FOR IMMEDIATE RELEASE Release #042-00
Monday, February 7, 2000

Release #042-00

MAYOR GIULIANI AND QUEENS BOROUGH PRESIDENT SHULMAN
ANNOUNCE LEADING INTERNET SERVICES PROVIDER TO LOCATE
IN LONG ISLAND CITY

EPSINet Will Open 300,000-Square-Foot Web Hosting Complex
New Facility Will Create 450 Permanent and 200 Construction Jobs

Mayor Rudolph W. Giuliani was joined today by William L. Schrader, PSINet Chairman and Chief Executive Officer; Queens Borough President Claire Shulman; and Michael G. Carey, President of the New York City Economic Development Corporation (EDC), to announce that PSINet has selected Queens as the location for a major web hosting facility, creating 450 full-time jobs and 200 construction jobs.

PSINet is in final negotiations for a lease on a private site in Long Island City. The company expects to make an initial $250 million investment to develop the facility. EDC, on behalf of the City, assisted the company in its search for an appropriate site to establish a state-of-the-art facility to service its New York City-based clients.

"This is great news for the Queens community," said Mayor Giuliani. "PSINet is no stranger to New York City. Last October, the company opened a 15,000 square-foot web hosting facility on Whitehall Street in Lower Manhattan. The company's decision to start up a major operation in Queens underscores the importance of boroughs other than Manhattan as important venues for high-tech companies in their continued success and growth."

PSINet (www.psinet.com) is a global facilities-based Internet Protocol data communications carrier headquartered in Herndon, Virginia. Publicly traded on the NASDAQ market as PSIX, PSINet operates in 26 countries and serves more than 85,000 companies, offering a broad range of advanced commercial Internet and Web service products.

The move into Queens will qualify PSINet for a number of as-of-right benefits, including Energy Cost Savings Program and the Industrial and Commercial Incentives Program (ICIP). The company will also qualify for benefits under the Relocation Employment Assistance Program (REAP) which provides tax incentives for businesses that relocate from south of 96th Street in Manhattan or outside the city to eligible premises north of 96th Street or to any borough other than Manhattan. Qualified businesses are entitled to a credit against business income tax liability of $1,000 per eligible employee per year for 12 years.

"Today's announcement is further evidence that Queens County is an excellent location for hi-tech industries," said Queens Borough President Claire Shulman. "Long Island City's convenient location and current climate of economic growth make it an ideal location to grow and prosper. In addition, our diverse population has the skills and knowledge to provide whatever additional resources PSINet will need. I want to thank PSINet for its investment in Queens and both the Mayor and the City's Economic Development Corporation for helping make today's announcement possible."

William L. Schrader, PSINet Chairman and Chief Executive Officer, said, "I would like to thank Mayor Giuliani, whose efforts to foster business in the City have helped boost the fortunes of Silicon Alley. New York City has the opportunity to be not just The Capital of the World, but The eCommerce Capital of the World as well. Since the dawn of the Internet in the early 1990s, New York City has put its own unique stamp on the future with Silicon Alley. The City's traditional strengths in finance, the arts and media have conspired with its remarkable technology and entrepreneurial zeal to create one of the most exciting business districts in the world. And as this nexus has exploded in size and creativity, we at PSINet knew it was time to seize this opportunity and establish a significant presence in New York City."

EDC President Michael G. Carey said, "PSINet's decision to locate a state-of-the-art web hosting facility in Long Island City demonstrates that Silicon Alley's boundaries are now expanding beyond Manhattan. Today New York City has over 3,000 new media firms, employing over 100,000 people, and I want to congratulate Mayor Giuliani for creating a business environment that continues to attract growing hi-tech companies like PSINet and jobs to New York City. "

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