New York City gets serious about biotech.

As Martha Stewart's insider trading trial drags on, avid gossipers tend to forget the whole mess sprouted from a controversy involving the biotech industry--an industry that is thriving in New York.

The approval by the Food and Drug Administration last week of the cancer drug Erbitux--whose initial pending rejection led to the infamous stock tip that landed ImClone founder Sam Waksal in prison and Stewart on trial--is one of the latest advances for biotechnology, an industry with many ties to New York City. Before its fall from grace, ImClone had been rumored as an anchor tenant for the city's first large scale bio-tech center, the campaign for which has continued to gather momentum.

The marketing effort is underway to launch a 300,000 s/f New York Bioscience Initiative and find a major anchor.

According to Maria Gotsch, senior vice president of the New York City Investment Fund, the timing is right.

"There are a number of companies in New York or around New York that are in the late Phase 3 drug development or near having drugs approved by the FDA," Gotsch said.

Gotsch said there are seven possible sites for the project. Three are in Manhattan, one downtown, one near the East River and one at the Audubon Center site, near Columbia University, where the city's first biotechnology incubator was opened in the 1990s.

Another possible site is in the Bronx and one is in Queens West. Two are in Brooklyn; one is in the Brooklyn Navy Yards and one is near SUNY Downstate, site of a new 10,000 s/f advanced biotechnology incubator.

In addition, Gotsch said, a couple of buildings in Lower Manhattan have been named as candidates for retrofitting in order to house the site.

According to Gotsch, the selection of a project site will depend largely on the wishes of the project's anchor tenant. Gotsch said that although several pharmaceutical companies have expressed strong interest in the project, no contracts have been signed.

"Our approach to this has been (to say) these are the menus of sites that are available to us, and let the anchor tenant choose the one that best suits their needs," Gotsch said.

Gotsch declined to name those interested in the properties.

Several small companies other than ImClone have recently established or expanded their presence in the New York City area.

On Jan. 30, Gov. Pataki's office announced that Aureon Biosciences, a Yonkers company, was expanding its area presence and would be hiring 80 new employers.

And a week earlier, Eyetech Pharmaceuticals announced it was leasing 65,000 s/f of space at 3 Times Square and moving from its headquarters at 500 Seventh Ave. The company also announced it would hire 100 more employees.

Local and state politicians have enthusiastically encouraged the biotech growth.

"When any company decides to expand in New York City, it is a major achievement," Bloomberg said at the time of the Eyetech announcement. "But when it's a biotechnology company paving its way in an industry so critical to New York City's future growth, the decision is particularly rewarding."

In his 2003 State of the State address, Pataki pledged to help fund "Centers of Excellence" in New York City for biotechnology research.

Some believe the launch of such a project in an area where real estate is so expensive and largely scarce is a huge undertaking. "It would take a consortium of people to do it," said David T. Houston, president of Colliers, Houston & Co., a real estate brokerage firm that deals largely with industrial properties. But Houston cited the volume of biotech-related work at city hospitals as a motivating factor.

"I can't conceive there isn't a demand in New York to do this," said Houston, who is also president of the Society of Industrial and Office Realtors. "There are huge projects going on there."

Gotsch said she was "confident" the project would eventually be launched "because of the richness of the underlying resources that are already here."

"We're not starting from scratch," she said.

Indeed, she added, from venture capitalists to Wall Street firms and from marketing companies to law firms, "all those providers have bioscience practices within their New York offices." But still, the question remains, why would someone establish such a spacious center in an area where real estate is so expensive and scarce?

"If you look at the other major centers of bioscience in the country, with smaller but yet important centers, at the core of all those centers is strong academic medical research," Gotsch said. "If you look at almost any metric on the research side, New York is equal to, if not superior to all those other clusters."

And on the clinical side, she added, in terms of doctors, nurses and hospital beds, "New York outstretches other areas of the country in terms of its concentration."

Yet Gotsch acknowledged that the location can be a hard sell sometimes. "The historic issue has been a marketing problem," she said. "New York is not perceived as a center of science. That's part of the marketing effort we've been working on with the city."