"I'm not getting a good sense that there is a workable business model here ... This thing defies gravity, in my view."

Can Biotech Boom In the State?

"I'm not getting a good sense that there is a workable business model here," said Peter Bianco, director of life-science business development at Halleland Health Consulting and a former CEO of University Enterprise Laboratories in St. Paul. "This thing defies gravity, in my view."

The state has begun work on $15 million worth of improvements, including a new interchange connecting Hwy. 52 near Pine Island to the facility. Tower Investments, which owns the 3.6-square-mile site, hopes to complete the facility in five to seven years. John Pierce, an executive with the firm, said in July that 10 companies already have committed to Elk Run, although he declined to name them.

Burrill, a Wisconsin native, has pledged to raise $1 billion by the end of the year, a difficult task in the current economy. He says he will use the money to lure biotech companies to Elk Run and to commercialize technology originating from the University of Minnesota and Mayo Clinic.

Several states have tried, with little success, to carve out a biotech niche from scratch. The Midwest, in particular, has focused on biotech to replace lost manufacturing jobs. But to create a successful biotech incubator, a state needs venture capital, a location adjacent to a major research institution, a skilled workforce and breakthrough scientific research -- things you wouldn't necessarily expect to find in Pine Island, a city of about 3,300 located 15 miles north of Rochester.

Tower never planned to build a bioscience center when it bought the 2,325-acre Bird Island property in 2006. The company envisioned hotels, schools, a wellness center, shops, office and warehouse space -- even a water park. Tower added a bioscience center only after it had failed to win state money for infrastructure improvements.

While experts applaud the plan's size and ambition, they question its logic. While venture capital-backed incubators have succeeded in places like Seattle and Menlo Park, Calif., the real estate portion of the fund adds a layer of unpredictability, said Randy Olson, vice president of economic development at the Initiative Foundation in Little Falls, Minn.

Olson also wonders whether the state will subsidize the rents or leases of the companies that move to Elk Run. An experiment with a similar incubator concept fizzled earlier this decade in the Twin Cities. Finding companies that could pay University Enterprise Laboratories' operating costs hobbled its mission to incubate start-ups, said Olson, a former general manager of University Enterprise Laboratories.

"There is a risk profile here that is probably off the charts," Olson said.

Despite some impressive research, Mayo and the University of Minnesota have long struggled to transfer ideas from lab to market, as both institutions tried to reconcile making money with their nonprofit missions.

Some experts wonder about Burrill's relationship with Mayo. The two parties say there is no legal partnership that gives Burrill first crack at Mayo technology, only a vague "working relationship." Whether that's good enough for investors remains to be seen.

Elk Run's biggest risk may be its sheer size.

"This project has a 'big-bang' feel to it and I don't know of any areas of the country where this has produced sustained economic and entrepreneurial growth," said Marti Nyman, a former director of global alliances at Best Buy and founder of Altavail Partners, a business incubator.