"When we briefed (Intel Corp. Chairman) Andy Grove on the project, he said, 'You're creating a Gene Valley,' " said J. Michael Bishop, chancellor of UCSF, which will be Mission Bay's intellectual anchor tenant.

UCSF is the key ingredient in plans to make Mission Bay a biotech mecca. During the past quarter centurn, researchers at the current UCSF Parnassus Heights campus made many of the breakthroughs that gave birth to the biotech industry - starting with the secret of how to cut and paste DNA to create blueprints for novel organisms.

But UCSF has long had a problem. Hemmed in by residential neighbors and unable to expand the university has made world-class researchers work in labs so cramped that some of its brightest minds got fed up and moved on.

"No question there's been some damage to the institution," said Cynthia Robbins-Roth, a maven among biotech analysts. "If junior faculty don't get lab space, they can't do enough research to win tenure, and if they don't get tenure where's the next crop of medical researchers to come from?"

Expansion in Mission Bay is supposed to address UCSF's growing pains. As the first concrete step, the regents will be asked to approve UCSF's proposal to build a 434,000 square foot molecular research complex on the site. When completed in 2002, it will house 1,000 scientists graduate students and technicians - about 8 percent of UCSF's current overall research capability.

"We want to have the groundbreaking in October," said Bruce Spaulding, the UCSF vice chancellor who spent more than 12 years doing the bureaucratic spadework for the university's expansion.

That groundbreaking would end UCSF's long, frustrating efforts to expand, first at the Parnassus Heights campus and later in Laurel Heights, only to be thwarted in both instances by neighborhood opposi- tion.

Although the UCSF research campus - which eventually will cover 43 acres, or 13 square city blocks - represents a large chunk of Mission Bay, it's just one ingredient of the overall development.

Catellus, Mission Bay's owner, also has won city approval to erect 6,000 residential units and a retail-entertainment complex in the northern part of the 303-acre tract, adjacent to the forthcoming Pac Bell baseball stadium.

"Mission Bay is the largest develment project in the history of the city, and it may be the largest project of its kind in the United States," said David Prowler, acting director of Mayor Willie Brown's Office of Economic Development.

"When you look at the mix of uses; from research to commercial to residential and open space, you can see we're planning one of the grand new neighborhoods of the 21 st centurn," said Catellus CEO Nelson Rising.

But city, business and university leaders agree that it is the project's biotech core - the UCSF research campus and the surrounding commmercial zone-that provided the economic momentum to make the vast project practical.

"UCSF was the catalyst that made everything else fall into place," Prowler said.

With the long-planned expansion approaching reality, UCSF leaders now must manage the institutional shock of transplanting some scientists to Mission Bay without causing envy or alienation among the larger group of researchers who remain at the Parnassus Heights campus.

Professor Keith Yamamoto, one of UCSF's top research scientists and chair of the academic committee managing the move, explained the paradox. "All of us recognize one of the great gleaming strengths of this place is that we were all jammed together," Yamamoto said.

Ironically, UCSF turned its problem - researchers working cheek to jowl - into a strength, forging a spirit of collaboration among UCSF scientists that went far beyond the scitific norm.

Yamamoto said UCSF will take many steps to upgrade labs at the Parnassus site, as well as to encourage cross-fertilization between the old and new research groups.

Final responsibility for expanding UCSF without killing its scientific culture falls to Bishop, who is somewhat inoculated against academic back-biting by his scientific stature. The chancellor shared a 1989 Nobel Prize with his UCSF colleague Harold Varmus for their work on how cancer develops.

"Failure is not an option," Bishop says simply. "We've reached the point where we can't catch the latest waves in biomedical research because we have no elbow room."

Bishop also rejects any suggestion that the university risks compromising its intellectual independence by placing its new research campus inside a ring of for-profit biotech ventures that will draw on UCSF brainpower.

"We'll be as open as we are now; there are no expectations on us," he said, adding that state and federal research guidelines encourage commercial spin-offs of scientific ideas. "I think we're obliged to take our discoveries into the real world," he said.

Far from shying away from cozy relations with the business leaders who were so instrumental in bringing UCSF to Mission Bay, Bishop says he's excited that the university's expansion, long seen as a contentious issue, may finally be perceived as a larger good.

"We have an opportunity to provide the intellectual gravitas for a project that contributes to the entire community," Bishop said.

UCSF will hold a community meeting to show off the proposed design of its first Mission Bay campus building tonight at 7 p.m. at the ILWU Hall at Second and King streets next to the ballpark construction site in San Francisco.