COVER STORY, AUGUST 2008

BUILDING A BRIGHTER FUTURE
For economic development organizations, opportunities abound in the Northeast.
Coleman Wood

The phrase “economic downturn” usually brings to mind words such as “layoffs” and “relocations”. Smaller cities are usually the first to suffer, as they do not have the large tax base of cities, such as New York and Boston, that mitigates the loss. So in the lean times, an economic development organization can be the life raft smaller cities need to weather the storm. This month, Northeast Real Estate Business takes a look at two New England areas that are turning things around after years of stagnation.

Dutchess County, New York

Until the mid-1990s, Dutchess County, a suburban county located halfway between New York City and Albany, had little use for its economic development corporation. The county thrived from the 21,000 jobs IBM’s facilities in the area provided. Times were good. But then IBM downsized, cutting more than half of the jobs from its Dutchess County operations.

“I started in April of 1994, and at that time about 14,000 people had been laid off, and there was probably 3 million square feet of vacant space [that previously] supported IBM at that time,” says Gordon Rutherford, director of business attraction for the Dutchess County Economic Development Corp.

“At that point, there was a massive, coordinated, crisis-driven decision to energize the economy, energize economic development, [and] coordinate and collaborate together through the economic development corporation to revitalize the economy,” adds Anne Conroy, president and CEO of the economic development corporation.

Over the next few years, the economic development corporation slowly began attracting businesses back to the region. Then, in 1999, the company went outside of its specialty in high-tech industries and convinced GAP to build a 2.5 million-square-foot distribution center on 200 acres of land in Fishkill. The project brought 200 jobs to the region.

Eventually, IBM expanded its Dutchess County operations, though not at its mid-90s levels. NXP, a spin-off of IBM, brought about 1,000 jobs to the region, and IBM’s present-day operations consist of 11,500 people working in chip and mainframe manufacturing, as well as data service.

Today, a lot of Dutchess County’s economic development efforts are focused on the county’s two largest cities, Beacon and Poughkeepsie.

Beacon, the smaller of the two cities, is in the midst of a downtown revitalization that aims to create an artist community with Dia, the city’s modern art museum, as the anchor. Art galleries and monthly street fairs are already flourishing in the area, and a multitude of mixed-use projects are currently underway.

A major redevelopment is currently in the works along the Hudson River in Beacon, New York. The project, Long Dock Beacon, is a 25-acre mixed-use project that will feature a 166-room hotel and conference center, a public pier, a 12,000-square-foot civic plaza, a kayak center, and a parks and trails system. Photo credited to Patkau Gruzen Samton.

On the city’s waterfront, two projects are currently underway. The first is The Beacon Institute, a research facility that studies river and estuary ecology, which is currently in Phase I of development. The other project, Long Dock Beacon, is a 25-acre mixed-use project located on the shores of the Hudson River. The $85 million sustainable project is being developed by a partnership between Scenic Hudson and Foss Group Beacon. It will contain a 166-room hotel and conference center, a public pier, a 12,000-square-foot civic plaza, a kayak center, and a parks and trails system.

Ariel view of the Long Dock Beacon project in Duchess County, New York. According to the master plan, the project will include all of the land in the center of the image below the railroad tracks — the public park, the long narrow building, and the parking pier and boardwalk to the left (north) of the building. Photo credited to Patkau Gruzen Samton.

Dutchess County’s main city, Poughkeepsie, is leading a similar downtown revitalization effort. One of the marquee projects is the redevelopment of the Luckey Platt Building. Formerly a department store, the building is being remodeled to include 141 studio and one-bedroom apartments, 23,100 square feet of street-level retail space and 22,000 square feet of lower-level retail and office space. The Luckey Platt project highlights a sea change going on in the city toward urban, multi-use projects.

“We are looking at some of the renovations in the city of Poughkeepsie that are totally urban feeling,” Conroy says. “In other words, you feel like you should be in Manhattan.”

Like Beacon, Poughkeepsie is also in the midst of a waterfront project, though this one consists of the redevelopment of 25 acres of contaminated former industrial space into a mixed-use project. Already completed is the 45,000-square-foot first phase, which contains The Grandview Catering facility, as well as the Shadows on the Hudson restaurant. The second phase will add four mixed-use buildings containing retail, restaurant, a spa and office space; a 100-slip marina; a three-quarters mile long riverfront promenade; a kayak/canoe launch and boat docking facilities; and three public green spaces. A third phase is still in the planning stages. 

Dutchess County has also mounted an advertising campaign with the assistance of the Hudson Valley Economic Development Corporation that it hopes will help draw even more high-tech companies to the area. Dutchess continues to focus on the microelectronics industry, but it sees a new market to tap in the field of solar cell manufacturing.  So far, there has been considerable interest, especially from outside the country.

“We’re finding a number of companies from Asia, Germany and Europe, as well, that are looking at possibly having operations in this state, and it [solar cell manufacturing] is so close to the semiconductor industry, that we think we’ll be successful in landing them.”

Carteret, New Jersey

The city of Carteret, New Jersey, located just down the New Jersey Turnpike from New York City, is similarly trying to reinvent itself. The city is located in an area that was once known as a major port center for the New York/New Jersey area. But times have changed, companies have moved, and the industrial companies that previously dotted the waterfront have left behind empty buildings.

“I think it just became very evident for Carteret — being such a heavily industrial area — that to sustain itself in the future it was going to have to look for new uses for this land,” says Kathleen Shaw, director of economic development for Carteret.

“It was just something you could not avoid dealing with,” she adds.

The city currently has nine zones that it is strategically targeting for redevelopment. Many of the areas are brownfield sites, though, and will need remediation before anything can be constructed. The state of New Jersey has stepped in, providing funds for the initial site investigation and grant money for the site remediation.

“These brownfield areas are a top priority to be reused and put back to work contributing to the overall tax base of the community,” says Shaw.

She adds that driving a lot of the redevelopment plans are New Jersey Smart Growth principles. The Office of Smart Growth is charged with guiding future growth in the state into more environmentally friendly developments, including denser mixed-use developments. This New Urbanist approach is being wholly adopted by the city for its projects.

One of the largest projects currently underway is the West Carteret Minue Street Retail Redevelopment Area. The $100 million redevelopment will create a mixed-use development on 17 acres of land along the Jersey Turnpike. P.C. Richard’s Home Electronic Super Center has already signed an agreement to build a retail, warehouse and office complex in the area. Plans call for the construction of a 33,000-square-foot retail and clearance store along Minue Street, which will open in 2010. Additionally, P.C. Richards will redevelop an existing 330,000-square-foot warehouse and distribution facility for its distribution operations. Finally, a 20,000-square-foot office building will be constructed for the retailer.

Carteret has given its redevelopment plans the flexibility to deal with market forces. Originally, the Minue Street project was going to be a retail/residential project, but the softening of the for-sale housing market caused them to take out of the residential component, and add the office and industrial components.

But that doesn’t mean that the city has scrapped the idea of residential development entirely. The Carteret area contains a lot of older, single-family housing, but it lacks the condominiums and apartments that many residents that have been priced out of New York City and the surrounding areas are seeking out. Shaw says that whereas you need roughly a million dollars to get a house in nearby Hoboken and Jersey City, Carteret is looking at a price point for housing that starts at $350,000, with the goal of attracting young professionals from New York City.

On the city’s waterfront, a massive redevelopment is underway that will convert a swath of abandoned industrial buildings into Carteret Landings, an expansive transit-oriented, mixed-use development. A waterfront park with a fishing pier and other entertainment attractions have already been constructed in the area. Joining it will be a planned 3,000 units of residential, retail and hotel space. Additional plans call for the construction of a marina, as well as a ferry terminal that will be able to take people on the short 16 nautical-mile trip to New York City.

“[These projects] are really going to change Carteret,” Shaw says. “We’re working to develop a new marketing strategy so that with the onset of the future ferry and retail centers, we become a destination. That’s been one of the major challenges when you’re in an older city and it falls into decline: who wants to go there? Why do they want to go? You have to create it. You have to create the destination elements that are going to make people want to live there, work there, and play there.”

To Shaw, the redevelopment projects are only half of the equation. Future economic development efforts are going to hinge on changing the public’s perception of Carteret, through city guides and commercials.

“People need to know what’s here,” Shaw says. “People go past the Turnpike, they see Carteret, they see Linden, and they have that typical ‘Saturday Night Live’ idea that it’s all heavy industrial. And there are those corridors that are remaining…but that’s a small component of what Carteret has to offer.”

For places such as Carteret and Dutchess County, the future is looking bright and economic development opportunities are everywhere. And while the economy may be slowing down right now, these two areas are bustling with activity, and are well on their way to creating two new destinations in New England.

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