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Power Grid

In the hyperactive Northeast, density begets both challenge and opportunity.


Preferred Freezer, Jersey City
This 137,000-sq.-ft. (12,727-sq.-m.) build-to-suit for Preferred Freezer in Jersey City is just one example of new projects arising on old industrial properties in the Northeast.

he region's issues hang over it like a slow-moving cold front: industrial pollution, onerous taxation, population density and traffic. But they still come. In Connecticut, Gov. John Rowland's budget calls for tax increases of some US$200 million, including an income tax increase for those earning more than $1 million a year. Not far away, property taxes in New York City are going to rise by 18.5 percent, and state budget deficits offer no hope of putting off tax increases of some kind any longer. And still they come.
        "I think we're very fortunate as a state," says Tom Barrett, founder of Barrett Builders in Fort Lee, N.J., on the Garden State's cu ltivation of the fruits of the Big Apple. "The combination of our strengths as an import-export area and being so close to one of the most powerful economic engines in the United States all leads to a lot of study by foreign companies for locating in the surrounding areas."
        In the meantime, a recent cost-of-doing-business update by cites New York City and northern New Jersey as among the handful of costliest places to do business in the entire country. Some say it's a natural occurrence, and others see it as a result of parochialism. "I'm experiencing a tremendous amount of frustration as a former secretary of commerce," says Gil Medina, who served in the administration of former New Jersey Gov. Christie Whitman and is now director of the Technology Enterprise Group for Cushman & Wakefield of New Jersey, Inc. "We have failed to take a regional approach to economic development."
        "We're not in competition against each other, we're really in competition with the rest of the world," he continues, citing an almost complete lack of cross-border partnership. "I don't think there is any meaningful collaboration among the four states [including Pennsylvania], and it's a real pity," he says, noting that the region is already a "fertile crescent" for life sciences, financial, insurance and real estate industries. Now if only the public sector could follow suit with its own clustered effort.
        "If the four states were able to come together and try to harmonize tax policy, incentives, and marketing, the net gain for each state would be substantial," Medina says.
        But even without such harmony, drawn by the very concentration of wealth, culture, workers and just pure activity that sometimes generates the region's headaches, corporations still find homes in New York, Connecticut and New Jersey a must.
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