Meet the money man behind the Elk Run developmentby Sea Stachura, Minnesota Public Radio
When an ambitious biobusiness park was proposed for southeast Minnesota, the first question was, who will finance it? The answer is a San Francisco-based venture capitalist with Midwestern roots. Industry experts say Steve Burrill has the experience to make the Elk Run project happen.
Rochester, Minn. — Steve Burrill is the founder of the life sciences venture capital firm Burrill & Co., based in San Francisco. The company manages more than $900 million in venture capital funds.
But this latest endeavor tops that. Burrill confirmed in an interview with MPR News that the investment in Elk Run will approach $1 billion.
"The intent is to raise large amounts of money from pension funds and institutional investors and friends of people in the state, some of the big corporations in the state, those sorts of places," said Burrill, "the places where venture capital and private equity funds typically raise money."
Burrill says this project is a long-term development. But he says he and Tower Investments will have evidence of progress in the next 60 to 90 days.
"Hopefully we'll have gotten all of the ducks aligned to get [a new Highway 52} interchange ready. We'll hopefully break some ground in the biobusiness park. We'll make some announcements about some capital raising," said Burrill.
To the layman's eyes, this may look far-fetched. A biobusiness park will be built on an elk farm, and the man largely financing it comes from San Francisco. Sure. And I have an island to sell you.
The real estate company behind Elk Run, Tower Investments, sought out Burrill. The family-owned Tower real estate company is based in northern California. It initially purchased the 2,300-acre elk farm for the project in 2006.
Elk Run is a large development which will also include housing, retail and office space, as well as plans for schools, a hospital and a wellness center.
Burrill is a big name in biotech venture capital. He has life science and real estate ventures in China, Malaysia and the Bay Area, among others. Scientific American named him a biotech visionary in 2002.
Burrill also has roots in the Midwest. He's a native of Madison, Wis., and is a University of Wisconsin-Madison alum.
"I spend half my year in the Midwest. Last year I was a keynote commencement speaker at the University of Minnesota, and I went from there in May to my Wisconsin home til October."
Burrill and the Mayo Clinic have worked together previously on projects involving individualized medicine. As early as 2005, Burrill touted the Midwest as the future hotbed of life sciences.
Burrill says he hopes to develop local and international biotech companies at Elk Run. But he isn't saying where he'll get the money, or who might come to Minnesota.
That gives biotech venture capitalist Pete McNerney some pause. McNerney is a cofounder of Thomas, McNerney and Partners, a national health care venture capital firm. McNerney is based in Minneapolis.
"I think it is a project I would really like to see succeed. I think this is a state that has some of the elements required to support a biotech, biopharamcuetical industry," said McNerney. "I'm a little bit unsure where the equity capital is going to come from, and under what terms they will attract it."
McNerney says usually, venture capital investments aren't restricted to type or to geography. The investors are looking for a big return, so committing a lot of money to one site and one industry is something new for Minnesota.
"We have no experience doing that. I know it's been tried before, but I'm not sure what the appetite of that is," he said.
McNerney says he only knows of Burrill through his strong reputation.
Other industry experts declined to comment on Burrill's track record, or said they didn't know enough about him.
For now, Burrill has won the confidence of state leaders. But as Gov. Pawlenty said yesterday, the project has a long way to go before they commit to anything.
- All Things Considered, 03/13/2009, 4:51 p.m.