NYSERDA - STEP Master Plan

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					                   Master Plan
                           January 2004




                                  Prepared for
                           New York State
Energy Research and Development Authority



                                   Prepared by
                   IDEA Partnerships, LLC
                                        with
                               Perkins & Will
                     The Saratoga Associates
  Saratoga Technology + Energy Park
             Master Plan
              Contents
                                            January 2004
I—CONTEXT...................................................................................................................... 1
NYSERDA .......................................................................................................................................1
  Organization .................................................................................................................................1
  Purposes........................................................................................................................................1
  Mission ..........................................................................................................................................1
  Goals and Business Culture ..........................................................................................................1
  Programs.......................................................................................................................................1
  Funding Highlights .......................................................................................................................2
PRIMARY STEP PARTNERS ................................................................................................................3
  The University at Albany (SUNY)..................................................................................................3
  Saratoga Economic Development Corporation (SEDC)...............................................................4
OTHER IMPORTANT RELATIONSHIPS ..................................................................................................5
  Town of Malta ...............................................................................................................................5
  R&D and Incubation Resources....................................................................................................5
  Economic Development Strategy and Marketing Partners ...........................................................5
2—SARATOGA TECHNOLOGY + ENERGY PARK ........................................................ 6
THE RATIONALE ................................................................................................................................6
  Energy and the Environment—A World Challenge and National Strategic Priority ....................6
  Energy—A New York State Priority ..............................................................................................6
THE CONCEPT ....................................................................................................................................6
THE VISION .......................................................................................................................................7
THE GOALS ........................................................................................................................................7
STATUS OF STEP ACTIVITIES ............................................................................................................8
  Partnership Development..............................................................................................................8
  Marketing and Early Tenants........................................................................................................8
  Master Plan and Regulatory Processes ........................................................................................8
3—GOVERNANCE AND DEVELOPMENT STRATEGY .................................................. 9
ALTERNATIVES CONSIDERED ............................................................................................................9
DECISION CRITERIA ...........................................................................................................................9
THE STRATEGY ..................................................................................................................................9
POTENTIAL PRIVATE DEVELOPMENT PARTNERS ...............................................................................9
4—MARKET STRATEGY ................................................................................................ 10
INPUTS FOR MARKET STRATEGY .....................................................................................................10
MARKET ANALYSIS SUMMARY .......................................................................................................10
  Industry Survey............................................................................................................................10
  Competitive Properties—Specific Technology Sites....................................................................10
  Regional Real Estate Market.......................................................................................................12
FOUR BUILDING BLOCKS OF MARKET STRATEGY ...........................................................................13
  By Target Industry Segments.......................................................................................................13
  By Company Life Cycle/Stage of Development ...........................................................................13
  By Partnership Relationships......................................................................................................14
  By Real Estate Factors ................................................................................................................15
SUMMARY—STEP MARKET POSITION............................................................................................17



                                                      STEP Master Plan Contents                                                        Page i
5—LAND PLAN ............................................................................................................... 19
THE REGIONAL CONTEXT ................................................................................................................19
PLANNING PRINCIPLES.....................................................................................................................19
THE PHYSICAL PLAN .......................................................................................................................20
  Organization of the Site...............................................................................................................20
  The Buildings ..............................................................................................................................21
  Organization ..............................................................................................................................21
  The Site and Infrastructure..........................................................................................................22
TECHNICAL DATA............................................................................................................................24
  Build-Out Statistics .....................................................................................................................24
  Coverages....................................................................................................................................24
PHASING ..........................................................................................................................................25
  Phase 1 Overview........................................................................................................................25
  Importance of the Initial Project .................................................................................................25
  Phase 1 Road Build-Out..............................................................................................................25
6—CAPITAL COSTS AND FINANCING ......................................................................... 26
CAPITAL COSTS SUMMARY .............................................................................................................26
TRIAL PRO FORMA SUMMARY .........................................................................................................27
FINANCING STRATEGIES ..................................................................................................................29
  Infrastructure ..............................................................................................................................29
  Common or Core Technology Facilities .....................................................................................29
  Common Amenities......................................................................................................................29
  Multi-Tenant Facilities................................................................................................................29
  Single-User Facilities..................................................................................................................29
EXHIBITS ......................................................................................................................... 30
EXHIBIT 1—PARTICIPANTS IN INTERVIEWS AND PLANNING DIALOGUE ..........................................30
  NYSERDA....................................................................................................................................30
  STEP Partners.............................................................................................................................30
  Market Analysis...........................................................................................................................30
  Legal Counsel..............................................................................................................................30
EXHIBIT 2—MARKET ANALYSIS—INDUSTRY SURVEY QUESTIONS & SUMMARY OF RESPONSES...31
EXHIBIT 3—TECHNOLOGY SITES IN THE IMMEDIATE REGION .........................................................34
  The CESTM Campus ...................................................................................................................34
  The University at Albany East Campus.......................................................................................34
  Luther Forest Technology Campus .............................................................................................34
  Rensselaer Technology Park .......................................................................................................35
  Harriman State Office Campus ...................................................................................................35
EXHIBIT 4—USEFUL WEB ADDRESSES...........................................................................................37




                                                     STEP Master Plan Contents                                                        Page ii
                   Saratoga Technology + Energy Park
                              Master Plan
                                             January 2004
                                                          conduct, sponsor, assist and foster programs of
I—CONTEXT                                                 research, development and demonstration in new
    Chapter 1 provides context for STEP                   energy technologies.”
planning, consisting of information about
NYSERDA and its STEP partners and their major             Mission
relevant activities.                                          The mission of NYSERDA is:
                                                              …to use innovation and technology to solve
NYSERDA                                                       some of New York’s most difficult energy and
                                                              environmental problems in ways that improve
Organization                                                  the State’s economy.
                            New York State Energy
                       Research and                       Goals and Business Culture
                       Development Authority
                                                               Basing its activities on the “3Es”—“Energy,
                       (NYSERDA) is a public
                                                          Environment, and Economic Development”—
                       benefit corporation
                                                          NYSERDA is committed to helping New York
                       established in 1975 under
                                                          businesses, municipalities, and residents solve
                       Title 9 of New York State’s
                                                          their most pressing energy and environmental
                       Public Authorities Law.
                                                          problems, while developing new, innovative
    NYSERDA is governed by a 13-member                    products and services that can be manufactured
Board of Directors appointed by the Governor.             or commercialized by New York State firms.
Three ex-officio members represent the Public
                                                               In carrying out its mission, NYSERDA is
Service Commission and the Departments of
                                                          dedicated to public service, forging strategic
Environmental Conservation and Transportation.
                                                          partnerships with private and public entities, and
Nine other members include utility executives, a
                                                          striving to be a model of what taxpayers want their
scientist, an environmentalist, an economist, a
                                                          government to be. NYSERDA also places a
consumer representative, and representatives of
                                                          premium on objective analysis and multi-
the public at large.
                                                          stakeholder collaborations as its way of doing
                                                          business.
Purposes
    NYSERDA’s purposes and powers, legally                Programs
established by its statute, include the following:
                                                              To meet mission purposes and goals,
     “The purposes of the Authority shall be to           NYSERDA’s programs collectively explore and
develop and implement new energy technologies             promote energy and environmental technologies
consistent with economic, social and                      and solutions that will conserve energy, protect
environmental objectives, to develop and                  the environment, and promote economic
encourage energy conservation technologies, to            development. Major program areas are:
promote, develop, encourage and assist in the
                                                              ∇ Economic Development
acquiring, constructing, improving, maintaining,
equipping and furnishing of industrial,                       ∇ Energy Analysis
manufacturing, warehousing, commercial,                       ∇ Energy Efficiency Services
research and industrial pollution control facilities
                                                              ∇ Residential Energy Affordability
[at STEP] and to promote, develop, encourage
and assist special energy projects and thereby                ∇ Research and Development
advance job opportunities, health, general                    ∇ West Valley Site Management
prosperity and economic welfare of the people of
                                                              ∇ Bond Financing.
the state of New York. In carrying out such
purposes, the Authority shall [have the power to]



                                                     STEP Master Plan                              Page 1
    STEP is a major component of NYSERDA’s
Economic Development Program. Other selected
                                                         Funding Highlights
programs most pertinent to the STEP Master Plan              In 2002-2003, NYSERDA deployed and
are described here briefly.                              managed aggregate funding of $219 million.
                                                         Primary sources of funding are:
Research and Development (R&D) Program                       ∇ System Benefits Charge (SBC)
    NYSERDA supports R&D projects that
develop and demonstrate innovative energy                    ∇ Assessments on electric and gas utility
technologies, products, and processes. The R&D                  sales
Program stresses consultation, collaboration, and            ∇ Voluntary contributions from New York
partnership with other organizations, including                 Power Authority (NYPA) and Long
universities, industries, utilities, engineering and            Island Power Authority (LIPA)
scientific research firms, local governments, and             ∇ Co-funding from public and private
state and federal agencies.                                      sources, and federal grants.
     NYSERDA project managers are deeply                      The annual budgets of the Research and
involved in projects ranging from development            Development (R&D) Program and the System
and commercialization of aluminum-oxide-based            Benefits Charge (SBC) Program are $17.5 million
slurries for chemical-mechanical polishing in New        and $144 million, respectively. This translates
York State, to the development and introduction of       into $87.5 million in R&D funding and $750 million
alternative-fuel vehicles.                               in SBC funding over the current five-year SBC
                                                         program.
Energy Efficiency Services
    The Energy Efficiency Services group                      As of the end of 2002, the New York Energy
provides technical assistance to improve the             $martsm Program has achieved 0.5% savings on
energy and environmental performance of                  statewide energy requirements, amounting to
businesses, institutions, and municipalities;            savings of $102 million for New York energy
identifies and deploys existing technology and           customers. In addition to creating or retaining
equipment to reduce energy costs; converts fleet         7,600 jobs, the Program has helped to reduce
vehicles to alternative fuels; and helps secure          emissions and has generated $1.8 billion in
energy-project funding from private and public           outside investment for the $614 million in
sources. NYSERDA’s performance contracting               NYSERDA commitments. The R&D programs
and peak-load electricity reduction programs are         have used funds to initiate more than 950 projects
renowned in the energy field.                            and to bring more than 200 innovative, energy-
                                                         efficient, and environmentally beneficial products,
New York Energy $martsm                                  processes, and services into use.
     The New York Energy $martsm program is
                                                             These contributions to the State’s economic
designed to continue energy efficiency, low-
                                                         growth and environmental protection are made at
income services, research and development, and
                                                         a cost of about $.70 per resident in the SBC
environmental protection programs during the
                                                         service area per year.
State’s transition to electric retail competition, and
is a key element in the restructuring of New York’s
electric utility industry. To ensure that these kinds
of programs continue to benefit New Yorkers, the
State’s Public Service Commission (PSC) named
NYSERDA administrator of these programs,
which are paid for by a System Benefits Charge
(SBC) on the electricity transmitted and distributed
by the State’s investor-owned utilities. The New
York Energy $martsm program is being
implemented in those utility territories.




                                                    STEP Master Plan                              Page 2
                                                           East Campus
Primary STEP Partners                                          The University is redeveloping, as East
    STEP is a joint initiative of NYSERDA, its             Campus, the former Sterling Winthrop complex in
owner and lead sponsor, with two primary                   East Greenbush. It is a mixed-use site, focused
partners— the University at Albany—SUNY (the               on University and private activity, primarily in
University) and Saratoga Economic Development              biotech, chemicals, and telecommunications.
Corporation (SEDC).
                                                           Albany NanoTech
The University at Albany (SUNY)                                Within the University, Albany NanoTech is a
                                                           comprehensive mix of programs, strategies,
                                                           relationships, and facilities that establishes the
                                                           University and the Capital Region as one of the
                                                           world’s premier concentrations of knowledge in
                                                           nanoscience and technology, including materials
                                                           and engineering, and their applications. Albany
                                                           NanoTech has the potential, one day, to become
                                                           recognized as the world’s premier knowledge
The University at Albany has three campuses: Uptown
(Main) Campus, Downtown Campus, and East Campus.           center in these disciplines.
                                                               Albany NanoTech supports the semiconductor
Overview                                                   industry in technology development for short-,
    The institution that is today the University at        medium-, and long-term development through
Albany—State University of New York (the                   partnerships with
University) was established originally in 1844.            International
                                                           SEMATECH
    In 1962, it was designated as one of four              (ISMT), the Focus
major University Centers in the SUNY system.               Center programs,
The University today is comprised of nine schools          and other
and colleges, with numerous specialized                    programs funded
research, policy, and service centers/institutes.          by the
                                                            Semiconductor         Class 10 clean room occupied
                                                            Industry              with 200 mm wafer metrology
                                                                                              tools
                                                            Association (SIA).
                                                                Two broad areas of common interest
                                                            between NYSERDA/STEP and Albany NanoTech
                                                            are alternative energy sources and reduced
                                                            energy consumption.
                                                                Because nanotechnologies will lead to new
                                                           energy industry sectors, there is an important and
                             New Science Library           natural synergy of interests. In one version of a
                                                           long-term vision, while Albany NanoTech
    The University serves more than 17,000                 currently houses all life-cycle activities in its fields
diverse students in 53 undergraduate, 84 master’s          of technology, it might one day grow such that it
and 39 doctoral programs. The University                   would need to constrain activities in its campus to
employs 4,600+ employees. Of these, there are              R&D, with downstream manufacturing and
more than 600 full-time faculty and about 350              services companies located at STEP, Luther
part-time faculty.                                         Forest Technology Campus, and elsewhere.
     The University has many organized research            CESTM Campus
centers and institutes, and its total research                The Center for Environmental Sciences and
expenditures in FY2001 were $70 million, up from           Technology Management (CESTM) is the physical
about $43 million in FY1994. The University’s              campus site of Albany NanoTech activities.
National Science Foundation (NSF) research rank
is 124 of 601 listed institutions.



                                                      STEP Master Plan                                  Page 3
     New York State and International
Semiconductor Manufacturing Technology
(International SEMATECH), the 12-member global
consortium of major computer chip manufacturers,
are building a $400 million, next-generation 300-
mm research and development center, in
collaboration with Albany NanoTech, on the
CESTM campus. Investment will include
approximately $210 million from New York State
and $193 million from IBM and other International
SEMATECH member firms.1

One-Stop Model
     Atypical for an academic vision, the vision for
Albany NanoTech is not only to be a globally
distinguished center of research in nanoscience
                                                                              Saratoga Springs is known, among
and nanotechnology, but also to create a unified,                              other things, for its horse races.
comprehensive, and “one-stop” model from basic
research to company growth and new product
                                                                           SEDC typically works with partner
development. Elements of the Albany NanoTech                          organizations to support the needs of its clients,
strategy thus include:
                                                                      and strongly believes that partnerships contribute
     ∇ Research and Development                                       to strong economic growth in the Capital Region.
     ∇ Technology Development                                             SEDC is developer of the much larger
     ∇ Commercialization                                              property called Luther Forest Technology Campus
                                                                      (LFTC), adjacent to STEP. A brief description of
     ∇ Business Development                                           plans for LFTC is provided in the chapter on
     ∇ Education and Work Force Training.                             Market Strategy and in Exhibit 3.

Saratoga Economic Development
Corporation (SEDC)
    SEDC is a private, non-profit consulting firm,
established in 1978, and is the regional economic
development entity for Saratoga County, New
York, in which STEP is located. SEDC services
aimed at helping businesses to locate or expand
in Saratoga County include:
     ∇ “World Class” Proposals
     ∇ Building and Site Location Inventory
     ∇ Financial Services
     ∇ Small Business Assistance
     ∇ Community Economic Development
     ∇ Customized Training Programs
     ∇ Labor Market Analysis
     ∇ Geographic Information Systems.

1
  The International SEMATECH (Semiconductor Manufacturing
Technology) research and development consortium includes: US firms:
IBM, Intel, Motorola, Hewlett-Packard, Texas Instruments, Advanced          Figure 1: Saratoga County’s location/access
Micro Devices, Agere Systems (Lucent); European firms: Philips                              advantages
(Netherlands), Infineon Technologies (Germany), and
STMicroelectronics (France); and Asian firms: Hynix (Korea), TSMC
(Taiwan).




                                                                 STEP Master Plan                                   Page 4
Other Important Relationships                                ∇ Center for Indoor Environmental
                                                                Quality, Syracuse University
Town of Malta                                                ∇ Lighting Research Center,
    The Town of Malta also is an important                      Renssalaer Polytechnic Institute
partner for land planning, development, and                  ∇ Materials and Particles CAT,
neighbor relations.                                             Clarkson University
     Although it was settled in the late 18th century,       ∇ Laser Fusion Center, University of
the Town was established officially in 1802, when               Rochester
it became separate from the adjacent Town of
                                                             ∇ Cooperative Extension Service and
Stillwater. Today, Malta is a charming residential,
                                                                Agricultural Efficiency and Biogas
                                                                Programs, Cornell University
                                                             ∇ Ceramics and Whitewares CAT and
                                                                 the Center for Environmental and
                                                                 Energy Research, Alfred University
                                                             In addition to these specific centers of
                                                         excellence, many of these universities have
                                                         incubators or research parks.

                                                         Economic Development Strategy and
                                                         Marketing Partners
                                                             While NYSERDA will lead and carry out its
               Gazebo, Town of Malta                     own marketing strategy for STEP, it has many
family-oriented community in the center of               partners in marketing the Capital Region, other
Saratoga County that calls itself “The Center of         local sites, and New York State.
the Universe.” The Town Board has adopted a
                                                            Other partners in regional marketing and
comprehensive plan that includes provisions for
                                                         economic development include the Albany
development of the STEP site.
                                                         Regional Chamber of Commerce, the Albany
                                                         County Partnership, the Center for Economic
R&D and Incubation Resources                             Growth, and the Malta Chamber of Commerce.
    Aside from CESTM’s energy-related interests,
the University at Albany’s development of a                  Incentive programs available are summarized
biotech and other technology focus at the East           briefly in the chapter on Market Strategy.
Campus is an important and growing resource.
    NYSERDA’s relationships in New York
encompass most other universities and Centers of
Advanced Technology (CAT) in the State.                                 City of Albany Skyline

Several of these are engaged in R&D programs,
incubator programs, or technology parks that
focus on science and technology disciplines
related to energy and the environment.
     Thus, for purposes of STEP development, it
may be said that virtually all centers of knowledge
in the State, including universities and colleges,
CATs, industry organizations, and incubators, are
potential resources or potential “partners” for
STEP. Examples of relevant programs include:
    ∇ Remanufacturing Center, Rochester
       Institute of Technology

                                                                State Capitol Building, Albany, New York




                                                    STEP Master Plan                                Page 5
2—SARATOGA TECHNOLOGY +
ENERGY PARK
    Chapter 2 provides a review of the STEP
concept, STEP purposes, and a brief summary of
planning activity status.

The Rationale
Energy and the Environment—A
World Challenge and National
Strategic Priority
    Energy and the environment are industry
clusters that will dominate the world economy for
the foreseeable future, and energy already is a
major focus of attention for industry, investors,            Satellite map of North America during the recent
                                                            Northeast US/Canada energy black-out. New York
and public policymakers.                                               State is among the “missing.”

    Terrorism events such as September 11,
continuing turmoil in the Middle East, the               The Concept
California energy crisis, major energy industry
reorganization, and the recent Northeast                    In August, 2001, Governor George Pataki
US/Canada black-out are only some of the factors         announced the creation of Saratoga Technology +
making energy and its relationship to sustainable        Energy Park (STEP).
environment and national security issues a                                                     The 280-acre
complex and urgent national strategic priority.                                           property, in Malta,
                                                                                          New York, has
Energy—A New York State Priority                                                          been owned by
    National priorities and industry statistics                                           NYSERDA for
indicate significant opportunities to retain,                                             nearly 40 years,
enhance, and create energy-related industry                                               and will be the first
segments, companies, and jobs in New York                                                 technology park
State.                                                                                    designated and
                                                                                          designed
    The State’s clean-energy technology sector                                            exclusively for
grew by 134% in 2000, and is projected to grow                                            research,
from $7 billion per year to about $82 billion per         Governor Pataki and U-Albany    development, and
year by 2010. New York State, already home to               President Karen Hitchcock     light manufacturing
more than 20 leading energy-technology                   of clean-energy products and processes.
companies, is well suited to take advantage of                STEP is conceived as much more than a real
rapid national and international industry growth.        estate development. It will be an energy and
     This sector represents not only an important        environmentally focused knowledge community.
economic development opportunity for New York,           It also will be a comprehensive knowledge-based
but is essential because of the State’s extensive        economic development strategy that takes
natural resources requiring protective stewardship       advantage of the expertise of NYSERDA and its
and the State’s enormous customer base and               clients and partners, to add value beyond the
demand for energy.                                       facilities—in relationships, technology
                                                         development services, and business funding.




                                                    STEP Master Plan                                Page 6
                                                             Along with other technology-focused initiatives
The Vision                                              in the Capital Region and the direct activities and
     STEP and the Capital Region will become            development projects of NYSERDA’s partners,
known internationally as a knowledge community          STEP bears the promise of being one among the
centered on niches of expertise in clean energy         major factors for emergence of the Capital Region
and environmental technologies—including an             as a strong, growth economy in the next decades.
important focus on transformational and enabling        It has been estimated that STEP will provide
technologies. By becoming known as one of a             between 1,000 and 1,500 jobs to the Capital
few business destinations-of-choice in the world        Region, as emerging environmentally friendly
for growing companies and products in these             energy companies take advantage of its
fields, STEP will be instrumental in enacting           resources. In addition, STEP will be among the
NYSERDA’s economic development mission for              strategies that focuses global attention on the
the Capital Region and New York State.                  Capital Region and New York State as the best
                                                        destination in the US, or in the world, for clean-
                                                        energy technologies and environmental research
                                                        companies.
                                                             The planned development of STEP not only
                                                        supports NYSERDA’s own mission, but more
                          +
                   ENABLING
                 TECHNOLOGIES                           broadly supports Governor Pataki’s Renewable
  ENERGY                              ENVIRONMENT       Energy Initiative (REI), designed to attract to New
                                                        York, companies that manufacture renewable
                                                        technologies such as wind energy, photovoltaics,
                                                        and fuel cells. STEP is poised to accommodate
                                                        emerging clean-energy technology companies
                    ECONOMIC                            that would grow at STEP and potentially expand
                  DEVELOPMENT                           or generate related business investment
                                                        elsewhere in the Capital Region and in other parts
                                                        of the State.
     Figure 2: NYSERDA and STEP Vision/Mission

The Goals
    Within this vision, there are four important
broad goals for STEP to pursue:
    ∇ STEP Companies. Directly and
       materially advance the success and
       growth of companies located in STEP
    ∇ STEP Partners. Support special focus
       on energy applications of
       nanotechnologies, thus aiding the
       growth and success of Albany
       NanoTech, and support SEDC in
       economic development and its
       development of LFTC                                        Figure 3: NY Empire Zones Regions.
    ∇ Capital Region. Be one important                     STEP is intended to have impact beyond the Capital
                                                                Region, to benefit all of New York State.
       component in the broader growth of
       energy and environmental industries
       in the Capital Region
    ∇ New York State. Contribute directly
       and indirectly to overall growth and
       success of energy and environmental
       industry segments throughout New
       York State.


                                                   STEP Master Plan                                Page 7
                                                                 ∇ Building Performance Institute, Inc.
Status of STEP Activities                                           is primarily in the business of
    As of the summer 2003, many planning                            residential energy efficiency, including
activities have been accomplished or are                            certification of contractors. BPI may
underway.                                                           be expanding into photovoltaics and
                                                                    multifamily housing.
Partnership Development                                          ∇ Global Resource Options is a full-
    NYSERDA has been working for several                            service renewable energy design,
years with SEDC and the University to develop                       sales, installation and service firm.
the STEP concept and the terms and elements of
                                                                 ∇ North American Board of Certified
the partner activities, as well as to coordinate land
                                                                    Energy Practitioners is working to
plan elements of STEP with planning for LFTC.
                                                                    develop national standards and
    NYSERDA has been working with consultants                       certification for renewable energy
to provide business services to its contractors and                 professionals.
incentives to attract companies to STEP.

Marketing and Early Tenants
    NYSERDA staff has begun substantial
promotion efforts and has been working with
numerous prospect companies that already have
expressed interest in locating at STEP. Early
marketing efforts have focused on tenants for the
existing 22,000 SF facility. Much of the interest
thus far has been in bench-scale
commercialization activities.

                                                                    NYSERDA, SEDC, and Starfire Systems, Inc.
                                                                         Personnel at the STEP Facility


                                                             Master Plan and Regulatory
                                                             Processes
                                                                  NYSERDA’s many early planning activities to
                                                             date have resulted in this Master Plan which is
                                                             intended to provide a framework for ongoing
                                                             tactical and technical planning and for
                                                             development implementation.
 Existing facility at STEP has housed various energy-            The Master Plan was prepared under the
  related R&D programs for decades, and currently
              houses early STEP tenants.                     direction of NYSERDA staff by IDEA Partnerships,
                                                             LLC, with Perkins & Will and The Saratoga
                                                             Associates. (Exhibit 1 provides a list of planning
     As this Master Plan was being prepared, there           participants.)
already are a number of active tenant prospects
and there are four tenants in the existing STEP                 NYSERDA and its legal counsel, Harris
facility:                                                    Beach, are working through regulatory processes:

    ∇ Starfire Systems, Inc. is developing                       ∇ Coordinating with the Town of Malta’s
       advanced ceramic-forming polymers                            comprehensive plan and zoning
       and technology with the potential to                      ∇ Working on compliance with the State
       meet advanced materials needs for                           Environmental Quality Review
       the next generation of defense                              (SEQR) Act.
       weapons and retrofit of existing
                                                                 ∇ Conducting traffic studies and related
       systems for current military and
                                                                    site technical studies.
       homeland security applications.



                                                        STEP Master Plan                               Page 8
3—GOVERNANCE AND                                           The Strategy
DEVELOPMENT STRATEGY                                            For early stages of development, NYSERDA
                                                           will carry out direct development, acting as owner,
    Chapter 3 outlines NYSERDA’s decisions                 lead sponsor, and developer of STEP. The
about ownership, governance, and development               concept of a controlled affiliate remains under
strategy.                                                  consideration, as it brings certain advantages that
                                                           may become important in the future.
Alternatives Considered                                         It is NYSERDA’s intention, and strong
     In preparation of this Master Plan, NYSERDA,          preference, to develop STEP via ground leases,
its consultants, and legal counsel reviewed                not via sales of property. However, NYSERDA
alternatives for governance/ownership and for              will consider sale of land on a case-by-case basis.
development strategy, to ensure that NYSERDA
would reach an informed conclusion about its               Potential Private Development
strategy for STEP.
                                                           Partners
    Alternatives reviewed were:
                                                               As STEP developer, NYSERDA expects to
    ∇ Direct development by NYSERDA                        contract with private developers for some or all
    ∇ Engagement of a private developer on                 development. The present concept is to engage a
       a project-by-project basis                          private development partner for development of
                                                           the first neighborhood/cluster.
    ∇ Engagement of a private master
       developer, with master lease and                         If/as NYSERDA decides to engage private
       carefully constructed business terms                development partners, formal contracts will be
                                                           developed to codify terms of such relationships.
    ∇ Indirect development by NYSERDA via
                                                           The form and content of such contractual
       a NYSERDA-formed special-purpose
                                                           agreements would vary, depending on whether a
       corporation or controlled affiliate:
                                                           long-term or project-specific relationship is
            Without any private development                developed. In either case, a ground lease
            partners                                       instrument also will be involved.
            With various private development
            partners (based on the nature of
            projects)
            With a private master development
            partner (long-term, per above).

Decision Criteria
    To evaluate the alternatives, decision criteria
were established. Development/governance
strategies were considered for their effects on:
    ∇ Advantages in furtherance of
       NYSERDA’s goals and objectives for
       STEP
    ∇ Isolation of development risk
    ∇ Access to financing
    ∇ Access to development expertise
    ∇ Ease of permitting.




                                                      STEP Master Plan                              Page 9
                                                         or incubation services, to desire to be in the
4—MARKET STRATEGY                                        capital region, to convenient highway/airport
    Chapter 4 summarizes elements of the market          access. The dominant reason given for current
analysis and outlines market strategy. More              location was cost of space and utilities.
detailed information is contained in exhibits.               Of the 16 companies interviewed, 14 indicated
                                                         that they plan to expand in the near future (in 1 to
Inputs for Market Strategy                               3 years). Dominant factors in the location
   Input factors that were considered, to shape a        decision process will include:
comprehensive STEP market strategy included:                 ∇ Proximity to university resources
    ∇ NYSERDA’s history, culture, and                        ∇ Cost of facilities
       specific technical programs                           ∇ Flexibility of space
    ∇ NYSERDA’s vision and goals for STEP                    ∇ Fit-up amenities.
       and synergies with other NYSERDA
       goals                                                 When companies were asked about desirable
                                                         STEP design and location features, the dominant
    ∇ Resources of and relationships with                responses included:
       primary partners
                                                             ∇ Shared specialized common space
    ∇ STEP site and location factors
                                                                (conference rooms, labs and
    ∇ General experience of the IDEA                            equipment etc.)
       Partnerships team (other tech parks)
                                                             ∇ High quality of life
     ∇ Specific market analysis findings.
                                                             ∇ Quality of a STEP address
     Specific market analysis tasks performed for
this Master Plan included:                                   ∇ High-speed Internet access
                                                             ∇ On-site technical assistance or
    ∇ Industry market survey (telephone)                        NYSERDA representation.
    ∇ NYSERDA’s ongoing information-                         Two positive elements of the findings were
       gathering with company prospects                  that:
    ∇ Visits to local tech park competitors
                                                             ∇ A substantial percentage of these
    ∇ Information from commercial brokers.                      companies expressed plans to
                                                                expand or relocate in the near future
Market Analysis Summary                                      ∇ Their interest in NYSERDA (and thus
Industry Survey                                                  in STEP) is high.
     To gather baseline information on company               Of some concern is the emphasis of
interest in the STEP site and to determine               respondents on low cost, combined with their
requirements of companies that represent                 emphasis on high levels of benefits and
potential tenants, a survey of selected companies        amenities. (See Exhibit 2 for survey participants
in the region was undertaken.                            and more detailed information on responses.)
    NYSERDA staff selected the companies for             Competitive Properties—Specific
the survey. Most were small firms with fewer than
25 employees. Most were in the business of               Technology Sites
manufacturing electronic products or energy
related devices.                                         National/International Competition
                                                             In a sense, STEP will be competing with many
     In nearly all cases, the current locations of the   hundreds of US and foreign technology and
companies surveyed were close to the residence           research parks. Primary competition will include
of the founder and/or in proximity to the mother         technology parks and business locations in
company from which the firm originated. Reasons          several regions worldwide that have prominence
given for current locations varied from the              in energy industries.
smallest of firms operating from the
entrepreneur’s home, to proximity to a university



                                                    STEP Master Plan                               Page 10
Regional Sites
    For this Master Plan, a limited assessment of
local properties was undertaken to inform the
market strategy. Following is a brief summary of
local property-based ventures that target or will
target technology companies.

Partner Sites—Collaboration, Not Competition
    Three of the sites—The University at Albany’s
East Campus, CESTM, and LFTC—are
developments of NYSERDA’s partners in STEP.
These four developments together thus offer an                  Figure 4: The University at Albany’s East Campus
extraordinary opportunity for joint marketing of             includes the School of Public Health, an incubator, and
                                                                          significant research facilities.
technology sites and services in the Capital
Region. In a concerted marketing program,                     In accommodating the University's public
prospects can be offered a series of business             health, telecommunications, and related scientific
locations, a wide range of occupancy options, and         and high-tech resources, the East Campus will
related features, services, and amenities.                enable University researchers to seek solutions to
                                                          the challenges that face the Capital Region, New
Center for Environmental Sciences and                     York State, and the nation.
Technology Management (CESTM)
    The Center for Environmental Sciences and             Luther Forest Technology Campus
Technology Management (CESTM) is the physical                  Luther Forest Technology Campus (LFTC) is
location at the University for many of the                a 1,350-acre forested site that completely
academic and industry partner facilities generated        surrounds the STEP site. Its development is
by Albany NanoTech programs. The CESTM                    being planned and undertaken by SEDC,
campus includes significant R&D facilities and            NYSERDA’s partner in STEP. Many elements of
incubation space.                                         infrastructure development are being planned in
                                                          coordination for the two sites, which are expected
                                                          to generate market synergies.
                                                              Of great advantage and interest is the fact
                                                          that the Semiconductor Industry Association (SIA)
                                                          recently identified LFTC as the best place in the
                                                          world for location of chip fab facilities.
     Albany NanoTech complex with Business
Incubator/Technology Accelerator on left, 300 mm
wafer R&D fabrication in center and existing 200mm
           wafer R&D facility on right.


The University at Albany East Campus
    Located at the former Sterling Winthrop
complex in East Greenbush, New York, the
University at Albany's East Campus brings
together modern office space and high-tech
laboratories in a venue that maximizes the Capital
Region's research and development strengths.
    The facility's mixed-purpose buildings provide
an interactive, dynamic environment for uniting
the University's educational, scientific, and
economic development capabilities with those of
industry and other research institutions.




                                                                          Figure 5: LFTC Land Plan


                                                     STEP Master Plan                                  Page 11
 Rensselaer Technology Park
    RensselaerTech Park (RTP) represents able
                                                          Regional Real Estate Market
 and immediate                                            Anecdotal/Informal Information
 competition for STEP.                                        Based on conversations with local commercial
                                                          broker sources, business sites in Albany recently
      With 200 acres                                      were experiencing an overall vacancy rate as high
 remaining to build out                                   as 15%, whereas the “normal” vacancy is 5%. As
 and some immediately                                     the market has been weak, and specifically due to
 available space (at 90%                                  the vacancy rates, new class A office space that
 occupancy), RTP                                          should be renting for $15.00 to $16.00 triple net
 represents a mature                                      per RSF, has been renting recently for as low as
 tech park with a high level of existing activity that    $10.00 per RSF. Industrial space typically has
 will be a serious option for companies considering       been renting at $4.00 to $6.00 triple net per RSF,
 STEP as a business destination.                          and has been as low as $3.00.
     RTP’s multi-tenant buildings are one-story,              In Saratoga County, the commercial market
 steel frame with flexible interiors (24 SF x 36 SF       mirrors that of the City of Albany. In Malta, the
 bays). Rents for this “good Class B” space are in        market for commercial office space is dominated
 the range of $10.00 to $12.00 per Rentable SF            by one major user, the State Farm Insurance
 (RSF). The Park’s Director believes that the             complex on Route 67, approximately 2 miles west
 region is nearing saturation for incubator facilities,   of STEP.
 with the exception of expanding activity in
 nanotech and biotech commercialization.                  Capital Region Summary—Industrial Market2
                                                               Overall, industrial vacancy for the entire
 Harriman State Office Campus                             Capital Region increased from 8.7% in 2001 to
     This is a large redevelopment site in Albany         11.5% in the1st quarter of 2003. The increase
 that will be available due to relocation of state        reflects the national vacancy average of 11.5%
 government offices. A significant focus will be          (as of 4th quarter, 2002).
 R&D companies, but not necessarily those
 focused on energy and environmental                          Available inventory increased to 6.7 million SF
 technologies. The competitive advantage of the           in January 2003. The class A, B and C vacancy
 Harriman campus site, when it goes into active           rate increased to 11.5%, up from 9% during spring
 development, is its excellent urban location in          2002. Lease rates for Class A industrial space
 Albany, including adjacency to the University.           average $4.00 to $6.00 per SF. Improved land
                                                          prices along the I-90 and I-87 intersection area
                                                          averaged $60,000 to $65,000 per acre.
                                                              Occupancy within the I-90/I-87 corridor
                                                          remains stable despite the overall vacancy
                                                          upswing. A growing number of companies have
                                                          discovered that these outlying areas (relative to
                                                          the Albany urban market) are both cost-effective
                                                          and strategically positioned for overnight access
                                                          to major Northeast US/Canadian population
                                                          center




In planning now, the Harriman State Office Campus
 will be redeveloped as a mixed-use business site.


   Exhibit 3 contains more information about these
 regional sites.
                                                          2
                                                              CB Richard Ellis, Market Index Brief, Mid-Year, 2003




                                                     STEP Master Plan                                                Page 12
                                                                     Four Building Blocks of Market
                                                                     Strategy


                                                                         4 Building Blocks of Market Strategy
                                                                             1. Target Industry Segments
                                                                                                              INTEGRATED

                                                                                         +                      MARKET
                                                                                                               STRATEGY
            State Farm Insurance is the largest office use in               2. Company Life Cycle/Stage
                                                                                                              Identity & Image
            Malta, and the company has downsized recently.
                                                                                                            Ties with NYSERDA
                                                                                         +
                                                                                                                Programs
Capital Region Summary—Office Market3
                                                                             3. U-Albany & Other Partner    Marketing Materials
     In October 2002, suburban office vacancy
swelled to an all-time high of 12%. Since, then,                                    Relationships          Outreach/Sales Tactics
the vacancy rate has moderated slightly, to 10.3%                                                            Pricing/Packaging
in the suburban market and 8% in the Albany                                              +
                                                                                                            Prospect Cultivation
Central Business District (CBD). Absorption has
                                                                               4. Real Estate Factors
been light and there has been virtually no new
construction added to the existing market. The
typical user profile has been small- to medium-
sized (2,000 to 5,000 SF) tenants.
                                                                         Figure 6: Four Components of Market Strategy
    As of spring 2003, available inventory in the
Albany CBD was 492,000 SF. The suburban                                 For each of these four building blocks, the
available office market inventory was 1.3 million                    STEP strategies are as follows:
SF, of a total inventory of 12.9 million SF.
                                                                     By Target Industry Segments
     The range of asking lease rates for class “A”                       Within the general focus of STEP on new
office space in suburban areas currently is from                     clean-energy and environmental technologies,
$15.25/SF to $20.50/SF. In the Albany CBD, the                       specific segments for targeted marketing will be:
range is $19.00/SF to $22.50/SF.
                                                                         ∇ Energy applications of advanced
     According to the most recent available CB
                                                                            materials/nanotechnology
Richard Ellis data, the Albany CBD vacancy rate
for the immediately ended quarter is down to 8%                          ∇ Alternative energy sources
and the suburban market is down slightly to                              ∇ Energy power/electronics
10.3%.                                                                   ∇ Energy deployment programs
    New construction in office and industrial                            ∇ Advanced energy products
space markets is relatively non-existent. While
                                                                         ∇ Transportation technologies
there are projects “on the drawing boards,” there
is no new construction underway in the regional                          ∇ Renewable energy
market place.                                                               technology/products
                                                                         ∇ Environmental technologies.

                                                                     By Company Life Cycle/Stage of
                                                                     Development
                                                                          All market analysis information suggests the
                                                                     idea that STEP’s best niche in the market place
                                                                     will be for early growth stage companies, from
3
    Ibid.
                                                                     bench-scale R&D to manufacturing scale-up



                                                                STEP Master Plan                                  Page 13
activities. Therefore, by stage of company                         the traditional “below market” lease
development, the market strategy will emphasize                    rates offered by older incubators
these stages, but not entirely to the exclusion of             ∇ Range of technology and business
other stages of company/product maturity. The                     support services provide by
life cycle strategy is as follows:                                NYSERDA, NYSERDA’s partners,
                                                                  and other consultants.
Growth Stage—Major Focus
    As STEP’s major market strategy focus will be
on scale-up and growth stages of companies or
                                                           By Partnership Relationships
products, in a sense, all of STEP will be                  University at Albany/Albany NanoTech
conceptually an “accelerator.” Strategy elements               The University at Albany and, in particular, its
are to:                                                    Albany NanoTech, are effectively NYSERDA’s
                                                           lead partner for science, technology, and
    ∇ Identify such companies or products                  commercialization activities relating to STEP.
       via NYSERDA R&D grant programs
       and other company relationships                        Elements of the partnership between
                                                           NYSERDA and the University and Albany
    ∇ Collaborate directly with U-Albany and               NanoTech will include the following.
       Albany NanoTech to capture growth
       of energy-related companies that                        ∇ To the degree feasible, some
       locate initially in the CESTM campus                       NYSERDA program funding will be
       and outgrow their stay there                               focused toward STEP and CESTM
    ∇ Partner with NY State CAT centers,                          companies.
       universities and incubator programs                     ∇ NYSERDA and Albany NanoTech will
       to identify growing companies in their                     be partners to raise funds for common
       sites that, by their business focus,                       use development (e.g., scale-up or
       would be suitable relocation or                            demonstration) facilities at STEP (see
       expansion candidates for STEP.                             next bullet).
Mature Companies—Small to Medium Scale                         ∇ The partners will coordinate certain
     STEP also will accommodate a more limited                    marketing materials, message, &
focus on mature companies/products, although                      outreach to non-NY State prospects
this will not include very large-scale plants.                 ∇ NYSERDA, the East Campus, and
                                                                  Albany NanoTech can develop a
    ∇ Ideally, STEP will be in a middle
                                                                  “business-development-without-walls”
       position between early-stage sites
                                                                  partnership—each providing support
       (Albany NanoTech and other
                                                                  to the other’s client companies in:
       incubators) and sites for mature users
       (LFTC).                                                         Technology development
    ∇ Ideally, STEP will succeed in growing                            Business development and financing
       some companies from scale-up stage                              Product marketing.
       to larger enterprises that are suitable
                                                           SEDC and LFTC
       for relocation and expansion into
                                                               SEDC is effectively NYSERDA’s economic
       LFTC.
                                                           development marketing, business services, and
Start-Ups and Incubation Strategy                          outreach partner for STEP. In addition,
    The STEP market strategy will include a                NYSERDA and SEDC are partners in some land
moderate to limited focus on true start-up or very         and infrastructure relationships.
early-stage companies (partially in collaboration
                                                               Elements of the partnerships strategies
with Albany NanoTech).
                                                           related to market strategy are:
    There may or not be a specific facility that is
considered an incubator, per se. Instead, the                  ∇ The partners will coordinate message
incubation strategy at STEP will consist of:                      and materials for marketing,
                                                                  particularly for out-of-state prospects.
    ∇ Normal or “market” or achievable lease                   ∇ The partners will cross-market, to be
       rates for leased space—rather than                         able to offer prospects an


                                                      STEP Master Plan                               Page 14
        unparalleled range of business                    therefore, will need to include, as much as
        location options.                                 possible, such shared spaces as:
Other New York State Universities/Training                    ∇ Conference rooms/training space
Centers/CAT Centers and Incubators                            ∇ Capacity for exhibit/showcase space
    All the other knowledge institutions and
specialized R&D centers in the State are                      ∇ Shared business and A/V equipment
potentially marketing partners in several ways.               ∇ Food service & amenities.
    ∇ Selected partnering in fundraising and              Desired Building Features
       development of collaborative centers                     Based on market evidence, which indicates
       or institutes                                      that prospects seek more than generic space, the
    ∇ Shared global marketing activities—                 initial STEP facilities that are built speculatively
       focused on New York State and                      will need to include special capabilities such as:
       growth of its energy and                               ∇ Loading dock
       environmental technology industry
                                                              ∇ Gases and special air handling
       segments
                                                              ∇ Extensive or redundant electrical
    ∇ Captured growth from other incubators
                                                                 capacity
       of energy-related companies in a
       manner not threatening to the                          ∇ Broadband connectivity.
       success of these partners                          High-Tech Look and Adirondack Heritage
    ∇ Work force development partnerships.                     In addition, for the market strategy, some
                                                          consideration needs to be given to the “look” of
By Real Estate Factors                                    facilities in expressing a “high tech” place. In the
Achieving “High Value”                                    opinion of Albany NanoTech’s leadership, this is
    All real estate factors in the market strategy        an important factor in attracting partners to
are functions of what the market perceives the            CESTM: The buildings at the CESTM campus
product to be in relation to cost or value and            consciously express high tech in their design.
market comparables.                                            At the same time, there are good reasons to
    Increasingly, the market is learning to assess        reflect the STEP site’s Adirondack heritage in
location options based on value, rather than cost,        building design. It will take some creativity to
where value represents the relationship between           address these two design themes in STEP
what total benefits you get for the rent you pay.         facilities.
    STEP facilities will be designed to achieve           Sustainable Facilities Design
high-value. They will need to be moderate in cost,            There was some evidence that facilities
not sumptuous in finish, but well-provided with           designed as green or sustainable are of interest to
functional features and space flexibility. Very           the market, although it is not clear that the market
importantly, STEP will prove value not only with          would pay considerably more in rent for those
several of these real estate factors, but also by         features. Market response aside, it is an
the services and relationships that add value to a        important cultural element and objective for
STEP location.                                            NYSERDA to demonstrate leadership in energy
                                                          and environmental strategies in the physical
Shared Facilities—Market Emphasis on Multi-               development of STEP.
Tenant Buildings
    The market analysis confirmed that availability             As there are no comparable green properties,
of shared facilities in multi-tenant buildings, a         it is not possible to predict market response. In
feature in competitive technology parks, is               fact, NYSERDA may find that its market is willing
considered very important by prospects. This              to pay premiums for the special character of the
confirms that much of STEP’s build-out should be          site. However, for mission reasons, in the event
geared to flexible multi-tenant buildings, with a         that market response to the costs involved in
mix of office, lab, and high-bay space for testing,       sustainable design is negative, NYSERDA will
prototype development, and light manufacturing.           consider ways to fund the required cost
Speculative multi-tenant facilities in STEP,



                                                     STEP Master Plan                               Page 15
premiums, and will benefit in the long run from            Malta/Saratoga County Empire Zone.
operating savings.                                     Approximately 29 acres of Saratoga County’s
                                                       Empire Zone in Malta are within the STEP site,
A Focused, Purposeful Business Community               generally surrounding the existing facility, and
in a Unique “Green” Experimental Site                  within the first neighborhood planned for
     Beyond the market value of green buildings        development. Empire Zones can be revised
that meet LEEDStm requirements, the STEP               annually; they will be revised to ensure that the
market strategy should position the entire             Zones fit the Land Plan and development phasing.
development as a truly unique experimental green
site, including enacting cutting-edge ideas. Thus,
STEP will be a living laboratory for testing and
showcasing, on a large scale and in a live
development project, new ideas in energy
efficiency and environmental sustainability, e.g.,
    ∇ Atypical treatments of energy systems
       for the site and its buildings
    ∇ Self-generation of power
    ∇ Experimental systems for re-using gray
       water in the site
    ∇ Innovative solutions to storm water.
Lease Rates and Occupancy Costs
     Lease rates and total occupancy costs will be
driven largely by construction, financing, and
operating costs. Public subsidies usually are
required in the first few buildings in a new
technology park, to bring down lease rates.
                                                                Figure 7: Empire Zones in Malta
Eventually, when the Park has momentum and
value is more apparent to prospects, lease rates
typically can be higher. In effect, the Park creates        Thus, benefits of locating in an Empire Zone
its own “market” levels of cost.                       will be available to some STEP companies. They
                                                       include:
    In the first several buildings (Phase 1 or
Neighborhood One), STEP should attempt to                  ∇ Sales Tax Exemptions, 10 years
achieve lease rates that are not too far above             ∇ Real Property Tax Credit, refunded
those of comparable properties, benchmarking                  against business taxes, based on
primarily to CESTM and RTP. This would mean                   increased employment, up to 10
that per RSF costs in the range of $10.00 to                  years
$15.00, for basic space, would be desirable.               ∇ Tax Reduction Credit
Incentives                                                 ∇ Wage Tax Credit, 5 years, for newly
    Synergy of STEP and NYSERDA Programs.                    created jobs
NYSERDA will use its R&D Program to recruit                ∇ EZ Investment Tax and Employment
companies for STEP and to help those companies                Incentives Credit, up to 19% of
develop and commercialize clean-energy                        eligible investment
technologies and products. NYSERDA will use its
                                                           ∇ New Business Refund, 50% cash
SBC programs, such as the New Construction
                                                              refund of unused EZ-WTC and ITC
Program, the Commercial/Industrial Performance
Contracting Program, and the Smart Equipment               ∇ Utility Rate Savings.
Choices Program, to provide further incentive for
companies to relocate to STEP. NYSERDA will
continue to use its contacts within the State to
forge public and private partnerships to help
leverage additional funds for investment.



                                                  STEP Master Plan                                Page 16
     Albany Regional Chamber of Commerce.                 ∇ Environmental Research.
Economic development programs administered by                Environmental Research and
the Albany Regional Chamber of Commerce                      Development (ESU) provides financial
include the following:                                       assistance for research, development
                                                             and demonstration projects for
   ∇ Entrepreneurial Assistance Center
                                                             pollution prevention in amounts up to
      Loan Fund (for fixed assets and
                                                             $200,000 for small companies.
      working capital, maximum loan is
      $25,000)                                            ∇ Small Tech Businesses. The Small
                                                             Business Technology Investment
   ∇ AL Tech Loan Fund (for working
                                                             Fund (SBTIF) provides venture capital
      capital, maximum loan is $300,000)
                                                             funding for high-tech companies.
   ∇ Al County/NY Business                                   Investments range from $50,000 to
      Development Corporation Loan                           $500,000
      Fund (for fixed assets and real
      estate, maximum loan is $100,000)               Summary—STEP Market Position
   ∇ Capital Business Assistance Fund                     By its focus on clean energy and
      (bank financing for mixed use,                  environmental technologies, STEP is a unique
      maximum is $230,000)                            business site, planned with true focus on
    ∇ SBA and SBA 504 (for capital                    industries that, if co-located, can create important
        equipment and working capital,                synergies that advance their individual business
        maximum SBA portion of loan is $1.3           success and stimulate growth of these industries
        million)                                      in New York.
    Other NY State Economic Development                   STEP is not only a real estate destination: It
Programs. Other incentives are available. Tax         also is a fully integrated knowledge community.
related programs include:
                                                          As its overall market position, STEP offers:
   ∇ Investment Tax Credit (ITC) provides
                                                          ∇ A 280-acre green laboratory for testing
      up to 5% for investments in
                                                             and showcasing innovations in clean-
      production equipment and property.
                                                             energy and environmental
   ∇ Research and Development Tax                            technologies
      Credit provides up to 9% corporate
                                                          ∇ A campus-like environment, designed
      tax credit for investment in research
                                                             to support communications and
      and development facilities.
                                                             interactions, and a sense of high-
   ∇ Sales Tax Exemptions are for                            energy
      purchase of production machinery
                                                          ∇ Multi-tenant buildings with flexible
      and equipment, research and
                                                             space and occupancy options at costs
      development property, or fuels/utilities
                                                             that represent high-value
      used in manufacturing and R&D.
                                                          ∇ Shared facilities for conferences,
   ∇ Real Property Tax Abatement is a10-
                                                             testing, and other activities
      year property tax abatement for
      expansion and improvement of                        ∇ State-of-the-art telecommunications
      commercial property.                                ∇ A high tech physical look and design
   Other programs include:                                   and/or an Adirondack heritage design
   ∇ Workforce Development. Training                      ∇ Access to programs, funding, and
     Assistance Funding for up to 50% of                     relationships of NYSERDA
     training costs including on-the-job-                 ∇ Access to technology
     training, consortia projects and small                  commercialization and science and
     business training.                                      technology resources of the
   ∇ Loan Discounts. The Linked Deposit                      University at Albany, including Albany
      Program is an assisted bank financing                  NanoTech and the East Campus
      up to $500,000 for small companies.



                                                 STEP Master Plan                                Page 17
∇ Access to the expertise, services,
   financing services of SEDC
∇ Empire Zone benefits, through the
   Town of Malta/Saratoga County, and
   other New York State business
   incentives
∇ An entry point into a network of NY
   State agencies, universities, and
   centers of excellence, as well as
   business-to-business relationships
   with innovating companies.




                                        STEP Master Plan   Page 18
5—LAND PLAN
    Chapter 5 summarizes the STEP land plan.

The Regional Context
    The 280-acre STEP site is located five miles
south of Saratoga Springs and 23 miles north of
Albany, in the Town of Malta, NY. The site is
essentially undeveloped, except for a road and
one building which has been in use for decades
as an R&D facility.
    The STEP site includes some of Saratoga
County’s Empire Zone areas that are within the
Town of Malta—about 29 acres surrounding the
existing building.
     STEP’s “region” is accessible from Route 87,
and a 30-minute drive from Albany’s airport. The
site is close to many tourism destinations like
Saratoga Springs.
                                                                Figure 8: The Regional Context for STEP



                                                        Planning Principles
                                                             The goal is to establish STEP as an
                                                        environment specifically designed to meet needs
                                                        of young, knowledge-based businesses. In
                                                        addition, STEP will demonstrate a comprehensive
                                                        array of sustainable design features, and ideally
                                                        will be itself a “laboratory” for sustainability.
                                                           The overall design principles embodied in the
                                                        Land Plan include:
            Aerial View of STEP Site                        ∇ Respect for the natural setting
                                                            ∇ Recognition of the Adirondack heritage
   Malta and the surrounding towns and areas of
Saratoga County are wonderful communities with              ∇ Creation of active and passive activity
convenient access and high quality of life.                    zones and recreation features
Saratoga Lake and many other recreational                   ∇ Establishment of common core
amenities are nearby.                                          facilities, including those for the
                                                               energy sector (electric generation,
    As Figure 8 shows, STEP is largely encircled
                                                               chilled water, steam, fuel storage
by the planned development site for LFTC. There
                                                               capacity) and those for the sanitary
are planned residential and other developments in
                                                               sector (potable water, gray water,
adjacent and nearby properties.
                                                               treatment and recycling)
                                                             ∇ Provision of a Knowledge Community
                                                                 Center featuring shared resources
                                                                 and incidental uses such as
                                                                 conference facilities, retail food, and
                                                                 day care, to serve the needs of the
                                                                 STEP tenants.
                                                             Sustainable design features utilized at STEP
                                                        will provide both a marketing feature and long-



                                                   STEP Master Plan                               Page 19
   term operational savings. Creation of a                features” on its outside edge. There are
   knowledge community will provide focus and             significant setbacks along all borders of the site
   momentum and a sense of place. The design of           except the contiguous border with LFTC where a
   STEP will help create a high-energy location           closer physical connection is desirable.
   where collaboration and shared resources will
                                                               A southwest portion of the site is established
   distinguish it from other potential locations.
                                                          as a more “public” zone including the existing
       A concentration of knowledge-based                 STEP facility and potential for two additional
   enterprises will form critical mass that will          buildings, the Knowledge Community Center and
   accelerate its growth.                                 a large open space. The public zone establishes
                                                          that section of the loop road as the visitor
   The Physical Plan                                      office/lab “light traffic zone.” It may be desirable
                                                          therefore to establish the northeast portions of the
       Figure 9 is the Land Plan overview.
                                                          neighborhoods as the preferred location for pilot
   Organization of the Site                               plant and scale-up facilities. This appears also to
                                                          coordinate with overall land use patterns at LFTC.
         The site is organized by a loop road which
   forms the boundary of the major building zones on
   its inside edge and open space and “public




The Land Plan for
STEP is
coordinated with
and
complementary
to the LFTC Land
Plan; however,
STEP has been
designed to be
able to proceed
completely
independently
from LFTC.




                                                    Figure 9: The Land Plan




                                                    STEP Master Plan                               Page 20
                                                          and to allow visitor entrance and turnarounds to
The Buildings                                             be provided to each neighborhood. While this is
Organization                                              not the most desirable orientation, it is acceptable
    There are five neighborhoods in the STEP              as the second most advantageous one.
Plan. Two of them—the existing STEP building
                                                              Additional buildings located adjacent to the
and two potential buildings and the Knowledge
                                                          existing building are oriented to form a
Community Center—are located in the public
                                                          relationship with the existing building; buildings in
zone. The other three neighborhoods are located
                                                          the Knowledge Community Center are aligned
within the loop road and represent the most
                                                          with the road.
significant portion of the development.
     The buildings are organized to create                Scale
identifiable places and outdoor courtyards that are            The buildings are clustered closely in order to
pleasant and that will induce pedestrian activity         form properly scaled outdoor “people places,” to
and informal meetings. All parking is located             achieve a campus-like visual impact, and to
between the neighborhoods and will be shared by           conserve a meaningful open space around each
all buildings, allowing parking efficiency and            neighborhood. Single-story to three-story
potential reduction in the total number of parking        buildings are assumed in the pro forma; however,
spaces. This will increase open space and                 it would be advantageous to build four-story
decrease runoff, an important feature in                  buildings. Multi-story buildings are desirable
sustainable design. Orientation of parking areas          because they offer more design opportunity,
is at 45° from most of the buildings, which helps to      achieve an effective scale to create memorable
define outdoor areas that are usable and                  neighborhoods, and conserve land and reduce
interesting.                                              coverage, important from a sustainable design
                                                          standpoint.
                                                              All buildings will be subject to design
                                                          guidelines, which should be established
                                                          concurrently with design of the initial buildings.
                                                          Scale, accessibility, use of design features and
                                                          materials that allow buildings to relate to one
                                                          another and the physical response to the
                                                          Adirondack heritage—as well as elements that
                                                          suggest “high tech,” if possible, will be among
                                                          important subjects in the design guidelines.
                                                              Buildings generally will range in size from
                                                          approximately 40,000 SF to approximately
                                                          100,000 SF, although some buildings will
                                                          undoubtedly be smaller and some larger. This
                                                          size/scale is appropriate for multi-tenant buildings
                                                          because this range represents both a minimum
                                                          size that is efficient to build and a size that
                                                          requires less time to lease up than significantly
                                                          larger buildings. Because these buildings are
         Figure 10: Typical Building Cluster              clustered into neighborhoods, they have a greater
                                                          impact than if they were isolated buildings, and
Orientation
                                                          there is the potential for companies to
    The buildings within the loop road are
                                                          conveniently expand in multiple buildings within
organized on a north-south axis with the short
                                                          the same neighborhood.
facades facing east-west and the long facades
facing north-south. This is the most                      Public Features
advantageous orientation for energy use and thus               It is important to create community facilities
contributes to sustainable design.                        for STEP tenants. These include shared common
    Several of the buildings are oriented with the        business facilities and convenience retail that
long façade facing northwest, to create interest          provide places to meet other STEP tenants and



                                                     STEP Master Plan                                Page 21
that create a sense of place. Conference                        It is assumed that natural gas and
facilities, as well as day care facilities, also are        telecommunications will be provided on-site from
common in knowledge-based communities. In                   existing services in the area. STEP will provide
addition to building a sense of community, such             centralized storm water control facilities and will
facilities limit use of automobiles, which is an            take advantage of new passive storm water
important feature of sustainable design.                    control features, to minimize run-off. The storm
                                                            water facilities will be phased, along with
The Site and Infrastructure                                 development of the various neighborhoods.
Common Core Facilities                                           Gray water irrigation will be provided as part
    Although significant feasibility analysis is            of the development of each neighborhood.
required, the STEP plan is designed to
accommodate on-site common core facilities.                 Roadways
These include provision of chilled water and                    Traffic and highway phasing is very important
steam, as well as the potential for electricity             and STEP has been designed to be flexible, to
generation. These facilities are organized within           proceed independently from LFTC, and to be
the “energy sector.”                                        coordinated with it.

     On-site common core facilities within the                  Based upon the Town of Malta’s traffic
“sanitary sector” might include potable water pre-          analysis, STEP can complete its build-out of
treatment, gray water irrigation, and wastewater            1,250,000 SF utilizing its current connection to
treatment and recycling. The location of the on-            Dunning Street, as shown in the Dunning Road
site common core facilities has not yet been                access graphic, Figure 11. The roadway system
determined.                                                 in STEP will be a closed loop.

Site Conditions
    There are several beautiful ravines and cuts in
the site which will be used as part of the site’s
recreational amenities. Topography and
vegetation generally are conducive to
development and there are few steep grades that
would impair development.
    As parking unfortunately will require
elimination of many trees, it will be important to
replace these trees, to re-oxygenate the
environment to the greatest extent possible, in
keeping with good sustainable design practices.
    A review of existing reports regarding STEP,
as well as comments in the LFTC’s generic
environmental impact statement, reveal no other
impacts upon development.

Utilities                                                              Figure 11: Dunning Road Access
      During the early phases of STEP                           It is also possible for STEP to connect to and
development, electricity will be provided through           integrate itself with the major highway
existing service in the area and will be distributed        improvements planned for LFTC, although
underground throughout STEP. Water will be                  additional design and coordination work will be
provided by a private source and a study should             required. In the event this occurs, it is possible,
be undertaken to provide firefighting water on-site,        although not required by STEP, that STEP’s
to use the off-site potable water supply efficiently.       current Dunning Street access might be
It is assumed that the existing sewer at Dunning            abandoned or controlled. This is shown in the
Road has the capacity to serve the early needs of           Route 9 and LFTC Connector graphic, Figure 12.
STEP and that there is sufficient capacity in the
sewer treatment plant.



                                                       STEP Master Plan                                 Page 22
                                                              Employees and repeat visitors who
                                                          understand the circulation enter from the loop
                                                          road directly to the parking lots. Each
                                                          neighborhood also has two visitor entrances that
                                                          provide convenient access at a turn-around
                                                          containing short-term visitor parking.




        Figure 12: Route 9 and LFTC Connector
     It is also possible for a Route 9 connector to
be created for STEP and this could occur
independently from LFTC; however, this will be an
expensive undertaking, involving many off-site
infrastructure and land acquisition issues. This
alternative is shown in the Route 9 Connector and                       Figure 14: Employee Access
Dunning Street, as Figure 13.




                                                                         Figure 15: Visitor Access
   Figure 13: Route 9 Connector and Dunning Street
                                                               To limit paved surface, service access to
Circulation and Access                                    loading facilities is integrated with employee
     Circulation on site is organized for efficiency,     access, as shown in Figure 16. Facilities
clarity for visitors, and separation of certain types     requiring major loading docks and shipping
of traffic. The objective is to recognize the             facilities will be designed with dedicated service
importance of vehicular circulation and parking           access.
and yet realize a pedestrian campus environment.



                                                     STEP Master Plan                                Page 23
                                                           Technical Data
                                                           Build-Out Statistics
                                                                The most important statistic is the SF build-
                                                           out of the site because this generates traffic and
                                                           use of resources—water, sewer treatment
                                                           facilities, electricity and gas. For purposes of the
                                                           Master Plan, the Town of Malta’s November 1999
                                                           Traffic Analysis was used to determine the
                                                           appropriate site build-out.
                                                                From the analysis, it was concluded that
                                                           1,250,000 SF of gross floor area could be
                                                           constructed, assuming that three off-site highway
                                                           improvements would be accomplished. The off-
                                                           site highway improvements, as well as the actual
                                                           trip generations resulting from the specific tenant
                                                           types and facilities use projected for STEP, must
                                                           be confirmed.
              Figure 16: Service Access                        The Land Plan shows 20 buildings to arrive at
    Sidewalks are provided within each                     the 1,250,000 total SF of build-out. For now, one-
neighborhood and between neighborhoods, to                 story, two-story, and three-story buildings are
promote pedestrian circulation and enjoyment of            assumed, although it would be advantageous to
the site. As figure 17 shows, this circulation not         build four-story buildings. Multi-story buildings
only ties the neighborhoods together, but                  reduce footprint and run-off and permit increase in
connects them to the Knowledge Community                   open space. The buildings shown in the Land
Center, the ravine, and the open space.                    Plan are summarized in Figure 18.

                                                                           Figure 18
                                                                   STEP Build-Out Statistics
                                                              Proposed Distribution of 1,250,000 SF
                                                              # of               # of               Square
                                                            Buildings           Stories             Footage
                                                                        5                 1              156,000
                                                                       10                 2              625,000
                                                                        5                 3              469,000
                                                           Note: The Land Plan permits buildings of up to 4
                                                           stories; however, for the purpose of these initial
                                                           calculations, buildings up to 3 stories were assumed.

                                                           Coverages
                                                                Coverages in the Land Plan are summarized
                                                           in Figure 19. The Land Plan results in 23%
                                                           impervious surfaces and 77% open space.

                                                                          Figure 19
          Figure 17: Pedestrian Circulation                     Summary of Proposed Coverages
                                                           Site (Acres)                                      280
                                                           Site (SF)                                  12,197,000
                                                           Building Coverage (SF)                        714,000
                                                           Roadway Coverage (SF)                         840,000
                                                           Parking Lot Coverage (SF)                   1,260,000
                                                           Total Coverage (SF)                         2,814,000
                                                           Impervious Surfaces                              23%
                                                           Open Space                                       77%
                                                     STEP Master Plan                                  Page 24
Phasing                                                     opportunity for those companies currently located
                                                            in the existing building.
     STEP will be phased carefully, to control the
cost of infrastructure and to carry out development
efficiently. Phase 1 will be closest to Dunning
Street and infrastructure will be installed to it, with
provisions made to extend services for
subsequent neighborhoods. Phasing also must
coordinate with off-site highway improvements, as
well as take into account efficient sizes to permit
provision of on-site core facilities.

Phase 1 Overview
      Figure 20 shows Phase 1 of the Land Plan,
constituting the first neighborhood. Neighborhood
One consists of four projects, some of which may
be comprised of multiple buildings, all totaling to
400,000 SF. The initial project is conceived as a
100,000 SF project because that is what is
required to provide central chilled water efficiently.
Next should be a 50,000 SF project, resulting in
150,000 cumulative SF. This is the maximum                    Figure 20: Phase 1 of Land Plan—Neighborhood One
number of SF that can be accommodated with the                    Although the types of businesses targeted for
initial off-site highway improvement. The next              STEP are always price-sensitive and there are a
project is intended to be 140,000 SF, which                 variety of discounted location options available in
results in 290,000 cumulative SF, the minimum               the current market place, it is important that the
necessary to establish an initial incremental               initial project reflect the ultimate value and quality
energy generation plant at STEP efficiently. A              envisioned for STEP. Unless the first project does
final project is envisioned to be approximately             so, it will not be possible for subsequent projects
110,000 SF, which will complete build-out of the            to easily improve the image. The first project will
initial neighborhood.                                       set the design content for all of STEP and in fact
                                                            should be the basis for creating design guidelines
Importance of the Initial Project                           for the Park.
     The initial project in Neighborhood One is
sized to permit an effective, efficient construction        Phase 1 Road Build-Out
program to cover the needed investment in                      Figure 21 shows the road build-out plan to
infrastructure and to permit the initial phases of          support Neighborhood One.
incremental on-site common core facilities.
     The initial project also must perform several
additional important objectives for STEP. The
facilities must be flexible enough to accommodate
a variety of user needs ranging from laboratory
space to office space to test bed facilities. We
currently envision one building for laboratory and
office space and a second building to
accommodate test-bed needs, as well as the
potential for assembly and light manufacturing.
    These buildings will be located in proximity to
the existing building, to help create a sense of
community and to focus the actual build-out as
well as its momentum. This location also will
provide an attractive and convenient expansion
                                                                 Figure 21: Road Build-Out, Neighborhood One




                                                       STEP Master Plan                                Page 25
                                                                  purposes. There are many assumptions. For
6—CAPITAL COSTS AND FINANCING                                     example, off-site infrastructure costs are
    Chapter 6 provides capital costs, a trial pro                 placeholders, pending advice from other
forma and an outline of financing strategies.                     consultants to NYSERDA. All costs are based
                                                                  upon experience and must be confirmed by a
                                                                  detailed cost estimate that would be based upon
Capital Costs Summary                                             actual design documents.
    The Capital Cost Summary, presented in
Figure 22, is an order-of-magnitude cost analysis          Also, all costs are presented in current dollars,
presented for discussion and comparative               without escalation, and rounded.
                                                Figure 22
                                         Capital Cost Summary
             Square Footages for Building Clusters and On-Site Common/Core Facilities
                            and Estimated Total and Unit Costs (rounded)

                                                            Phase 1
                                  First Project                                       Phases 2 and 3          Total
                                                       Neighborhood One*
Buildings (SF)
Office                                     30,000                        135,000                 285,000         420,000
Laboratory                                 30,000                        135,000                 285,000         420,000
Pilot Plant                                25,000                         55,000                 185,000         240,000
Incidental Use                               5,000                        15,000                  60,000          75,000
Conference Center                          10,000                         30,000                  35,000          65,000
Business Center                                   0                       30,000                       0          30,000
Total                                    100,000                        400,000                 850,000        1,250,000

On Site Common Core Facilities
Chilled Water (TONS)                          586                          5,100                    1,867             6,967
Power Generation (KW)                             0                        2,000                    1,000             3,000
Boilers (BHP)                                 152                          1,424                     470              1,894
Gray Water (GPD)                             1,013                         9,344                    3,081         12,425
Waste Treatment (GPD)                        1,266                        11,680                    3,852         15,531
Haz Mat (LBS)                                3,000                        28,200                    9,300         37,500

Cost
Direct Cost
Off Site Infrastructure                   $20,000                     $1,006,000               $1,132,000      $2,138,000
On Site Infrastructure                    343,000                      1,284,000                1,886,000      $3,170,000
On Site Common Core
                                        2,049,000                      9,419,000               16,880,000     $26,299,000
Facilities
Site Improvements                         450,000                      1,800,000                3,825,000      $5,625,000
Base Building Core & Shell              6,000,000                     24,000,000               51,000,000     $75,000,000
Tenant Improvements                     5,403,000                     23,596,000               48,987,000     $72,583,000
Indirect Cost
Summary                                 4,279,000                     18,332,000               37,113,000     $55,445,000
Contingency                             1,426,000                      6,111,000               12,371,000     $18,482,000
Factor for Escalation                             0                             0                      0                $0
Total                               $19,970,000                    $85,548,000            $173,194,000      $258,742,000

Unit Cost                                    $200                          $214                     $204              $207
*The statistics for Phase 1 (Neighborhood One) include the statistics for the First Project.




                                                          STEP Master Plan                                    Page 26
     Capital costs are included for the on-site               The Capital Cost Summary assumes that a
common core facilities. It is assumed that user           standard base building core and shell can be
fees will cover the cost of debt service as well as       constructed for $65.00 per SF. An assumed
operations of these facilities. As on-site common         $8.00 has been removed from this cost, due to the
core facilities will replace cooling and steam            on-site common core facilities and $3.00 has been
systems that otherwise would be provided with             added to accommodate elements of sustainable
each individual building, the projected capital cost      design. This results in a cost of $60.00 per gross
for individual buildings has been reduced by $8.00        SF for the base building core and shell.
per gross SF. These savings are assumed to
                                                              The estimated unit costs for tenant
offset a STEP common area maintenance charge
                                                          improvements (TI) are applied against the Usable
for the on-site common core facilities, so that the
                                                          Square Feet (USF) in each building and are
economic impact on the building is neutral;
                                                          summarized in Figure 23.
however, because the on-site common core
facilities will be energy-efficient, STEP tenants
                                                                            Figure 23
should enjoy the resulting lower operating costs.
                                                                 Cost of Tenant Improvements (TI)
     Figure 22 summarizes the square footage and            Space Type               $ per USF for TI
uses assumed in the first project; the square
                                                            Office                                     30.00
footage in Phase 1 (or Neighborhood One), which
includes the first project; the combined square             Laboratory                                150.00
footage in subsequent neighborhoods, as Phases              Pilot Plant                                20.00
2 and 3; and the total square footage.                      Retail                                     30.00
     On-site common core facilities are not                 Conference Center                          35.00
included in the SF totals because they (arguably)
                                                            Business Center                            35.00
would normally be off-site (in the case of electric
generation) or on the rooftops of buildings (in the
case of chillers). These facilities therefore are
expressed not as square footage, but as                   Trial Pro Forma Summary
increments of use—tons of chilled water, kilowatts            A trial pro forma has been developed for
of power generation, etc.                                 Phase 1 (Neighborhood One) at STEP, to
                                                          determine the amount of rent that might be
    Figure 22 also summarizes the total project           necessary and to explore the cost of capital
cost for STEP in the same categories as the               requirements.
square footage summaries.
                                                              As with the Capital Cost Summary, this trial
     Direct costs represent the actual cost of            pro forma should be viewed as illustrative or
construction, including contractor mark-up,               order-of-magnitude estimates, for comparative
overhead, and profit. Indirect costs include all          purposes only, and as a beginning to more
those additional costs necessary to carry out the         detailed pro forma analyses for specific projects.
construction, such as fees, insurance, permits,
testing and inspection, financing issuance,                     The trial pro forma assumes that Phase 1 will
construction period interest costs, and                   be comprised of four projects, which may be more
contingency.                                              than four buildings. Figure 24 summarizes these
                                                          projects and hypothesizes that significant grant
     The direct costs for the buildings themselves        money or deferred loans will be available in the
assume that the design and cost for the base              initial project, to support the upfront costs to
building core and shell is the same for each              develop STEP and to control rent for market
building type. This will result in a uniform and          reasons. Rents in the range of $8.00/SF to
consistent appearance throughout STEP. The                $15.00/SF are assumed, and a vacancy rate
cost to fit-up the interiors of these buildings is        assumption of 10% is applied.
different for each building type and this is what
results in the cost differentials between uses.               All numbers in Figure 24 are rounded.




                                                     STEP Master Plan                              Page 27
                                                         Figure 24
                                     Trial Pro Forma for Phase 1 (Neighborhood One)
                                                      Project 1 Project 2   Project 3            Project 4         Total
PROJECT COSTS
DIRECT COSTS
Off Site Infrastructure                                   $20,000            $0      $986,000            $0       $1,006,000
On Site Infrastructure                                    343,000       321,000       273,000       347,000       $1,284,000
On Site Common Core Facilities                           2,049,000      850,000      4,016,000     2,505,000      $9,420,000
Site Improvements                                         450,000       225,000       630,000       495,000       $1,800,000
Base Building Core & Shell                               6,000,000     3,000,000     8,400,000     6,600,000     $24,000,000
Tenant Improvements                                      5,403,000     3,799,000     7,472,000     6,923,000     $23,597,000
INDIRECT COSTS
Summary                                                  4,279,000     2,458,000     6,533,000     5,061,000     $18,331,000
Contingency                                              1,426,000      819,000      2,178,000     1,687,000      $6,110,000
Factor for Escalation                                           0             0             0                0             $0
Total                                                  $19,970,000   $11,472,000   $30,488,000   $23,618,000     $85,548,000
Unit Cost                                                    $200          $229          $218          $215            $214

SOURCE OF FUNDS
Deferred Loans or Grants                                $9,000,000           $0            $0            $0       $9,000,000
Specialized Funding                                      4,750,000            0             0                0    $4,750,000
Senior Debt                                              6,000,000     8,250,000    22,500,000    17,500,000     $54,250,000
Mezzanine Debt                                                  0      3,000,000     7,750,000     6,000,000     $16,750,000
Other                                                     220,000       222,000       238,000       118,000        $798,000
Total                                                  $19,970,000   $11,472,000   $30,488,000   $23,618,000     $85,548,000

Revenue
Office                                         12.00     $350,000      $641,000     $1,107,000    $1,573,000      $3,671,000
Laboratory                                     24.00      699,000      1,282,000     2,214,000     3,146,000      $7,341,000
Pilot Plant                                     8.00      194,000       194,000       427,000       427,000       $1,242,000
Incidental Use                                 10.00       49,000        49,000        49,000       146,000        $293,000
Conference Center                              15.00      146,000       146,000       437,000       437,000       $1,166,000
Business Center                                10.00            0             0        97,000       291,000        $388,000
Chilled Water Facilities Fee                    1.00      100,000        50,000       140,000       110,000        $400,000
                BGSF to RSF Factor      1.03
                    Vacancy Factor    10.00%              -154,000      -236,000      -447,000      -613,000     -$1,450,000
Total                                                   $1,384,000    $2,126,000    $4,024,000    $5,517,000     $13,051,000

Expenses
Debt Service
  Specialized Funding                 6.00%      30      $342,000            $0            $0            $0        $342,000
  Senior Debt                         7.00%      25       509,000       700,000      1,908,000     1,484,000      $4,601,000
  Mezzanine Debt                      8.00%      15             0       344,000       889,000       688,000       $1,921,000
  Other Debt                          8.00%      25        21,000        21,000        22,000        11,000         $75,000
Other Non-Reimbursed Expenses           5.00              500,000       250,000       700,000       550,000       $2,000,000
Total                                                   $1,372,000    $1,315,000    $3,519,000    $2,733,000      $8,939,000
Annual Net Cash Flow per Project                          $12,000      $811,000      $505,000     $2,784,000      $4,112,000
Annual Consolidated Net Cash Flow                         $12,000      $823,000     $1,328,000    $4,112,000




                                                         STEP Master Plan                                 Page 28
                                                                 For STEP, early development of multi-tenant
Financing Strategies                                        facilities will need to be supported by an
     For STEP development, it is important to note          engineered mix of commercial financing with
that, while NYSERDA is a large organization,                sufficient creditworthy pre-lease or NYSERDA
most of its funding is restricted to established            support to induce the equity and/or debt.
programs and purposes. Consequently, internal
funding available for Economic Development                  Single-User Facilities
Programs, including STEP development, will be                    NYSERDA’s experience with STEP is
limited.                                                    expected to be similar to that of other projects with
     Following is an outline of general concepts for        similar missions in knowledge-based economic
sources of financing by types of facilities. In             development, in that the number of facilities, at
reality, each project will require a highly                 least in early phases, that are built-to-suit for
specialized plan of financing and, most likely, a           large-scale, single users will be limited. In this
mix of funding sources.                                     case, LFTC is intended to be a destination for
                                                            large-scale users. If/as such opportunities arise
Infrastructure                                              that are suitable for STEP, such facilities may be
                                                            self-developed by the corporate user, or
    For technology parks, the most typical
                                                            developed by NYSERDA for the user. Financing
approach to financing new infrastructure is US
                                                            will be dependent upon the tenant’s credit.
EDA grants with matching state, local
government, or sponsor funding. This is the
proposed approach for STEP, with NYSERDA
providing a portion of the matching funds.

Common or Core Technology
Facilities
     Facilities of this type require special-purpose
funding, which may be a mix of federal, state,
local, and sponsor funding. Some philanthropic
foundation or corporate grants also are possible.
This is the proposed funding concept for any
large-scale special-purpose building or major
instrumentation to be developed in/for STEP.

Common Amenities
     For shared resources and incidental uses,
including food service, scaled retail, child care,
fitness/recreation, and similar facilities, STEP will
seek private sector development and financing. If
NYSERDA creates a controlled affiliate, it is
possible that that corporation would engage in
some of these related businesses and be in a
position to finance all or some of such facilities.

Multi-Tenant Facilities
     National experience has proven that the multi-
tenant facility, developed at least in part to have
immediately available (and therefore speculative)
space, is the most critical real estate product to
spur build-out of technology parks. And, due to
their speculative nature, these also have been, in
the experience of all other tech parks, the most
difficult facilities to finance.



                                                       STEP Master Plan                               Page 29
EXHIBITS
Exhibit 1—Participants in Interviews and Planning Dialogue
NYSERDA                                              Saratoga Economic Development Corporation
                                                     Kenneth A. Green, President
STEP Master Plan Project Management                  Jon A. (Jack) Kelly, Senior Vice President
Hal Brodie, Esq., Deputy Counsel
                                                     Town of Malta
Robert Callender, Vice President for Programs
                                                     David R. Meager, Supervisor
Kevin L. Hunt, Associate Project Manager,
                                                     Clifford Lange, Councilman
     Economic Development
Paula Rosenberg, Senior Project Manager,             Market Analysis
     Economic Development
                                                     Industry Survey Participants
Administration—Other                                 Harry Apkarian, Chairman and CEO, Trans Tech
Stanley Brownell, Facility Manager                        Systems, Inc.
Peter Mahar, Controller and Assistant Treasurer      Suresh Bhate, President, Inverters Unlimited, Inc.
Peter R. Smith, President                            John Corey, Clever Fellows Innovation
Program/Project Managers                                  Consortium, Inc.
Tom Barone, Program Manager, Energy                  Larry Cioffi (respondent for Hal Cowles, President,
     Efficiency Services                                  Environmental C & C, Inc.
Peter Douglas, R. A., Program Manager,               Dr. Robert C. Degeneff, President, Utility Systems
     Buildings Research                                   Technologies, Inc.
Mark Eggers, Program Manager, Energy                 John Howell, Executive Vice President,
     Efficiency Services                                  Ebidenergy.com, Inc.
Bill Reinhardt, Senior Project Manager, Buildings    Ed Johnson, Keystone Monitoring Corporation
     and Industry Program                            Dennis Landsberg, PE, President, Landsberg
James Reis, P.E., Program Manager, Residential            Engineering, PC
     Energy Affordability                            Ian Shapiro, President, Taitem Engineering
Scott Smith, Project Manager, Energy Efficiency      Jeffery D. Wolfe, PE, President, Global Resource
     Services                                             Options
Gunnar Walmet, Director, Buildings and Industry      Ira S. Rubenstein, Executive Director,
     Programs                                             Environmental Business Associates of NY
David Young, Manager of Computer Systems             Don Prohaska, President, Fucellco, Inc.
                                                     Dr. Richard Gibbs, Director, Bureau of Mobile
STEP Partners                                             Sources, NYS Department of Environmental
University at Albany and Albany NanoTech                  Conservation
Dr. Michael M. Fancher, Director for Economic        John Pilecki, VP, Engineering/Purchasing, Unifrax
    Outreach, Albany NanoTech                        Other Market Analysis Sources
Dr. David Gilbert, Vice President for Outreach       Daniel Kennedy, Chief, Bureau of Special
Dr. Pradeep Haldar, Director, Technology                  Projects, Office of General Services, State of
    Applications Center                                   New York
Dr. Alain E. Kaloyeros, Executive Director, Albany   Joseph Larkin, CCIM, President/Broker, Larkin
    NanoTech and Founding Dean, School of                 Commercial Properties, Inc.
    Nanosciences and NanoEngineering,                Michael H. Wacholder, Director, Rensselaer
    University at Albany                                  Technology Park
Dr. Eugene Schuler, Associate Vice President for
    Research and Director, Technology                Legal Counsel
    Development                                      Brendan Chudy, Esq, Harris Beach
                                                     Shawn Griffin, Esq., Harris Beach
                                                     Alice Kryzan, Esq., Harris Beach




                                                STEP Master Plan                             Page 30
Exhibit 2—Market Analysis—Industry Survey Questions and Summary
of Responses
Question 1.   Please tell me about your company including the nature of the business
              (product/service/process), current employment and skill mix?

              Company size range from a company of 1 (2 of those surveyed) to a maximum of 25.
              One company chose not to give size and the NY DEC has over 4,000 employees (not
              significant to this survey). Average size of companies responding = 8.3 employees
              Product range included
              Sensors for highway construction mfg                      1
              Cooling devices for semiconductor mfg                     1
              Energy related products/alternatives consulting           5
              Environmental consulting                                  1
              Power supply Mfg                                          1
              AC/DC inverters Mfg                                       1
              Electronic Sensor mfg                                     1
              State Environmental Agency                                1
              Incubation/investment                                     1
              Photo voltage devices mfg                                 1
              Fuel Cell Mfg                                             2

              TOTAL Companies Interviewed                               16

Question 2.   What is/are your current business location(s) and what is the primary facility use at each
              location (office, mfg, lab etc)?

              Schenectady (3)                  Troy                     Albany (4)
              Niskayuna                        Ithaca                   West Henrietta NY
              Clifton Park (2)                 Strafford VT             Boston MA
              Tonawanda NY

Question 3.   What are the reasons on which you based your decisions regarding your current
              business location?

              Close to GE R&D
              Close to hwy access, NY Empire Zone
              Proximity to Capitol region
              Low cost space (2)
              Operating out of home (4)
              Close to SUNY and NYSERDA
              Proximity to University
              RPI Incubator and University Support
              RPI and State Government
              Access to capital $$
              Access to market in NE US, Quality of life (2)
              Low cost power Niagara Falls region




                                               STEP Master Plan                                Page 31
Question 4.   Based on your current situation and anticipated needs, are you planning on expansion or
              change of location in the foreseeable future?

              14 yes
              2 no
              1 no commitment

Question 5.   If “yes,” what (location, cost, amenity) factors govern your company’s decision about
              where and how to move or expand? Describe location factors critical to your decision
              making process.

              Proximity to university resources (6)
              Highway
              Passenger rail and/or airport (2)
              Capital District, Albany area (2)
              CESTM Complex
              Cost of facilities (3)
              Proximity to residence (s) of employees
              Flexible space (3)
              Access to capital $$
              “Cluster” firm proximity

Question 6.   As we are planning for the development of the STEP property, what kinds of space
              configurations, cost structures, amenities and other features would you suggest be
              considered—if STEP is to be appealing to your company or companies like yours?

              Malta… high quality of life and quality address (6)
              Shared conference and meeting rooms (10)
              Prefer to lease space in multi-tenant or incubator flexible space (4)
              High Speed internet access (7)
              Green Building design (2)
              Shared lab for electronics testing, and other equipment (6)
              Focus on “knowledge community” (2)
              Loading Dock (3)
              Adequate electric service (quality and quantity) (2)
              Technical assistance, business assistance mentoring (4)
              Quality AV equipment (3)
              Business machines shared (3)
              Adequate parking
              “Reasonably” priced space (2)
              Industrial Gases and natural gas (2)
              STEP “isolated” (3)
              Alternate fuel test facilities
              Shared warehousing

Question 7.   Do you have any other comments or ideas on how STEP should be positioned to be
              responsive to needs in the markets it is addressing?

              NYSERDA should assist with financing of fit-up at STEP
              Build a mini-conference center to showcase new Energy technologies and demo energy
              alternative technologies like PV and Passive Solar (2)
              Develop “knowledge community” of energy related enterprises
              Promote the concept of Incubation at STEP (2)
              Take steps to overcome “isolation” of site at Malta



                                               STEP Master Plan                             Page 32
Relationship with NYSERDA very important…wants proximity to NYSERDA
Develop a “green” building concept at STEP
Build Incubation facility with entry/exit procedures (2)
Provide for set of services to assist tenants including access to capital
NYSERDA needs to consider low interest financing programs for equipment purchase
Pricing of space must be competitive with market
NYSERDA as project partner at STEP
Develop targeted facilities at STEP with a focus on regional opportunity (the Hudson
River PCB remediation project) with GE/State Government
“Compensate” for site location disadvantage with preferential NYSERDA R&D funding
opportunities for tenants. (3)
Build in mechanism for technical assistance to residents/tenants plus economic
development program incentive program liaison.




                               STEP Master Plan                              Page 33
Exhibit 3—Technology Sites in the Immediate Region
                                                                ∇ Established businesses that can
The CESTM Campus                                                   utilize East Campus facilities, and
    The Center for Environmental Sciences and                      provide mentoring and collaborative
Technology Management (CESTM) was                                  support for the incubator program's
dedicated in 1997 to strengthen the partnership                    start-up companies
between the community and the area economy.
                                                                ∇ Companies that offer various
     CESTM is a comprehensive research facility                    business services to companies
that supports a high-tech incubation program,                      within the incubator program.
state of the art laboratories, flexible office and              Market targets for the East Campus include:
conference space, access to University faculty,
facilities and research equipment.                              ∇ Biotchnology
     CESTM is home to the Atmospheric                           ∇ Biomedical Engineering
Sciences Research Center (ARSC), the New                        ∇ Pharmaceuticals
York State Center for Advanced Thin Film                        ∇ Chemicals
Technology, and the National Weather Service
Forecasting Office. CESTM also is home to a                     ∇ Analytical Instrumentation
pilot manufacturing/prototyping facility designed               ∇ Telecommunications
to accommodate the 300-millimeter silicon wafer                 ∇ Other High-Technology
fabrication. The facility will be a shared
research development and manufacturing                          School of Public Health programs include:
environment that includes clean room, business                  ∇ Biomedical Sciences
incubation and work force training spaces.
                                                                ∇ Biometry & Statistics
The University at Albany East                                   ∇ Environmental Health & Toxicology
                                                                ∇ Epidemiology
Campus
    East Campus features include:                               ∇ Health Policy Management &
                                                                   Behavior.
    ∇ Easy access from major interstate                         Regional research facilities include:
       highways
                                                                ∇ Transgenic
    ∇ State-of-the-art laboratories
                                                                ∇ NMR
    ∇ Modern office space
                                                                ∇ DNA Analysis
    ∇ Spacious conference facilities
                                                                ∇ Hybridoma.
    ∇ Access to University faculty expertise
    ∇ Reception and other support services                  Luther Forest Technology Campus
    ∇ Support of the University at Albany's                      SEDC’s vision for Luther Forest Technology
         School of Business and Small                       Campus (LFTC) is to create a “beautiful,
         Business Development Center                        secluded, environmentally friendly location in
    As one of two University at Albany incubator            which people can work and recreate in a forest
sites, the business incubator at the East                   setting”. The LFTC is designed to “look and
Campus offers an array of services to Capital               feel” like a college campus.
Region entrepreneurs.                                          Selected summary information about the site
    Incubator facilities are geared to benefit              and its development plan is as follows:
three types of participants:                                    ∇ 1,350 acre site (more than 2 square
    ∇ Newly formed small businesses that                           miles)
       would have access to University                          ∇ Approximately 80% in the Town of
       faculty expertise and facilities                            Malta and 20% in the Town of
                                                                   Stillwater




                                                     STEP Master Plan                               Page 34
    ∇ 50% of the site will remain                           of the University’s Board of Trustees. RPI
       undeveloped and will include:                        funded early buildings from endowment. Later
          18 acres of recreation areas                      buildings were conventionally financed.
          7 miles of trails                                      Of the 450 developable acres (of 1,250
          100-foot forest buffers around                    total), about 250 acres are fully developed, with
          development                                       13 multi-tenant buildings consisting of 425,000
                                                            SF of flex space. RPI considers that these
          Tennis & basketball courts                        multi-tenant buildings were essential to the
          More than 600 acres of woodland to                success of the RTP. The occupancy rate is 90%
          remain as “forest managed                         at present.
          property”
                                                                With tenant-owned facilities included, build-
          250 acres of lawns and landscaping.               out of Phases 1 and 2 is 1 million SF. Phase 3,
    ∇ Buildings will occupy 150 acres                       remaining to be developed, is 200 acres.
    ∇ Water will be taken from the Hudson                       There are 50 companies employing more
      River and not Saratoga Lake                           than 2,200 persons.
    ∇ New access roads will be built to limit
                                                                 The RPI Incubator Program operates three
       the impact of traffic
                                                            facilities totaling 125,000 SF. They include a
    ∇ Zoning will be Rural Residential and                  45,000 SF flex office building, a 52,000 SF wet
       Industrial                                           lab building and a 35,000 SF mixed-use facility
    ∇ Major highway access is via NYS                       in downtown Troy.
       route 9 and I-87 exits. The site is                      RTP represents competition for STEP. With
       located halfway between NYC,                         200 acres (1 million SF) remaining to build out
       Montreal, Boston and Buffalo and is:                 and some immediately available space (90%
           2 miles to exit 12 Interstate 87                 occupancy), RTP represents a mature tech park
           17 miles to NYS route 7                          with a high level of existing activity.
           22 miles to Interstate 90                            The multi-tenant buildings are one-story,
           20 miles to Albany County Airport                steel frame with flexible interiors (24 SF x 36 SF
                                                            bays). Rents for “good Class B” space are in
    ∇ Rail access is via an Amtrak line 6
                                                            the range of $10.00 to $12.00 per RSF.
       miles west of the site
    ∇ River access to the Hudson River is                       The Director believes that the region is
       7 miles east of the site                             nearing saturation for incubator facilities with the
                                                            exception of expanding activity in nanotech and
    On-site infrastructure plans include:
                                                            biotech commercialization.
    ∇ On-site storm water management
    ∇ Electric power, 34.5 KVA provided by                  Harriman State Office Campus
       New York Electric & Gas                                  The State of New York has embarked on a
                                                            long-range plan (the “Albany Plan”) to move all
    ∇ Natural Gas, 8 in. high pressure,
                                                            state government offices to the Downtown
       provided by Niagara Mohawk
                                                            (Albany) office complex. The Harriman site is
    ∇ Telecommunications, provided by                       being converted under a master plan to a
       Verizon                                              technology campus consisting of incubation,
    ∇ Water, 8 in. private water system                     laboratory, R&D and office space.
    ∇ Sewer, 54 in. gravity line provided by                     A preliminary plan has been drafted by
       Saratoga County                                      Hamilton, Rabinovitz and Alschuler, Inc. The
                                                            plan stages demolition, renovation, and new
Rensselaer Technology Park                                  construction. At final build out (20 years) the
     Rensselaer Technology Park (RTP) began                 350-acre site will contain 2.7 million SF of space
development in 1981, with the first building built          employing an anticipated 8,000 workers. Details
in 1983. RTP is developed and managed                       of planned uses are:
entirely by RPI, reporting to a special committee


                                                     STEP Master Plan                                Page 35
    ∇ 1.2 million SF of Class A office space               Two multi-tenant buildings are planned for the
       with a technology focus                             first phase of development.
    ∇ 525,000 SF of new R&D space                              It is anticipated that a corporate entity will be
    ∇ 650,000 SF of Class B office space                   formed around a partnership of the State of New
       in renovated buildings                              York and the University. This corporation will
                                                           control all development at the site. Title to the
    ∇ 250,000 SF of R&D space in
                                                           land will be transferred to this development
       renovated buildings
                                                           corporation.
    ∇ 70,000 SF of food and service-
        oriented retail.                                        Given complexities of the Albany Plan, the
                                                           Harriman Campus project will not begin
    The site is adjacent to the University at
                                                           implementation for a few years. Once it begins
Albany and the vision includes university derived
                                                           development, it will pose an attractive alternative
enterprise start-ups in incubation facilities and
                                                           for technology companies, given its proximity to
expansions locating within a series of multi-
                                                           the University. It will not, however, be focused
tenant buildings. The plan includes renovation
                                                           on companies in clean energy and
of an existing building for business incubation.
                                                           environmental industries.




                                                    STEP Master Plan                                 Page 36
Exhibit 4—Useful WEB Addresses
  New York State Energy Research and Development Authority
  www.nyserda.org

  University at Albany—SUNY
  www.albany.edu

  Albany NanoTech
  www.albanynanotech.org

  University at Albany East Campus
  www.albany.edu/research/TechDev/EASTCAM1.html

  Saratoga Economic Development Corporation
  www.saratogaedc.org

  Town of Malta
  www.malta-town.org

  Saratoga County
  www.co.saratoga.ny.us

  Harris Beach, LLP
  www.harrisbeach.com




                                          STEP Master Plan   Page 37
For Information:

NYSERDA
NY State Energy Research & Development Authority
17 Columbia Circle
Albany, NY 12203-6399 USA
V: +518 862 1090
F: +518 862 1091

Mr. Robert Callender, Vice President for Programs
E: rgc@nyserda.org

or

Ms. Paula Rosenberg, Senior Project Manager, Economic Development
E: pr1@nyserda.org




IDEA Partnerships, LLC
Mr. William C. Morlok
The Belgravia
1811 Chestnut Street, Suite 302
Philadelphia, PA 19103 USA
V: +215 564 4002
F: +215 564 4016
E: wc-morlok@ideapartnerships.com

or

Ms. Eva Klein
503 Seneca Road
Great Falls, Virginia 22066 USA
V: +703 406 6100
F: +703 406 6101
E: e-klein@ideapartnerships.com