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COVER STORY, AUGUST 2006
TARGETING FOR SUCCESS
Three economic development corporations discuss growth in their respective cities.
Stephanie Mayhew
As the population of the United States nears 300 million, economic development corporations in cities throughout the Northeast are capitalizing on this growth and looking at ways to bring businesses and residents to their area. Northeast Real Estate Business spoke with three economic development officials from Rochester, New Hampshire; Jersey City, New Jersey; and Williamsport, Pennsylvania, to see what they are doing to make their communities the place to be.
Rochester, New Hampshire
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Ten Rod Industrial Park in Rochester, New Hampshire, boasts significant highway frontage, which provides a strategic and convenient location for its tenants.
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Located just an hour and half from Boston, Rochester’s strategic location, availability of land and labor, low cost of living and the absence of sales and income taxes have meant substantial growth for New Hampshire’s fourth largest city. According to Karen Pollard, the Economic Development manager for Rochester, residential development has been the city’s number one area of growth, and retail is a strong second. However, Pollard notes that the city of Rochester is currently focusing heavily on bringing more commercial businesses and development into the area.
Thus far, “because of Rochester’s strategic location, industrial development activity has been very positive,” says Pollard. To further boost this activity, the city recently updated all zoning requirements to coincide with this goal. Rochester offers eight industrial parks, all of which have water and sewage systems in place, and several have access to rail and regional airports.
One of Rochester’s newest industrial parks is Granite State Business Park, a 250+ acre, multi-use commercial and industrial park that is intended for light and heavy manufacturing, research and development, warehousing and distribution, office space, and service use. The park, which currently houses over 350 employees, includes amenities such as natural gas, on-site airport and railroad access, and new water, sanitary and utility systems.
Another Rochester industrial park is the Turnkey Recycling & Environmental Enterprise (TREE) Industrial Park, an environmentally safe property that offers short- and long-term leases and provides tenants with landfill gas, a cheap and efficient alternative energy resource. This 1,216-acre, “green” industrial park also includes a 100-acre Forest Management Area, a 199-acre landfill, the Mount Isinglas Recreational Area, and a Material Recovery Facility.
Pollard notes that having the “infrastructure in place and well maintained provides a significant convenience for a business coming into the area.” To further ensure growth opportunities, the city has also accumulated land around the industrial parks so they can be expanded in the future. “We have available land in our industrial parks and we have been very fortunate to have space where many of our neighbors don’t,” says Pollard.
When designing and developing their industrial parks, infrastructure was not the only consideration; thus, each Rochester industrial park was planned with convenient access to several major transportation corridors. For example, businesses have access to six direct exits along the Spaulding Turnpike. The turnpike intersects with Interstate 95, a crucial Southern corridor for transportation. Rochester is also easily connected to the growing Portsmouth, Maine area via Route 202 to the east and Concord, New Hampshire to the west.
On the retail development side, The Flatley Company is currently developing the Shoppes at Rochester at the intersection of Route 202 and Spaulding Turnpike. The approximately 305,000-square-foot shopping center is situated on 49 acres and will be anchored by Kohl’s and Lowe’s Home Improvement Warehouse. The center also contains retail spaces ranging from 1,000 square feet to 20,000 square feet. The $30 million project is scheduled to be complete in October 2007. As part of Rochester’s downtown revitalization plan, the city is in the process of applying to become a New Hampshire Main Street Community, which will strengthen the city’s existing tax base, increase retail sales, attract new businesses, create new jobs and preserve existing historic locations in the downtown area.
Pollard, who acts as a liaison for businesses coming into the Rochester area, says that she is involved in every step of the process, whether it involves site selection, labor force or the design elements of a building. “We are very flexible on our standards and just do what needs to be done in order for the business to succeed,” says Pollard.
Jersey City, New Jersey
The Economic Development Council of Jersey City, New Jersey has not had to look very far for its economic success — just across the Hudson River in fact. The city’s close proximity to Manhattan and its high-paying jobs, easily accessible transportation and a cheaper place to do business certainly makes Jersey City an easy place to live and work. According to Daniel Frowirth, the director of real estate for the Jersey City Economic Development Corporation, in the last several years, the majority of the developments in Jersey City have been residential projects with a retail component at the base of each property. This is a change for Jersey City, which for many years was mainly focused on commercial and office development.
Office development has waxed and waned in Jersey City since the mid 1980s when the office boom began with the construction of the Lefrak Organization’s first Newport office development. Due to economic downturn in the 1990s, the office market in Jersey City went soft, but boomed again in the late 90s, when the Lefrak Organization built their Newport Office Center 3. Frowirth says that prior to that time, “Jersey City had primarily been looked at as a place to only do ‘back office’ type of business, but when Lord Abbett moved its entire New York office to Jersey City, it completely changed how people looked at doing business in Jersey City.”
The current increasing demand for residential developments in Jersey City is due largely in part to the exorbitant cost of housing in Manhattan. Frowirth notes that the size of the current residential developments has also changed in Jersey City. “What might have been 12 stories a few years ago is now 50 stories, and a small tower is 30 stories,” says Frowirth.
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With towers rising 50 and 55 stories, Trump Plaza is the biggest residential development currently under construction in Jersey City, New Jersey.
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For example, one of the biggest residential projects in the area is Trump Plaza, which is currently being constructed by the Trump Organization and Metro Homes. Located at Washington and Bay streets, the $415 million project consists of two towers situated on two acres on the waterfront. The first 55-story tower is 531,500 square feet with 445 condominiums, and the second tower is 50 stories with 417 residences totaling 480,000 square feet. The towers will rise from a seven-story, 328,658-square-foot base that will house 23,000 square feet of retail space and a 696-space parking garage. The towers also boast an 8,000-square-foot fitness center, a rooftop plaza with an outdoor heated swimming pool, a business center, a home theater screening room, a children’s play area, an enclosed basketball court and a private landscaped yard.
Metrovest Equities is in the midst of the redeveloping the historic art deco buildings of the Jersey City Medical Center complex into luxury condominiums. The Rialto is a 22-story condominium development with 164 units. A second building, the Capitol, is a 21-story condominium building with 151 units. Amenities include a gym, an indoor pool, a yoga studio, rooftop sundeck equipped for grilling, poker rooms, a billiards hall, two theaters, a day care center and shuttle buses to the PATH trains.
The Deluco Organization is currently planning the development of The Renaissance in Jersey City’s oldest and most well-known neighborhood, Journal Square. This ground-up, luxury condominium development will include two towers set between Newark and Hoboken avenues. The first 11-story tower will feature 92 residences and the second 12-story tower will contain 150 units. The Renaissance will offer easy access to the PATH trains and will include amenities such as a rooftop running track, a putting green, on-site indoor parking, floor-to-ceiling windows and an indoor heated swimming pool. The $100 million project is part of an on-going re-birth of the Journal Square area in Jersey City.
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The Renaissance is set to break ground in 2007 and is part of the on-going re-birth of the famed Journal Square in Jersey City, New Jersey.
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The waterfront is the symbol Jersey City’s renaissance, but development continues to thrive throughout all of Jersey City, providing residential, retail and commercial developments in areas that were once abandoned buildings and neighborhoods. Frowirth says, “We have pushed hard to ensure that new construction has retail space to make the streetscape more attractive and active, which provides a great place to live and keeps people from having to run into New York City to find a great restaurant or shopping.”
The residential and retail construction boom provides great incentives for residents, but Jersey City also provides several incentives for businesses in the area, including the state’s Business Employment Incentive Program (BEIP), Business Relocation Assistance Grants (BRAG), Employee Training Grants (ETG), Urban Enterprise Zones (UEZ) and other local pro-business policies. Plus, Jersey City boasts no city income tax, no corporate tax, no payroll tax and no commercial rent tax. Compared to Manhattan, rent for office space, operating costs and utility rates are extremely economical.
Williamsport, Pennsylvania
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The Generation Sports Complex in Williamsport, Pennsylvania, will be the country’s largest air-supported structure. Spanning 85 acres, the dome is 75 feet tall and is two football fields long and one and a half football fields wide.
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Some 50 years ago, a steel span bridge was erected in Williamsport, Pennsylvania. Today the replacement of that bridge has brought renewed attention to this Pennsylvania city. Construction to replace the aging Market Street Bridge has been the catalyst for numerous developments in the city, including a new conference center, a multiplex theatre complex, a sports dome, expansion of the Trade and Transit Centre and most importantly, it has increased awareness of the multitude of opportunities throughout the Williamsport area.
According to David Dougherty, vice president of Economic Development for the Williamsport/Lycoming Chamber of Commerce, “When you have a $70 million project in which the main share of the money is coming from the Federal government, people will start to look and see where that money is going.” The attention that Williamsport has garnered from the new bridge has spawned into more than half a billion dollars in public and private development projects.
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The Williamsport, Pennsylvania, multiplex is part of the downtown revitalization project.
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The new Market Street Bridge project is part of a larger $6 million on-going revitalization of Williamsport’s downtown. Dougherty notes that, “Most of the new projects within in Williamsport are all happening within a two block radius of the new bridge project.” The design engineering is currently underway on the new Williamsport conference center, which will be strategically located off the Market Street Bridge. The center will be 13,000 square feet with a capacity of approximately 2,500 people, and will include a new parking deck. The center will also tie in with the development of a new Holiday Inn and a Holiday Inn Express. Construction on a new multiplex theatre is scheduled to begin in October and is expected to be completed spring 2007.
Another exciting development within Williamsport is the new Generation Sports Complex, a $4.8 million, 85-acre sports dome. The new sports dome will be the country’s largest air-supported structure and will be blown up the week of the Little League World Series, which is hosted in Williamsport every year. The dome is 75 feet tall and is two football fields long and one and a half football fields wide. The sports dome will not only provide access to local sports affiliations, but also the city hopes that the dome will also bring in several different traveling sports teams including soccer, baseball and softball. “The community is very youth sports oriented, so the complex really plays into what our community is all about,” says Dougherty. The development of the dome is being coordinated with the building of the Eastern Lycoming YMCA.
While the downtown revitalization projects are focused on increasing tourism and entertainment options, Dougherty says that Williamsport is also focusing their attention on commercial and industrial developments. Several industries such as metal fabrication, plastics manufacturing, back-office operations and call centers have made their home in Williamsport. “Williamsport currently has more fiber optics within city limits than any other city of its size in the state of Pennsylvania, giving businesses an automatic plug and play type of scenario,” says Dougherty. He also notes that, the proximity to Interstate 80 and the onset of the Interstate 99 corridor ensures easy access for distribution centers and logistics areas. “We also have the largest number of rail-served industrial sites in the commonwealth,” says Dougherty.
The Williamsport/Lycoming Chamber of Commerce is currently working on developing infrastructure in two industrial parks that are located in Keystone Opportunity Zones (KOZ), which means they are tax free zones until 2011. The KOZ program is a statewide program enacted in 1999 that was designed to make certain properties more desirable for development and to help bring rural communities more into the mainstream of corporate relocation sites. This program has resulted in 12,000 new jobs throughout the commonwealth.
To ensure that inquiries from potential businesses are answered quickly, the city created a homegrown program they call the 90/90 Rapid Response program. The system allows the city to respond to 90 percent of the inquiries they receive, 24-hours-a-day, seven-days-a-week, within 90 minutes. They are able to give inquiring businesses approximately 280 pages of data and community information, from workforce to property specifics and demographic data all in digital format that can also be specific to a particular project.
“We work very closely with the county planning department. When a company comes in, we want them to do what they do best. We do all of the coordination with regards to the municipalities, working with state government and local government in order to get them what they need. We realize that companies don’t have 18 months to 2 years to get a project up and running, they need to be up in 9 months, so we try to facilitate the process and make things happen within their time frame,” says Dougherty.
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