hen Denmark’s LEGO Group announced in January 2023 that it would relocate its headquarters for the Americas from Connecticut to Massachusetts, the news only confirmed what a lot of site selectors already knew: The building blocks for economic growth have been in Massachusetts all along.
Two record-setting years in a row are the latest evidence, capped by a remarkable run of economic development success in 2022. MassEcon (Massachusetts Alliance for Economic Development) helped the state land 18 business facility investment projects that created 1,503 jobs and more than 1 million sq. ft. of facility space last year.
And the work of MassEcon is far from done. According to MassEcon Executive Director Peter Abair, the state is just getting cranked up. LEGO made sure of that on January 24 when it revealed plans to relocate its Americas home office from Enfield, Connecticut, to Boston.
Skip Kodak, president of the LEGO Group in the Americas, said, “Boston is ranked one of the best cities in the world to attract and retain talent. This, along with its world-class academic institutions, skilled workforce and great quality of life, makes it an ideal location for our U.S. head office.”
The move will occur in phases and begin in mid-2025, the company noted, with completion slated by the end of 2026. The LEGO Group has been based in Enfield since 1975. The company employs 2,600 people in the U.S. About 740 of them work in the Enfield office.
MassEcon is a statewide non-profit alliance of private and public sector partners who work together to champion Massachusetts as the best place to start, grow or locate a business. In short, MassEcon is an advocate, marketing arm and dealmaking facilitator for economic development statewide, and it is constantly adding to its toolkit of business-building materials.
We recently caught up with Peter Abair to get an inside look at how MassEcon operates and the progress the state is making in economic development.
What have been your state’s biggest economic development wins of the past year?
PETER ABAIR: We have had a very good year. We have a lot of great projects happening. The Takeda Pharmaceuticals project in Cambridge at 585 Kendall Street is a 600,000-square-foot U.S. headquarters and lab facility going up right in the heart of Kendall Square. It was one of those remaining spaces in Kendall Square in Cambridge in the core of the life sciences industries. A second one is Eli Lilly’s announcement this past year that they are building a 330,000-square-foot lab building in the seaport area of Boston. Thirdly, Commonwealth Fusion in the energy sector is building a campus at Devens. That is a 47-acre campus. The energy generation, transmission and storage sectors are growing here.
What location factors are driving companies to invest in Massachusetts?
PETER ABAIR: It is certainly the availability of a talented workforce. But generally, it is a number of factors beyond workforce. These larger companies started with a number of smaller investments. The venture capital community here is very strong. We lead the country in terms of VC per capita. The presence of university research and serial entrepreneurs who work with these companies is a major factor. We incubate these smaller companies and help them grow into larger companies. That is how Massachusetts has grown in the last quarter century. It is due to our innovation culture.
We also have a savvy investment community and a savvy build community. They know how to build lab space and process development space. Plus, we are a low-crime state. We have high-performing public schools. And we are ranked as the healthiest state.
Massachusetts ranks No. 1 in the U.S. in venture capital per capita.
How has Massachusetts improved its business climate over the past four years?
PETER ABAIR: There has been a concerted effort on workforce connectivity. We are taking an active role in assisting companies to find the workers they need. We are working with state higher-ed institutions and community colleges and tech schools to put training resources in place for worker training. We are rich in educational institutions. And our collaboration has never been stronger. We have seen that under the last two administrations.
Are there any major transportation infrastructure projects underway (or recently completed) that business leaders should know about?
PETER ABAIR: The Port of Boston has become big-ship ready. They can now receive the largest container ships in the world. It was a $900-million investment to dredge the harbor and provide the crane capacity at Conley Terminal at the port.
What are your top priorities for MassEcon for the next year?
PETER ABAIR: We are on Team Massachusetts. We collaborate with a number of other state organizations on economic development. We all get along. If you contact one of us, you are really contacting all of us. The Team Massachusetts concept is working very well now. The Baker Administration started it.
At MassEcon, we are involved in marketing the state with a focus on getting good information to site selectors proactively. They shouldn’t have to make 15 calls or dig deep to access the information they need. That is a big priority for us to continue to build that knowledge and information base. We have done that with our website. It is loaded with information; and we can respond quickly to their informational needs.
Also this year, we are going to assemble more 100-acre sites. While we do have some sites available, we don’t have enough of them. We will also provide technical assistance to communities and landowners to get those sites into the marketplace. That is a key initiative for us. Massachusetts will not be in competition for any 1,000-acre opportunities. The state is not flat enough for that. But 100-acre sites are the sweet spot for us.
Lastly, we will assist with location projects. We help companies find residential properties for relocating workers. We also provide detailed info on public school systems in host communities. We can now provide that info up front due to new investments we made into databases.
What is your business expansion prospect pipeline like now?
PETER ABAIR: In 2021, we worked on 86 location projects. That was a record for us. In 2022, we worked on 93. This year, we are already at 40 projects, and we are barely into March. It has been a busy two years, and the amount of work now is very high-volume.
The pipeline remains very strong in life sciences. That accounts for just under 50% of the projects we work on. The other industry area is advanced manufacturing. We are seeing manufacturers looking for more domestic capacity in different markets around the U.S. We were at 160,000 square feet in average project size in 2021. This year, the average size is 95,000 square feet. That is more normal for us.
Are you seeing activity with data centers?
PETER ABAIR: Yes, we have had some smaller ones pop up in the last two years in the Metro West area. We have a very significant project considering a site right now in Western Mass. If it lands, it will be a huge employment generator in Western Mass. This region has good infrastructure for data centers. High-speed data lines go up the I-91 corridor and go across the I-90 corridor. That is key for big data users. Capacity is there.
How did the LEGO Group headquarters deal work?
PETER ABAIR: That was a fast-moving project in Boston. The LEGO Group first came to Massachusetts with two small sites. One was an office operation. The other was a retail destination facility. There are two comparatively smaller spaces in Massachusetts. They became comfortable with their experience in Boston. In that case, we were a frontrunner from the get-go for the headquarters.
Moving from Connecticut to Boston, they needed proximity to an international airport. They did not have that in Enfield. We are very pleased to have them. That was a fast mover. We have a new mayor of Boston and a new governor, and both reacted very quickly to LEGO’s needs. That is very promising for us as we move forward.
How active does your Governor get when it comes to recruiting CEOs from other states to choose a Massachusetts business location?
PETER ABAIR: Our governor jumped right on the LEGO project immediately. Gov. Maura Healy and other recent governors have taken on that role. In my experience, we have never lacked that in Massachusetts. You have to go back to the administration of Michael Dukakis to find a time when Massachusetts was not known as a welcoming place for business. All of the monikers hung on Massachusetts back then were probably deserved — inaccessible leadership, high taxes, etc. With every governor since then, there has been a consistent level of support and readiness to engage with prospects. I have never had any issue getting a governor or lieutenant governor involved. For example, we had a French company visit us during the time that Mitt Romney was governor. He sat down with them and spoke fluent French. We didn’t even know that he could speak French. And he sold them on doing business in Massachusetts.
What are some markets to watch, besides Boston, over the next decade?
PETER ABAIR: Massachusetts is a high-value state. We have approachable, lower-cost markets. We are seeing that right now in Central Massachusetts. This is the region around the western turn of Interstate 495 — the outer beltway around Boston — from Devens to Worcester and on down to the Rhode Island border. That is Central Mass. We are seeing a lot of activity in that corridor now. Worcester has been our second biggest city in population for a long time.
We also like to talk about Western Mass. That is fertile ground for the next wave of opportunity . This is where I-91 north-south and I-90 east-west crisscross in Western Mass. You are as close to metro New York City as you are to metro Boston there. You are just right on the periphery of these two dynamic economies. UMASS-Amherst is there, along with 20 other colleges.
This region has a very high quality of life with a different pace. That is appealing to a lot of employers. Plus, there is a 30% to 40% discount for employers there. The cost of living there is not much different from the national average. That is a place where high value meets low cost.
Agilent, for example, just made a major investment in Chicopee. They said they needed a talented workforce. The CEO noted at the time that this was the perfect place to make an investment.