LEGISLATIVE ANALYST REPORT

TO: The Honorable Board of Supervisors
FROM: Elaine Forbes, Legislative Analyst
HEARING: N/A
DATE: June 26, 2002
ISSUE: Bioscience Industry

Summary of Request

A motion passed by the Board (File 01-2024) requests that the Office of the Legislative Analyst (OLA) research and report on the bioscience industry, particularly as it relates to land use, planning, and health and safety issues. In response, this report considers current San Francisco land use, zoning, and health and safety practices in regard to bioscience firms, reviews the policies of surrounding jurisdictions, and offers recommendations.

Executive Summary

Defining the bioscience industry, also called the biotechnology industry, is challenging because bioscience has many diverse applications ranging from developing diagnostic tests that spot cancers to designing bugs that will clean brownfield contaminants. Generally, the bioscience industry can be divided into three subsections: diagnostics, therapeutics and the supplier sector. Long product cycles, high private expenditures for research, and a tendency to form geographic clusters characterize the bioscience industry. According to the Mayor"s Office of Economic Development, the goal of the City of San Francisco is to encourage the bioscience industry to locate within the City because of the potential economic benefits.

Unlike some Bay Area cities that are home to many bioscience firms, San Francisco does not expressly identify bioscience within a use category.¹ Instead, bioscience is addressed in a 1988 Zoning Administrator interpretation and in the Jobs Housing Linkage and Impact Fees section. Presently, bioscience laboratories are permitted as a primary use only in the industrial zones and, generally, downtown commercial districts. However, because the Planning Code does not contain one use category that encompasses all of the various functions that may make up a bioscience facility, the Planning Department has discretion in characterizing the principle use of a bioscience firm and in determining where bioscience firms are allowed.

A well-developed set of federal and state regulations apply to the industry. The OLA was unable to find an example of another jurisdiction in California that has adopted additional health and safety controls specifically for bioscience firms beyond those required by State and Federal law.

In order to develop land use controls for bioscience, the City must articulate the nature of the use and identify issues that may arise from that use. Bioscience consists of several functions, including wet laboratories and laboratory support, computer research, and office functions. Additionally, bioscience firms tend to change over time; thus, particular functions may be more or less prominent depending on the stage of the product cycle. A sample of local cities, combined with a consideration of the specific conditions San Francisco presents, yields alternatives that the Board of Supervisors may wish to consider. Following the direction of the Board of Supervisors to the Planning Department regarding Citywide planning and increased public participation, this report recommends that these controls be vetted in a public process. The Board may wish to establish interim controls for bioscience applications Citywide or within certain districts (mixed use and commercial) until the Planning Department and/or another appropriate group creates appropriate permanent zoning controls in collaboration with a public process (Task Force, Working Group, and/or as part of Better Neighborhoods planning). The Board of Supervisors may wish to direct the group(s) charged with the development of these controls to consider creating a new use classification that expressly includes bioscience. Whether to establish interim controls and/or a task force or working group is a policy decision for the Board of Supervisors.

Background

Defining the bioscience industry presents challenges because bioscience has many diverse applications ranging from developing diagnostic tests that spot cancers to designing bugs that will clean brownfield contaminants. The U.S. Office of Technology Assessment defines bioscience as "any modern technology that uses living organisms (or parts of organisms) to produce or modify products, to improve plants or animals, or to develop microorganisms for specific uses".

According to the California Health Institute, the bioscience sector began in 1975 when Herb Boyer, a biochemist from UCSF and Bob Swanson, a venture capitalist, started Genentech in a warehouse in South San Francisco.² The present day biosciece industry in the Bay Area can be divided into three subsections. The diagnostics section involves the creation of products used to analyze and detect various sicknesses. The therapeutics sector involves designing products that cure sicknesses. The supplier sector involves providing capital goods, machinery, instruments, software, and reagents for research and production.³ Long product cycles, high private expenditures for research, and a tendency to form geographic clusters characterize the bioscience industry.⁴

The bioscience sector is concentrated in California, Massachusetts, New Jersey, New York, North Carolina and Washington.⁵ The Bay Area has the highest concentration of bioscience in California in terms of number of employees and firms.⁶ According to the California Health Institute, over 747 bioscience firms employing 85,000 people are in the Bay Area.⁷ The University of California at San Francisco has spun off approximately 60 bioscience startups, including Genentech and Chiron. However, to date only one bioscience firm has located in San Francisco County.⁸ Bioscience firms are agglomerated in the South and East Bays, with clusters in South San Francisco, Richmond, Hayward/Freemont and Palo Alto. According to Jesse Blout, Deputy Director of the Mayor"s Office of Economic Development, the epicenter for bioscience is Palo Alto. The East Bay is home to about 1/3 of all companies. Suppliers to these firms are located throughout the Bay Area proximate to bioscience companies.

Economic Impacts⁹

According to Jesse Blout, Deputy Director of the Mayor"s Office of Economic Development, attracting the bioscience industry to San Francisco has the potential to be a source of long-term economic stability for San Francisco. The presence of the University of California at San Francisco (UCSF) new 43-acre Mission Bay research campus, expected to employ over 9,000 researchers and staff at full build-out, represents a unique opportunity to attract biotech companies to San Francisco that would otherwise locate elsewhere in the region or in other parts of the United States and the world.

The principal benefits of the bioscience industry for San Francisco include the following:

High paying direct jobs: the average annual salary of biotech worker in California was $64,353 in 2000 (California Healthcare Institute, 2002).

A high job "multiplier": estimates are that for every one direct biotech job created, two to five indirect jobs are created.

Diversification of the local economy to include a more stable, human-health based industry

Significant fiscal benefits to San Francisco, including:

o Payroll taxes: The high wage structure for Biotech translates into potential increased payroll taxes for the City of San Francisco.

o Property taxes: The extraordinarily high capital investment required for biotech facilities (for instance, typical tenant improvement costs are as high as $200 - $250/square foot, compared with an average of $20 - $30 for an office building) generate much higher property tax revenues on a square foot basis compared to comparable commercial use.

o Transit Occupancy Taxes: A growing biotech sector in San Francisco will attract business travelers from around the U.S. and the world, which leads to increased hotel tax revenue.

o Venture capital investment: the biosciece industry in the Bay Area attracts investment capital from all over the world.

Overview of Bioscience Facilities

According to Christopher Scott, Assistant Vice Chancellor of University Industry Partnerships for UCSF, bioscience firms may be configured in a variety of ways ranging from large research laboratories to primarily office-type space. Non-laboratory space includes office space, laboratory work stations outside the laboratory, areas containing science equipment and research materials, libraries, and other types of space associated with research functions. According to Scott, bioscience firms also tend to change over time, as office and research functions may expand or contract depending on the stage of the product cycle. The amount of office space versus laboratory or other types of research space depends not only on the stage of the product cycle but also on the type of bioscience firm. The mapping of the human genome has created the potential to conduct bioscience research by means of computers. This new type of bioscience research, called bioinfomatics, is hypothesized to be an important emerging field in bioscience. To date bioscience research is primarily laboratory-based.

While no "typical" bioscience building exists, according to Sean Charpentier"s research on behalf of the Mayor"s Office of Economic Development, bioscience buildings differ from office buildings in four ways:

1. Bioscience buildings typically require more mechanical infrastructure, including complex HVAC systems because the air in buildings cannot be recycled and the temperature needs to be closely regulated. In addition, there is usually a requirement for separate piping systems to carry different grades of water and/or different waste streams. The need for a great deal of mechanical infrastructure frequently necessitates higher ceilings, ranging up to 17 feet high

2. Some bioscience firms have back-up power generators because of the need to maintain a constant temperature and humidity in rooms where experiments are occurring. The backup generators would provide power in the case of a power outage, thereby maintaining the integrity of ongoing research projects. Generators are typically stored in service yards outside or on the roof.

3. Some bioscience firms either have a vivarium, a facility to house animals, or a greenhouse.

4. Bioscience firms tend to have lower ratios of employees per square foot of building space. Ratios in bioscience firms range from one employee per 350 to 450 square feet of building space, compared to an average range of one employee per 250 to 300 square feet of building space in a typical office building.

Current Law and Practice - Land Use

The San Francisco Planning Department has limited experience in processing the permits for bioscience firms. This report reviews the San Francisco Planning Code, considers the treatment of bioscience uses in the Mission Bay South Redevelopment Plan Area, and uses a bioscience firm that located in San Francisco in June 2002 as a case study. This section was written in collaboration with Deputy City Attorney Elaine Warren.

Planning Code Use Districts and Zoning Bulletin Interpretation. Presently, the Planning Code does not include the term "bioscience" in the use classifications of the Planning Code. However, a 1988 Zoning Administrator bulletin clarified which zoning districts permit Research and Development (R&D) facilities. The Zoning Administrator defined an R&D facility as a facility that has as its primary purpose scientific or technical research and development activities. Within the definition of R&D, the bulletin includes several subcategories of uses that relate to bioscience activities: research laboratories, support and related materials, equipment and support facilities, and administrative and record-keeping services needed for managing research and development facilities. The bulletin interprets R&D facilities as uses within Planning Code Sections 226(d) (light manufacturing not otherwise specifically identified in the Planning Code); 226(e) (industrial or chemical research or testing laboratories not including a danger of explosives); and 226(f) (experimental laboratory). Under the current Planning Code, uses within Sections 226(d) through 226(f) are permitted in M-1 and M-2 zoning districts. Section 226(e) uses are also permitted in C-3-O, C-3-R, C-3-G, C-3-S and C-M zoning districts. Section 226(f) uses are conditional uses in C-3-S and C-M districts.

According to former zoning administrator Robert Passmore, the Bulletin was written primarily to address medical facilities. The issue of concern at that time centered on explosives and toxic releases. The Bulletin indicates that rezoning proposals for the South of Market area ("SOMA") were under consideration at the time. These proposals would have continued to allow certain light industrial uses in certain SOMA districts, including light manufacturing/industrial or a chemical research/testing laboratory not involving any danger of explosions. However, the current South of Market mixed use districts that permit light industrial uses (SPD, RSD, SLR, SLI, SSO) disallow "chemical processing of materials" or any uses allowed under Sections 226(e) through 226(w). Consequently, bioscience laboratories are permitted as a primary use only in the industrial zones and, generally, in downtown commercial districts.

Jobs Housing Linkage and Impact Fees (Section 313.1). In 2001, the City revised its ordinance requiring developers of certain projects to contribute to affordable housing through fees or housing construction (Planning Code Sections 313 through 313.15). Uses that pay fees are entertainment, hotel, office, research and development, and retail. Bioscience is included expressly in the Research and Development (R&D) category defined as follows:

"Research and development use" shall mean space within any structure or portion thereof intended or primarily suitable for basic and applied research or systematic use of research knowledge for the production of materials, devices, systems, information or methods, including design, development and improvement of products and processing, including bioscience, which involves the integration of natural and engineering sciences and advanced biological techniques using organisms, cells, and parts thereof for products and services, excluding laboratories which are defined as light manufacturing uses consistent with Section 226 of the Planning Code."

A study prepared by the City in support of fees for different categories of development projects showed that research and development uses had fewer employees per square foot than office uses but more employees per square foot than entertainment, hotel and retail.¹⁰ OLA research for this report supports this finding.

Mission Bay South Redevelopment Plan. The Mission Bay South Redevelopment Plan contains residential, hotel, commercial industrial, commercial industrial/retail, UCSF, public facility and open space use districts. The commercial industrial, commercial industrial/retail and UCSF districts allow activities that encompass bioscience operations. Uses specifically allowed in these districts include various types of laboratories, laboratory support facilities, office-based or computer-based research facilities, medical research facilities, and bio-technical research facilities. Areas that allow bioscience (and other commercial/industrial uses) do not allow residential uses and are separated from residential use areas in Mission Bay South by open space.

Case Study. The bioscience firm that located in San Francisco in the first quarter of 2002 located in an SSO district South of Market. This district excludes chemical research or testing laboratories (see above) as a principle use. According to the Zoning Administrator, Lawrence Badiner, this application was approved because laboratory space made up less than 25% of the firm"s total square footage. Accordingly, the plan was approved as an office use, with the laboratory considered an accessory use.

The Planning Code does not contain one use category that encompasses all of the various functions that may make up a bioscience facility. Consequently, as this test case shows, the Planning Department has discretion in characterizing the principle use of a bioscience firm and in determining where bioscience firms are allowed. According to Zoning Administrator Lawrence Badiner, a major disadvantage of treating bioscience firms as office is that it requires such firms to get office allocations under Proposition M (for more detail, see below under Issue Analysis).

Jurisdictional Comparison

This report surveys Alameda, Emeryville, Berkeley, South San Francisco, Palo Alto and San Jose to ascertain how local jurisdictions with bioscience firms treat them in their planning codes. Of the cities surveyed, no city has a separate land use category for bioscience. However, all have one use category that encompasses bioscience. Most (Alameda, South San Francisco, Palo Alto and San Jose) include bioscience in a Research and Development category. Berkeley includes bioscience in the "Other Industrial Use" category, which includes other types of laboratories. Emeryville includes bioscience in a "High Technology" category.

Where Allowed. Cities generally allow bioscience firms in industrial and manufacturing zones, with some exceptions. Alameda and San Jose generally restrict bioscience to planned business park areas. San Jose only allows bioscience firms in the IP Industrial Park Zoning District in order to protect space for other, more traditional light and heavy industry uses. Where bioscience is allowed in mixed-use zones, a conditional use permit is usually required. Two of the cities surveyed (Emeryville and South San Francisco) require conditional use permits for bioscience in all zones, including manufacturing zones. Berkeley also requires conditional use permits for the mixed manufacturing zone. None of the cities surveyed allow bioscience firms in commercial zones, unless those zones are part of planned business parks.

Proximity. Berkeley is the only city surveyed that specifies how proximate bioscience firms may be to residential uses. Berkeley uses laboratory biosafety level classifications to determine how far facilities must be from residential uses. Biological materials handled by laboratories are classified based on the hazards to human beings associated with the organisms, with Class 1 organisms posing the least risk and Class 4 organisms posing the greatest risk.¹¹ In Berkeley, laboratories using Class 2 organisms are prohibited within 500 feet of residential or mixed-use residential districts. The other cities surveyed rely on the homogeneity of the zones and the setback and, side and rear yard requirements to buffer industrial and manufacturing uses from residential uses. For example, in South San Francisco bioscience firms are located on the East Side of Highway 101 and virtually no residential uses are on that side of the freeway. The Mission Bay South Plan uses a similar approach, separating residential uses from zones that allow bioscience functions. The ability to use this approach elsewhere in San Francisco may be limited, however, given the richly varied land uses in some areas that change dramatically from block to block.

Building design. The cities surveyed rely on the Unified Building Code (UBC) to deal with issues of rooftop equipment, exhaust systems, and seismic safety.

Health and Safety

Bioscience firms that contain wet laboratories (laboratories handling biological materials) are regulated like hospitals in terms of how they must dispose of biohazardous and medical waste. In addition, a complex set of federal, state and local laws regulate substances used by bioscience firms that are considered hazardous materials or wastes. Please see Attachment 1: Regulatory Framework for a description of the general regulatory framework for bioscience firms, including regulations pertaining to onsite hazardous materials, hazardous waste, biological safety, biohazardous waste, radioactive materials, air quality, water quality, and occupational safety.

The OLA could not find an example of a jurisdiction in California that has adopted health and safety controls specifically for bioscience firms. In San Francisco, bioscience firms, like other firms that handle hazardous materials or wastes or generate medical wastes, are subject to regulation by the San Francisco Department of Public Health. This section briefly describes the regulatory framework for hazardous materials and waste, medical waste and industrial discharges to air and water.

Hazardous waste and hazardous materials. A number of federal and state laws define and regulate hazardous waste and hazardous materials. Federal law regulates hazardous waste from its creation to ultimate disposal. As is the case with several federal environmental regulatory schemes, federal law provides for state enforcement. California has chosen to enforce federal laws that regulate hazardous wastes. It has also adopted additional laws regulating both hazardous wastes and hazardous materials. California certifies local agencies to implement and enforce many provisions of these laws. Such agencies are called Certified Unified Program Agencies (CUPAs). In San Francisco, the San Francisco Department of Public Health is the CUPA for the use, storage, and generation of hazardous materials and hazardous waste. San Francisco has supplemented California laws that regulate hazardous materials through the adoption of the Hazardous Materials Permit and Disclosure Ordinance, Health Code Chapter 21. Key requirements imposed on businesses handling hazardous materials include:

Hazardous Materials Business Plan: Describes the type and quantities of the hazardous waste/material on site and the storage facilities. Hazardous waste must be stored in leak proof containers that are labeled. Secondary containment guidelines are provided to control for accidental spills. Disclosure requirements specifically apply to wet laboratories.

Emergency Response Plan: Describes how the facility will respond to an emergency.

Training Plan: Describes the training procedures to educate the workforce about the proper handling methods.

If a facility that generates hazardous waste plans to treat the waste, additional requirements apply. Hazardous waste must be hauled by a state-licensed hauler and can only be disposed of at a State permitted treatment, storage, and disposal facility (TSD facility).

California regulates medical waste, like hazardous waste, from its creation to its disposal. San Francisco implements the state law and stricter local requirements through Health Code Chapter 25.

The storage, use, transport, and disposal of radioactive materials are regulated by federal law, which in turn provides for state enforcement. California implements the federal law through the California Radiation Control Act.

Air. The federal Clean Air Act regulates toxic air contaminants and priority air pollutants. In California, the Air Resources Board and local air quality districts implement the Clean Air Act. The Bay Area Air Quality Management District (BAAQMD) monitors and regulates the particulate, vapors, and gases that facilities emit. A bioscience firm would require a permit to operate if its emissions exceeded BAAQMD thresholds. Additionally, the BAAQMD requires a laboratory to apply for an air permit if the gross area of the lab is larger than 25,000 square feet or if there are more than 50 fume hoods. Laboratories that do not exceed these thresholds do not have to apply for a permit provided that they adhere to BAAQMD"s Responsible Laboratory Management Practices.¹²

California Health and Safety Code Sections 25531-25543 implement provisions of federal law designed to prevent releases of toxic air contaminants. This state law requires the preparation of risk management prevention plans for users of certain quantities of acutely hazardous materials. DPH oversees preparation of risk management prevention plans through Health Code Article 21A.

Water. The federal Clean Water Act regulates industries that discharge wastes to water bodies or sewer systems. In general, the rules and regulations for bioscience firms are the same as for other industrial entities and hospitals. No facility is allowed to release hazardous materials or waste into the environment or the sewer system. All industrial discharges into the sewer are regulated according to the pretreatment standards established under the Clean Water Act. San Francisco implements the federal law through the Industrial Discharge Ordinance, which requires permits for discharges to the sewer system. In San Francisco, there are two types of discharge permits. Class I, permits are for significant industrial dischargers while Class II permits are for minor industrial dischargers. (Article 4.1, Sec. 119). Dischargers must comply with federal pretreatment standards in addition to meeting local requirements. The bioscience industry, for example, may be required to adjust the pH (acidity) level of its waste water before the waste can be released into the sewer system.

Issue Analysis: Zoning and planning

Unlike some of the surrounding cities that are home to many bioscience firms, except in Mission Bay South, San Francisco does not expressly identify bioscience as included within a use category. Since bioscience can consist of a variety of functions, where a particular bioscience use may locate depends on which of those functions is deemed the principle use.

According to San Francisco Zoning Administrator Lawrence Badiner providing a definition of bioscience and identifying the zoning districts where the use is allowed is preferable to the current system in San Francisco for the following reasons: (1) it would provide the industry and developers for the industry with more certainty; (2) the City could more proactively prepare and plan for the industry should an agglomeration of bioscience firms form in San Francisco; (3) the City could more easily take health and safety issues into consideration; and, (4) bioscience uses that are not classified as office space under Proposition M would not compete with office users for office space allocation.

In order to develop appropriate land use controls for bioscience uses, according to former Zoning Administrator Robert Passmore, the City must articulate the nature of the use and identify issues that may arise from that use. A sample of local cities, combined with a consideration of the specific conditions San Francisco presents, yields several alternatives that the Board of Supervisors may wish to consider.

According to Mr. Passmore, the primary issue to consider when developing zoning controls is the compatibility of the use with other uses. The laboratory component of bioscience uses may raise special health and safety considerations. Although laboratories are highly regulated, the City may have concerns about regulatory compliance and want assurances that facilities are well prepared to respond to emergency situations. One way in which the City currently regulates laboratories involves the Department of Public Health"s requiring laboratories to submit information on the types and quantities of hazardous materials that the laboratory uses and to prepare emergency response plans. This information is available to the public. Additional requirements apply to users of acutely hazardous materials. The Board of Supervisors is also in the process of considering legislation that would further regulate standby emergency generators.

Unless a bioscience firm is engaging in production, most other aspects of bioscience are more akin to commercial uses than industrial uses, according to Mr. Badiner. Mr. Badiner"s impression is that in terms of employment, as demonstrated by the Job Housing Nexus, bioscience has fewer employees per square foot of space than office and retail uses and the parking demand is consequently less intensive. This information can be taken into account in considering the intensity and density of bioscience use (including traffic and parking) and the compatibility of bioscience uses with other uses.

Parking and Traffic. Bioscience uses may raise neighborhood concerns about adequacy of parking and traffic congestion. These issues are not unique to bioscience uses. City restrictions on parking may impact bioscience firms" decisions to locate in San Francisco given that the City"s maximum allowance of parking may be less than what is allowed by other jurisdictions.

Compatibility with other Uses - Agglomeration. The OLA survey of local jurisdictions indicates that bioscience firms do tend to agglomerate regionally but may be dispersed at the local level. Alameda and Berkeley both have bioscience firms scattered throughout the city, for example. The land use patterns of the jurisdiction can influence how proximately bioscience firms locate to one another. There is a large cluster of bioscience firms in South San Francisco and a large cluster in the Palo Alto/Mountain View/Sunnyvale area. However, because bioscience firms tend to disperse at the local level, bioscience does not appear to be incompatible with the presence of other industrial and research and development activities.

Proposition M. Whether bioscience space requires a Proposition M allocation depends on whether the use meets the definition of office space in the Proposition. Bioscience firms face a conundrum in this regard. One, firms may have difficulty determining whether a particular part of a bioscience function counts as office space under the Proposition M definition. Two, bioscience functions within a firm may change over time and the amount of space that may meet the definition of office space under the Proposition may change. Given these uncertainties, bioscience firms may seek Proposition M allocations for their entire operations, as was done in the case of Mission Bay. This approach has two consequences. One, bioscience firms may absorb limited office space and restrict other office uses beyond the intent of the Proposition. Two, obtaining a Proposition M allocation adds a layer of complexity to the sector. No other jurisdiction surveyed imposed special requirements on office functions of bioscience firms or required businesses to distinguish between office and non-office functions. This additional requirement may encourage firms to locate in nearby cities that lack such requirements. If attracting bioscience firms to San Francisco is of interest to the Board, it may wish to pursue this issue further. There are many existing projects that already have a Prop M. allocation and in some cases this works, but the planning department is looking at this as a case-by-case basis.

Potential Solutions

Developing effective zoning controls for bioscience will have the benefits of providing certainty for the industry and for the City by giving the City the ability to more proactively prepare and plan for the industry. Following the direction of the Board of Supervisors to the Planning Department regarding Citywide planning and increased public participation, this report recommends that these controls be vetted in a public process. The Board may wish to impose interim controls on bioscience applications Citywide or within certain districts (mixed-use and commercial) until the Planning Department and/or another appropriate group creates appropriate zoning controls in collaboration with a public process (Task Force, Working Group, and/or as part of Better Neighborhoods planning). The Board of Supervisors may wish to direct the group(s) charged with the development of these controls to consider the following options:

Option 1 - Status quo. Under the current Planning Code, bioscience laboratories are permitted as a principle use in M-1 and M-2 zoning districts. Section 226(e) uses are also permitted in C-3-O, C-3-R, C-3-G, C-3-S and C-M zoning districts. Section 226(f) uses are conditional uses in C-3-S and C-M districts. In addition to these zoning districts, bioscience laboratories may be allowed as an accessory use in the South of Market Planning Area. This approach provides the Planning Department with a great deal of flexibility in approving applications from bioscience firms when laboratory space makes up less than 25% of the total space in the South of Market Planning Area. However, few bioscience firms may have less than 25% of total space for laboratories. According to Sean Charpentier"s research on behalf of the Mayor"s Office of Economic Development, between 30-50% of a typical bioscience building is used for office purposes. In addition to office and laboratory space, bioscience firms utilize research areas, libraries, and other types of spaces that are neither laboratory nor office. This approach will limit facilities with larger laboratories to the downtown commercial and industrial zones or Mission Bay South commercial industrial areas. For the bioscience firms that do have laboratories which makeup less than 25% of their total space, the status quo may entail, however, that these firms seek office allocations under Proposition M even though all of the firms" space does not count as office space under the Proposition.¹³

Option 2 - Create a new use classification that expressly includes bioscience. In addition to expressly allowing bioscience uses in Mission Bay South, the City could add a use classification to the Planning Code that (1) defines bioscience to include both the laboratory and non-laboratory components and (2) designates the zoning districts in which the use is permitted or conditionally permitted. The City may not want to limit the new use category to bioscience, but define it more broadly to include other types of research and development uses, as is done in other jurisdictions. In determining where bioscience uses should be permitted, considerations include:

1. Hazardous materials use. The City may require firms to submit information about the nature and quantity of hazardous materials that they will use. This information can be used to determine appropriate environmental review and mitigation of environmental impacts and to track compliance with Department of Public Health hazardous materials registration requirements and applicable state and federal law requirements.

2. Proximity to residential uses. The City may wish to provide for a minimum amount of separation between residential uses and bioscience uses.

3. Agglomeration. The City may wish to encourage agglomeration of bioscience uses. In evaluating this issue, the City should take into account the previous authorization of bioscience uses in the Mission Bay South Redevelopment Plan area.

4. Parking. The City may wish to develop parking minimums or maximums tailored to bioscience uses.

5. Displacement of other uses. The City may wish to consider whether allowing bioscience uses in certain locations will discourage the location of other uses that it wishes to encourage. For example, if the City only allows bioscience uses in industrial areas, will this have the consequence of encouraging the displacement of industrial uses that the City wants to preserve?

6. Production uses. The City may wish to allow bioscience uses that include production facilities in different areas than other bioscience uses.

Conclusion

Providing a definition of bioscience and identifying the zoning districts where the use is allowed is likely preferable to the current system in San Francisco for the following reasons: (1) it would provide the industry and developers for the industry with more certainty; (2) the City could more proactively prepare and plan for the industry should an agglomeration form in San Francisco; and (3) the City could more easily take health and safety issues into consideration. However, developing appropriate controls will require the City to articulate the nature of the use and to identify issues that may arise from that use.

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Attachment 1: Regulatory Framework

	Federal	State	Local
Onsite Hazardous Materials	Emergency Planning and Community Right-to-Know Act regulates hazardous materials releases.	Hazardous Materials Release Response Plans and Inventory Law incorporates federal requirements and more stringent state requirements. California Building and Fire Codes regulate building standards and material container requirements for different hazardous materials.	San Francisco Hazardous Materials Permit and Disclosure Ordinance implements state law and stricter local requirements. Businesses with hazardous materials on site must file Hazardous Materials Business Plan, Emergency Response Plan and Training Plan. Building Department and Fire Department implement Building and Fire Code requirements applicable to hazardous materials use in buildings.
Hazardous Waste	Resources Conservation and Recovery Act regulates hazardous wastes from creation to ultimate disposal.	Hazardous Waste Control Act implements federal law and additional California requirements related to generation, transportation, treatment, storage, and disposal of hazardous waste in the state.	Health Code Chapter 22 provides for Health Department enforcement of certain provisions of the state requirements.
Biological Safety	Laboratories conducting NIH funded research must follow guidelines developed by the U.S. Department of Health and Human Services.		San Francisco Hazardous Materials Permit and Disclosure Ordinance tracks use of infectious agents.
Biohazardous Waste		California Medical Waste Management Act imposes "cradle to grave" tracking system and monitoring system for facilities storing, treating and disposing of medical waste.	Health Code Chapter 25 implements state law and stricter local requirements.
Radioactive Materials	Atomic Energy Act regulates the use and control of radioactive material.	California Radiation Control Law implements federal law and governs storage, use, transport and disposal of radioactive material.
Air Quality	Clean Air Act regulates toxic air contaminants and priority air pollutants.	Health and Safety Code Sections 25531-25543 require users of acutely hazardous materials to prepare risk management prevention plans to avoid releases of toxic air contaminants. BAAQMD requires permits for laboratories with more than 25,000 square feet or more than 50 fume hoods.	Health Department implements state law through Health Code Chapter 21A.
Water Quality	Federal Clean Water Act regulates industrial discharges.	Porter Cologne Water Quality Control Act implements federal law and stricter state requirements.	San Francisco Industrial Waste Discharge Ordinance implements federal and state requirements applicable to sewer systems and requires wastewater discharge permits for discharge to City sewer.
Occupational Safety	Fed/OSHA regulates worker safety including handling of hazardous materials and bloodborne pathogens.	Cal/OSHA obligates many businesses to prepare Injury and Illness Prevention Plans and Chemical Hygiene Plans.

Attachment 2: Allowable Zones

City	Where bioscience firms are allowed
Alameda	MX (mixed use) and CM (commercial/manufacturing), Intermediate and General Industrial Zones (M-1 and M-2) zones. Biotech intended to be located in two Business Park areas, one of which is MX and the other of which is CM.
Emeryville	Requires a conditional use permit. With CUP, allowed in light industrial, general industrial and mixed used zones - which cover over half of the City.
Berkeley	Mixed Manufacturing with permit or permit with public hearing, depending on size. Mixed Use-Light Industrial with restrictions based on type of organism tested on.
South San Francisco	Most of biotech is on R&D side; SSF does not have much of the manufacturing side. Standard biotech labs are allowed in industrial zones, but since use permit is required for all non-res. uses with more than 100 vehicle trips per day, R&D is basically conditional in all zones. Use permitted in industrial and planned commercial zone (Office Park). Not allowed in mixed commercial use or commercial zone.
Palo Alto	Permitted in OR Office/Research, CM general manufacturing, and LM Limited Industrial/Research Park district. In Planned Community District depending on specific provisions.
San Jose	Permitted in IP Industrial Park Zoning Districts only (not even conditionally in Light or Heavy Industrial Zoning Districts)--"We see need to protect our light and heavy industrial districts"(Andrew Crabtree).
Source: OLA Survey, January 2002

¹ With the exception of Mission Bay South.

² California Health Institute 2000a; Nolte 1999; Pappas 1994, p.6.

³ Blakely & Willoughbhy 1993, p. 10; Joint Ventures 2001, p. 16.

⁴ According to the California Health Institute, it often takes 10-12 years and $500 million to bring one new medicine to market and only 5 to 20% of the products make it from the pre-clinical trials to the final FDA approval.

⁵ Haug 1995, p.249.

⁶ Koehler 1996.

⁷ California Healthcare Institute 200b.

⁸ In June of 2002, Signature Bioscience Inc. relocated to San Francisco from Hayward.

⁹ This section was written by Jesse Blout, Deputy Director of the Mayor"s Office of Economic Development.

¹⁰ Jobs Housing Nexus Analysis, Keyser Marston Associates, Inc. 1997.

¹¹ Class 1 organisms include E coli K12 bacteria and baker"s yeast. Class 4 organisms include exotic organisms that are handled at few locations in the United States. Mission Bay FEIR, vol. 1.V.I.22-23, 1998.

¹² BAAQMD 2-1-113.2(2.12).

¹³ See CHI report on S. SF 25 Years of Achievement, www.chi.org. This report estimates that about 40% of the bioscience space in South San Francisco is composed of office uses. Architects estimate that on average between 30-50% of bioscience building space is used for office purposes.