 |
|
|
|
|
With much anticipation, the Laboratory in 1998 advanced a broad series of initiatives in education and research that will shape our institution in the 21st century.
Foremost among these is the Watson School of Biological Sciences, which received approval in October from the New York State Board of Regents and by year end was recruiting its first class of Ph.D. candidates. We also established new courses at the postgraduate level and continued to expand the program of scientific meetings held on the main campus and at Banbury Center. The DNA Learning Center introduced a remarkable new genetics Internet site, DNA from the Beginning. Designed initially for high school students, the site will be further developed for the general public. The Cold Spring Harbor Press launched a new venture in textbook publishing at the college freshman level.
In research, the Laboratory began programs in neural imaging, bioinformatics, gene sequencing and function, and DNA microarray technology. All are designed to augment our traditional focus on cancer, neuroscience, and plant research.
Construction of new buildings for imaging and bioinformatics began on the main campus and will be completed this summer. A major renovation of the old powerhouse and carpentry shop is under way. When completed, it will provide office space for our expanding Human Resources, Development, and Public Affairs Departments. We purchased an historic Cold Spring Harbor residence across the harbor and are renovating it for use by our first class of graduate students, who will arrive in the fall. In Cold Spring Harbor Village, the DNA Learning Center completed plans for a badly needed expansion of its laboratory and computer teaching space.
A few minutes' drive to the south in Woodbury, the Lab purchased an 11-acre site and a 60,000-square-foot building from the American Institute of Physics. It will be renovated as a new home for the Cold Spring Harbor Laboratory Press and as a high-technology center for research on gene sequencing and function and DNA microarray technology. Space will also be available there for behavior studies and housing of new mouse lines.
During 1998, New York State approved $15 million in funding for a new biotechnology park, which will be located on State University of New York (SUNY) land in Farmingdale, just south of Woodbury. This will be the home for young biotechnology companies that are developing commercial applications for new technology developed at the Laboratory and other institutions. Because of the lack of appropriate facilities on Long Island, such companies have located in states such as Massachusetts, South Carolina, California, and Washington, which have aggressively encouraged biotechnology clusters near academic institutions. Now such companies will have the opportunity to locate in close proximity to the center of academic excellence represented by Cold Spring Harbor Laboratory, SUNY Stony Brook, and Brookhaven National Laboratory.
The park will be managed by a new nonprofit corporation, Broad Hollow Bioscience Park, Inc. A majority of the corporation's directors will be appointed by CSHL, the remainder, by SUNY Farmingdale. John Cleary, who in 1997 completed terms as president of the CSHL Association and as a trustee of the Laboratory, is Chairman of the Board of the new corporation. Construction will begin this spring and should be completed in 2000.
Strong finances are an important foundation from which to launch new initiatives, and, therefore, it is pleasing to report that Cold Spring Harbor Laboratory had its best financial year ever in 1998. Revenues, at $53,639,000, were 10% larger than in 1997, while expenses increased by 8%, to $48,970,000. There was a surplus of $476,000 after depreciation of $3,443,000 and establishment of a reserve of $750,000 for the coming start-up costs of our new imaging and bioinformatics programs. These results are much better than had been anticipated in our annual budget. All major areas of operations-the main Lab, the CSHL Press, Banbury Center, and the DNA Learning Center-achieved break-even or better results, thus reaching a key goal established at the beginning of the year. There was a positive cash flow from operations of $4,669,700, which, as in the past, will be used to maintain and modernize our capital plant, purchase scientific equipment, and support new programs.
Our strong financial position was primarily due to our scientists' success in obtaining federal grants; the strength of our meetings, courses, and other educational programs; higher royalty and investment income; improved operations at the CSHL Press; and very careful cost control by administrative departments. The strong financial status of the Laboratory was recognized at year-end with a high A+1 rating from Standard & Poor's, which enabled us in early 1999 to issue $42.2 million of tax-exempt Civic Facility Refunding and Improvement Bonds through the Nassau County Industrial Development Agency. Underwritten by J.P. Morgan Securities Inc., the bonds provide $15.2 million for the new Woodbury High Technology Center and $27 million to refinance outstanding debt. The A+1 rating permits the new issue to be backed by a liquidity facility from Morgan Guaranty Bank at half the cost of the previously needed letter of credit.
Despite the great volatility experienced in financial markets during 1998, the Laboratory's endowment again increased substantially as a result of good market return and new additions. The endowment consists of the Robertson Research Fund and the Cold Spring Harbor Fund; the latter now includes the funds being raised for our new graduate school. At year-end, the market value of the endowment was $167,044,000, a 12-month increase of nearly $23 million, or about 16%. The funds, which continue to be invested in a balanced mix of equities, fixed-income and short-term instruments, are managed by a team of investment professionals-Essex Investment Management Company, LLC; Miller Anderson & Sherrerd (now a subsidiary of Morgan Stanley Dean Witter); U.S. Trust Company; and the Vanguard PRIMECAP Fund. In a year in which it was extremely difficult for managers to exceed benchmark indices, Vanguard and Essex were able to do so-in the case of Essex, by a very handsome margin. Over many years, the Laboratory's conservative policy, under which it draws 4% per annum from the endowment, has played an important role in the remarkable growth of the funds. The 4% drawdown is based on an average of the market value of the endowment at the end of each of the past three years. In consideration of the extraordinary strength of recent equity markets, the drawdown was held even below the 4% target in 1998 and 1999.
|