Yale University has constituently spun biotechnology companies out of its various laboratories, medical facilities and programs.

With a new facility from pharmaceutical giant Pfizer Inc. in the works, New Haven is gearing up to become a player in the biotechnology industry – a move that experts say could benefit the city in several ways.

“The biotech industry in New Haven, compared to a city like Boston, is really a nascent market,” said Carl Traub, president of New Haven-based Traub & Co.

While the market is slowly developing, there are two main areas where biotech has gained a foothold. The first is New Haven’s Science Park at Yale, which has a long and bitter history of promising developments that have led the park dangerously close to bankruptcy in the past.

Lyme Properties, a Cambridge, Mass.-based biotech real estate developer, has been hired by Science Park’s board of directors to rehab the facility. Building No. 25, the main facility at Science Park, will have its 250,000 square feet of space gutted to create smaller spaces inside. New buildings, garages and landscaping are also in the works to strengthen the overall development.

The other area of development is along the Route 34 connector in downtown New Haven. The former SNET (Southern New England Telephone) building at 300 George St. has been recently purchased and renovated, and currently about 60 percent to 70 percent of the building has been leased out, mostly to biotech companies.

“Do two buildings really make a biotech market? Well, it’s a start,” said Traub.

One area that remains strong for New Haven is Yale University, which has consistently spun biotech companies out of its various laboratories, medical facilities and programs.

“Yale is really a great resource for the biotech industry,” said Traub.

On whether the biotech market will be good for New Haven, Traub said that it would aid the city in two areas. The first is housing.

“We have a very strong housing market and a lot of people in these biotech groups are young people attracted from all over the world, and they’re going to be looking for housing close to their work,” said Traub. That potential influx of workers will help to boost the already strong housing market, he said.

The other area that will be added is the city’s retail sector.

“New Haven is probably the most exciting city in Connecticut,” said Traub, remarking that the city is well connected through several forms of transportation to New York City and Boston.

“Retail is really going to be lifted by the biotech industry, with all of our shops, restaurants and theaters,” said Traub. “I would also hope that the office market could turn around in the area of accounting and lawyers.”

‘Hot Spot’

Normally in New Haven the office space tends to be reactive to the leading industry indicators, and therefore complementary services to the biotech field could presumably be filling in adjacent office space in the future.

New Haven’s current office market is “relatively small but certainly strong,” said Traub.

Near the SNET building at 300 George St. is the future location of a new facility to be built by Pfizer, a large pharmaceutical firm that currently has a strong presence in New London.

The new facility will be constructed just outside of the immediate central business district in an area that could potentially become a biotech corridor. While there was retail located in the area in the past, many of the buildings have been vacated for some time. However, with biotech groups moving in, there is potential for retail buildup to support the new firms.

Biotech development seems to be edging away from downtown toward the Yale New Haven Hospital area, said Traub.

“The city is doing everything it can to attract these kinds of tenants, and the administration sees that that area as a biotech center,” he said.

Back in February, Pfizer announced plans to build a state-of-the-art clinical research unit in New Haven to confirm the safety and action of new medicines.

Over the next two years, Pfizer will invest roughly $35 million to build and equip the new unit in the city’s downtown. The 60,000-square-foot facility will include 50 beds and will employ between 40 and 50 staff members.

The 2.5-acre site, between Park and Howe streets, is owned by the state of Connecticut, which has identified the area for bioscience investment. Construction is scheduled to begin this fall and the research unit is expected to open in 2005.

At the new unit, healthy volunteers will be given medicines in development during Phase 1 clinical trials. Some studies at the new unit will be undertaken in collaboration with the nearby Yale University School of Medicine. Using scanning technology, Yale scientists will be able to track medicines to better understand their action and how they are metabolized in the body.

When the facility was first announced, Gov. John G. Rowland backed the project, saying the collaboration between Pfizer and Yale was another example of the state’s efforts to be recognized as a “hot spot for bioscience companies.”

“This is very good news for New Haven, for Yale, for Pfizer and, most importantly, for patients waiting for new treatments,” said Pfizer Chief Executive Hank McKinnell. “We already have a substantial commitment in Connecticut and we are delighted to further contribute to economic development here.”

McKinnell added, “We greatly appreciate the support for this project from the state of Connecticut and the city of New Haven. Their partnership has allowed us to bring investment, jobs and cutting-edge science to the heart of this city.”

In exchange for Pfizer’s investment, the state – through the Office of BioScience -will convey its land to Pfizer. The new facility will be eligible for property tax abatements under the Enterprise Zone program, which is administered by the state Department of Economic and Community Development.

“We are happy to welcome Pfizer to New Haven – the biotech capital of Connecticut,” said New Haven Mayor John DeStefano Jr. “In the age of new medical technology, biotech companies in the Elm City will continue to find progressive ways to fight disease. We look forward to a long partnership with Pfizer.”

“It is great news for Connecticut and New Haven that Pfizer has decided to locate its new clinical research unit in the city. Pfizer had many options for the facility, and we can all take pride in the fact that New Haven proved to be the most attractive one,” said Yale University President Richard C. Levin. “Yale strongly supports efforts by the state and city to spur economic development related to scientific research and new technology. We are gratified that Yale’s presence at the center of research in the region was an important factor in Pfizer’s decision.”