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By Jack Rogers
From the January/February 2014 issue
Gov. Tom Corbett is on a roll. Pennsylvania’s chief executive has stepped forward several times to announce mega-projects which promise to drive job creation and technology development in the Commonwealth for years to come.
In January, Gov. Corbett joined Comcast Chairman and CEO Brian Roberts and Liberty Property Trust Chairman and CEO Bill Hankowsky to unveil a $1.2-billion project that will transform Philadelphia’s skyline while generating thousands of new jobs. Comcast’s new Innovation and Technology Center includes a mixed-use 59-story tower which will be the dedicated home for the cable giant’s expanding workforce of technicians, engineers and software architects.
“[This] transformative investment will have a strong impact throughout the region,” Gov. Corbett said. “The Commonwealth’s partnership with Comcast will create more than 20,000 direct and indirect jobs during construction, at least 1,500 new Comcast positions and energize Philadelphia’s Center City. I believe that it is our people—their creativity, ingenuity, talents and skills—who drive companies like Comcast to make Pennsylvania home.”
The project will generate an estimated $2.75-billion economic impact in Pennsylvania and eventually will create nearly 4,000 permanent jobs. The state will provide up to $30 million in grants and $4.5 million in tax credits. A study by Econsult indicates the project will yield $80 million in new tax revenues, amounting to a 200-percent return on the investment PA is making with its incentives.
In November, Corbett heralded a $40-million investment by Hon Hai/Foxconn, the world’s largest contract electronics manufacturer (Foxconn factories in China produce Apple’s iPad). The electronics vendor will spend $30 million to expand its connector and engineering operations, building a new high-tech manufacturing center at a PA site still to be chosen, creating 500 new jobs. Hon Hai/Foxconn also is investing $10 million in a new strategic R&D partnership with Carnegie Mellon University (CMU), a two-year collaboration.
In a wide-ranging interview with Business Facilities, the governor credited his administration’s focus on fiscal stability with creating an improved business climate in the Keystone State.
“I firmly believe that government does not create jobs, but rather builds an environment in which jobs can be fostered and grow. I’ve shown my commitment to securing Pennsylvania’s financial future and stimulating job creation through meaningful tax, legal and regulatory reform,” Corbett told BF. “As a result, Pennsylvania’s private sector has added more than 149,000 new jobs and we’ve recovered more than 99 percent of our pre-recession jobs level. With record investments in education, historic transportation funding, a renewed business climate and abundant low-cost energy, Pennsylvania’s employment future is bright.”
With the nation’s infrastructure earning a dreary D+ in the American Society of Civil Engineers’ most recent annual report card, Gov. Corbett has moved aggressively to make sure PA avoids this critical pothole in the road to sustainable growth. “[Our] transportation package will invest an additional $2.3 billion in the state’s roads, bridges and multi-modal transportation systems by the fifth year, creating at least 50,000 new jobs,” he said. “Additional funds also will support public transit systems across the state.”
Pennsylvania also is getting ready for increased shipping from the expanding Panama Canal. The state has secured more than $60 million in federal funds to deepen the Delaware River’s entire 103-mile main shipping channel from 40 to 45 feet. This long-planned work will ensure the Port of Philadelphia can accommodate larger ships and compete with other, nearby ports.
“We’ve also invested significantly in industrial and business site development to increase inventory of pad-ready sites with infrastructure, power, electric, and water/wastewater service,” Corbett noted. “In 2012 and 2013, we invested $93 million in low-interest loans through the Pennsylvania Industrial Development Authority to prep sites for development. This state investment has leveraged more than $240 million in private investment and supported the creation or retention of more than 13,500 Pennsylvania jobs.”
Pennsylvania is home to the second largest energy field in the world, including abundant natural gas reserves in the Marcellus Shale Formation that have helped make the state a leading natural gas producer. Since the onset of shale-gas production using horizontal drilling (fracking), PA businesses and homeowners have enjoyed a 50-percent decline in natural gas prices; the state’s diverse electric-generation portfolio has driven electricity prices down by 40 percent.
Gov. Corbett expects this energy revolution to power a “manufacturing revolution” in Pennsylvania. “This [also] translates into billions of dollars in annual savings for consumers—raising our competitiveness while bringing stability to long-term energy costs,” he said. “Our air is cleaner, and our communities healthier. Emissions, including carbon, are down significantly. Pennsylvania is demonstrating we can have both a growing economy and a cleaner environment.”
Corbett credits the Marcellus and Utica shale-gas plays with directly and indirectly supporting 240,000 jobs in the state. “Businesses are expanding or coming back home, while companies with deep roots in the Commonwealth are seizing new opportunities presented by safe and resource gas development,” he said. “Our common sense policies are demonstrating that Pennsylvania energy equals Pennsylvania jobs.”
The state’s innovative Resource Manufacturing Tax Credit is aimed at manufacturers who use natural gas and make large-scale capital investments of $1 billion or more. “The Resource Manufacturing Tax Credit sends a strong signal to job-creators: we want you to come and invest in Pennsylvania,” Corbett said.
Nationwide, a shortage of skilled labor has moved workforce training to the top of the economic development priority list. Gov. Corbett recently created the Pennsylvania Targeted Industry Program to prepare PA students for high-demand industries.
“Nothing is more critical to ensuring the economic strength of Pennsylvania than the development of a well-educated and trained workforce,” the governor explained. “More state funding has been directed to public education during my administration than any other time in Pennsylvania’s history. In order to begin closing the skills gap, I established the Targeted Industry Program to provide financial aid grants to meet workforce needs. So far, grants have been given to over 1,200 students-including veterans-enrolled in certification programs in high-demand industries.”
FOSTERING REGIONAL COOPERATION
Recognizing that regional cooperation is critical to successful development in today’s highly competitive environment, Gov. Corbett has spearheaded regional initiatives like a collaboration between educators, industry and government in northwestern PA to implement a welding certificate program to address a shortage of skilled welders. In the Lehigh Valley, the Manufacturers Resource Center, a nationally recognized leader in manufacturing assistance, has launched a ‘Skill Up’ initiative to encourage careers in modern manufacturing.
Pennsylvania has launched a job-matching website, JobGateway, to help those looking for work to find job and job-training opportunities in the state.
Gov. Corbett has mandated that support for economic development be streamlined. The Pennsylvania First program, which combined and retooled three existing programs, has helped businesses expand by awarding grants for equipment, acquisition of land and working capital. To qualify for the program, businesses must create or retain a minimum of 100 direct jobs, increase full-time employment by at least 20 percent or provide new full-time opportunities within high-growth industries.
In the last three years, PA First has invested more than $54 million, leveraging matching funds totaling $1.3 billion with commitments of more than 10,300 jobs to be created and 40,750 jobs to be retained, while helping to train more than 175,000 workers in the state.
Gov. Corbett reformed the method of funding redevelopment assistance capital projects to make the process more transparent and objective. “The Commonwealth’s spending and borrowing for capital redevelopment assistance had become unsustainable, growing from $400 million in 1986 to slightly more than $4 billion in 2010,” he explained. “Since the reforms were implemented, the Commonwealth has awarded funding totaling $188 million to support 118 projects that will create or retain more than 125,300 jobs.”
The new Innovate in PA program will inject at least $75 million of additional funding to the Ben Franklin Technology Partners, venture capital and life sciences greenhouses. Corbett also introduced Discovered in PA—Developed in PA (D2PA) to promote entrepreneurship and encourage technology transfer and the commercialization of intellectual property. The D2PA program awarded a $1 million grant last year to fund the Research for Advanced Manufacturing initiative, providing small incentive grants to teams at both Carnegie Mellon University and Lehigh University engaged in short-term innovation projects with PA manufacturers.
At the Comcast project announcement, Gov. Corbett fired a warning shot at a well-known competitive market to the north. “This project shows that Philadelphia is taking a bite out of the ‘Big Apple’ and we are ready to compete with anyone in the world to bring jobs to Pennsylvania,” he declared.
Like the ringing of the Liberty Bell, we suspect this challenge will reverberate and be heard across the country.