San Francisco was chosen Friday as the headquarters for California’s new stem cell agency, beating out San Diego, Sacramento and Emeryville.

The stem cell institute was created in November after voters overwhelmingly approved a measure allowing the state to borrow $3 billion to fund human embryonic stem cell research.

Plans call for a 17,000-square-foot office with a maximum of 50 employees who will help dole out nearly $300 million in research grants annually over 10 years.

No actual stem cell research is planned at the headquarters, but supporters said winning the bid would give the successful city scientific and marketing prestige that can be used to attract biotechnology companies.

“There is no question it will be an anchor for business,” Mayor Gavin Newsom said after the vote. “This secures our future as a point of destination for discovery.”

Newsom said his city’s bid is worth $17 million in perks, including 10 years of free rent at a building near new research labs at the University of California and the Giants baseball stadium.

San Francisco also will provide 2,600 free hotel rooms and discounts on another 14,000 rooms, which he said were worth $900,000. It will also give the center free access to several conference centers and free use of 46,000 square feet of laboratory space at San Francisco General Hospital.

Sacramento and San Diego offered free rent and other multimillion dollar perks. The 29-member committee that oversees the new Institute for Regenerative Medicine made the final decision.

Two lawsuits have been filed against the institute — one alleging that its oversight of $3 billion is illegal and the other claiming the proposition language that created the agency was unconstitutional.

The institute can’t borrow any money while the lawsuits are pending unless it files a special lawsuit called a “validation suit” to ensure lenders they will get paid back. Board chairman Bob Klein said the agency is considering such a move. He has said both lawsuits are without merit.

The board on Friday appointed 15 scientists from outside California to oversee the grant-application process. Institute officials said they hope to begin awarding modest individual grants by November.


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