Innovation, influence and business in America's medical cities.

Laboratory and office space for up-and-coming biomedical companies has been tight in the University Circle area of Cleveland for several years.

Not a bad problem to have, until you start turning away promising young tenants for lack of space. And consider this: Northeast Ohio, which had about 250 biomedical companies in 2003, now has more than 600. So the space problem is probably getting worse.

In the mid-2000s, Case Western Reserve University and real estate developer Forest City Enterprises Inc. tried to strike a contract for West Quad — a proposed $125 million biotechnology campus to be built on a 14-acre site near the university that once was home to Mt. Sinai Medical Center.

Cleveland, Ohio-based Forest City built University Park in Cambridge, Massachusetts — the 2.3 million-square-foot science and technology campus at Massachusetts Institute of Technology – in 1999. But budget problems and new leadership at Case Western Reserve stalled the Cleveland plan.

Now, several organizations — from biomedical company developer BioEnterprise to real estate developer MidTown Cleveland Inc. to University Hospitals to governments Cleveland and Cuyahoga County — have feasibility studies in-hand and are beginning to put their resources together to create the Health-Tech Corridor in Cleveland.

The corridor starts at East 22nd street and extends east, roughly following Euclid Avenue, to University Circle — near the main campuses of the Cleveland Clinic and University Hospitals. The corridor includes seven institutions, seven incubators for young companies, and more than 75 biomedical and 45 technology companies.

The goal is to attract more biomedical, healthcare services and technology companies to build on nearly $3 billion in investments already made in the corridor — from a new heart hospital at the Cleveland Clinic, to a new cancer hospital being built at University Hospitals, to several Ohio Third Frontier-funded research centers, including the Global Cardiovascular Innovation Center and Center for Stem Cell & Regenerative Medicine.

The plan is to recycle old buildings and build new ones; provide property management, financing, industry and start-up help to companies; and offer service providers access to four hospital systems — the Clinic, UH, St. Vincent Medical Center and the Louis Stokes Cleveland Veterans Affairs Medical Center — which have goals for doing a certain amount of their business in the city. A $200 million rapid transportation project — the RTA HealthLine — runs the length of the corridor.

MidTown Cleveland is heading up the real estate development and management operations. BioEnterprise is contributing industry professionals, as well as those who can walk prospective tenants through the tax, financing and incentive options available in the corridor. Both supported feasibility studies by AngelouEconomics, as did the Cleveland Foundation, Greater Cleveland Partnership and Team NEO.

AngelouEconomics, an economic analysis firm in Austin, Texas, found some common characteristics among successful bio-corridors, such as Research Triangle Park, North Carolina:

• Engaged research institutions with active leadership — Cleveland’s got that.
• Available capital covering all stages of the business cycle — After years of want, Northeast Ohio and Ohio have developed formidable seed and early stage capital resources. Though some see a looming need for growth capital, the state — and Northeast Ohio, in particular — has been attracting healthcare venture capital firms with its Third Frontier program.
• Workforce and talent pool on which to build and sustain efforts — Check.
• Stable and supportive business, tax and regulatory policies — Hmmm, the city and county are trying to be more friendly, but small business owners will tell you they still have a way to go.
• Access to facilities and equipment — A lot of the facilities exist; the corridor project proposes to renovate or build others, as needed; Cleveland research institutions are well-equipped and willing to share.
• Master plan — That’s in the making.
• Marketing — BioEnterprise, the Greater Cleveland Partnership and TeamNEO are covering that, along with business and workforce development.
• Partnerships — The corridor is a public-private partnership; there’s a rising spirit of collaboration — even among competing hospital systems and researchers — who see that as the only avenue to prosperity.

Jim Haviland, MidTown Cleveland’s executive director, said land-banking in the city has been speculative in the past. But planning and collaboration is giving the corridor a market focus, he said.

“What’s nice about that, when you have your governmental sector — the municipal, county and the state — aligned behind this initiative, that bring to bear tremendous resources that are needed to tackle traditional urban problems with contamination or land assembly,” Haviland said. “Now, you’ve got the ability to get these properties, whether they are vacant or underutilized buildings, back into productive use.”

In addition, foundations, like the Cleveland Foundation, “bring a different layer of subsidy to this,” he said. “We’ve never had everybody coming together like this.”

Putting together entrepreneurs and healthcare institutions in one corridor also could foster business.

“We’ve got a unique system here in Northeast Ohio for accelerating biomedical businesses,” said Baiju Shah, president and CEO of BioEnterprise. “The network of venture development partners — it’s a powerful platform for any entrepreneur to launch a business.

“The addition of this corridor is geography in which you are one of many,” Shah said. “So you have the sense of vibrancy, of like-minded souls. And you’ve got an opportunity to interact more closely with the institutions that are part of the corridor.”

Cuyahoga County and Cleveland have designated the corridor as an innovation zone, which means the corridor is eligible for small development grants. But it also might mean resident companies could get special benefits. “What that means is still being shaped,” Shah said. “I would hope that by the end of the summer that becomes clear, then we’ll have the full offering.”