COVER STORY, AUGUST 2007

MEETING THE DEMAND
Northeast cities work to balance growth among all sectors.
Brianne Gloski

Cities across the Northeast are struggling to keep up with the housing demand sweeping across the nation. Even in smaller cities away from major metropolitan areas like Syracuse, New York, and the Pocono Mountains region of Pennsylvania, the demand is still there, and officials are working to answer this call with the right economic balance.

Syracuse, New York

Destiny USA, a multi-billion dollar development in Syracuse, New York, will feature shopping, dining, entertainment and hospitality uses upon full completion.

With a vibrant university at its core, Syracuse, New York, is not exactly struggling to bring new development to the city. The growth of medical and educational institutions has been a major plus in Syracuse’s economic growth. And, according to David Michel, economic development director for the City of Syracuse, Syracuse University has several major extension projects on their campus and three of the city’s hospitals, including SUNY Upstate Medical University and St Joseph’s Hospital, are undertaking expansion projects. St. Joseph’s is constructing a new parking garage on the site, as well as a new medical building, and has numerous other projects on their master plan.

As part of this growth, Syracuse University and the city are working to create stronger links between the university and the businesses in the region, especially in the high-tech area, according to Michel. Last year, Syracuse University renovated a building in downtown Syracuse and brought 600 students and faculty into the downtown area. “As part of the efforts to link the campus and the community, they’re developing a plan for the city called the connectivity corridor, which would link the university with their downtown facility,” says Michel.

Across 16 counties in the Central New York region, the Metropolitan Development Association is coordinating collaborations between institutions like Syracuse University and Cornell University and businesses in that region. The state of New York has also created a center of excellence program in conjunction with various universities in the state, including Syracuse University, and Syracuse’s program will focus on environmental and energy systems.

Medical and educational institutions are not the only sectors laying claim to land in Syracuse. The retail market will get a major push once the Carousel Center expansion is completed. The mall already totals 1.3 million square feet, and when this 870,000-square-foot expansion is completed, the mall could possibly be the fourth largest mall in the country. This expansion is the first phase of the multi-billion dollar Destiny USA development, a project of The Destiny Company, which will feature shopping, dining, entertainment and hospitality uses upon full completion. Destiny USA is unique in that 100 percent biodiesel fuel is being utilized by all equipment on the job site.

On the residential side, the focus has been on increasing the supply of market-rate housing in the downtown area. According to Michel, the housing developments in the downtown area are 98 percent occupied, and more are looking to locate in Syracuse’s core. “A month ago, we had a housing fair and we had more than 2,000 people show up on one Saturday afternoon,” Michel says. “It was a lot more people than we expected.” Despite the renewed interest, Syracuse does have its share of housing woes. “Like many older Northeast cities, we do have issues of loss of population and abandonment,” Michel says. “We are working with a variety of programs to upgrade our neighborhoods and encourage greater home ownership.”

It is projected that there is $1.7 billion worth of projects either underway or projected in the next couple years. Downtown, there are also several hotel projects in the planning stages: one connected with the county’s convention center and two other smaller hotels. In addition, there is more of a focus on turning buildings into mixed-use spaces with ground-floor retail and office space below residential space. Syracuse is also showing that it has a bit of a “green thumb” with its collaborative effort with private economic development organizations in the country. The effort is focusing on developing what they call, green projects, mainly focusing on education and medical facilities.

Developing in Syracuse has many benefits, according to Michel. The economic development department has taken several steps to ensure that permits are delivered to developers and businesses in a reasonable amount of time. “We have pre-development meetings with developers and businesses, and we also assign an account representative to work with them and make the process easier,” Michel says. “In effect, we are trying to create a one stop shop in the office.”

Syracuse benefits from its close proximity to major metropolitan areas such as Philadelphia, New York City, Toronto and Montreal. However, the city is far enough away to escape from the hustle and bustle — and also the prices — of these cities. “You can live in Syracuse and have very affordable housing, but yet, you have many of the benefits of a large city,” says Michel.

Pocono Mountains, Pennsylvania

The Pocono Mountains in Pennsylvania have witnessed extraordinary residential growth in the past 30 years. In 1970, the population numbered around 30,000. Now, it is estimated to be somewhere between 160,000 and 180,000. Charles Leonard, executive director for the Pocono Mountains Economic Development Corporation says, “One thing that was driving our rapid growth was the rapidly increasing residential real estate environment in New York and New Jersey. There were many people selling their houses there and moving here.” While Leonard predicts the housing market in the region will slow a little due to the softening of the New York and New Jersey markets, the Pocono Mountains will not be hurting for new development opportunities. National builders, such as the Toll Brothers, have entered the region and are buying up land for new housing developments. Advertising is playing a key part in this equation. “What’s happening is that the national companies building the houses are attracting the buyers that normally wouldn’t have an interest in being here,” Leonard says. “People are coming. We anticipate that we are going to have a continuing influx of individuals.”

Development in the Poconos is also currently focusing on creating a balanced and healthy economy for its residents. The goal of Leonard and his staff is to create jobs within the community for all these new residents. However, one main employer falls right into their lap without even having to try that much, because with the residential growth comes retail growth. Currently under construction near the existing Stroud Mall is a retail center containing Best Buy, Borders Books & Music and Bed Bath & Beyond. Past this development is a Target/The Home Depot/T.J. Maxx retail development, and another 2 miles past that is another retail center containing two recently opened national chains: Kohl’s and Lowe’s Home Improvement Warehouse. In addition, large national restaurant chains, like Ruby Tuesday, are now staking spots in the Poconos economic landscape.

The retail and residential industries are not the only sectors to see growth; both manufacturing and logistics are seeing a boost. The Pocono Mountains enjoy a reasonable proximity to major Northeast metropolises like Philadelphia and New York City, and, according to Leonard, companies are attracted to the region both for its proximity and lower cost environment. In addition, the region has “a robust marketplace, a growing labor force and we have the appearance that we are ready for new industry,” says Leonard. Tax incentives, keystone opportunity zones and local tax breaks are some of the other advantages of locating one’s business in the Pocono Mountains. The economic development department will also work with the developer to get all the permitting done as soon as possible. “We went through the process of permitting a building without revealing who the client was,” Leonard says. “What it does is it cuts costs on the timeline. We work very hard with the developers to get through the process.”

An example of all the hard work done by the economic development department is the recent long-term lease of 1.37 million square feet to Johnson & Johnson in Arcadia North Business Park. Upon full build-out, the park will house 450 to 600 acres of industrial, office and distribution space. The economic development company’s development partner in this project is Arcadia Properties.

“As part of our ongoing development efforts here on the mountain and throughout the county, we try to preserve land that is zoned industrial for business use,” Leonard says. “We’ve seen such rapid commercial and residential growth, we wanted to keep some property for other uses like logistics and manufacturing and other industrial-type uses.”

Besides emphasizing general manufacturing and logistics uses in the area’s future development plan, the Pocono Mountains Economic Development Corporation is focusing on general office use. The region has seen a peeked interest in office users looking for space, but there is a lack of Class A office space available. “We hope that as the marketplace matures a little bit, we will see more speculative building,” Leonard says.

In addition, the tourism industry in the Pocono Mountains is getting some new life breathed into it. Gambling was recently introduced to Pennsylvania, and new vacation destinations, such as an indoor water park and ski resorts, have recently opened in the region. “These new developments have filled a niche in the market,” says Leonard. “We were mostly a summer destination, and now we are becoming a winter destination.”

The Pocono Mountains Economic Development Corporation hopes to use its location and rural quality to draw residents and businesses in. “One of the advantages of living here, if you like the city, but don’t like living there necessarily and would prefer to have a house in the woods, you can live in the Poconos and it’s only a 2-hour trip on a work day into downtown New York City,” says Leonard. We have a lot of rural characteristics but also a lot of the advantages of a major metropolitan area.”


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