COVER STORY, APRIL 2011

ECONOMIC DEVELOPMENT

Although we keep hearing about a "jobless recovery," we all know that more jobs will create more demand for real estate. And who is looking to attract jobs and fill buildings? Economic development experts.

Northeast Real Estate Business asked representatives from the Hudson Valley Economic Development Corporation, MetroHartford Alliance, and City of Claremont, New Hampshire, to share what they are seeing as the economy improves and how they are helping their local markets to attract companies that will stimulate economic growth.

Hudson Valley Economic Development Corporation

A former IBM facility in East Fishkill, New York, features 986,000 square feet on 157 acres. Vacant properties like this could become key real estate transactions as the economy improves. Economic development organizations are ramping up marketing initiatives in order to attract companies — and jobs — to real estate opportunities like this.

New York’s Hudson Valley is becoming the East Coast’s Silicon Valley for biotechnology companies.

The Hudson Valley Economic Development Corporation  (HVEDC) in New Windsor, New York, is focused on a cluster-development strategy embodied in renewable energy and biotechnology and pharmaceutical firms. We’ve seen successes in both these sectors with the recent attraction of Solartech Renewables, Life Medical Technologies and ContraFect Corporation. We have entered 2011 with a clear strategic plan to help make the Hudson Valley stronger and the location of choice for businesses looking to expand or relocate.

The Hudson Valley region has struggled with a difficult economy just like everyone else. Despite this tough climate, HVEDC was able to create more than 1,400 jobs and occupy more than 1.1 million square feet of commercial and industrial space throughout the region in 2010.

There has been an increase in activity in a couple of industry sectors. The industrial market is seeing a number of e-commerce distribution requirements and other distribution/warehouse requirements for the Orange County, New York, market. The e-commerce market is growing at a rapid rate and facilities are needed to distribute the goods.

The Hudson Valley Region is in a great position to capitalize on that demand and we have the sites to fill the need. We also saw an increase in manufacturing requirements and actually created more than 600 jobs last year with the attraction of several manufacturing companies including President Container, Takasago, and Solartech Renewables. A significant increase in interest has occurred in the biotech/life sciences industry sector, strongly supporting our position that NY BioHud Valley is growing.

The HVEDC has built solid relationships with brokers and site selectors from across the nation. As they begin to see an increase in activity we hope they will reach out to us to help with their clients’ location requirements. We work with representatives from the state and local levels and come together to present the best package for the client. We also have a strong board of directors that assists us with helping businesses to land here.

Incentive programs available to companies in the Hudson Valley include the Excelsior Jobs Program that is offered through Empire State Development. The state also offers discretionary grants and loans to companies looking to locate or expand to New York. Local incentives include the Industrial Development Agencies benefits, which can be a Payment in Lieu of Taxes (PILOT), sales tax abatement, or similar. The utilities that serve the region also offer incentives for companies looking to locate here. Examples include dollars per job created and discounted delivery rates. Other benefits include job training dollars and energy efficiency program dollars.

Additionally, we have a number of properties on the market that present good opportunities for companies that want to move to or relocate with in the Hudson Valley:

• The West Campus at East Fishkill (pictured on the cover) in East Fishkill, New York, features 986,000 square feet on 157 acres just off an interstate highway. The property was formerly an IBM chip fabrication and office space facility and is currently for sale with an asking price of $12 million.

• The Pharmaceutical Building at 1033 Stoneleigh Avenue in Carmel, New York, totals 111,450 square feet. Formerly home to Watson Pharmaceuticals, the building sits on 25.75 acres and is available for sale with an asking price of $5.65 million.

• Hudson Valley Crossings in Montgomery, New York, is a 138-acre site that can accommodate up to 1.3 million square feet. The site is in a prime location to serve as a distribution site for the Northeast.

— Marissa Brett is vice president of the Hudson Valley Economic Development Corporation.

MetroHartford Alliance

From a growing healthcare industry to a new business development zone around New England’s second-largest airport, the Hartford, Connecticut, region is looking up as the downturn ends.

Healthcare remains a growth opportunity for the Hartford region. Metro Realty’s fourth medical building in Farmington is nearing full occupancy and the fifth building is on the slate for Fall 2012. The University of Connecticut's  state-of-the-art Stem Cell Institute is now located in the new $52 million, 117,000-square-foot building equipped with the latest technologies for studying stem cells and their genomes. Hartford Hospital, the second largest surgical center in New England and the Northeast’s largest robotic surgery center, recently opened its 40,000-square-foot Center for Education, Simulation and Innovation (CESI). CESI is the state’s first "simulation center," which features life-like, fully responsive computerized replicas of the human body that allow doctors, military medics and other clinicians to hone their skills. Also in March, St. Francis Hospital and Medical Center opened its 10-floor, 318,000-square-foot $184 million John T. O'Connell Tower, the new home to the Connecticut Joint Replacement Institute (CJRI). The CJRI is the largest joint replacement center in Connecticut and one of six high-volume participants in the American Joint Replacement Registry as well as the largest ever federally funded joint replacement outcomes project.

Additionally, Connecticut Children’s Medical Center has exceeded fundraising expectations despite the down economy. The hospital is nearing the beginning of construction on a new Care Center for Cancer and Related Blood Disorders. The new center will integrate all outpatient care and support services into one location and triple the size of the current space to accommodate the rapidly growing number of children and families who are seeking the clinical trials and outstanding family-center care at Connecticut Children’s.

A new business development zone establishing incentive potential to catalyze manufacturing and airport-related development in the area will be effective this fall. The 2,000-acre Bradley Development Zone (BDZ) surrounds the Bradley International Airport. The BDZ was established during the 2010 legislative session, thanks to the collective efforts of the MetroHartford Alliance and the Bradley Development League, a consortium of the four towns surrounding Bradley International Airport. Located in Windsor Locks, Connecticut, the airport is New England’s second largest airport and has been recognized by regional leaders as an underleveraged asset. The incentives, coupled with the airport’s capabilities, further enhance Hartford’s appeal to many office and industrial companies.

In general, the industrial market in our area is moving at a slower pace than in previous years. However, recent activity includes the consolidation of STR Holdings, which produces solar panel parts, in East Windsor and the expansion of Dattco, a transportation company, in New Britain. The brokerage community sees business picking up within the small to medium size market.

Leading into this first quarter, the general office market is seeing higher vacancies as less office space is required from the shift to a more distributed workforce. That being said, it appears that companies that were dormant or that contracted are now looking at expansion — small expansion, but expansion nonetheless.

Recent investment sales include Global Net Lease Partners’ $24.9 million acquisition of a 450,000-square-foot industrial property in Hartford’s North Meadows and Hartford Square Associates’ $3.5 million acquisition of the 574,000-square-foot Gateway Crossings in New Britain.

As the Hartford Region’s lead economic development organization, the MetroHartford Alliance continues to market the region and facilitate the site selection process for site selectors, corporate real estate executives and business owners. Facilitation ranges from site location assistance to financial assistance.

As a private economic development organization primarily funded by the business community and modest funding from the municipalities, the MetroHartford Alliance is the liaison to the state, the 35 municipalities, workforce training, and incentives programs. Services include demographic and market data, site location assistance, labor information, field study coordination, a low-interest Growth Fund Loan Program, and an International Business Center for incoming foreign-owned entities.

As business finds its stride, the Hartford Region stands ready not only at the nexus of major highways or where the commercial real estate structure may offer a lower cost alternative but at the nexus of talent, technology and transformation.

— Sandra Johnson is  vice president and director of business development with the MetroHartford Alliance in Connecticut.

City of Claremont

In 2010, the city of Claremont, New Hampshire, earned the International Economic Development Council award for adaptive reuse of the historic Monadnock Mills in the City Center. This revitalization brought Red River Computer Company and the Common Man Inn & Restaurant to Claremont — and the project brought to life an important area of the community. Claremont is committed to continued efforts to strengthen and grow the local economy.

Economic development is a high priority in the city of Claremont. A number of the industrial zones have been designated New Hampshire Economic Revitalization Zones to make state business tax credits available for eligible projects. Community Development Block Grants, revolving loan funds and other state agency programs can also benefit a new or expanding business. The Claremont Planning & Development Department works with local businesses to address any issues that impact that business.

The Claremont Development Authority is currently marketing business parcels of land available in the Syd Clarke and Ashley Landing parks with water, sewer, roads and conduit in place. The sites range from 2 to 20 acres and are ready for construction. Three-phase power is available at all locations, and current use of the municipal water and wastewater treatment systems is only at 30 percent of the system capacity. Interstate 91 is a few miles from Claremont, allowing companies to easily truck goods to major markets in Montreal; Hartford, Connecticut; or New York. Shipping by freight is also available from some parcels in the city.

We are actively marketing the city as a good location for business, with a large investment in infrastructure and job training resources at River Valley Community College and Granite State College. Both of these institutions are part of the University System of New Hampshire and offer degree programs as well as opportunities for on- or off-site workforce training opportunities.

The real estate market in Claremont is very competitive in the region, with premier office space, commercial buildings and land available in a variety of locations. Claremont has seen an improvement in the overall market during the last few months. We are seeing more inquiries in general for small start-ups, more activity in manufacturing, and several building projects are scheduled for 2011. A major addition and renovation at Structal-Bridges, a division of Canam Steel Corp., has created new job opportunities and is scheduled for completion in the next few months. In 2010, Lowe’s opened a new store and Valley Regional Hospital completed a significant addition and renovation project. Additionally, construction will soon begin on a new CVS/pharmacy store and a Tractor Supply Company location.

— Nancy Merrill is director of Planning and Development with the city of Claremont in New Hampshire.

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