COVER STORY, OCTOBER/NOVEMBER 2010

ECONOMIC DEVELOPMENT
By Jaime Lackey

As the economic picture begins to shine a little brighter, the question is which cities will see growth first. Economic development corporations strive to position their cities to attract businesses that could soon start expanding.

We talk with economic development experts in New Haven, Connecticut, and The Township of Lakewood, New Jersey, about what their towns offer in terms of incentives and real estate options.

The Township of Lakewood, New Jersey

A new medical office building at 55 Park Street in New Haven, Connecticut, contains 146,000 square feet of medical office space. Photo credit: EDC New Haven

The Township of Lakewood, New Jersey, is experiencing tremendous growth. The town currently has 100,000 residents. It is anticipated that by 2030, the municipality’s population will swell to 230,000 residents.

The area has an excellent quality of life that is helping to attract corporations. Points of interest include a minor league baseball stadium, historic Strand Theater, parks, golf courses, close proximity to shore recreation, public school system, two universities and a regional business center.

Many companies that are looking to grow in the Township of Lakewood include firms in the biomass industry, energy production, manufacturing and the transportation, distributing, and warehousing industries.

These industries are particularly interested in the Township of Lakewood because of its Foreign Trade Zone (FTZ), Urban Enterprise Zone (UEZ), and Hub Zone designations.

FTZs provide special customs procedures for firms involved in international trade. For example, items that are imported and processed in FTZs before being re-exported are allowed duty-free treatment. The UEZ Program is designed to stimulate local economies; the Township of Lakewood offers advantageous loans, grants and other incentives to participating businesses. The HUB zone offers federal contracting assistance to qualified businesses.

The Township of Lakewood — which is centrally located between Philadelphia, New York and Washington, D.C. — offers space that appeals to many industrial-type companies. For example, The Lakewood Industrial Park is a three-lobed industrial park, comprising Corporate Park, Industrial Campus and James Street/Prospect Street Park. It is the second largest industrial/business park in the state of New Jersey. Lakewood’s Industrial Park system consists of 2,200 acres of clean industry-zoned and industrial park professional service zoned lands containing more than 8.5 million square feet of industrial space in 200 buildings. Corporate headquarters located in the park include The Lightstone Group and Gaming Labs International as well as the northeastern USA hub location of Blinds To Go USA. More than 325 businesses — largely consisting of manufacturers, packagers, distributors, warehousing operations, professional services, recyclers, importers and exporters — are located in the park. Rail siding serves the Prospect Street/James Street Park with public rail siding available in Lakewood’s downtown to receive and ship freight by rail. Lakewood’s Industrial Park is designated as a U.S. Foreign Trade Zone as well as being located within Lakewood’s Urban Enterprise Zone.

The Lakewood Township Airport is also a plus for businesses. The airport is planning an expansion to better serve corporations as well as recreational pilots. Lands surrounding Lakewood Municipal Airport are being prepared for development. A concept exists in the development of the 60 acres immediately outside of the airport-proper into Class A office space or possibly as a headquarters to a high-airport-use business. Lakewood Airport is undergoing continued improvements to its facility, runways and light aircraft services. Underway are plans to construct a helipad and self-fueling stations. As administrators of Lakewood Airport, Lakewood Township is currently pursuing the extension of the main runway at Lakewood Airport to accommodate other aircraft in the future.

The area also offers a good pool of both white-collar and blue-collar employees as well as quality of life amenities, including good schools.

The Lakewood Development Corporation, a 501(c)3 nonprofit entity created by the Township of Lakewood, is charged with facilitating business growth in the city and connecting businesses with the programs that will benefit them.

According to Patricia Komsa, who serves as executive director, Urban Enterprise Zone coordinator and Foreign Trade Zone administrator with the Lakewood Development Corporation, “The UEZ program has served as a strong catalyst for economic growth and job creation and retention in Lakewood.”

She says, “As of April 2010, the UEZ supported 7,049 full-time jobs and 1,190 part-time jobs. It has created 1,934 full time and 348 part-time positions with $576.6 million in private business investments.”

She adds, “Since the Urban Enterprise Zone Authority’s approval of Lakewood’s UEZ designation in 1994, businesses have benefited from the economic development projects funded through the program. One of the largest UEZ projects ever undertaken in the state was completed in Lakewood. That economic development project was the Lakewood Baseball Stadium, home to the Lakewood BlueClaws, a single A affiliate of the Philadelphia Phillies. This project required UEZ investment over a 10-year period. The stadium has proven to be an anchor in Lakewood’s economic development through its attraction of an estimated 500,000 fans a year to the township.”

The success of the stadium has also drawn three nationally franchised restaurants and a Hilton Garden Inn hotel to Lakewood. “They generate roughly $15.6 million in ratables, $500,000 in general tax revenues and about 175 jobs,” Komsa adds.

The UEZ also has a Financial Assistance Program with opportunities for businesses to apply for low-interest loans for the purchase of equipment, working capital and inventory. Since the project’s inception, approximately $10.5 million has been lent to startup and expanding businesses within the UEZ, Komsa says.

“Those loans created almost 500 additional Lakewood jobs. Most of these jobs were created by small startup and expanding companies that not only created jobs but ratables and general tax revenue to the municipality and the state.”

In 1998, the Township of Lakewood in cooperation with the UEZ and New Jersey Economic Development Authority and numerous state relocation incentive programs attracted Blinds-To-Go (USA), Inc., a Canadian-based manufacturer and retailer, to Lakewood Township for their U.S.-based operations. The nearly $20 million project included the construction of a new 100,000-square-foot facility for the manufacturing and distribution of window treatment products, as well as a new retail location to support the company’s expansion into the northeastern United States market. Blinds-To-Go received $1.5 million in UEZ loans as part of the incentive package. Blinds-To-Go currently employs approximately 240 people.

The Lakewood UEZ has taken deliberate steps to design programs that directly impact local businesses. Such programs include a Cooperative Advertising project and a Small Business Development Consulting program. Komsa explains, “The Coop Advertising is a matching grant program that will target small UEZ merchants and encourage them to promote their businesses. The focus of the Small Business Development project is to help businesses to create a more efficient work environment. By utilizing this program, a business moves quickly along the learning curve for operating an efficient business environment in multiple facets of the business. As a result, businesses are able to concentrate on new product development, quality assurance, new product lines, new avenues for increasing sales and generating revenue — all of which maintain and even create jobs.”

Komsa continues, “We have listened closely to our business community who have asked for more information and educational opportunities to learn about running their businesses more efficiently. As a result, the zone implemented a Business Encouragement Seminar series that covers a wide variety of topics that are important to business owners, such as advertising on a small budget and doing business with the federal government. The UEZ has been able to partner with various state agencies and other non-profit organizations to provide this service for free to participants. All seminars are well attended with participants seeking to return for additional workshops.”

Over the course of the next year, the Lakewood Development Corporation will assist the Township of Lakewood with its re-branding campaign and identify businesses that locate in municipalities just like Lakewood. The organization will also continue to promote the advantages of the FTZ to manufacturers and importers and will work to expand the role of the UEZ.

NEW HAVEN, CONNECTICUT

Smilow Cancer Center. Photo credit: EDC New Haven

While the national news has been dominated by reports of sluggish job growth across the U.S., New Haven, Connecticut, is vibrant and growth is accelerating, according to Anne Haynes, CEO of the Economic Development Corporation of New Haven.

She notes that more than 2 million square feet of commercial space has recently been completed, is under construction or will break ground in the first quarter of 2011.

For example, 360 State Street is a $180 million project that will contain 500 residential units and 80,000 square feet of retail and office space, including a grocery store. The project is striving for LEED Platinum status. Some residences are already occupied and the commercial space will deliver in first quarter 2011.

The Smilow Cancer Center at Yale-New Haven Hospital is a $500 million, 450,000-square-foot development that opened in October 2009. (Haynes notes that Yale-New Haven Hospital is the only tier 1 cancer center between New York City and Boston.)

Additionally, 2 Howe Street now contains 57,000 square feet of office space, 15,560 square feet of retail space and 24 residential units; 55 Park Street contains 146,000 square feet of medical office space; and 25 Science Park, a former industrial property, has been renovated to contain 267,000 square feet of office space.

Projects to break ground in first quarter 2011 include 100 College Street, which will contain 240,000 square feet of commercial/lab space, and 100 River Street, a former industrial property that will be converted to office and retail space.

“Despite this development, the region needs additional commercial space, especially in New Haven where there are developable parcels available in the CBD and surrounding neighborhoods,” Haynes says.

Leasing activity is also starting to pick up in New Haven. For example, Covidien, a Dublin, Ireland-based global life science firm, recently expanded and leased 130,000 square feet of Class A space at 555 Long Wharf Drive.

Higher One, a New Haven-based financial services company that recently went public is looking to expand to another building in Science Park, a corporate/bio tech park where they are currently located. The company is looking for an additional 150,000 square feet.

Haynes says that new media, creative industries and businesses in the life science sector are growing in the New Haven region. In fact, she says, “New Haven has a significant cluster of life sciences — second only to Cambridge, Massachusetts, in the Northeast.”

These businesses are attracted by the local workforce and business-friendly environment. Haynes notes, “Yale University provides access to talent and cooperative research opportunities, and New Haven maintains low start up and overhead costs despite being in the Northeast corridor.”

She adds, “New media and creative industries are also attracted to the region because of a desire to be located in the creative capital of Connecticut. There are numerous venues sustaining visual and performing art companies through dedicated proper physical space and collectively organized world-class events.”

The Economic Development Corporation of New Haven is at the forefront for attracting businesses to the area. According to Haynes, “The EDC aggressively promotes New Haven through traditional and new media efforts and successfully raised the general public’s awareness of the organization in the last 12 months. From participation in trade shows to buzz marketing, our outreach has allowed us to make contact with hundreds of businesses for both recruitment and retention efforts.”

The EDC also offers no-cost assistance to new and existing businesses that want help navigating local, state and federal incentive programs. There are a number of these programs. For example, the EDC itself offers a small financial incentive tied to job creation and longevity. There are several low- or no-cost regional programs that provide assistance to businesses in their development, administration, sourcing, funding, and staffing. Additionally these programs provide access to federal programs such as WIA (training costs), SBA (funding), and SCORE (administration).

Haynes notes that New Haven has designated areas that receive Enterprise Zone benefits, making it eligible for certain federal funding programs. The city also has just approved legislation to allow Enterprise Zone benefits in specific geographic areas extending benefits to emerging sectors not widely recognized elsewhere (i.e., new media). Qualifying businesses are responsible for only 30 percent of their personal property tax (such as equipment) for the first 5 years the company is in business. This is a straight abatement not a loan or a deferral, Haynes explains.

The city’s Façade Improvement program is well funded despite the economic downturn. Businesses in targeted neighborhoods can take advantage of the program, which is not limited to retail businesses or building owners. “These improvements not only boost the appearance of businesses but provide direct financial benefit for costs outside of normal operating expenses,” Haynes says.

And finally, New Haven will soon be served by a community bank with a $20 million loan pool targeting locally owned businesses. Start Community Bank is a for-profit subsidiary of the not-for-profit First City Funding formed with $25 million from the New Alliance Bank public offering (formerly New Haven Savings Bank). Start Community Bank will be the only locally owned, managed and governed community bank in New Haven.

“New Haven offers a high quality of life with broad appeal in a very intimate setting,” Haynes says. “Our region boasts shoreline communities, a culturally diverse urban center, proximity and ease of travel to other U.S. cities, university town amenities, and a wide range of housing opportunities.”

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