This Wednesday, state officials ended the bidding war for cities to host the California Institute for Regenerative Medicine, the stem-cell research agency approved by voters last November. But as San Francisco offers its candidacy for review, a vote of no-confidence from biotechnology firms may knock the city out of the running.

All municipal bids are required to provide the institute 17,000 square feet of office space and competitive rent rates, as well as to meet stringent parking and transportation needs. As the agency awards billions of dollars in research grants later this year, it is sure to attract industry capital. All eyes have now turned to San Francisco, as local officials and some industry leaders are now pushing to crown The City for its industry importance.

More than 70 biotech companies have spun off from laboratory work at the world-famous University of California, San Francisco, a hotbed of innovation in life-science research. However, not a single industry firm calls San Francisco home. The reason? Excessive costs and unfriendly regulations.

City Hall spends taxpayer money like a teenager with a credit card, digging itself into debt and in perpetual need of a bailout. Looking to cover a multimillion-dollar shortfall, government leaders placed two measures on the local ballot last fall that would have created a new revenue tax on businesses and raised the current sales tax rate to 8.75 percent, which would have been the highest in the state.

As voters rebuffed those advances, city officials have turned to people's pocketbooks, with proposals to tax residents extra for using grocery bags and for driving downtown. In San Francisco, no idea to nickel-and-dime locals is too far-fetched, giving firms ample cause to look elsewhere. Burdensome government restrictions on housing have also soured the local environment for biotech.

Due to onerous building laws and a local aversion to new housing development, commercial property comes at a costly premium, with city vacancies currently at 17 percent, according to BT Commercial real-estate brokers. Most firms move to nearby cities such as Palo Alto or South San Francisco, where government rules and land-use restrictions are friendlier to commerce. The rest of the region now harbors more than half of the nation's biotechnology firms. San Francisco's loss is their gain. All of this is true in spite of Mayor Gavin Newsom's aggressive effort to build a local biotech cluster.

In his pitch to biotech officials, Newsom points to the bio industry conference hosted by The City last summer, and a new payroll tax exemption for biotech firms. But the conference was marred by hundreds of inflamed protestors who gave event attendees a chilling reception. Making matters worse, few on the Board of Supervisors support Newsom's call to industry.

The board whittled away the tax exemption and even considered officially commending the BIO protestors. If the rising city costs won't scare firms away, the restless natives sure will. Unfortunately for Newsom, San Francisco's red carpet extends only as far as his office door.

With transportation and cost considerations a priority, California Institute officials would be wise to stay put in Emeryville, where the agency is now temporarily housed rent-free, or to move south to San Jose, where traffic congestion is a small fraction of San Francisco's commuter hell. Though Newsom has made some gains against the efforts of local biotech opponents, political reality has likely doomed his efforts.

A decision by institute officials is expected by April, but San Francisco shouldn't expect a call back. The City has failed to make the biotech industry's short list, and the California Institute will likely follow suit. San Francisco has only itself to blame.