Joslin set to unveil lab deal

Joslin Diabetes Center is expected to disclose today that it has found a new partner to build a $300 million biotechnology laboratory on land it owns in the Longwood Medical Area.

But in a departure from two previous failed attempts to develop that site, Joslin will sell the entire development to the partner, and will become a tenant when the building is finished in about four years. The new developer may also scrap plans to build 150 units of housing to focus exclusively on lab space.

A joint venture between National Development of Boston and Alexandria Real Estate Equities Inc. of Pasadena, Calif., signed a letter of intent to buy and build on Joslin's property at the corner of Longwood and Brookline avenues in the heart of the medical district. Joslin officials said they hope to complete a formal purchase and sale agreement "within weeks."

Developers will pay Joslin more than $100 million for the site, two existing buildings, and the development rights, according to an official briefed on the transaction. The space will likely house research labs for Joslin, surrounding hospitals, and biotech companies.

"This is an important development for our city," said Mayor Thomas M. Menino in an interview. "We're committed to expanding our biotech space."

Menino said the project is a sign that the epicenter of the local biotech cluster may be moving from Kendall Square in Cambridge to the Longwood area in Boston. In recent years, drug giant Merck & Co. built a research tower in Longwood and a new 703,000-square-foot research tower on Blackfan Circle is set to be completed soon.

Joslin, the world's largest diabetes center and clinic, first proposed the development in 2001. Two years later, the Boston Redevelopment Authority approved a mixed-use project comprising lab space, 150 apartments, and underground parking. Keefe Co. was to have been the developer.

The project never got off the ground, and Joslin went back to the BRA last year proposing that Boston Properties would co-develop the building. That arrangement also stalled.

Ranch C. Kimball , the former state secretary of economic development who is now Joslin's chief executive, said that with Boston Properties, "the Joslin was trying to be too much of a codeveloper." He added, "Boston Properties had a hard time making the deal work for them, and the deal got too complicated in a lot of ways."

Officials from Boston Properties could not be reached for comment.

Kimball said the new arrangement is preferable, because the diabetes center shouldn't be in the development game. "My business judgment was if we were the codeveloper, the project would move much more slowly," said Kimball. "The best option for the Joslin was to get a highly motivated developer."

As to possible profits from ownership of the building, he said, "I don't think I'm leaving that much on the table."

When complete, Joslin will house its diabetes research labs in the new complex, occupying up to 135,000 square feet. The total size of the project hasn't yet been determined. Kimball said Joslin might purchase the space rather than renting.

Ted Tye , managing partner of National Development, said he wants to create a "premier biotechnology research facility."

But doing so may also mean changing Joslin's original plan. "Most likely we'll try to go in a direction that might not have the residential component," Tye said. "That may result in a smaller project."

The problem, he said, is that biotech lab space has specialized requirements, including stronger floors, upgraded ventilation and electric service, and special plumbing for oxygen and other lab utilities. That pushes up the cost of the housing.

"The two uses may not go well together," he said.

The project originally was to be called Joslin Place. That name will likely change, Tye said, although a new name hasn't been chosen.

If the parties agree on final terms quickly, construction could begin in about a year. Despite the other lab space under construction, Tye said, there would be more than adequate demand for the project.

"Everybody wants to be in the Longwood area," he said.

National Development's local projects include the Marriott Hotel and residences at Tudor Wharf in Charlestown and Station Landing in Medford.

Jeffrey Krasner can be reached at krasner@globe.com.