Clean Tech Renewable Energy Park Bourne Community 3/05/2009.
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Transcript of Clean Tech Renewable Energy Park Bourne Community 3/05/2009.
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
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
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
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 RequirementsSite Requirements
8
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
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 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
19
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
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
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”
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 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
22
Economic and Fiscal ImpactEconomic 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
273,000 150,000
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
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
273,000 150,000
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
26
Source: NP calculations based on IRS Mass 2006 Statistics of Income state income taxes paid compared to AGI
Build Out Square Footage
273,000 150,000
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
28
Projected incremental spending by employment scenario
29
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
30
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