REGIONAL REPORT: THE NORTHEAST

Things are looking up—slightly—for the nation’s Northeast, which was losing workers and flat on growth last year. BY CRAIG GUILLOT

*No. ranking in the 2019 Chief Executive Best & Worst States for Business (ChiefExecutive.net/2019- Best-Worst-States)

TECH, MANUFACTURING AND LIFE sciences continue to be prime economic drivers in the Northeast. The region remains a mixed bag of urban innovation and development with moderate growth and some signs of hope in states that have traditionally suffered population declines.

22* DELAWARE INNOVATION IN THE FIRST STATE The Delaware Prosperity Partnership is driving new development initiatives that offer the private sector a bigger seat at the table, says DPP CEO Kurt Foreman. Efforts focusing on tech and science startups are paying off. The Delaware Innovation Space, an incubator and accelerator for science startups, formally opened a $6 million lab in September 2019, and recently doubled its seed and pre-seed First Fund investment program to $150,000. “The knowledge base, the talent pool and the concentration of Ph.D.’s in science, health and engineering have continued to attract startups and angel investors,” says Foreman. Other big developments continue to sprout in The First State. GT USA, a subsidiary of Gulftainer, is undertaking a $600 million project to turn the Port of Wilmington into one of the largest facilities of its kind on the East Coast. And, in June 2019, Kansas City-based Northpoint Development announced a deal to create 2 million square feet of warehouse and logistics space at the Delaware City Logistics Park.

In July 2019, the Delaware Business Roundtable launched the Ready in 6 initiative to speed up the time it takes for the state to approve projects from an average of 24 months to only six. “It’s a plan to ensure we can commit to be ready in six months for companies who need and want us to move at the pace of business,” Foreman says.

26 NEW HAMPSHIRE GROWTH IN THE GRANITE STATE Life sciences and manufacturing are experiencing strong growth in New Hampshire. BAE Systems announced in February 2019

DELAWARE GT USA aims to turn the port of Wilmington into one of the largest facilities of its kind on the East Coast.

a 200,000-square-foot expansion of its operations in Manchester. The facility will employ up to 800 workers, adding to the 6,000 workers already at multiple facilities across the state. Hitchiner Manufacturing is also in the process of constructing a $50 million expansion in Manchester and adding another 85 jobs. Meanwhile, the Advanced Regenerative Manufacturing Institute, founded at the University of New Hampshire in 2016, continues to attract new members and spur development.

One challenge the state now faces is finding workforce to support the growth. Along with neighboring states, New Hampshire is grappling with a graying population and low population growth rates. The state is looking to address workforce and housing issues with a collaboration of government and private enterprise. “The problem with us right now is, like many places, we don’t have the workforce to allow these companies to expand at the rate they should,” says Will Arvelo, director at the New Hampshire Division of Economic Development.

35 MAINE NATURAL OPPORTUNITIES In November 2019, Maine released a new 10-year Economic Development Strategy. One primary initiative is to tap the state’s wind, tides, sunlight, natural resources and expertise to develop solutions to the global climate crisis, said Heather Johnson, commissioner of the Maine Department of Economic and Community Development, in the report. “Our growth potential lies at the intersection of global trends and Maine’s assets,” Johnson said.

Many international leading scientists are looking to the state as a place to deploy new ideas related to food production and sustainability, says Peter DelGreco, CEO of Maine & Co. Big deals inked in 2018 and 2019 are now starting to take shape. Last year, three companies, including Whole Oceans, Nordic Aquafarms and Kingfish Zeeland, announced plans to establish landbased fish operations on the state’s coast. “These projects are north of $100 million… this will hopefully be the year when shovels go into the ground as they move through federal, state and local permitting projects,” DelGreco says.

In early 2019, the state ended its moratorium on land-based wind projects. Gov. Janet Mills called for a goal of 100 percent renewable energy by 2050, and the state legislature is considering proposals that would reduce gas emissions by 80 percent within 10 years. The American Wind Energy Association reports the state currently has 923 megawatts of installed capacity, an equivalent investment of nearly $2 billion. “I think we’re going to see those worlds marry each other,” DelGreco says. “If you look at something like land-based aquaculture, they use a lot of electricity. We’re going to start to see these companies deploying new ways of generating their own clean energy to power these operations.”

33 PENNSYLVANIA THE KEYS TO OPPORTUNITY Bloomberg’s inaugural “Economic Diversity Index” ranked Pennsylvania the most economically diverse state in the nation. More than just steel and chocolate, the state has seen big growth in real estate, manufacturing and healthcare. The state’s rich history, cutting-edge innovation and can-do spirit will help set the state apart and provide for future growth and prosperity, says Dennis Davin, secretary of the Department of Community and Economic Development.

Last year was a busy period for groundbreakings and expansions. Amazon announced in July 2019 it will construct a one-million-square-foot fulfillment center and create more than 800 full-time jobs in Allegheny County. In September 2019, Keurig Dr Pepper announced a $220 million manufacturing facility and up to 400 new jobs in Lehigh County. And near the end of last year, Stuffed Puffs opened a new facility in Bethlehem, and Astrobotic

MAINE Three companies plan to bring new landbased fish operations to Maine’s coastline.

RHODE ISLAND The Naval Undersea Warfare Center’s Division Newport joined the 401 Tech Bridge innovation initiative in December of 2019.

Technology announced relocating to Pittsburgh. Like many states, Pennsylvania is trying to address a growing workforce shortage. In 2019, Gov. Tom Wolf secured $40 million for education and workforce development through PAsmart, an initiative that connects state residents with resources to work, learn and train in new careers. In February 2019, the state founded the Keystone Economic Development and Workforce Command Center to bring state, labor and business leaders together on a weekly basis to address real-time workforce issues.

34 MARYLAND STACKING THE INCENTIVES Between August and October 2019, Maryland added more than 30,000 jobs, the biggest boost in a decade, says Kelly Schulz, secretary of the Maryland Department of Commerce. That growth is partly being driven by economic development efforts, one of which is to offer stackable incentives on top of the federal Opportunity Zone program. The More Opportunities for Marylanders Act offers additional tax credit for each new job created in an opportunity zone. These companies are also eligible for a $6 million in tax credit with an exemption of all state property taxes and a waiver for all business record, filing or special fees. “Having those stackable incentives has been really important, and we’ve been letting the world know about it,” Schulz says. New projects taking shape include building out the 3,250-acre Tradepoint Atlantic site, already home to such companies as Under Armour, Amazon, FedEx and Home Depot. Kite Pharma in Frederick County is also constructing an advanced pharmaceutical manufacturing facility and adding up to 700 jobs. And in March 2019, Northrop Grumman announced an expansion and 175 new jobs in Cecil County.

Maryland has also experienced strong growth in STEM occupations capitalizing on its university system, federal laboratories and incoming R&D dollars, Schulz says. “We really want to help commercialize them and move into a bigger, larger ecosystem filled with lots of growth,” Schulz says.

36 RHODE ISLAND INSPIRING INNOVATION CNBC named Providence metropolitan area as one of the top five places in the country to find a job, and, in November 2019, the Ocean State hit another all-time job high with more than a half million employed residents. Close proximity to New York and Boston, coupled with a more favorable cost of living and quality of life, are attracting companies seeking to expand, says Brian Hodge, deputy director of communications at the Rhode Island Commerce Corporation.

Innovation is an area where Rhode Island is gaining momentum. In addition to the Wexford Innovation Center and Innovate Newport Center, there are five other new innovation campuses under development. One of those is 401 Tech Bridge, a partnership with the U.S. Navy that will tap small businesses to engage in cooperative R&D to help solve Navy problems. Along with the infrastructure, initiatives such as the Qualified Jobs and Rebuild Rhode Island tax credit programs have proven valuable for innovation-oriented companies like Virgin Pulse, Amgen and Rubius Therapeutics. “Our state has made unprecedented investments in innovation. Plus, our small size provides unparalleled access to key assets and institutions, all of which are taking an active approach to boosting innovation,” Hodge says.

41 VERMONT A NATURAL HAVEN FOR REMOTE WORK Vermont is working hard to address a dearth of workers with the Vermont Employment Growth Incentive, which offers payments of up to $5,000 per year for up to two years for remote workers who relocate to the state. “People typically think of Vermont as a great place to visit but not a great place to live,” says Joan Goldstein, Commissioner of the Vermont Department of Economic Development. “We really wanted

to change that narrative.”

The program went viral in 2019, generating the equivalent of more than $7 million in free advertising, and has brought hundreds of new residents to the state, Goldstein says. That might not seem like a big deal in many places, but it’s a decent win for a state desperately trying to attract new residents.

Meanwhile, Vermont’s bread-and-butter industries are growing. And two years after Blodgett Oven relocated its campus elsewhere within the state, entrepreneurs are hoping to renovate the waterfront campus as a space for big-tech businesses. “They’ve brought some subsidiaries from other areas of the country, and there’s new opportunity in the footprint,” Goldstein says.

45 MASSACHUSETTS BIG OPPORTUNITIES IN THE BAY STATE More than a year after Gov. Charlie Baker signed a $1.15 billion economic development bond bill, Massachusetts is boosting funding for initiatives like infrastructure improvements, MassWorks, the Massachusetts Technology Development Corporation and the Massachusetts Cybersecurity Innovation Fund. “It’s really doubling down on a lot of different areas of economic development, from workforce training to grants for innovation and science and technology,” says Peter Abair, executive director at MassEcon.

The Bay State wasn’t selected for Amazon’s HQ2 project, but Amazon is constructing a 500,000-square-foot facility and adding 4,000 jobs in the Seaport area of Boston. It also acquired two additional facilities in Revere and Westborough, each of which will add close to 1,000 new jobs. “While we didn’t win this big competition, we have been winning these incredible Amazon projects ever since,” Abair says.

The life sciences and biopharma industries also continue to grow. According to the 2019 Industry Snapshot by MassBio, the industry added 20,000 jobs in the past 10 years, a growth rate of more than 35 percent. “The impact has been dramatic with the number of lab and manufacturing facilities going up in just the past year,” Abair says.

46 CONNECTICUT DOUBLING DOWN ON CORE STRENGTHS Connecticut is focusing on its core strengths of advanced manufacturing, life sciences and financial services, says David Lehman, commissioner of Economic and Community Development for the State of Connecticut. “We’re focused on high-productivity industries with good-paying jobs and where we have a natural competitive advantage,” he says.

In April 2019, Yale New Haven Hospital announced plans to build a 505,000-square

foot, $838 million neuroscience center to research diseases such as Alzheimer’s, Parkinson’s, epilepsy and multiple sclerosis. In October 2019, Polamer Precision announced intent to purchase 27 acres of undeveloped space in the Pinnacle Business Park in New Britain for a major expansion. In April, Stanley Black & Decker opened its Manufactory 4.0 advanced manufacturing center of excellence in Hartford. And in September, General Dynamics Electric Boat broke ground on an $850 million expansion.

Financial stability has also been a factor in this robust growth in key sectors,” says Lehman. “Connecticut had the best-performing bonds in 2019 of any state, as a function of the state’s finances being on the mend, and no taxes were increased in the past budget.”

47 NEW JERSEY NEW WORKSPACE The New Jersey Economic Development Authority released a report in 2018 about

MASSACHUSETTS Boston’s Seaport area will be the site of a new 500,000-square-foot Amazon facility.

NEW YORK Onondaga County will be home to a new mid-size manufacturing plant for Cyromech.

creating a stronger and fairer economy that would extend economic opportunities across all demographics and parts of the population. One initiative is NJ Ignite, an effort that supports entrepreneurs with rent grants and collaborative workspaces with a new tenant attraction tool. Gov. Phil Murphy said in a press release that a common concern from the entrepreneurial community is the difficulty that startups have finding affordable space in the state. “Through NJ Ignite, we are striving to remove that obstacle, enabling Garden State innovators to preserve precious capital for product development, connecting with investors and everything else it takes to successfully grow and prosper here” Murphy said.

The program offers up to nine months of rent support for startups that move into collaborative workspaces. The first nine workspaces were approved by the New Jersey Economic Development Authority in December 2019, including the 108,000-square foot Enterprise Development Center at the New Jersey Institute of Technology and the Rutgers EcoComplex.

49 NEW YORK EXPANDING THE EMPIRE The Empire State has been striving to enhance economic development beyond New York City and to all corners of the state. In 2019, more than $761 million were awarded to 10 regional economic development councils to drive local economies forward and implement strategic plans for growth. “By bringing together local leaders and stakeholders who are invested in their communities, we have replaced the ‘one-size-fits-all’ approach to economic development with one that is unique to each community, creating opportunities for success all across The Empire State,” said Gov. Andrew Cuomo.

Notable announcements in 2019 included the state’s completion of the first-in-the-nation “drone corridor,” a 50-mile unmanned traffic management path for drone testing from Central New York to the Mohawk Valley. Several mid-sized manufacturing plants have broken ground, from Cryomech in Onondaga County to Briggs & Stratton in Oneida County and Sullivan County Fabrication in the Woodridge. And in September 2019, the state announced a $1 billion public-private partnership with Cree to create the world’s largest silicon carbide device facility at SUNY Poly Campus. “This is a crucial step in cultivating the advanced manufacturing infrastructure of New York State, growing the upstate economy and transforming the future of the Mohawk Valley,” said Cuomo in a press release.

N/R WASHINGTON, D.C.

RAISING CAPITAL IN THE CAPITAL The Washington D.C. Regional Report by Avison Young forecasts the metro area’s economy to grow by an average of 2 percent annually over the next five years. The positive sign is the District is diversifying and relying less on federal spending, with a quarter of the expansions anticipated to be in tech. Much of that is due to Amazon’s operations in the area. D.C. lost the bid for Amazon’s HQ2 project but indirectly won as the retailer sets up shop just south of the capital in Arlington, Virginia. The company plans to add up to 25,000 jobs in the region at an average salary of $150,000.

In addition to the gain in real estate prices and influx of new talent, a wave of ancillary service providers and startups can be expected to follow. A report released by the Virginia Chamber Foundation said the D.C. area can expect to see $15 billion in new economic activity and 62,000 new jobs by 2030. According to the Venture Monitor report by PitchBook and the National Venture Capital Association, D.C. area startups raised nearly $2 billion in 246 venture capital deals in 2019—slightly less than 2018 but still the second-highest year since 2006. CE