updated 4/13/2005 8:33:20 AM ET 2005-04-13T12:33:20

San Francisco emerged as the early front-runner to land California’s new $3 billion stem cell headquarters after its incentive-laden bid scored the highest marks among the four cities named to a short list of contenders.

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Sacramento ranked second followed by San Diego and Emeryville. The list of finalists, released Tuesday by the Department of General Services and the California Institute for Regenerative Medicine, was culled from 10 applicants.

The institute plans to build at least a 17,000-square-foot office with a maximum of 50 employees who will help dole out nearly $300 million in research grants annually. No actual stem cell research is planned at the headquarters.

Los Angeles and San Jose were the two biggest cities not to make the final cut, though stem cell agency officials are free to ignore the short list compiled by the state Department of General Services.

All the finalists offer free rent and a wide range of incentives that include free office furniture, free parking and free gym memberships for agency employees.

Municipal development officials say giving away so much to lure an agency with a relatively small economic impact is worth it for the prestige the stem cell agency will bring to the winning city. They expect biotechnology companies to sprout around the permanent headquarters.

The 29-member board that oversees the stem cell agency is expected to name a winner May 6 at its monthly meeting in San Francisco after a subcommittee publicly considers the list Wednesday, and on May 2.

The institute was created in November after voters overwhelmingly approved a measure allowing California to borrow $3 billion to fund human embryonic stem cell research over 10 years.

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