COVER STORY, JANUARY 2008

STRIKING THE RIGHT BALANCE
Community officials work to strike the right balance.
Stephanie Mayhew

The maturity of the Northeast market makes it an ideal place for new businesses and residents alike. In order to meet the demand, economic development officials are working with developers and owners to strike the right balance for each sector in their cities. This month Northeast Real Estate Business takes a look at the development and demand in two unique Northeastern cities.

Rochester, New Hampshire

The City of Rochester Planning Board approved the Wilder Companies’ Rochester Crossing project in just 62 days.

Situated in Stafford County in southeastern New Hampshire, Rochester boasts a growing population as the largest city in the seacoast region and the fourth largest city in the state. Rochester has become a popular choice for residents and businesses because of its convenience to the many outdoor activities available  in New Hampshire, but also because of its excellent highway, air, rail and water transportation connections. Residents and business owners can enjoy the convenience of the city, but still enjoy the feeling of a small New England town.

According to Karen Pollard, economic development manager for Rochester, development has been quite strong in the area over the last several years. “In the last 3 years the city has set records for the amount of non-residential development that has occurred in the city,” she says. “The city has had expansions in commercial, industrial and even our hospital is doing a $40 million expansion right now.”

The city is currently focusing on Route 11, the corridor that leads  from Rochester to the Lakes region. “We are calling it the Granite Ridge Development District,” Pollard notes. “The city is looking for additional opportunities for residents and tourists because it is a highly traveled visitor corridor.” The district has many opportunities for retail due to much pent-up demand. “The plan is to bring in more entertainment venues, shopping venues, as well as restaurants, apparel and retailers like Target,” explains Pollard. “Residents will often travel long distances to go shopping, so we want to make it easier for people to stay close to home.”

The city also hopes to attract more office users. Office space is available at the former Cabletron space and Pollard believes that the space will be taken up by the insurance industry, call centers or other back office type of user. And although most of the existing buildings in the town’s eight industrial parks are full, there is still available land for more development. Access to many major roadways as well as the sea ports and airports has made Rochester a great place for industrial development.

Major highways include routes 11, 108, 125, 202 and the Spaulding Turnpike (Route 16), a four-lane, limited access highway with six exits to the City. This expressway provides easy access to Interstate 95, the Pease International Tradeport, Boston’s Logan Airport, Manchester International Airport, the Portland International Jetport and the Port of Portsmouth. The New Hampshire Northcoast rail line and Skyhaven Airport also serve Rochester. Pollard notes that the industrial market has been strong, and many existing companies such as Albany Composite Materials, Lars Heating Systems, and Spalding Composites have recently expanded.

This growth has helped attract residents to the area as well. “The city has actually pulled more multifamily permits at a much greater dollar value this year than last year,” remarks Pollard. “Plus, housing is still being constructed, which is different from other communities in the area that may be experiencing a dramatic slowdown in new home construction or housing development.”

Growth is predicted to stay strong over the next several years and even the next decade in Rochester. “We do anticipate much growth in the retail sector because it is an underserved area for us,” says Pollard. “We are also anticipating the medical industry to continue to grow.” The expansion of the Frisbie Memorial Hospital is expected to be a tremendous asset to the entire population as well as all businesses. In addition a medical dialysis facility is being constructed on Route 11 in the Granite Ridge Development District. The new center is expected to serve a large regional population and will help bring in ancillary types of services to the area.

In order to attract more businesses to the area, Pollard explains that the city has take a “pro-business” stance. “The business environment in Rochester is different from what you find in many New England communities,” she says. “The city strives to make it a pleasure to work here, so even though we have to deal with the same type of regulations that every other city does, we try make it a much more positive experience and make it a win/win situation for everyone.” They city works to approve projects within a timely manner as well as not ask for things that are unreasonable. “The planning board approved the new Rochester Crossing project within 62 days,” Pollard remarks proudly. “There are many communities that don’t want development and put up as many roadblocks as they can, or they make it so expensive that it is no longer a feasible project,” she notes. “The city of Rochester tries to make the process run smoothly and not hold up any developments.”

Central Pennsylvania

Pennsylvania has become the go-to area for industrial development, and economic development officials in Central Pennsylvania are doing their part to usher in this new business.

According to Meg Smith, executive director for Focus Central Pennsylvania, Central Pennsylvania is well suited for alternative energy and device manufacturing, warehousing and logistics, medical device manufacturing, agro foods/food processing, cement and aggregates, fabricated housing, window and door manufacturing as well as the plastics industries, lumber and wood processing manufacturing.

The Muncy industrial parks in Lycoming and Muncy counties are situated in close proximity to Interstate 180.

Central Pennsylvania’s industrial parks have been a big draw for businesses entering the state. Most are situated within minutes of interstate corridors and have complete infrastructures. Major industrial parks in the area include: Mifflin Industrial, a 32-acre industrial park with rail and lots that range in size from 5 to 29 acres. The park has complete infrastructure and is located in Lewistown and Mifflin counties in a Key Opportunity Zone (KOZ). Armagh Business Park is set within 67 acres in Armagh and Mifflin counties. Still under development, the park contains lots in Phase 1. In Muncy and Lycoming counties, the 6-acre Muncy Park, the 162-acre Muncy II park and the 106-acre Divine Industrial Park all have complete infrastructure and rail service. Muncy II is also situated within a KOZ site. In addition, Pawling Station Business Park recently opened in Selinsgrove and Snyder counties. The 48-acre park is slated to include complete infrastructure by spring 2008.

Smith notes that such tremendous growth in Central Pennsylvania is due to the area’s excellent work ethic, low cost real estate, central location to Northeast population and major transportation hubs, uncongested highways, the state’s progressive energy independence strategy and the addition of Route 99, which will run north and south through center of region once construction is complete.

State programs such as Key Opportunity Zones, or KOZs, and the KOZ extension are also helping to attract businesses. Smith notes that the KOZ Zones help ensure that many of the state’s young professionals stay in the state. The programs create an environment in which educational institutions, economic developers, businesses, capital sources and community leaders can connect and provide a network of support and resources. “The state has initiated strategies and grants to attract alternative energy device manufacturing in addition to a progressive energy independence strategy,” notes Smith

Governor Rendell’s energy independence strategy will help reduce the state’s dependence on foreign oil and save billions in energy costs. The program will incorporate the use of biofuels and smart meters that will help consumers regulate their use of electricity. Rendell’s Energy Harvest program focuses on renewable energy technologies. The state will offer grants for programs including renewable energy deployment, including biomass, waste coal reclamation for energy, deployment of innovative efficiency technologies and distributed generation projects. The grants will leverage almost $14 million in private investments and create or retain more than 100 jobs.

Overall, cities in the Northeast are working to bring smart, planned development to meet the needs of its residents and existing business now and well into the future.

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