Capture Mobile Workers
Building, retaining and retraining a 21st century labor pool
is the top priority in the tri-state Northeast region.
CONSOL Energy's new $50-million headquarters is just one sign of Pittsburgh's shining prospects. Moody's Investors Service in January called the seven-county Pittsburgh region "the best commercial real estate market in the nation."
hile national media outlets were busy reporting massive Wall Street job losses the last two quarters, an undercurrent of change was sweeping through New York, New Jersey and Pennsylvania.
Work-force mobility –a trend that has gained prominence due to rapidly changing employer fortunes and job markets –became the rule of thumb.
"A portion of the financial services cadre –about 10 to 15 percent –will leave the area of New York City," says David Brandon, senior vice president of The Pathfinders, a Dallas-based consulting firm that specializes in studying the demographic make-up and behavioral patterns of labor sheds around the country.
"They will find new employment elsewhere or go to another field or even start their own firms," he adds. "But 65 to 75 percent of them will make an effort to stay within the financial services industry, either with another firm or to some day rejoin their former employer. Most will stay within their current market."
Niches On the Move
For communities in the Northeast, the challenge is retaining this base of high-talent, high-wage personnel, and not just in the financial services sector. Keeping information-technology and life-science talent is at a premium as well.
"We are seeing a break from past labor practices," Brandon says. "While historically there has been a concentration of the financial services work force on Wall Street, people will now go to wherever the jobs are. This work force, which had been heavily concentrated in the New York City and Northern New Jersey area, will spread across the Eastern U.S. This will create opportunities for enterprising communities to build one or more sectors based on talent."
Several communities are already tapping into this trend, says Brandon: Valley Forge, Lancaster, Harrisburg and Hazleton, Pa.; Hudson Valley, N.Y.; and Vineland, N.J.
"There is an availability of technical, managerial and analytical talent in Eastern Pennsylvania right now," he says. "Places like Valley Forge and Lancaster will see increased activity as a result of the availability of this young talent. They can take advantage of this trend."
Hazleton, he adds, could be a model for other communities. "We have just completed a large site selection project in Hazleton," says Brandon. "They brought to the table a very aggressive approach to economic development and a willingness to create an environment of good governance, quality energy and infrastructure that is well built and well maintained."
'Knowing What You Have'
Brandon did not name the project, but Tootsie Roll Industries Inc. announced Jan. 7 that it will open a distribution center in the Humboldt Industrial Park in Hazleton.
The 240,000-sq.-ft. (2,230-sq.-m.) center will be the distribution point for Tootsie Roll's 36 brands to locations throughout the Northeast and the Atlantic Seaboard, said Ellen Gordon, the company's president and chief operating officer.
Gordon cited the community's work force as a critical factor in the location decision.
Brandon tells Site Selection
that he has also placed a US$50-million manufacturing operation in the Hudson Valley and is considering Vineland for a food-processing operation. In each case, he notes, work force is the main ingredient.
"The City of Vineland understands very well what their work force can bring to the table," he says. "They are building upon that foundation. In that part of New Jersey, they have an excellent work force and an excellent operating environment."
The Pathfinders completed a detailed "Labor Availability Report" for Vineland last August. Among the study's key findings:
• The area's labor shed of 102,900 workers had a pool of about 6,900 unemployed people who were actively seeking work.
• Another 10,100 workers in the area were classified as "underemployed" and were open to changing jobs for slightly better wages.
• About one-fourth of the underemployed would accept a new job for less than $14 an hour. The top quartile of experienced workers would command more than $22.26 per hour.
• Altogether, the Vineland area has about 18,600 available workers for new or expanding companies.
Knowing the attributes and possible mobility of a local work force is job one for any expanding employer, and therefore it must be job one for any community, says Brandon.
"Knowing what you have is important right now," he says. "It is one of the most difficult issues to understand. Now that you are facing a severe challenge to your economy, the lesson tells you that work force is the number one factor in an investment decision. States, regions, metropolitan areas and counties need to understand precisely what they have in terms of work force, especially in terms of the younger work force. We older folks are going to be leaving here soon."
Seeking High-Tech Workers
Throughout the region, company executives say that work force was central to their expansion location decision. In New York, access to a ready-made pool of high-tech workers sealed the deal for two growing firms.
GlobeOp Financial Services in New York
At GlobeOp Financial Services in New York, "access to a skilled local work force that further reinforces our robust, international client service network" made Westchester County the logical choice for a $10.5-million data center investment, says Vernon Barback, the firm's president and chief operating officer.
"We first established our Harrison office in Westchester County in 2000, when GlobeOp was founded. The county is home to many major hedge funds and close to the New York financial district," Barback said in an e-mail interview. "Our focus in 2009 will be to relocate some of the Harrison-based client service, IT and client investor relations group to Yorktown Heights. Our goal is to retain our highly skilled professional work force and be an employer of choice in the areas in which we operate."
Headquartered in both New York City and London, GlobeOp is moving about 70 key personnel to the new 80,000-sq.-ft. (7,432-sq.-m.) data center and office complex in Yorktown Heights, about 40 miles (64 km.) from Manhattan. The company is spending $5.5 million to buy the building and another $5 million to retrofit and equip it.
The presence of an existing facility with the necessary infrastructure made the site choice easier, says Barback. Yorktown Heights offered "a building that provided additional capacity for technology infrastructure and related data services to support client service expansion and future business growth," he says, noting that the building also provided "the physical and infrastructural capacity for advanced data management and disaster recovery systems and equipment to safeguard clients' business-critical information systems and data."
Wyeth is investing $16 million in expanding its site in Pearl River, N.Y., in Rockland County. The company will build a new vaccine plant on the parcel, which it has owned since 1907. For the first time, Rockland County is offering an incentive for the project, in the form of a sales tax abatement.
Other critical location factors included "multiple route and transportation access options in the event of an emergency," Barback adds. "Minimizing the impact on client service, functional teams and individual commutes" was also an advantage.
Globally, the company employs 1,800 people and services clients on three continents. Besides New York and London, the firm has offices in Dublin, Ireland; George Town, Cayman Islands; and Mumbai, India.
Another global company, Wyeth Pharmaceuticals, is expanding its facility footprint in New York, even as it enters into an agreement to be purchased by Pfizer for $68 billion.
Wyeth announced last September that it would invest $16 million to expand its campus in Pearl River by 36,000 sq. ft. (3,344 sq. m.). The company plans to build a new vaccine plant on the 550-acre (223-hectare) North Middletown Road site, which has 28 buildings and 3,100 employees.
"We will use existing staff to manufacture Prevnar 13," a vaccine given to infants and toddlers to protect them from meningitis and other diseases caused by pneumococcal bacteria, says Grace Ann Arnold, associate director of site communications for Wyeth. "This is a huge, fabulous site that Wyeth has owned since 1907."
While the expansion creates no new jobs, it "enhances our existing capabilities on site," adds Arnold. "The new facility will include production space, temperature-controlled storage and office space. We anticipate a December 2009 completion."
The Rockland Industrial Development Agency approved a $283,900 sales tax abatement on the purchase of building materials needed to construct the plant. The incentive is the first that Wyeth has received in the county, according to Mike McDermott, site operations vice president for the firm.
Located about 20 miles north of Manhattan, the Pearl River site is one of the largest facilities in Wyeth's global network. It is also the largest private employer in Rockland County, with an annual payroll of $275 million.
Headquartered in Madison, N.J., Wyeth employs 47,000 people worldwide and ranks as the 12th largest pharmaceutical company in the U.S. Its revenues in 2008 were $23.5 billion.
"We really needed to increase our production capacity at Pearl River, and this expansion will help us produce the new version of Prevnar once it receives FDA approval this year," Arnold says. "We also manufacture the Centrum multi-vitamin and the leukemia drug Mylotarg at this site."
New York 'GAINS' $50M Fund
New York is no stranger to work-force mobility issues. Dennis Mullen, Upstate president for Empire State Development, says, "Since New York has historically relied heavily upon Wall Street, with up to 20 percent of the state's revenues coming from financial services industries, this imbalance has left us exceedingly vulnerable. With this volatility highlighted in dire economic times, it is now –more than ever –essential to diversify our economy in order to dilute risk and stimulate growth."
New York Gov. David Paterson's economic stimulus plan includes a $50-million grant program known as the New York Growth, Achievement and Investment Strategy (GAINS) Fund, which targets job creation in strategic industries such as manufacturing, financial services, agri-business, high technology and biotechnology.
In addition, the state is setting aside another $31.6 million to support critical university-based matching grants that go toward applied research and technology.
Despite the economic crisis that erupted on Wall Street, the Empire State posted a number of high-profile corporate facility investments in 2008, notes Mullen. Among them were Nova Bus in Plattsburgh, Globe Specialty Metals in Niagara Falls and medical diagnostic equipment maker Welch Allyn in Skaneateles Falls.
Nova Bus is building a 120,000-sq.-ft. (11,148-sq.-m.) plant in the North Country Region of New York to house the company's U.S. bus assembly plant and engineering operations. The $25-million project creates 300 skilled manufacturing jobs and is eligible to receive up to $2.95 million in various state incentives.
Globe Specialty Metals is investing $60 million to reopen and expand its silicon processing plant in Western New York. The project creates 500 "green collar" jobs in manufacturing a component used in the production of solar energy panels.
Welch Allyn in Central New York will soon break ground on a $30-million expansion that will create 175 jobs and help support 1,125 existing jobs. Empire State Development is providing $1.5 million in grants to facilitate job creation and improve productivity.
Site Selection Online – The magazine of Corporate Real Estate Strategy and Area Economic Development.
©2009 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.