By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
Somewhere right now, in some remote farm, maybe in the Midwest or clear on the other side of the globe, a sheep is rubbing obsessively against fence posts and barbed wire, as if trying to reach some incessant itch. The sheep will scratch itself until its wool disappears, right down to the skin, and then to the bone if no one stops it. It's terrible for the sheep but perhaps fortuitous for human beings. Because of the sheep's self-destructive behavior, scientists with Scripps Research Institute may someday find a cure for one of modern day's most feared diseases.
That sheep was on the minds of Scripps scientists recently as they unpacked microscopes and centrifuges at a temporary lab set up at Florida Atlantic University in Boca Raton. There, they'll study the sheep's ailment, a fatal disease called scrapie, and try to figure out why it has never been transmitted to humans. What's significant about scrapie, says Scripps neuroscientist Chris Baker, is that it acts in similar ways to something more deadly to people: mad cow disease. Figure out what makes humans immune to scrapie and the Scripps team just might find a way to save us from mad cow disease. "If we could develop something that could prevent people from being infected," Baker said while taking a break from the unpacking, "then it's possible we could develop a treatment."
If that happens, perhaps in years or decades from now, Scripps will begin the arduous task of getting the treatment into drugstores. They'll start with animal testing and then, with government approval, give doses to human volunteers. If things go wrong during testing, as they often do in the world of biomedical research, Scripps has Florida law on its side. State law offers just the kind of immunity from civil actions that make researchers developing new pharmaceuticals feel right at home, Scripps President Richard Lerner noted to a luncheon crowd recently. "If you do your best to help people," Lerner explained, "then you can't be sued when it hurts them."
It was a moment of candor for Lerner, and it was the first time that anyone from Scripps had publicly spoken of the loophole. Clearly, the loophole is one reason, perhaps a major one, why California-based Scripps decided in October to build a massive new branch in Palm Beach County. As more details emerge on Scripps' move to Florida, protection against legal action is just one of several alarming problems with the deal Gov. Jeb Bush cut to get the institute to make a home in the Sunshine State.
Overflowing with optimism last fall, Bush called the Scripps Florida project "a seminal moment in our state's history." His plan immediately received widespread praise in a county where fellow Republicans have launched a massive campaign to attract voters. Despite all the paeans to Scripps' bounty and idealism, however, it soon became clear that Scripps Florida would fall far short of Bush's vision of uninterrupted bounty and idealism.
Scripps Florida will cost taxpayers hundreds of millions, if not billions, more than projected. It is not likely to produce anywhere near the number of jobs pledged, and taxpayers probably won't see the returns on their investment promised by Bush, critics say. Florida's proposed investment in Scripps and connected projects has grown to at least $1.6 billion, more than three times higher than original estimates. The actual number of jobs created may be only half of the 50,500 new jobs promised by Bush's office. Worst of all, biotech experts and economists now say the financial benefits may never compare to the money paid by the state's taxpayers.
Of greatest concern to environmentalists, the Scripps complex, which will be a self-contained city, will be built among Everglades wetlands that have been slated by the county government for protection. Environmentalists fear the Scripps city will undo years of efforts to restore the Everglades and stop South Florida's sprawl. Nat Reed, a founder of Florida's preservation efforts and aide to Presidents Nixon and Ford, said the Scripps deal, by attaching the biomedical program to plans for a western city, has become a way for developers to build in what should be protected wetlands. "This is a land scam that ranks right up there with the biggest boondoggles in Florida history," Reed says. "It could set off a series of land deals that will destroy the environment, overrun roads, and the whole thing will probably result in a legal challenge which could hang it up for years."
The work done by a Scripps' Palm Beach County branch could be monumental: cures for diseases, work on the human genome, and astonishing developments in science with a Florida dateline. Founded 80 years ago by lifelong philanthropist Ellen Browning Scripps, the research center is an organization with noble goals, including searching for cures to cancer, AIDS, and Alzheimer's disease. But the big question surrounding the Scripps deal -- which likely won't be answered for decades -- is whether the likelihood of those accomplishments outweighs the possibility of damaging the Everglades and spending billions in state and federal money.
During a recent speech, molecular biologist Dr. Charles Weissman, one of Scripps Florida's principal scientists, acknowledged the pressure put on his organization. "The only thing I can complain about," Weissman joked, with the buoyancy of someone who has just won the lottery, "is that I've been given so much positive publicity that I don't know how to live up to it." On the shoulders of Scripps scientists are no less than the Everglades restoration efforts, the legacy of Gov. Bush, and the reputation of just about every Palm Beach County elected official. Now, Scripps must find a way to succeed with a plan that, from the beginning, has been beset with problems.
Like a salesman refusing to remove his foot from the door, Gov. Bush landed the Scripps deal for Florida by talking his way into a long car ride. Last July, the governor got a tip that Scripps was considering opening a new branch now that its La Jolla, California, headquarters had become cramped. Bush immediately saw the vast potential of Scripps' picking Florida. He deemed it "Operation Air Conditioning," calling it as important to Florida as the invention of Freon-cooled homes. Scripps could provide much-needed jobs during a downturned economy and fulfill an election promise by Bush to get the biotech industry into Florida. Bush flew out to Scripps headquarters July 17 and found a way to get a two-hour, uninterrupted conversation with Lerner: He tagged along with the Scripps president while he drove to catch a flight at the Los Angeles airport.
Chatting their way north, Bush's 120-mile sales pitch to Lerner proved successful. The Scripps president, a Democrat who financially supported former Sen. Bill Bradley for president in 1999 over Bush's brother, was impressed by the governor. Lerner attributed it to Bush's charm, but it was also his willingness to give Lerner whatever he wanted. In a follow-up discussion, Bush agreed to give Scripps a new facility, as much land as it needed, and to pay its payroll for the first few years. He made these promises without approval from any other elected official or from Florida taxpayers.
The only thing left was to pick a location. Bush's office narrowed down potential sites, with Orlando and Palm Beach County the finalists. He told a few select local officials only that unnamed businessmen would soon visit to consider relocating. The mysterious "businessmen," Bush explained, must be given 100 acres, with another 400 acres surrounding it for other companies that would follow. On September 23, two Scripps officials arrived at Palm Beach County International Airport. Gary Hines, senior vice president of development for the Palm Beach County Business Development Board, picked them up, and, acting out the clandestine deal that it was, they introduced themselves only by their first names.
Hines drove the pair through the Palm Beach Park of Commerce and around the spacious Pratt & Whitney campus, both in the rural northern outskirts of the county. The spots were big enough, but neither had 500 connected acres. After dinner, the Scripps officials sequestered themselves for two hours in the Business Development Board's conference room. When they came out, they revealed who they were and their intentions for relocating. But they had bad news. Neither site seemed perfect. "You guys let us know if you find a better site," Hines recalls one of them saying.
The Business Development Board searched frantically for a new site. "We were very downtrodden that day," Hines says. They knew they would lose the Scripps deal if they couldn't find enough open land. At a meeting of its board of directors days later, one member suggested a stretch of farm and ranchland off North Lake Boulevard. Mecca Farms and the Vavrus Ranch were not for sale, but the directors knew all farmland has its price. As the Business Development Board suspected, the owners were willing to sell 4,000 acres for a price that would amount to $120 million.
On October 6, Scripps officials returned for a helicopter ride over the land that would keep the research facility in Palm Beach County. This time, Bush expanded the circle in the know and included some Democrats. It was a smart move, assuring they'd be on his side. In on the deal early was state Sen. Ron Klein, and the Democrat from Delray Beach immediately became a staunch proponent of the plan.
Scripps officials who took the bird's-eye tour of the property that day didn't see the inhospitable marsh and scraggly grazing land. They saw a research park and a city on the edge of the Everglades, says Weissman, the Scripps molecular biologist. "It's probably like sex," Weissman says. "Imagination does more than reality. I was also taken out to see nothing, but the idea of what's possible is so much better."
Four days later, Bush and Scripps officials made the announcement of a deal he compared to having Walt Disney and NASA choose Florida. The excitement of that day has apparently been enough so far to conceal the deal's mounting problems.
When Gov. Bush needs to drum up support for a project, he calls one of his father's old friends, economist Tony Villamil of Coral Gables. Villamil served as undersecretary of commerce under the first President Bush, has contributed thousands to Republican campaigns, and now acts as a top economic adviser to the governor. Last fall, when Gov. Bush needed public support for putting the Free Trade Area of the Americas (FTAA) headquarters in Miami, he asked Villamil to be the pitchman for the project. Villamil claimed the state would gain 89,000 new jobs with the FTAA headquarters. Unfortunately for Bush, the report was roundly criticized as an exaggeration. Even the FTAA itself admitted it would produce no more than 58,000 jobs. But the report still received wide circulation in the press, and Villamil did his job as Bush's cheerleader.
So in October, when Bush needed public support for Scripps, he again called Villamil, who produced a report lavishing economic praise on the project. Owner of the Coral Gables-based Washington Economics Group consulting firm, Villamil claimed that in 15 years, Scripps would help bring an astonishing 50,500 jobs to Palm Beach County. The state would see a 45 percent return on its $310 million investment, he claimed. Bush and local lawmakers used the numbers to gain broad support for Scripps. In announcing the deal, the governor said, "Just as the visions of Henry Flagler and Walt Disney changed Florida's future, so too will the people of Scripps."
Critics soon found Villamil's report rife with errors and exaggerations that call into question the economic benefits of the Scripps plan. But the euphoria of the initial announcement, with its rosy projections, seemed to eclipse dire news that has trickled out about the program since. First, the initial figure pledged wouldn't come close to the total to buy the property, supply it with utilities, build temporary lab space, put up 364,000 square feet of research space, and pay Scripps' expenses and payroll for seven years. Updated estimates now reach somewhere near $600 million. Road and utility upgrades could bring the total near $1 billion, critics say, and Bush has added another $1 billion investment from the state's pension fund to be used in risky biomedical ventures.
Robert Cruz, a Barry University professor who wrote the original report for Villamil's company, stands by his initial figures. The report was produced free of charge to Bush "as a public service to the state," Cruz says, and errors were no more than "minor discrepancies." As to whether the report was exaggerated so Bush would look good publicly, Cruz says, "No, that wasn't our goal."
Gov. Bush did not respond to numerous calls, faxes, and e-mails from New Times requesting comment. Spokeswoman Alia Faraj said she could not comment on Scripps and referred questions to the governor's Office of Tourism, Trade, and Economic Development. But Pam Dana, director of that office, did not return phone calls either.
County officials are still holding fast to the original job projections and say they've already received dozens of calls from companies interested in locating near Scripps. "The Cleveland Clinic, Johns Hopkins, they all want to be next to Scripps," says Mary McCarty, a county commissioner. "I think this is going to actually be more successful than we first thought."
After touring Scripps in California and the biotech companies that have gravitated to it, county commissioners envision the same thing happening in Palm Beach County. "If you look at the La Jolla location," Commissioner Tony Masilotti says, "you can see there are thousands and thousands of jobs created around it. There's no reason to believe it won't be created here [as well]."
Fearing Bush's numbers were inflated, though, state Rep. Dan Gelber commissioned his own study. In October, Gelber, a Democrat from Miami Beach, hired a former economist with the Florida Legislature, Ed Montanaro, who found that the initial study grossly exaggerated the potential benefits. Villamil's report had used a dubious best-case scenario, asserting that 499 private firms would follow Scripps to Palm Beach County, adding 44,000 new jobs to the 6,500 generated directly by Scripps. A more accurate projection, Montanaro determined, would see Scripps attracting 109 new firms, generating 16,000 jobs, with Scripps itself creating 5,700 jobs -- all in all, less than half of Bush's rosy job projections.
State Sen. Klein, the Palm Beach County Democrat, says he always suspected the governor deliberately exaggerated the numbers to get backing from the public. "I've said from the beginning that the jobs-creation numbers weren't necessarily substantiated, but over a five-, ten-, or 15-year period, if we give this enough support, it will become something very substantial." Klein says Bush, by hyping the numbers, underestimates his constituents. "I didn't think the governor needed to exaggerate. People would've been on board anyway, even if it was as low as 16,000 jobs."
Despite dissent from critics, the Florida Legislature approved spending $310 million in money it got from the federal government for economic development. Bush called a special session of the Legislature to approve the money, and in the four days of discussion in Tallahassee, the plan met little scrutiny. "It was rubber-stamped with very little input," Gelber says. "They said there would be an economic impact, but if you spend half a billion on anything, it would create jobs."
The contract the state signed with Scripps requires little of the firm, says state Rep. Doug Wiles, a Democrat from St. Augustine. Of the thousands of jobs promised, Scripps is required to create just 545 jobs over the next seven years and 3,000 jobs within 15 years. That's hundreds of thousands of dollars per job and a snail's-pace return on the state's investment, says Wiles, the House minority leader. "It took 30 years for Scripps to develop in California," Wiles says. "Let's hope it doesn't take 30 years for them to develop in Florida."
Montanaro also found that Scripps itself may have embellished its ability to get government grants to pay for its operating expenses in Florida. Roughly 85 percent of Scripps' current $200-million-a-year budget comes from government sources. Montanaro doubts Scripps can double its government grants to pay for the budget of the Florida branch.
Perhaps even more ominous than Montanaro's report is an analysis of the Scripps Florida plan by Joe Cortright, an economist who has done work for the Brookings Institute on biomedical research centers. According to Cortright, Palm Beach County lacks the local researchers and venture capitalists needed to make biomedical centers successful. Cortright, from his office in Portland, Oregon, says: "The fact that they are building this campus in a metropolitan area that has none of the key ingredients makes it seem destined for failure. It's ludicrous, really."
On a recent Monday morning, two of South Florida's top environmentalists took a field trip. Trespassing is what some might call it, as the pair made their way onto the now-wild land Scripps will soon call home.
Joanne Davis, director of the 1000 Friends of Florida, drove, and beside her in the Toyota SUV was environmental land attorney Lisa Interlandi. They made their way along a road of sugar sand that runs parallel to the C-18 canal, with developed Palm Beach County to the east. To the west was the sprawling J.W. Corbett Wildlife Management Area, a 60,000-acre stretch of nature that nearly surrounds the future Scripps city on all sides. Swampland here runs west into untouched marshland that makes up the eastern edge of the Everglades. After a five-mile drive, Davis pulled over next to a barbed wire gate. She pointed to a poster-sized aerial picture of the territory. "This strip of green," she said, pointing to a stretch of iguana-colored foliage running south for miles, "that's where we're going to hike."
The path meandered under the cabbage palms and giant oaks, covered with lygodium vines that gave the area the appearance of a South American rain forest. The trail, running through the Corbett reserve next to the future Scripps city, was dotted with droppings and hoof prints. The woods rustled constantly. Not long into the hike, a jet-black hog halted in the center of the path, eyed the hikers, and then, grunting a goodbye, disappeared. "You see that?" Davis barked with excitement. "This area is teeming with wildlife."
Soon enough, at least a piece of this wildlife preserve will be largely bulldozed to make way for a road to the future Scripps site. While most of Scripps' new buildings will be built in an orange grove nearby, much of the new development that will surround Scripps will go in on pristine lands full of wetlands and wildlife. It is a place the county government tried desperately for years to protect and keep from becoming the kind of development that Scripps will bring.
The land has a rough history. The native people, who built a city of mounds here thousands of years ago, suffered genocide from diseases brought by Europeans. Seminoles, escaping the charging U.S. military in the 19th Century, hid in swamps here that were impenetrable to the army's cavalry. The troops merely surrounded the Seminoles and in time starved them into surrendering. Since then, locals have called that area Hungryland Slough.
In the last century, ranchers and timber companies bought the land. Some sold off to the Corbett reserve, and for most of the last century, the government eyed the rest for preservation, refusing most development plans. The Mecca property, where Scripps Florida headquarters will soon go, was previously limited by Palm Beach County to no more than one home per ten acres in hopes of keeping the land largely rural. That rule will be abandoned so Scripps can come.
Government officials have attempted to control development of Vavrus Ranch as well. In 1991, rancher Charles Vavrus submitted plans to the state for 18,000 homes and 7 million square feet of office space on the area now targeted for the Scripps city. Vavrus, an Illinois farmer, planned to spend $2 billion over about two decades on the project. He hired contractors, who drew up his project in two volumes about a foot thick each, and paid tens of thousands of dollars in fees to submit them to regulatory agencies. He promised to develop "with great emphasis placed on the preservation of existing wetlands." With little consideration, the Army Corps of Engineers and other government agencies shot down the Vavrus plans as too detrimental to the environment.
The old Vavrus project is remarkably similar to the new plan for Scripps, which will be surrounded by 10,000 homes, more than a half-million square feet of commercial space, and 2 million square feet of research labs and offices. In just a few years, the new Scripps city would rival west-county towns established for decades, eclipsing Belle Glade and perhaps even Wellington (population 40,000). But no government officials have objected as they did to the Vavrus project.
With orders from Bush, the 80 or so agencies that must review such a massive project have agreed to a fast-track schedule, requiring them to spend no more than three months reviewing it. Even the federal agencies, under the auspices of the governor's brother, have agreed to attempt the deadline. The Army Corps, which typically takes two or more years to approve such plans, will try to finish within the three-month deadline. All of the reviews are expected to be completed in August.
Complaints over the unseemly haste of the review process have come from unlikely sources. In April, Michael Busha, executive director of the Treasure Coast Regional Planning Council, sent a letter to an official under the governor to question the deadline. "Unfortunately," Busha wrote, "the plan seems to be suffering partly from the speed at which we all have been asked to work under the expedited permitting process." Asked about his letter, Busha hesitated from saying the Mecca and Vavrus sites were not a good choice. "I think everybody questioned the location they chose," Busha says. "But that decision wasn't the choice of the Regional Planning Council. The governor chose it; Scripps chose it. The decision has been made, and really there is no reason to debate it further."
Conservationists fear this hurried process won't allow regulators time to consider the impact to the environment and charge that the plans will be approved only because they are attached to a state project that's supposed to generate jobs. The environmentalists have so far been drowned out among the hordes supporting the possible economic benefits of Scripps. Still, a half-dozen or so conservationists frequent the near-weekly hearings on Scripps, often the only people from the public to comment on the plans.
Over the past decade, Palm Beach County has made dozens of attempts to buy the Vavrus property to preserve it. Using money approved by two voter referendums, the county made several written offers to Vavrus that were repeatedly shot down. Rosa Durando, the environmental chair of the Audubon Society's Everglades branch, says the county's decision to now back developing the land makes no sense. "With the blessings of the government, they have raised swamp-busting to a new art, and I think it stinks," Durando says. "The public never had a choice in this."
Friends of the Everglades, the grassroots organization that has done perhaps more than any other to preserve wetlands, decided against a lawsuit to stop Scripps, board member Juanita Greene says. "It would be a fine thing to have Scripps here, but only if it were not in such pristine wetlands," Greene says. "They could not have picked a worse spot if they tried, but unfortunately, we just don't have the resources to file a lawsuit for every bad plan that comes our way."
Reed, the former assistant secretary of the Interior under presidents Nixon and Ford and Florida's first head of the Department of Environmental Protection, says a lawsuit against Scripps could tie the project up for years, if not decades. "I suggest to you that the wetlands issues alone could result in a legal challenge that would put the future of this project in jeopardy for years to come." A 70-year-old retiree in Hobe Sound, Reed has long been a voice of reason among hot-headed conservationists. He's a Republican, and his family donated the nearly priceless waterfront land that became the Hobe Sound National Wildlife Refuge. Reed believes a legal fight over Scripps is destined, although just which organization will file it isn't clear, and Reed believes the environmental issues will eventually sink a Scripps plan that could be beneficial elsewhere.
Davis also drove to the Vavrus ranchland and the orange grove on the Mecca property and continued out to the western lands of Corbett. There, she found wild orchids, great blue herons, and a sign warning that the dirt road continued for 20 miles to nowhere. "People say we environmentalists bitch about every project and that there's got to be something that's not sacred. But when you stand here on this property, you can see this is land that should be saved."
Back in the mid-1970s, pharmaceutical giant Novartis AG, a partner of Scripps, thought it had developed a drug that would finally fight Parkinson's disease. The Swiss company began testing the drug, called Parlodel, on humans. While it didn't get far in helping people with Parkinson's, it did have an odd side effect that would prove valuable. Women who had recently given birth who took Parlodel found that their mammary glands would go immediately dry. Novartis quickly reshaped its target audience for Parlodel and in 1980 began selling it as an anti-lactation drug for women who chose not to breast-feed.
Then came the lawsuits. Dozens of women who took the drug had strokes and seizures not long after. Just how many suffered or died will never be known since Novartis settled many of the suits before they went to trial. In 1994, the company took Parlodel off the shelves after pressure from the government to do so. But the lawsuits are still coming. In February, a Kentucky jury awarded $18 million to the estate of a woman who took Parlodel and died from a stroke just days after giving birth.
Novartis' lawsuit nightmare isn't uncommon in the high-stakes world of pharmaceuticals. Lawsuits against drug manufacturers are increasing, many of them claiming the companies failed to adequately test drugs before bringing them to market.
Scripps, on the other hand, can benefit from Florida law meant to protect government agencies from lawsuits because it has partnered with the state.
Lerner, the Scripps president, revealed this legal benefit during a question-and- answer period after his speech before a Boca Raton Chamber of Commerce luncheon. After Lerner's comments, Scripps officials, typically extremely accessible to the media, declined to discuss it further. Over several weeks, calls from New Times seeking comment on this issue were not returned by Keith McKeown, Scripps' spokesman, or Douglas Bingham, vice president and general counsel.
Scripps and Novartis both stand to gain in Florida courts. Novartis has a contract that pays Scripps $20 million a year for first rights on any new drug Scripps creates. If Novartis chooses to accept the marketing of a new drug, it can also become a partner in the human testing, making both companies potentially liable if something goes wrong.
According to Lerner, the Florida law that will protect his company from lawsuits is called "sovereign immunity," which harks back to old English decrees meant to protect government agencies and officials from lawsuits.
Scripps could benefit from the law thanks to its deal with Florida, says Victor Schwartz, general counsel with the American Tort Reform Association and part-time Hollywood resident. "By partnering with the state," Schwartz says, "they're less likely to be held liable." When new drugs are brought to market, companies set up what's called an "institutional review board" to monitor the success. With the Florida deal, Scripps could set up a board comprised entirely of state employees, meaning Scripps would escape blame for problems with the testing.
The losers in such an arrangement are the test subjects who could be injured, says Barbara Noah, a University of Florida law school research associate. According to a 2001 study by a University of Maryland biochemist, an estimated 5,000 people a year die during clinical trials and tens of thousands more are injured. "There is inadequate protection of human subjects," Noah says.
While Scripps did not respond to questions on this issue, drug manufacturers and researchers say lawsuits have hampered their ability to bring new cures and treatments to the market. Noah acknowledges that fear of legal action has made some companies leery of testing new drugs, and Florida's protections for Scripps could give it more freedom to introduce new medicines.
Drug testing has become a deadly business because of the way the federal government operates, says Don Farber, a lawyer in San Rafael, California, who has made a career suing pharmaceutical companies. Drug makers need only two successful trials to get government approval to sell a new product. Meanwhile, companies can have dozens of unsuccessful trials, with injuries or deaths resulting, and still get approval, Farber says. Those unsuccessful trials often get buried in the mounds of paperwork drug companies submit to get government approval. "The whole process is dubious," Farber says. "There are often times drug companies filter out the bad information to get drugs to market."
At the temporary Scripps lab at Florida Atlantic, scientists say they're not thinking about human testing or bringing drugs to the market. Their concerns are developing cures, and then others in the company see if they're marketable. Baker, the neuroscientist working on mad cow disease, says Scripps isn't like pharmaceutical companies that often place demands on researchers to come up with new drugs. "Scripps isn't exactly industry, where there's pressure to develop new things, and it's not exactly academic research either," Baker says. "What Scripps wants is to develop new cures, and I think that's the best goal."
Soon, Scripps Florida may be the site of new announcements of treatment and cures for big-name diseases, Baker says. "It could be decades away, but we're hopeful."
If so, such announcements could give supporters of the state's deal credibility. But if the decades pass with no announcements or miracle medicines, critics of Florida's ten-figure pact with Scripps will surely feel that the state has been swindled, and the environment with it.