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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
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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
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
Clean Tech has multiple segments growing at different rates 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 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
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 Source: Douglas – Westwood AUV market forecasts; UMASS Marine Science & Technology Industry in NE; NP research
Solar power related recent facility announcements… Source: industry publications; company announcements
Wind power related recent facility announcements… • For a number of the foreign companies (including those not listed) the major • manufacturing facility doubles as the US headquarters Source: industry publications; company announcements
Other Green tech examples… 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 • 50k sq ft buildings to meet the range of space • demand • Subdivided flex space opportunity • “Business Launch to business scale” space • adaptability Sizing of facilities 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
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 Spending Distribution %
Factors influencing company location decisions vary by their stage of development • 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 asdemonstration of inability to pull from the • Boston labor market Source: BTS, CTTP 2000; NP analysis
Market perspectives on Bourne as a location Start Up Product 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 • Limited to companies already in the area • “Roll ups” of marine tech firms present both opportunity and risk “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 ” “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” “Perhaps your client should consider a permitted test bed facility that could serve as a magnet for companies and expand the research base”
Additional findings Finding Discussion • 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 Technology basis of companies may have significant influence on location decision-making • 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 New England is not likely to be a hot bed of research for certain types of renewable technologies
Additional findings Finding Discussion • 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 “Green” raises as many questions as it offers possibilities for tenants 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”
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
Estimated number of annual employees by build-out scenario and facility- type • town-wide private employment average 5382 jobs in 2007 Source: NP calculations based on employment planning variables
Estimated amount of total wages by potential industry-type • total private payroll in Bourne equaled $198.4 million in 2007 Source: NP calculations based on MASS Labor Market Information ES 202 average wages
Estimated income taxes from employment Source: NP calculations based on IRS Mass 2006 Statistics of Income state income taxes paid compared to AGI
Estimated property taxes – building only • Town levy is approximately $46 million • Excludes site improvements and wind turbines Source: NP calculations based on RS Means Quick Estimator for Buzzards Bay, MA
The business park is likely to impact only 26% of the town budget
