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ONLINE INSIDER A Site Selection Web Exclusive, May 2015
A Hudson River Valley site once home to thousands of IBMers is positioned for a reboot 60 years after its debut.

ONLINE INSIDER

The TechCity property, first established in 1955 by IBM, is characterized as much by its magnificent setting as its magnificent industrial infrastructure.
Photos courtesy of TechCity

 

 

 

If there’s an edge of desperation in the voice of Jim Quigley III, town supervisor of Ulster, N.Y., it’s well earned. The Hudson Valley town, 90 minutes north of the Big Apple, has had its share of economic struggles since the days when IBM first established a major site there.”In the 1950s, IBM made a site selection decision that changed the face of the community, when they made the decision to build a manufacturing plant in a cornfield in a small little town that was a suburb of Kingston and dependent on an agrarian economy,” says the lifelong Ulster County resident. “It became the driving force of the economic development of the community, taking the population from around 3,500 in 1950 to slightly over 12,000.”Today the community’s face, like many across the nation, is looking decidedly older, owing to a classic case of brain drain. Some would trace it to IBM’s departure in the mid-1990s.”Kids lucky enough to go to college don’t come back,” says Quigley. “We’re suffering from that, due to a lack of opportunities in our community. Consequently it’s very tough to make a living.”

Jim Quigley III, town supervisor for Ulster, N.Y., says of the TechCity site, “I’ve done everything I could over the last five-and-a-half years to make something here.”

The recent pullout by Niagara Bottling from a planned $53-million drinking water bottling operation didn’t help. Nor does an Ulster County population that has lost some 2,000 residents since 2010, with a current estimated population of 180,445. But that very IBM site — on the brink of passing its final environmental remediation milestone — is getting into position to slake the economic thirst of the region.

Early this month, the site’s owner TechCity Properties, which acquired the property in February 1998 from IBM, engaged Alvarez & Marsal Real Estate Advisory Services (A&M) to begin a process that will result in the sale of all or part of the 258-acre property, which contains 1.7 million sq. ft. of existing space and has the potential for millions of square feet of additional development.

“This sale represents a unique opportunity to acquire office and manufacturing buildings at a significant discount to replacement value, as well as developable land in a magnificent setting with views of the Catskill Mountains and Esopus Creek, near the historic towns of Woodstock, Rhinebeck and Kingston, New York,” said Jerry Pietroforte, who heads the A&M team.

In addition to its own road network and CSX rail link, the site has a large freshwater supply for cooling; ample supply and access for gas and electrical service (“sufficient for data centers and back-up generators” A&M notes); access to a diverse fiber-optic network; and even an on-site helipad.

The site is organized to allow for development of individual buildings on 27 separate tax parcels, clusters or as a multi-faceted commercial park. In addition to the buildings, greenfield sites of around 58 and 36 acres are also available for development.

Renewed Promise

Already the property is about 40 percent occupied by a combination of industrial and office tenants unbothered by the fact that environmental remediation related to seepage of industrial solvents from years of R&D was not complete. Pietroforte, a 30-year real estate veteran himself, says that fact alone is reason for optimism.

“What’s different now is that the environmental issue has largely been remediated,” he says, with the final check-off possibly less than a year away. “It can attract the right kinds of tenants, provided it’s a fit for what they’re trying to do operationally and locationally.”

“We’ve been successful in bringing in Bank of America and various low- and high-tech companies,” says TechCity CEO Alan Ginsberg, who acquired the site from IBM in 1998. “There are some cool things going on, including a cluster of agricultural type businesses. The Hudson Valley is amazing — it’s a farm-to-table market. You’re an hour and a half outside the biggest market in the world.”

The approved master plan allows for office, manufacturing, distribution, R&D, and a variety of recreational uses. That designation has not come easy, as redevelopment plans proposed over the years tended to be residential in nature.

“It would be a detriment to future generations to down-zone that site for less intensive use.”

— Ulster Town Supervisor Jim Quigley III

“Throughout my career I’ve seen developers one after another propose conversions to residential because that’s the most money they can make,” says Town Supervisor Quigley. “But it’s not necessarily the best answer to the question.”

An experienced real estate professional, Quigley is the son of a construction executive and real estate broker who developed real estate in the area in the 1980s, and who trace their business lineage in the region back to the mid-1800s.

He knows whereof he speaks when it comes to land use, and he knows what sort of operations create quality jobs.

“This is the last major contiguous parcel in our town that has the development attributes for an industrial site,” he says, referencing land use proposals from 2010 that “I felt were incompatible with the history of the site and where the town wanted to see this site go. It would be a detriment to future generations to down-zone that site for less intensive use. It is the town’s objective to see that it remains a site for job generation, as opposed to a conversion to a residential or retail use.”

Pietroforte compliments the collaborative and cooperative spirit among TechCity, IBM, the EPA and the New York Department of Environmental Conservation (DEC) over 15 years of remediation activity.

“Having devoted a significant portion of my life and a considerable amount of my personal resources to making TechCity a success, I am now hopeful that it will attract the interest of developers who see it as an asset with great potential.”

— TechCity CEO Alan Ginsberg

“I’ve worked on several of these kinds of projects before,” he says. “Until the property is totally remediated, it’s hard to gauge exactly where you are. But it’s usually pretty apparent when you’ve gone from a very egregious situation to a considerably better situation. That’s exactly where we’ve gone here. For the sophisticated real estate investor, I don’t expect the environmental issue is a significant one — it takes due diligence but doesn’t require anything that resembles alarm.”

Given the size of the property and scale of the contamination, he says there’s usually ample opportunity for things to go off the rails for one reason or another.

“In my view it’s an encouraging story” of regulators and companies working together to right a wrong, he says. “IBM has done the right thing here. The engineers all around have stuck around for a lengthy period of time, and they’ve come out the other side in pretty good shape. Alan has fought his way through all of those issues, and done a masterful job of making sure IBM and the DEC have held to their original commitments.”

Finish Line, Starting Line

Ginsberg says it was 20 years ago when he first had contact with IBM senior management about the property, after new leadership had taken the helm at the company.

“This was one of their most important sites on the globe,” he says, where mainframe computer testing, and before that electric typewriter manufacturing, had taken place for years, and an enormous infrastructure had been built up to support hundreds of millions of dollars worth of equipment. At its height of activity, some 7,100 people worked there round the clock, inventing such things as the FAA’s air traffic control system and the SABRE airline reservation system.

Of the way the company dealt with environmental issues on site, Ginsberg says, “IBM, because they’re a standup company, only knows one way to do things, the right way. This is one of the most dignified, professional, reputable companies in the world — I have so much respect for them,” says Ginsberg.

That respect persisted despite some difficult negotiations with Big Blue, which was used to holding onto sites in perpetuity. But gradually it learned to let it go.

“They had built it out for 2.5 million square feet when I acquired it — office, data centers, light industrial and distribution,” Ginsberg says. “They had plans to double the square footage for more data centers and more high-level facilities. So it takes some time to go through that process. It was a difficult, challenging transaction.”

For his part, Quigley says it’s time to see the campus broken apart.

Jerry Pietroforte, managing director of Alvarez & Marsal Real Estate Advisory Services, is impressed by the level of collaboration among IBM, state regulators, the local community and TechCity during 15 years of environmental remediation activity.

“As I look at it today, it’s configured as a single-user facility, which is not ideal for redevelopment,” he says, noting, among other challenges, a massive centralized utility plant designed to provide IBM low-cost heat and power. He likens the outdated configuration to the hundreds of regional malls gasping for breath across the country. Their locations remain prime, but their physical attributes need a complete overhaul to reflect today’s technology and workforce environment.

For example, all the corridors at the IBM site are on the outside, befitting the single-user corporate ethos of days gone by — “No one gets a window office,” says Quigley — but not the ethos of today’s rental market, where users will pay a premium for window offices.

That said, the entire property — a participant in partnership with Ulster Community College in the Start-Up-NY program — is available to a single end user with a vision. There’s certainly precedent for such a mega-investor in the state: Just visit GlobalFoundries’ manufacturing campus in Malta, N.Y.

“We’ve done a lot of the heavy lifting,” says Ginsberg. “It’s a beautiful environment. The setting is spectacular, with water and mountains. And it’s all flat — 90 percent of the site is developable, which is extraordinary.

“This place,” he says, “is ready to rock and roll.”

TechCity, already home to a cluster of ag and food firms, is only 90 minutes from the Big Apple.

The sprawling former IBM Corp. plant here, known as TechCity since 1998 when it was bought by a developer, is for sale again.

Alan Ginsberg, who bought the site and has worked on developing it as a business center, announced today, Wednesday, that he has hired a company to find a buyer for all or part of it.

Ginsberg hired Alvarez & Marsal Real Estate Advisory Services, or A&M, “to begin a process that will result in the sale of all or part of the 258-acre property,” a spokesman said. The site has 1.7 million square feet of existing space “and has the potential for millions of square feet of additional development.”

Ginsberg said in his announcement, “We have seen some notable achievements since we took ownership in 1998. We have attracted a number of businesses, obtained approval for a new master plan and, through our marketing, told a positive story about the region to countless people around the world.”

He added, “I am also pleased to be able to say that the completion of IBM’s environmental remediation efforts is now within sight – perhaps less than a year away.”

IBM has continuing responsibility for chemical contamination at the site.

Ginsberg, whose activities in realty had been largely in the New York City metropolitan area, came to Ulster County seeking IBM’s surplus property and seeing it as a multi-tenant high-tech site. There have been some successes, including some more traditional forms of manufacturing or business use.

“Having devoted a significant portion of my life and a considerable amount of my personal resources to making TechCity a success, I am now hopeful that it will attract the interest of developers who see it as an asset with great potential,” he said.

As many as 7,000 IBMers worked at the plant in its heyday.

KINGSTON, N.Y.–(BUSINESS WIRE)–TechCity Properties has engaged Alvarez & Marsal Real Estate Advisory Services (A&M) to begin a process that will result in the sale of all or part of the 258-acre property. The site contains 1.7 million square feet of existing space and has the potential for millions of square feet of additional development.

“Having devoted a significant portion of my life and a considerable amount of my personal resources to making TechCity a success, I am now hopeful that it will attract the interest of developers who see it as an asset with great potential.”

Jerry Pietroforte, who heads the A&M team, said: “This sale represents a unique opportunity to acquire office and manufacturing buildings at a significant discount to replacement value, as well as developable land in a magnificent setting with views of the Catskill Mountains and Esopus Creek, near the historic towns of Woodstock, Rhinebeck and Kingston, New York. Originally built by IBM for its own use, the property has its own road network and CSX rail link and is organized to allow for development of individual buildings on 27 separate tax parcels, clusters or as a multi-faceted commercial park.”

TechCity CEO Alan Ginsberg said: “We have seen some notable achievements since we took ownership in 1998. We have attracted a number of businesses, obtained approval for a new master plan and, through our marketing, told a positive story about the region to countless people around the world. I am also pleased to be able to say that the completion of IBM’s environmental remediation efforts is now within sight – perhaps less than a year away.

“Having devoted a significant portion of my life and a considerable amount of my personal resources to making TechCity a success, I am now hopeful that it will attract the interest of developers who see it as an asset with great potential.”

The property’s additional attributes include:

  • Proximity to a regional and national transportation network;
  • A large fresh water supply for cooling;
  • Ample supply and easy access to gas and electrical service, sufficient for data centers and back-up generators;
  • Access to a diverse fiber optic network.
  • On-site helipad.
  • Magnificent views in the midst of the scenic Hudson River Valley.

Located within a community that is known as a center for art, music and culture, with affordable housing stock and numerous nearby educational institutions, the property has an approved master plan that would allow for its use in office, manufacturing, distribution, R&D, and a variety of recreational uses. It is also a participant, in partnership with Ulster Community College, in New York State’s “Start-Up New York” program.

Because the property is being offered for sale in whole or in part, there are a variety of possible scenarios, ranging from an individual owner with a vision for the entire site to a small business that sees an opportunity to relocate and grow by purchasing an individual building in this cost-effective location.

Alvarez & Marsal is a leading global professional services firm that delivers performance improvement, turnaround management and business advisory services. A&M Real Estate Advisory Services has more than 60 dedicated real estate professionals in nine offices in the U.S. and Europe. It provides innovative, action-oriented and results-driven services to owners, investors, lenders, managers and occupiers of real estate.

The A&M team is being led by Managing Director Jerry Pietroforte, who has more than 30 years of real estate and capital markets experience and specializes in restructuring, strategic planning and transactional execution. He has served as a lawyer, banker, financial advisory and principal. He has evaluated real estate equity and debt matters in excess of $100 billion and he has structured purchases and sales of numerous real estate assets.

Town of Ulster—(July 1st, 2014) Five new tenants have signed leases totaling more than 17,000 square feet at TechCity, including Hudson Valley Harvest, which will occupy 9,000 square feet in 72 Boices Lane, and Visual Color Systems, which will occupy 4,000 square feet in 74 Boices Lane.

 

Hudson Valley Harvest was created in 2011 to improve access to the bounty of the Hudson Valley. The company works with farms to provide local, traceable, transparent food of the highest quality to the Tri-State area. Its network of independently owned local farms produces some of the most delicious, highest quality local food found anywhere, which Hudson Valley Harvest, makes available to consumers reliably and conveniently.

 

Among Hudson Valley Harvest’s new neighbors will be Farm to Table Co-Packers, which has been located at TechCity since 2009 and which now occupies 34,000 square feet. Farm to Table is a full service contract packaging facility that produces everything from frozen vegetables and soups to jarred pickles and sauces. Farm to Table provides superior service throughout the entire co-packing experience, while producing the highest qualities products for its clients. It operates a 29,000 square foot kitchen, a dedicated processing line, a full bakery and an incubator/test kitchen.

 

TechCity management believes that the location of these two agricultural and food products companies represents the beginning of an industry cluster at the site, which has ample ability in an adjacent building to provide the services – production, warehouse and distribution, refrigeration, ease of shipping and receiving – that companies in that sector require.

 

Paul Alward, President of Hudson Valley Harvest, said: “Hudson Valley Harvest is very pleased to be a part of the renewal happening here at TechCity. They have created an environment conducive to entrepreneurship and job creation. For many people in our community this area has been a reminder of hardship for far too long, we are very fortunate to be part of the rebirth happening here.”

 

Visual Color Systems, Inc. is an independent company dedicated to helping its customers select, specify, communicate, and control color. It brings to this field over 30 years of experience working in all aspects of color communications, including hands-on color matching, process control, product development, sales and management. The company has helped to create color control programs for food products, computer systems, office furniture, cosmetic packaging, automotive applications, medical instruments, and many more diverse applications.

 

The additional new leases signed are with:

 

–       Centaur Properties, LLC, a New York City-based real estate firm, to be located in 60 Boices Lane;

–       Coram CVS, a leader in the home infusion industry, serving 20,000 patients each month, to be located in 506 Enterprise Drive;

–       Scrub Masters Plus Corp, a cleaning service, to be located in 505 Enterprise Drive.

 

Alan Ginsberg, CEO of TechCity Properties, said: “TechCity has become a true Commerce Park, with a wide range of companies choosing it as a location. Our 256-acre site includes outstanding infrastructure, existing space for sale or lease and open space ready for development. And its approved master plan allows for future improvements and a diverse mix of occupants – from industrial to R&D, from agricultural to education, from retail to residential, from manufacturing to film production.”

 

TechCity, located in the scenic Hudson Valley, 90-minutes from New York City and 60-minutes from Albany, offers a number of benefits to companies that locate there, including: possible inclusion in the Start-Up NY program, through a partnership with Ulster Community College, for companies that qualify; industrial grade infrastructure, including lit and dark fiber communication trunks, two major electrical power providers and ample water supply; and proximity and ease of access, by rail, road and air to markets from the mid-Atlantic to Canada.

 

Cushman and Wakefield/Pyramid Brokerage Company serves as TechCity’s broker. Stephen Perfit, Senior Executive Director of Pyramid’s Hudson Valley Office in Newburgh, can be reached at (845) 522-5900 or sperfit@pyramidbrokerage.com.

TOWN OF ULSTER >> Ulster County Community College is one of eight schools in the SUNY system selected to participate in Start-Up NY, a tax-exempt economic development program designed to link colleges in the state with businesses.

UCCC will use 168,000 square feet in a building at TechCity in the town of Ulster to train students for careers, college president Donald Katt said on Tuesday.

“I’ve been meeting with prospective business partners,” Katt said in a phone interview. “I’ve met with about a dozen, and I think two of them are really ready to go, and we’re setting up a meeting for the first person who has submitted an application to us to become a partner.

Katt did not identify any of the prospective business partners.

The program, unveiled last year by Gov. Andrew Cuomo, provides participating businesses with exemptions from state business taxes, sales taxes and personal income taxes.

Katt said the relationship between UCCC students and business owners can include paid and unpaid internships, business assistance for students and company representatives visit classes.

“That will be a huge advantage to our students to actually spend time in the business in whatever area the business might be operating in,” he said.

“We would ask that the principals of the business perhaps consider joining our curriculum advisory council to make sure our curriculum is … up to current standards,” Katt said. “We might ask the principals of the company to be guest speakers in our classrooms.”

Katt the program also gives business owners incentives to address areas that need employment growth.

As for using space at TechCity rather than on UCCC’s Stone Ridge campus, Katt said: “Initially, when they started talking about this in the governor’s office, they had businesses locating in vacant space on SUNY campuses. Then they realized, especially in the community colleges … there isn’t any room. Between 9 (a.m.) and 2 (p.m.), there isn’t a vacant room on this campus.”

TechCity officials could not be reached for comment on Tuesday, but property owner Alan Ginsberg, in a press release, spoke highly of the Start-Up New York program and UCCC’s participation.

“The Hudson Valley can be a center of economic growth in the future, and we’re proud to be working with Ulster County Community College as they move forward in the Start-Up New York program,” Ginsberg said. “We believe the manufacturing, technology and entrepreneurship efforts that Start-Up New York is focused on can enliven the economy.”

The other seven SUNY-connected schools selected to participate in Start-Up New York, according to the Times Union of Albany, are SUNY Albany, SUNY Buffalo, SUNY Stony Brook, SUNY Downstate (in Brooklyn), Monroe Community College (Rochester), Onondaga Community College (Syracuse) and the state-run portion of Cornell University

TechCity, which was an IBM plant from the 1950s until the mid-1990s, has contaminations problems left by the computer giant, but a map included with a state Department of Environmental Conservation cleanup order shows no problems related to the property’s Building 052, which UCCC is to use for the Start-Up NY program. The building is at the northeast corner of the sprawling TechCity campus.

Ginsberg bought the property from IBM in 1998, 20 years after IBM discovered the contamination. IBM is responsible for the cleanup.

Katt said he is confident that contamination issues have been addressed by the Department of Environmental Conservation.

“The seem to have a remediation plan that’s much better and faster than what IBM had been proposing,” he said.

http://www.dailyfreeman.com/general-news/20140311/ulster-county-community-college-will-use-168000-square-feet-at-techcity-for-start-up-ny-program

TechCity Properties, of the town of Ulster, N,Y., has appointed Roger Osterhoudt, of Saugerties, N.Y., as vice president of property management and Gregory Strong, of Beacon, N.Y., as vice president of administration.

Osterhoudt has a background in construction, management and manufacturing and has been facilities manager at TechCity for the past four years. Prior to that, he held positions with J. Mullen and Sons Construction in Saugerties. In his new position, he will manage property operations, leasing, maintenance and security and coordinate with contractors to meet the needs of current and future tenants.

Strong has a background in property management and has worked in lease administration and general bookkeeping at TechCity for the past four years. Prior to that, he held a series of positions with Miron Building Products of Kingston, N.Y. In his new position, he will participate in long-range planning, human resources activities and various other administrative and management functions.

TechCity could be hub for future economic growth, say business leaders

KINGSTON, N.Y. (June 17, 2013) – The New York State Department of Environmental Conservation (NYSDEC) has issued “No Action” and “No Further Action” declarations for TechCity in Kingston that clear the way for new ways to develop the site in the future.

“This is a major milestone for TechCity, which has the potential to be a powerful economic engine for the region,” said Alan Ginsberg, the CEO of TechCity. “Achieving the necessary DEC approvals was our most urgent priority. TechCity’s 191 acres and 1,700,000 square feet of office space are clean and ready for development.”

In the DEC’s Final Statement of Basis, it deemed the corrective measures taken by IBM and TechCity to be “protective of human health and the environment.” The Final Statement of Basis included responses submitted during a public comment period from February 28 to March 29. The TechCity site is a former IBM plant.

“I commend TechCity in working with NYS and IBM to resolve environmental contamination and liability issues on the TechCity campus,” said Mike Hein, the Ulster County Executive. “This site has tremendous infrastructure and economic development potential now that this important clean bill of health has been issued.”

Ginsberg said the site’s master plan has been approved to host universities, colleges, retail, office and industrial uses.

“TechCity now has a clean bill of health and we will examine ways to transform the site and bring hundreds of new jobs to Ulster County,” said Ginsberg, who said that TechCity’s investment in the remediation efforts have included the removal of several buildings. “This site has unlimited potential and can accommodate almost any industry type.”

The NYSDEC’s Robert W. Schick, P.E., Director of the Division of Environmental Remediation, wrote in the Final Statement of Basis, “This remedy utilizes permanent solutions and alternative treatment, or resource recovery technologies, to the maximum extent practicable, and satisfies the preference for remedies that reduce toxicity, mobility, or volume as a principal element.”

Ned Sullivan, the President of Scenic Hudson, expects the DEC declarations to help position TechCity as a prime commercial site for Fortune 1,000 firms. “This DEC action represents a regulatory sea change,” said Sullivan. “TechCity is now dressed for success as a job hub in the exciting new economy of the Hudson Valley.  We at Scenic Hudson are particularly excited to see the cleanup and revitalization of a former industrial facility — a great regional and national model of smart growth.  I commend Alan Ginsberg, TechCity, IBM, and the New York State Department of Environmental Conservation for this collaborative achievement.”

Business leaders from across the region expressed enthusiasm about the DEC pronouncements and believe TechCity can help promote much-needed economic development.

Ward Todd, the President and CEO of the Ulster County Regional Chamber of Commerce, said, “This is great news for Kingston, Ulster County and the entire region. This will now position TechCity to be a centerpiece of economic growth. We look forward to the opportunity to help promote TechCity and allow it to reach its fullest potential.”

Michael Smith, the President of the New Paltz Regional Chamber of Commerce, said, “It is a positive step for our region. We need business centers like TechCity that can accommodate businesses from all types of industries. TechCity represents one of the region’s most accessible and versatile shovel-ready sites.”

TechCity Properties, the Hudson Valley’s premier commercial real estate redevelopment site, together with Time Warner Cable Business Class, recently announced the companies have completed a project that brings an advanced communications fiber network to the 258-acre, 2.2 million square-foot TechCity complex.

“Fiber connectivity is a critical element in attracting data-dependent operations and data centers to TechCity and the Hudson Valley,” said Alan Ginsberg, Chairman of TechCity Properties, Inc.  “Creating a redundant system ensures maximum up time and gives TechCity another competitive advantage compared to other sites in the Hudson Valley and New York State.”

Ken Fitzpatrick, President of Time Warner Cable Business Class for the East Region, said, “Our early-on decision to extend our fiber network to TechCity sends a strong signal to the data center industry that this business campus stands prime and ready for immediate occupancy. As the premier telecommunications provider in New York and beyond, we look forward to serving the technology needs of TechCity tenants and businesses throughout the Hudson Valley.”

KingstonNOW, a locally produced TV news program, recently featured TechCity and all that is happening at the Hudson Valley’s leading commercial real estate site.  Sales and Marketing Director Paul Rakov gave his thoughts on why TechCity has been successful attracting solar panel manufacturing, solar thermal technology, leading-edge technology manufacturing, sustainable food production and other innovative industries.  Check it out!

The Ulster Town Board on Thursday approved a new  zoning designation for TechCity, allowing the former IBM-Kingston complex to expedite changes on its 138.4-acre east campus.

The board, by a unanimous vote, granted the request for a Redevelopment Overlay District to replace an Office Manufacturing District zone for the property.

Town Supervisor James Quigley said the change was needed to help TechCity secure new businesses for the site.

“For the most part, as long as they stay within the major concept set forth in the environmental impact statement, they can go comfortably and confidently to either a new tenant or a prospective buyer … to construct (buildings) within the envelope that we’ve defined and be reasonably comfortable they’re going to get efficient and fast town approvals,” Quigley said.

Under the proposed redevelopment plan, about  290,000 square feet of obsolete office space would be demolished;  two buildings comprising 558,000 square feet would be reconfigured for interior parking facilities; 1.3 million square feet of existing office space would continue in use, and new construction would add about 645,000 square feet.

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