There's No Stopping Now

In New York, Gov. George Pataki begins his third term on a roll, vowing to not only move forward with scheduled tax cuts (despite a budget deficit approaching $10 billion in fiscal year 2004), but target more high-tech business attraction with a new set of tax incentives. He also wants to add Centers of Excellence in New York City and Westchester to the centers already under way in state capital Albany, Syracuse, Buffalo, Rochester and Long Island.
        The high-profile projects of 2002 certainly back him up: SEMATECH's $400-million R&D center in the Big Apple, Tokyo Electron's $300-million R&D center in Albany and the latest, an investment of several hundred million dollars in an advanced chip development venture in the Hudson Valley jointly operated by Advanced Micro Devices and IBM.
        The Business Council of New York State, Inc., agrees that R&D, especially when tied into universities, is a strong plank for the future, but calls for more than splashy projects to keep the state's ticker ticking. On its pro-business legislative agenda for 2003: taming state spending; immediate siting of new power plants to keep up with demand; enactment of single-sales factor reform of corporate taxes; and reforms to brownfield policy, health insurance and workers' compensation programs to free up business plans and pocketbooks.

City On the Comeback Trail

Of course, the pall cast by 9/11 is not going anywhere soon. But efforts toward redevelopment of parts of the World Trade Center property – while delayed by the debate over a suitable memorial – were boosted in January 2003 by the offer of financing assistance through the NYC Industrial Development Agency. Located on a 58,400-sq.-ft. (5,425-sq.-m.) site, the 52-story 7 World Trade Center building will receive up to $400 million in Liberty Bonds to back the rebuilding project, which has a price tag of some $1.2 billion. The edifice's total of 1.7 million sq. ft. (157,930 sq. m.) will be managed and leased by Silverstein Properties. The New York Liberty Bond program has $8 billion in bond issuance authority for Lower Manhattan and New York City.
        Governor George E. Pataki and New York City Mayor Michael R. Bloomberg announced in December 2002 that Deutsche Bank has chosen to move its U.S. headquarters and 5,500 employees to Lower Manhattan.
        "Moving into 60 Wall Street not only underlines our commitment to New York but represents another step forward in building our U.S. franchise," said Dr. Josef Ackermann, Chairman of Deutsche Bank's Group Executive Committee. The move into the 1.6-million-sq.-ft. (148,640-sq.-m.) building is being aided in part by the federally funded Job Creation and Retention Program, designed to help the approximately 140 larger companies in Lower Manhattan.
        In Brooklyn, the 2001 purchase of Gutmann Plastics by St. Louis, Mo.-based Alpha Packaging has been just a small part of a regional surge in pharmaceutical and healthcare activity. Dan Creston, Alpha's vice president and general manager, says about $1.5 million is being invested in the plant, and the welcome mat has been easier to find than in his home state.
        "New York has been a home run," he reports. "Energy grants, economic incentive grants, the Empire Zone in Brooklyn, they've been very generous. We're putting in a co-generation facility for power with our neighbor, Food Pro, so we'll be even more competitive up there."
        Most of the plastic containers Alpha makes are for the pharmaceutical industry, which has shown a 22-percent increase in jobs over the past 25 years ... at the same time that manufacturing jobs in general were declining by 41 percent. According to A Pharm State, a report issued by the Business Council's Public Policy Institute, not only have New York pharmaceutical manufacturers increased their shipments by 89 percent since 1997, but their jobs pay 16 percent better than the state's average manufacturing gig. Trailing only California and New Jersey in sector job creation, the state boasts 130 pharmaceutical firms, with 590 in biotech and related fields.

Movin' On Upstate

The state is just a cog in a Northeastern health care corridor that now sees one out of every 10 new jobs in the field, the highest ratio of any region in the country, according to Economy.com. And no matter what the jurisdiction, the talent from the telecom meltdown has found the pharmaceutical industry to be an inviting safety net. The health care sector's vitality extends upstate, where medical device makers and pharmaceutical firms are thriving. Regeneron Pharmaceuticals is headquartered in Tarrytown, and proximity to that locus of research was a top motivator behind the company's decision to spend $25 million to expand its plant in Greenbush, outside Albany. The company hopes to add 225 jobs to its current payroll of 175 over the next five years.
        Pharma is not the only industry to find a soft landing in the Capital City region. In October 2002, Sealy Mattress Co. announced it would also invest $25 million in an expansion, saving 198 jobs and adding 260 new jobs over the first year of operation. The 307,000-sq.-ft. (28,520-sq.-m.) build-to-suit site in Green Island beat out Sealy locations in Massachusetts and Pennsylvania, partly because of its situation in an Empire Zone. But just as important was the work force situated there: out of Sealy's operations spread across 19 states, the Albany County plant has been its top-performing for four of the past five years.
        One might think that the 150 miles between Albany and the ports of New York and New Jersey would preclude it from being directly connected to those ports' cargo business, but a new program launched by the Port Authority of New York and New Jersey in December 2002 could change that perception – and change the traffic problem perception as well.
        "The transportation issue has become a nightmare for moving materials effectively," admits Tom Barrett, president of New Jersey-based Barrett Builders. "For distribution companies, the theory years ago was there would be a lot of small regional truck terminals delivering materials into the city – break bulk from cross-country and distribute materials into the populated areas. Then all of a sudden the new genius plan was to not regionalize, break bulk and do it in Jersey. So everybody wanted a main facility in Jersey. What's happening is it's going back to the regional stuff because traffic is such a nightmare. It's become a quagmire."
        To help companies get out of that jam, the Port of Albany has become the first Northeast port to claim membership in the Port Inland Distribution Network, which will move containerized cargo by barge or rail between marine terminal facilities in the New York-New Jersey area and regional terminals in New York, New Jersey and three other Northeast states.
        "This new cargo distribution network will provide major benefits for both Upstate and metropolitan New York, including more port-related jobs, less traffic on congested highways and improved air quality," says Pataki. His New Jersey counterpart agrees.
        "When this network is in full operation, it is anticipated to generate approximately $125 million throughout the New Jersey and New York region from new distribution warehousing activities," says New Jersey Gov. James E. McGreevey. "In addition, 257 dockworker jobs will be created in New Jersey to handle additional cargo containers created by the new network. We look forward to implementing the next phase of this program in South Jersey to boost economic development and job opportunities in that region."
        Around 84 percent of the containers coming into the sea ports is now moved by truck, and one goal of the program is to reduce that percentage by nearly a third, eliminating some 1,000 truck trips per day on New York roadways by 2020. That goal is contingent on the participation of port operators in Davisville, R.I.; Bridgeport and New Haven, Conn.; Camden and Salem, N.J.; and Wilmington, Del.