Miles Update on the Development Agreement

Since the Development Agreement between Miles and the City of Berkeley was signed in February of 1992, plans for more than 16 projects totaling approximately 250,000 square feet of building construction has been reviewed by the city. These projects provide building and manufacturing space which benefit Miles, Berkeley, and the people whose lives are saved through the availability of the products we produce on this site.

Between 1990 and 1991, Miles invested about $25 million for capital improvements at the Berkeley site. During those years, funds were allocated mostly to improve and replace equipment and to ensure the safest possible facility. Funds were allocated to the Berkeley site on a per project basis, with each individual project requiring separate approval.

Since the signing of the Agreement in 1992, more than $150 million has been approved for additional in-vestments at the site. These funds have been targeted toward new growth, and include new buildings, substantial renovation of existing buildings, and overall site improvements. The increase in expenditures and investment at the Berkeley site is a direct response by the corporation to the sense of security the Development Agreement provides.

Following is a list of some of these projects:

Building 57 South Annex (Research and Development): designated for product research and development; currently used to produce a monoclonal antibody against Tumor Necrosis Factor (anti-TNF), which is in the final stages of clinical investigation.

This drug treats septic shock by protecting healthy body tissue from attack following massive infection often present in bum victims and as a result of surgical procedures. Construction for Building 57 South Annex (actually an expansion of an existing building) was the first project brought to the City for approval after the signing of the Development Agreement. The project was reviewed by the City of Berkeley Design Review Committee March 1992; construction began July 1992; and occupancy was in December 1992.

Design Review, Plan Check and Building Permits Fees paid to the City for this project totaled $55,500.

Building 5A Addition (Production): houses the production of materials used in the manufacture of rFVIII (recombinant Factor VIII), or Kogenate, a life-saving drug for people suffering from hemophilia.

The 20,000 square foot addition to existing Building 5 provides the capacity Miles needs to manufacture the product at levels required by market demand. The project was reviewed by the Design Review Committee November 1992; construction began April 1993. The addition was recently completed (June 1994) and occupancy is anticipated shortly.

Design Review, Plan Check and Building Permit Fees totaled $69,100.

Building 55 Addition (Production): is also a manufacturing plant for Kogenate (product described above).

The design of this 30,000 square foot addition to the original building began in early 1994 and received approval from the Design Review Committee in March 1994. The site is now being prepared so that construction can begin in July 1994; occupancy is anticipated for late 1995.

Design Review, Plan Check and Building Permit Fees have totaled $8,500 to date

Building 60 (Production): 120,000 square foot building designed to serve as a multi-purpose biotechnology production facility for the manufacture of biotech pharmaceuticals. Because this building is larger than 40,000 square feet, the terms of the Development Agreement required a hearing at the Zoning Adjustments Board.

Building 60 is the first new construction project begun under the terms of the Agreement. It is located on the section of the site designated for production buildings and is 65' tall (the maximum height allowed by the Development Agreement in this location). Approval from the Zoning Adjustments Board was granted the building in November 1992; Design Review Approval was received in December 1992; construction began in June 1993 and the building is scheduled for completion in June 1995.

Design Review, Plan Check and Building Permit Fees have totaled $410,500 to date

Central Utilities Complex (Utilities): major components of this complex include Building 61 (electrical supply), Building 62 (refrigeration) and a pipe rack which will distribute utilities throughout the site.

The utilities generated in this portion of the complex are initially designed to serve Building 60's needs but will also support the further development of the site. The complex was reviewed by the Design Review Committee in November 1993; the RMPP for the ammonia refrigeration system was reviewed in December 1993 by the City's Emergency and Toxics Management Program along with a consultant hired by the City of Berkeley and by the Citizens Review Task Force for Disaster Planning and the Community Environmental Advisory Commission; construction began June 1994.

Design Review, Plan Check and Building Permit Fees have totaled $91,800 to date.

Employee Parking Lot E Designated in the Development Agreement to be used for parking, this lot replaced areas on site formerly used for parking, but which are now under construction for building development. The lot also provides 68 spaces for merchant parking. This project was reviewed by the Design Review Committee in October 1993; construction began November 1993.

Design Review, Plan Check and Building Permit Fees totaled $4,100.

New Site Entry at Sixth Street Security Relocation the first step in developing the main site entry at Sixth Street and Dwight Way, as specified in the Development Agreement. Employees using Parking Lot E as well as visitors to Miles will enter the site here. The project was reviewed by the Design Review Committee in October 1993; began construction June 1994; completion is anticipated in July 1994.

Design Review, Plan Check and Building Permit Fees have totaled $4,700 to date

Other Projects In addition to the very visible new projects on site, there are many other less visible projects which assure safe, efficient, and expanded production capabilities. Such projects include small additions to existing buildings, seismic upgrades to three structures, numerous interior renovations, as well as site work, including abatement of hazardous materials, removal of underground tanks, removal of railroad tracks, and storm and sanitary sewer upgrades.

Plan Check and Building Permit Fees for these projects have totaled more than $25,000.

Total fees paid to the City, by Miles for permits and plan checks

(March 1992 - June 1994), exceed $669,000.

While further investments on the site will depend on the success of those projects currently underway, we are confident that the merit of our new products, the ability and enthusiasm of our employees, and the continuation of our strong relationship with the City of Berkeley will justify the future growth and development of the site.

NOTICE OF SPECIAL MEETING BERKELEY CITY COUNCIL
Date: July 1, 1994

NOTICE IS HEREBY GIVEN that a Special Meeting of the City Council of the City of Berkeley is hereby called as follows:
Thursday, July 7, 1994, 7:00 p.m. 730 Parker Street (at Fourth Street) Miles Inc. Site (Map on reverse side)

AGENDA

MILES INC. DEVELOPMENT AGREEMENT AND IMPLEMENTATION EFFORT

1. Roll Call: 7:00 p.m.

2. Introduction by Weldon Rucker, Acting City Manager

3. Public Comment (30 minutes)

4. Welcome and introduction to Miles site Udo Klein, Site Manager and Vice President, Technical Operations, Miles Inc. Don Lyndon, Lyndon-Buchanan Associates, Architects Temporary Adjournment At approximately 7:30 p.m., meeting will adjourn temporarily to tour a portion of the Miles site. All attendees are invited to participate in a guided tour of Buildings 55, 5A, and 60. Reconvene at meeting site (8:00 p.m.)

5. Presentation on Development Agreement and Implementation Effort Gil Kelley, Planning Director, City of Berkeley Rick Srigley, Vice President, Production & Engineering, Miles Inc.

6. Discussion and questions by members of the City Council, Board and Commission members.

7. Closing Comments by Mayor and Council

8. Adjournment (approximately 9:00 p.m.) Jeffery S. Leiter, Mayor  City Clerk City of Berkeley