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County signs $86.9 million deal with Max Planck Society
(South Florida Sun-Sentinel (KRT) Via Acquire Media NewsEdge) Jul. 22--When Palm Beach County commissioners signed an $86.9 million deal to bring the celebrated German science group Max Planck Society to town, it was something akin to a consumer deep in debt putting another charge on the credit card.
The deal, approved unanimously to fanfare Tuesday, commits the county to decades of debt payments that will quickly reach $6 million annually, adding to an increasingly heavy load that includes major yearly payments for Scripps Florida, the historic county courthouse and a new jail.
With the county bracing for a shortfall of as much as $10 million next year, the debt payments for the jail and the two science centers alone soon could equal about 10 percent of the county's non-sheriff operating budget -- or about as much as the county spends to run a dozen libraries.
"You have to look at Max Planck as a $6 million hit," County Administrator Bob Weisman said. "Not insignificant."
Still, county commissioners and Max Planck's president billed the deal as a historic step in cultivating a biotech economy in Palm Beach County, one well worth the price tag to taxpayers.
The county money will help build and operate Max Planck's U.S. headquarters at the Florida Atlantic University MacArthur campus in Jupiter. With the county money and $94 million from the state, Max Planck plans to build a bio-imaging center with 135 scientists.
"It's certainly a very trying time for Palm Beach County, with our financial situation and having to cut back on many things, and yet we're going ahead and expending $87 million," Commissioner Burt Aaronson said. "I'm perfectly willing to do that because I believe, in the long run, it's going to be very beneficial."
Max Planck President Peter Gruss, who flew in from the science center's Munich, Germany, headquarters, said the deal forms an "intellectual core" with Max Planck and Scripps, stationed side by side along Interstate 95. "It's a lighthouse, visible worldwide," he said.
It comes with a cost.
In 2010, the county's general debt obligations will rise to $94 million, up 12 percent from the 2009 budget that starts Oct. 1, said debt manager John Long. The reason: The county will be paying its first installments on Max Planck and the $375 million jail.
The payments for Max Planck and the jail won't be finished until 2038. Scripps won't be paid in full in 2028.
A bit of better news: The debt for restoring the historic courthouse in downtown West Palm Beach -- an annual $20 million bill -- is retired in 2015. And the county has a major asset in the 1,919-acre Mecca Farms property, the former Scripps site, that it can sell to offset some of the debt costs.
At Tuesday's contract signing, the focus was on Max Planck's potential, not the taxpayer implications.
"Scripps was certainly a great investment, but something was lacking," Commissioner Jess Santamaria said. "You complete the circle."
Next up: FAU's 13-member Board of Trustees will consider a 50-year lease with Max Planck on July 30, with their contract likely to be finalized on Sept. 17. Max Planck scientists would begin moving into temporary labs at FAU early next year, once Scripps scientists pack up and move next door to their permanent facility.
Max Planck, which operates 80 satellite institutes across Germany, has won 17 Nobel prizes in the past 60 years and developed a reputation for fostering profitable spinoff companies. A recent example is a cancer-fighting drug developed by Max Planck and bought by Pfizer that shows signs of shrinking tumors.
The contract requires the county to build a 100,000-square-foot biomedical research center and pay some of Max Planck's operating costs. In exchange, Max Planck agrees to stay at least 15 years, share 3 percent of its royalties from discoveries with local schools and set up internships and mentoring programs for county students and teachers.
Staff Writer Mark Hollis contributed to this story.
Josh Hafenbrack can be reached at or 561-228-5508.
WATCH
For a video report on the $86.9 million deal with research giant Max Planck Society, got to Sun-Sentinel.com/maxplanck
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