Clean Tech Renewable Energy Park Bourne Community 3/05/2009

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 Overview 3

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 4

Clean Tech has multiple segments growing at different rates 5 Source: 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 areas 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 6

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

Site Requirements 8

Solar power related recent facility announcements… Plant LocationPhysical Plant Announced Cost Projected Employees Evergreen Solar Devens MA450 K sq ft$165 million700 Phase 1 Flabeg Mirrors Pittsburgh PA209 K sq ft$30 million300 SVTC (lab to fab R&D plant) San Jose CA87K sq ft$30 millionvaries Source: industry publications; company announcements

Wind power related recent facility announcements… Plant LocationPhysical Plant CostProjected Employees Siemens Wind Blade Fort Madison IA311K sq ft originally 125K new building and 75K expansion $33 million for expansion 533 MFG / GE Wind Aberdeen SD$40 million750 Siemens Energy & Automation (turbine gear) Elgin IL330K sq ft Approximately 40ft tall $20 million in existing plant 300 production 55 office TPI Newton IA316K sq ft500 LM Glasfiber Little Rock AK (HQ and plant) Sits on 135 acres Approximately 40 ft tall $150 million300 immediately 1000 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 LocationPhysical Plant CostProjected Employees Novozymes Blair NE30 acre site$100 million100 Integrated Environmental Technology Bend ORHQ Relocation 3400 sq ft N/A23 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 ft¾ of industrial space demand is less than 50K Source: CBRE Market View Q2 2008

Implications for Site Planning and Space Product IssuesDiscussion 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 AirWaterSolid Waste In-vitro diagnostic substance mfg Moderate Biological product (except diagnostic) mfg Moderate Engine, turbine, & power transmission equipment mfg Low Semiconductor & other electronic component mfg High Analytical laboratory instrument mfg Low Automatic environmental control mfg Low Pollution Control Spending Distribution %

Bourne as a Location 16

Factors influencing company location decisions vary by their stage of development 17 Interviewees were asked to spend $100 on the four location attributes

Workforce accessibility may be an issue Approximately 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 19 Start UpProduct Launch Company Expansion 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 FindingDiscussion 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 20 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 FindingDiscussion Green raises as many questions as it offers possibilities 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? Its too far from Boston Is there enough technically trained people in that area 21

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 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 22

Economic and Fiscal Impact 23

Estimated number of annual employees by build-out scenario and facility- type 24 Source: NP calculations based on employment planning variables Build Out Square Footage 273, ,000 Employee Estimates Light industrial Office R&D town-wide private employment average 5382 jobs in 2007

Estimated amount of total wages by potential industry-type 25 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 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 26 Source: NP calculations based on IRS Mass 2006 Statistics of Income state income taxes paid compared to AGI Build Out Square Footage 273, ,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 27 Source: 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&DLowMedHigh 273Ksqft $ 283,099 $ 314,554 $ 393, ksqft $ 157,000 $ 174,445 $ 218,056 Office Low Med High 273Ksqft $ 144,220 $ 160,245 $ 200, ksqft $ 81,955 $ 91,061 $ 113,826

The business park is likely to impact only 26% of the town budget 28

Projected incremental spending by employment scenario 29 Job Levels 273Ksqft Incremental Town Spending Job Levels 150ksqft Incremental Town Spending Light industrial390 $ 8, $ 4,698 Office1092 $ 23, $ 13,155 R&D546 $ 11, $ 6,577

Net property tax generation ranges 30 R&D 273KOffice 273KR&D 150KOffice 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