UPDATE ON BUSINESS DEVELOPMENTS IN NEW YORK’S HUDSON VALLEY

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INSIGHTS

A MESSAGE FROM OUR PRESIDENT

Experience The ExcitementAs Hudson Valley Economic Development Corp.’s new president and CEO, it is wonderful to lead this tremendous organization, and I would like to thank Board Chairman Steve Lant and the rest of our board members for their support.

I have worked closely with HVEDC over the last several years. When I was director of economic development for Westchester County, I co-founded the NY BioHud Valley® and Hudson Valley Food & Beverage Alliance initiatives with HVEDC and I have been a proud member of the organization’s board.

It is an exciting time to lead HVEDC, as we bring together the intellectual capital of our region to address the challenges of the new economy. HVEDC has been working on many creative initiatives and economic development projects over the past few months, many of which are displayed in the pages of this newsletter.

So, please, take a look, as we bring you the latest Insights from HVEDC.

HVEDC Introducing 3D Printing to the Hudson Valley

Hudson Valley Economic Development Corporation (HVEDC) is launching an innovative series of ongoing breakfast and lunch seminars, so mark your calendars as you see event notifications in your email, or in the media.

The Next Big Thing Breakfast Series and the Thought Leaders Lunch Series events will present innovative ideas and trends to business and community leaders throughout the Hudson Valley thirsting for knowledge of the way business is done today and in the future. HVEDC is also developing special events, such as the Wine, Beer and Spirits Summit on October 31st at The Culinary Institute of America that will connect businesses throughout the Hudson Valley and beyond who share common opportunities and challenges, providing a forum for discussion and collaboration.

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Laurence P. Gottlieb President and CEO

Next Big Thing Breakfast Series kicks off with May 30th event

AN EVENT

Arthrogryposis meant Emma couldn’t move her arms, so researchers 3D printed a durable custom exoskeleton with the tiny, lightweight parts she needed. Image courtesy of Stratasys, Ltd.

New investment to help spur company’s growth in coming yearsThe ContraFect Corp., based in Yonkers, recently announced that China’s Zongyi Group has invested $8.6 million in the company as part of a financing deal worth a total of $9.5 million.

ContraFect is a company that focuses on medical research for treating life-threatening illnesses. With this new funding, the company will be able to progress a variety of clinical trials for a brand-new drug that will be used to treat drug-resistant diseases.

Laurence P. Gottlieb, president of the Hudson Valley Economic Development Corp., said: “This investment builds on the Hudson Valley Economic Development Corporation’s longstanding commitment to the biopharmaceutical industry in the Hudson Valley and is the culmination of our BioHud Valley initiative that promotes this important growing regional industry. I want to thank my predecessor, Mike Oates, for his role in

promoting Yonkers and the Hudson Valley as an ideal location for this investment.”

This is big news for Yonkers, as the city has recently undergone a major revitalization to its waterfront and downtown locations. ContraFect’s attraction of new, major investors has gone a long way toward making all of that possible. Several different businesses and economic organizations have recently devoted significant efforts to promote Yonkers as an ideal location for investment, and the result has been major deals like this one.

Zongyi Group is one of China’s leading diversified business groups, covering information technology, investments, asset management and new energy. The total market value and asset worth of the group is more than $30 billion. Many of its diversified investments, like ContraFect, are located in the U.S.

With this new deal, ContraFect will have unique access to the Chinese market, which has become the world’s fastest and most important emerging business sector. This type of relationship will be extremely important as the company continues to increase in size and

scope.

The deal has already helped spur significant growth in the company. ContraFect currently employs 35 people, and is expected to increase that number to 50 within the next year. Local business officials see the investment as a way to not only increase the scope of the work being done by ContraFect, but also to develop new jobs downtown and build on the recent successes along Yonkers’s Saw Mill River.

The Zongyi Group investment adds another success to the efforts taken by Hudson Valley Economic Development Corp. and Scenic Hudson to promote investments in Yonkers-area businesses. Both groups commit themselves to finding projects that are both economically and environmentally beneficial for the area.

Scenic Hudson worked with the city of Yonkers over the course of a decade to rejuvenate the Saw Mill River area, and ContraFect’s growth will add to those efforts. The business is located in the i.Park Hudson technology campus, which is owned by NY BioHud Valley founding member Joe Cotter and is home to a BioHud office.

HVEDC Helps ContraFect Secure Major Chinese Funding Source with Zongyi Group

HVEDC President Laurence P. Gottlieb announces that China’s Zongyi Group is making an $8.6 million investment in Yonkers-based ContraFect Corp.

2 Hudson Valley Economic Development Corporation HVEDC.COM

Regeneron Pharmaceuticals, a biopharmaceutical company based in Westchester County and NY BioHud Valley founding member, recently announced the expansion of its corporate headquarters and main laboratories. The expansion will create more than 400 jobs for highly skilled workers in the region.

Upon the project’s completion, Regeneron’s complex will contain two brand-new buildings covering more than 300,000 square feet of office and laboratory space, as well as 85,000 square feet of additional space and a 700-car parking garage. These numbers add to the 590,000 square feet of space that the company already occupies in the complex.

Construction is set to begin this year, with a target completion date of 2015. The project became necessary because of the significant, continuous growth seen by Regeneron over the past six years. In 2007, the company employed about 682 employees. Today, that number extends beyond 2,000.

Regeneron’s complex currently contains three buildings, located on Old Saw Mill River Road. The existing buildings will be connected to the new ones with an enclosed pedestrian bridge. The company has been based in New York State for its entire 25 years of existence, and the new expansion ensures that it will remain here for the foreseeable future.

Funding for the project comes partially from $8.5 million in tax credits from the Excelsior Jobs Program, in addition to unspecified incentives from the Mount Pleasant Industrial Development Agency.

The announcement of the project comes barely six months after Regeneron announced its plans to invest $70 million in the expansion of its manufacturing capacity in Rensselaer and the creation of more than 300 new jobs in the Capital Region.

BioHud Valley Update:

Regeneron Pharmaceuticals to Expand Westchester Facilities

The U.S. microbrew industry is rapidly growing, and now local business owners and farmers in the Hudson Valley are seeking federal financing for a collaborative hops yard.

Many brewmasters and farmers point to the Hudson Valley region as an ideal place for farming hops, as the climate and soil are very conducive to the process. The expectation is that a Hudson Valley hops yard could supply breweries across the entire state and the Northeast.

Several local officials and organizations see the potential for major economic development through a hops yard. U.S. Sen. Charles Schumer recently urged the U.S. Department of Agriculture and the Small Business Administration to give initial capital to help promote a cooperative of local farms and craft breweries. The result will be organic, locally grown hops to sell to various regional breweries.

Support for the cooperative was obvious at a recent speech by Sen. Schumer at Eastern View Nursery and Dutchess Hops in Lagrangeville. Present were many Hudson Valley Food & Beverage Alliance microbrewers, including the Yonkers Brewing Co., Newburgh Brewery, Hudson Valley Brewery and Catskill Brewery, as well as representatives from Hudson Valley Economic Development Corp., who helped bring these craft brewers together for the event.

The craft beer industry continues to explode across the United States, and yet as many proponents point out, New York is one of few states without a major hops yard. The state of New York has a long history in hops production

– it was a national leader in the field in the mid-1800s. However, as competition increased and Prohibition took root, the industry eventually declined.

Those in favor of the hops yard believe that the cooperative would help the state return to its roots in the hop production and brewing industries. Given the necessary funding to get the project started, the cooperative could soon return the New York hops industry to a respectable, competitive status.

Securing that funding, however, has been an early challenge for the project. Estimates indicate that starting up the hops yard would require $100,000 for equipment and $13 per acre to properly prepare the soil.

Schumer together with local brewers and farmers are quick to highlight the economic benefits that such a hops yard would bring to the region. If the cooperative can convince the USDA and SBA to provide low-interest loans or loan guarantees in a timely fashion, they could begin planting crops for harvest late this summer.

Plus, Dutchess Hops is currently preparing to plant a crop of hops for the first time this season. If the farm is able secure the financing for the necessary equipment and soil preparation, it could open the door for other hops farms in the Hudson Valley to collaborate under this plan.

With a potential public-private partnership through Hudson Valley Hops, the craft brewing industry around New York could see even more rapid growth in the near future.

Hudson Valley Food & Beverage Alliance Update:

Farmers and Brewmasters Seek Funding to Capitalize on Rapidly Growing Industry

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From left, Tom Crowell, owner of Chatham Brewing; Senator Charles Schumer; Patrick Manning, executive director of Hudson Valley Hops; Justin Riccobono, Dutchess Hops farm director; Carmine Istvan, owner of Dutchess Hops/Eastern View Nursery; and Sean Eldridge, founder and president of Hudson River Ventures.

Mario R. Nacinovich Jr. is the managing partner of AXON, a specialist healthcare consultancy firm based in Rye Brook, N.Y. He also serves as editor-in-chief of the Journal of Communication in Healthcare and as a member of the adjunct faculty at Boston University. He is a trusted strategist and mentor who is on the editorial boards for the International Journal of Medicine and Public Health, Journal of Brand Strategy, International Journal of Healthcare Management,

Medical Writing, and PM360. He is a founding member of the American Heart Association’s Red Tie Society and his firm is a founding partner and strategic consultancy to NY BioHud Valley.

James Bernardo, the founder and CEO of Candela Systems Corp. in 1994, has spent 22 years in the energy services field, many of which have been focused on technological innovations in energy efficiency. His company has spearheaded a number of energy-efficient lighting initiatives in partnership with the Environmental Protection Agency, and Bernardo himself has been awarded two U.S. patents. Candela Systems Corp., a New York State Certified Minority Owned Business Enterprise, provides various electrical contracting services, all of which come with an

environmentally responsible approach. The company’s services include design, lighting auditing, energy cost analysis, project management, material procurement, solar solutions and quality control.

Hudson Valley Economic Development Corporation HVEDC.COM4

HVEDC Introducing 3D Printing

to the Hudson ValleyCONTINUED FROM PAGE 1

The first 3D-printed full-scale turbo-prop aircraft engine model was built with Stratasys and Autodesk. NASA’s next Rover also has 3D-printed parts.

The first such event is The Next Big Thing Breakfast Series: 3D Printing, 8-10 a.m. on May 30 at SUNY New Paltz. A hallmark introduction to 3D printing in the Hudson Valley, the event will include major announcements that will positively impact the regional economy.

Additive manufacturing – better known as 3D printing – is a multi-billion dollar business that’s revolutionizing the world around us. From producing lightweight aircraft parts to customized toys to lifesaving custom prosthetics, 3D printing is on the verge of becoming a massive engine for global economic growth.

“We chose to start our Next Big Thing Breakfast Series with 3D printing, because it is the most exciting emerging trend in the manufacturing industry today,” said Laurence P. Gottlieb, president and CEO of HVEDC. “The great thing about 3D printing is that it can be done anywhere, so this event is truly for everyone in the Hudson Valley.”

HVEDC is inviting the community to experience 3D printing firsthand and learn how it can change the way business is conducted. Participants will learn how HVEDC is bringing this amazing technology to the Hudson Valley. The breakfast presentation – from the best and brightest of the 3D printing industry – is

from 8 to 10 a.m. at the SUNY New Paltz Student Union. Sharon Smith, vice president, marketing, for Stratasys Ltd., the leading manufacturer of 3D printers and production systems for prototyping and manufacturing, will provide an overview of additive manufacturing and explain how 3D printing is re-engineering a wide variety of industries. Plus, there will be big announcements from several HVEDC partners, including Sean Eldridge and SUNY New Paltz President Donald Christian. After the breakfast there will be live demonstrations of 3D printing by Stratasys and industry networking.

“Hudson Valley Economic Development Corporation is rolling out unique events to advance the knowledge and opportunities for entrepreneurs and businesspeople, enhance the regional economy and create jobs throughout the Hudson Valley in all counties,” Gottlieb said. “3D printing is just the first in what we hope will become a series of thought-provoking discussions.”

The economic opportunities are enormous for 3D printing. According to Wohlers Associates, the sale of additive manufacturing products and services could reach $3.7 billion worldwide by 2015, and exceed $6.5 billion by 2019. That’s up from $1.7 billion today.

Standby Reservations

The Next Big Thing Breakfast Series: 3D Printing is now sold out. For standby reservations, contact Gina Domenico at 845-220-2244 or gdomenico@hvedc.com.

Hudson Valley Economic Development Corporation announced two new members of its board of directors:

HVEDC Expands Board of Directors

Mario Nacinovich James Bernardo

Business is booming in the Hudson Valley and it’s starting from the ground up. The Orange County Business Accelerator (OCBA) is buzzing with new talent, and its recent business challenge has brought a variety of budding companies to the epicenter of innovation and technology in the region.

“The Accelerator is an exciting place to be these days,” said Laurence P. Gottlieb, president and CEO of Hudson Valley Economic Development Corp. and managing director at OCBA. “It’s full of innovators seeking the knowledge and tools for economic growth and prosperity that’s offered at the Accelerator.”

The Challenge

All three OCBA Challenge Gold winners are homegrown businesses from New York’s Hudson Valley: Free Thought Designs, Air Chex Corp., and Sabila Aloe Drink. Free Thought Designs, of Woodbury, is a 3D printing manufacturer. Owner Ed Hebel is currently focusing on toll pass holders and phone stands, with aspirations of a mass production facility one day. Mark Wallach, owner of Air Chex, has plans for every bus, truck and trailer in the world to one day utilize his state-of-the-art tire air pressure monitoring system. Sabila, which started out of a Pine Island garage in 2009, produces a variety of aloe drinks distributed across the region with plans to expand its distribution network with help from the Hudson Valley Food & Beverage Alliance – an HVEDC cluster development initiative.

Silver winners include a creator and distributor of innovative online and app-based learning software – KudoKit. Bronze winners include companies from a variety of industries, including food and beverage, marketing, a ballet-inspired workout system, software development for contractors, safety equipment and more: Bronx Pop, Beyond Barre, Capacity Consulting Inc., Connected Contractors, Innovative Safety, Itelligent, Round The Mark Marketing and True Light Inc.

“The Accelerator has been a talent magnet and economic development epicenter of the Hudson Valley since its inception in 2009,” said Orange County Executive Edward A. Diana. “I am especially proud of our existing business community’s participation and partnership in the Challenge.”

In November 2012, the OCBA Challenge gave small businesses throughout the Hudson Valley an extraordinary opportunity: Present your outstanding business summary and compete for a chance to win one year at the Accelerator for just one dollar. After a thorough application process, the winners were chosen by OCBA officials and honored at a luncheon on Wednesday, April 3 at the Accelerator. OCBA received so many applicants, officials decided to award 3 levels of winners. The three runners-up, which were Silver winners, were awarded 50 percent discounts on a one-year residency while six Bronze winners earned 50 percent discounts on non-resident client services.

Not only did the Challenge attract high quality companies, but it

also engaged the Hudson Valley business community by providing professional support to the winners. The OCBA Challenge was sponsored by three prominent businesses, Hudson River Ventures LLC; Advance Testing Company Inc.; and Jacobowitz & Gubits LLP.

In addition to discounted Accelerator services, all winners also received a complimentary one-year membership to the Orange County Chamber of Commerce and Orange County Partnership for Economic Development, courtesy of Advance Testing, as well as a complimentary one-hour legal consultation with Jacobowitz & Gubits.

“The Orange County Business Accelerator Challenge is a tremendous resource for start-up companies that helps reduce overhead when small businesses need it most,” said Sean Eldridge, founder and president of Hudson River Ventures. James P. Smith, owner of Advance Testing, added, “I started my business out of a station wagon for a year before

I could afford rent. Programs like the Accelerator have given today’s startups the head-start I wish I had.”

Gerald Jacobowitz, founding partner of Jacobowitz & Gubits, said, “We are very pleased to see winners of the OCBA Challenge in the food and technology industries. These are thriving business clusters in the Hudson Valley and we’re sure the Accelerator will assist them in achieving job growth and economic wealth well into the future.”

“Orange County has an incredibly vital business community with a ton of great talent,” said Dr. John A. D’Ambrosio, President of the Orange County Chamber. “Thanks to the OCBA Challenge and its sponsors, there’s now more.”

With help from the Accelerator’s aggressive three-year program, Continental Organics, an aquaponics farm, last year opened its 70,000-square-foot, state-of-the-art facility in New Windsor and recently announced plans to expand. It is currently one of the fastest-growing such operations in the Northeast – a great inspiration for the new Accelerator clients.

Businesses Rise to Accelerator Challenge

From L to R: Challenge winner Ed Hebel, of Free Thought Designs; Challenge sponsor James Smith, of Advance Testing; Challenge winner Mark Wallach, of Air Chex Corp.; former Congresswoman Nan Hayworth; Challenge winner Kyle Kuciemba, of Media BuyBack; Challenge winner Deborah Kurtzman, of KudoKit; Orange County Executive Edward Diana; Laurence Gottlieb, President of Hudson Valley Economic Development Corp.; Mike Oates, CEO of Challenge sponsor Hudson River Ventures; Bob Armistead, chairman of the Orange County Industrial Development Agency; and Kenan Porter, of Challenge winner Sabila USA.

Spring 2013 5

Contest brings various new companies to OCBA

Hudson River Ventures CEO Mike Oates and Ed Hebel of Free Thought Designs.

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Operation and warehouse to add hundreds of jobs and focus on sustainable energyUnited Natural Foods, Inc. (UNFI), a national distributor of organic, natural and various specialty foods, will build a brand-new, state-of-the-art warehouse and distribution facility in Montgomery- thanks to the great teamwork between Orange County officials, the Orange County Partnership, HVEDC and Empire State Development.

Many community leaders and executives say the coming facility will be a major boon for the local economy as the area continues to grow as a key distribution hub for the entire Northeast. Montgomery is an optimal location for the 525,000-square-foot facility, not only geographically but also due to the community’s commitment to fostering significant economic development in the region.

The area will receive more than 360 new jobs from the project.

UNFI is one of the national leaders in distribution of natural foods, but this project marks its first distribution center in the state of New York. The facility is scheduled for completion in fall 2014.

UNFI is investing more than $55 million in the project, with additional funding coming from state economic development agency Empire State Development. That additional funding will come in the form of $3.6 million in tax credits through the Excelsior Jobs program.

The new facility will be located just off of Interstate 84 in the Hudson Valley, a region that has seen some significant growth in recent years. The warehouse and distribution facility will give UNFI the capability to increase the efficiency of distribution and service to New York’s growing metropolitan area, while preventing capacity from being an issue in the facilities that already exist in the Northeast.

Initial employment estimates indicate that it will open with 223 associates, with that number increasing to 331 within the first two years as UNFI scales up capacity to meet local demand.

Another Big Win: Town of Montgomery to be the Site of New United Natural Foods Distribution Facility

Senator Schumer visits Fryer Machine Systems to discuss the America Works Act.

Legislation will help supply local businesses with the skilled workers they needA coalition of local business and academic leaders joined U.S. Senator Charles E. Schumer, as he launched a plan to ensure that community colleges are able to provide students with opportunities for high-tech manufacturing positions.

The plan is called the America Works Act and it restructures the financing methods for community college workforce training programs. Under this legislation, all programs that provide industry-recognized credentials to their graduates will be prioritized when it comes to federal funding.

Fryer Machine Systems, a Putnam County-based company that specializes in manufacturing more than 50 high-quality machine products for the automotive and aerospace markets, was used as an example of a business that would benefit from this legislation. The family-owned company has noticed a lack of skilled workers that are properly prepared for jobs. The America Works Act would help to provide the company with the skilled machinists, testing employees and process engineers it needs.

Sen. Schumer and other Putnam County business leaders and representatives chose Fryer Machine Systems to be the site of the announcement of the America Works Act because the business perfectly illustrates the need for the program and the types of economic benefits the bill can provide.

The National Association of Manufacturers recently highlighted a study that showed that 74 percent of companies lack qualified workers to fill their skilled production positions. This negatively impacts a business’s ability to expand, which in turn reduces the money that it can bring into a community. And, unemployment rates are improving. The New York State Labor Department places unemployment rates at 6.3 percent in Putnam, 6.4 percent in Rockland, 6.8 percent in Westchester, 7.4 percent in Dutchess, 7.9 percent in Orange, 8.5 percent in Ulster and 9.9 in Sullivan.

The ultimate goal of the America Works Act is to find a balance between these two issues, and incentivize the use of industry-recognized standards from certification programs to get community colleges and various job-training centers to update their curricula. The more students who enroll in programs such as computer engineering, welding and machining, the more skilled workers will be available to fill these production jobs and help local businesses to flourish.

The result of this shift in curricula is a closing of the skills gap that currently plagues many manufacturing industries. It also helps students earn their degrees and find greater access to good jobs out of school that pay well and allow them to make use of their education in a practical manner.

Local community colleges, students and businesses are all on board with the plan.

America Works Act Introduced in Presentation at Fryer Machine Systems

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Spring 2013

Company becomes founding member of organization created by HVEDCArtuso Pastry Foods Corp., an Italian-American family-grown business that has become a nationally recognized culinary treasure through dedication and authenticity, one fabulous cannoli at a time, has joined the Hudson Valley Food & Beverage Alliance as a founding member.

In business for nearly 70 years, Artuso Pastry was founded by Vincent F. Artuso Sr., who migrated to the Bronx with his family in 1930 and purchased a pastry shop after returning home from serving in World War II. Over the years, and through four generations of family, the shop has grown into a company that now has a wholesale division in Mount Vernon, which distributes Italian pastries to specialty retailers, premium food service distributors, and nationwide supermarkets, including Whole Foods, ShopRite and Wegmans. In addition to the original Bronx location, Artuso Pastry has expanded its retail presence with a new café in the village of Mamaroneck.

“Artuso Pastry is proud to become a founding member of the Hudson Valley Food & Beverage Alliance and we look forward to working closely with the Hudson Valley Economic Development Corp. and the other founding members of the Food & Beverage Alliance,” said Anthony J. Artuso Jr., grandson of founder, Vincent. “This is an important time of growth both locally and beyond, and that, of course, brings both opportunities and challenges for any business. It will help us to be part of an organization of businesses that are confronting similar concerns.”

The Food & Beverage Alliance helps food and beverage companies in the region work together as strong partners and market their products nationwide. Launched by the Hudson Valley Economic Development Corp., the organization includes food businesses, farmers, vegetable growers, beverage makers, distributors, and other organizations in the industry.

“We are delighted to welcome this long-standing, iconic business to our new organization,” said Laurence P. Gottlieb, president and CEO of HVEDC. “Artuso Pastry is ramping up its business while also maintaining the bakery traditions of its founding. This company will continue to expand its production presence in the Hudson Valley and its product will become a household name well beyond our region.”

Artuso Pastry Joins the Hudson Valley Food & Beverage Alliance

HVEDC on YouTubeLearn more about HVEDC projects by visiting our YouTube Channel.

www.youtube.com/user/HudsonValleyEDC

UPDATE ON BUSINESS DEVELOPMENTS IN NEW YORK’S HUDSON VALLEY

S P R I N G 2 0 1 3 • H V E D C . C O M

INSIGHTS