP FACILITIES.

CHAIRMAN LICHTENGER: SO I GUESS TO ANSWER YOUR QUESTION, ED, SOMEWHERE BETWEEN VERY GOOD AND EXCELLENT. AFTER I HEAR THEIR ANSWER, I'LL LET YOU KNOW.

MR. LAFF: I WANT TO TALK ABOUT THE 25,000 SQUARE FOOT COMMITMENT. WHEN YOU READ ALL OF THE APPLICANTS, YOU WILL FIND OUT THAT MANY OF THESE APPLICANTS HAD THE RESEARCHERS IN LEASED SPACE, IN SPACE THAT IS USED FOR OTHER THAN RESEARCHERS, AND THEY'RE BRINGING THOSE PEOPLE OUT AND THEY'RE GETTING RID OF THE SPACE TO OCCUPY THESE BUILDINGS. SO I SORT OF FALL ON THE SIDE OF BOB. IT'S A NICE THING, BUT I'M NOT SURE WHAT THE VALUE IS AND WHY YOU SHOULD GIVE THEM CREDIT WHEN OTHER PEOPLE DIDN'T EVEN HAVE THE ABILITY TO DO IT.

MR. KLEIN: I WANT TO MAKE IT CLEAR. I THINK IT'S A VALUE. I JUST -- THE QUESTION IS WHERE DO I ACCOUNT FOR IT? AND IT'S KIND OF A VALUE OUTSIDE OF WHAT WE SPECIFICALLY ASKED FOR IS ALL I'M STATING.

CHAIRMAN LICHTENGER: I WOULD AGREE WITH THAT, BOB. I DON'T THINK WE CAN COUNT IT DIRECTLY IN SOME OF THESE CATEGORIES, BUT IT IS GOOD INFORMATION. AND I WISH ALL THE INSTITUTIONS HAD COMMITTED THEIR BACKFILL SPACE. YOU KNOW, WE MAY NOT BE ABLE TO TAKE IT INTO ACCOUNT NOW, BUT I'M OPEN TO HEARING ABOUT IT.

MS. HYSEN: CAN I ADD ONE COMMENT ON THAT? I THINK FOR ME IN THE SAME WAY, AND I THINK IT WAS THE UC DAVIS PROPOSAL, THAT IDENTIFIED GROWTH SPACE. THERE WAS A FUTURE PHASE. TO ME WE'RE SORT OF LOOKING AT THIS IN THE REVERSE. TO ME THIS IS FUTURE SPACE. AND SO I NOT ONLY LOOKED AT THE FACT THAT THEY ACTUALLY COMMITTED TO PROVIDING THIS SPACE TO CIRM, AND SO THIS WAS COMMITTED FUTURE SPACE, AND IT ALLOWED FOR THE GROWTH. AND IN MY MIND IT WAS 25,000 FREE SQUARE FEET.

CHAIRMAN LICHTENGER: THANK YOU. COULD THE APPLICANT PLEASE ADDRESS THE COMMITTEE NOW.

MS. YAMAUCHI: MY NAME IS LAURIE YAMAUCHI. I'M ASSISTANT VICE CHANCELLOR FOR CAMPUS PLANNING AT UCSF. BEFORE WE ADDRESS YOUR QUESTIONS, I WANTED TO STATE THAT SINCE WE SUBMITTED OUR APPLICATION TO YOU, THE BOARD OF REGENTS FOR THE UNIVERSITY OF CALIFORNIA AT ITS MARCH MEETING APPROVED THIS PROJECT. AND THEY ALSO APPROVED THE SITE INFRASTRUCTURE PROJECT THAT WAS REFERRED TO EARLIER. AND WE'LL SPEAK TO THAT IN A MOMENT.

WITH ME ARE COLLEAGUES BOTH ON THE ACADEMIC SIDE AND ON THE FACILITIES SIDE.

MR. BADE: I'M MICHAEL BADE. I'M DIRECTOR OF CAPITAL PROGRAMS AT UCSF.

DR. KRIEGSTEIN: ARNOLD KRIEGSTEIN, DIRECTOR OF THE STEM CELL PROGRAM AT UCSF.

MR. BENDET: DAVID BENDET, PROJECT MANAGER.

DR. HALME: DINA GOULD HALME, DEAN'S OFFICE, SCHOOL OF MEDICINE.

MS. YAMAUCHI: SO WE'RE PLEASED TO ANSWER YOUR QUESTIONS. SPECIFICALLY YOU HAD A QUESTION ABOUT THE COLLABORATION WITH OTHER INSTITUTIONS, ARRANGEMENTS WITH OTHER INSTITUTIONS. DID YOU WANT TO TALK ABOUT THE $14 MILLION? WHERE DID YOU WANT TO START?

CHAIRMAN LICHTENGER: WHEREVER YOU GUYS WANT TO START IS FINE WITH ME.

MS. YAMAUCHI: SINCE YOU JUST SPOKE ABOUT THE 25,000 SQUARE FEET OF SPACE THAT WE WOULD COMMIT, VACATED SPACE THAT WE COULD COMMIT, DR. KRIEGSTEIN IS PREPARED TO SPEAK.

DR. KRIEGSTEIN: I JUST WANT TO ECHO SOME OF THE COMMENTS THAT WE'D HEARD BEFORE. THAT IS THAT THE APPLICATION DIDN'T ASK US HOW WE WOULD HANDLE PEOPLE WHO ARE RELOCATED INTO THE NEW BUILDING. THERE'S AN INSTITUTIONAL COMMITMENT AT UCSF FOR THE STEM CELL PROGRAM THAT ACTUALLY, AS WE SAY, IS TRANSLATED INTO THE COMMITMENT OF THAT SPACE THAT'S VACATED WHEN INVESTIGATORS CURRENTLY AT UCSF MOVE INTO THE NEW SPACE. THE BACKFILL SPACE WILL THEN BE COMMITTED ALSO TO THE STEM CELL PROGRAM. SO THE NEW FACULTY HIRED INTO THOSE SLOTS, OF WHICH WE ESTIMATE THERE WILL BE 18, WILL ALL BE CIRM THAT WILL BE STEM CELL INVESTIGATORS. AND THAT'S THE COMMITMENT THAT THE INSTITUTION HAS MADE.

CHAIRMAN LICHTENGER: IS THAT A TEN-YEAR PLUS COMMITMENT?

DR. KRIEGSTEIN: THOSE SLOTS WILL BE FILLED AS SOON AS THOSE ROOMS ARE VACATED.

CHAIRMAN LICHTENGER: YOU'RE COMMITTING THAT SPACE FOR TEN YEARS OR MORE?

DR. HALME: I BELIEVE MY UNDERSTANDING IS THAT IT WOULD BE FOR THE COMMITMENT OF THE LIFETIME OF CIRM, WHICH IS THE SAME TIMEFRAME FOR WHICH WE'RE COMMITTING THE SPACE IN THE BUILDING.

CHAIRMAN LICHTENGER: GREAT. THANK YOU.HOW ABOUT -- CAN WE TALK ABOUT THE UTILITIES? THAT SEEMS TO BE AN ISSUE.

MR. BADE: I'LL BE HAPPY TO ADDRESS THAT.

CHAIRMAN LICHTENGER: CAN YOU GIVE ME SOME GRANULARITY ON THE UTILITY NUMBER?

MR. BADE: IT'S AN INTERESTING QUESTION. WE HAVE A 13-MEGAWATT COGENERATION FACILITY ON THE PARNASSUS CAMPUS. AND WE ARE GOING TO SERVE THIS BUILDING FROM THAT CENTRAL PLANT. THAT CENTRAL PLANT ALSO SERVES OUR MEDICAL CENTER, AND IT'S AN OSHPD-REGULATED FACILITY. COST OF DEVELOPING IT IS MUCH HIGHER THAN FOR A NORMAL CENTRAL PLANT BECAUSE IT HAS TO GO THROUGH OSHPD STRUCTURAL REVIEW AND FUNCTIONALITY REVIEW. SO WE WERE REALLY SCRATCHING OUR HEADS. WE'RE MAKING A PARALLEL INVESTMENT --

CHAIRMAN LICHTENGER: WHAT'S THE TOTAL COST ON THAT FACILITY?

MR. BADE: OH, GOD. I DON'T KNOW. TEN YEARS AGO IT WAS $70 MILLION. AND IF WE DID IT TODAY, IT WOULD PROBABLY BE 150 MILLION EASILY, MAYBE MORE, BECAUSE IT'S OSHPD REGULATED. BUT WE ARE MAKING AN INVESTMENT IN THAT CENTRAL PLANT SEPARATE FROM THE CIRM PROJECT IN PARALLEL WITH IT TO IMPROVE ITS LOW LOAD FUNCTIONALITY. AND THAT WILL SERVE THE BUILDING AND THE REST OF THE CAMPUS. WE'RE IN A -- OUR CLIMATE IS HIGHLY VARIABLE. SOMETIMES HAVE A HIGH COOLING LOAD, AND A LOT OF THE TIME WE DON'T BECAUSE IT'S SAN FRANCISCO, COUPLE MILES FROM THE OCEAN.

SO WE'RE ACTUALLY INVESTING ABOUT $5 MILLION IN THAT ENHANCEMENT TO THE CENTRAL PLANT. IF WE WERE TO BUILD A STAND-ALONE PLANT FOR THIS BUILDING, WE WOULD HAVE TWO CHILLERS AND TWO BOILERS FOR REDUNDANCY, AND THE CHILLERS WERE ESTIMATED AT ABOUT $7 MILLION AND THE BOILERS AT ABOUT $6 MILLION. NOW, REMEMBER, THIS IS A DIFFICULT SITE TO BUILD ON, AND SO WE WOULD HAVE TO MAKE PROVISION INSIDE THE BUILDING FOR THIS OR WRECK OUR ROOFSCAPE. SO THIS IN AND OF ITSELF IS MORE EXPENSIVE THAN IF IT WERE IN A MORE CONVENTIONAL BUILDING.

CHAIRMAN LICHTENGER: I'M SORRY. I'M STRUGGLING ON THIS UTILITY ISSUE. SO MY QUESTION FOR YOU IS THAT EXISTING UTILITY, YOU'RE PUTTING $17 MILLION MORE RELATED TO CIRM INTO IT?

MR. BADE: NO. THE $17 MILLION IS SITE DEVELOPMENT.

CHAIRMAN LICHTENGER: $14 MILLION.

MR. BADE: NO. NO. WE'RE ACTUALLY -- WE HAVE A PARALLEL INVESTMENT IN THE CENTRAL PLANT THAT'S SERVING THE CIRM PROJECT AND OTHER BUILDINGS ON CAMPUS. IT'S ABOUT A $5 MILLION INVESTMENT. WE HAVE PLENTY OF CAPACITY IN THE CENTRAL PLANT. WE'RE IMPROVING ITS FUNCTIONALITY IS WHAT WE'RE DOING. THAT'S WHY, WHEN WE PUT OUR APPLICATION IN, WE DIDN'T REALLY INCLUDE THAT IN THE COST OF THE BUILDING.

CHAIRMAN LICHTENGER: I'M REALLY STRUGGLING NOW. SO 5 MILLION OR 14 MILLION? I WANT TO KNOW HOW MUCH MONEY IS BEING PUT FOR THE CIRM -- THAT'S GOING INTO SUPPORT CIRM ON THIS UTILITY.

MR. BADE: THAT'S HARD TO ANSWER.

MR. KLEIN: COULD I ASK A LITTLE BIT DIFFERENT QUESTION? IF YOU SIZE THAT PLANT AND THAT PLANT IS GOING TO SERVE THIS FACILITY, AND YOU DID A PRO RATA ALLOCATION OF THAT PLANT BASED ON NORMALIZED COSTS, FORGETTING YOUR OSHPD BECAUSE WE DON'T NEED AN OSHPD FOR THIS BUILDING, SO ON A NORMALIZED BASIS, WHAT'S THE PRO RATA ALLOCATION OF COST OF THIS BUILDING? AND IF IT TAKES A MINUTE TO COME UP WITH IT, YOU COULD COME BACK WITH A FIGURE LATER. IT'S A TOUGH QUESTION. I WANT YOU TO HAVE THE CHANCE TO THINK ABOUT IT IF YOU NEED TO.

MR. BADE: IT GETS INTO THE ARCANA OF CENTRAL PLANT CAPACITY ALLOCATIONS, WHICH IS A VERY COMPLEX SUBJECT. ON A PEAK LOAD BASIS, THE CHILLED CAPACITY OF THE -- OR THE CHILLED WATER DEMAND FOR THE CIRM IS ABOUT SEVEN -- 6, 7 PERCENT OF THE PLANT CAPACITY.

MR. KLEIN: SO, MR. CHAIRMAN, I WOULD SUGGEST THAT IF HE HAS A CHANCE TO JUST, AFTER THE REST OF THESE QUESTIONS, TO SIT DOWN AND THINK ABOUT HOW TO ALLOCATE THIS, WHETHER 6 OR 7 PERCENT, AND COME BACK WITH A NUMBER THAT DOESN'T HAVE THE EXCESS OSHPD OVERLAY, WE'D PROBABLY GET A NUMBER CLOSER TO SOME OF THESE OTHER NUMBERS.

CHAIRMAN LICHTENGER: I MAY BE ASKING A DIFFERENT QUESTION THAN BOB IS, BUT BASICALLY I WANT TO UNDERSTAND A BREAKOUT OF ANY ADDITIONAL UPGRADES THAT ARE REQUIRED THAT YOU ARE PUTTING INTO THE PLANT THAT ARE RELATED TO CIRM. DOES THAT MAKE SENSE TO EVERYONE?

MR. BADE: YEP.

CHAIRMAN LICHTENGER: DO WE HAVE ANY OTHER QUESTIONS? I KNOW WE HAD ONE ABOUT SHARED RESOURCES.

VICE CHAIRMAN SERRANO-SEWELL: IT IS OSHPD REGULATED, RIGHT?

MR. BADE: THE CENTRAL PLANT.

VICE CHAIRMAN SERRANO-SEWELL: YES. ONE CAN THEORETICALLY SEPARATE IT AND DICE IT ALL WE WANT. AT THE END OF THE DAY, IN REALITY IT IS OSHPD REGULATED BECAUSE IT'S PART OF THE HOSPITAL; IS THAT RIGHT?

MR. BADE: IT SERVES BOTH THE RESEARCH INFRASTRUCTURE AND THE HOSPITAL, WHICH IS WHY IT HAD TO BE OSHPD REGULATED, WHICH IS ALL CONNECTED IN A 15-STORY MEGA STRUCTURE.

VICE CHAIRMAN SERRANO-SEWELL: RIGHT. ON PARNASSUS. I WAS THERE YESTERDAY. SO I MEAN IT IS WHAT IT IS. I THINK WHAT BOB'S SUGGESTING IS INTERESTING, BUT WE HAVE TO KEEP IN MIND THAT IT IS OSHPD REGULATED. THAT IS ONE OF THE UNIQUE FEATURES OF THIS APPLICATION.

MR. KLEIN: DAVID, MAYBE HE COULD GIVE US THE TRUE COST ALLOCATION WITH AND WITHOUT THE OSHPD OVERLAY, AND THEN INDIVIDUALS CAN LOOK AT IT.

CHAIRMAN LICHTENGER: RICK, I HAVE A QUESTION FOR YOU RELATED TO THIS. WAS THIS AMOUNT FOR UTILITIES AS PROPOSED NEW DOLLARS TO UPGRADE, OR IS THIS -- THIS IS MONEY THAT WAS PREVIOUSLY SPENT?

MR. KELLER: WE ASKED THE INSTITUTIONS, AND WE GAVE THEM ABOUT SIX HOURS TO RESPOND TO THE QUESTION, WAS WHAT IS THE VALUE OF THE CENTRAL GENERATING CAPACITY THAT IS BEING COMMITTED TO THE CIRM-FUNDED PROJECT.

CHAIRMAN LICHTENGER: VALUE.

DR. HALME: WE PROVIDED THE COST SAVINGS. SO IF YOU HAD TO PROVIDE THIS CAPACITY IN THE BUILDING, THEN WE ESTIMATE IT WOULD HAVE COST AN ADDITIONAL $14 MILLION. WE THOUGHT THAT WAS THE QUESTION. I DON'T KNOW WHAT THE OTHER APPLICANTS THOUGHT THE QUESTION WAS, SO I'M NOT SURE WHAT THOSE NUMBERS ARE EITHER. I REALIZE OURS ARE MUCH HIGHER; BUT GIVEN OUR ASSESSMENT, AND MICHAEL CAN GIVE YOU THE BREAKDOWN OF 7 MILLION FOR THE CHILLERS, ETC., AND THAT'S HOW WE DERIVED THAT NUMBER.

CHAIRMAN LICHTENGER: BUT THE UTILITY EXISTS TODAY, AND YOU'RE NOT HAVING TO SPEND THE MONEY, CORRECT?

MR. BADE: THAT'S CORRECT.

CHAIRMAN LICHTENGER: SO THERE IS NO NEW COST THAT'S BEING INCURRED TO SUPPORT THE CIRM FACILITY. THAT'S MY QUESTION.

MR. BADE: WE'RE SPENDING ABOUT $5 MILLION TO SUPPORT THE CIRM FACILITY IN SOMETHING THAT REALLY AMOUNTS TO A FUNCTIONALITY UPGRADE OF THE CENTRAL PLANT. IT'S NOT IN STRAIGHT CAPACITY.

CHAIRMAN LICHTENGER: SO NOW THIS $5 MILLION IS TO UPGRADE THE WHOLE FACILITY OR JUST THE PORTION FOR CIRM, OR IS THAT THE ALLOCATED COST FOR CIRM?

MR. BADE: THAT'S THE ALLOCATED COST FOR CIRM.

CHAIRMAN LICHTENGER: SO THE 5 MILLION IS NEW DOLLARS IN SUPPORT OF THE CIRM FACILITY.

MR. BADE: RIGHT.

CHAIRMAN LICHTENGER: THANK YOU. I THINK I FINALLY UNDERSTAND THE UTILITIES.

MR. BADE: I DON'T.

MS. HYSEN: ISN'T YOUR UTILITIES MORE COMPLICATED BY THE FACT YOUR ROOFS ARE ALL GREEN?

MR. BADE: IT MADE IT -- IT MAKES IT DIFFICULT TO DO THE NORMAL THING, WHICH IS TO PLUNK THE PLANT EQUIPMENT ON THE ROOFS. WE DIDN'T WANT TO DO THAT. WE WANTED TO MAKE IT A PLACE THAT WOULD ENHANCE THE BUILDING.

MS. HYSEN: THERE'S A COST ASSOCIATED WITH THAT?

MR. BADE: THERE WOULD BE IF WE WERE GOING TO INCORPORATE THE PLANT INTO THE BUILDING. WE'D HAVE TO UNDERSLUNG IT, AND THAT GETS VERY EXPENSIVE BECAUSE IT BECOMES DIFFICULT TO CONSTRUCT.

MS. HYSEN: THANK YOU.

CHAIRMAN LICHTENGER: SO I KNOW I HAD A QUESTION ABOUT SHARED RESOURCES WITH OTHER INSTITUTIONS. CAN SOMEONE COMMENT TO YOUR CURRENT AGREEMENTS WITH OTHER INSTITUTIONS AND PLANS?

DR. KRIEGSTEIN: SURE. SO WE HAVE MULTIPLE LEVELS OF COLLABORATION WITH INSTITUTIONS LOCALLY AND, OF COURSE, AT GREAT DISTANCES. WITHIN SAN FRANCISCO, OF COURSE, THE GLADSTONE INSTITUTIONS, AND WE COLLABORATE VERY EXTENSIVELY AND WE HAVE AGREEMENTS FOR COLLABORATION THERE. SAN FRANCISCO STATE AS WELL, WE TRAIN STEM CELL TECHNICIANS IN OUR STEM CELL COURSE. WE HAVE A RELATIONSHIP WITH THE UNIVERSITY OF BERKELEY WHEN IT COMES TO TECHNOLOGY AND BUYING MATERIALS. THERE'S JUST A WHOLE RANGE OF NETWORKS OF COLLABORATIONS, BOTH INDIVIDUAL TO INDIVIDUAL AND INSTITUTION TO INSTITUTION THAT SUPPORT THE INFRASTRUCTURE AT UCSF, AND OUR STEM CELL PROGRAM AS WELL.

MR. KLEIN: IN TERMS OF THE 17 MILLION, IN MY INTERIM COMMENTS, I HAD ADVOCATED THAT IT APPEARED TO ME YOU HAD UNDERSOLD YOUR LEVERAGE. AND AS I UNDERSTAND IT, THAT IS REAL COST ALLOCATED TO THIS SITE FOR SITE DEVELOPMENT AND LANDSCAPING. SO FROM MY PERSPECTIVE, IT VERY CLEANLY FITS WITHIN OUR RULES AND SHOULD GO DIRECTLY INTO LEVERAGE. IS THAT WHAT THAT COST IS?

MR. BADE: THAT IS.

CHAIRMAN LICHTENGER: DO WE HAVE ANY MORE QUESTIONS FOR THE APPLICANTS?

MR. KASHIAN: I DON'T HAVE A QUESTION. I HAVE A REQUEST. I DON'T HAVE A QUESTION, BUT I HAVE A REQUEST. DEBORAH INVITED HERSELF TO THE OPENING. I WAS WONDERING IF YOU COULD EXTEND TWO INVITATIONS. I'D LIKE TO SEE IT AS WELL.

MR. BADE: WE WOULD BE DELIGHTED.

MR. KLEIN: MR. CHAIRMAN, COULD WE FIND OUT IN CAPACITY HOW MANY TOTAL RESEARCHERS WOULD BE IN THIS BUILDING? WHAT IS YOUR ESTIMATE?

DR. HALME: IF YOU INCLUDE PRINCIPAL INVESTIGATORS, IT'S 245. IF YOU DO NOT, IT'S 220. AND IF YOU INCLUDE THE BACKFILL SPACE, WHICH I KNOW IS CONTROVERSIAL, BUT I'LL PROVIDE THE NUMBER ANYWAY, THAT WOULD BE AN ADDITIONAL 18 PI'S, WHICH WOULD BRING US TO A TOTAL OF 421 RESEARCHERS.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. THANK YOU FOR ANSWERING MY QUESTIONS. I ACTUALLY THINK I NOW UNDERSTAND ON UTILITIES.

DR. KRIEGSTEIN: I WONDER IF I COULD JUST MAKE ONE VERY BRIEF STATEMENT, WHICH IS THAT, AS ONE OF THE SCIENTISTS WHO WILL LIVE IN THIS BUILDING, I JUST WANT TO LET EVERYONE KNOW THAT THIS DESIGN OF THE SITE SELECTION, THE RELATIONSHIP TO THE ENVIRONMENT, EVERY ASPECT OF THIS BUILDING WAS REALLY DICTATED BY THE SCIENCE AND NOT BY ANY OTHER CONSIDERATION. THAT'S PART OF THE REASON WHY THE SITE IS SO CHALLENGING. I THINK, AS YOU ALL MENTIONED, I THINK WE HAD A CHALLENGE TO OVERCOME, AND I'M VERY GRATEFUL TO THE ARCHITECTURE AND FOR THE BUILDING ITSELF. AND I CERTAINLY AM LOOKING FORWARD TO MOVING IN MYSELF.

CHAIRMAN LICHTENGER: THANK YOU.

MR. KLEIN: I'D ALSO LIKE TO SAY I DO APPRECIATE THE DATA ON THE BACKFILL SPACE BECAUSE I DO THINK IT'S A UNIQUE CONTRIBUTION AND HAS A VALUE ASPECT. JUST THE QUESTION IS TO HOW WE LOOK AT IT IN TERMS OF THE OVERALL SCORING.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. SO I'D LIKE TO, BEFORE WE TAKE ANY PUBLIC COMMENT, I'D JUST LIKE TO SAY I PERSONALLY AM VIEWING IT, I DON'T KNOW HOW WE HANDLE THIS, RICK, BUT I THINK THAT WE NEED TO ADJUST THE NEW LEVERAGE NUMBER DOWN.

MR. KELLER: EASILY DONE.

CHAIRMAN LICHTENGER: I MOVE -- DO WE NEED A MOTION? MY MOTION IS THAT WE REDUCE THE UCSF LEVERAGE ON UTILITIES DOWN TO 5 MILLION. DO I HAVE A SECOND?

MR. KLEIN: I'LL DO A SECOND.

CHAIRMAN LICHTENGER: SO I GUESS WE HAVE TO HAVE A VOTE NOW. ALL THOSE IN FAVOR SAY AYE.

MS. PACHTER: MIGHT WANT TO DO A ROLL CALL.

CHAIRMAN LICHTENGER: WANT TO DO CALL ROLL,PLEASE.

MS. PACHTER: DEBORAH HYSEN.

MR. HYSEN: ABSTAIN. I FEEL THERE'S STILL A LACK OF CLARITY IN MIND ABOUT WHAT WAS ASKED AND WHAT WAS RESPONDED TO BY THE CANDIDATE.

MS. PACHTER: EDWARD KASHIAN.

MR. KASHIAN: I'M IN THE SAME CATEGORY AS DEBORAH. I DON'T QUITE UNDERSTAND WHAT'S BEING TALKED ABOUT.

MS. PACHTER: ROBERT KLEIN.

MR. KLEIN: AYE.

MS. PACHTER: STUART LAFF.

MR. LAFF: YES.

MS. PACHTER: DAVID LICHTENGER.

CHAIRMAN LICHTENGER: YES.

MS. PACHTER: DAVID SERRANO-SEWELL.

VICE CHAIRMAN SERRANO-SEWELL: NO.

MS. PACHTER: JANET WRIGHT.

DR. WRIGHT: NO.

MS. PACHTER: IT DOES NOT CARRY.

MR. KLEIN: MR. CHAIRMAN, IS THERE -- WE HAVE TWO MEMBERS THAT SAY THEY DON'T HAVE SUFFICIENT INFORMATION. IS THERE GOING TO BE A MOTION TO INCLUDE THE 14 MILLION? OR, IN FACT, DO WE NEED TO ASK THE APPLICANT ADDITIONAL INFORMATION SO THAT WE CAN ACTUALLY HAVE A VOTE THAT WE KNOW WHERE WE'RE AT?

MS. PACHTER: IF I CAN MAKE A SUGGESTION.

CHAIRMAN LICHTENGER: PLEASE.

MS. PACHTER: ALL OF YOU ARE GOING TO TAKE ALL THE DIFFERENT INFORMATION THAT'S GIVEN TO YOU AS A DATA POINT. AND I DON'T KNOW IF IT'S NECESSARY FOR YOU TO DECIDE WHAT'S GOING TO BE IN LEVERAGE OR NOT SINCE ULTIMATELY ALL YOU ARE GOING TO DECIDE IS A SCORE. YOU MIGHT WANT TO THINK ABOUT THAT.

MR. KLEIN: I DON'T THINK THAT'S APPROPRIATE WHEN THIS IS SUCH A LARGE NUMBER. IT JUST DOESN'T PASS MUSTER. I WOULD ASK THE INDIVIDUALS, DEBORAH AND ED, WHO SAID THEY DON'T HAVE SUFFICIENT INFORMATION, WOULD A CLARIFICATION OF THIS $5 MILLION HELP YOU?

MS. HYSEN: WELL, IT'S NOT THAT -- I THINK THEY'VE ADEQUATELY EXPLAINED IT. I'M JUST WONDERING IF THE QUESTION THAT WAS ASKED IS CLEAR IN EVERY APPLICANT'S MIND, THAT THEY RESPONDED UNIFORMLY. AND I DON'T GET THAT SENSE. VALUE IS DIFFERENT THAN COST. AND SO IT SEEMS TO ME PERHAPS WE DIDN'T ASK A CLEAR ENOUGH QUESTION. AND IT JUST HAPPENS TO BE IN UCSF'S APPLICATION RIGHT NOW, BUT I'M WONDERING IF THAT QUESTION WAS CLEARLY ASKED OF ALL OF THE CANDIDATES.

CHAIRMAN LICHTENGER: HOW ABOUT WE -- MAYBE WE CAN HAVE UCSF ANSWER -- TO COME BACK UP FOR A MOMENT.

MS. HYSEN: IT MIGHT EVEN BE HELPFUL TO POLL THE APPLICANTS ON THIS QUESTION.

CHAIRMAN LICHTENGER: RICK, CAN WE TALK ABOUT OUR DEFINITION ON UTILITIES SO THAT -- AND MAYBE UCSF CAN HELP ENLIGHTEN US TO WHAT THE RIGHT NUMBER IS.

MS. HYSEN: RICK, PERHAPS YOU CAN REPHRASE THE QUESTION THAT WAS ASKED OF THEM SO I CAN UNDERSTAND WHAT THAT QUESTION WAS.

CHAIRMAN LICHTENGER: I THINK, RICK, IF IT'S OKAY, I WANT TO TRY TO PARAPHRASE IT. SO WE WERE ASKING THE APPLICANTS ABOUT ANY COSTS INCURRED ON-SITE, CORRECT, RICK, NOT OFFSITE?

MR. KLEIN: WHY DON'T WE DO THIS. WE COULD GO FORWARD AND HE CAN FIND THE E-MAIL, GIVE HIM SOME TIME TO FIND IT, SO WE CAN HEAR THE EXACT QUESTION. THAT GIVES US AN OBJECTIVE BASIS.

MR. KELLER: OH, I HAVE SEVERAL COPIES HERE. SO WHAT I ASKED FOR WAS WILL THE CIRM-FUNDED PROJECT DRAW FROM CENTRAL ENERGY GENERATING RESOURCES ON YOUR CAMPUS?

MR. BADE: ANSWER IS YES.

MR. KELLER: INDICATING ELECTRICAL GENERATION, STEAM, OR HOT WATER PLANT, OR CHILLED WATER. IF YES, CAN YOU PROVIDE AN ESTIMATE OF THE CAPITAL VALUE OF THE PORTION OF GENERATING CAPACITY THAT IS BEING COMMITTED TO THE CIRM-FUNDED PROJECT?

MR. BADE: I THINK WE MISUNDERSTOOD THE QUESTION ORIGINALLY. AND WE ANSWERED IT IF WE WERE GOING TO HAVE TO BUILD THAT CAPACITY IN THE BUILDING. BUT I THINK THE QUESTION IS ASKING WHAT IS THE FRACTIONAL VALUE OF THE CENTRAL PLANT THAT'S DEVOTED TO THE CIRM BUILDING? IS THAT THE SENSE OF THE COMMITTEE?

CHAIRMAN LICHTENGER: YES.

MR. BADE: THAT'S NOT A QUESTION I CAN ANSWER OFF THE TOP OF MY HEAD BECAUSE WE HAVE 13 MEGAWATTS OF GENERATING CAPACITY, WE HAVE 5,000 TONS OF CHILLED WATER, WE HAVE X AMOUNT OF STEAM. AND SO WE HAVE TO LOOK AT EACH SYSTEM AND DO A POLYNOMIAL CALCULATION AND COME UP WITH A COMPOSITE ANSWER. SO ON THE BASIS OF CHILLED WATER, IT'S ABOUT 6 OR 7 PERCENT. IT'S 400 TONS OF 5,000 TONS, BUT IT'S DIFFERENT FOR POWER AND IT'S DIFFERENT FOR STEAM.

CHAIRMAN LICHTENGER: THAT'S GREAT. I THINK I UNDERSTAND WHERE THE PROBLEM LIES. I THINK I WAS THINKING ABOUT A DIFFERENT QUESTION THAN WE ASKED. I THINK I WAS -- I WAS THINKING ABOUT WHAT WAS ANY ADDITIONAL COST THAT MIGHT HAVE BEEN INCURRED ON BEHALF OF THE PROJECT.

MR. BADE: WE WERE MAKING THIS INVESTMENT IN THE CENTRAL PLANT, BUT WE DIDN'T CREDIT THE PROJECT WITH IT IN OUR APPLICATION. WE WERE SILENT ON THAT. SO WE'RE TRYING TO ANSWER THE COMMITTEE'S QUESTIONS AS BEST WE CAN.

CHAIRMAN LICHTENGER: I UNDERSTAND NOW, I THINK, A LITTLE BIT MORE CLEARLY WHERE THE ISSUE IS. THANKS VERY MUCH.

MR. KLEIN: WHAT YOU ARE GOING TO NEED IS TO GIVE THEM SOME TIME TO COME UP WITH A NUMBER.

CHAIRMAN LICHTENGER: I DON'T THINK WE HAVE THAT TIME, BOB. I DON'T THINK WE HAVE THAT LUXURY. EACH MEMBER OF THE COMMITTEE IS GOING TO HAVE TO TAKE THAT $14 MILLION INTO ACCOUNT HOW THEY VIEW IT. I DON'T THINK WE CAN --

MR. KLEIN: HOW MUCH TIME? HERE'S THE PROBLEM. THIS IS A MAJOR DISTORTION IN THE OTHER FIGURES. YOU COULD ALSO JUST ELIMINATE THE UTILITY COLUMN COMPLETELY FROM ALL APPLICATIONS. BUT THE PROBLEM HERE IS IF YOU DON'T HAVE THE CONSISTENCY BETWEEN THESE APPLICATIONS, THIS IS GOING TO CREATE A DISTORTION.

CHAIRMAN LICHTENGER: I UNDERSTAND. I AGREE WITH THAT.

VICE CHAIRMAN SERRANO-SEWELL: I JUST WANTED TO ECHO YOUR COMMENTS, DAVID. I KNOW WE CAN -- I BET IF I WENT THROUGH CATEGORY BY CATEGORY, BOB, I COULD SAY, WELL, WE ASKED THAT QUESTION DIFFERENTLY, AND HOW DID THEY ANSWER, AND ARE WE BEING CONSISTENT? RICK, PUT THAT CHART UP AGAIN. I WANT TO SEE IT. CALCULATE IT THIS WAY. WE CAN COME UP WITH MULTIPLE DIFFERENT ANALYSES OF EACH DATA POINT.

I AGREE WITH YOU, DAVID. WE'VE ASKED THE QUESTION. THE APPLICANTS ANSWERED TO THE BEST THEY COULD, THE BEST THEY COULD UNDERSTAND THE ANSWER. I THINK THEY'VE DONE A GOOD JOB. NOW IT'S TIME FOR US TO SCORE, AND WE OUGHT TO DO THAT. UNFORTUNATELY, BOB, I JUST DON'T FEEL LIKE WE HAVE THE LUXURY TO GET THIS INFORMATION RIGHT NOW. QUITE FRANKLY, I DON'T KNOW IF IT'S GOING TO HAVE A BEARING ON THE SCORE ONE WAY OR THE OTHER, SO I PROPOSE WE MOVE ON.

CHAIRMAN LICHTENGER: I AGREE WITH YOU.

MS. HYSEN: CAN I JUST SAY ONE THING TO THE DAVIDS?

CHAIRMAN LICHTENGER: CAN WE ALLOW THE APPLICANT TO SIT DOWN UNLESS WE HAVE MORE QUESTIONS?

MS. HYSEN: THERE MAY BE A QUESTION. I THINK YOU'RE RIGHT. I THINK THAT EACH QUESTION COULD BE PERHAPS VIEWED DIFFERENTLY. THE FACT THAT WE GAVE THE APPLICANTS SIX HOURS, ADMITTEDLY STATED BY THE STAFF, ON SOMETHING AS UNDEFINED AS WHAT IS VALUE, CLEARLY A VERY SOPHISTICATED INSTITUTION THAT'S USED TO PRODUCING GRANT INFORMATION DID NOT SEE CLARITY IN THIS QUESTION, AND ADMITTED THAT THEY MAY NOT HAVE UNDERSTOOD THE QUESTION CORRECTLY. SO I THINK THAT IT IS AN ISSUE. I DON'T KNOW THAT WE HAVE THE TIME TO RESOLVE IT TODAY. I HATE TO DISCOUNT THE FACT THAT THEY'RE UTILIZING EXISTING CAPACITY OFFSITE. COGENS, THAT'S A VERY IMPORTANT ENVIRONMENTAL EFFORT. I HATE TO DISCOUNT THAT ENTIRELY, BUT I DO THINK THAT, SINCE WE GAVE THEM SUCH A SHORT AMOUNT OF TIME, AND OUR FIRST RESPONDENT THAT WE'VE ACTUALLY ASKED THIS QUESTION DIDN'T SEEM TO UNDERSTAND IT. AND I THINK THE FACT THAT WE'RE ALL PERHAPS UNCLEAR ON IT, I'M JUST CONCERNED THAT ONE WAY OR THE OTHER WE ADDRESS IT, BUT I THINK THERE'S CLEARLY SOME INCONSISTENCY THAT WE --

MR. KLEIN: SO I WOULD MAKE A MOTION THAT WE ELIMINATE ALL OF THESE ADDITIONAL UTILITIES WHICH WERE NOT DIRECTLY ASKED FOR IN THE APPLICATION. AND BEFORE WE GO TO THE BOARD MEETING, WE CAN GIVE THEM PLENTY OF TIME WITH SOME VERY PRECISE DEFINITION AND GET A FINAL ANSWER TO THE QUESTION. BUT AT THIS POINT I DON'T THINK WE HAVE THE INFORMATION TO INCLUDE UTILITIES IN ADDITION TO LEVERAGE.

CHAIRMAN LICHTENGER: THANK YOU. THANKS AGAIN. SO, RICK, I HAVE A QUESTION FOR YOU, BOB, BEFORE I ADDRESS THIS. RICK, WHAT WERE THE OTHER APPLICANTS THAT HAD ADDITIONAL DOLLARS? I KNOW DAVIS HAD DOLLARS ON UTILITY.

MR. KELLER: THEY'RE LISTED IN THE TABLE: STANFORD, DAVIS, UC IRVINE. AND THEN IT'S FOOTNOTED TO INDICATE WHERE THERE WERE OTHER INDICATIONS SUCH AS THE SHELL SPACE CORRECTION AT IRVINE. WE WERE JUST, AGAIN, TAKING ACCOUNT OF THE FACT THAT THEY WERE GIVEN A VERY SHORT TIMEFRAME, AND IN RESPONSE TO REQUESTS FOR THIS INFORMATION FROM REVIEWERS, THE INFORMATION WAS ACCUMULATED.

MR. KLEIN: ORIGINALLY ONLY TWO OF THE APPLICANTS HAD THIS UTILITY FIGURE.

CHAIRMAN LICHTENGER: SO I GUESS I WOULD AGREE FOR --

MR. KLEIN: I HAVE A MOTION. THE QUESTION IS, IS THERE A SECOND AS A POINT OF ORDER?

DR. WRIGHT: I'LL SECOND IT.

MR. KASHIAN: I THOUGHT SOMEBODY ASKED ME MY OPINION ABOUT A HALF HOUR AGO.

CHAIRMAN LICHTENGER: GO AHEAD.

MR. KASHIAN: I SEE THE QUESTION OF BEING OSHPD CORRECTED OR NOT CORRECTED AS BEING IRRELEVANT. IT IS WHAT IT IS. THE QUESTION REALLY IS IF THEY DO BUILD A NEW POWER PLANT JUST TO SERVE THIS BUILDING, HOW MUCH WOULD THAT COST? AND I'M NOT SURE, GIVEN THE AMOUNT OF DOLLARS WE'RE TALKING ABOUT, THAT IT'S RELEVANT.

I ALSO BELIEVE THAT, FOR WHATEVER REASON, WE HAVE TO ASSUME BOTH OUR STAFF AND THE APPLICANTS ARE INTELLECTUALLY HONEST AND ARE GIVING THEIR BEST OPINIONS. I PERSONALLY DON'T LIKE GETTING MANIPULATED WITH MY OPINION ABOUT THAT KIND OF A QUESTION. I BELIEVE THAT THIS BELONGS IN EXECUTIVE SESSION WHERE WE CAN TALK IT OUT IN DETAIL.

CHAIRMAN LICHTENGER: THANK YOU, ED. ANY OTHER COMMENTS? WE HAVE A MOTION ON THE FLOOR. IF WE HAVE NO OTHER COMMENTS, WE'LL TAKE A VOTE.

MR. KLEIN: JUST AS A POINT, WE'RE NOT ALLOWED TO -- THIS IS NOT A SUBJECT WE CAN COVER IN EXECUTIVE SESSION. SO JUST BECAUSE OF THE RULES THE STATE OPERATES UNDER, WE CAN ONLY TALK ABOUT THIS ISSUE IN THIS CONTEXT.

THE MOTION IS TO TAKE -- SINCE THERE APPEARS TO BE CONFUSION AS TO THIS ITEM IS TO ELIMINATE THE UTILITY ITEM AT THIS TIME. BEFORE WE GO TO THE BOARD, WE'LL HAVE SOME VERY REFINED QUESTIONS AND TRY AND GET CONSISTENT ISSUES SO THAT AT THE BOARD WE COULD LOOK AT THIS AS ADDITIONAL LEVERAGE.

CHAIRMAN LICHTENGER: I HAVE A QUESTION. BOB,ARE YOU SUGGESTING ALSO ABOUT UCSF'S LEVERAGE ABOUT THE OTHER DOLLARS?

MR. KLEIN: THE OTHER DOLLARS APPEAR TO BE COMPLETELY WITHIN OUR DEFINITION.

CHAIRMAN LICHTENGER: FINE.

VICE CHAIRMAN SERRANO-SEWELL: MY FOLLOW UP QUESTION, BOB, IS, MAKE SURE I UNDERSTAND IT A HUNDRED PERCENT. SO YOU'RE SAYING -- OKAY. SO THE QUESTION THAT MR. KELLER POSED VIA E-MAIL IN WHICH THE APPLICANTS HAD SIX HOURS TO ANSWER, WE'RE WIPING THAT OUT FOR ALL THE APPLICANTS?

MR. KLEIN: FOR ALL THE APPLICANTS.

CHAIRMAN LICHTENGER: FOR UTILITIES.

VICE CHAIRMAN SERRANO-SEWELL: WE'RE RETRACTING THAT ANSWER.

MR. KLEIN: WE ARE NOT GOING TO COUNT THAT AS ADDITIONAL LEVERAGE AT THIS LEVEL IN THIS COMMITTEE. BECAUSE WE --

VICE CHAIRMAN SERRANO-SEWELL: WHAT SORT OF GUIDANCE ARE WE GOING TO PROVIDE TO THE FULL ICOC IN MAY? THEY'LL LOOK TO US FOR SOME --

CHAIRMAN LICHTENGER: I THINK OUR GUIDANCE TO THEM SHOULD BE TO GIVE THE STAFF AND THE APPLICANTS ADEQUATE TIME TO HAVE A WELL-DEFINED DEFINITION THAT EVERYONE CAN RESPOND TO, AND WE CAN CONSIDER IT AS LEVERAGE AT THAT POINT IN TIME.

VICE CHAIRMAN SERRANO-SEWELL: AS A PART OF YOUR MOTION, I WOULD FEEL MORE COMFORTABLE IF WE DELEGATED THE AUTHORITY TO ASK THAT QUESTION TO THE PRESIDENT. I DON'T FEEL CONFIDENT WITH THAT QUESTION BEING DELEGATED TO ANY ICOC MEMBER OR WORKING GROUP MEMBER.

MR. KLEIN: I WILL AMEND MY MOTION TO INCLUDE --

VICE CHAIRMAN SERRANO-SEWELL: IF THAT'S ACCEPTABLE TO THE PRESIDENT. I'D FEEL MORE COMFORTABLE, ALAN, IF THAT ISSUE RESTED WITH YOU BECAUSE THAT'S JUST MY OPINION. AS PRESIDENT, AS THE CHIEF EXECUTIVE OF THE INSTITUTE, AND DEALING WITH A COMPLICATED ISSUE HERE SORT OF, YOU'VE HEARD ALL THE TESTIMONY, I HAVE A COMFORT LEVEL, AND I THINK THE OTHER ICOC MEMBERS WOULD TOO IF THE QUESTION CAME FROM YOUR OFFICE.

MR. KLEIN: YOU'RE ASKING HIM TO DIRECT STAFF?

VICE CHAIRMAN SERRANO-SEWELL: AS YOU SEE FIT.

DR. TROUNSON: YOU KNOW, I THINK THAT'S FINE. I JUST WANT ABSOLUTE CLARITY ABOUT WHAT YOU THINK WE SHOULD BE ASKING IN THIS REGARD BECAUSE I THINK --

VICE CHAIRMAN SERRANO-SEWELL: WE DON'T KNOW. THAT'S PART OF THE PROBLEM.

DR. TROUNSON: THAT'S A LITTLE BIT OF THE PROBLEM.

CHAIRMAN LICHTENGER: I THINK THERE ARE TWO QUESTIONS. I AGREE WITH YOU, ALAN.

DR. TROUNSON: IF THERE ARE TWO, IF WE COULD GET THEM PRECISELY, THEN I THINK WE CAN ACCOMMODATE. IF WE GO ASK THE QUESTION AGAIN, THAT SAME QUESTION, WE'LL PROBABLY END UP WITH FURTHER CONFUSION. SO IF YOU COULD BE MORE PRECISE THE QUESTION OR TWO QUESTIONS, AND THEN WE WILL DO THEM.

MR. KLEIN: MR. CHAIRMAN, IF WE COULD HAVE A VOTE ON THE MOTION, AND THEN WE CAN HAVE A DISCUSSION OF THE DIRECTION TO THE STAFF.

MS. PACHTER: IF I CAN MAKE A SUGGESTION, I WOULD SUGGEST THAT THE MOTION THAT MEMBER KLEIN MADE ORIGINALLY TO ELIMINATE ALL UTILITIES FROM THE CALCULATION OF LEVERAGE IN EACH APPLICATION, AND THEN YOU CAN GIVE DIRECTION TO THE PRESIDENT SEPARATELY. YOU DON'T NEED TO PUT IT IN THE MOTION.

CHAIRMAN LICHTENGER: BUT ARE WE TALKING ABOUT,BOB, ON YOUR MOTION ALL UTILITIES OR ALL NEW UTILITIES THAT WE HAD RESPONSES?

MR. KLEIN: I THINK JUST TO HAVE A FAIR AND EQUAL PLAYING FIELD FOR EVERYONE, IF WE TAKE -- THESE ARE UTILITY COSTS OUTSIDE THE BUILDING. THESE ARE CENTRAL PLANT UTILITIES. THAT'S THE QUESTION. SO WE'RE ELIMINATING ALL CENTRAL PLANT UTILITIES AS ADDITIONAL LEVERAGE.

CHAIRMAN LICHTENGER: OKAY. SO I THINK WE UNDERSTAND THE QUESTION NOW. SO LET'S CALL ROLL ON THIS.

MS. PACHTER: DEBORAH HYSEN.

MS. HYSEN: FOR CLARITY, THE MOTION WILL NOT INCLUDE THE DIRECTION TO THE PRESIDENT, BUT --

MS. PACHTER: THAT'S RIGHT. LET ME REPEAT THE MOTION SO EVERYBODY UNDERSTANDS. THE MOTION IS TO ELIMINATE ALL UTILITIES FROM THE CALCULATION OF LEVERAGE IN EACH APPLICATION.

MR. KLEIN: ALL CENTRAL PLANT UTILITIES.

MS. HYSEN: IS THERE GOING TO BE A CAVEAT TO THE MOTION, THAT WE'LL HAVE THE PRESIDENT DECIDE ON --

MR. KLEIN: THAT'S AN UNDERSTANDING THAT WE'LL IMMEDIATELY GO TO THAT ITEM.

MS. HYSEN: THEN AYE.

MS. PACHTER: ED KASHIAN.

MR. KASHIAN: A RELUCTANT AYE.

MS. PACHTER: ROBERT KLEIN.

MR. KLEIN: AYE.

MS. PACHTER: STUART LAFF.

MR. LAFF: NO.

MS. PACHTER: DAVID LICHTENGER.

CHAIRMAN LICHTENGER: YES.

MS. PACHTER: DAVID SERRANO-SEWELL.

VICE CHAIRMAN SERRANO-SEWELL: NO.

MS. PACHTER: JANET WRIGHT.

DR. WRIGHT: YES.

MS. PACHTER: IT PASSES.

VICE CHAIRMAN SERRANO-SEWELL: IF I CAN SPEAK TO THE ISSUE, SINCE I RAISED IT, AND I DON'T KNOW IF I'M THE PERSON TO BRING CLARITY TO THE QUESTION OR QUESTIONS, DR. TROUNSON, BUT THAT'S WHY I WANT TO DELEGATE IT TO YOUR OFFICE. BECAUSE I'M NOT CONFIDENT, WITH ALL DUE

RESPECT TO THE PERSONS THAT ASKED RICK TO ASK THOSE QUESTIONS, THAT WE'RE GOING TO GET CLARITY ON THAT NOW. SO I TRUST ALAN TO SURVEY THE STAKEHOLDERS AND DO WHAT HE DEEMS APPROPRIATE TO ASK THE QUESTION OR QUESTIONS. I DON'T WANT TO LIMIT DR. TROUNSON IN HIS ABILITY TO ASK AND DO HIS DUE DILIGENCE TO ASK THAT QUESTION. I DON'T WANT TO GET INTO THE WEEDS THAT WAY BECAUSE WE HAVE OTHER THINGS TO DEAL WITH.

WHAT I WOULD PROPOSE IS THAT WE DELEGATE TO THE PRESIDENT THE AUTHORITY TO ASK THE QUESTION OF THESE CENTRAL UTILITIES IN A WAY THAT THE PRESIDENT DEEMS FIT, TAKING INTO CONSIDERATION THE TESTIMONY HE HEARD TODAY AND ANY OTHER DUE DILIGENCE THE PRESIDENT SEES FIT. LET'S JUST MOVE ON. I KNOW THE ICOC WILL ENDORSE WHATEVER THE PRESIDENT SEES AS THE APPROPRIATE NEXT STEP.

MR. KLEIN: I THINK THAT'S APPROPRIATE.

VICE CHAIRMAN SERRANO-SEWELL: IT'S MORE OF A PHILOSOPHICAL STATEMENT THAN A MOTION. I THINK THAT'S THE BEST WAY TO PROCEED.

CHAIRMAN LICHTENGER: I'M OKAY WITH THAT. I ASSUME, YOU KNOW, THAT HE WILL CONSULT WITH THE CHAIR OF THE FACILITIES WORKING GROUP. SO THEN I'M GOOD WITH IT. CAN WE NOW TAKE ANY --

MS. PACHTER: I JUST WANTED TO LET THE CHAIR KNOW THAT WE'RE CHECKING, BUT WE DON'T THINK THAT THE

MOTION CARRIED BECAUSE WE THINK WE'RE REQUIRED TO HAVE 65 PERCENT OF A QUORUM, WHICH WOULD BE A VOTE OF SIX, AND WE HAVE A VOTE OF FIVE.

MR. KLEIN: 65 PERCENT OF A QUORUM? NO. MR. HARRISON, COULD YOU COMMENT ON THIS, PLEASE?

MR. HARRISON: WE'LL CHECK. A QUORUM IS 65 PERCENT OF THE COMMITTEE. MAJORITY OF A QUORUM.

MR. KLEIN: EXACTLY. YOU NEED A MAJORITY OF THE QUORUM.

MS. PACHTER: THEN IT SHOULD BE FINE. I JUST WANTED TO LET YOU KNOW.

CHAIRMAN LICHTENGER: IT DID CARRY. OKAY. GREAT. SO I CERTAINLY APOLOGIZE FOR US GETTING A BIT OFF TRACK ON THIS UTILITY QUESTION. I HAVE TO TAKE MY SHARE OF RESPONSIBILITY ON IT. SORRY.

SO AT THIS POINT I'D LIKE TO INVITE PUBLIC COMMENT, IF ANY, AND THEN I'D LIKE TO ASK THE COMMITTEE MEMBERS TO SCORE THEIR PRELIMINARY SCORE FOR UCSF.

VICE CHAIRMAN SERRANO-SEWELL: I WOULD SAY -- I WON'T MAKE IT AS A MOTION. YOU GET THE SENSE OF THE COMMITTEE, DR. TROUNSON. I DON'T EVEN KNOW IF I COULD ENCAPSULATE IT ALL IN ONE LONG SENTENCE. SO LET'S JUST FOREGO THE VOTE. YOU SEE THE EXPRESSED WILL OF THE COMMITTEE. IT'S UNANIMOUS AS FAR AS I CAN TELL.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: DO WE NEED TO TAKE A --GIVE OUR TWO-HOUR BREAK FOR A FEW MINUTES?

MR. KELLER: YOU'RE SCHEDULED FOR A MEAL.

CHAIRMAN LICHTENGER: DO WE WANT --

MR. KELLER: SCHEDULED FOR DINNER FIVE MINUTES AGO.

CHAIRMAN LICHTENGER: WELL, THE QUESTION IS DO WE WANT TO TRY TO DO ONE MORE, OR DO WE WANT TO -- HOW IS EVERYONE FEELING? LET'S TRY TO DO ONE MORE. HOPEFULLY THERE WILL BE NO UTILITY QUESTIONS ON THAT.

I DID WANT TO JUST FOR THE RECORD STATE THAT IN SPITE OF THE UTILITY QUESTION, I ABSOLUTELY THOUGHT UCSF'S APPLICATION WAS EXTREMELY STRONG IN EVERY REGARD. JUST TO GO ON THE RECORD WITH THAT.

MR. LAFF: I'D LIKE TO ECHO THAT. AND REGARDLESS OF WHAT COMES OUT, THE SCORE THAT I'M GOING TO GIVE UCSF DOESN'T CHANGE.

CHAIRMAN LICHTENGER: ANYWAY, SO NOW NEXT APPLICATION.

MR. KELLER: NEXT APPLICATION IS 619, USC. THE PROJECT IS CONSTRUCTION OF A NEW FIVE-STORY BUILDING WHICH IS BELOW GRADE CONNECTING TO AN EXISTING MULTISTORY LAB BUILDING. THE LABORATORIES WOULD BE LOCATED ON THE UPPER FLOORS, AND THERE WILL BE A SHELL SPACE BELOW GRADE THAT WOULD BE FINISHED LATER ON INTO A VIVARIUM. IT'S ABOUT 52,000 ASSIGNABLE SQUARE FEET, 87,000 GROSS WITH A TOTAL COST OF $80 MILLION, GROUP II EQUIPMENT IS 2 MILLION 160.

CIRM FUNDING REQUEST IS 37 MILLION. THERE'S A TOTAL OF 18 PRINCIPAL INVESTIGATORS, 15 AT THE INSTITUTION AND THREE THAT ARE ASSOCIATED WITH THE COLLABORATING INSTITUTIONS IN THE AREA, BUT IT IS NOT A CONSORTIUM.

THERE'S EXTENSIVE SHARED SPACE, INCLUDING CONFERENCE SPACE AND SHARED LABORATORY SPACE. THE CORE LABS ARE EXTENSIVE, CELL BANK, MASS SPECTROMETERS, CELL CULTURE. THE PROJECT ALSO INCLUDES GREEN BUILDING ELEMENTS, INCLUDING GREEN ROOF.

COMPLETION OF THE PROJECT IS SCHEDULED FOR JULY 2010, AND IT IS PROPOSED TO BE A SILVER UNDER THE LEED'S GUIDELINES.

THE ONLY ISSUE WE REALLY BROUGHT UP HERE WAS THE FACT THAT THERE WAS THE SHELL SPACE WHICH WAS INDICATED IN THE APPLICATION AS PART OF THE PROJECT. AND YOU'VE ALREADY HAD A DISCUSSION ABOUT SHELL SPACE, AND I THINK OUR POINT WAS SIMPLY TO MAKE SURE THE COMMITTEE WAS AWARE OF THE FACT THAT THE PROJECT INCLUDED SHELL SPACE AND THAT THE APPLICANT ADDRESSED THAT ISSUE IN TERMS OF THE FUTURE FUNDING IN THEIR LETTER OF COMMENT ON THE STAFF ANALYSIS.

THE STEVE COPENHAGEN REMARKS WERE A FUNCTIONAL SCORE OF B MINUS AND VALUE OF C. AND HE NOTES THE AMOUNT OF LAB SUPPORT SPACE ON THE FLOORS IS GOOD; HOWEVER, THE RELIANCE ON CORES IN THE ADJACENT BUILDING OR AT THE REMOTE LOCATION OF THE PARTNER INSTITUTIONS MAY CAUSE PROBLEMS WITH INEFFICIENCY. ALL OF THE CASE WORK HAS BEEN IDENTIFIED AS OWNER FURNISHED.

WITH THAT, I'LL TURN IT OVER TO THE PRIMARY REVIEWER, WHICH IS MEMBER LAFF, AND THE SECONDARY REVIEWER IS MEMBER KASHIAN.

MR. LAFF: THANK YOU. I WILL TRY NOT TO BE REDUNDANT ON WHAT HAS ALREADY BEEN TOLD TO YOU. THEY HAVE PROVIDED AN EXCELLENT TEAM BOTH ARCHITECTURALLY AND THE CONTRACTOR. USC HAS HAD AN INCREDIBLE BUILDING PROGRAM GOING ON AS LONG AS I'VE BEEN IN L.A. THE INTERESTING THING I THINK ABOUT THIS INSTITUTION IS THAT IT IS LOCATED IN THE CENTER, ESSENTIALLY THE CENTER OF LOS ANGELES, WITH EASY ACCESS BOTH BY FREEWAYS WHEN THEY WORK, BUT PUBLIC TRANSPORTATION TO GET TO THE SITE.

SO I THINK IT OFFERS SOME GOOD ABILITY FOR SOME OF THE CONSORTIUM MEMBERS TO TRAVEL EASILY TO USC. I WAS IMPRESSED BY THE FACT THAT THEY WERE PUTTING A GREEN ROOF ON. I WAS IMPRESSED BY THE FACT THAT THEY'RE TAKING CARE OF THEIR STORM RUNOFF, WHICH I ASSUME IS THE REASON WHY THE MECHANICAL ROOM WAS PUT ON THE FIRST FLOOR OF THE BUILDING, THAT AND THE VIVARIUM BELOW IT, WHICH WOULD MAKE IT PROBABLY THE MOST ECONOMICAL WAY TO PUT IN THE VIVARIUM LATER.

ONE OF THE QUESTIONS I HAD ABOUT THAT IS WHAT KIND OF VIBRATION ARE THEY GOING TO GET THROUGH THAT BUILDING BY HAVING THE MECHANICAL AND ELECTRICAL EQUIPMENT ON THE FIRST FLOOR? HOPEFULLY WHEN SC COMES UP HERE, THEY WILL TALK TO THAT. I'M SURE IT CAN BE ISOLATED. I JUST WANT TO UNDERSTAND WHAT THEY'RE DOING TO DO THAT.

I THOUGHT THE PROJECT WAS WELL LEVERAGED. I AGREE WITH THE COMMENTS ON THE PLANNING OF THE FACILITY. I WAS WORRIED ABOUT THE FACT THAT, I GUESS, A LOT OF THE CORE IS GOING TO BE DONE IN ANOTHER BUILDING. AND EVEN THOUGH I GUESS IT'S A BUILDING ACROSS THE STREET, THERE IS -- THERE'S INEFFICIENCIES THAT COME ALONG WITH PUTTING FACILITIES IN TWO BUILDINGS. SO THAT CONCERNED ME.

I THOUGHT THEY WERE REASONABLY WELL LEVERAGED, ESPECIALLY WITH THE ADDITION NOW OF -- MAYBE THE ADDITION OF THE ELECTRICITY OR THE UTILITY. THEY HAVE CLEARLY DEMONSTRATED THROUGH THEIR TEAM AND SCHEDULES AND BUDGETS THAT THEY'VE PUT FORTH THAT THEY CAN CLEARLY DO THIS PROJECT IN THE TIMEFRAME THAT THEY'RE SAYING.

THEY HAVE A WONDERFUL COLLABORATION BETWEEN SIX INSTITUTIONS THAT HAVE ACTUALLY SIGNED A DEFINITIVE AGREEMENT TO COLLABORATE WITH EACH OTHER. AND I LOOKED AT THAT AS VERY POSITIVE. SOME OF THESE INSTITUTIONS ARE LOCATED IN DOWNTOWN L.A. AS WELL. SO I THOUGHT THAT WAS GOOD.

I THOUGHT THE SPACE ON FLOORS 3, 4, AND 5 WERE WELL DESIGNED, AND I LIKE THEIR SOLUTION OF REMOVABLE BENCHES AND SUCH THAT THEY WERE USING. I THOUGHT THAT SEEMS TO BE THE WAY ALL OF THE APPLICANTS ARE DOING IT IN ONE WAY OR THE OTHER. SO I THOUGHT THAT WAS KIND OF INTERESTING.

AGAIN, I TALKED ABOUT SHELL SPACE. I'M NOT SURE AT THE END OF THE DAY THAT THAT WILL BE A VIVARIUM. I THINK IT JUST DEPENDS ON THE USE. BUT I HAVE NO DOUBT THAT SC CAN RAISE THE FUNDS TO DO THE VIVARIUM ANY TIME THEY CHOOSE TO DO THE VIVARIUM. I MEAN THEY JUST FINISHED A $600 MILLION CAMPAIGN, EITHER A BILLION CAMPAIGN AND STARTING ON THE 600 MILLION OR THE REVERSE, BUT THEY KNOW HOW TO RAISE MONEY.

CHAIRMAN LICHTENGER: SHOW ME THE MONEY.

MR. LAFF: THEY'VE RAISED IT. SO I THOUGHT IT WAS A WELL PUT TOGETHER PROPOSAL. AND I REALLY LIKED THE FACT THAT THEY HAVE THIS CONSORTIUM THAT IS SIGNED WITH A MEMO OF UNDERSTANDING, THAT PEOPLE ARE REALLY GOING TO DO THIS SHARING OF SPACE. I'M ALWAYS WORRIED WHEN IT'S NEBULOUS. WE'VE HAD THIS WE DON'T HAVE IT, BUT THEY HAVE IT, AND I WAS PRETTY IMPRESSED WITH THAT.

CHAIRMAN LICHTENGER: THANK YOU, STUART.

MR. KASHIAN: I CONCUR GENERALLY WITH THE PRIMARY REVIEWER. I'D LIKE TO ADD SOME OTHER ISSUES THAT I THINK ARE IMPORTANT. THEY ARE IN THE PROCESS OF CREATING, AS I UNDERSTAND, AN ELEVEN-ACRE MEDICAL RESEARCH PARK ADJACENT TO THIS FACILITY. I CONSIDER THAT EXTREMELY IMPORTANT.

I HAVE SOME QUESTIONS ABOUT I WASN'T QUITE SURE ABOUT WHETHER THE BUILDING PERMIT HAD BEEN GRANTED OR NOT GRANTED OR WHAT THE ISSUE WAS AND SOME QUESTIONS ABOUT THE STATUS OF THE EIR. I HAVE NO QUESTION IN MY MIND THAT USC IS CAPABLE OF EXECUTION BOTH IN CONSTRUCTION AND RAISING MONEY. BUT SOMETIMES THE GOVERNMENT BUREAUCRACY GETS IN THE WAY, SO I'D LIKE SOME CLARIFICATION ABOUT THAT ISSUE.

OTHERWISE, THE APPLICATION WAS GREAT, AND I NOTED THAT WE HAD MADE PRIOR INVESTMENTS IN MEDICAL GRANTS TO THIS INSTITUTION, AND I FEEL LIKE IT'S IMPORTANT TO BE ABLE TO FOLLOW UP WITH THESE GRANTS AS WELL.

CHAIRMAN LICHTENGER: THANK YOU, ED. I HAD SOME QUESTIONS FOR STEVE. SO, STEVE, YOU MENTION THAT YOU'RE CONCERNED ABOUT BUILDING UP THE VIVARIUM WILL BE DISRUPTIVE TO THE ADJACENT CORE.

MR. COPENHAGEN: RIGHT. IN THE BASEMENT ADJACENT TO THE SHELL SPACE, THEY HAVE LOCATED A COUPLE OF THEIR SENSITIVE INSTRUMENTS

CHAIRMAN LICHTENGER: IN THE BASEMENT?

MR. COPENHAGEN: IN THE BASEMENT. IT'S THE RIGHT PLACE FOR THE INSTRUMENTS, AND IT WOULD BE OKAY IF THE VIVARIUM HAD ALREADY BEEN BUILT OUT, BUT THE CONSTRUCTION OF THE VIVARIUM COULD BE DISRUPTIVE TO THE LOCATION OF THOSE INSTRUMENTS.

CHAIRMAN LICHTENGER: OKAY. RICK, I HAD OR RAY. I DON'T KNOW. RICK, ON THE CASE WORK, IS THAT SHOWN AS A COST OR A LEVERAGE?

MR. KELLER: IT'S IN THE PROJECT. WHAT HAPPENED WAS WHEN I REVIEWED THE COST ESTIMATE, THE CONTRACTOR HAD TAKEN IT OUT BECAUSE THE INSTITUTION IS PROVIDING THAT THROUGH A SEPARATE --

CHAIRMAN LICHTENGER: SO IT'S IN THERE.

MR. KELLER: WHEN I INITIALLY REVIEWED THE COST ESTIMATE, IT WAS ZERO, SO I WAS CONCERNED THAT THEY WERE GOING TO HAVE A BUILDING WITH VERY LITTLE CASE WORK.

CHAIRMAN LICHTENGER: WHAT ABOUT THIS GROUP II EQUIPMENT COST? THE LAST ITEM ON STEVE'S, BOTTOM OF THE PAGE. CASE WORK DOESN'T SHOW UP IN THERE. I SEE. NEVER MIND.

DOES ANYONE HAVE ANY MORE QUESTIONS BEFORE WE HAVE USC COME UP?

MS. HYSEN: I JUST HAVE A COMMENT. IT SEEMED TO ME YOU WERE QUESTIONING WHETHER THERE WAS MONEY ALLOCATED FOR THE FUTURE BUILDOUT OF THE SHELL SPACE. AND IT SEEMED THAT STAFF INDICATED THERE WAS, THAT THEY HAD COMMITTED TO 50 MILLION. I DON'T KNOW IF I MISSED THAT IN THE DISCUSSION.

MR. KLEIN: THEY HAVE IN THEIR WRITE-UP $50 MILLION, WHICH IS ALSO COMMITTED. A PORTION OF IT GOES TO FACULTY, BUT A PORTION GOES INTO EQUIPPING NEW EQUIPMENT AND BUILDOUT.

CHAIRMAN LICHTENGER: LET'S ASK THE APPLICANT.SO IF IT'S OKAY WITH EVERYONE, I'D LIKE TO HAVE USC STEP UP. YOU GUYS GET TO GO RIGHT BEFORE WE EAT.

MR. WILLIAMS: I WAS TRYING TO DEBATE WHETHER IT'S GOOD TO BE EARLY OR LATE IN THESE PROCEEDINGS. AND I'M CURT WILLIAMS, AND I'M THE VICE PRESIDENT FOR CAMPUS DEVELOPMENT, AND WITH ME IS DR. MARTIN PERA, WHO IS THE DIRECTOR OF OUR STEM CELL PROGRAM AT USC. I'LL MAKE A FEW COMMENTS, AND THEN DR. PERA CAN SPEAK ESPECIALLY TO THE COLLABORATION AND THOSE ISSUES.

BUT WE REALLY FEEL THAT THE VALUE OF THIS PROJECT, ESPECIALLY BY THE LAB PLANNER, HAS BEEN UNDERVALUED IN THE SENSE THAT NOT ONLY ARE WE TAKING MAXIMUM ADVANTAGE OF SHARED RESOURCES, BOTH OF OUR OWN SHARED RESOURCES WITHIN THE UNIVERSITY, BUT ALSO WITH OUR PARTNERS, AND THAT BRINGS TREMENDOUS VALUE. IN ADDITION, THERE'S ALMOST $4 MILLION OF EQUIPMENT THAT WAS PURCHASED ALREADY THAT COULD NOT BE INCLUDED. AND IN SOME OF THE DISCUSSION ABOUT THE $50 MILLION COMMITMENT, WHICH WAS NOT DIRECTLY FOR THE VIVARIUM BUILDOUT, BUT OUT OF THAT THERE'S SEVEN OR $8 MILLION OF EQUIPMENT THAT ALSO WILL BE FURNISHED TO THE PROJECT, WHICH IS ALSO NOT INCLUDED IN THE LEVERAGE.

AND I WANT TO SPEAK REAL BRIEFLY ABOUT BRINGING UP AN ISSUE FROM THE PREVIOUS PRESENTATION ABOUT BUILDING ON DIFFICULT SITES. MOST OF US THAT LIVE ON URBAN CAMPUSES ARE BUILDING ON DIFFICULT SITES. AND IN SOME CASES THOSE ARE INCLUDED IN OUR PROJECT COST AND OTHER CASES WE HAVE NOT INCLUDED THOSE. I'M SURE THAT USC IS SPENDING PROBABLY $10 MILLION OF MONIES OUTSIDE OF THIS TO BE ABLE TO BUILD THIS BUILDING FOR VARIOUS MITIGATIONS AND OTHER ISSUES JUST BECAUSE WE ARE ON AN URBAN CAMPUS. SO I ASK AS YOU CONSIDER REALLY, AND YOU HAVE THE TREMENDOUS CHALLENGE OF COMPARING APPLES AND APPLES ALL ACROSS THE BOARD, WHETHER IT'S PI'S, SQUARE FOOT PER PI, RESEARCHERS, ALL THOSE KINDS OF THINGS, AND IT GETS TO BE VERY DIFFICULT, AND I WOULD ASK THAT YOU TAKE INTO ACCOUNT THOSE KIND OF THINGS AND HOW WE DEFINE THEM.

JUST A FEW THINGS IN SPECIFIC REFERENCE TO SOME OF YOUR QUESTIONS. THE MECHANICAL SPACE THAT'S ON THE FIRST FLOOR, THIS IS A CONCRETE BUILDING. IT'S BEING DESIGNED WITH ALL THE AIR HANDLERS ON VIBRATION PADS. WE FEEL THE VIBRATION IS LESS THAN IN MOST CASES WHERE A LOT OF THIS EQUIPMENT WOULD BE LOCATED ON THE ROOF. IT'S VERY ACCESSIBLE TO BEING ABLE TO WORK ON THE VIVARIA.

THE WHOLE BUILDING IS BEING DESIGNED SO THAT THAT SHELL SPACE, WHICH IS INTENDED TO BE VIVARIA IN THE FUTURE, CAN BE BUILT OUT WITH VIRTUALLY NO DISRUPTION TO THE BUILDING. MUCH OF THE INFRASTRUCTURE IS ALREADY IN PLACE, AND WE FEEL IT CAN BE INSTALLED VERY, VERY EASILY.

WE DO NOT NEED TO DO FUND-RAISING. WE MAY DO FUND-RAISING, BUT WE DO NOT NEED TO DO FUND-RAISING TO BE ABLE TO BUILD OUT THIS SPACE.

A COUPLE OF OTHER THINGS. A QUESTION WAS, WE WILL HAVE APPROXIMATELY 234 PEOPLE IN THIS BUILDING, BOTH PI'S AND INVESTIGATORS, WHEN THE BUILDING GETS BUILT. AND I THINK OUR KEY THING IS THAT WE REALLY DON'T WANT TO SPEND MONEY ON BUILDING FACILITIES THAT WE DON'T HAVE TO WHERE WE CAN TAKE ADVANTAGE OF THE PARTNERSHIPS WITH OTHER INSTITUTIONS OR WITHIN OUR OWN DEPARTMENTS WITHIN OUR CAMPUS. I'LL LET DR. PERA SPEAK MORE TO THAT.

DR. PERA: THANK YOU. AND THANKS TO ALL OF YOU FOR YOUR ASSESSMENTS AND YOUR HELPFUL COMMENTS. WITH REGARD TO THE CORES, AS A SCIENTIST WHO WILL USE THIS BUILDING, I'M ABSOLUTELY CONFIDENT THAT THE CORES WILL DELIVER THE FACILITIES THAT WE NEED. ALL THE CORES IN THIS BUILDING ARE CORES THAT WE REQUIRE DIRECT ACCESS TO. THESE ARE CORES THAT WE USE TO ANALYZE CELLS, BE IT THE STEM CELL CORE, THE IMAGING CORE, THE FLOW CYTOMETRY CORE, OR THE CHEMICAL GENOMICS CORES. OTHER CORES, WE DON'T REQUIRE QUITE SO DIRECT ACCESS TO, BUT MOST OF THEM, THE ROUTINE STUFF, SUCH AS GENOMICS, ARRAYS, ETC., IS VERY EASILY REACHABLE.

AND WITH RESPECT TO THE COLLABORATION, THE PURPOSE OF THE -- PART OF THE PURPOSE OF THE COLLABORATION WAS TO LEVERAGE SOME OF THE CAPABILITY AVAILABLE IN OUR AREA, SUCH AS GMP AND NANOFABRICATION, WHICH WOULD HAVE OTHERWISE BEEN VERY, VERY EXPENSIVE TO DUPLICATE.

MR. KLEIN: SO QUESTION FOR YOU. IT WAS MY UNDERSTANDING THE VIVARIUM IS CONNECTED BY A TUNNEL. THE EXISTING VIVARIUM IS CONNECTED BY A TUNNEL TO THIS FACILITY SO THAT YOU HAVE DIRECT CONNECTION TO THAT RESOURCE; IS THAT CORRECT?

DR. PERA: THAT'S CORRECT.

MR. KLEIN: WHAT IS THE CONNECTION TO THE BUILDING THAT HAS MOST OF THE OTHER CORES, OR IS IT A -- WHEN IT'S ADJOINING, JUST GIVE US A PROXIMITY UNDERSTANDING.

DR. PERA: THE ADJOINING BUILDING, WHICH IS ACTUALLY CONNECTED ON ALL LEVELS BY A BRIDGE, IS THE SILKEN NEUROGENETIC INSTITUTE. THAT'S WHERE THE VIVARIUM IS. WE'LL USE THEM AS A DELIVERY ACCESS AND ALSO AS A LIQUID NITROGEN STORE. MOREOVER, THERE ARE IMPORTANT SCIENTIFIC CONNECTIONS WITH THIS BUILDING BECAUSE WE HAVE CLOSE COLLABORATIONS WITH THEM.

IN FUTURE, JUST TO SPEAK TO AN ISSUE THAT CAME UP EARLIER, THAT AREA IS WHERE OUR STEM CELL PROGRAM CURRENTLY IS AND THE CANCER TOWER. BOTH OF THOSE SPACES WILL BE VACATED, AND WE ARE DOING JOINT RECRUITMENTS IN STEM CELL THAT WILL MOVE INTO THOSE AREAS.

MR. KLEIN: SO IF EACH OF THOSE FLOORS IS CONNECTED BY A BRIDGE, IF I COULD ASK -- IS IT STEVE THAT EVALUATED THIS APPLICATION. IT WAS RAY. WHO EVALUATED -- WHO GAVE THE GREEN SHEET GRADE ON THIS?

MR. COPENHAGEN: GREEN SHEET IS MINE.

MR. KLEIN: SO THE QUESTION IS IN TERMS OF THE COMMENT ABOUT CORES, IF IT'S CONNECTED BY BRIDGES AT EVERY LEVEL, THAT'S AN INCREDIBLE, FLEXIBLE, AND EASILY FUNCTIONAL ACCESS. SO WHY ISN'T THAT KIND OF AN OPTIMAL ABILITY TO LEVERAGE JUST AS SAN FRANCISCO DID BY THE BRIDGE TO THE ADJOINING BUILDING TO BENEFIT THE CORES? UC SAN FRANCISCO YOU GAVE AN A TO, YET THEY HAVE FAR FEWER CORES IN THEIR BUILDING THAN THIS ONE DOES.

MR. COPENHAGEN: I THINK THE FUNCTIONAL GRADE THAT I GAVE THEM WAS A CONCERN OF THE -- THERE WAS ONLY FIVE FACULTY MEMBERS ON A FLOOR OF THE BUILDING. JUST THE SITE DELIVERED A BUILDING WITH A FAIRLY SMALL FLOOR PLATE. THEY'VE DONE EVERYTHING THEY CAN TO MAXIMIZE THE INTERACTION BETWEEN THE ADJACENT BUILDINGS. JUST THE FLOOR PLATE DIDN'T HAVE ENOUGH CRITICAL MASS TO IT OR WAS ON THE SMALL SIDE. SO THEY'VE LOCATED THE INTERACTION CONFERENCE ROOMS, MEETING ROOM SPACES AT THE KNUCKLE BETWEEN THE TWO BUILDINGS. THEY'VE DONE EVERYTHING RIGHT TO MAXIMIZE THE FUNCTIONALITY AND THE INTERACTION BETWEEN THE BUILDINGS. IT JUST WAS WHEN COMPARED TO THE INTERACTION. I'M NOT TALKING A CORE ISSUE HERE.

MR. KLEIN: THIS IS NOT A CORE ISSUE. THIS IS JUST FLOOR PLATE SIZE FOR OPTIMAL INTERACTION?

MR. COPENHAGEN: THAT'S RIGHT.

MR. KLEIN: THAT'S VERY HELPFUL. THANK YOU.

CHAIRMAN LICHTENGER: SO I HAVE A FEW QUESTIONS. SO ON THIS $50 MILLION THAT HAVE BEEN REFERRED TO, SO YOU'RE SAYING THERE'S ABOUT $8 MILLION OF EQUIPMENT THAT WILL BE EVENTUALLY PUT INTO THIS SPACE; IS THAT CORRECT?

MR. WILLIAMS: WELL, THERE IS PARTS OF THE RECRUITMENT PACKAGES THAT SOME OF THE OTHER UNIVERSITIES HAVE AS WELL. WE ESTIMATE THAT SEVEN TO $8 MILLION OF THOSE RECRUITMENT PACKAGES WILL BE EQUIPMENT THAT WILL GO INTO THIS BUILDING.

CHAIRMAN LICHTENGER: ALSO CAN WE TALK ABOUT YOUR -- A LITTLE BIT ABOUT YOUR SCHEDULE? SO THERE'S AN ENVIRONMENTAL IMPACT REPORT. CAN YOU GIVE ME A LITTLE GRANULARITY ABOUT WHERE YOU GUYS ARE IN THE PROCESS?

MR. WILLIAMS: THAT QUESTION HAS BEEN RAISED. WE HAVE THE ENVIRONMENTAL IMPACT REPORT COMPLETED, TOTALLY DONE. IT INCLUDES NOT ONLY DEVELOPMENT ON THIS SITE BUT OTHER SITES ON OUR HEALTH SCIENCES CAMPUS. AND WE HAVE A SPECIFIC APPROVAL FOR THIS PROJECT WHERE YOU HAVE TO KNOW WHERE THE BUILDING IS GOING, THE SIZE, AND THOSE KIND OF THINGS. THAT'S IN FOR REVIEW, AND WE WILL HAVE THAT BY THE TIME THE MAY MEETING COMES AROUND. AND THE BUILDING PERMIT WILL BE ISSUED ALONG ABOUT THE SAME TIME. SO WE DO NOT SEE THAT ANY OF THE ENVIRONMENTAL OR BUILDING PERMIT BEING A HINDRANCE TO BUILDING THIS BUILDING.

MR. KASHIAN: I NOTICED YOU HAVE A VERY DIFFICULT ENVIRONMENT. I KNOW FIRSTHAND. IN YOUR ENVIRONMENTAL IMPACT REPORT, YOU HAD A SIGNIFICANT AMOUNT OF OFFSITE MITIGATING MEASURES. ARE ANY OF THOSE BEING ALLOCATED AGAINST THIS BUILDING, AND WHO'S MAKING THAT JUDGMENT DECISION?

MR. WILLIAMS: THOSE ARE WHAT I MENTIONED BEFORE ABOUT EVERY SITE IS A DIFFICULT SITE. SO WHEN WE BUILD A NEW BUILDING, AND THE EIR OUTLINES CERTAIN TRIGGERS THAT SAY, OKAY, AT A CERTAIN POINT, ENOUGH POPULATION COMES TO THE CAMPUS, YOU HAVE TO DO THESE MITIGATIONS THAT INCLUDE THINGS LIKE FREEWAY OFFRAMP IMPROVEMENTS, OTHER INTERSECTION IMPROVEMENTS, ADDITIONAL PARKING, THOSE KIND OF THINGS. AND WE HAVE TWO OR THREE PROJECTS THAT ARE GOING ALONG AT THE SAME TIME THAT ARE TRIGGERING THOSE KIND OF THINGS, WHICH PROBABLY REPRESENT SIX OR $8 MILLION.

NONE, I COULD SAY, ARE EXACTLY TRIGGERED BY THE BROAD CENTER THAT WE'RE BUILDING, BUT THE COMBINATION OF THE THREE PROJECTS ARE TRIGGERING THOSE MITIGATIONS.

MR. KASHIAN: NONE OF COST OF THAT -- OF THOSE MITIGATING MEASURES ARE ALLOCATED AGAINST THIS BUILDING?

MR. WILLIAMS: AND IT'S NOT COUNTED AS PART OF OUR LEVERAGE EITHER.

MR. KASHIAN: I NOTICE ONE THING THAT WAS EXTREMELY HELPFUL. YOU HAVE THE SUPPORT OF THE MAYOR.THANK YOU.

CHAIRMAN LICHTENGER: ANY OTHER QUESTIONS FOR USC? YOU GUYS BUILDING ANY POWER PLANTS? JUST KIDDING. PUBLIC COMMENTS. OKAY. SO WE'RE GOING TO ADJOURN FOR DINNER AND REGROUP.

MR. KELLER: YOU MIGHT WANT TO RECORD YOUR PRELIMINARY VOTE ON USC, AND THEN WE'LL COLLECT THOSE OR MAKE SURE THAT THEY'RE SECURE.

CHAIRMAN LICHTENGER: YES. WE'RE GOING TO RECORD OUR PRELIMINARY SCORES NOW, AND THEN WE'RE GOING TO ADJOURN FOR DINNER. AND, RICK, HOW LONG ARE WE GIVING?

MR. KELLER: YOU'RE ALLOCATED ONE HOUR. CHAIRMAN LICHTENGER: SO WE'RE GOING TO GIVE EVERYBODY AN HOUR. IT LOOKS LIKE IT'S ABOUT SEVEN NOW. SO WE'LL SEE EVERYBODY BACK AT EIGHT SHARP.

(A RECESS WAS TAKEN.)CHAIRMAN LICHTENGER: SO NOW I AM GOING TO CALL THE MEETING TO ORDER OFFICIALLY

MR. KLEIN: MR. CHAIRMAN, SINCE YOU'VE CALLED THE MEETING TO ORDER, I'D LIKE TO MAKE THIS DAVID SERRANO-SEWELL DAY FOR MAJOR FACILITIES.

MS. SAMUELSON: SECOND.

MR. KLEIN: I HAVE A SECOND. SO MAYBE WE COULD JUST HAVE IT BE UNANIMOUS.

CHAIRMAN LICHTENGER: DAVID SERRANO-SEWELL DAY FOR MAJOR FACILITIES DAY. I'M TRYING TO GET THROUGH SOME APPLICATIONS HERE, GUYS.

SO I WOULD LIKE TO INVITE THE PUBLIC TO COME AND MAKE COMMENTS. OKAY. SO I SAID IT. ALL KIDDING ASIDE NOW, I'VE ASKED THE PUBLIC, AND NO ONE WOULD LIKE TO MAKE ANY PUBLIC COMMENT AT THIS TIME, SO I'M GOING TO ASK RICK -- OH, WE ARE GOING TO GET A PUBLIC COMMENT.

MR. SIMPSON: JUST INFORMATIONALLY I THINK A NUMBER OF THE APPLICANTS ARE STILL DINING. I SUSPECT THEY'LL WANT TO BE BACK.

CHAIRMAN LICHTENGER: WE'RE PUNCTUAL PEOPLE HERE AT THE FACILITIES WORKING GROUP. YOU CAN FEEL FREE TO GO GET THEM. YOU CAN INFORM THEM.

MR. KELLER: THE SAN DIEGO PEOPLE ARE HERE.

CHAIRMAN LICHTENGER: SAN DIEGO PEOPLE, THANK YOU FOR BEING HERE TODAY. ALL KIDDING ASIDE, RICK, CAN WE START THE REVIEW OF THE SAN DIEGO CONSORTIUM OF REGENERATIVE MEDICINE?

MR. KELLER: SURE. THIS PROPOSAL IS FOR CONSTRUCTION OF A FIVE-STORY BUILDING. IT WILL HOUSE STEM CELL RESEARCHERS FROM FOUR INSTITUTIONS IN THE AREA, AND IT IS THE ONLY CONSORTIUM FORMED IN RESPONSE TO THE RFA.

THE OBJECTIVE IS TO CO-LOCATE THE STEM CELL RESEARCHERS, AND THE BUILDING INCLUDES 130,000 GROSS SQUARE FEET, ROUGHLY A HUNDRED THOUSAND ASSIGNABLE SQUARE FEET, SOME OF WHICH WOULD BE ASSIGNED TO NON-CIRM RESEARCH ACTIVITY, BUT IT COULD BE DEVOTED TO STEM CELL RESEARCH AT SOME POINT IN THE FUTURE. THE CIRM COMPONENT IS ABOUT 71,332 ASSIGNABLE SQUARE FEET, THE NON-CIRM SPACE IS 29,240.

THE CIRM FUNDING REQUEST IS FOR $50 MILLION, AND THE TOTAL PROJECT COST IS $115.2 MILLION. THE FACILITY INCLUDES LAB, LAB SUPPORT, CORE FACILITIES, INCLUDING A NEW VIVARIUM, RELATED OFFICE ADMINISTRATIVE AND SUPPORT SPACE. IT WOULD HOUSE 21 RESEARCH TEAMS OR PI'S, 18 OF WHICH WILL BE RELOCATING FROM THE HOME MEMBER INSTITUTIONS. THE PROJECT IS CURRENTLY SILVER, BUT I THINK THEY'RE GOING FOR MORE POINTS TO TRY TO GET IT HIGHER.

WE IDENTIFIED TWO KEY ISSUES WHEN WE REVIEWED THIS. ONE WAS THE FACT THAT THE LAND COST OR RATHER THE LAND VALUE, THE FACILITY IS GOING TO BE LOCATED ON SEVEN ACRES, AND IT WILL BE PROPERTY THAT WILL BE UNDER A GROUND LEASE WITH THE UNIVERSITY OF CALIFORNIA, BUT THE CONSORTIUM WILL CONTROL IT. AND THAT GROUND LEASE WAS VALUED AT $14 MILLION ON A PRESENT VALUE BASIS. AND YOUR ORIGINAL JUDGMENT ABOUT HOW LEVERAGE SHOULD BE COUNTED WAS IT WOULD BE OUT-OF-POCKET EXPENSES FOR LAND. SO YOU NEED TO JUDGE WHETHER OR NOT YOU FEEL THAT THE COST OF LAND IN PRESENT VALUE TERMS, AND THERE'S SOME QUESTION ABOUT WHETHER OR NOT THAT WOULD EVER BE PAID IF THE CONSORTIUM PROCEEDS WITH THE RESEARCH. THERE MAY BE SOME PROVISION FOR FORGIVENESS OF THE RENT BY THE UNIVERSITY.

AND THEN THE OTHER ISSUE WAS THAT WE WERE CONCERNED ABOUT KIND OF THE WAY THE SPACE HAD BEEN PARSED BETWEEN THE CIRM-FUNDED SPACE AND THE NON-CIRM-FUNDED SPACE. IN THE PROCESS OF WORKING THROUGH THAT WITH REPRESENTATIVES OF THE CONSORTIUM, AND GETTING ADDITIONAL INFORMATION AS OF, LIKE, YESTERDAY MORNING, THEN I THINK WE'RE FINE WITH THE FACT THAT WE'VE GOT SOME UPDATED INFORMATION ON THE WAY THAT THAT SPACE IS BEING ALLOCATED BETWEEN NON-CIRM AND CIRM SPACE. SO THE BUILDING IS ACTUALLY 142,000 GROSS SQUARE FEET, AND SO THAT MADE A BIG DIFFERENCE. SO IT WENT UP 12,000 FEET, AND THAT 12,000 GROSS SQUARE FEET WAS ACTUALLY PART OF THE NON-CIRM-FUNDED SPACE.

THE LAB PLANNING SCORE WAS A FUNCTIONALITY SCORE C, VALUE SCORE OF C MINUS. STEVE'S COMMENTS INCLUDED WHILE THE FLOORS WERE CONFIGURED FOR MAXIMUM INTERACTION, THE RESULTANT PATTERN BREAKS THE LABORATORIES INTO SMALL UNITS OF CONTIGUOUS BENCH SPACE WHICH AFFECTS THE ULTIMATE FLEXIBILITY AND SPACE BENCH ASSIGNMENT. HE ALSO MENTIONS THAT THE LARGEST CORE BEING PROVIDED IS IN THE VIVARIUM, WHICH IS ONE OF THE MOST EXPENSIVE TYPES OF SPACES TO BUILD.

THE PRIMARY REVIEWER IS CHAIR LICHTENGER AND THE SECONDARY REVIEWER IS MEMBER HYSEN.

CHAIRMAN LICHTENGER: I'M HAVING PROBLEMS HERE WITH MY MIC. GREAT. SO, RICK, QUICK HOUSEKEEPING QUESTION REGARDING LEVERAGE. SO THE CURRENT CHARTS WE HAVE DO NOT SHOW THE LAND, CORRECT?

MR. KELLER: I REDID THE CHART AT THE BREAK, AND WE TOOK OUT THE AREAS -- I'M SORRY -- THE FIGURE THAT DEALT WITH ALL THE UTILITIES AND INSTEAD LEFT IN THE ADJUSTMENTS FOR THE INFRASTRUCTURE, LANDSCAPING, AND SITE PREPARATION FOR SAN FRANCISCO, WHICH I BELIEVE THERE WAS AN AGREEMENT TO INCLUDE THAT 17 MILLION. WE LEFT IN ON 612, IRVINE, THE AMOUNT THAT WAS RELATED TO THE SHELL SPACE THAT HAD NOT PREVIOUSLY BEEN CONSIDERED IN LEVERAGE. AND I BELIEVE THE BERKELEY, WE HAVEN'T GOTTEN TO BERKELEY YET, BUT I'LL JUST MENTION THAT THERE WAS SPACE IN THE BASEMENT OF THE BUILDING WHERE THE STEM CELL PROGRAM IS LOCATED THAT HAS SIMILAR CIRCUMSTANCES AS IRVINE WHERE THERE'S SPACE THAT'S FULLY DEVOTED TO THE STEM CELL PROGRAM, AND THE VALUE OF THAT SPACE IS IN THE FACT THAT THEY HAD ALREADY COUNTED $4.5 MILLION IN LEVERAGE FOR THE EQUIPMENT. THE SPACE NEEDED TO BE ACCOUNTED FOR AS WELL.

CHAIRMAN LICHTENGER: THANK YOU, RICK. SO SPECIFICALLY REGARDING THE CONSORTIUM, WE DO NOT HAVE THE LAND IN THAT NUMBER, CORRECT?

MR. KELLER: THE LAND IS IN THE LEVERAGE.

CHAIRMAN LICHTENGER: IT IS.

MR. KELLER: IT IS NOT IN THE COST.

CHAIRMAN LICHTENGER: SO IT IS IN THE LEVERAGE.

MR. KELLER: IT IS IN THE LEVERAGE.

CHAIRMAN LICHTENGER: OKAY. FINE.

MR. KELLER: IN THE DARK BLUE COLUMN.

CHAIRMAN LICHTENGER: OKAY. THAT'S WHAT I WANTED TO CLARIFY.

MR. KASHIAN: WHAT IS THE AMOUNT OF RENT CHARGED FROM UC?

MR. KLEIN: IT'S ON PAGE 5. IT'S ON PAGE 5 OF THE APPLICANT'S LETTER.

CHAIRMAN LICHTENGER: IF YOU DON'T MIND, IF YOU COULD JUST LET ME DO MY REVIEW FIRST. IT IS ON PAGE 5 THOUGH.

SO I HAD A COUPLE OF QUESTIONS FOR OUR LABORATORY PLANNER. SO, STEVE, YOU KNOW, I NOTICE YOU GAVE THEM A C FOR FUNCTIONALITY, SO CAN YOU GIVE ME SOME -- A LITTLE MORE DETAIL ABOUT WHY YOU GAVE THEM THE C?

MR. COPENHAGEN: I WAS CONCERNED WITH THE BUILDING BEING BY ITSELF, AND THEY'VE VERY CAREFULLY LOCATED IT EQUIDISTANT BETWEEN ALL THE OTHER INSTITUTES THAT THEY ARE WORKING WITH OR RESEARCH CAMPUSES, BUT THEY ALSO LEFT A LOT OF THE SUPPORT CORES, WHICH IS VALUE BECAUSE WE'RE NOT BUILDING MORE CORE HERE. WE'RE GOING TO USE THE CORE AT THE OTHER CAMPUS. BUT WHERE THE OTHER APPLICANTS HAD CORES IN THE ADJACENT BUILDING OR IN A CLOSELY LOCATED CIRCLE AROUND THEIR LABORATORIES, THIS APPLICANT, BECAUSE THEY'RE LOCATED OUT ON THAT TORREY PINES KIND OF A FREESTANDING, INDEPENDENT BUILDING, LOOKED TO ME LIKE THEY WERE GOING TO HAVE TO RELY ON -- HAD TO RELY ON CORES AT THE OTHER INSTITUTES, AND THEY HAD TO GO TO FOUR OTHER PLACES TO USE ALL THOSE CORES.

CHAIRMAN LICHTENGER: SO IT WAS REALLY BECAUSE OF THE LOCATION THAT WAS SEPARATE FROM THE FOUR INSTITUTIONS?

MR. COPENHAGEN: IT'S DISCONNECTED FROM ANY ONE INSTITUTION, WHICH IS BOTH A PLUS AND MINUS.

CHAIRMAN LICHTENGER: SO THAT WAS YOUR -- BUT IN TERMS OF THE FUNCTIONALITY OF THE ACTUAL SPACE THEY WERE BUILDING.

MR. COPENHAGEN: THE FLOOR PLANS LOOKED GOOD. THEY DID -- WHILE ALL THE OTHER APPLICANTS HAD MORE CONTIGUOUS LAB, THEY HAD BROKEN THEIR CONTIGUOUS LABS UP WITH ALL OFFICE SPACE OR SUPPORT SPACE. WASN'T AS MUCH CONTIGUOUS BENCH SPACE, WHICH IS A LOT OF YOUR FLEXIBILITY IS THAT I CAN JUST TAKE OVER THE NEXT BENCH.

CHAIRMAN LICHTENGER: AND ON YOUR VALUE SCORE YOU HAVE A C MINUS. CAN YOU GIVE ME SOME UNDERSTANDING?

MR. COPENHAGEN: THE ACTUAL LAB FLOORS LOOKED GOOD, LOOKED LIKE GOOD LAB FLOORS. THEY HAD SOME HIGH DEGREE OF INTERACTION PROVIDED ON THE FLOOR, BUT THE OTHER SPACES IN THE BUILDING, THERE WAS A LOT OF OTHER VOLUME OF SPACE THAT WAS JUST, IN MY MIND, CHALLENGED AS TO HOW MUCH IT WAS TRULY CONTRIBUTING TO THE SCIENCE IN THE BUILDING. I UNDERSTAND BECAUSE THEY ARE REMOTE FROM ALL THE OTHER INSTITUTES, THAT THEY HAVE TO DRAW PEOPLE TO THEIR BUILDING FOR THE INTERACTION, AND THAT CAUSED THEM TO CREATE A LOT OF THESE LARGER SEMINAR AND AUDITORIUM SPACES DOWN ON THE FIRST FLOOR AND MAYBE A LARGER BREAKOUT AREA. SO IT WAS A CONSEQUENCE OF THEIR LOCATION CAUSED A LARGER VOLUME OF SPACE THAN THE OTHER APPLICANTS HAD TO PROVIDE.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. SO I'M GOING -- THANKS FOR CLARIFYING THAT. SO I'LL START WITH FUNCTIONALITY IN TERMS OF MY REVIEW. YOU KNOW, I THOUGHT THE PROJECT GENERALLY HAD GOOD FUNCTIONALITY. YOU KNOW, AS STEVE OUTLINED, THERE ARE SOME CHALLENGES GIVEN ITS LOCATION, GIVEN THE FACT THAT IT'S A NEW ORGANIZATION, BUT I'M NOT A HUNDRED PERCENT EXACTLY HOW WE VALUE OR HOW WE TAKE THAT INTO ACCOUNT IN FUNCTIONALITY BECAUSE IT'S THE NATURE OF A NEW ORGANIZATION, AND IT IS SEPARATE AND APART FROM THE FOUR ORGANIZATIONS THAT ARE PERFORMING IT. GENERALLY I THOUGHT THE SPACE WAS FUNCTIONAL AND GOOD.

AND LEVERAGE, I THOUGHT THE LEVERAGE WAS ABOVE AVERAGE, BUT IT WASN'T EXCELLENT. AND THAT'S TAKING INTO ACCOUNT THE VALUE OF THE LAND. AGAIN, IF WE TOOK OUT THAT VALUE OF THE LAND, THE LEVERAGE WOULD BE SIGNIFICANTLY LESS AND BELOW AVERAGE. BUT TAKING INTO ACCOUNT THE LAND, IT IS ABOVE AVERAGE.

ON URGENCY, YOU KNOW, I HAD SOME CONCERNS ON THE URGENCY. I THINK THERE POTENTIALLY COULD BE SOME DELAYS RELATED TO THE PROCESS. SO I THINK THE SCHEDULE SEEMS SOMEWHAT AGGRESSIVE, ALTHOUGH ON PAPER, AGAIN, I BELIEVE, RICK, THEY MEET THE CRITERIA, CORRECT, FOR TWO YEARS? YEAH. SO THEY MEET IT ON PAPER. ALTHOUGH I DO HAVE SOME CONCERNS ABOUT THAT SCHEDULE BECAUSE I THINK THERE'S SOME COASTAL AND ENVIRONMENTAL AND DESIGN CONSIDERATIONS THAT NEED TO BE ADDRESSED. PERHAPS THE APPLICANT CAN SHED SOME LIGHT ON THOSE ISSUES.

IN TERMS OF SHARED RESOURCES, I THINK OBVIOUSLY, GIVEN THE NATURE OF A CONSORTIUM AND THE FOUR INSTITUTIONS THAT ARE FORMING IT, I THINK THAT THE SHARED RESOURCES WILL BE EXCELLENT. I DON'T KNOW THE EXACT -- DO WE HAVE KNOWLEDGE OF THE EXACT DISTANCES FROM THE FOUR INSTITUTIONS? PERHAPS THE APPLICANT CAN GIVE US THOSE EXACT DISTANCES BECAUSE THAT WAS A LITTLE UNCLEAR TO ME WHEN I WAS LOOKING AT THIS. SO OVERALL URGENCY, WE TALKED ABOUT SHARED RESOURCES I THOUGHT WAS EXCELLENT. LEVERAGE WAS ABOVE AVERAGE.

AND VALUE I THINK, YOU KNOW, IT'S GOOD. YOU KNOW, THE COSTS WERE LOW, WHICH I THINK WAS ONE OF THEIR BIGGEST PLUSES THEY HAD, THAT THEY WERE ONE OF THE LOWEST, IF NOT THE LOWEST, CORRECT, RICK, IN TERMS OF COST IN THIS CATEGORY.

MR. KELLER: I THINK THEY WERE THE LOWEST -- SECOND LOWEST. LOWEST IN THIS CATEGORY AND SECOND LOWEST OVERALL.

CHAIRMAN LICHTENGER: SO THEY WERE THE LOWEST IN THIS CATEGORY, SO I THOUGHT THAT WAS A HUGE PLUS IN THEIR FAVOR. AND, YOU KNOW, WITH THE LAND AND THE NATURE OF THE CONSORTIUM, AGAIN, OVERALL I THOUGHT IT WAS GOOD VALUE. SO THAT'S MY REVIEW.

MS. HYSEN: THANK YOU. WELL, FIRST OF ALL, I THINK WE'RE ALL EXCITED TO SEE A LOT OF INSTITUTIONS COMING TOGETHER IN A FORMAL WAY TO CREATE A CONSORTIUM. WE HAD ENCOURAGED THAT EARLY ON. AND TO SEE SAN DIEGO STEP UP AND MAKE THAT A REALITY WAS VERY EXCITING TO ME.

NOT TO REPEAT A LOT OF WHAT HAS BEEN SAID ALREADY, YES, THE BUILDING COSTS SEEMED LOW. MY NUMBER WAS 773 PER SQUARE FOOT. IT'D BE EVEN BETTER WITH THE ADDITIONAL SQUARE FOOTAGE THAT'S BEEN ADDED, SO I FOUND THAT WAS GOOD. GROUP II EQUIPMENT DID SEEM TO BE HIGH, BUT IN GENERAL THE COSTS SEEMED LOW.

I KNOW FROM A VALUE STANDPOINT, IT WAS PROBABLY REAL HARD TO FIGURE OUT HOW TO LOCATE THIS FACILITY TO MAXIMIZE INTERACTION WITH ALL FOUR INSTITUTIONS. AND SHORT OF LOCATING IT AT ONE INSTITUTION, I THINK THE THEORY OF LOCATING IT EQUIDISTANCE WAS PROBABLY THE MOST APPROPRIATE THING THEY COULD DO. AND I'M VERY FAMILIAR WITH THESE FOUR INSTITUTIONS, AND I THINK THAT THAT'S PROBABLY AN IDEAL LOCATION WHERE THEY HAVE IT IN TORREY PINES MESA.

THE ONE THING THAT I DID NOTE, AND PERHAPS THE CONSORTIUM CAN SPEAK TO THIS, IS THEY REALLY SEEM TO DEVELOP THEIR CYBER INFRASTRUCTURE CORE TO FACILITATE COMMUNICATION AND DATA ANALYSIS. I'M HOPING THAT THAT WAS MEANT TO ENHANCE THE INTERACTION, IF NOT IN A PHYSICAL WAY, IN A VIRTUAL WAY WITH THE INSTITUTIONS THAT ARE LOCATED OFFSITE. SO I'D REALLY LIKE TO HEAR THAT.

THE AMOUNT OF ASSIGNED SQUARE FEET PER PI VERY GOOD, BUT I NOTED THAT IN MR. COPENHAGEN'S ANALYSIS HE WAS CONCERNED THAT THE ASSIGNED SQUARE FOOTAGE WAS VERY GOOD BECAUSE OF THE WAY IN WHICH THEY ALLOCATED THE FIRST-FLOOR SPACE. WAS THAT RESOLVED IN LATER ANALYSIS?

MR. COPENHAGEN: THE ASSIGNMENT OF SQUARE FOOTAGE IN MY ANALYSIS IS JUST THE LABORATORY SPACE. IT DID NOT ACCOUNT FOR THE NONLAB FUNCTIONS THAT WERE DOWN ON THE FIRST FLOOR.

MS. HYSEN: OKAY. I NOTICE THAT YOU SAID THAT THERE WAS VERY LOW VALUE ASCRIBED TO THE FIRST-FLOOR SPACE, BUT GOOD VALUE ON THE LAB FLOORS; IS THAT CORRECT? OR IS THAT STAFF ANALYSIS?

MR. COPENHAGEN: YES. I THINK MY ANALYSIS COMMENTED ON HOW THEY UTILIZED THAT FIRST FLOOR. THERE WAS A LOT OF VOLUME OF SPACE THERE. AND IN ONGOING DISCUSSION, IT APPEARS THAT THE SAN DIEGO AREA AND THOSE INSTITUTES IN PARTICULAR DO DRAW WELL AND SHARE WELL AND HAVE SYMPOSIUMS ON CAMPUSES, AND A LOT OF PEOPLE DO COME TO THEM FROM ALL OVER THE SAN DIEGO AREA, WHICH IS PROBABLY SOMETHING UNIQUE TO THE SAN DIEGO AREA. OTHERWISE THAT KIND OF AN INSTITUTE OUT BY ITSELF HOPES TO HAVE THIS MAGNET, BUT NOBODY EVER USES IT.

MS. HYSEN: SO THERE WAS MORE VALUE.

MR. COPENHAGEN: RIGHT.

MS. HYSEN: AND THEY EXPECT TO RECEIVE LEED GOLD. I THINK THAT'S A GREAT ACCOMPLISHMENT IF THEY CAN DO THAT.

I ALSO WAS CONCERNED ABOUT THE LAND VALUE ISSUE. I'M NOT SURE HOW WE ADDRESS THAT. BUT THEY WERE HIGHER, THEY WERE SECOND OF SEVEN IN TERMS OF LEVERAGE. AND I DON'T KNOW WHERE THEY WOULD BE PLACED IF THE LAND VALUE WAS DEDUCTED FROM THAT EQUATION.

URGENCY, I THINK OF ANY OF THE CONCERNS THAT I HAD IN THIS APPLICATION IT WAS IN URGENCY. I THINK THIS SCHEDULE IS HIGHLY AMBITIOUS. I WOULD BE REALLY SURPRISED IF THEY COULD MEET THE DEADLINE THAT THEY'VE IDENTIFIED. SO I THINK THAT'S ONE THING I'D REALLY LIKE TO HEAR ABOUT BECAUSE WE PUT A LOT OF IMPORTANCE ON GETTING UP AND RUNNING AS SOON AS POSSIBLE. I DON'T KNOW THAT THEY'VE ADEQUATELY ADDRESSED HOW THEY CAN MITIGATE SOME OF THESE SCHEDULE RISKS. ANY OF YOU THAT HAVE TRIED TO GET A PERMIT FROM THE COASTAL COMMISSION, IT'S QUITE COMPLICATED. AND I DON'T BELIEVE THAT THEY HAVE THE PERMIT NOW, ALTHOUGH THEY EXPECT TO RECEIVE IT IN DECEMBER OF THIS YEAR. I'D LIKE TO HEAR A LITTLE BIT ABOUT THAT BECAUSE I THINK THE SCHEDULE IS AMBITIOUS EVEN WITHOUT HAVING TO DEAL WITH THE COASTAL COMMISSION. FROM AN URGENCY STANDPOINT, I HAD CONCERNS THERE.

SHARED RESOURCES, OBVIOUSLY THE FACT THAT THEY HAVE COME TOGETHER WITH, AS THE SCIENTIFIC REVIEW HAS POINTED OUT, AN INCREDIBLE ARRAY OF SCIENTISTS IN WHAT IS CLEARLY GOING TO BE A HIGH COLLABORATIVE ENVIRONMENT WAS INCREDIBLE. I THINK THEIR COLLABORATION PLANS ARE WELL DEFINED.

FUNCTIONALITY, THE ONLY THING THAT I NOTED, I DID NOTE THE SCORE OF C FROM MR. COPENHAGEN. I DID SEE THAT THE FLOOR PLANS WERE SMALL, AND SO I WASN'T CERTAIN IF THAT PROVIDED THE MOST AMOUNT OF INTERACTION BETWEEN THE SCIENTISTS. OTHER THAN THAT I DIDN'T HAVE ANY CONCERNS WITH THE DESIGN.

THERE WAS NOT MUCH DISCUSSION OF GROWTH, AND SO I DON'T KNOW HOW THEY WOULD BE ABLE TO ACCOMPLISH GROWTH, IF AT ALL. MAYBE I JUST MISSED IT. BUT IN GENERAL, I FOUND THIS BE A VERY GOOD APPLICATION.

CHAIRMAN LICHTENGER: THANK YOU, DEBORAH. RICK, I HAD A COUPLE OF QUESTIONS GOING BACK TO THE ISSUE OF THE SQUARE FOOTAGE AND THE ALLOCATION. SO PREVIOUSLY, THE PREVIOUS ANALYSIS HAD BEEN THAT THERE WAS AN ASSIGNMENT OF A HUNDRED PERCENT OF THE --

MR. KELLER: DIFFERENCE BETWEEN GROSS, THAT WE WERE BASICALLY BEING PRESENTED WITH A COST FOR CIRCULATION, MECHANICAL SPACE, AND BASICALLY THE TEAR AS BEING ALLOCATED TO THE CIRM-FUNDED PORTION OF THE PROJECT. SINCE THAT TIME, THEY INDICATED THAT THE TABLES THAT WERE INCLUDED IN THE APPLICATION WERE INCORRECT. AND, IN FACT, IN SOME OF THE DRAWINGS, ONCE YOU CONSIDER THE CIRCULATION SPACE ON UPPER FLOORS, THE GROSS IS ACTUALLY 142, SO IT ENDS UP ABOUT A THIRD OF THE GROSS HAS BEEN ALLOCATED TO THE NON --

CHAIRMAN LICHTENGER: SO --

MR. KELLER: SO IT'S RESOLVED ITSELF.

CHAIRMAN LICHTENGER: SO IT'S RESOLVED ITSELF IN LINE WITH WHAT WE WOULD HAVE EXPECTED TO HAVE SEEN?

MR. KELLER: THAT'S RIGHT.

CHAIRMAN LICHTENGER: EXCELLENT. THAT'S GOOD. BEFORE WE CALL UP -- BOB.

MR. KLEIN: BEFORE THE APPLICANT, IF WE TALK HERE ABOUT THE VALUE SCORE WHICH WAS EXPLORED HERE A LITTLE EARLIER. AS DEBORAH SAYS, THIS COST IS 20 PERCENT BELOW THE AVERAGE COST FOR INSTITUTES. AND MY UNDERSTANDING IS THAT, STEVE, YOU SAW FUNCTIONALLY A VERY GOOD VALUE IN THE LAB SPACE ITSELF, AND YOUR CONCERN OVER VALUE WAS IN THE AUDITORIUM SPACE AND THE CONFERENCE SPACE.

MR. COPENHAGEN: THAT'S RIGHT.

MR. KLEIN: AND WITH THIS BEING THE LOWEST COST BY 20 PERCENT, IF WE ASSIGN NO VALUE TO THAT SPACE AT ALL, THEN THEY WOULD HAVE -- WE COULD OFFSET THAT LACK OF VALUE BY THE 20 PERCENT LOWER COST, AND THEY'D BE LEFT WITH A RATING OF VERY GOOD FUNCTIONALITY ON ALL THE OTHER SPACE. SO I THINK YOU HAVE TO MAKE IN VALUE A VALUE ADJUSTMENT FOR THE FACT THEY HAVE 20 PERCENT LOWER COST.

CHAIRMAN LICHTENGER: BUT, BOB, RICK, MAYBE YOU COULD HELP ME WITH THIS, BOB. THEY HAVE A 20 PERCENT LOWER COST THAT TAKE INTO ACCOUNT THEIR CONFERENCE AND OFFICE SPACE IN THE FIRST FLOOR, CORRECT?

MR. KLEIN: SURE, IT DOES.

MR. KELLER: YES, IT DOES.

MR. KLEIN: HE'S SAYING THAT THEY DON'T HAVE GOOD VALUE TO CONFER. WHAT WE'RE BUYING IS -- THEY'RE BEING DOWNGRADED BECAUSE OF THAT CONFERENCE SPACE. WHEN YOU DO THE VALUE ADJUSTMENT, WE COULD GET ZERO VALUE OF THAT AND STILL HAVE EFFECTIVELY, THEN, ON THE BALANCE OF THIS -- THE 20 PERCENT LOWER COST IS AS IF WE DIDN'T EVER PAY FOR THAT SPACE AT ALL. FOLLOW ME? WE GOT TO NET OUT 20 PERCENT OF THE COST BECAUSE THEY'RE 20 PERCENT LOWER COST THAN THE AVERAGE COST, AND THEN YOU ARE LEFT WITH LAB SPACE THAT'S FUNCTIONALLY VIEWED AS BEING VERY GOOD. FROM A VALUE VIEWPOINT, STEVE, WHEN YOU ADJUST FOR COST, WOULD YOU ASSIGN IT A DIFFERENT GRADE?

MR. COPENHAGEN: I WAS TRYING IN MY ANALYSIS NOT TO JUST LOOK AT THE DOLLAR PER SQUARE FOOT AND SAY THAT'S LOWER AND, THEREFORE, HAS GREATER VALUE. I WAS LOOKING AT THE FUNCTIONAL OR THE -- WHETHER THE BUILDING WAS CREATING SPACES THAT WERE REALLY STRONG SUPPORT OR NECESSARY TO THE SCIENCE AS PART OF THAT VALUE EQUATION.

BUT IF YOU TAKE YOUR SCENARIO THERE, YES, BECAUSE THEY ARE SO MUCH CHEAPER IN COST, THAT YOU ARE GETTING THAT VOLUME OF SPACE AND YOU'RE NOT PAYING A PREMIUM FOR IT AT ALL.

CHAIRMAN LICHTENGER: IT SHOULD BE LESS EXPENSIVE SPACE THOUGH IF 36 PERCENT OF IT IS OTHER OFFICES AND ADMIN SUPPORT.

MR. KLEIN: SURE. BUT YOU CAN'T PENALIZE SOMEONE TWICE. THEY'VE ALREADY GOT THE LOWEST COST.

CHAIRMAN LICHTENGER: I'M NOT PENALIZING THEM. I JUST -- I'M JUST SAYING, BOB, IF YOU WANT TO REALLY EQUALIZE COST, THEN YOU HAVE TO SAY WHAT PERCENTAGE OF THE SPACE IS OFFICE AND OTHER COMPARED TO LABS, SUPPORT, AND PI, AND CORE FACILITIES.

MR. KLEIN: OFFICE HAS BEEN INCLUDED IN THE -- THE PI OFFICES HAVE BEEN INCLUDED WITH LAB SPACE IN THE OTHER APPLICANTS. SO IT'S -- FURTHERMORE, I WOULD MAKE THE ARGUMENT THAT ONE OF THE UNIQUE THINGS THAT THEY PRESENTED IN TERMS OF THE SCIENTIFIC ARGUMENTS FOR THIS AND ONE OF OTHER UNIQUE THINGS THEY PRESENTED IN THE APPLICATION WAS THEY'RE PART OF A BIOTECH COMMUNITY THAT'S VERY VIBRANT HERE, AND THAT THEY ARE PROPOSING TO BRING THEM TOGETHER THROUGH THIS CONFERENCE AND MEETING SPACE WITH THE CLINICIANS AND THE SCIENTISTS TO GET BETTER TEAMS OF PEOPLE. SO I THINK IT ACTUALLY HAS A VALUE.

CHAIRMAN LICHTENGER: BOB, YOU KNOW, I WOULD SAY THERE'S DEFINITELY A VALUE TO THAT; BUT IF YOU LOOK AT THE COST, TOTAL PROJECT COST PER PI, THEY DO HAVE, I GUESS, THE THIRD HIGHEST IN THIS CATEGORY.

MR. KLEIN: IF YOU ADJUST THAT FOR TOTAL COST PER RESEARCHER, YOU WILL FIND THAT THEY'RE TOWARDS THE LOWEST END BECAUSE THEY'RE PROVIDING MORE SQUARE FOOTAGE PER RESEARCHER THAN MANY OF THE OTHER APPLICANTS.

CHAIRMAN LICHTENGER: OKAY. SO ANY OTHER COMMENTS OR QUESTIONS BEFORE WE --

MR. KASHIAN: I HAVE SOME QUESTIONS. ON THE ISSUE THAT BOB IS TALKING ABOUT, I TOTALLY AGREE. WHAT THEY'RE DOING IN EFFECT IS CREATING A NEW ORGANIZATION, A NEW ORGANIZATION THAT HAS TO SUSTAIN ITSELF WITH THE ORGANIZATIONAL PART OF THE ASSOCIATIONS, ORGANIZATIONAL PART THAT'S ALREADY ASSOCIATED WITH THE ESTABLISHED CAMPUSES. THEY DON'T HAVE ADMINISTRATIVE OFFICE FOR FACULTY AND FACILITIES AND THIS KIND OF THING. IF YOU ADJUST THE COST AND TAKE OUT, THEN THEIR COST IS ABOUT THE AVERAGE OF EVERYONE ELSE.

THE QUESTION I HAVE IS, RICK, I GUESS THIS IS OF YOU. THERE'S NO QUESTION IN MY MIND THAT THERE'S VALUE TO THE LAND. I KNOW TO BE FACT THAT THE UNIVERSITY, THE UNIVERSITY TRUSTEES ARE NOT ALLOWED TO SELL GROUND BY LAW. CAN'T DO IT. THE VALUE OF THE LAND DEPENDS ON WHAT RENT THE TRUSTEES ARE CHARGING THIS CONSORTIUM FOR THE LAND. THAT DETERMINES THE VALUE OF THE LAND. SO DO YOU KNOW THE ANSWER TO MY QUESTION?

MR. KELLER: I KNOW WHAT THEY SAID IN THEIR LETTER. AND I THINK THE CHAIRMAN INDICATED ON PAGE 5.

CHAIRMAN LICHTENGER: TAKE A LOOK AT PAGE 5.

MR. KELLER: PAGE 5 IN THE YELLOW SHEET.

MR. KLEIN: IT'S THE YELLOW SHEET, PAGE 5, THE SECOND FULL PARAGRAPH.

MR. KELLER: WHAT THAT INDICATES IS THAT THEY WILL OBTAIN RIGHTS TO USE THE LAND FOR A 52-YEAR LEASE. AND THEN THE LAST SENTENCE IS THE CAPITALIZED LEASE COST, CIRM-FUNDED SHARE OF THE FACILITY IS 14.4 MILLION. AND THEN IN THE PARAGRAPH THAT STARTS BELOW, IT SAYS, ACCORDING TO STATEMENT OF ACCOUNTS, AND THEN THE NEXT PARAGRAPH IS TO THE EXTENT THAT THE SDCRM USES ALL OR A PORTION OF THE BUILDING FOR THE APPROVED USES, UCSD HAS GENEROUSLY OFFERED TO GRANT TO SDCRM A CREDIT IN PROPORTION TO SUCH APPROVED USE.

SO I DON'T KNOW THE DYNAMIC. ANSWERING YOUR QUESTION AS TO HOW MUCH WILL THEY PAY IN RENT, IT SAYS THAT THERE'S AN AMOUNT THAT IS PART OF A CAPITALIZED LEASE. AND THEN THERE'S A STATEMENT THAT IT WOULD BE FORGIVEN GENEROUSLY IF THEY USE THE BUILDING FOR THE PURPOSES FOR WHICH IT'S INTENDED TO BE USED.

MR. KASHIAN: WELL, THE SECOND HALF OF THAT IS RELEVANT.

MR. KELLER: YES.

MR. KASHIAN: THE OTHER ISSUE IS IS 52 YEARS ENOUGH TO AMORTIZE WHAT WE'RE TALKING ABOUT AS A LONG-TERM RESEARCH PROGRAM?

MR. KELLER: THIS WOULD HAVE THE LAND REVERT BACK TO THE UNIVERSITY AT THE CONCLUSION OF THAT ALONG WITH ANY IMPROVEMENTS.

CHAIRMAN LICHTENGER: ED, I HATE TO CUT YOU OFF, BUT I WANT TO GET THE APPLICANT UP HERE. AND WE CAN TALK ABOUT THAT A LITTLE BIT MORE AFTER.

MR. KASHIAN: I OBJECT.

CHAIRMAN LICHTENGER: YOU OBJECT. OKAY. WHAT'S YOUR QUESTION ON THIS, ED?

MR. KASHIAN: MY OTHER QUESTION LIES WITH THE ABILITY TO GOVERN. WHERE IS -- HOW IS THAT ADDRESSED? WHEN YOU DEVELOP A NEW CONSORTIUM, YOU HAVE ALL THESE DIFFERENT ISSUES. AND HOW DO YOU GOVERN THE CONSORTIUM?

MR. KELLER: WE DIDN'T ADDRESS THAT, BUT I THINK THE APPLICANT WILL BE ABLE TO ADDRESS IT.

MR. KASHIAN: THANK YOU.

CHAIRMAN LICHTENGER: THANKS, ED. IF WE COULD HAVE THE CONSORTIUM STEP UP TO THE PODIUM, PLEASE.

DR. HOLMES: THANK YOU. MY NAME IS ED HOLMES. I'M THE PRESIDENT OF THE SAN DIEGO CONSORTIUM FOR REGENERATIVE MEDICINE OR SDCRM. AND LET ME SAY IT'S A REAL PLEASURE TO BE ON THIS SIDE OF THE TABLE AND TO BE HAVING THIS DISCUSSION. HAVING HAD THE PLEASURE TO WORK WITH THE ICOC FOR SEVERAL YEARS, BOB AND OTHER ICOC MEMBERS, I APPLAUD THAT YOU'VE GOTTEN US THIS FAR WHERE WE'RE HAVING THIS PARTICULAR DISCUSSION. I ALSO THANK RICK AND HIS STAFF. BEING A CONSORTIUM, WE PROBABLY HAD TWICE AS MANY QUESTIONS AS ANYONE ELSE DID TO COME TO YOU, AND THEY'VE BEEN VERY PATIENT IN HELPING US.

SO I'M HERE WITH MY COLLEAGUE, LOUIS COFFMAN, WHO'S THE VICE PRESIDENT OF SDCRM. AND WE THOUGHT WE WOULD TAKE THIS IN TWO SETS IF THAT'S OKAY. I'LL DEAL WITH FUNCTIONALITY, HE'LL DEAL WITH VALUE, AND WE'LL TRY AND ANSWER ANY QUESTIONS OBVIOUSLY THAT HAVE YOU FOR US ABOUT OTHER ISSUES IF THAT'S OKAY, MR. CHAIRMAN.

CHAIRMAN LICHTENGER: SURE. PLEASE NOTE THAT YOU HAVE A THREE-MINUTE LIMIT OTHER THAN ANSWERING QUESTIONS.

DR. HOLMES: QUICKLY THEN, ON THE FUNCTIONALITY PART OF THIS, THE SCIENTISTS, I BROUGHT A LETTER WHICH I COULD LEAVE FOR THE GROUP FROM THE LOCAL SCIENTISTS THAT PARTICULARLY ADDRESS THIS FUNCTIONALITY. AND I WON'T GO INTO THAT OTHER THAN TO SAY THIS IS A BUILDING THAT'S REALLY BEEN DESIGNED BY LOCAL SCIENTISTS. AND THEY FEEL VERY POSITIVE ABOUT THE BUILDING SERVING THEIR SCIENTIFIC NEEDS, WHICH WE THINK IS VERY IMPORTANT.

LIKEWISE, TO SAY SOMETHING ABOUT THE COMMON SPACE, I THINK THAT, AS MR. KLEIN SAID IN HIS REMARKS, THAT A PART OF THE SCIENTIFIC PROGRAM IS THE COMMON SPACE. THAT'S THE WAY THE PROGRAM WAS DESIGNED AND UNDER ITS SCIENTIFIC REVIEW WAS SOMETHING THAT WAS VIEWED, I THINK, POSITIVELY AT THAT TIME. SO THE COMMON SPACE IS PART OF THE OVERALL COLLABORATIVE EFFORT WITH OTHER PEOPLE WHO AREN'T IN THE BUILDING, BEING THE PRIVATE SECTOR ARE THERE.

IF I MIGHT SAY A WORD ABOUT THE LOCATION, THAT THE EXACT NUMBER OF METERS, I CAN'T TELL YOU, BUT THE SITE WAS CHOSEN SO THAT IT IS ADJACENT. THE SALK INSTITUTE, UCSD, AND THE SCRIPPS RESEARCH INSTITUTE PROPERTY ALL ABUTS UPON THIS. SO AS THE SALK FACULTY LIKE TO SAY, IT'S CLOSER TO GET TO THIS BUILDING THAN IT IS THEIR CAFETERIA IN THE SALK SO THAT IT'S QUITE PROXIMATE FOR PEOPLE AT UCSD, SALK, AND TSRI TO GET THERE. IT'S ACROSS THE STREET FROM UCSD, IT ABUTS SALK, AND THE TSRI PROPERTY IS ADJACENT TO IT ALSO.

CHAIRMAN LICHTENGER: CAN YOU GIVE ME -- AGAIN, I KNOW YOU'RE SAYING THAT YOU DON'T KNOW METERS. ARE WE TALKING A HUNDRED YARDS, 300 YARDS?

DR. HOLMES: I GUESS IT DEPENDS UPON WHAT PART OF THE UCSD CAMPUS THAT YOU MIGHT BE IN. LET'S SAY, SALK, IT'S LITERALLY AS FAR AS FROM HERE TO YOU ACROSS THE STREET TO GET THERE. FROM UCSD, PART OF UCSD IS LITERALLY ACROSS THE STREET.

CHAIRMAN LICHTENGER: WHAT ABOUT THE CORES THAT THESE RESEARCHERS WILL ACCESS?

DR. HOLMES: I MIGHT HAVE TO ASK LOUIS WHERE ALL OF THE CORES ARE LOCATED.

MR. COFFMAN: PRINCIPALLY WHAT'S HAPPENED, AS ED SAID, THE BUILDING HAS BEEN DESIGNED FROM THE BOTTOM UP. AND SO THE CORES THAT SCIENTISTS NEED, SPECIFICALLY THE VIVARIUM AND THE ANIMAL IMAGING, ARE IN THE BUILDING. THE GENOMICS, THE HIGH THROUGHPUT GENOMICS AND THE LIKE ARE ALL IN THE BUILDING BECAUSE THE SCIENTISTS SAID THEY NEED THAT TO ACHIEVE THE SCIENCE THAT THEY DESCRIBED IN PART 1.

THE CORES THAT WE'RE GOING TO RELY ON PARTNERS, OUR GMP FACILITIES, OUR RELATIONSHIP WITH ALTHEA TECHNOLOGIES, GENOMICS WITH THE VENDOR INSTITUTE AND THE LIKE.

WITH RESPECT TO DISRUPTION IN TERMS OF ACCESS TO THE CORES ITSELF THAT ARE GOING TO BE RELIED ON IN OTHER INSTITUTES, PROTEOMICS IS THE LARGEST, AND THAT'S SO WE DON'T HAVE TO DUPLICATE THE MASS SPEC FACILITY THAT'S AT TSRI IMMEDIATELY ADJACENT TO THE SITE.

DR. HOLMES: I THINK TO ANSWER THE CHAIRMAN'S QUESTION, THE PROTEOMICS IS AT TSRI, WHICH ABUTS. I DON'T KNOW EXACTLY WHICH BUILDING IN TSRI THAT IT'S IN. WE CAN GET THAT INFORMATION FOR YOU.

CHAIRMAN LICHTENGER: I THINK YOU'VE GIVEN ME A GOOD ENOUGH SENSE, THAT IT'S RIGHT NEXT TO IT.

DR. HOLMES: I THINK YOU CAN SAY THAT IT'S FIVE MINUTES WALKING DISTANCE TO MOST OF THE AREA.

CHAIRMAN LICHTENGER: PERFECT. THAT HELPS. THANK YOU.

DR. HOLMES: AND IF I MIGHT SAY ONE THING ABOUT GROWTH, WHICH WE WERE ASKED SPECIFICALLY TO COMMENT ON GROWTH. THE BUILDING AS IT'S DESIGNED AND WAS SPOKEN TO, ROUGHLY 60 PERCENT OF IT IS SDCRM, 40 PERCENT OR 29,000 SQUARE FEET OF THIS SPACE IS NOT SDCRM. THE COMMITMENT FROM THE FOUR PARTNER INSTITUTIONS IS THAT THEY WILL PUT, TO THE EXTENT POSSIBLE, STEM CELL SCIENTISTS INTO THAT. SO IN OUR MIND THAT IS OUR GROWTH SPACE THAT IS PART OF THAT BUILDING. AND EACH OF THE FOUR INSTITUTIONS WANTS AND PLANS TO AND IS COMMITTED TO PUT STEM CELL SCIENTISTS THERE. THEY MAY NOT HAVE ALL OF THE STEM CELL SCIENTISTS RIGHT NOW TO GO IN THAT; HENCE, THE GROWTH CAPACITY.

FINALLY, I WOULD JUST SAY ONE THING ABOUT THE CONSORTIUM. I DON'T KNOW HOW YOU WOULD PUT THIS IN AS FAR AS VALUATION TO DEAL WITH. BUT IN OUR EARLY DISCUSSIONS ABOUT GOING IN SEPARATELY AS FOUR INSTITUTIONS VERSUS GOING IN AS A CONSORTIUM, IN THE BEGINNING STAGE EACH OF THE FOUR INSTITUTIONS HAD PLANNED TO GO IN SEPARATELY. SO WE WENT IN FOR $50 MILLION. I DON'T KNOW EXACTLY WHAT IT WOULD BE IF WE HAD GONE IN SEPARATELY, BUT I SUSPECT IT WOULD HAVE BEEN $100 MILLION IF YOU TAKE THE VARIOUS INSTITUTIONS IF THEY HAD GONE IN. I DON'T KNOW HOW TO DEAL WITH THAT AS A PARTICULAR SAVINGS, BUT IT WAS A SPECIFIC PART OF OUR PLAN WAS TO TRY AND SAVE COST THAT WAY.

CHAIRMAN LICHTENGER: WE APPRECIATE IT. THANK YOU.

MR. COFFMAN: I THINK OUR THREE MINUTES ARE UP, BUT IF I CAN IMPOSE JUST TO ADDRESS A COUPLE OF THE QUESTIONS.

CHAIRMAN LICHTENGER: QUESTIONS DON'T COUNT FOR YOUR TIME.

MR. COFFMAN: ASK ME ABOUT VALUE.

CHAIRMAN LICHTENGER: ACTUALLY I WANT TO ASK YOU ABOUT URGENCY THOUGH.

MR. COFFMAN: HAPPY TO TALK ABOUT THE URGENCY. SO URGENCY, ONE OF THE THINGS THAT WE'VE -- THE INNOVATIVE THINGS THAT WE'VE DONE HERE IS THAT THE CONSORTIUM HAS ENGAGED A DEVELOPER. THE DEVELOPER, AND THE DEVELOPER IS LANGFORD & ASSOCIATES, WE WENT THROUGH AN RFP PROCESS, AND HE HAS ASSEMBLED A TEAM, INCLUDING TWO SETS OF ARCHITECTS, AS WELL AS A SUSTAINABILITY ENGINEER, AND HENSEL PHELPS IS THE CONTRACTOR. WE'VE ENGAGED THE DEVELOPER EFFECTIVELY TO BRING COST DISCIPLINE AND TIME DISCIPLINE. BUT WE'RE WORKING WITH UCSD AS OUR GROUND TENANT AND ALSO AS THE LEAD AGENCY WITH RESPECT TO THE EIR. AND SO MANY PARTS OF THE EIR PROSECUTION PROCESS ARE BEING DONE IN PARALLEL THAT WOULD NORMALLY BE DONE SERIALLY.

FOR INSTANCE, NOW WE ARE IN THE MIDST OF THE -- WE ARE IN THE PUBLIC HEARING ON THE NOTICE OF PREPARATION. OUR EIR IS BEING DRAFTED. IT'S NOT PREDETERMINED, BUT IT'S BEING DRAFTED AS WE SPEAK. SO WHEN THE NOTICE OF PREPARATION, THAT PUBLIC PERIOD IS OUT, WE'RE READY TO ISSUE THE EIR. WE WORK WITH THE OFFICE OF THE PRESIDENT IN TERMS OF THE NUMBERS OF REVIEWS THAT WE EXPECT THAT THEY WILL DO, SO WE BELIEVE, WE APPRECIATE AND WE ACCEPT THAT IT IS AN AGGRESSIVE SCHEDULE, BUT WE BELIEVE THAT WE CAN GET TO THE REGENTS IN NOVEMBER OF '08. IF WE GET TO THE REGENTS IN NOVEMBER OF '08, WE CAN BE TO THE CALIFORNIA COASTAL COMMISSION BECAUSE WE'VE HAD PRELIMINARY DISCUSSIONS WITH THE STAFF. WE BELIEVE WE CAN BE THERE IN DECEMBER, AND WE CAN PUT A SHOVEL IN THE GROUND IN MARCH '09.

MS. HYSEN: IN TERMS OF THE SCHEDULE, I DO THINK IT'S HIGHLY AMBITIOUS. DO YOU HAVE ANY INCENTIVE TO THE CONTRACTOR OR ARE YOU CONTEMPLATING IT TO MEET YOUR TIMEFRAMES OR CONVERSELY ANY PENALTY IF THEY DON'T?

MR. COFFMAN: WE HAVE PASSED THROUGH ANY PENALTIES ASSOCIATED WITH THE CIRM PENALTIES BACK ONTO THE DEVELOPMENT MANAGEMENT AGREEMENT WHERE THE PRESIDENT HAS DISCRETION TO PENALIZE US IF WE DO NOT MEET THE URGENCY REQUIREMENT.

CHAIRMAN LICHTENGER: WHAT IF IT'S CAUSED BY THE COASTAL PERMIT PROCESS OR OTHER GOVERNMENTAL APPROVAL PROCESSES? SO I MEAN --

MR. COFFMAN: IF WE DO NOT MEET THE CIRM DEADLINE, WE HAVE THE ISSUE. WHAT THEY'VE DONE IS THEY'VE WORKED PART AND PARCEL WITH US PUTTING TOGETHER THE SCHEDULE. WE ADMIT IT'S AGGRESSIVE. IT'S VERY DIFFICULT. I BELIEVE WE'VE EXPENDED EVERY EFFORT WE CAN TO, ONE, ENGAGE THE COMMUNITY. ONE, I THINK YOU'VE SEEN IN OUR LETTER WE HAVE SUPPORT OF THE MAYOR, WE HAVE THE SUPPORT OF THE COUNCIL PRESIDENT, WE HAVE THE SUPPORT OF TWO MEMBERS OF THE BOARD OF SUPERVISORS, AND THEY'RE ALL WHOLLY BEHIND THE PROJECT. SO, YES, IT IS AGGRESSIVE, BUT WE BELIEVE THAT WE CAN ACCOMPLISH IT AND BE IN FRONT OF THE REGENTS IN NOVEMBER.

CHAIRMAN LICHTENGER: I'M GOING TO GIVE YOU A SOFTBALL. YOU WANT TO TELL ME ABOUT VALUE?

MR. COFFMAN: THANK YOU. WITH RESPECT TO VALUE, WHAT WE DID IS ADDRESS IN THE APPLICATION IN THE CRITERIA THAT WERE DISCUSSED THROUGHOUT THE LAST YEAR. ONE, REASONABLE AND NECESSARY COST I REMEMBER BECAUSE I SUGGESTED IT, AND THEN INNOVATION AND SUSTAINABILITY. WITH RESPECT TO REASONABLE AND NECESSARY, IT'S ALREADY BEEN POINTED OUT THAT THE APPLICATION IS THE LOWEST COST. AND WE BELIEVE THAT IT'S A RESULT OF THE DISCIPLINE THAT WE BROUGHT BY VIRTUE OF EMPLOYING THE DEVELOPER, WHO'S BEEN VERY RIGOROUS IN TERMS OF HOLDING THE COST DOWN.

WITH RESPECT TO SUSTAINABILITY, WE'VE ENGAGED LINCOLN SCOTT, WHO IS VERY, VERY ADVANCED IN TERMS OF SUSTAINABILITY AND DIFFERENT GREEN INITIATIVES. SOME OF THE MEP SOLUTIONS THAT THEY'VE HAD HELPED US REDUCE SIGNIFICANTLY THE MECHANICAL COSTS OF THE BUILDING USING CHILLED BEAMS, CONVECTIVE, AND THE LIKE, AND SO THAT, I THINK, IS GOING TO BE EXTRAORDINARY. AS WELL AS THE VIVARIUM, WE'RE LOOKING AT WHAT I KNOW OTHER APPLICANTS HAVE LOOKED AT AS WELL, A DISPOSABLE CAGING SYSTEM WHICH OBVIATES THE PURCHASE OF EXTRAORDINARY CAGE WASHING EQUIPMENT, PLUS IT ENABLES US TO LOCATE VIVARIA UP ON THE LAB FLOORS.

THE OTHER INNOVATIVE THING WHICH ADDRESSES A THING THAT, MS. HYSEN, YOU BROUGHT UP AS WELL AS STEVE CRITICIZED THE LABS AS BEING CONTIGUOUS. ONE OF THE PEOPLE MADE A COMMENT THAT LAB RESEARCHERS ARE PRONE TO GO 10 X HORIZONTAL BEFORE THEY GO VERTICAL. IT'S BECAUSE THEY HAVE TO BECAUSE THERE ARE NO SPACES. WHAT WE HAVE DONE IS, GIVEN THE SITE LIMITATIONS, WE'VE CREATED CIRCULAR STAIRCASES IN THE MIDDLE OF THE LABS, WHAT WE CALL VERTICAL CIRCULATION ELEMENTS, TO TIE THE ENTIRE BUILDING TOGETHER TO INCREASE THE COLLABORATION. I'M GETTING EXCITED. I'VE BEEN LIVING THIS.

SO THE IDEA WAS THAT THE PRINCIPAL PURPOSE OF THE BUILDING WAS TO ENABLE AND FACILITATE COLLABORATION. AND SO IN THAT EVERYTHING WE'VE DONE IS THAT THE SCIENTISTS, EVERYTHING ABOUT THE BUILDING WAS TO ENABLE THAT. AND THE MOST IMPORTANT THING WITH RESPECT TO FUNCTIONALITY IN THAT ADDITIONAL SPACE, WE'RE GOING TO LOCATE 21 INVESTIGATORS IN THE BUILDING. IN OUR PART 1 APPLICATION, THERE WERE 109 BIOSKETCHES, AND THERE WEREN'T 160 BECAUSE 50 COULDN'T GET THEM TO US IN TIME. THE OTHER SPACES ARE CREATED THERE TO ENGAGE THE OTHER 90 MEMBERS OF THE NONRESIDENT FACULTY MEMBERS IN THE COMMUNITY AS WELL AS THE CORPORATE PARTNERS THAT I ALLUDED TO.

MS. SAMUELSON: MY QUESTION GOES TO I THINK BOTH VALUE AND FUNCTIONALITY AND MAYBE FOCUSES MOST ON THE GROUND FLOOR CONFERENCE SPACES. AND THERE WAS A DISCUSSION ABOUT THAT BEING A BENEFIT COUNTYWIDE. IT WOULD SEEM TO ME THAT THE BENEFIT IS MUCH MORE INTERNATIONAL. WITNESS YOUR OWN DR. HOLMES' HISTORY SINCE YOU LEFT US. AND THE COLLABORATIONS, I WOULD THINK YOU'D BE HAVING WITH ASIA AND SO ON. THAT'S VERY EXCITING, I WOULD THINK, AND OF ENORMOUS VALUE AND HAVE A BIG A RETURN ON INVESTMENT IN TERMS OF THE WORK PRODUCT, IN ADDITION TO BEING CHEAP PERHAPS. COULD YOU SPEAK TO THAT BECAUSE WE HAVEN'T REALLY HEARD ABOUT THAT?

DR. HOLMES: THANK YOU FOR THAT COMMENT. YES, WE DO VIEW IT AS SOMETHING THAT IS MORE THAN JUST THE LOCAL COMMUNITY THAT WOULD TAKE ADVANTAGE OF THAT. THE DESIGN OF THE PROGRAM SCIENTIFICALLY IN THE SCIENTIST'S MIND, I THINK, COULD VERY MUCH ENVISION THAT PART OF THEIR COLLABORATION, YOU COULD EITHER HAVE PEOPLE COMING IN AND WORKING AT A BENCH NEXT TO YOU, OR YOU COULD HAVING PEOPLE COMING INTO A FACILITY LIKE THIS TO PARTICIPATE IN DIFFERENT TYPES OF INTERACTION. AND I TAKE YOUR POINT. IT WOULD BE, ALTHOUGH WE HAVE NOT THOUGHT ABOUT IT, IT WOULD BE REALLY IMPORTANT TO THINK ABOUT USING IT FOR INTERNATIONAL TYPES OF ACTIVITIES AS WELL AS JUST ACTIVITIES ACROSS THE WIDER SAN DIEGO COMMUNITY AND CALIFORNIA. DO YOU WANT TO ADD ANYTHING TO IT?

MR. COFFMAN: I THINK BEYOND THE INTERNATIONAL, A COMMENT THAT WAS MADE BY MR. COPENHAGEN IS THAT THERE ARE NO PROGRAMS IDENTIFIED OTHER THAN INTERACTION AND SEMINAR SPACE THAT JUSTIFIES THE LARGE OPEN AREA ON THE FIRST FLOOR. WE RESPECTFULLY DISAGREE BECAUSE IN THE PART 1, THROUGHOUT THE PART 1 AND ALSO IN PART 2, THE PRINCIPAL OBJECTIVES OF THE CONSORTIUM WERE TO PROMOTE COLLABORATION, TO INVENT NEW TOOLS, TEACH AND TRAIN THE NEXT GENERATION OF SCIENTISTS, AND THEN OUTREACH TO THE COMMUNITY. ALL OF THESE SPACES ARE VITALLY IMPORTANT FOR THOSE SPECIFIC PURPOSES. IT'S NOT THAT THIS IS STARTING DE NOVO. THERE'S AN EXTRAORDINARY EXPERIENCE AMONG ALL THE CONSORTIUM MEMBERS ALREADY IN REACHING OUT TO THE COMMUNITY. THE NEUROSCIENCE STEM CELL TRAINING PROGRAM WAS RECENTLY RANKED THE BEST IN THE WORLD.

SO THERE IS PROGRAMMATIC PURPOSE FOR THOSE SPACES. AND OTHERS ARE CRITICIZED FOR NOT HAVING ENOUGH OF THEM, AND WE'VE GOT TOO MUCH OF THEM, BUT WE BELIEVE THAT THEY'RE WHOLLY SUPPORTED AND JUSTIFIED IN WHAT WAS DESCRIBED IN PART 1.

CHAIRMAN LICHTENGER: THE VICE CHAIR HAD A QUESTION.

VICE CHAIRMAN SERRANO-SEWELL: I WANT TO GET BACK TO URGENCY FOR A SECOND. I DON'T WANT TO DWELL ON IT, BUT IT SEEMS TO ME THAT THERE WERE CERTAIN -- GIVE ME A COMFORT LEVEL HERE. IT SEEMS TO ME THAT THERE ARE CERTAIN CHALLENGES AND ISSUES THAT ARE JUST OUTSIDE OF THE CONSORTIUM'S CONTROL. YOU CAN MEET WITH THE COASTAL COMMISSION, AND IT'S GOOD. I'M GLAD TO HEAR YOU'RE MEETING WITH THEM, BUT ULTIMATELY IT'S THE COMMISSIONERS THAT ARE GOING TO MAKE THAT CALL. THERE ARE OTHER INTERESTED STAKEHOLDERS IN THE COMMUNITY THAT HAVE EXPRESSED THEIR DIRE -- THEIR CONCERN ABOUT THIS.

MR. COFFMAN: IT'S DIRE.

VICE CHAIRMAN SERRANO-SEWELL: I'M A LAND USE ATTORNEY IN SAN FRANCISCO FOR THE CITY, SO I KNOW HOW CHALLENGING THIS CAN BE. IT CAN BE VERY CHALLENGING, AND GETS VERY DICEY REAL FAST. SO HAVE YOU THOUGHT ABOUT AND ARE YOU ENGAGING SOMEONE TO, LIKE, WORK WITH THOSE STAKEHOLDERS TO GET A BROKERED SITUATION SO, YOU KNOW, THERE'S A UNIFIED FRONT BEFORE THE COASTAL COMMISSION? BECAUSE IT'S BEEN MY EXPERIENCE YOU DON'T NEED A LOT TO STOP SOMETHING. IT'S EASY TO STOP SOMETHING. IT'S HARDER TO MAKE IT HAPPEN. THAT'S THE HARD WORK.

I'M NOT SUGGESTING -- I'M NOT CASTING ANY ASPERSIONS ON ANYONE. I THINK ALL VOICES NEED TO BE HEARD, AND THIS IS WHAT THE REGULATORY PROCESS IS ALL ABOUT. SO IT'S NOT A SLIGHT ON ANYONE. BUT I'M NOT SUGGESTING THAT PEOPLE JUST WANT TO SAY NO TO THESE THINGS. BUT I'M SAYING THIS IS THE REALITY OF CALIFORNIA LAND USE POLITICS ARE SUCH THAT YOU, AS THE APPLICANT AND AS THE PROJECT SPONSOR, HAVE TO DEAL WITH IT.

SO BEYOND, LIKE, OKAY, I GOT THE WHOLE SCIENCE, IT'S INTEGRATED WITH STAIRS. I'M FINE. TELL ME HOW YOU'RE GOING TO DEAL WITH THAT PIECE OF IT, AND THAT GOES TO URGENCY IN MY OPINION.

MR. COFFMAN: ABSOLUTELY. SINCE DECEMBER, WEEKLY UCSD, WHO IS THE LEAD AGENCY IN ALL OF THIS, AS WELL AS WITH CONTACTS BACK INTO UNIVERSITY, THE PRESIDENT'S OFFICE AS WELL, ALSO -- I DIDN'T KNOW THIS EXISTED BEFORE WE STARTED THIS -- A HISTORICAL ATTORNEY, WHOSE FOCUS IS JUST ON DEALING WITH SITES THAT ARE LISTED ON THE NATIONAL REGISTRY OF HISTORICAL PLACES. AND WE ALSO HAVE A CEQA ATTORNEY WHO'S WORKING WITH US HAND IN HAND IN DEVELOPING THE EIR. THE SITE, THE ISSUE, WE VISITED, WE'VE DONE IT, WE'VE DONE A PRELIMINARY REVIEW OF ALL THE ENVIRONMENTAL POTENTIAL IMPACTS, AND WE HAVE NOT PREDETERMINED. BUT AS THE APPLICANT, WE'VE DECIDED TO GO FORWARD CONSCIOUSLY WITH THIS DESPITE ALL OF THESE POTENTIAL BARRIERS BECAUSE THE ISSUE IS THE GLIDER PORT. AND IT'S NOT THE HANG GLIDERS. THE HANG GLIDERS, THE PEOPLE WHO TAKE THE LEAP OF FAITH WITH THE LITTLE KITE ON THE BACK, THEY'RE NOT GOING TO BE IMPACTED. IT'S JUST THE SOARING, THE GLIDERS, THE FIXED-WING GLIDERS. AND THE FIXED-WING GLIDER PORT IS NOTED ON THE NATIONAL REGISTRY FOR HISTORICAL SIGNIFICANCE FROM 1932 TO 1950.

NOW, THE IMPORTANCE IS, WHAT WE'VE LEARNED OF THE NATIONAL HISTORIC SITE IS THAT WHAT'S THE BASIS OF THIS LISTING? AND THE BASIS OF THIS LISTING IS EVENTS AND PEOPLE, NOT A STRUCTURE. AND SO WE BELIEVE THAT GIVEN THE FACT THAT -- WE AGREE THAT THE EVENTS AND THE PEOPLE THAT HAPPEN THERE SHOULD BE REMEMBERED AND CELEBRATED. WE THINK WE CAN DO THAT WITHOUT DISRUPTING -- WITHOUT IT PRECLUDING US FROM BUILDING ON A SITE THAT'S IN THE UCSD LONG-RANGE DEVELOPMENT PLAN FOR ACADEMIC USE IN A GROVE OF TREES, WHICH IS NOT A PIECE OF PROPERTY THAT'S TYPICALLY ASSOCIATED WITH FLIGHT. THE GLIDER PORT HAS A RUNWAY. THAT'S GOING TO BE UNIMPACTED, SO WE HAVE A TEAM OF PEOPLE, VERY DIVERSE PEOPLE, THAT ARE VISITING THESE ISSUES.

YOU'RE RIGHT, MR. SERRANO-SEWELL, WE CAN'T -- ANYTHING CAN HAPPEN, BUT I THINK WE'VE DONE A VERY, VERY THOROUGH JOB OF EXAMINING THEM AND ANTICIPATING THEM.

MR. KLEIN: I THINK THE GLIDER PORT --

DR. HOLMES: YOU MENTIONED ABOUT HAVING OTHER HELP. WE HAVE RETAINED A CONSULTANT WHO'S VERY KNOWLEDGEABLE IN DEALING WITH THESE TYPES OF MATTERS WHO'S WORKING WITH US ON A BASIS TO DEAL WITH THE POLITICAL, ALL THE VARIOUS AGENCIES WITH WHOM WE HAVE TO WORK, AND HAS BEEN SUCCESSFUL IN THE PAST IN HELPING.

MR. KLEIN: THE GLIDER PORT IS CLEARLY AN ISSUE, AND THE COASTAL ZONE APPROVAL IS CLEARLY AN ISSUE. BUT I HAVE ACTUALLY FOR AFFORDABLE HOUSING GONE THROUGH A COASTAL ZONE APPROVAL EVEN FASTER THAN THIS. IT'S A WEIGHING OF PUBLIC POLICY. I TAKE IT THAT BEING LOCAL THERE YOU WOULDN'T BE SPENDING MONEY UNLESS YOU REALLY BELIEVED YOU'RE GOING TO GET THROUGH THE COASTAL ZONE COMMISSION BECAUSE THE PEOPLE THAT ARE INVOLVED HERE ARE EXTRAORDINARILY WELL-INFORMED PEOPLE IN THIS COMMUNITY. BUT IT IS A RISK THAT EVERYBODY HAS TO UNDERSTAND.

BUT IN TERMS OF THE FUNCTIONALITY, THIS RECEIVED THE HIGHEST OVERALL SCORES OF ANY APPLICATION. AND THE PEER REVIEW PROCESS, THEY UNDERSTOOD WHERE THIS WAS, HOW IT WAS SITUATED IN RELATION TO THE OTHER FACILITIES. AND IT WOULD BE INTERDEPENDENT FOR ITS USE OF CORES, SO THE SCIENTISTS ON THE PEER REVIEW PANEL, IN GIVING THIS THE HIGHEST SCIENTIFIC SCORE, LOOKED AT THIS ISSUE AND EVALUATED IT, AND I THINK I PERSONALLY WILL SHOW SOME DEFERENCE TO THEIR OPINION.

BUT FOR THE PUBLIC'S BENEFIT, YOU HAVE A LETTER. HOW LONG IS THAT LETTER, THE LETTER FROM THE SCIENTISTS?

DR. HOLMES: I CAN PROBABLY EXTRACT THE KEY POINTS FROM IT AND LEAVE IT WITH YOU. IT'S A PAGE AND A HALF.

CHAIRMAN LICHTENGER: WHY DON'T WE DISTRIBUTE IT TO THE MEMBERS.

MR. KLEIN: WE SHOULD DISTRIBUTE IT, BUT FOR THE BENEFIT OF THE PUBLIC, I THINK YOU SHOULD READ THE KEY POINTS BECAUSE IT'S IMPORTANT THAT THE PUBLIC BE ABLE TO COMMENT ON THOSE KEY POINTS IF THEY THINK IT'S APPROPRIATE.

DR. HOLMES: THIS IS SIGNED BY -- ACTUALLY WE WERE ASKED ABOUT GOVERNANCE, IF I MIGHT ANSWER THAT BECAUSE IT GOES TO THIS POINT, MR. CHAIRMAN, ABOUT HOW WE WOULD GOVERN THE ORGANIZATION. I'M THE PRESIDENT OF THE ORGANIZATION, WHICH WOULD BE SORT OF LIKE A DEAN, I GUESS YOU WOULD SAY. WE HAVE A SCIENTIFIC STEERING COMMITTEE WHO ARE THE PEOPLE WHO SIGNED THIS PARTICULAR LETTER IN FRONT OF YOU, WHICH IS A SENIOR SCIENTIST, STEM CELL SCIENTIST, FROM EACH OF THE FOUR INSTITUTIONS, AND WE HAVE A BOARD OF DIRECTORS COMPOSED OF THE PRESIDENTS OF THE FOUR INSTITUTIONS, PLUS KEY COMMUNITY LEADERS WHO WE GO TO FOR GOVERNANCE-RELATED ISSUES.

AS FAR AS RECRUITMENT, THE FOUR SCIENTISTS WORKING WITH THE FACULTIES IN THE FOUR INSTITUTIONS WILL DO THE ADDITIONAL RECRUITING AS A TEAM EFFORT, AND EACH PERSON WILL HOLD A PRIMARY APPOINTMENT ON THE FACULTY AT ONE OF THE INSTITUTIONS. CIRM GETS, IF YOU WILL, THE BENEFIT OF, LET'S SAY, HAVING TENURE AT UCSD AND THE SIX FTE'S THAT UCSD IS PUTTING INTO THIS IF THAT POTENTIALLY ADDRESSES THAT QUESTION.

MR. KASHIAN: I'D LIKE TO ASK YOU A FEW MORE FOLLOW-UP QUESTIONS.

DR. HOLMES: SHOULD I JUST FINISH OFF THIS LETTER, THEN, FROM THE SCIENTIFIC STEERING COMMITTEE?

CHAIRMAN LICHTENGER: LET HIM FINISH THAT IF THAT'S OKAY, ED.

DR. HOLMES: JUST TO READ A SENTENCE HERE, AS THE LEADERSHIP TEAM FOR THE GROUP OF SCIENTISTS WHO WILL OCCUPY AND USE THIS BUILDING, WE ARE CONFIDENT THAT THE DESIGN OF THIS FACILITY IS HIGHLY FUNCTIONAL FOR THE TYPE OF COLLABORATIVE STEM CELL RESEARCH AND BEHAVIORAL

CHARACTERISTICS OF OUR UNIQUELY INTERACTIVE SCIENTIFIC COMMUNITY. THEY GO ON TO SAY THAT THEY'VE WORKED CAREFULLY WITH THE ARCHITECTS AT EVERY STEP OF THE WAY AND HAVE BROUGHT THE BEST OF WHAT THEY HAVE IN THEIR FOUR INSTITUTIONS INTO THE PLANNING OF THIS SPACE THAT MEETS THEIR NEED.

THEY SAY THE APPARENT ISOLATION OF THE PROPOSED SDCRM AS NOTED BY CANNON DESIGN DOES NOT TAKE ACCOUNT THAT OUR COMMUNITY MOVEMENT OF SCIENTISTS AND COLLABORATIVE TEAMS BETWEEN THE FOUR INSTITUTIONS HAPPENS ON A DAILY BASIS BY A COMBINATION OF WALKING, DRIVING, AND SHUTTLE SERVICES. NONE OF THESE SITES IS MORE THAN FIVE TO TEN MINUTES AWAY FROM EACH OTHER. IN FACT, THE COMBINED SITE IS SMALLER THAN MOST UNIVERSITY CAMPUS SITES. AND I BELIEVE THAT'S THE KEY POINTS RELATED TO THAT.

CHAIRMAN LICHTENGER: GREAT. THANK YOU. ED, DID YOU WANT TO ASK A FOLLOW-UP QUESTION?

MR. KASHIAN: A FEW. I WANT TO PREFACE WHAT I'M ASKING BY TELLING YOU THAT THIS CONCEPT IN THE SCIENTIFIC SCORE, I COMMEND YOU AND YOUR COLLEAGUES TOTALLY. IT'S EXACTLY THE KIND OF THING THAT I THINK SHOULD HAPPEN.

THAT BEING SAID, I DON'T MEAN TO BE CRASS BY ASKING THIS QUESTION, BUT IT MAY HAVE BEEN WRITTEN AND I MISSED IT, DO YOU HAVE A WRITTEN ORGANIZATION? ARE YOU A LEGAL ENTITY?

DR. HOLMES: OH, YES. WE ARE A 501(C)(3) NOT-FOR-PROFIT.

MR. COFFMAN: YES, WE'RE ORGANIZED AS A CALIFORNIA CORPORATION, NONPROFIT CORPORATION. WE'VE RECEIVED AN IRS DETERMINING LETTER OF OUR TAX-EXEMPT STATUS.

MR. KASHIAN: DO YOU HAVE A WRITTEN, EXECUTED LEASE WITH THE UNIVERSITY?

MR. COFFMAN: IT'S UNDER NEGOTIATION. TERM SHEET, BUT IT WAS EMBODIED -- THE DOCUMENT THAT CAUSED THE ORGANIZATIONS TO COME TOGETHER WAS A CONSORTIUM AGREEMENT. THAT CONSORTIUM AGREEMENT HAD IT IN THERE THAT WE WOULD WORK THROUGH THIS TERM SHEET FOR A GROUND LEASE WITH THE UNDERSTANDING --

MR. KASHIAN: LEASE SAYS THAT THE RENT WILL BE FORGIVEN IF IT'S USED FOR THIS PURPOSE?

MR. COFFMAN: THE LEASE SAYS -- YES, WE WILL PAY FAIR MARKET RENT FOR THE LEASE, WHICH IS DETERMINED BASED UPON A FAIR MARKET COMP BASED ON A RECENT TRANSACTION LEASE THAT THEY'VE DONE WITH ANOTHER TENANT.

THEY WILL, INDEED, TO THE EXTENT THAT WE USE THIS FOR STEM CELL RESEARCH, WE WILL INDEED GET A RENT CREDIT EQUAL TO THAT USE; HOWEVER, WE MAY HAVE TO MONETIZE THEIR POSITION BECAUSE IT SAID TO THE EXTENT THAT ANY OF THE PARTNERS HAVE TO COME UP WITH A CAPITAL CONTRIBUTION TO MEET THE MATCHING REQUIREMENT, THANKFULLY WE'RE NOT GOING TO HAVE TO DO THAT, BUT IF THERE'S MATCH, THE VALUE OF THE LEASE WOULD OFFSET THEIR COMMITMENT. SO THERE'S A POTENTIAL THAT IT CAN, IN FACT, BE MONETIZED.

OUR APPROACH HERE WAS BECAUSE THIS ENTITY IS SEPARATE AND DISTINCT FROM THE UNIVERSITY, TWO SEPARATE ENTITIES, WE ENTERED INTO A TRANSACTION AT FAIR MARKET VALUE AT ARM'S LENGTH WITH THE UNIVERSITY. AND THE UNIVERSITY IS A SEPARATE ORGANIZATION, GRANTED A CONTRIBUTION BACK. SO IN OUR VIEW IT'S TANTAMOUNT TO A DONOR MAKING A CONTRIBUTION THAT WE WENT AFTER AND PAID FOR.

AND IT'S NOT MEANT TO BE SLEIGHT OF HAND; IT'S NOT MEANT TO BE DISINGENUOUS. THE IDEA IS USING ACTUALLY ONE OF THE QUESTIONS, THE FAQ'S, THAT WAS IN THE RFA THAT SAID THIS IS -- BECAUSE, AS YOU SAID, MR. KASHIAN, THERE'S VALUE TO THIS LAND, AND THIS IS A NEW ORGANIZATION.

MR. KASHIAN: SOMEONE AT THE PRESIDENT'S OFFICE WAS CONCERNED ABOUT THE FACT THAT YOU'RE ABLE TO EXECUTE. WHY?

MR. COFFMAN: I'M SORRY?

MR. KASHIAN: WELL, THE LEASE SAYS IF USED FOR THIS PURPOSE, THEN THE RENT WOULD BE FORGIVEN, WHICH WOULD THEN, IN MY MIND, GIVE YOU THE FULL VALUE OF THE REAL ESTATE AS LEVERAGE.

MR. KLEIN: ED, THERE'S A 52-YEAR LEASE, AND THEY'RE COMMITTED WITH US, EVERY INSTITUTION, TO STEM CELL RESEARCH FOR TEN YEARS. AFTER THE TEN YEARS, PART OF THIS COULD BE -- ANY OF THESE APPLICANTS COULD USE SPACE FOR DIFFERENT PURPOSES IF, IN FACT, THE SCIENCE MOVED IN A DIFFERENT DIRECTION.

MR. COFFMAN: PERHAPS A WORD OF THE EVOLUTION OF THIS AS WELL. THE ENGAGEMENT OF THE DEVELOPER, THE DEVELOPER WAS GOING TO HAVE FREE REIGN TO LEASE A PORTION --

CHAIRMAN LICHTENGER: I'M SORRY. I'M JUST GOING TO -- WE'RE REALLY RUNNING OUT OF TIME ON THIS ISSUE, ED. I'M SORRY.

MR. KASHIAN: I WANT TO HEAR IT.

CHAIRMAN LICHTENGER: WELL, ED, PLEASE.

MR. KASHIAN: LET ME GO ONE STEP FURTHER.

CHAIRMAN LICHTENGER: ON THIS ISSUE I THINK IT'S VERY CLEAR IN THE DETAILS THAT RICK PROVIDED AND THEIR COMMENTS THE ISSUE AND HOW WE'RE DEALING WITH THIS.

MR. KASHIAN: I UNDERSTAND.

CHAIRMAN LICHTENGER: WHAT'S THE NEXT ISSUE?

MR. KASHIAN: I'M GOING ON TO ANOTHER QUESTION.

CHAIRMAN LICHTENGER: WHAT IS THAT?

MR. KASHIAN: YOU WANT ME TO ASK YOU OR YOU WANT ME TO ASK THEM?

CHAIRMAN LICHTENGER: I WANT TO MOVE ON TO THE NEXT APPLICATION BECAUSE WE HAVE OTHERS TO DO TONIGHT.

MR. KASHIAN: IN ORDER TO GET THROUGH ALL OF THIS, YOU NEED TO BE FUNDED FOR PREDEVELOPMENT COSTS. WHERE IS THAT MONEY COMING FROM?

MR. COFFMAN: THE DEVELOPER. WE'VE A WRITTEN AGREEMENT. OUR AGREEMENT WITH THE DEVELOPER WAS WE WENT OUT AND ASKED FOR AN RFP FROM DEVELOPERS WHO WOULD FRONT ALL OF THESE COSTS WITH FULL RISK OF LOSS IF WE'RE NOT AWARDED THIS GRANT. SO THE DEVELOPER HAS FRONTED ALL OF THESE COSTS. CLOSE TO THREE QUARTERS OF A MILLION DOLLARS, AND IF WE DON'T GET THE GRANT --

MR. KASHIAN: INCLUDING THE EIR AND ALL?

MR. COFFMAN: HE'S BEEN FRONTING ALL OF THE COST.

MR. KASHIAN: EXCELLENT.

MS. HYSEN: WHAT'S THEIR NAME?

MR. COFFMAN: LANGFORD & ASSOCIATES. WE HAD THREE BIDDERS.

CHAIRMAN LICHTENGER: GREAT. THANK YOU, ED. FIRST OF ALL, I'D LIKE TO THANK THE CONSORTIUM FOR COMING THIS EVENING AND ANSWERING OUR QUESTIONS FOR YOUR APPLICATION, WHICH WAS REALLY APPRECIATED. AND THANK YOU. SO PUBLIC COMMENT?

MR. SIMPSON: JOHN SIMPSON FROM CONSUMER WATCHDOG. I JUST WANT TO SAY THAT FROM THE TAXPAYER'S POINT OF VIEW, WE WOULD RATE THIS A PLUS, A PLUS. WE THINK THAT THEY'VE DONE EVERYTHING THAT SHOULD HAVE HAPPENED. THE SCIENTISTS GOT TOGETHER. FROM WHAT I UNDERSTAND, THEY SAID THIS IS THE KIND OF BUILDING WE WANT TO HAVE BUILT. IT'S BEEN BUILT. I FEAR THAT THE LAB DESIGNER EVALUATED THIS PERHAPS FROM THE POINT OF VIEW OF FREESTANDING LAB AND NOT TAKING INTO FULL ACCOUNT THE COMPLETELY COLLABORATIVE NATURE OF THIS. IT WOULD SEEM TO ME STRANGE IF YOU DID NOT END UP GIVING THIS PROBABLY ALSO YOUR HIGHEST SCORE ON THE FACILITIES SIDE AS WELL AS ON THE SCIENTIFIC SIDE. THANK YOU.

MS. SAMUELSON: I JUST WANTED TO POINT SOMETHING OUT FOR ANYBODY ON THE WORKING GROUP WHO MAY NOT KNOW THE SCIENTISTS. AND I'M NOT A SCIENTIST, BUT I DO KNOW THAT THEY AREN'T JUST GREAT SCIENTISTS WHO REPRESENT IMPORTANT INSTITUTIONS. LARRY GOLDSTEIN, RUSTY GAGE, AND EVAN SNIDER ARE ALL INDEPENDENTLY BIG KAHUNAS IN THE INTERNATIONAL STEM CELL COMMUNITY. FOR THEM ALL TO BE ENDORSING THIS, I DON'T JUST HAPPEN TO KNOW DR. FRIEDLANDER, BUT HE MAY WELL BE OF THE SAME STATURE, BUT THEY ARE GIANTS IN THE INTERNATIONAL STEM CELL COMMUNITY, WOULDN'T YOU SAY, BOB, AND THAT'S ANOTHER REALLY EXCITING THING.

CHAIRMAN LICHTENGER: THANK YOU, JOAN. SO WE'VE GOTTEN PUBLIC COMMENTS, WE'VE CERTAINLY ASKED A FEW QUESTIONS, SO I'D ASK EVERYONE TO RECORD THEIR PRELIMINARY SCORE. I'M HAVING MIC PROBLEMS HERE.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: SO, RICK, SO NOW WE'VE DONE EVERY ONE OF THE ONES IN THIS CATEGORY, SO WE'RE GOING TO ALLOW TIME.

MR. KELLER: IF YOU'D LIKE TO TAKE A MOMENT TO REREVIEW YOUR PRELIMINARY SCORES AND PUT THE FINAL SCORES DOWN, THAT WOULD BE A GOOD THING TO DO. AND THAT WAY WE CAN AGGREGATE THOSE IN THE MORNING REGARDLESS OF WHERE YOU FINISH. YOU NEED TO DO THAT IN INK ACCORDING TO YOUR GENERAL COUNSEL.

MS. HYSEN: THESE ARE FINAL? WE DON'T HAVE A CHANCE TO MODIFY THEM TOMORROW AFTER DISCUSSION? I FORGET THE PROCESS.

MS. PACHTER: WHAT WE'RE TRYING TO DO IS COMPLETE THE DISCUSSION ON EACH CATEGORY INDIVIDUALLY SO WE CAN INVITE BACK IN THE MEMBERS WHO WERE RECUSED IN THIS CATEGORY, BUT WHO CAN PARTICIPATE IN THE NEXT TWO. THERE'S NOTHING TO PREVENT YOU FROM HAVING DISCUSSION NOW ON THE WHOLE CATEGORY.

MS. HYSEN: THAT WOULD BE IN PUBLIC?

MS. PACHTER: YES.

MS. HYSEN: THANK YOU.

MR. KLEIN: WE WILL IN THE PROGRAM DISCUSSION TOMORROW HAVE AN ABILITY TO EVALUATE WHAT THE SCORES MEAN HAVING GONE THROUGH ALL THREE CATEGORIES.

(PAUSE IN PROCEEDINGS.)

MS. HYSEN: EVEN IF THERE'S STILL INFORMATION NOT FILLED OUT ON THAT PAGE?

MR. KELLER: ANY PAGE WHERE YOU FILLED SOMETHING IN, I DON'T KNOW WHERE THE BREAK IS. JUST SO THAT WE HAVE THE RECORD IF WE AGGREGATE THOSE SCORES, IN THE MORNING, WE WANT TO MAKE SURE THAT YOUR SIGNATURE IS ON THE PAGE THAT YOU PUT ANYTHING ON.

MS. HYSEN: BUT WHEN THERE'S A PAGE WHERE THERE'S ONE WHO GROUP THAT'S NOT BEEN FILLED IN, DO YOU WANT US TO SIGN JUST THAT ONE WE FILLED IN?

MR. KELLER: JUST THE ONE YOU FILLED IN OR DRAW A LINE AND SIGN IN. JUST DRAW A LINE AND SIGN IT.

MR. KLEIN: SO WE'RE GOING TO GET A SEPARATE BOOK TO PUT THE OTHERS IN?

MR. KELLER: NO. THEY SHOULD BE IN THERE. WE'RE GOING TO COLLECT THEM AND THEN REDISTRIBUTE THEM BACK.

CHAIRMAN LICHTENGER: RICK.

MR. KELLER: IN THE MORNING.

MR. KLEIN: BUT WE'RE GOING TO COVER TWO MORE TONIGHT.

CHAIRMAN LICHTENGER: WHY WOULDN'T WE GIVE THESE TO WHOEVER IS GOING TO PUT THOSE NUMBERS TOGETHER SO THEY CAN START WORKING ON THEM?

MR. KELLER: THAT'S THE DAY CREW. THE DAY CREW WILL BE IN AT 7 A.M. TO DO THIS.

CHAIRMAN LICHTENGER: YOU GUYS DON'T HAVE THE SHIFT COMING IN SHORTLY?

MR. KELLER: DIVISION OF LABOR.

MR. KLEIN: WE'RE SIGNING THESE, BUT WE'RE NOT HANDING THEM IN YET.

MR. KELLER: RIGHT.

CHAIRMAN LICHTENGER: SO LET'S GIVE MEMBERS ANOTHER COUPLE OF MINUTES, AND THEN WE'RE GOING TO MOVE ON TO THE NEXT APPLICATION. WE DID TAKE PUBLIC COMMENTS, RIGHT?

WELCOME, MARCY. OKAY. RICK, I THINK WE CAN MOVE ON TO THE NEXT APPLICATION.

MR. KELLER: THAT COMPLETES THE INSTITUTES. AND MOVING ON TO THE CENTERS OF EXCELLENCE, YOU HAVE TWO PROPOSALS IN THIS CATEGORY.

CHAIRMAN LICHTENGER: OUR GOAL IS TO GET THROUGH THESE TWO THIS EVENING.

MR. KELLER: THE FIRST ONE IN THIS CATEGORY IS APPLICATION 600 FOR THE BUCK INSTITUTE. THE APPLICATION PROPOSES CONSTRUCTION OF A FOUR-STORY BUILDING TO HOUSE LABORATORIES FOR EXISTING AND FUTURE STEM CELL RESEARCHERS, CORE FACILITIES, AND ALSO A REGIONAL OR STATEWIDE TISSUE CULTURE FACILITY, AND A VARIETY OF SUPPORT SPACES AS WELL.

THE BUILDING DESIGN IS SIMILAR IN DESIGN TO EXISTING BUILDINGS AT THIS CAMPUS. SO IT'S SORT OF TAKING ADVANTAGE OF EXISTING DESIGN FOR THEIR MASTER PLAN. THE PROJECT WOULD HAVE 12 PRINCIPAL INVESTIGATORS THAT WOULD BE ENGAGED IN INSTITUTIONAL-BASED RESEARCH, AND THERE'S ALSO CAPACITY FOR FOUR ADDITIONAL PI'S ON A VISITING SCIENTIST BASIS. CURRENTLY THE APPLICANT HAS SIX PI'S AND ANTICIPATES TO RECRUIT A TOTAL OF TEN WITH SOME OTHERS LOCATED IN OTHER BUILDINGS ON THE CAMPUS.

THE PROJECT ALSO INCLUDES A VARIETY OF SPACES BECAUSE IT'S A VERY FAIRLY SMALL INSTITUTE AND, THEREFORE, THEY HAVE OPTED TO INCLUDE SOME SPACES THAT ARE TYPICALLY NOT INCLUDED IN SCIENCE BUILDINGS, SUCH AS A FITNESS CENTER, A CONFERENCE CENTER, AND EXTENSIVE FOOD SERVICE AND LIBRARY SPACE AS PART OF THE PROJECT.

IN ADDITION, WE IDENTIFIED THE FACT THAT THERE WERE SOME DIFFICULTIES WITH THE CALCULATION OF THE ASSIGNABLE SQUARE FEET, BUT I THINK WE'VE ESTABLISHED THAT THE ASSIGNABLE SQUARE FEET SHOULD BE 44,119, AND THAT'S THE NUMBER THAT WE USED THROUGHOUT THIS AS WE CONSIDER IT A TECHNICAL CORRECTION.

SECOND, THE CIRM-FUNDED PROJECT INCLUDES SPACE THAT TYPICALLY IS NOT PROVIDED, AS I MENTIONED. AND ALSO IN THE STRATEGIC PLAN SPACE FOR STATEWIDE CORE FACILITIES, SUCH AS TISSUE CULTURE, IS AN OBJECTIVE OF CIRM LATER ON. IF THESE SPACES WERE FUNDED OUTSIDE THE CIRM-FUNDED PROJECT, THE PROJECT WOULD BE ABOUT ONE-THIRD THE SIZE THAT IT CURRENTLY IS.

THIRD, WE NOTE THAT THE AMOUNT OF LEVERAGE INCLUDED A CONSIDERABLE AMOUNT OF FUNDS FOR WHAT IS CLASSIFIED AS PRIOR EXPENDITURES. AND ON PAGE 4 OF THE STAFF ANALYSIS, THERE'S A LISTING OF SIX CATEGORIES. BASED ON YOUR PREVIOUS ACTION, 2,250,000 THAT HAD BEEN INCLUDED TO APPORTION PRESENT VALUE OF THE CENTRAL PLANT UTILITIES AND AN EXISTING AUDITORIUM AND RELATED DESIGN COST WOULD NOT BE ALLOWED. YOU MAY WANT TO DISCUSS THAT. THERE'S ALSO 1.9 MILLION THAT'S ACTUALLY PRIOR YEAR EXPENDITURES FOR RESEARCH. THERE'S 6.4 MILLION FOR AN EXISTING VIVARIUM, WHICH IS EXISTING. AND SO WE WOULD NOT CONSIDER THAT TO BE LEVERAGE.

THE BALANCE, THE TOP THREE ITEMS INCLUDES THE PRESENT VALUE OF LAND APPORTIONMENT AND ENTITLEMENTS ASSOCIATED WITH THE INSTITUTE, WHICH BEGAN -- I BELIEVE CONSTRUCTION BEGAN ABOUT 1995.

FINALLY, IN TERMS OF IDENTIFICATION OF FUNDING FOR MATCHING. THERE'S A MATCHING REQUIREMENT AND FUNDS IN EXCESS -- CONSTRUCTION FUNDS THAT ARE NEEDED IN EXCESS OF THE CIRM REQUEST OF $25 MILLION IS 11.9 MILLION. THE APPLICANT INDICATES THAT THIS MONEY WOULD COME FROM A YET-TO-BE CONSUMMATED REAL ESTATE TRANSACTION THAT WILL THROW OFF FUNDING THAT WOULD PROVIDE THE MATCH AND ADDITIONAL CONSTRUCTION FUNDS. SO WE DON'T KNOW THE NATURE OF THAT OR WHETHER IT CAN BE CONSUMMATED PRIOR TO THE JULY REQUIREMENT.

STEVE COPENHAGEN'S EVALUATION WAS A FUNCTIONAL SCORE B AND A VALUE SCORE C. HE NOTED THAT THE INTERACTION SPACE AND RELATIVELY LOW COST FOR THIS PROJECT ARE DUE TO AVAILABLE AND CONVENIENT SITE. I THINK THAT ABOUT COVERS IT. I THINK WE'D TURN THIS OVER TO THE PRIMARY REVIEWER IS MEMBER KASHIAN AND SECONDARY REVIEWER IS CHAIR LICHTENGER.

MR. KASHIAN: THANK YOU. THIS APPLICATION IS EXCELLENT FROM MY POINT OF VIEW. AT THE RISK OF ANNOYING MR. HARRISON, I HAVE A PARTICULAR INTEREST IN THIS INSTITUTION BECAUSE THEIR FOCUS IS ON THE AGING, AND I FEEL LIKE I QUALIFY FOR THAT GROUP. I'M NOT SURE THAT'S A CONFLICT.

MR. HARRISON: IT'S NOT.

MR. KASHIAN: THE INSTITUTE IS FOCUSED AND HAS

BEEN RELENTLESS IN THE PURSUIT OF THEIR MISSION SINCE INCEPTION, WHICH IS NOW BARELY 20 YEARS OLD OR SUCH. AND THIS APPLICATION IS CONSISTENT, I BELIEVE, WITH THE REQUIREMENTS OF THE CIRM AND CONSISTENT WITH PROPOSITION 71. THEY ARE, AS I UNDERSTAND IT, RESEARCHING SEVEN OF THE TWELVE ISSUES THAT ARE REQUIRED IN THE PROPOSITION.

THE COSTS ARE IN LINE AND COMMENSURATE WITH THE AREA. THEIR ABILITY TO BE ABLE TO START IS DEMONSTRATED. THEY HAVE ALL OF THE LAND ENTITLEMENTS AND ALL OF THE ISSUES READY TO GO. THEY HAVE ALL OF THE INFRASTRUCTURE IN. I'M NOT SURE THEY GET CREDIT FOR IT OR NOT, BOB, BUT I GIVE THEM CREDIT FOR THAT. AND IT'S ALL AVAILABLE AND IN PROCESS.

THE BUILDING COSTS ARE, IN MY MIND, REALLY APPROPRIATE. THEY'RE ABOUT $450 A SQUARE FOOT, THEREABOUTS. AND WHAT'S OF PARTICULAR VALUE TO ME IS THE FACT THAT THEY ARE INCLUDING IN THEIR PLAN HOUSING ON SITE. TOGETHER WITH THE OPEN SPACE THEY HAVE ON A LARGE CAMPUS, I BELIEVE THAT IT CREATES A REALLY GOOD ENVIRONMENT FOR SCIENTISTS LONG TERM AND LONG-TERM RECRUITMENT. IT'S EASY TO RECRUIT SOMEBODY, BUT KEEPING THEM FOR A LONG PERIOD OF TIME, IN MY OPINION, IS DIFFICULT. I WHOLEHEARTEDLY RECOMMEND THIS PROJECT.

CHAIRMAN LICHTENGER: THANK YOU, ED. SO I'D LIKE TO START ON URGENCY FIRST. I ASSUME THAT THEY MET OUR REQUIREMENTS FOR TWO YEARS AND COMPLETION -- I WAS SAYING ON URGENCY THEY SEEM TO BE FROM VERY GOOD TO EXCELLENT. THEY MET OUR REQUIREMENTS FOR TWO YEARS. LOOKS LIKE THEY'RE SCHEDULED TO COMPLETE IN JULY 2010, AND IT SEEMS LIKE THEY'VE GOT A GOOD TEAM THERE, AND IT SEEMS LIKE THERE ARE NO ISSUES THAT I'VE IDENTIFIED OR CIRM HAS IDENTIFIED THAT SEEM TO BE MAJOR ISSUES FOR THEM.

ON LEVERAGE, YOU KNOW, I HAVE A LOT OF QUESTIONS FOR THE APPLICANT, SO I'M GOING TO HOLD MY OPINION UNTIL I UNDERSTAND A BIT MORE ABOUT THAT.

ON SHARED RESOURCES, YOU KNOW, THEY DO SEEM TO HAVE SOME CORES THAT WILL BE AVAILABLE TO BE SHARED. I'D LIKE TO ASK THE APPLICANT A LITTLE BIT MORE ABOUT THEIR SHARED RESOURCES.

THEIR COSTS WERE LOW. THAT WAS ACTUALLY ONE OF THE BEST THINGS ABOUT THE PROPOSAL. I THOUGHT THEY DID A GREAT JOB. I THINK THEY WERE -- THEY'RE CERTAINLY THE LOWEST IN THIS CATEGORY, CORRECT, RICK?

MR. KELLER: LOWEST IN BOTH CATEGORIES.

CHAIRMAN LICHTENGER: THEY HAD VERY, VERY LOW COST, WHICH IS, I THINK, EXCELLENT.

AND THE BIG QUESTION FOR ME IS TO UNDERSTAND THIS LEVERAGE ON A LOT OF THE BREAKDOWN ITEMS THAT RICK IDENTIFIED THAT I'D LIKE TO ASK THE APPLICANT ABOUT REGARDING THESE. THERE'S ABOUT $28 MILLION OF LEVERAGE, AND TO ME IT SEEMS VERY CLEAR THAT APPROXIMATELY EIGHT AND A HALF OF IT NEEDS TO BE RULED OUT IMMEDIATELY. 6.4 MILLION PRORATED SHARE OF AN EXISTING VIVARIUM AND 1.952 MILLION FOR PRIOR EXPENDITURES FOR RESEARCH, BUT I DO WANT TO ASK THE APPLICANT ON THE PRESENT VALUE OF LAND AND THE PRESENT VALUE OF APPORTIONED COST, THE LAND IMPROVEMENTS, AND COSTS FOR ENTITLEMENTS. AND WE'VE ALREADY DEALT WITH THE UTILITY COST. I THINK WE'RE PRETTY CLEAR THAT WE -- RICK, AND WE ARE WILLING TO ALLOW AT COST, CORRECT, LAND AND LAND IMPROVEMENTS?

MR. KELLER : WHATEVER YOU DETERMINE TO INCLUDE.

CHAIRMAN LICHTENGER: BUT DON'T WE HAVE -- WE DON'T TALK ABOUT PRESENT VALUE. WE TALK ABOUT COST, CORRECT?

MR. KELLER: YOU TALKING ABOUT THE UTILITIES?

CHAIRMAN LICHTENGER: NO. I'M TALKING ABOUT CIRM --

MR. KELLER: ON THE LAND.

CHAIRMAN LICHTENGER: ON THE LAND. CIRM HAS A GUIDELINE ABOUT HOW WE'RE GOING TO VIEW COST, CORRECT, BOB? HELP ME HERE.

MR. KLEIN: SURE. THERE'S TWO CONCEPTS OF PRESENT VALUE. IF IT WAS A PRIOR EXPENDITURE, THEIR PRESENT VALUE BY INFLATING IT, I DON'T THINK THAT WORKS. COST IS COST. BUT IN TERMS OF THE UC SAN DIEGO WHICH WE JUST LOOKED AT, THEY DISCOUNTED THE PRESENT VALUE, AND THAT WOULD BE AN APPROPRIATE FASBE REQUIRED FINANCIAL STATEMENT PROCEDURE FOR ARRIVING AT COST.

CHAIRMAN LICHTENGER: I THINK THE BEST THING TO DO TO IS REALLY HAVE THE APPLICANT COME UP AT THIS POINT, AND PERHAPS THEY CAN ANSWER SOME OF THESE QUESTIONS THAT I HAVE.

MR. KLEIN: DON'T YOU HAVE A SECONDARY?

CHAIRMAN LICHTENGER: PRIMARY WENT ALREADY.

MR. KLEIN: ARE YOU GOING TO TAKE QUESTIONS?

CHAIRMAN LICHTENGER: SURE. WE CAN HAVE

QUESTIONS BEFORE THE APPLICANT COMES UP. I THOUGHT THERE WOULD PROBABLY BE A LOT MORE ANSWERS WHEN THE APPLICANT WAS HERE. GO AHEAD.

MR. KLEIN: WELL, IN TERMS OF THIS PARTICULAR APPLICATION, THE SAME PERSPECTIVE REALLY AS WITH SAN DIEGO, WHICH IS THE OTHER LOW COST. I THINK STEVE CAN EXPECT MY POSITION HERE IS THAT MY UNDERSTANDING IS THAT ON VALUE, COULD YOU EXPLAIN WHY, AS THE LOWEST COST PRODUCER, THEY WERE DOWNGRADED ON VALUE? THEN I'D LIKE TO HAVE A DISCUSSION ABOUT THAT.

MR. COPENHAGEN: SIMILAR TO THE SAN DIEGO CONSORTIUM, IT WAS THERE WERE SPACES IN THE BUILDING THAT WERE NOT DIRECTLY RELATED TO THE LABORATORY. SUPPORT SIZE OF THE ENTIRE INSTITUTE, BUT LOOKING AT THE BUILDING JUST SAYING IF THERE WAS SPACE IN THERE TO PUT IN A FITNESS CENTER, WOULD IT HAVE BEEN GREATER VALUE TO PUT IT IN AS MORE RESEARCH SPACE OR NOT BUILD IT. SO IT WAS TOTALLY ON THAT AND WAS NOT LOOKING AT THE LOW DOLLAR PER SQUARE FOOT THAT THE OVERALL PROJECT WAS BEING DELIVERED AT.

MR. KLEIN: WAS YOUR OTHER COMMENT ON VALUE RELATED TO THE TISSUE -- CELL AND TISSUE STORAGE?

MR. COPENHAGEN: YES. SIMILAR, IT'S A LARGE VOLUME OF SPACE IN THE LOWER LEVEL OF THE BUILDING THAT THE APPLICANT DIDN'T HAVE IMMEDIATE NEED FOR IT AND WERE OFFERING IT AS A SHARED RESOURCE TO ALL OF CIRM OR MAYBE EVEN THE STATE AS A DEPOSITORY OF CELL STORAGE.

MR. KLEIN: SO IN TERMS OF THOSE TWO ISSUES, AT 30 PERCENT LOWER COST THAN THE AVERAGE OF ALL THE OTHER FACILITIES, IF THIS INSTITUTION FEELS THAT IN RECRUITING SCIENTISTS TO A RURAL LOCATION, THEY NEED TO PUT A FITNESS FACILITY IN, AND THAT CERTAINLY WE COULD ELIMINATE THAT FOOTAGE TOTALLY AND GIVE IT NO VALUE AND STILL BE SUBSTANTIALLY AHEAD IN TERMS OF HAVING STILL THE LOWEST COST FACILITY OF ANY OF THESE IN TERMS OF VALUE, WHAT WE'RE PURCHASING.

THE OTHER ISSUE ON CELL AND TISSUE STORAGE FACILITY, WE'RE AWARE FROM THE APPLICATIONS THAT THEY HAVE A COLLABORATIVE EFFORT WITH UC DAVIS. I'D LIKE TO SEE WHEN THE APPLICANT COMES UP IF THEY'LL COMMENT ABOUT WHETHER THEY INTEND TO COLLABORATE WITH THEM IN TERMS OF THE CELL AND TISSUE STORAGE FACILITY. IT IS SOMETHING THAT WE NEED AS A STATE. IT SEEMS INAPPROPRIATE NOT TO GIVE IT VALUE; BUT IF WE GAVE IT HALF THE VALUE, THEY, AGAIN, WOULD STILL BE THE LOWEST COST PRODUCER OF SPACE. SO WE'RE GETTING BONUSES THAT WE'RE NOT PAYING FOR BECAUSE OF THEIR COST ECONOMIES IN THERE.

SO THAT'S WHY I HAVE A DIFFERENT PERSPECTIVE ON VALUE BECAUSE WE'RE GETTING A GREAT PRICE ON WHAT WE'RE PURCHASING, AND THESE ARE BONUSES. I DON'T VIEW THEM NEGATIVELY. I VIEW THEM AS A POSITIVE.

IN TERMS OF THE APPROACH, RICK, IN THE LEVERAGE THAT YOU'VE SHOWN ALREADY, YOU'VE ALREADY ELIMINATED THE VIVARIUM.

MR. KELLER: NO.

MR. KLEIN: YOU HAVEN'T?

MR. KELLER: THE LEVERAGE THAT'S IN THE STAFF ANALYSIS WAS --

MR. KLEIN: MY UNDERSTANDING IS THAT YOU HAD ELIMINATED SOME OF THOSE ITEMS. IS THAT INCORRECT?

MR. KELLER: WELL, I THINK THERE WAS A --

MR. KLEIN: YOU'RE NOT SHOWING THEM AT A 175. WE DON'T HAVE THE LEVERAGE CHART UP. MAYBE WE COULD PUT THAT BACK UP. SO --

CHAIRMAN LICHTENGER: HE IS SHOWING IT AT 175. MR. KLEIN: SO THE QUESTION IS, RICK, THERE'S SOME PRETTY CLEAR ISSUES, UNLESS THERE'S SOME SURPRISING ANSWERS HERE.

CHAIRMAN LICHTENGER: WHY DON'T WE ASK THEM THE QUESTIONS.

MR. KLEIN: MAYBE WE CAN HAVE THE APPLICANT -- AS DAVID SAYS, WHEN THE APPLICANT TAKES POSITION, THE EXISTING -- THE VIVARIUM IS A SHARED RESOURCE, NOT LEVERAGE, AS FAR AS I UNDERSTAND FROM OUR RULES. AND THE UTILITIES WE'RE ELIMINATING FOR EVERYONE. THE EXISTING AUDITORIUM IN ANOTHER BUILDING IS A SHARED RESOURCE, NOT LEVERAGE. IT IS A SHARED RESOURCE. IT'S GOOD THAT IT'S THERE, BUT IT'S NOT LEVERAGE. AND THE PRIOR EXPENDITURES FOR RESEARCH, IF IT'S REALLY RESEARCH, IT'S CERTAINLY NOT LEVERAGE AND NOT A COST OF THE BUILDING. BUT I'D LIKE TO, WHEN THE APPLICANT SPEAKS, TO ADDRESS -- CERTAINLY HAVE THEM ADDRESS THOSE ITEMS.

AS TO COST FOR ENTITLEMENTS, AS A COST FOR -- APPORTIONED COST OF LAND IMPROVEMENTS, AS LONG AS IT'S NOT INFLATED, IT WOULD BE A COST. AND I'D LIKE TO UNDERSTAND. IT'S MY UNDERSTANDING FROM THE APPLICATION THAT THERE'S THREE EQUITY PARTNERS THEY HAVE IN DEVELOPING THIS. AND SO THEY HAVE IDENTIFIED THREE. THEY'RE MERELY HAVING THEM COMPETE AGAINST EACH OTHER, BUT I'D LIKE TO UNDERSTAND HOW THE LAND VALUE IS DETERMINED IN THAT. IS IT COST-BASED OR LIKE SAN DIEGO OR IS IT NOT?

CHAIRMAN LICHTENGER: OKAY. IF IT'S OKAY, BOB, I'D LIKE TO HAVE THE APPLICANT COME UP NOW. SO IF YOU COULD TRY TO ADDRESS, FIRST OF ALL, AFTER YOU INTRODUCE YOURSELF, THIS LEVERAGE ISSUE IN SOME OF THESE CATEGORIES, THAT'D BE GREAT.

MR. O'REAR: IT'S RALPH O'REAR, VICE PRESIDENT OF FACILITIES AND PLANNING. I'M AFRAID TO SPEAK ANYMORE. THE LEVERAGE IS DISAPPEARING.

LET ME GIVE A LITTLE BACKGROUND. THE BUCK INSTITUTE PURCHASED ITS LAND IN 1988, AND IT WAS NOT ZONED FOR ITS CURRENT PURPOSE. SO IN ORDER FOR THE INSTITUTE TO EXIST, IT HAD TO GO THROUGH ALL THE STAGES TO BECOME A ZONED, ENTITLED PROPERTY SO THAT THE INSTITUTE COULD ACTUALLY BE BUILT.

THE DESIGN OF THE BUILDING IS FOR FIVE BUILDINGS, AND THERE ARE FIVE LOTS ON THE PARCEL. SO EACH OF THE LOTS ACT INDEPENDENTLY. THEY'RE THEIR OWN SEPARATE FINANCIAL ENTITY. TWO OF -- THE TWO BUILDINGS THAT EXIST ARE 185,000 SQUARE FEET. AND THE WAY THE DESIGN RAN, I.M. PEI DESIGN RAN, WAS THAT ALL OF THE MAJOR FACILITIES TO SERVICE THE FUTURE BUILDINGS ARE IN ONE BUILDING, THE CENTRAL PLANT, ALL THE ELECTRICAL DISTRIBUTION, ALL THE PARKING, ALL THE THINGS THAT WILL SUPPORT THE FUTURE BUILDINGS ARE INHERENT IN THAT FIRST SET OF BUILDINGS.

SO IT'S NOT TOO DRAMATIC TO SAY THAT WITHOUT THE EXISTING BUILDINGS, THE CURRENT DESIGN COULD NOT BE ACCOMPLISHED. SO ALL OF THE SERVICES EXTEND ARE ONE OF THE REASONS WHY THE COSTS ARE SO LOW.

WITH RESPECT TO THE PRICING OF THE LAND, AGAIN, IT ISN'T THE LAND ITSELF THAT HAS THAT MUCH VALUE. IT'S THE LAND IMPROVEMENTS THAT HAVE MADE IT USEFUL. SO THEN THE COST OF THE ENTITLEMENTS ALSO MAKE THEM USEFUL. CERTAINLY HAVE A FACTOR IN WHAT VALUE IS THERE.

CHAIRMAN LICHTENGER: SO WE'RE SHOWING YOU HAVE 4 MILLION 772 AS THE PRESENT VALUE OF THE LAND AND THE 8 MILLION 764 AS THE PRESENT VALUE OF THE APPORTIONED COST OF THE LAND IMPROVEMENT. BUT WE DON'T ALLOW PRESENT VALUE. IF YOU BOUGHT THAT LAND IN 1988, THE PRESENT VALUE ISN'T SOMETHING WE REALLY WANT TO BE LOOKING AT. WE WANT TO LOOK AT IF THERE'S LAND, ACTUALLY OUT-OF-POCKET COST, CORRECT, RICK?

MR. KELLER: WE HAD DISCUSSED THAT IF THERE NEEDED TO BE A LAND PURCHASE IN ORDER TO BUILD A CIRM FACILITY.

CHAIRMAN LICHTENGER: AND THEN YOU'VE GOT 2 MILLION 154 FOR ENTITLEMENTS. HOW IS THAT BROKEN OUT, AND HOW DID YOU ARRIVE AT THAT NUMBER? WHAT PERCENTAGE OF THE ENTITLEMENT COSTS ARE YOU ALLOCATING TO THE CIRM?

MR. KLEIN: DO YOU WANT HIM TO ANSWER ONE AT A TIME?

MR. O'REAR: ON THE 4 MILLION LAND VALUATION, WE HAVE THREE POTENTIAL EQUITY PARTNERS OR THREE DEAL STRUCTURES THAT WE HAVE TERM SHEETS ON. THAT 4 MILLION AND SOME ODD DOLLARS WAS DETERMINED. THAT'S THE VALUE THAT THEY WILL ATTRIBUTE TO THE LAND WHEN THEY BUY INTO THE PARTNERSHIP; OR IF THEY TAKE AN EQUITY POSITION, THEY WILL MONETIZE THE SQUARE FOOTAGE UNDERNEATH THE BUILDING AT THAT 4 MILLION AND SOME ODD DOLLARS. SO THAT REALLY ISN'T THE PRESENT VALUE. THAT'S A COST THAT'S --

MR. KLEIN: IF THEY BUY INTO THE BUILDING, DO YOU THEN HAVE TO LEASE IT BACK?

MR. O'REAR: THAT'S ONE OF THE STRUCTURES. SO SALE/LEASE-BACK IS ONE OF THE COMPONENTS THAT COULD BE DONE HERE. ANOTHER IS FOR US TO BE A PARTNER IN THE BUILDING SO THAT OUR PARTNER WOULD COME IN AND MONETIZE THE MATCHING FUNDS AND THE SHORTFALL IN CONSTRUCTION COSTS AS PART OF THE PARTNERSHIP. SO THEY WOULD PURCHASE.

MR. KLEIN: DO THEY GET A PREFERENCE ON WHAT THEY PAY FOR THIS LAND? DO THEY GET A RETURN ON IT? MR. O'REAR: WE WOULD PAY RENT UNDER ONE OF THE STRUCTURES. UNDER ANOTHER CONSTRUCT, IT'S SIMILAR TO THE SAN DIEGO ONE WHERE AS AN EQUITY PARTNER IN IT, WE WOULD TAKE OWNERSHIP AFTER 20 YEARS.

CHAIRMAN LICHTENGER: YOU CURRENTLY OWN THE LAND, RIGHT?

MR. O'REAR: WE DO. WE OWN THE LAND FREE AND CLEAR.

CHAIRMAN LICHTENGER: AND SO THERE'S NO GUARANTEE THAT ONE OF THESE PARTNERS, THE SITUATIONS WILL HAPPEN, CORRECT?

MR. O'REAR: WELL, I DON'T HAVE A SIGNED DEAL, THERE'S NO WEDDING SIGNATURE WITH ANY OF THEM, BUT THEY ALL ARE WAITING FOR THE RESULTS OF THESE MEETINGS AND THE PROCEEDINGS TO DETERMINE AT WHAT LEVEL OF DEAL WE WOULD BUY INTO. SO UNTIL WE KNOW IF WE'RE ELIGIBLE FOR FUNDING AND WHAT THAT LEVEL OF FUNDING MIGHT BE, WE CAN'T CONSUMMATE THESE DEALS.

MR. KLEIN: THE APPLICANTS THAT HAVE COME BEFORE US TODAY HAVE CONTINGENT CONTRIBUTIONS, THAT UNLESS WE MAKE THE CONTRIBUTION, THEY DON'T GET THE DONATION. SO ALL OF THE APPLICANTS WE'RE LOOKING AT HAVE NOT -- MANY OF THE APPLICANTS WE'RE LOOKING AT HAVE NOT COLLECTED A SUBSTANTIAL SHARE OF THE CONTRIBUTIONS. IN THAT SENSE, THEY ALL HAVE AGREED TERM SHEETS.

CHAIRMAN LICHTENGER: TELL ME ABOUT THE 8 MILLION 764.

MR. O'REAR: OKAY. AS I EXPLAINED, THE CONSTRUCTION OF THE FIRST TWO BUILDINGS HAD ALL THE SERVICES THAT WERE REQUIRED. WE'RE ABOUT 4,000 FEET FROM THE CLOSEST CONNECTION. SO THE LAND IMPROVEMENTS WERE ALL OF THE THINGS, AGAIN, THAT WERE REQUIRED TO SERVICE THIS BUILDING, FROM ROADS, SEWERS, DETENTION BASINS, DRAINAGE, THE PARKING LOTS, THE ELECTRICAL DISTRIBUTION, ALL OF THE THINGS THAT ARE ASSOCIATED WITH THE GREEN FIELD DEVELOPMENT. SO WE WERE LOOKING AT IT AS IF THERE WERE PRIOR EXPENDITURES THAT AVOIDED CIRM'S INVESTMENT IN THOSE PARTICULAR THINGS, THEY WOULD BE ELIGIBLE FOR CONSIDERATION.

CHAIRMAN LICHTENGER: WHAT YEAR WERE THOSE IMPROVEMENTS DONE?

MR. O'REAR: 1995. AND WE TOOK AN IMPUTED VALUE. WE KNOW WHAT THE REAL COSTS WERE, SO WE TOOK A 35-PERCENT SLICE BASED ON THE LEVEL OF OCCUPANCY. IF YOU ADD THE 65,000 SQUARE FEET TO OUR EXISTING FACILITY, THE CIRM-SPONSORED SPACE EQUATES TO ABOUT A 35-PERCENT OCCUPANCY LOAD. SO WE TOOK 35 PERCENT OF THE TOTAL COST OF ALL THOSE LAND IMPROVEMENTS AND ASSOCIATED THOSE WITH THE CIRM PROJECT OR THE PROPOSED PROJECT.

CHAIRMAN LICHTENGER: HOW BIG IS YOUR TOTAL -- HOW MUCH LAND DO YOU HAVE THERE?

MR. O'REAR: 417 ACRES.

CHAIRMAN LICHTENGER: SO CIRM IS GOING TO GET ONE-THIRD OF THOSE ACRES?

MR. O'REAR: NO. THEY'LL GET 1.38 ACRES UNDER THE BUILDING THAT'S BEING PROPOSED.

CHAIRMAN LICHTENGER: OKAY.

MR. O'REAR: AND THE VALUE THAT'S ASSOCIATED WITH THAT IS AS DESCRIBED. IT IS IMPORTANT TO NOTE IN TERMS OF THE FUNDING STRUCTURES, BECAUSE THEY'RE ALL ON SEPARATE LOTS AND WE CAN DO WITH THEM AS WE SEE FIT, I'LL GIVE YOU A LITTLE BIT OF ORDER OF MAGNITUDE. WITH A 355,000 SQUARE FOOT ENTITLED PROJECT, YOU ALREADY KNOW THAT IN THE STATE OF CALIFORNIA THERE'S VALUE ON THE ENTITLEMENTS. THE EXISTING BUILDINGS ARE VARIOUSLY CONSIDERED TO BE WORTH ABOUT $90 MILLION, AND OUR DEBT SERVICE OR OUR DEBT COST ON THOSE ARE 55 MILLION. SO ONE OF THE FUNDING MECHANISMS WOULD BE TO DO A SALE/LEASE-BACK ON THE EXISTING BUILDINGS AND USE THE FUNDS FROM THAT SALE/LEASE-BACK TO APPLY TO BUILDING THREE, WHICH WOULD THEN BE DONE.

WE ALSO HAVE THE NEXT TWO LOTS, WHICH ARE ALSO ELIGIBLE FOR A SEPARATE DEAL, AND THAT MONEY COULD BE ALSO USED TO INVEST IN THE DEVELOPMENT OF THE INSTITUTE, BUT MORE SPECIFICALLY TO COVER ANY MATCHING FUNDS OR SHORTFALL IN CONSTRUCTION BETWEEN THE INVESTMENT BY CIRM AND THE TOTAL COSTS.

CHAIRMAN LICHTENGER: ON THE ENTITLEMENTS, TELL ME HOW YOU ARRIVED AT THAT 2 MILLION 164 NUMBER.

MR. O'REAR: IT TOOK NINE YEARS TO GET PERMITS. THERE WERE PUBLIC HEARINGS, THERE WERE PUBLIC HEARINGS, THERE WERE TWO DIFFERENT BALLOT MEASURES, THERE WAS AN INCREDIBLE AMOUNT OF ACTIVITY THAT TOOK PLACE. AND THE $8 MILLION IS 35 PERCENT OF THE COST THAT IT TOOK TO PUT THE ENTITLEMENTS IN PLACE.

CHAIRMAN LICHTENGER: I'M TALKING ABOUT THE SEPARATE -- SO YOU HAVE 8 MILLION 764 AS THE PRESENT VALUE OF THE APPORTIONED COST OF LAND IMPROVEMENTS, AND THEN YOU HAVE A SEPARATE NUMBER, 2 MILLION 164, FOR ENTITLEMENTS.

MR. O'REAR: THAT'S FOR THE FINAL MAPS, FOR THE LEGAL FEES THAT ARE ASSOCIATED WITH THAT, ALL THE FILINGS, AND THE FINAL SIGN-OFF BY ALL THE LOCAL OFFICIALS.

CHAIRMAN LICHTENGER: WHEN WAS THAT DONE? WHAT YEAR?

MR. O'REAR: THAT WAS DONE IN 1994.

MR. KLEIN: IF I CAN UNDERSTAND, THAT'S 35 PERCENT OF THE TOTAL COST. SO YOU APPORTIONED THE COST FOR ENTITLEMENTS AND ASSIGNED 35 PERCENT TO THIS PAD BECAUSE THIS IS 35 PERCENT OF THE SPACE; IS THAT CORRECT?

MR. O'REAR: CORRECT.

MR. KASHIAN: I'D LIKE TO ASK A FEW QUESTIONS IF I MAY. HOW MUCH OF THE 460 ACRES IS OPEN SPACE?

MR. O'REAR: 327 ACRES ARE OPEN SPACE. THEY'RE NOT FORMAL OPEN SPACE, SO WE HAVE AGRICULTURAL USES THAT CAN BE MADE OF THAT SPACE. SO THERE ARE OTHER WAYS THAT WE CAN MONETIZE THAT PARTICULAR COMPONENT TO ASSURE THAT WE WOULD BE ABLE TO FULFILL OUR OBLIGATIONS TO CIRM IF WE'RE FORTUNATE ENOUGH TO GET A GRANT.

MR. KASHIAN: FOR ARGUMENT SAKE, PRESENT DAY VALUE WITH THE ENTITLEMENTS IN PLACE, IF YOU WERE TO SELL IT TO A PRIVATE PARTY, HOW MUCH WOULD THIS PROPERTY BE WORTH?

MR. O'REAR: WELL, I CAN ONLY GIVE YOU AN OPINION THAT'S BASED ON SOME DISCUSSIONS, BUT WE WOULD BELIEVE THAT 125 TO $150 MILLION WOULD BE THE SALE PRICE.

MR. KASHIAN: I PERSONALLY BELIEVE, ALTHOUGH IT MAY NOT BE IN OUR RULES, THAT PROVIDING THIS OPEN SPACE AND FITNESS CENTERS AND ANY AMENITY THAT WOULD BE ATTRACTIVE, INCLUDING THE HOUSING, WOULD BE ATTRACTIVE TO THE SCIENTISTS AS A MAJOR PLUS. AND I CAN TELL YOU CATEGORICALLY HOW YOU GOT BY WITH THAT LITTLE MONEY FOR THAT INFRASTRUCTURE IN TODAY'S FEE SCHEDULE IS UNBELIEVABLE TO ME. I COMMEND YOU, AND YOU'RE GIVING US A MAJOR VALUE AS FAR AS I'M CONCERNED.

MR. O'REAR: THANK YOU. THE DISCUSSIONS ABOUT ATTRACTING AND RETAINING STAFF ARE VERY RELEVANT TO THE SITE THERE BECAUSE WE'RE KIND OF AN ISLAND OF RESEARCH, AND OUR COLLEAGUES AND FRIENDLY COMPETITORS IN THIS ENDEAVOR MARVEL AT THE MEANS THAT THEY HAVE. IN ORDER TO ATTRACT THE PEOPLE THAT WE HAVE THAT ARE IMPORTANT TO OUR RESEARCH IN AGING AND AGE-ASSOCIATED DISEASES, WE ALREADY KNOW THAT THEY TRULY APPRECIATE THE GROUNDS AND THE FACILITIES, AND THEY'RE VERY HAPPY THAT IF THIS COMES TO FRUITION, THAT IT WILL ALSO ENABLE THE HOUSING PROJECT. SO WE HAVE 128 UNITS OF HOUSING THAT WOULD PROVIDE ON-SITE RESIDENCY ON AN AFFORDABLE BASIS TO PEOPLE THAT WORK AT THE SITE.

CHAIRMAN LICHTENGER: HOW ARE YOU -- CAN YOU TELL US A LITTLE BIT ABOUT ANY AGREEMENTS WITH OTHER INSTITUTIONS FOR SHARING YOUR RESOURCES?

MR. O'REAR: IT WAS COVERED IN PART 1, BUT I'LL TRY AND REMEMBER MOST OF THEM. WE CERTAINLY HAVE A MEMORANDUM OF UNDERSTANDING WITH UC DAVIS. SO AS A CENTER OF EXCELLENCE, WHEN WE GET TO THE POINT WHERE OUR TRANSLATIONAL RESEARCH NEEDS TO BE HANDED OFF TO SOMEONE WHO CAN TAKE IT TO THE NEXT APPROPRIATE LEVEL, THEN WE HAVE THAT IN PLACE WITH UC DAVIS. WE HAVE AN MOU WITH DOMINICAN UNIVERSITY, WHICH IS ANOTHER MARIN COUNTY BASED. IT'S FOR AN ADVANCED DEGREE PROGRAM, AND IT'S BEGINNING A PH.D. PROGRAM IN WHAT WE'VE COINED GEROSCIENCE. GEROSCIENCE IS AN INTERDISCIPLINARY APPROACH FOR AGING RESEARCH WHERE YOU HAVE ALL OF THE DIFFERENT ASPECTS OF AGING IN ONE LOCATION AND CAN TRAIN PEOPLE IN THE MULTIPLE DISCIPLINES THAT ARE REQUIRED TO BE AN EFFECTIVE RESEARCHER IN THE AGING FIELD.

WE HAVE THE GALLO INSTITUTE IN EMERYVILLE AND SONOMA STATE, AND WE'RE ALWAYS WORKING ON OTHER ONES. WE HAVE A COUPLE INTERNATIONAL ONES, WHICH I APOLOGIZE. I DON'T REMEMBER WHO THEY'RE WITH, BUT OUR DR. BRETTISON HAS TWO COLLABORATORS IN FRANCE THAT HAVE BEEN PRETTY EFFECTIVE IN SOME ALZHEIMER'S WORK.

CHAIRMAN LICHTENGER: MARCY.

MS. FEIT: WAS THERE ANY CONSIDERATION GIVEN TO THE AMENITIES, OUTSOURCING THEM, RATHER THAN USING MONEY MARKED FOR SCIENTIFIC RESEARCH? WAS THERE ANY CONSIDERATION TO OUTSOURCING TO OTHER VENDORS TO COME IN AND PROVIDE A FITNESS CENTER OR A RESTAURANT OR FOOD SERVICES RATHER THAN THE INSTITUTE DOING IT THEMSELVES?

MR. O'REAR: I THINK THERE'S TWO COMPONENTS TO THAT. ONE IS THAT WE ARE AN ISLAND. WE'RE ISOLATED, SO WE'RE NOT THAT CLOSE TO FOOD SERVICE LIKE MANY OF OUR COLLEAGUES. SO HAVING IT ON SITE, NOT ONLY ENCOURAGES COLLABORATION, IT ALSO SAVES THE TIME AND EFFORT TO GO TO OTHER PLACES. SO WHAT WE DO NOW, BECAUSE WE'VE CONVERTED OUR KITCHEN AND CAFETERIA INTO SPACE, WE HAD A GRANT FROM THE FEDERAL GOVERNMENT TO CONVERT WHAT WOULD HAVE BEEN FUTURE KITCHEN AND CAFETERIA SPACE INTO MORE LAB SPACE. SO WE LOST THAT OPPORTUNITY, AND THIS IS REPLACING THAT OPPORTUNITY IN THE NEXT BUILDING.

WE DO HAVE OUTSIDE OPERATORS THAT WOULD BE WILLING TO COME IN AND OPERATE A FACILITY; BUT IF WE DON'T HAVE THE SPACE WITHIN WHICH TO DO THAT, THEN IT KIND OF OBVIATES THAT COMPONENT. WE CURRENTLY HAVE LOCAL VENDORS WHO HAVE FAXES. WE SET UP FAXES. IN THE MORNING YOU CAN GO DOWN TO THE RECEPTION AREA AND THERE'S MENUS FROM WHOEVER IS BRINGING FOOD UP THAT DAY. YOU FILL OUT YOUR MENU AND YOU PAY THE MONEY TO THE RECEPTIONIST, AND THEN THOSE VENDORS BRING THE FOOD TO YOU. THEY DELIVER IT, AND WE HAVE A LITTLE SMALL BREAK AREA RIGHT NOW.

IN TERMS OF EXERCISE, WE HAVE 417 ACRES OF GROUNDS AND TRAILS THAT CONNECT TO POLY AND IT CONNECTS MARIN COUNTY OPEN SPACE. SO THAT'S A VERY ATTRACTIVE COMPONENT FOR THEM FROM THE EXERCISE STANDPOINT. WE DON'T HAVE ENOUGH SHOWERS TO TAKE CARE OF ALL THE PEOPLE THAT ARE TAKING ADVANTAGE OF THE SURROUNDINGS, AND THAT'S ANOTHER REASON WHY WE HAVE PUT THE AMENITIES INTO THE FUTURE BUILDING.

MS. SAMUELSON: COUPLE QUICK QUESTIONS. ONE IS THE ENVIRONMENTAL ANIMAL RIGHTS BATTLE DONE NOW, OR WILL THIS RAISE ANOTHER OPPORTUNITY FOR THAT IN THE BOARD OF SUPERVISORS OR WHEREVER?

MR. O'REAR: WE BELIEVE IT'S DONE. I'LL GIVE A -- I'LL TRY NOT TO BURN UP TOO MUCH TIME, BUT A QUICK ANECDOTE. WHEN WE FIRST MOVED IN, WE KNEW THAT THE ANIMAL RIGHTS ACTIVISTS AND THE ANTIDEVELOPMENT PEOPLE HAD GOTTEN TOGETHER TO TRY AND PREVENT THE INSTITUTE'S ENTITLEMENT AND CONSTRUCTION. AND IN DEFENSE OF ANIMALS HAS A PERSON, THEIR LEADER CAME TO ONE OF OUR SEMINARS AND ASKED QUESTIONS ABOUT HOW WE'RE HANDLING OUR ANIMAL RESEARCH. AND HE WAS SATISFIED ENOUGH WITH THE ANSWER TO COMPLIMENT HOW WE WERE TAKING THAT APPROACH. AND WE'VE HAD NO MORE TROUBLE. NEVER HAD ANY TROUBLE, BUT WE ACTUALLY HAVE BEEN COMPLIMENTED ON HOW WE'RE MANAGING OUR ANIMAL FACILITY.

MS. SAMUELSON: THAT'S EXTRAORDINARY CONSIDERING WHAT A BATTLE THAT WAS.

I GUESS MY OTHER QUESTION IS ACTUALLY MORE A COMMENT BECAUSE I'VE DRIVEN BY THERE A MILLION TIMES. AND EVERYONE SHOULD UNDERSTAND HOW REMOTE IT IS. TO BE ABLE TO WORK OUT OR EAT SOMEWHERE DECENT OFF CAMPUS, THEY'D HAVE TO GO TO SAN RAFAEL TO THE SOUTH MORE OR LESS UNLESS IT'S THE A & W OR TO PETALUMA TO THE NORTH. WE DON'T WANT THEM GOING OFFSITE TO WORK OUT OR TAKE A SHOWER.

MR. O'REAR: I WILL SAY THAT THE GEROSCIENCE INITIATIVE WAS HATCHED OVER A LUNCH THAT WAS BROUGHT UP BY A LOCAL DELI. AND THAT INITIATIVE ENDED UP WITH US BEING ONE OF EIGHT PILOT PROGRAMS IN THE UNITED STATES FOR A CONSORTIUM GRANT. IT'S AN INTERDISCIPLINARY APPROACH, AND THAT RESULTED IN THIS $25 MILLION GRANT OVER FIVE YEARS. AND THAT OCCURRED BECAUSE WE HAD CAPTIVES. THEY COULDN'T GO OFFSITE TO LUNCH. SO THEY WERE THERE. AND, AGAIN, THAT'S ONE TANGIBLE RESULT OF THE -- IF ISOLATION IS A NEGATIVE, I'M SHOWING THAT IT CAN ALSO BE A POSITIVE.

MS. SAMUELSON: I COMPLETELY AGREE. I THINK THAT'S A REAL EXCITING COMPONENT, BUT THEN I WAS JUST THINKING ABOUT THE FACT THAT YOU DON'T WANT FOLKS TO LEAVE TO WORK OUT WHEN THERE AREN'T FACILITIES. IT'S NOT LIKE A DOWNTOWN AREA. THANK YOU.

CHAIRMAN LICHTENGER: BOB, ONE. ON THE EQUIPMENT WE HAD SOME CONCERNS ABOUT THERE MAY BE A FUNDING GAP ON EQUIPMENT. CAN YOU GO INTO THAT A LITTLE BIT?

MR. O'REAR: I THINK THE STAFF ANALYSIS READ WHAT WAS WRITTEN CORRECTLY, BUT WE CHARACTERIZED IT INCORRECTLY. I THINK YOU ARE REFERRING TO THE $7.4 MILLION POTENTIAL SHORTFALL IN EQUIPMENT FOR THE 12 NEW LABS?

CHAIRMAN LICHTENGER: RIGHT.

MR. O'REAR: IT'S ABOUT $500,000 FOR ALL 12 LABS, NOT $500,000 PER LAB. AND THAT'S BASED ON THE AVAILABILITY OF THE CORES AND SHARED RESOURCES MAKE ALL THE EXPENSIVE EQUIPMENT IN THE SPECIALIZED ROOMS AND FACILITIES AVAILABLE IN THE EXISTING BUILDING FOR THE MOST PART. SO FOR THE STEM CELL ACTIVITIES, WE'D BE EXTENDING THE CORES THERE THAT ARE MOST IMPORTANT, SO CELL CULTURE AND IMAGERY ARE THOSE THAT WOULD BE DISTRIBUTED WITHIN THE PROPOSED FACILITY.

CHAIRMAN LICHTENGER: ARE YOU SAYING THAT THE AMOUNT YOU HAVE BUDGETED IS SUFFICIENT TO FULLY FURNISH THOSE LABORATORIES?

MR. O'REAR: YES. WHEN OTHERS HAVE TALKED ABOUT THE PACKAGES, WHEN PEOPLE COME IN WITH THE PACKAGES, MUCH OF THEIR EQUIPMENT IS UNDER THE $5,000 CAPITAL THRESHOLD. AND THE THINGS THAT THEY NEED TO SUPPORT THEMSELVES, THE MORE EXPENSIVE ITEMS, WOULD BE IN THEIR START-UP PACKAGES OR PROVIDED FROM INSTITUTIONAL FUNDS.

MR. KLEIN: A COUPLE OF THINGS. ONE TO UNDERSTAND THE LAST ANSWER. SO WHEN YOU HAVE A HIRING PACKAGE LIKE OTHER INSTITUTIONS, YOU PUT THE EQUIPMENT IN THOSE PACKAGES TO THE EXTENT THAT IT'S NOT COVERED IN THE STANDARD EQUIPMENT; IS THAT A CORRECT STATEMENT?

MR. O'REAR: THAT'S CORRECT.

MR. KLEIN: SO JUST LIKE THE COMMENT FROM USC WHO HAS 50 MILLION AND PART OF THAT IS GOING INTO EQUIPMENT PACKAGES, AS YOU RECRUIT PEOPLE, YOU HAVE EQUIPMENT PACKAGES THAT GO WHEN THEY'RE HIRED. AND YOU'RE NOT COUNTING THAT IN LEVERAGE, BUT THAT'S PART OF YOUR HIRING PROCESS GIVEN THE EQUIPMENT, ANY SPECIALIZED EQUIPMENT THEY NEED OUTSIDE THE CORES.

THE OTHER THING THAT I'D LIKE TO POINT OUT IS THAT MY RECOLLECTION IN TERMS OF THE SCIENTIFIC POSITION WAS THAT AS YOUR STRATEGIC POSITION, AS I REMEMBER IT, WAS THAT AS A RURAL CAMPUS, YOU'VE CREATED THESE CONFERENCE SPACES AND ABILITY TO SERVE FOOD FOR THEM AS PART OF YOUR THEORY OF HAVING SYMPOSIA TO DRAW SOME OF THE BEST PEOPLE FROM THE WORLD INTO YOUR SITE TO CREATE THE INTERACTION THAT WOULD OTHERWISE BE AVAILABLE IN A LOCAL URBAN SITE.

MR. O'REAR: CORRECT.

MR. KLEIN: ISN'T THAT A CORRECT STATEMENT?

MR. O'REAR: THAT'S CORRECT.

MR. KLEIN: SO THIS IS PART OF YOUR STRATEGIC WAY TO PULL THE EXPERTISE IN FROM AROUND THE COUNTRY, AROUND THE WORLD. I THINK MAHENDRA RAU IS THE ONE THAT'S SPEARHEADING THAT PROGRAM?

MR. O'REAR: THAT'S CORRECT. AND WE ARE ABOUT TO COMPLETE OUR SHARED RESEARCH LABORATORY AND STEM CELL TRAINING FACILITY. SO OUR FIRST COURSES WILL BE STARTING UP IN JUNE, AND THAT WILL DRAW OUR FIRST STRINGS OF STUDENTS. WE'VE HAD A COURSE ALREADY, BUT WE WILL BE HAVING IT IN THE NEWLY DEDICATED CIRM SHARED RESEARCH LAB AND STEM CELL TRAINING FACILITY IN JUNE. AND THAT WILL KICK OFF A CONFERENCE PROGRAM. SO WE WISH TO DO EXACTLY AS YOU DESCRIBED, TO USE THE GROUNDS, THE LOCATION, THE FACILITY TO ATTRACT CONFERENCES AND SYMPOSIA ON A REGULAR BASIS TO THE INSTITUTE. IN FACT, THAT'S ANOTHER ENHANCEMENT FROM THOSE WHO ARE INTERESTED IN BECOMING POTENTIAL DEVELOPMENT PARTNERS WITH US IS THEY SEE THAT AS A VERY BIG THING FOR THEM AND THEIR ABILITIES TO NEGOTIATE FOR FUTURE DEVELOPMENT RIGHTS FOR THE NEXT TWO BUILDINGS.

CHAIRMAN LICHTENGER: GREAT. THANK YOU VERY MUCH.

DR. TROUNSON: I WONDER IF YOU'D INDULGE ME A QUESTION TO THE APPLICANT.

CHAIRMAN LICHTENGER: PLEASE.

DR. TROUNSON: I JUST THINK IT'S IMPORTANT IN THIS SPACE. WHEN YOU'RE WORKING WITH AGING SYSTEMS, FOR EXAMPLE, AGING ANIMALS, YOU NEED A VERY SPECIAL ANIMAL FACILITY TO MAINTAIN. IT'S A VERY EXPENSIVE PROCESS. I'M AWARE INTERNATIONALLY THIS IS VERY DIFFICULT AND COSTLY.

DO YOU ANTICIPATE MAINTAINING SOME OF THESE AGING, SAY, RODENT POPULATIONS TO WORK ON? HAVE YOU GOT SPECIAL FACILITIES IN PLACE TO DO THAT?

MR. O'REAR: YES, WE DO. SO ONE OF THE THINGS THAT OUR SCIENTISTS HAVE SCHOOLED ME ON IS THAT LONGITUDINAL STUDIES, JUST WHERE YOU WATCH ORGANISMS AND ANIMALS AGE WITHOUT INTERFERENCE, JUST WATCH THEM THROUGH THEIR NATURAL LIFE SPAN, IS VERY HELPFUL IN THE AGING PROCESS. SO WHEN YOU CAN INDUCE PARTICULAR DISEASES OR FIND GENETIC STRAINS THAT EXHIBIT PARTICULAR SYMPTOMS OR PROPERTIES, THEN YOU CAN WATCH THEM THROUGHOUT SEVERAL GENERATIONS. WE THINK THERE'S A SHORTAGE OF THAT CAPACITY RIGHT NOW, AND THAT'S ONE OF THE THINGS THAT WE'D LIKE TO INCORPORATE INTO THE USE OF OUR EXISTING VIVARIUM.

ON THE STEM CELL COMPONENT, I JUST WANT TO TOUCH ON THAT. THE STORAGE FACILITIES OF OUR REPOSITORY, ONE OF THE REASONS THAT WE THINK THE BASEMENT IS GOING TO BE IMPORTANT, THAT NOT ONLY IT HAS A PRACTICAL ASSOCIATION BECAUSE IT LINKS THE BASEMENTS OF THE EXISTING BUILDING AND DELIVERS ALL THE SERVICES TO THE PROPOSED FACILITY, BUT IT ALSO LINKS TO TWO OTHER BASEMENTS. AND WE HAVE SEPARATE AND APART FROM OUR POTENTIAL EQUITY PARTNERS A GROUP WHO'S IN THE BUSINESS OF STORAGE AND REPOSITORIES. AND THEY'RE QUITE INTERESTED IN NOT ONLY THE BASEMENT IN THE EXISTING BUILDING AND TRYING TO DO CATALOGING AND INDEXING AND CREATE SOME STANDARDS THAT WOULD HELP WHEN CELLS ARE DERIVED, TO IMMORTALIZE THOSE CELL LINES, HAVE A PERMANENT LOCATION FOR THEM TO BE THAT ARE ON PRIVATE PROPERTY, OFF THE BEATEN TRACK, THAT HAVE ALL THE REDUNDANT SYSTEMS TO ASSURE THEIR IMMORTALITY AS MUCH AS HUMANLY POSSIBLE. THAT'S A CONSIDERATION FOR THE BASEMENT AND THE NEXT TWO BASEMENTS.

CHAIRMAN LICHTENGER: THANK YOU VERY MUCH. THANK YOU FOR YOUR ANSWERS.

SO I WANT TO BRING UP AMONGST THE FACILITIES WORKING GROUP THIS LEVERAGE ISSUE BECAUSE I HAVE SOME CONCERNS HERE ABOUT. RICK, THE LEVERAGE CURRENTLY FOR BUCK, WHAT ARE WE SHOWING THE TOTAL DOLLAR AMOUNT OF LEVERAGE, PLEASE?

MR. KELLER: 48,610,000.

CHAIRMAN LICHTENGER: SO, YOU KNOW, THE WAY I'M LOOKING AT THIS LEVERAGE, OUT OF 28,692,600, I'M HAVING A PROBLEM WITH PRETTY MUCH EVERYTHING EXCEPT THE 4,772,600. SO I DON'T KNOW HOW EXACTLY WE DEAL WITH THIS. BUT BASICALLY THAT WOULD BE KNOCKING OUT ABOUT $23 MILLION OF LEVERAGE.

MR. KLEIN: MR. CHAIRMAN, I'D LIKE TO PRESENT, SINCE YOU HAVEN'T PRESENTED A MOTION, A COUNTER MOTION WHICH WOULD ELIMINATE THE VIVARIUM BECAUSE IT'S SHARED RESOURCES, ELIMINATE THE CENTRAL PLANT UTILITIES AND EXISTING AUDITORIUM BECAUSE ALL SHARED UTILITIES WE'VE ELIMINATED. AND THE AUDITORIUM IS REALLY A SHARED FACILITY. AND ELIMINATE THE RESEARCH EXPENDITURES, BUT ENTITLEMENTS, THE APPORTIONED COST OF LAND IMPROVEMENTS AND THE LAND, WHETHER IT'S UNDER A RENT BASIS OR A SALE/LEASE-BACK BASIS, IT'S A THIRD-PARTY VALUATION OF THAT. AND THEY'RE GOING TO HAVE TO PAY FOR IT JUST LIKE SAN DIEGO IS PAYING FOR IT.

SO FOR CONSISTENCY BASIS, I WOULD LIKE TO PROPOSE TO SEE IF THERE'S A SECOND THAT WE EXCLUDE THE 6 MILLION 4, THE 2 MILLION 2, AND THE MILLION 950, AND COUNT THE 2 MILLION 164 IN COST, 8 MILLION 764 IN COST, AND THE 4 MILLION 772 THAT IS GOING TO END UP IN RENT OR SALE/LEASE-BACK PAYMENTS OR THE EQUIVALENT.

CHAIRMAN LICHTENGER: BOB, CAN I -- I KNOW --

MR. KLEIN: I NEED TO SEE IF THERE'S A SECOND,AND THEN WE CAN HAVE A DISCUSSION.

VICE CHAIRMAN SERRANO-SEWELL: LET ME SEE IF I CAN MAKE AN AMENDMENT TO THAT, BOB. I THINK THERE MIGHT BE UNANIMITY ON THE FIRST PART OF YOUR MOTION, AND THAT IS WHAT TO TAKE OUT.

MR. KLEIN: OKAY.

VICE CHAIRMAN SERRANO-SEWELL: MAYBE WE COULD START WITH THAT BECAUSE YOU HAD, LIKE, TAKE OUT AND, LIKE, COUNT.

MR. KLEIN: PREPARED TO DO IT INCREMENTALLY. IS THAT A SECOND?

VICE CHAIRMAN SERRANO-SEWELL: YES.

MR. KLEIN: THE MOTION -- FIRST MOTION IS TO ELIMINATE THE 6 MILLION 4, THE 2 MILLION 250, AND THE MILLION NINE FIFTY-TWO.

CHAIRMAN LICHTENGER: SO AS FAR AS DISCUSSION, I'D LIKE TO DISCUSS IT NOW. SO I THINK THAT'S A START. BUT -- SO I THINK FOR CONSISTENCY WITH ALL THE OTHER APPLICANTS HERE, THE ONLY CATEGORY HERE THAT I SEE OUT OF THIS 28,692,600 THAT WOULD BE CONSISTENT WOULD BE THE 4,772,600 AS THIS, QUOTE, UNQUOTE, PRESENT VALUE OF THE LAND AND THE POTENTIAL SALE/LEASE-BACK. BUT THE 8 MILLION 764, THE 2 MILLION 164, YOU KNOW, THE APPLICANT HASN'T EVEN REPRESENTED TO US THAT THAT WOULD BE A POTENTIAL COST IN TERMS OF THE SALE/LEASE-BACK.

MR. KLEIN: THESE ARE ACTUAL HISTORICAL COSTS. THEY'VE TOLD YOU THAT THEY'VE SPENT THE MONEY. THESE ARE HISTORICAL.

CHAIRMAN LICHTENGER: IN 1993.

MR. KLEIN: DOESN'T MATTER. THE OTHER

APPLICANTS HAVE SPENT MONEY FOR THESE.

CHAIRMAN LICHTENGER: BUT WE HAVEN'T GIVEN THEM A CREDIT FOR THEM, HAVE WE?

MR. KLEIN: ABSOLUTELY. THE LAND IMPROVEMENTS FOR ALL THE OTHERS, WE'VE GIVEN THEM CREDIT.

CHAIRMAN LICHTENGER: IN LEVERAGE?

MR. KLEIN: YEAH.

MR. KASHIAN: YEAH.

CHAIRMAN LICHTENGER: RICK, CAN YOU HELP ME ON THIS?

MR. KELLER: WE ONLY HAD ONE OTHER PROPOSAL WITH LAND IN IT, WHICH WAS SAN DIEGO. ALL THE OTHERS --

CHAIRMAN LICHTENGER: WE DIDN'T GIVE ANY OF THE OTHER APPLICANTS CREDIT FOR --

MR. KLEIN: NO. WAIT. THIS IS NOT CORRECT. FOR SITE PREPARATION AND FOR DEMOLITION AND DETOXIFICATION OF THE SITE --

CHAIRMAN LICHTENGER: FOR CURRENT DOLLARS.

MR. KLEIN: THIS IS -- MY UNDERSTANDING IS THAT THE 2 MILLION 164 IS ACTUAL DOLLARS ALLOCATED. IT'S 35 PERCENT OF THE TOTAL COST.

CHAIRMAN LICHTENGER: YEAH. IN 1993. WE'RE TALKING -- ALL THE OTHER APPLICANTS ARE TALKING ABOUT DOLLARS THAT THEY'RE INCURRING NOW, BOB.

MR. KLEIN: WE DIDN'T PUT THAT REQUIREMENT ON ANYONE. FOR EXAMPLE, THERE'S SOME OF THESE OTHER SITES THAT PEOPLE HAVE BEEN -- THEY'VE TOLD YOU. THERE'S SOME OF THESE OTHER PROJECTS THAT PEOPLE HAVE BEEN WORKING ON FOR FOUR OR FIVE YEARS. SO IF IT'S FIVE YEARS OLD, IT'S OKAY, BUT NOT IF IT TAKES THEM 15 YEARS? IT TOOK THEM NINE YEARS JUST TO --

MR. KASHIAN: HOW ABOUT THE PROPORTION OF SHARE OF THE UTILITIES OR A POWER PLANT THAT WAS BUILT 20 YEARS AGO?

CHAIRMAN LICHTENGER: WE ALREADY HAD A RULING ON THAT ONE.

SO, BOB, TO MAKE THIS CONSISTENT WITH THE OTHER APPLICANTS, THE ONLY ITEM OUT OF THIS 28 MILLION 192 WOULD BE THE 4,772,600. IF WE TAKE THAT --

MR. KLEIN: YOU'RE NOT SPEAKING ON THE MOTION. SO I RESPECTFULLY REQUEST THAT WE VOTE ON THE FIRST MOTION. AND THEN IF YOU'D LIKE TO MAKE A SECOND MOTION --

CHAIRMAN LICHTENGER: FINE. I WILL. THAT'S FINE. SO ANY OTHER DISCUSSION ABOUT THIS? SO WOULD YOU LIKE TO CALL THE ROLL?

MS. PACHTER: I JUST WANT TO RESTATE THE MOTION TO MAKE SURE I HAVE IT. THE MOTION IS TO EXCLUDE FROM LEVERAGE 6.4 MILLION, THE 2.25 MILLION, AND THE 1.954 OR IS THAT 2 MILLION FROM LEVERAGE AND INCLUDE --

MR. KLEIN: NO. NO. THAT IS THE MOTION.

MS. PACHTER: THAT IS THE MOTION.

MR. KLEIN: JUST REMOVING THOSE THREE ITEMS.

MS. PACHTER: THE MOTION WAS BY MEMBER KLEIN AND SECONDED BY THE VICE CHAIR. OKAY. TO CALL THE ROLL, MARCY FEIT.

MS. FEIT: YES.

MS. PACHTER: DEBORAH HYSEN.

MS. HYSEN: YES.

MS. PACHTER: EDWARD KASHIAN.

MR. KASHIAN: YES.

MS. PACHTER: ROBERT KLEIN.

MR. KLEIN: YES.

MS. PACHTER: STUART LAFF.

MR. LAFF: YES.

MS. PACHTER: DAVID LICHTENGER.

CHAIRMAN LICHTENGER: ABSTAIN.

MS. PACHTER: JOAN SAMUELSON.

MS. SAMUELSON: YES.

MS. PACHTER: DAVID SERRANO-SEWELL.

VICE CHAIRMAN SERRANO-SEWELL: YES. AND, CHAIRMAN, I DON'T KNOW WHAT TO DO WITH THESE OTHER THINGS THAT BOB HAS IDENTIFIED. I HAVEN'T DECIDED WHERE I STAND ON IT, THE OTHER THINGS YOU CITED AS WELL. I WANT TO GET THIS OFF THE TABLE AND FOCUS THE DISCUSSION.

MS. PACHTER: AND JANET WRIGHT.

DR. WRIGHT: YES.

MS. PACHTER: MOTION CARRIES.

CHAIRMAN LICHTENGER: I'D LIKE TO PROPOSE A NEW MOTION, THAT WE EXCLUDE THE VALUE, THE PRESENT VALUE OF THE APPORTIONED COST OF THE LAND IMPROVEMENTS FOR 8 MILLION 764 AND 2 MILLION 164 FOR ENTITLEMENTS. I'D LIKE TO PROPOSE THAT AS A MOTION. DO I HAVE A SECOND?

MS. FEIT: SECOND.

CHAIRMAN LICHTENGER: OPEN UP FOR DISCUSSION.

MS. SAMUELSON: QUESTION. IS IT CLEAR THAT THIS WOULD BE CONSISTENT WITH THE WAY OTHER APPLICANTS HAVE BEEN TREATED OR NOT?

CHAIRMAN LICHTENGER: I THINK IT IS.

MS. SAMUELSON: SEEMS LIKE IT WOULD BE ONE WAY OR THE OTHER.

CHAIRMAN LICHTENGER: SO MY PERSPECTIVE -- MR. KLEIN: MR. CHAIRMAN, COULD YOU ASK STAFF IF WE HAVE REPRESENTATION FROM THE OTHER APPLICANTS THAT THEY HAVE NOT INCLUDED ENTITLEMENT COSTS OR THEY HAVE NOT INCLUDED LAND IMPROVEMENT COST?

MR. KELLER: WHAT WE ASKED THE APPLICANTS TO DEFINE FOR IMPROVEMENT COSTS WERE ON-SITE IMPROVEMENTS RELATED TO THE SPECIFIC PROJECT. SO IF THEY WERE GOING TO DO EXCAVATION OR CONNECTING OF UTILITIES, THEN THOSE LAND IMPROVEMENTS ARE ON-SITE IMPROVEMENTS RELATED TO THE CIRM-FUNDED PROJECT. IT DID NOT INCLUDE PORTIONS OF ROADWAYS, SEWER LINES AT STANFORD OR USC, OR THE APPORTIONMENT OF THE CAMP ANEELY (PHONETIC) AT BERKELEY, OR ANYTHING RELATED TO INFRASTRUCTURE THAT WAS PUT IN AT A PRIOR DATE AND THEN APPORTIONED TO THIS.

MR. KLEIN: SO, RICK, YOU ARE SHOWING ON THE PLANS FOR STANFORD THAT THEY HAVE ABUTTING MAJOR CORRIDORS THAT ARE OUTSIDE THE BUILDING ENVELOPE. YOU'RE SHOWING IN SAN DIEGO THAT THE PARKING LOT IS INCLUDED AS A SITE IMPROVEMENT COST; IS THAT CORRECT?

MR. KELLER: THE PARKING LOT IS A MITIGATION FOR THE EIR, CORRECT.

CHAIRMAN LICHTENGER: THOSE ARE CURRENT EXPENDITURES, BOB.

MR. KELLER: CURRENT. IN ORDER FOR THE PROJECT TO HAPPEN, THEY NEED THE PARKING. THEY HAVE TO HAVE THE PARKING.

MR. KLEIN: YOU CANNOT BUILD THIS BUILDING WITHOUT AN APPORTIONMENT OF THE PARKING FOR THIS SITE. THE LEGAL ENTITLEMENTS AS BASIC LAW IS THAT YOU CANNOT BUILD THE BUILDING WITHOUT THE ENTITLEMENTS. IT IS NOT POSSIBLE. SO --

CHAIRMAN LICHTENGER: IT'S NOT A CURRENT EXPENDITURE, BOB.

MR. KLEIN: WHERE IS IT THAT WE SAID IT HAD TO BE A CURRENT EXPENDITURE?

CHAIRMAN LICHTENGER: I DON'T KNOW WHERE IT IS, BUT ALL THE OTHER APPLICANTS WE -- RICK, WE HAVE BEEN VERY CLEAR THAT --

MR. KELLER: WE COMMUNICATED THAT IT HAD TO BE A CAPITALIZED PROJECT COST.

CHAIRMAN LICHTENGER: CAPITALIZED PROJECT COST.

MR. KELLER: IF IT HAD ALREADY BEEN CAPITALIZED BY A PREVIOUS PROJECT --

CHAIRMAN LICHTENGER: BOB, LET ME. IF THEY WERE INCLUDING THIS VALUE IN THE 4 MILLION 772 AND THE SALE/LEASE-BACK, THAT WOULD BE DIFFERENT, BUT IT'S NOT EVEN INCLUDED IN THE VALUE OF THE SALE/LEASE-BACK.

MR. KLEIN: YOU DON'T KNOW THAT.

CHAIRMAN LICHTENGER: LET'S ASK THE APPLICANT.

MR. O'REAR: THE VALUE OF THE SALE/LEASE-BACK IS ABSOLUTELY ESSENTIALLY CONNECTED TO THE EXISTING.

CHAIRMAN LICHTENGER: WHAT IS THE -- WHAT IS THE PROPOSED VALUE OF THE SALE/LEASE-BACK, 4 MILLION 772?

MR. O'REAR: NO. ACTUALLY THE PROPOSED VALUE OF SOME OF THE SALE/LEASE-BACKS GO FAR BEYOND THAT. SOME OF THE SALE/LEASE-BACKS WOULD GENERATE $30 MILLION.

CHAIRMAN LICHTENGER: BUT WE'RE TALKING ABOUT THE VALUE -- THE PROPOSED SALE/LEASE-BACK OPTION WITH THE LAND THAT THE CIRM BUILDING WOULD BE BUILT ON.

MR. O'REAR: LET ME GO IN REVERSE. THERE WOULD BE NO VALUE IN THE SALE/LEASE-BACK WITHOUT THESE ENTITLEMENTS.

MR. KLEIN: I THINK HE'S ASKING IS IT APPORTIONMENT OF THE COST OF THE SITE IMPROVEMENTS, WOULD THAT BE IN THE SALE/LEASE-BACK AS A PART OF THE TOTAL COST?

MR. O'REAR: YES.

CHAIRMAN LICHTENGER: GREAT. THEN WHAT IS THAT -- WHAT IS THAT AMOUNT CONTEMPLATED, THE 4 MILLION 772?

MR. O'REAR: NO. THE 12 MILLION WHATEVER THEY ARE TOGETHER.

CHAIRMAN LICHTENGER: SO YOU'RE TELLING ME -- SO YOU HAVE 4 MILLION 772 AND THEN YOU HAVE EIGHT SEVEN SIX FOUR. SO YOU'RE TELLING ME THAT A POTENTIAL SALE/LEASE-BACK OPTION WOULD BE ADDING THOSE TWO NUMBERS TOGETHER?

MR. O'REAR: CORRECT. AND THEN WE WOULD MONETIZE THOSE -- THE SALE/LEASE-BACK COMPONENT OR AN EQUITY PARTNER WOULD PAY US FOR THOSE EXISTING CONDITIONS. SO THOSE PRIOR EXPENDITURES ARE BENEFICIAL TO THEIR INVESTMENT.

CHAIRMAN LICHTENGER: WHAT ABOUT THE 2 MILLION 164 ENTITLEMENTS? IS THAT INCLUDED IN THERE?

MR. O'REAR: IT WOULD BE, YES.

CHAIRMAN LICHTENGER: DO YOU HAVE SOME TERM SHEETS?

MR. O'REAR: I DO. I'VE BEEN TRYING TO MAINTAIN THE CONFIDENTIALITY OF THOSE BECAUSE WE'RE ALSO IN A NEGOTIATION UNDER THREE OR FOUR DIFFERENT POTENTIAL SCENARIOS.

CHAIRMAN LICHTENGER: BUT -- OKAY. THANK YOU.

MR. KASHIAN: JUST BECAUSE YOU'RE THE CHAIRMAN,DOESN'T MEAN YOU CAN DRAG THIS THING OUT.

CHAIRMAN LICHTENGER: WELL, I'M TRYING TO GET AT A FAIR WAY OF TREATING ALL THE APPLICANTS THE SAME WAY.

MR. KASHIAN: SO ARE WE.

CHAIRMAN LICHTENGER: SO YOU WANT TO ASK A QUESTION, ASK A QUESTION.

MR. KASHIAN: I'M NOT ASKING A QUESTION. I'M ASKING FOR THE QUESTION ON YOUR MOTION.

CHAIRMAN LICHTENGER: ARE THERE ANY OTHER MORE DISCUSSIONS ON MY MOTION BEFORE WE HAVE A ROLL CALL?

VICE CHAIRMAN SERRANO-SEWELL: I DO, AND I DON'T WANT TO DRAG IT OUT, BELIEVE ME, ED. BUT I WANT TO BE MINDFUL OF THE ISSUES THAT DAVID'S RAISING BECAUSE IT DOES CAUSE ME SOME PAUSE. AND WHILE WE MAY NOT HAVE SAID WITH SPECIFICITY WHAT'S GOING TO COUNT AND WHAT ISN'T, I ALWAYS DID HAVE THE UNDERSTANDING, IN TERMS OF LEVERAGE, THAT THE CIRM AWARD WOULD PROMPT NEW ADDITIONAL INVESTMENTS ON THEIR PART. IF THESE ARE INVESTMENTS THAT HAVE ALREADY HAPPENED YEARS AGO, THAT SORT OF WIDENS THE SCOPE IN MY MIND OF WHAT LEVERAGE -- WHAT IS DEFINED AS LEVERAGE. AND THAT MIGHT BE VERY WELL OKAY. THAT'S FINE. IT'S NOT HOW THE OTHER APPLICANTS RESPONDED IN ANSWERING THIS QUESTION. I THINK THAT'S WHAT -- THAT'S FOR ME WHAT THE ISSUE IS.

MR. KASHIAN: I TOTALLY DISAGREE. USC CAME UP AND SAID THERE WAS TWO MILLION SOME ODD THOUSAND DOLLARS SPENT FOR ENTITLEMENTS. WE ALLOWED THAT. WHETHER THE ENTITLEMENTS WERE DONE NOW OR LATER IS NOT SIGNIFICANT. WHAT IS SIGNIFICANT IS IF THEY'RE DONE NOW, THEY'LL COST MORE THAN THEY WOULD LATER, SO WHAT WE HAVE IS WE HAVE A REAL VALUE. THE REAL ESTATE IS THE ISSUE.

VICE CHAIRMAN SERRANO-SEWELL: I GUESS WHAT'S UNIQUE ABOUT THE BUCK IS THEY DO, AS YOU KNOW, ED, THEY'VE SECURED THEIR ENTITLEMENTS A LONG TIME AGO.

MR. KASHIAN: I HAVE TO ASSUME EVERYBODY IS TELLING THE TRUTH.

VICE CHAIRMAN SERRANO-SEWELL: I'M NOT SUGGESTING THEY SHOULD BE PENALIZED FOR THAT.

CHAIRMAN LICHTENGER: AND THEY'RE PRORATING A THIRD OF ALL THEIR COST TO THIS PROJECT. AND WHEN I ASKED THE QUESTION HOW MUCH LAND WILL BE GIVEN TO THE CIRM PROJECT, WE'RE NOT GETTING A THIRD OF THE LAND.WE'RE PAYING FOR A THIRD OF THE ENTITLEMENT COST.

MR. KLEIN: NOW, DAVID, THAT IS COMPLETELY UNFAIR. THEY SAID THAT THEY APPORTIONED 35 PERCENT BECAUSE IT'S 35 PERCENT OF THE IMPROVEMENTS. SO 35 PERCENT OF THE SPACE, SO THEY GOT 35 PERCENT OF THE LAND IMPROVEMENTS, WHICH IS THAT IS THE SQUARE FOOTAGE THAT THE LAND IMPROVEMENT COVERS.

CHAIRMAN LICHTENGER: OKAY. YOU KNOW WHAT. WE'RE HAVING A DISCUSSION ABOUT IT. THERE'S A MOTION. ANY MORE DISCUSSION? MARCY.

MS. FEIT: I'M JUST CONCERNED AT THIS POINT BECAUSE THERE'S JUST SO MUCH DISAGREEMENT ON THIS PANEL ABOUT THIS ISSUE, AND IT'S AN IMPORTANT ISSUE. AND I REMEMBER A MEETING THAT WE HAD WHEN WE WERE SETTING DOWN THE RULES OF ENGAGEMENT HERE, AND WE HAD A GREAT DEAL OF DISCUSSION ABOUT LEVERAGE. AND DAVID SERRANO-SEWELL IS CORRECT. WE WERE VERY SPECIFIC THAT WE DIDN'T WANT TO BE DIGGING BACK INTO THE PAST. WE WANTED PROJECT COSTS TO BE RELATED TO OUR PROJECTS. AND IF YOU READ THE DEFINITION OF LEVERAGE, WE SAID IT RIGHT IN THE DEFINITION. AND I THINK THIS IS A WONDERFUL PROJECT. I'M NOT -- IT'S NOT ABOUT WHAT THEY'RE TRYING TO DO. IT'S ABOUT WHAT WE SAID WE WOULD BE DOING. AND I'M CONCERNED NOW THAT WE HAVE TOTAL DISAGREEMENT ON THIS PANEL, AND I DON'T WANT TO VOTE -- I DON'T WANT TO EVEN SCORE THIS UNTIL -- IF WE HAVE TO GO INTO A CLOSED SESSION AND HASH THIS OUT AGAIN AND STICK TO THE POLICY WE WROTE, FINE. BUT I'M CONCERNED AT THIS POINT.

CHAIRMAN LICHTENGER: THANK YOU, MARCY.

DR. TROUNSON: SORRY, MR. CHAIRMAN. LOOK, I HAVE A LOT OF SYMPATHIES WITH YOU, IN FACT, WHERE YOU ARE BECAUSE I THINK THAT'S WHAT THE STAFF HAVE INTERPRETED, THAT IT WAS REALLY ESSENTIALLY COSTS THAT ARE GOING INTO PREPARATION OF THE SITE BECAUSE IT'S ALREADY OWNED. SO IT'S SORT OF -- IF IT'S A MORE COMPLICATED ISSUE ABOUT PAYING FOR A SITE THAT IS ALREADY OWNED BY THAT INSTITUTE, YOU KNOW, IT DEFINITELY WASN'T APPARENT TO US IN MAKING THE ASSESSMENTS AND PROVIDING IT TO YOU.

I STRONGLY RECOMMEND THAT YOU TAKE THE INFORMATION THAT YOU HAVE AT THE MOMENT. AND WHILE IT WON'T BE PERFECT, I'M A BIT CONCERNED IF WE MAKE ANOTHER SET OF DECISIONS, WE'LL HAVE TO GO BACK TO ALL THE OTHER INSTITUTES AND GET THEM TO THINK IN THE SAME WAY AND PRO RATA THEIR LAND COSTS GOING FORWARD. I THINK YOU OUGHT TO MAKE A DECISION ON THE INFORMATION THAT YOU'VE GOT, AND MAKE YOUR OWN JUDGMENTS ABOUT WHETHER THIS REPRESENTS REASONABLE LEVERAGE OR NOT, AND ACCOMMODATE THAT WITHIN THE SPECTRUM OF THE VARIABILITY OF ASKING THESE QUESTIONS AND GETTING, I THINK, OFF ON QUITE COMPLEX RESPONSES.

CHAIRMAN LICHTENGER: THANK YOU.

MR. KLEIN: CAN I ASK A QUESTION? ALAN, DOES THAT MEAN THAT YOU ACCEPT EITHER APPROACH, OR DO YOU ONLY ACCEPT ONE APPROACH? ARE YOU TAKING A POSITION ON WHICH APPROACH WE TAKE ON THESE COSTS?

DR. TROUNSON: NO. BOB, I'M NOT TAKING A POSITION. I'M SUGGESTING THAT THE PANEL CAN INDIVIDUALLY MAKE THEIR OWN DECISIONS AND FACTOR INTO THE MARK THAT THEY'RE PREPARING. SOME PEOPLE WILL BE VERY SUPPORTIVE AND POSITIVE ABOUT THAT. SOME WILL BE A LITTLE LESS. I ACTUALLY DON'T THINK IT WILL MAKE A LOT OF DIFFERENCE IN THE END OF THE SCORE. I THINK IT'S A GOOD PROJECT. EVERYBODY SAID THAT. I THINK YOU JUST HAVE TO FACTOR IN WHAT YOU THINK IS A REASONABLE INTERPRETATION OF WHAT YOU HEARD. AND IF YOU COULD DO THAT, I THINK WE CAN MOVE ON. I THINK IF WE GO INTO SESSION WHICH REDEFINES THIS, WE MAY HAVE TO GO BACK AND --

CHAIRMAN LICHTENGER: FAIR ENOUGH. I AGREE WITH YOU ON THAT, DR. TROUNSON.

MR. LAFF: THAT REALLY ECHOES WHAT I WAS GOING TO SAY. I WOULD LIKE TO POINT OUT ONE THING, THAT ALL OF THE THOUGHT THAT WENT INTO THEIR CENTRAL PLANT AND THEIR PARKING AND ALL OF THE SERVICES IS WHAT'S RESULTED IN A SIGNIFICANTLY LOWER COST TO CIRM FOR THOSE FACILITIES. AND THEY SHOULD BE GIVEN A LOT OF CREDIT FOR THAT.

CHAIRMAN LICHTENGER: THEY CAN CERTAINLY BE GIVEN CREDIT UNDER VALUE IN THOSE AREAS.

MR. KLEIN: I'D LIKE TO WITHDRAW MY MOTION AND FOLLOW DR. TROUNSON'S DIRECTION.

CHAIRMAN LICHTENGER: I DON'T THINK THAT'S WHAT HE WAS SUGGESTING, BOB.

MR. KLEIN: WELL, ALLOWING EVERYONE TO MAKE THEIR INDIVIDUAL DECISION.

CHAIRMAN LICHTENGER: WELL, I'D LIKE TO KEEP MY MOTION ON THE FLOOR. I DON'T THINK THAT'S WHAT HE WAS SUGGESTING. WAS THAT WHAT YOU WERE SUGGESTING, DR. TROUNSON?

DR. TROUNSON: YES. YES, MR. CHAIRMAN. I THINK -- BECAUSE I THINK YOU'VE GOT SIGNIFICANT DISAGREEMENT ABOUT THIS, BUT I THINK, YOU KNOW, THE PROPOSITION THAT YOU PROPOSE IS REALLY FAIR ENOUGH IN THE SENSE THAT YOU'VE ARGUED THE CASE, AND I THINK WE'VE UNDERSTOOD -- WE WOULD HAVE UNDERSTOOD THAT WOULD PROBABLY BE THE CASE, BUT THERE'S A MORE COMPLICATED PROPOSAL ABOUT TAKING THESE COSTS FOR GENERATING THE MONEY TO MAKE THIS PROJECT WORK. AND WHAT I THINK YOU NEED TO DO NOW IS FACTOR THAT IN WITHOUT TAKING ANY FURTHER AMENDMENTS TO IT.

CHAIRMAN LICHTENGER: SO I APPRECIATE YOUR POSITION. I UNDERSTAND WHAT YOU'RE SAYING. I CAN'T IN GOOD CONSCIENCE WITHDRAW MY MOTION BECAUSE I REALLY FEEL -- I HAVE A LOT OF CONCERNS WHEN I SAW THIS $28 MILLION IN LEVERAGE THAT INCLUDED ITEMS THAT CLEARLY COULDN'T EVEN BE CONSIDERED UNDER IT. AND SO I HAVE AN ISSUE ON THIS. I REALLY DO. I DON'T SEE HOW -- VICE CHAIR, CAN YOU GIVE ME SOME HELP ON THIS?

VICE CHAIRMAN SERRANO-SEWELL: LET ME HELP YOU HERE. IF THIS -- DAVID, IF IT'S A MATTER OF CONSCIENCE FOR YOU, WE'RE GOING TO VOTE ON IT. I DON'T KNOW WHAT THE VOTE'S GOING TO BE, BUT WE'LL VOTE ON IT. WE'LL SPEND FIVE MINUTES. WE'LL VOTE ON IT. LET ME ASSURE YOU THAT THE ISSUES THAT YOU'VE RAISED WILL HAVE A PROFOUND IMPACT ON THE DISCUSSION AT THE ICOC. AND I HATE TO DISAGREE WITH ALAN, BUT I THINK IT WILL HAVE AN IMPACT ON THE SCORING. AND THE DIFFERENCES BETWEEN ALL THE APPLICANTS ARE GOING TO BE RAZOR THIN. SO ANY LITTLE DEVIATION IN THE SCORE COULD HAVE MILLIONS OF DOLLARS IN IMPACT FOR ANY GIVEN INSTITUTION. THAT HAS A CASCADING EFFECT ON HOW WE'RE GOING TO FUND ALL THE OTHER PLACES.

SO I THINK IT WILL BE A BIG POINT, A BIG DATA POINT WHEN WE TAKE THIS TO THE ICOC, SO -- BUT I DO AGREE WITH ALAN, THAT I THINK AT THIS STAGE IN THE GAME, IT'S BEST TO LET'S JUST VOTE ON IT. IF YOU AGREE WITH THE SITUATION A, SCORE IT THAT WAY. IF YOU AGREE WITH SITUATION B, SCORE IT THAT WAY AND JUST BE DONE WITH IT. BUT THE ISSUES YOU RAISE ARE GOING TO CARRY ON BECAUSE THEY'RE GOING TO BE REFLECTED IN THE SCORES. I HAPPEN TO AGREE WITH YOU, SO IT'S GOING TO BE REFLECTED IN MY SCORE, WHICH I HEARD ALAN SAY I CAN DO. I THINK BOB'S GOING TO DISAGREE WITH ME. IT WILL BE REFLECTED IN HIS SCORE.

CHAIRMAN LICHTENGER: FAIR ENOUGH.

VICE CHAIRMAN SERRANO-SEWELL: BUT IF YOU WANT TO DO THE VOTE, WE CAN DO THE VOTE.

CHAIRMAN LICHTENGER: I DO WANT TO DO THE VOTE, AND PEOPLE ARE GOING TO SCORE HOW THEY WANT TO SCORE; BUT I FEEL IN DOING MY JOB AS THE CHAIR OF THIS FACILITIES WORKING GROUP AND LOOKING AT STAFF'S ANALYSIS, MY OWN ANALYSIS, THIS IS WHAT I THINK IS BEST.

VICE CHAIRMAN SERRANO-SEWELL: I WILL SECOND YOUR MOTION.

CHAIRMAN LICHTENGER: I THINK WE HAVE A SECOND,SO CAN WE CALL THE ROLL ON THIS?

MS. PACHTER: I'LL REPEAT THE MOTION. THE MOTION IS TO EXCLUDE THE 8.764 MILLION AND THE 2.164 MILLION FROM LEVERAGE.

CHAIRMAN LICHTENGER: NO. NOW WE HAVE TO AMEND THE MOTION BECAUSE BOB WITHDREW HIS.

MR. KLEIN: NO. NO. WE'VE ALREADY VOTED ON THAT.

CHAIRMAN LICHTENGER: WE'VE APPROVED THAT.SORRY. SORRY.

MS. PACHTER: IS THAT MOTION CORRECT, TO EXCLUDE THE 8.764 MILLION AND THE 2.164 MILLION?

CHAIRMAN LICHTENGER: ASSUMING THAT WE'VE ALREADY TAKEN OUT THE OTHER THREE LINE ITEMS, YES.

MS. PACHTER: IT'S THE LAST THREE WERE TAKEN OUT. SO TO CALL THE ROLL, MARCY FEIT.

MS. FEIT: YES.

MS. PACHTER: DEBORAH HYSEN.

MS. HYSEN: ABSTAIN.

MS. PACHTER: EDWARD KASHIAN.

MR. KASHIAN: NO.

MS. PACHTER: ROBERT KLEIN.

MR. KLEIN: NO.

MS. PACHTER: STUART LAFF.

MR. LAFF: YES.

MS. PACHTER: DAVID LICHTENGER.

CHAIRMAN LICHTENGER: YES.

MS. PACHTER: DAVID SERRANO-SEWELL.

VICE CHAIRMAN SERRANO-SEWELL: I'LL VOTE YES ON THE MOTION.

MS. PACHTER: JANET WRIGHT.

DR. WRIGHT: YES.

MS. PACHTER: THE MOTION CARRIES.

CHAIRMAN LICHTENGER: THANK YOU. SO NOW, UNLESS THERE'S ANY MORE FURTHER COMMENT ON THIS APPLICATION, WE CAN NOW RECORD OUR PRELIMINARY SCORES.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: RICK, WHAT WOULD THE NEW LEVERAGE NUMBER BE, PLEASE, FOR CLARITY FOR EVERYONE?

MR. KELLER: AS I UNDERSTAND IT, WHAT WOULD REMAIN WOULD BE --

CHAIRMAN LICHTENGER: ABOUT 11 MILLION 888 PLUS 4 MILLION 772?

MR. KELLER: 16,660 -- 16,660,000.

CHAIRMAN LICHTENGER: THANK YOU. SO CAN WE POLL THE MEMBERS, ONE MORE OR CALL IT QUITS?

MS. HYSEN: IT WOULD BE NICE TO GET THIS CATEGORY DONE SINCE THERE'S ONLY ONE MORE.

CHAIRMAN LICHTENGER: SO WE CAN TAKE ROLL ON THIS ONE.

MS. HYSEN: IF WE AGREE NOT TO BELABOR THE POINT.

CHAIRMAN LICHTENGER: I'D GO ONE MORE. I CAN GO EITHER WAY. STUART, ONE MORE?

MR. LAFF: I WAS JUST LOOKING TO MAKE SURE IT WASN'T ME. YES.

CHAIRMAN LICHTENGER: MARCY.

MS. FEIT: YES.

CHAIRMAN LICHTENGER: BOB.

MR. KLEIN: IN DEFERENCE TO MY COLLEAGUE HERE, I WILL BE VERY SHORT IN MY COMMENTS IF WE COULD DO ONE MORE, BUT I'M GOING TO LEAVE IT UP TO MY COLLEAGUE.

VICE CHAIRMAN SERRANO-SEWELL: LOOK, IF YOU WANT TO GO ONE MORE, FINE. I JUST THINK -- I WON'T BE AT A HUNDRED PERCENT. I CAN RUN AT 85 PERCENT AND STILL MAKE AN EDUCATED DECISION, BUT I'M ON A VERY SHORT FUSE. AND I DON'T WANT TO IN ANY WAY DISADVANTAGE MERCED -- BERKELEY. I HAVE QUESTIONS WITH BERKELEY. I THINK THERE ARE ISSUES THAT -- AND I DON'T WANT TO BELABOR ANYTHING. I THINK IF I'M CRANKY AND TIRED, I'LL START DOING THAT. IF YOU WANT TO GO ONE MORE, I'M NOT GOING TO BE THE ONE -- I'M ALREADY STARTING TO BELABOR.

CHAIRMAN LICHTENGER: YOU KNOW WHAT. WE COULD TRY, AND IF IT GETS CRANKY, WE'LL PICK IT UP IN THE MORNING. THERE'S NO REASON WE CAN'T IF WE START TO REALLY BURN OUT DURING IT.

PUBLIC COMMENTS ON BUCK? ANYBODY LEFT IN THE AUDIENCE? OKAY.

IF IT'S ALL RIGHT WITH EVERYONE, I'D LIKE TO MOVE ON TO THE NEXT ONE.

MR. KELLER: APPLICATION 610, UC BERKELEY, IT IS CONSTRUCTION OF TWO FLOORS OF A SIX-STORY BUILDING THAT WILL HOUSE PROGRAMS -- THE ENTIRE BUILDING WILL HOUSE PROGRAMS IN BIOMEDICAL AND HEALTH SCIENCES, AND TWO FLOORS WOULD BE RELATED TO THE CIRM PROJECT. THERE'S ALSO A VIVARIUM IN THE BASEMENT. TOTAL PROJECT COST IS 80.6 MILLION AND A CIRM REQUEST OF $25 MILLION.

THE NON-CIRM PORTION OF THE BUILDING HOUSES SEVERAL CORE FACILITIES THAT ARE CRITICAL TO STEM CELL RESEARCH. AND I MENTIONED THE VIVARIUM, ANIMAL IMAGING CORE, MOLECULAR, 12 PRINCIPAL INVESTIGATORS.

THE LEVERAGE IS APPROXIMATELY ONE TO TWO. THE COMPLETION OF THE PROJECT IS JUNE OF 2010. I MENTIONED IT ON OUR CHART OF REVISED -- NEW LEVERAGE WOULD BE A MINOR ADJUSTMENT BECAUSE THEY HAD INCLUDED $4.5 MILLION FOR EQUIPMENT THAT THEY HAD RECEIVED IN DONATION FROM A FOUNDATION FOR A CORE THAT WAS IN THE BASEMENT. WHEN WE WERE DISCUSSING THAT INVESTMENT WITH THE CAMPUS, IT WAS JUST THAT WE COULD THEN -- BECAUSE THAT WAS NONCONTIGUOUS SPACE, BUT WAS SUPPORTING THE STEM CELL RESEARCH PROGRAM, WE COULD INCLUDE THE COST OF THE SPACE. SO $700,000 WAS IDENTIFIED. IT'S STILL UNDER THE ANIMAL MANAGEMENT COMPONENT OF THE CAMPUS, BUT SUPPORTS STEM CELL RESEARCH.

I THINK THE ONLY ISSUE THAT CAME UP FOR US WAS THAT THERE'S A RELATIVELY SMALL AMOUNT OF CORES; BUT, HERE AGAIN, BECAUSE IT'S PART OF A LARGER BUILDING THAT HAS A LOT OF CORES IN IT, THEN THERE'S REALLY A GOOD VALUE FOR THE CIRM IN TERMS OF THE FACT THAT YOU'RE NOT PAYING FOR A LOT OF CORES THAT ARE BEING BUILT NEW.

MR. COPENHAGEN'S REVIEW WAS FUNCTIONAL SCORE WAS A, VALUE SCORE WAS B PLUS. GOOD PLANNING OF FACILITIES, PROVIDED HIGHLY FUNCTIONAL GATHERING AND INTERACTIVE SPACES, ACHIEVING HIGH NET TO GROSS EFFICIENCY, HIGH LAB SPACE FOR PI, AND HIGH SUPPORT TO LAB RATIO WITHIN THIS CATEGORY.

THE PRIMARY REVIEWER IS CHAIR LICHTENGER, SECONDARY REVIEWER IS MEMBER HYSEN.

CHAIRMAN LICHTENGER: THANK YOU, RICK. UC BERKELEY, SO I AGREED WITH OUR LABORATORY PLANNER ON FUNCTIONALITY. I THOUGHT IT WAS EXCELLENT. NO DISAGREEMENT THERE. I THOUGHT CERTAINLY IN THIS CATEGORY AND OVERALL THEIR LEVERAGE WAS EXCELLENT. THEY WERE THE HIGHEST IN THIS CATEGORY, AS WELL AS, RICK, WHERE WERE THEY INCLUDING THE INSTITUTES, THEY SECOND?

MR. KELLER: FOR LEVERAGE?

CHAIRMAN LICHTENGER: YEAH.

MR. KELLER: YES, THEY'RE SECOND AT 1.97 WITH THE ADJUSTMENT.

CHAIRMAN LICHTENGER: SO IN LEVERAGE I THOUGHT THEY WERE EXCELLENT.

URGENCY, I PUT THEM VERY GOOD. SO IT WAS, I THINK, A TYPICAL DESIGN-BID-BUILD MODEL WITH A VERY EXPERIENCED TEAM. COMPLETION WAS ANTICIPATED TO BE JUNE 2010.

ON SHARED RESOURCES, I THOUGHT IT WAS VERY GOOD TO EXCELLENT. THEY HAD A TREMENDOUS AMOUNT OF SHARED RESOURCES AND CORES AVAILABLE FOR THE CIRM SPACE. I'D LIKE TO HEAR A LITTLE BIT FROM THE APPLICANT ABOUT WHAT KIND OF SHARING THEY HAVE WITH OTHER INSTITUTIONS AND ORGANIZATIONS. BUT, AGAIN, SOMEWHERE BETWEEN VERY GOOD AND EXCELLENT.

YOU KNOW, IN TERMS OF -- I THINK I COVERED EVERYTHING EXCEPT VALUE. YOU KNOW, THEIR COSTS WERE HIGH. YOU KNOW, THAT WAS ONE OF THE NEGATIVES. SO THAT WAS -- BUT THEIR LEVERAGE WAS VERY GOOD, SO THOSE KIND OF OFFSET IN MY MIND. I DO THINK THEY WERE TRYING TO ACHIEVE, WAS IT SILVER, RICK, THEY WERE TRYING TO ACHIEVE?

MS. HYSEN: PLATINUM.

CHAIRMAN LICHTENGER: PLATINUM. ACTUALLY EVEN BETTER. I THOUGHT THERE WERE A LOT OF GOOD ELEMENTS TO THE PROPOSAL. I CHARACTERIZE THIS IN THE VALUE PROPOSITION OF GOOD TO VERY GOOD.

MS. HYSEN: WELL, I THINK THIS IS THE ONLY FACILITY THAT'S CLAIMING TO TRY TO ACHIEVE PLATINUM, AND THAT'S A VERY ADMIRABLE GOAL, AND I HOPE THEY GET IT.

I THOUGHT THE ARCHITECTURAL FIRM DID A REALLY GOOD JOB WITH THE DESIGN. THE SCIENTISTS NOTED AND BOB MENTIONED SOMETHING EARLIER, AND I HAVEN'T OPINED ON IT IN ANY OF MY ANALYSES, BUT I REALLY LOOKED AND REALLY TOOK INTO CONSIDERATION WHAT THE SCIENTISTS SAID ABOUT THE DESIGN AND JUST, IN GENERAL, WHAT KIND OF SCIENCE WAS GOING ON IN THE FACILITY. AND THEY NOTED WHAT WAS HAPPENING HERE. THERE WAS AN OUTSTANDING FACULTY WITH A LONG HISTORY OF TRANSLATING BENCH SCIENCE INTO INDUSTRY. I THOUGHT THAT WAS QUITE IMPRESSIVE. IT'S ALWAYS GOOD TO HAVE A BUILDING THAT FACILITATES GOOD SCIENCE.

THE COSTS WERE HIGH, 1228 PERCENT SQUARE FOOT. IT WAS DOUBLE THE COST OF THE OTHER ONE IN THIS CATEGORY. SO I THOUGHT THAT WAS SOMETHING THAT WASN'T REALLY EXPLAINED, AT LEAST TO MY SATISFACTION. THE COST -- AND AS A RESULT, THE COST PER PI WAS HIGHER THAN THE CENTER OF EXCELLENCE OR THE OTHER UNIVERSITY IN THIS CATEGORY AND ALSO HIGHER THAN THE OTHER CATEGORIES.

THEY DID -- UC BERKELEY DID INDICATE THAT PART OF THAT HAS TO DO WITH THE FACT THAT THERE WAS AN EXISTING FACILITY THAT NEEDED TO BE DEMOLISHED AND THAT THERE WERE SOME SEISMIC ISSUES. I THINK THAT'S PROBABLY VERY APPROPRIATE GIVEN ITS PROXIMITY TO ACTIVE SEISMIC FAULTS. I THOUGHT THE VALUE WAS SOMEWHAT DIMINISHED BECAUSE THE COSTS WERE SO HIGH.

THE LEVERAGE WAS VERY, VERY HIGH. AND SO I RATED THAT VERY STRONGLY.

THE URGENCY, I FELT THAT THIS WAS A DESIGN-BUILD, BUT THEY WERE ABLE TO DESCRIBE HOW -- THE WAY IN WHICH THEY SET UP THEIR CONSTRUCTION FIRM.

CHAIRMAN LICHTENGER: I THINK IT'S A TYPICAL DESIGN-BID-BUILD.

MS. HYSEN: I MEANT TO SAY THAT. IT'S LATE. THAT THEY ARE DOING DESIGN-BID-BUILD, BUT THEY WERE ABLE TO DESCRIBE THE WAY IN WHICH THEY'RE STRUCTURING THEIR FIRMS. THEY'RE SOMEWHAT MIMICKING DESIGN-BUILD.

THEY DID DESCRIBE THE RELATIONSHIP WITH OTHER ORGANIZATIONS THAT THEY'D BE COLLABORATING WITH, SO I FELT THEY DETAILED THAT QUITE NICELY. AND THEY DESCRIBED HOW THERE WOULD BE EXISTING CORE FACILITIES THAT WOULD BE AVAILABLE ON CAMPUS FOR OTHER CIRM-FUNDED RESEARCHERS.

I NOTICE THAT MR. COPENHAGEN DID PROVIDE THEM AN A FOR FUNCTIONALITY, PARTICULARLY THE PERCENTAGE OF ASSIGNABLE SQUARE FEET TO GROSS SQUARE FEET WAS GENERALLY GOOD, AND HE NOTED THAT THERE WERE GOOD INTERACTIONS. ONE OF THE CONCERNS HE DID RAISE, AND I'M HOPING THEY CAN SPEAK TO IT, IS, AND I SORT OF SUMMARIZED HIS COMMENT, THAT THE RATIO OF LAB SPACE TO SUPPORT SPACE MAY RESULT IN BENCHES IN LABS BEING USED FOR COMMON INSTRUMENTATION AND COMPETE FOR SURFACE AREA. AND I DON'T PRETEND TO KNOW EXACTLY THE RAMIFICATIONS OF THAT, BUT MR. COPENHAGEN WAS CONCERNED ABOUT THAT POINT. SO I'D LIKE TO SEE IF THE INSTITUTION CAN SPEAK TO THAT.

BUT, IN GENERAL, I FELT THAT THIS WAS A WORLD-CLASS ARCHITECTURE, AND IT SEEMED LIKE WHAT WAS HAPPENING WITHIN THE BUILDING WAS WORLD-CLASS SCIENCE. I FOUND THIS TO BE A VERY STRONG PROPOSAL, AND THIS WAS AN INCREDIBLY ATTRACTIVE AND BEAUTIFUL BOOK, AND I'M DYING TO KNOW WHO HELPED YOU DO THIS BECAUSE I'M LOOKING FOR SOMETHING LIKE THIS IN A PROPOSAL I'M WORKING ON, SO I NEED TO TALK TO YOU GUYS. THANK YOU.

CHAIRMAN LICHTENGER: THANK YOU, DEBORAH. I'D LIKE TO OPEN UP, BEFORE WE CALL THE APPLICANT, TO ANY DISCUSSIONS OR QUESTIONS OF STEVE OR RICK. EVERYONE IS JUST TOO BURNED OUT? MARCY. MARCY, YOU'RE OUR ACE IN THE HOLE FOR THIS LAST ONE.

MS. FEIT: I WOULD LIKE TO HEAR FROM THE APPLICANT A LITTLE MORE ABOUT THE COSTS BECAUSE THEY ARE SO HIGH. I DO UNDERSTAND IF YOU'RE SITTING ON A FAULT, THAT SEISMIC CONSIDERATIONS CAN BE VERY, VERY COSTLY. BUT IS IT THE FINISHES BECAUSE YOU EXPECT IT TO BE A GATEWAY-TYPE BUILDING ONTO THE CAMPUS, OR WHAT IS IT THAT'S DRIVING? SO I'D LIKE TO HEAR A LITTLE MORE DISCUSSION ABOUT THE COST.

CHAIRMAN LICHTENGER: OKAY. SO WHY DON'T WE HAVE THE APPLICANT COME UP NOW IF THEY'RE STILL AWAKE. THIS IS NOT A STRATEGY WE TYPICALLY EMPLOY.

MS. MELANO: GOOD EVENING. MY NAME IS PAULA MELANO. I'M THE ACTING DIRECTOR OF SPACE MANAGEMENT AND CAPITAL PROGRAMS ON THE BERKELEY CAMPUS. AND WITH ME TODAY IS BOB BLUHM, WHO'S THE ASSISTANT DIRECTOR OF CAPITAL PROGRAMS. BOB'S PROBABLY GOING TO ADDRESS THE COST ISSUES THAT ARE SO NEAR AND DEAR TO YOUR HEART, AND MAYBE I CAN ADDRESS SOME OF THE COLLABORATIVE ISSUES.

CHAIRMAN LICHTENGER: SO CAN YOU, SINCE YOU'RE UP THERE, CAN YOU TELL US ABOUT YOUR COLLABORATIONS WITH OTHER INSTITUTIONS AND ORGANIZATIONS?

MS. MELANO: WELL, I'M NOT A SCIENTIST, SO I CAN'T GET DOWN TO THE NITTY-GRITTY, BUT I CAN TELL YOU WHAT I KNOW ABOUT THE TWO OR THREE OFFICIAL AGREEMENTS WE HAVE. WE DO HAVE AN EXECUTED AGREEMENT WITH THE COREY FOUNDATION IN OAKLAND A FEW MILES AWAY AND ONE WITH STANFORD, WHICH WAS RECENTLY FUNDED AT THE $9 MILLION LEVEL TO ESTABLISH AN EXCHANGE OF VISITORS BETWEEN STANFORD AND BERKELEY SO THEY CAN COME AND SIT IN OUR SPACE NEXT TO OUR SCIENTISTS AND CONDUCT THIS RESEARCH SIDE BY SIDE.

THE OTHER ASSOCIATION WE HAVE IS A LONG-TERM ONE. LAWRENCE BERKELEY NATIONAL LABORATORY IS RIGHT UP THE HILL FROM THE BERKELEY CAMPUS, AND MANY OF OUR FACULTY HAVE JOINT APPOINTMENTS AT BOTH THE BERKELEY CAMPUS AND AT THE LAB, SO THAT'S THE THIRD OFFICIAL AFFILIATION THAT WE HAVE.

CHAIRMAN LICHTENGER: THANK YOU.

MR. BLUHM: THE COST CHALLENGES IN BUILDING AT BERKELEY ARE QUITE CHALLENGING. THE HAYWARD FAULT PROXIMITY CLEARLY ADDS TO THE FOUNDATION COST AND STRUCTURAL COSTS. WE DID A BRIEF STUDY OF THE -- TRYING TO QUANTIFY THE ADDITIONAL COST BECAUSE OF THE NEAR FAULT CONDITION FOR A PROJECT THAT WAS RECENTLY COMPLETED, AND OUR ASSESSMENT WAS THAT IT ADDED APPROXIMATELY $25 CONSTRUCTION COST PER SQUARE FOOT.

ANOTHER FACTOR IS THAT THE BUILDING HOUSES THREE CATEGORIES OF VERY HIGH-COST SPACE. ONE, THE VIVARIUM; TWO, THERE'S A BIOSAFETY LEVEL THREE SUITE ON THE TOP FLOOR; AND OUR COSTLY IMAGING SPACE IN THE BASEMENT TO HOUSE FOUR MAGNETS, FAIRLY SIZABLE.

THE LABOR COSTS AT BERKELEY ARE QUITE HIGH. VARIOUS PROFESSIONAL COST ESTIMATORS HAVE DONE ANALYSES OF REGIONAL COST DIFFERENTIALS MOSTLY DRIVEN BY LABOR. AND I THINK THEY'RE CITED IN THE LETTER THAT WE WROTE, BUT THEY CAN BE SIGNIFICANT. PARKING IS VERY LIMITED FOR CONTRACTORS, STAGING IS EXTREMELY LIMITED, THE CAMPUS IS OLD, VERY DENSE, CONGESTED. ALSO THE FACILITY IMMEDIATELY ABUTS A FUNCTIONING FACILITY FOR ANIMAL HANDLING, AND THE COST IMPACTS BECAUSE OF THAT ARE SEVERE IN TERMS OF MITIGATING NOISE, VIBRATION, SECURITY CONCERNS, AND SO FORTH.

ALSO THE HIGH LEVEL OF LEED CERTIFICATION THAT WE'RE STRIVING FOR DOES ADD TO THE INITIAL CAPITAL INVESTMENT.

CHAIRMAN LICHTENGER: HOW MUCH WOULD YOU ANTICIPATE THAT ADDS TO YOUR COST?

MR. BLUHM: WE'VE DONE A LITTLE BIT OF ANALYSIS, AND NUMBERS HAVE -- WE'VE HEARD VARIOUS NUMBERS, BUT IF WE HAD TO GUESS, WE WOULD SAY APPROXIMATELY 1 PERCENT, POSSIBLY 2 PERCENT. IF THE QUESTION WERE ASKED A COUPLE YEARS AGO, WE MIGHT SAY 3 OR 4 PERCENT.

CHAIRMAN LICHTENGER: MR. VICE CHAIR, DID YOU HAVE SOME QUESTIONS? MARCY? OKAY. THANK YOU VERY MUCH. THANK YOU FOR YOUR APPLICATION AND YOUR ANSWERS AND COMING TODAY.

MR. KLEIN: I'D JUST LIKE TO SAY THAT I THOUGHT THIS WAS AN EXCELLENT APPLICATION, TO ECHO WHAT DEBORAH SAID. THERE'S SOME REALLY GREAT ASPECTS TO THIS.

MS. HYSEN: DON'T FORGET TO TELL ME WHO DID YOUR BOOK BECAUSE I NEED TO KNOW THAT.

CHAIRMAN LICHTENGER: I'D LIKE TO ADD ALSO I THOUGHT IT WAS AN EXCELLENT APPLICATION, BEING THE PRIMARY REVIEWER, OTHER THAN YOUR HIGH COSTS.

SO AT THIS POINT, BEFORE WE DO OUR PRELIMINARY AND FINAL SCORING FOR THIS CATEGORY, I'D LIKE TO ASK THE PUBLIC IF THEY'D LIKE TO HAVE ANY PUBLIC COMMENTS OTHER

THAN WHAT THE TIME IS. NOBODY IS OUT THERE. OKAY. SO THEN WE'LL TAKE A FEW MINUTES TO DO OUR FINAL SCORING FOR UC BERKELEY AND FINALIZE OUR SCORE FOR THE BUCK IN THIS CATEGORY.

(PAUSE IN PROCEEDINGS.)

CHAIRMAN LICHTENGER: I'D JUST LIKE TO THANK ALL CIRM STAFF FOR DOING AN UNBELIEVABLE JOB HERE TODAY, ESPECIALLY RICK KELLER, ALTHOUGH THE JOB IS NOT DONE YET, RICK. YOU MAY BE DONE, BUT THE JOB IS NOT DONE. AND SO I'D LIKE TO THANK EVERYBODY. CAN I OFFICIALLY ADJOURN TILL 9 A.M. TOMORROW? GOOD NIGHT.

(THE MEETING WAS THEN RECESSED AT 10:35 P.M.,TO BE RECONVENED AT 9 A.M. ON APRIL 5, 2008.)

REPORTER'S CERTIFICATE

I, BETH C. DRAIN, A CERTIFIED SHORTHAND REPORTER IN AND FOR THE STATE OF CALIFORNIA, HEREBY CERTIFY THAT THE FOREGOING TRANSCRIPT OF THE PROCEEDINGS BEFORE THE SCIENTIFIC AND MEDICAL FACILITIES WORKING GROUP TO THE INDEPENDENT CITIZEN'S OVERSIGHT COMMITTEE OF THE CALIFORNIA INSTITUTE FOR REGENERATIVE MEDICINE IN THE MATTER OF ITS REGULAR MEETING HELD AT THE LOCATION INDICATED BELOW

THE WESTIN SAN FRANCISCO AIRPORT

1 OLD BAYSHORE HIGHWAY

MILLBRAE, CALIFORNIA

APRIL 4, 2008

WAS HELD AS HEREIN APPEARS AND THAT THIS IS THE ORIGINAL TRANSCRIPT THEREOF AND THAT THE STATEMENTS THAT APPEAR IN THIS TRANSCRIPT WERE REPORTED STENOGRAPHICALLY BY ME AND TRANSCRIBED BY ME. I ALSO CERTIFY THAT THIS TRANSCRIPT IS A TRUE AND ACCURATE RECORD OF THE PROCEEDING.

State Stem Cell Agency Facilities Working Group Transcript 4/4/08

California State Stem Cell Agency

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