Gyrodyne Unveils Plan for Redevelopment of Smithtown Site

ST. JAMES, N.Y., Jan. 8 /PRNewswire-FirstCall/ -- Gyrodyne Company of America, Inc. (NASDAQ: GYRO) today announced that it has petitioned the Town of Smithtown in Suffolk County, NY for a change in zoning classification so that the Company can pursue development of an age-restricted luxury residential community at a 67-acre prime location it owns. On December 7, 2006, the Company announced that it soon would be filing the petition.

As indicated in the petition, Gyrodyne plans to develop a community that would feature 39 single-family homes, 60 townhouses and 210 condominiums. Living space would range from 1,600 square feet for the smallest condominiums to 2,800 square feet for detached single-family homes. Amenities would include a clubhouse with recreation facilities, pedestrian and bicycle paths, and extensive landscaping. Prices are currently expected to range from $850,000 to $1.45 million per home.

The company has engaged the firm of Platt Byard Dovell White Architects for design work. The firm enjoys an outstanding reputation for designing attractive residential and commercial properties. Leading the project will be Sam White, FAIA, a partner at the firm who is known specifically for his proven ability to blend historic context into new architecture.

The petition asks for the zoning of approximately 62.4 acres to be changed from "light industrial" (approx. 55.5 acres) and "residential" (approx. 6.9 acres) to "planned residential." Another 4.3 acres of the property owned by the Company, while already zoned as "residential," would remain undeveloped. Total amount of open space remaining after development is expected to exceed 40 acres. As indicated in the petition, Gyrodyne plans to remove the industrial buildings currently in use at the appropriate time.

According to an analysis obtained by the Company, the local road traffic caused by the residential development would be lower than the levels attributed to the current industrial operations. The development also would have a positive impact on the municipal tax base, while the age-restricted nature of the community would not affect the local school population. The company estimates that 100 construction jobs and 15 permanent jobs would be created by the project.

Gyrodyne's proposal replaces its previous plan, developed with substantial public input, to develop what had been a much larger property as a luxury golf course community. In 2005, the State of New York on behalf of Stony Brook University seized 245 acres through eminent domain.

Gyrodyne President Stephen V. Maroney commented, "We are delighted to begin the process of presenting this development proposal to the Town of Smithtown and its residents, so many of whom were supportive of our previous plan. Our objective has been, and continues to be, to identify and pursue the best use for this extraordinary piece of property. There is a definite market demand for this type of housing, and we're pleased that we've come up with a way to help meet that demand that benefits the surrounding community in several significant ways."

Forward-Looking Statement Safe Harbor

The statements made in this press release that are not historical facts contain "forward-looking information" within the meaning of the Private Securities Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, which can be identified by the use of forward-looking terminology such as "may," "will," "anticipates," "expects," "projects," "estimates," "believes," "seeks," "could," "should," or "continue," the negative thereof, other variations or comparable terminology. Important factors, including certain risks and uncertainties, with respect to such forward-looking statements that could cause actual results to differ materially from those reflected in such forward-looking statements include, but are not limited to, the effect of economic and business conditions, including risks inherent in the Long Island, New York and Palm Beach County, Florida real estate markets, the ability to obtain additional capital or a viable merger candidate in order to develop the existing real estate and other risks detailed from time to time in our SEC reports. We assume no obligation to update the information in this press release.

About Gyrodyne Company of America, Inc.

Gyrodyne owns a 67-acre site approximately 50 miles east of New York City on the north shore of Long Island. The Company is currently contesting the value paid by New York State for 245.5 adjoining acres taken under eminent domain proceedings. The Company is also a limited partner in the Callery Judge Grove, L.P., which owns a 3,500 plus acre property in Palm Beach County, Florida. Gyrodyne's common stock is traded on the NASDAQ Stock Market under the symbol GYRO. Additional information about Gyrodyne may be found on its web site at http://www.gyrodyne.com/.