Clean Tech Renewable Clean Tech Renewable Energy ParkEnergy Park

Bourne CommunityBourne Community 3/05/20093/05/2009

Study Approach

Study conducted between June and November of 2008 One community stakeholder meeting to focus and define “Green Park” concept Extensive secondary market research on the industry and key trends Extensive secondary and primary research on industrial and office market in region Interviewed 14 companies regarding key location factors and Bourne as a potential site Developed database of clean energy site announcements to understand scale of facilities being

constructed Created a economic and fiscal impact model

Fiscal impact approach similar to that used for potential resort development

Industry OverviewIndustry Overview

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Findings from the Market Overview

“Clean tech” industry is robust in Massachusetts and has a prominent position in the Plymouth/Cape region

Massachusetts position within “clean tech” is more focused on enabling technologies rather than direct production of energy or end products

Expansion of research capability across Massachusetts will continue to place the state near the forefront of clean tech applications

A combination of renewable portfolio standards and economic subsidies for users will generate local demand

The Bourne/Cape/Plymouth region does not presently have the appropriate real estate products to meet the needs of expanding companies or R&D facilities

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Clean Tech has multiple segments growing at different rates

5Source: Clean Edge; NERAC, NP calculations

Clean tech in Massachusetts

Clean Industry Findings Most of these companies are small with

40% having fewer than $1 million in revenues

Most companies in the renewable space are less than 5 years old

Renewable energy is the fastest growing sector in Massachusetts Projections are for 30% employment

growth in this subsector in the next year

Implication for BFDC NP estimates based on the MassTech

survey that between 190 and 260 people are employed in clean energy activities in the immediate Bourne/Cape /Plymouth area If area’s companies grow at the same

rate as the expected statewide average at least 68 jobs could be added

This could potentially create demand for as much as 17,000 sq ft of space in the area

Cost and credit quality may be an issue for consideration in developing the park given their size and relative age

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Marine technology as a potential tenant

In the 495 S and Cape region there are 104 companies employing 2060 people

Representative companies in the region include: Deep Sea Systems JW Fishers Hydroid

Global ROV/AUV market could grow to as much as 1972 units with a market value of $3.7 billion

Ocean observation technology is approximately a 1.6 billion global market with expectations to grow to as much as $2.2 billion The US is the largest market for

expenditures

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Source: Douglas – Westwood AUV market forecasts; UMASS Marine Science & Technology Industry in NE; NP research

Site RequirementsSite Requirements

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Solar power related recent facility announcements…

Plant Location PhysicalPlant

AnnouncedCost

ProjectedEmployees

Evergreen Solar Devens MA 450 K sq ft $165 million 700 Phase 1

Flabeg Mirrors Pittsburgh PA 209 K sq ft $30 million 300

SVTC (lab to fab R&D plant)

San Jose CA 87K sq ft $30 million varies

Source: industry publications; company announcements

Wind power related recent facility announcements…

Plant Location PhysicalPlant

Cost ProjectedEmployees

Siemens Wind Blade

Fort Madison IA 311K sq ft originally125K new building and 75K expansion

$33 million for expansion

533

MFG / GE Wind Aberdeen SD $40 million 750

Siemens Energy & Automation (turbine gear)

Elgin IL 330K sq ftApproximately 40ft

tall

$20 million in existing plant

300 production55 office

TPI Newton IA 316K sq ft 500

LM Glasfiber Little Rock AK (HQ and plant)

Sits on 135 acresApproximately 40 ft

tall

$150 million 300 immediately1000 in five years

Source: industry publications; company announcements

For a number of the foreign companies (including those not listed) the major manufacturing facility doubles as the US headquarters

Other Green tech examples…

Plant Location PhysicalPlant

Cost ProjectedEmployees

Novozymes Blair NE 30 acre site $100 million 100

Integrated Environmental Technology

Bend OR HQ Relocation3400 sq ft

N/A 23

Source: industry publications; company announcements

Most active searches in suburban Boston are for less than 50K sq ft of space

Average search size is approximately 23K sq ft ¾ of industrial space demand is less than 50K

Source: CBRE Market View Q2 2008

Implications for Site Planning and “Space Product”

Issues Discussion

Attraction of “mature”full scale production

It is clear that certain large scale production facilities in clean tech are too large for the proposed park and its present land area

Sizing of facilities 50k sq ft buildings to meet the range of space demand Subdivided flex space opportunity “Business Launch to business scale” space adaptability

Consideration should be given to building design to allow for the widest range of potential users if a spec building is constructed

Flex space with the following considerations: Ceiling heights:

Minimum 14 ft Should consider 20 to 25 feet for air

handling and other environmental systems

Consider higher clearances (30 / 40 ft) to allow for warehousing/logistics space

Floor loading Consider floor loads (150 psf) to

support potential bio or data center applications

May want to consider 400 to 600 (psf) in certain spaces to minimize / eliminate vibration

Green design question Green roofs and implications for ceiling load

levels

Developing a “green” park will require managing a variety of waste streams at different levels of intensity depending on the tenant mix

Pollution Control Needs

Air Water Solid Waste

In-vitro diagnostic substance mfg Moderate0.1 0.2 0.8

Biological product (except diagnostic) mfg Moderate0.1 0.4 0.6

Engine, turbine, & power transmission equipment mfg

Low0.2 0.4 0.4

Semiconductor & other electronic component mfg

High0.3 0.5 0.2

Analytical laboratory instrument mfg Low0.1 0.1 0.8

Automatic environmental control mfg Low0.1 0.2 0.7

Pollution Control Spending Distribution %

Bourne as a LocationBourne as a Location

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Factors influencing company location decisions vary by their stage of development

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Interviewees were asked to “spend $100” on the four location attributes

Workforce accessibility may be an issue

Approximately 84000 work within Barnstable County A net out-migration (excluding Plymouth County) of approximately 6000 workers Site consultants may view this data as demonstration of inability to pull from the Boston labor market

Source: BTS, CTTP 2000; NP analysis

Market perspectives on Bourne as a location

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Start Up Product Launch CompanyExpansion M&A

Difficult to see Bourne being a location except for entrepreneurs and spin offs from the region Concern that venture capital firms may try to pull companies closer to Boston

For companies involved in off-shore activities in the New England region Bourne would be a logical decision

Could see Bourne area as a location for European firms tied to hydrokinetic power or hybrid hydro/wind generation Research activity could play an important attraction role

“The regulatory environment in Ma/RI

is going to have a heavy influence on whether

we become a production center or just a R&D location”

“Bourne is close but maybe not close enough. I am not sure you would be able to

find the technical workforce in the region and its close enough to make a case for moving without losing the

core team ”

“Perhaps your client should consider a permitted test bed

facility that could serve as a magnet for

companies and expand the research base”

Limited to companies already in the area “Roll ups” of marine tech firms present both opportunity and risk

Additional findings

Finding Discussion

Technology basis of companies may have significant influence on location decision-making

Engineering-driven or R&D companies are likely to want to locate near a technically trained workforce Assembly-driven located near markets for products What is unclear is the location future of ancillary businesses tied to these companies

Other markets in the US are emerging more quickly than the East Coast and New England

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New England is not likely to be a hot bed of research for certain types of renewable technologies

Most do not see New England as the cornerstone of renewable research except for the underlying materials

nanotechnology thin film composites

Hydrokinetics are an exception because it marries the ocean engineering skills of the region Many believe that New England particularly Massachusetts will be one of the leaders in energy efficiency technology due to its strengths in computer sciences and communication technologies

Additional findings

Finding Discussion

“Green” raises as many questions as it offerspossibilities for tenants

The number one concern is that “green” will be substantially more expensive It will be important to demonstrate that “green” from the start is more cost effective than retrofits “Everyone is requiring LEED certification for new buildings and some parks in the area are changing to LEED standards It may also imply that BFDC may need to absorb the “green” differential

Bourne location needs to be communicated to offset some perceived disadvantages

“Is it over the Bridge?” “It’s too far from Boston” “Is there enough technically trained people in that area”

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The green nature of the park design may be more attractive to foreign firms

Jones Lang research suggests that a large percentage of foreign firms place a higher degree of interest in sustainable designs

ISO 14001 registrations from European and Japanese companies far outweigh listings from US companies

Additionally carbon trading regimes and government mandates are driving demand

However

Major industrial developers such as AMB are moving as a matter of course towards LEED-CS certification as a minimum standard AMB has also developed a “green” business park in San Jose CA that represents a infill/ conversion

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Economic and Fiscal ImpactEconomic and Fiscal Impact

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Estimated number of annual employees by build-out scenario and facility- type

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Source: NP calculations based on employment planning variables

  Build Out Square Footage

  273,000 150,000

  Employee Estimates

Light industrial 390 214

Office 1092 600

R&D 546 300

town-wide private employment average 5382 jobs in 2007

Estimated amount of total wages by potential industry-type

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Source: NP calculations based on MASS Labor Market Information ES 202 average wages

total private payroll in Bourne equaled $198.4 million in 2007

  Build Out Square Footage

  273,000 150,000

Marine $ 21,644,220 $ 11,892,429

Durable Manufact $ 22,109,490 $ 12,148,071

Profess/Tech $ 80,885,532 $ 44,442,600

R&D $ 56,727,216 $ 31,168,800

Estimated income taxes from employment

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Source: NP calculations based on IRS Mass 2006 Statistics of Income state income taxes paid compared to AGI

  Build Out Square Footage

  273,000 150,000

Marine $ 606,038 $ 332,988

Durable Manufact $ 619,066 $ 340,146

Profess/Tech $ 2,992,765 $ 1,644,376

R&D $ 2,098,907 $ 1,153,246

Estimated property taxes – building only

27Source: NP calculations based on RS Means Quick Estimator for Buzzards Bay, MA

Town levy is approximately $46 million Excludes site improvements and wind turbines

Data/Basic R&D Low Med High

273Ksqft $ 283,099 $ 314,554 $ 393,193

150ksqft $ 157,000 $ 174,445 $ 218,056

Office Low Med High

273Ksqft $ 144,220 $ 160,245 $ 200,306

150ksqft $ 81,955 $ 91,061 $ 113,826

The business park is likely to impact only 26% of the town budget

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Projected incremental spending by employment scenario

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 Job Levels 273Ksqft

Incremental Town Spending

Job Levels 150ksqft

Incremental Town Spending

Light industrial 390 $ 8,551 214 $ 4,698

Office 1092 $ 23,942 600 $ 13,155

R&D 546 $ 11,971 300 $ 6,577

Net property tax generation ranges

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  R&D 273K Office 273K R&D 150K Office 150K

Prop Tax Medium $ 314,554 $ 160,245 $ 174,445 $ 91,061

Inc. New Spending $ 11,971 $ 23,942 $ 6,577 $ 13,155

Net Property Tax $ 302,583 $ 136,303 $ 167,867 $ 77,906