Officials: UF is backing out of its Sanford Burnham deal

Perceived lack of stakeholder support spurs move

The much-debated plan for the University of Florida to take over operations of Sanford Burnham in Orlando’s medical city is off, UF officials confirmed Tuesday.

“The University of Florida is willing to discuss how it can be helpful to the state in a manner that makes sense for all parties . ... However, it is unclear how UF can help in a timely manner, given the likely need for legislative approval. As such, UF is unable to proceed at this time,” UF officials said in a statement.

Sources close to the matter said that the university is backing out partly because it hasn’t received support from key stakeholders, including the state, Orange County and Orlando.

That means Sanford Burnham officials in California may have to find a new solution for taking the Lake Nona operations off their books.

“We recently learned that UF has no plans to proceed with the asset transfer at this time,” Sanford Burnham said in a statement

Tuesday. “Thus, SBP is now faced with the need to find another viable alternative.”

It was only May when Sanford Burnham and UF, having come to an agreement behind closed doors, were preparing a news release about their proposal.

“Under a plan both parties have agreed to, the SBP at Lake Nona facility in Medical City would become part of UF as soon as June 30 pending approvals,” said their draft press release. “This is a transfer of assets without payment from UF to SBP,” they wrote, adding that “input and support of numerous stakeholders including Orange County, the City of Orlando, Lake Nona Land Co., and the state of Florida, among others, is required for the proposal to be finalized.”

The news of the proposal leaked before the press release was made public, and it turned out getting the stakeholders’ support wasn’t an easy process.

Gov. Rick Scott’s office sent a sharply worded letter to Sanford Burnham and UF in May after learning about their proposed plans, indicating the governor was kept in the dark and demanding answers about what their negotiations would mean for the state and taxpayers.

Scott sent both parties a series of questions, such as “Please detail how the proposed transfer is a good deal for the state.”

Scott’s office said in a statement Tuesday that it has “met with both groups and is going through the process of evaluating their plans. Additionally, this matter will be under review by the Board of Governors and the Legislature.”

When the Californiabased research center won more than $360 million of incentives to open an Orlando center in 2006, it agreed to create 303 jobs high-paying jobs over a decade. Most recent reports show it is 66 jobs short.

With roots dating back 40 years, the institute has benefited from hundreds of millions of dollars worth of donations in recent years and showed financial gains of more than $11 million on tax documents from 2014.

But those have not been apparent in Orlando.

Part of the challenges for Sanford Burnham lie in struggles to get research dollars, particularly from the federal government, its leaders say. Records show that the institution’s federal research funding for its Orlando and La Jolla, Calif., operations has declined steadily from $112 million in 2012 to $98 million in 2015.

According to experts, as a nonprofit looking to shrink its operations, Sanford Burnham has three options: find another partner; spin off the center as its own nonprofit; or simply close it down. But the institute’s situation is unique and more complex, because of the involvement of other stakeholders.

But the fact that the process is taking so long may be a sign that the institute isn’t thinking about closing the doors of its Lake Nona facility, they said.

“Nobody likes uncertainty, but the fact that they’re being deliberate about this process and going through this and trying to find a good landing spot for this work, should be encouraging,” said Rick Cohen, director of communications and operations for the National Council of Nonprofits.

Assuming that UF would be taking over Sanford Burnham, UCF and UF had drafted an agreement in May to create a research consortium. Now, it is unclear if UCF will have a role with Sanford Burnham.

UCF officials declined to comment for this story.

The news comes after an investigation by UF last month cleared Dr. Bernie Machen, former university president and now-trustee-board-chair at Sanford Burnham, of conflict of interest for his potential involvement in the Sanford Burnham-UF deal.