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PENNSYLVANIA
From Site Selection magazine, September 2021
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A Road Trip Through ‘Multiple States in One’

Pennsylvania
Philadelphia, Pennsylvania
Photo: Getty Images

by Mark Arend

When word got out that Site Selection’s annual Pennsylvania Spotlight was in the works for this issue, the result was an avalanche of interest from regions looking to weigh in. That’s normal. But their sense of urgency was heightened this year because many areas have seen so far in 2021 not a light at the end of the tunnel, but the end of the tunnel. Their intention is to make that known, because they know the same is true in locations around the country. 

Project activity has largely resumed to pre-pandemic levels throughout the Commonwealth, and industry sectors old and new are again in growth mode. Still, recovery and growth rates do vary from location to location.

“Pennsylvania is sort of like multiple states in one with extremely rural areas, large metros and small towns,” says Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corporation. He previously was a twice-elected mayor of Bethlehem, a county executive, a cabinet secretary under former Governor Ed Rendell and president of the Pennsylvania League of Cities. “About 20 to 22 counties are heavy population and economic growth areas. Large population centers have transitioned out of heavy industry nicely into more of the 21st century economy with life sciences and technology and health care and finance.”

Cunningham says the norm in the early 1980s was for graduates to leave locations like the Lehigh Valley to find career opportunities elsewhere. But that has changed: “Today, the largest portion of our work force is 35 years of age and younger, and we have the fastest growing population per capita of young people in Pennsylvania. We’re not the Rust Belt anymore and haven’t been for years. Having said that, manufacturing is the second biggest part of the Lehigh Valley economy. But today it’s guitars, medical equipment, diagnostics and food and beverage.” Logistics and e-commerce too are now central to the area’s economy given its proximity to the major cities in the Northeast.

Following are snapshots of some recent regional economic activity around Pennsylvania that may reveal clues as to where to look closer for a future project site.

Western Pennsylvania

CBRE in 2020 named Pittsburgh the number one emerging life sciences cluster in the United States. Among other life sciences assets, it’s home to the University of Pittsburgh Medical Center and the Allegheny Health Network.

pitt

Pittsburgh, Pennsylvania
Photos: Getty Images

In mid-2021, Jim Futrell, vice president of market research at the Allegheny Conference on Community Development in Pittsburgh, hosted a webcast focusing on the region’s Business Investment Scorecard and the project data it reveals about activity in 2020. He followed up with attendees with a synopsis of the main points of the presentation, including a look ahead. The takeaways were:

Expansions of existing regional companies accounted for the most deals in 2020. This continues a trend observed over the past 14 years of tracking investment activity across the region. It’s reinforcement of the reality that the majority share of economic activity comes from a region’s existing companies. Pittsburgh is no exception. 

IT & Robotics remained — for the fourth consecutive year — the region’s most active sector for announced investment deals. It was also the most active sector for generating new jobs (2,000+) for four years straight. Robotics held its own with 15 announced projects.

Manufacturing was the second most active sector for investment activity, right behind IT. It generated the second highest level of capital investment among key sectors: $76.5 million.

Life sciences deals tripled from a historic average of six to 18, the most in a decade. Healthcare and life sciences together generated the most capital investment of any sector ($181 million) and ranked second in total job impact.

CBRE in 2020 named Pittsburgh the number one emerging life sciences cluster in the United States. Among other life sciences assets, it’s home to the University of Pittsburgh Medical Center and the Allegheny Health Network.

These findings reinforce the sectors that are positioned for growth in a post-pandemic economy — domestic and international — and those where the Pittsburgh region has competitive advantages. 

Now and Next: 2021 and Beyond

As to the region’s current situation, here are a few of Futrell’s observations about activity in 2021:

  • After a slow start, investment momentum seems to be building with 47 total announcements in the first half of the year.
  • Continued strength in IT and Robotics (14 of 47 announcements through June 2021 were in this sector).
  • Strength in Manufacturing: 39% of announcements through June 2021 (20 of 47) were in manufacturing, Compared to 19% in 2020, 21% in 2019, 26% in 2018 at the same point in time. Nearly all of the manufacturing announcements involve manufacturing facilities (as opposed to HQ’s or R&D Centers).
  • Growth of distribution centers continues ahead of the record pace recorded in 2020 — companies are rethinking their logistics for how they meet the demands of customers who have increasingly prioritized online shopping.

Penn State’s Old Main building

Penn State’s Old Main building is located in State College, Pennsylvania. Pennsylvania State University or Penn State is a major public research university, enrolling nearly 90,000 students in 2020.
Photos: Getty Images

Central Pennsylvania

West Pharmaceutical Services, Inc., a leading global manufacturer in design and production of high-quality delivery systems for injectable medicines, will expand and modernize its Williamsport manufacturing plant, investing over $18 million into the expansion. The company is retaining 1,100 jobs statewide and creating over 200 new, full-time jobs collectively at three Pennsylvania locations in Williamsport, Jersey Shore and the company’s headquarters in Exton. 

The expansion will include a 12,000-sq.-ft. addition to the Williamsport facility and the purchase of production equipment for a new product mixer line. The project is expected to modernize the plant, increase manufacturing output and improve overall efficiency.

“We are pleased to continue our growth within Pennsylvania, which will help support our mission of improving the lives of patients across the globe,” said David Montecalvo, West’s senior vice president, chief operations and supply chain officer. “We are grateful for our partnership with the Commonwealth of PA and for the support of the Governor’s Action Team, which will help enable our continued commitment to expand our operations in PA and supporting a bright future for the communities in which we operate.”

Trivium Packaging, a metal packaging manufacturer, is expanding its manufacturing operations with upgrades to an existing production line, the installation of an interior sunken dock pit, and a building expansion for receiving steel coil shipments to accommodate new business, investing over $7 million into the upgrades, retaining 76 jobs at its South Centre Township, Columbia County, site and creating 48 new, full-time jobs.

Trivium Packaging offers a variety of sustainable metal packaging with innovative shaping, decoration, embossing, debossing, and opening solutions to more than 1,300 customers. The company also has a location in Pittsburgh and has been at its facility in Columbia County since 2000.

“We are extremely excited to see the upcoming developments and upgrades that this new project will bring to our Bloomsburg plant and overall operations,” said Trivium President of the Americas Jens Irion. “The investments also illustrate the importance that manufacturing still plays for our society, so being able to retain 76 jobs and add an additional 48 makes us extremely proud, as these jobs will provide good living wages and benefits to individuals and their communities. We thank the Governor’s Office for providing us with this opportunity.”

The company received a funding proposal from the Department of Community and Economic Development (DCED) for a $144,000 Pennsylvania First grant, a $400,000 Pennsylvania Industrial Development Authority (PIDA) loan and was encouraged to apply for the department’s Manufacturing Tax Credit (MTC) program. The company has committed to investing $7.17 million into the project and creating at least 48 new jobs over the next three years.

Bonduelle USA, Inc., a French, family-run company involved in the processing and commercialization of canned and frozen vegetables in the United States, and indirect wholly-owned subsidiary of Bonduelle US Holding Inc., will expand operations at its Lebanon County facility, investing at least $5 million into the expansion and creating 35 new, full-time jobs.

Bonduelle packages frozen products for major private label brands and also markets vegetables under its own brands. The expansion will include the purchase of new machinery and equipment and the addition of two new frozen vegetable processing and packaging lines, increasing output from 45 million pounds to 75 million pounds annually by 2023. The expansion will also streamline operations and boost efficiency with the integration of new automated technology.

“Bonduelle is excited to work with Governor Wolf’s office to increase our business in Pennsylvania and create new jobs in the Lebanon, PA community,” said U.S. Packaging Operations Manager Jeremie Williams. “We know that there are many opportunities at the Lebanon plant and are looking forward to continuing to see the site grow with new technology and people. Bonduelle is committed to building a better future through plant-based food, feeding future generations, and is dedicated to putting our people and communities at the heart of what we do.”

 

"Bonduelle is committed to building a better future through plant-based food, feeding future generations, and is dedicated to putting our people and communities at the heart of what we do.”
— Jeremie Williams, U.S. Packaging Operations Manager at Bonduelle USA, Inc.

 

The company received a funding proposal from the Department of Community and Economic Development (DCED) for a $70,000 Pennsylvania First grant, a $35,000 workforce development grant to help the company train workers, and a $400,000 Pennsylvania Industrial Development Authority (PIDA) loan. The project was coordinated by the Governor’s Action Team, an experienced group of economic development professionals who report directly to the governor and work with businesses that are considering locating or expanding in Pennsylvania.

South Central Pennsylvania

Located in South Central Pennsylvania, Lancaster serves as the seat of Pennsylvania’s Lancaster County and is one of the oldest inland towns in the United States.
Photos: Getty Images

 

Eastern Pennsylvania

Philadelphia has added to its roster of life sciences projects is recent months with several announcements of expansions and new facilities, including:

  • Diagnostic company Biomeme will relocate its entire operations to a 44,000-sq.-ft. location in City Center;
  • Aro Biotherpeutics will begin to relocate its operations to The Curtis in Center City Philadelphia in October. “We couldn’t be more pleased to be relocating to the historic Curtis building as we enter our next phase of growth,” says Susan Dillon, Ph.D., co-founder and CEO. “The lab and office spaces will help us create a world-class facility, and along with the other building amenities and nearby attractions, The Curtis is ideal for Aro hiring and retaining the very best talent.”

Elsewhere in the region, Stir Foods Lancaster, LLC, a custom manufacturer of soups, sauces, dressings, and fresh salsas for retail, industrial, and foodservice customers, will expand its Lancaster manufacturing location, investing more than $4 million into the expansion, retaining 51 jobs and creating 100 new, full-time jobs over the next three years.
Stir Foods Lancaster will expand its existing facility to accommodate its growing business. With new investments in machinery and equipment, the company will significantly increase production, while enhancing food safety and product quality. The expansion project will result in the need for a second shift and will triple existing employment.

“We plan to invest in Lancaster to grow the facility into one of our ‘flagship’ locations, and appreciate the support that the state of Pennsylvania has offered us,” said Milt Liu, CEO of Stir Foods.

Chewy, Inc., a pet supply online retailer, is expanding its operations in Pittston Township, Luzerne County, leasing 155,000 sq. ft. of existing space for a pharmacy fulfillment center creating 550 new, full-time jobs.

Reading Pagoda

The Reading Pagoda overlooks the city of Reading.
Photos: Getty Images

 

With an anticipated opening in late 2021, Chewy’s new pharmacy location will provide fulfillment of pet prescriptions, medications, and special dietary foods. The project is Chewy’s third expansion in the Commonwealth within two years. The Pittston Township facility will be the first pharmacy location in Pennsylvania while Chewy currently employs nearly 3,500 Pennsylvanians at its fulfillment centers in Wilkes-Barre, Archbald, Lewisberry and Mechanicsburg.

“We are proud to expand our presence in Pennsylvania with the opening of our first pharmacy facility in the state. This new site joins our four fulfillment centers already in the region which collectively employ nearly 3,500 Pennsylvanians,” said Pete Krillies, vice president of Real Estate, Facilities, Procurement of Chewy, Inc. “This expansion continues our significant regional investment with the creation of 550 additional new jobs and will also allow us to provide our customers with even faster delivery of the necessary prescriptions and health and wellness products for their pets.”

Cardinal Systems, Inc., a family-owned custom fabricator and manufacturer, will expand its existing operation and production capacity at its facilities in North Manheim Township, Schuylkill County, and Manchester Township, York County, investing nearly $9 million into the multi-site expansion, retaining more than 300 jobs and creating nearly 60 new, full-time jobs.

Cardinal is expanding after experiencing an increased demand for its products. The company, established in Schuylkill County in 1976, is a leading manufacturer of steel and plastic products, custom fabricates and manufactures steel wall panels, thermomoulded and extruded plastic products, and vinyl liners for the swimming pool industry.

“We are excited to embark on this expansion of our manufacturing facility during this unprecedented busy time brought on by the pandemic. As a family-owned business, we believe strongly in investing in our people and our operation as a way to provide a solid foundation for our success as an American manufacturer,” said Cardinal Systems, Inc., Owner Rachel Bradley.

Specifically, the company will expand its Schuylkill County headquarters, which will include the construction of new office and warehouse space. This expansion will streamline its shipping operations, repurpose its existing warehouse facility, reduce truck traffic on Route 61, allow the company to increase capacity on its production floor, and create additional offices, open work centers and training space for ongoing training needs. 

Harrisburg

Harrisburg 2

The city of Harrisburg is home to the State Capitol.
Photos: Getty Images

 

Mark Arend
Editor in Chief of Site Selection magazine

Mark Arend

Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.

 



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