Port St. Lucie, Fla., officials are balking at a request from the Vaccine & Gene Therapy Institute of Florida (VGTI Florida) for a $21 million subsidy from the city that the research institute says will allow it to stabilize its finances after missing a scheduled $2.6 million bond payment due today.

In return for the money, VGTI Florida has promised to stay in the city and not move to Palm Beach County, where it says it has an offer for rent-free space for three years at a site it has not identified.

VGTI Florida says it is struggling with declining grant funding from the NIH and the $4.2 million it must pay each year toward debt service on the 100,000-square-foot lab building it opened in 2012. The research institute says it has slashed its expenses and halved its workforce to 50 from 100 staffers in 2013.

The dispute has spiraled into a series of angry public statements by both sides.

Port St. Lucie City manager Jeff Bremer has urged the City Council to reject VGTI’s subsidy request, and has accused the research institute of extorting the city and hardball tactics. At a press conference yesterday, Bremer made public a photo showing a research van parked outside VGTI Florida, alleging that the institute was packing up and moving away to Florida Atlantic University (FAU) in Jupiter.

“I’m extremely disappointed,” Bremer said at the press conference, according to the Palm Beach Post, adding: “We went into this as a partnership.”

VGTI Florida responded last night with a statement in part denying any move out of Port St. Lucie. The institute insisted the van was only intended to transport the equipment of one researcher who had long ago planned to move out of the Port St. Lucie lab.

However, VGTI Florida said it arranged for Port St. Lucie officials last November to meet with FAU administrators, which presented a plan to keep the institute in the city, only to receive no response from the city.

“In separate meetings with VGTI Florida, certain members of City Council indicated that FAU’s proposal required a level of debt forgiveness which was a nonstarter,” VGTI Florida asserted.

More recently, VGTI Florida added, it has begun “exploratory discussions” with FAU to relocate VGTI Florida’s Center for Diseases of Aging to the university’s Jupiter campus, “only as a final option if everything else fails.”

“There is no firm commitment by either party to move to FAU’s campus at this time. VGTI Florida would only potentially proceed with this option if it is the final strategic opportunity to survive, preserve the maximum number of jobs and continue with its life-saving research,” the institute stated.

After city staff asked VGTI Florida if FAU would reconsider the November proposal if the $4.2 million in annual bond debt toward the building were forgiven, the institute said, it presented three options to Port St. Lucie officials:

  • VGTI Florida would move to Palm Beach County

 

  • The city would cover VGTI Florida’s bond debt and operating deficit for three years. VGTI Florida says a $7 million a year subsidy over three years would go toward debt service, building operations and maintenance, and information technology.  

 

  • The city would forgive VGTI Florida’s debt, fund its operating deficit over three years, and attract a university partner for a strategic alliance or merger.

Such a partner, according to the institute, would populate VGTI Florida’s Port St. Lucie lab with new scientists and research programs, “create new collaborative opportunities” with Sweden’s Karolinska Institutet—with which the institute has launched the Center for Diseases of Aging—and increase the number of clinical trials with St. Lucie County hospitals and a local VA nursing center.

In return for either the second or third option, VGTI offered to give the city a 33% ownership interest in its intellectual property and future inventions.

“VGTI Florida is especially disappointed that the City has inflamed this situation by communicating its position through the media rather than continuing discussions with VGTI Florida in good faith,” the research institute said.

VGTI Florida was established by Oregon Health and Sciences University, and agreed to move into Port St. Lucie in 2008 following $120 million in government subsidies agreed upon four years earlier—half from the state, half from the city and St. Lucie County. At the time, Florida was showering research institutes with millions of dollars to build facilities in the Sunshine State, which reasoned the institutions would spin off startups that eventually would create enough high-paying jobs for the state to broaden its economy beyond tourism and agriculture.