BioMarin pauses expansion of San Rafael complex
BioMarin, the global pharmaceutical company based in San Rafael, has paused plans for a downtown campus expansion six years after winning city approval.
The plan for the 3-acre property at 999 Third St. involved two 72-foot-tall buildings with offices and lab space that would have brought more than 500 new employees.
The property remains a mostly vacant, paved lot.
BioMarin said that in the post-pandemic, hybrid work environment, it has redirected its focus to a new plan to convert one of its office buildings at 781 Lincoln Ave. into a laboratory.
"Like many organizations, BioMarin adopted a hybrid workplace model following the pandemic, with employees working both on site and remotely, depending on their roles," said Andrew Villani, a company spokesperson. "This approach allows us to foster in-person collaboration, support the needs of our employees and continue to utilize and invest in our San Rafael campus."
The property at 781 Lincoln Ave. "is one of those spaces currently being evaluated to determine how best to meet the needs of our teams of researchers and scientists," he said.
BioMarin, founded in 1997, moved its headquarters to the San Rafael Corporate Center at 770 Lindaro St. in 2013. It purchased the property in 2014.
In 2015, BioMarin purchased the Third Street property, a former Pacific Gas & Electric Co. gas plant, with the intent of redeveloping the site and expanding its downtown campus. After the acquisition, BioMarin worked with PG&E to complete a $16 million cleanup to remove contaminated soils.
The San Rafael City Council approved the Third Street expansion plan in 2020.
The project involved donating land at Brooks Street and Third Street to Vivalon, the nonprofit that provides services to seniors and people with disabilities. Vivalon partnered with Eden Housing, a nonprofit affordable housing developer, to construct a "healthy aging campus" with 67 affordable residences for seniors and a community center.
BioMarin's campus comprises nine parcels totaling more than 18.5 acres. The main campus is bounded by Second Street to the north, Andersen Drive to the south, Lincoln Avenue to the east and the PG&E substation to the west. More than 600 employees work there, according to BioMarin.
The plan to convert an office building into a laboratory was brought up as a footnote during a San Rafael Planning Commission hearing on April 14 in which BioMarin sought to end a public access agreement.
Stewart Summers, a planning commissioner, asked BioMarin representatives, "Do you foresee ever constructing buildings on Third Street?"
Shar Zamanpour, BioMarin's campus director, said, "It's not within the next couple of years, let's say, two to three years' plan at this point, because our focus is on 781 (Lincoln Ave.)."
The 10-year vesting period carries the building rights through April 23, 2030.
Villani said BioMarin will share information through public forums as its plans progress.
BioMarin declined to provide information about how much of its office space is vacant.
Haden Ongaro, executive managing director of the Newmark commercial real estate office in San Rafael, provided some insights on office space in Marin County.
"I would say BioMarin is not an isolated case," Ongaro said.
Ongaro said that since the pandemic, many companies have reduced office space.
"We've also seen companies reluctant to make long-term commitments because they don't know about the return to office," he said.
However, Ongaro said there has been a recent uptick in interest in office space in San Rafael, including medical offices. Converting existing office space into housing is another trend, which would diminish the office inventory and increase demand, Ongaro said.
An offices-to-apartments project at 4040 Civic Center Drive is an example, Ongaro said. The project, approved earlier this year, involves a 238-apartment complex in two buildings. One building is a new seven-story construction with 130 apartments, while the other would retrofit a five-story office structure into 108 apartments.
"No doubt that office demand has suffered, but I do see it getting better," he said, noting that businesses in San Francisco are expanding, and that could trickle into Marin County.
Overall, San Rafael has 3.3 million square feet of office space, roughly 45% of the inventory for the county.
The city has been well below the average vacancy of the rest of Marin office market since 2019. The lowest vacancy for San Rafael was the third and fourth quarter of 2019, with a 13.1% vacancy rate, according to data from Newmark.
It peaked in the fourth quarter of 2022 with a vacancy rate of 21.2%. That has dropped to 17.4%, Ongaro said. The countywide vacancy rate is 19.1%, he said.
The BioMarin agreement discussed at the Planning Commission meeting on April 14 allows public access to an onsite park, conference rooms and city use of a parking garage. BioMarin officials cited security as a main reason for wanting out.
Zamanpour said the original public access agreements were established in 1998, when the campus was the San Rafael Corporate Center. She said now that BioMarin owns the property and has been the sole occupant since 2022, things have changed.
The site at 770 Lindaro St. serves as the global headquarters for the company, "which significantly differs in security, access and operational requirements of the campus," Zamanpour told the commission.
"As a global company, BioMarin employees work across multiple time zones," she said. "Conference spaces are in use continuously to support international collaboration and sometimes these meetings go many, many days in a row with a lot of materials that remain in the rooms, which limits the availability of the conference rooms for others."
The Planning Commission agreed with BioMarin that the use of the site has changed. It recommended that the City Council relieve the company of the public access requirement.
The issue is expected to be presented to the council at its meeting on May 4.
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