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The biotechnology and pharmaceuticals sectors have become engines for economic development across the country.
With so many new financial centers emerging in secondary cities around the U.S., where will your new location be?
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Featuring reports from the Mayors of Jersey City, NJ, Decatur, IL, and New Lenox, IL
Novo Opts to Grow in the Garden State In March, health care company Novo Nordisk announced plans to expand its U.S. headquarters in Princeton, NJ to accommodate future growth. In the past five years, the company has experienced a 150% increase in workers at its headquarters, where around 700 people are employed. The new building will have the capacity for more than 400 employees and feature an in-house training facility capable of training 100 employees simultaneously. Novo had been considering sites in Pennsylvania, California, and Massachusetts for the project. Novo Nordisk was offered a Business Retention and Relocation Assistance Act Grant of $420,000 and an estimated sales tax exemption of $1.39 million to assist with its expansion. The company is also eligible for $5.4 million in Business Employment Incentive Program assistance. “We consider the state of New Jersey and our local community key contributors to our vision, as they have been exemplary partners and have supported and encouraged Novo Nordisk’s growth in the area,” says Jerzy Gruhn, president of Novo Nordisk, Inc. Novo Nordisk’s new facility is the first of five five-story buildings to be completed at the Princeton Corporate Campus, an 800,000-square-foot master-planned office development located in Plainsboro, NJ. Tax-Exempt Bonds Yield New Jobs at Tris Pharma Tris Pharma, Inc. revealed its plans late last year to ramp up its pharmaceutical manufacturing capacity with the help of $4.9 million in tax-exempt bonds issued under the state’s Edison Innovation Fund. The company anticipates that the resulting manufacturing expansion will result in more than 50 new jobs at the site. The New Jersey Economic Development Authority (EDA) has supported the growth and development of Tris Pharma, Inc. since March 2002, and has helped the company grow from a staff of eight to more than 70 over the past five years. “The availability of low-cost capital in the form of tax-exempt bonds is a great opportunity for companies like us and helps add manufacturing capacity right here at home in New Jersey,” says Ketan Mehta, CEO of Tris Pharma, Inc. “This is the second time we have been a beneficiary of EDA’s bond program. Our continued investment in first-rate technology infrastructure is greatly facilitated by this bond-financing. The bonds, directly purchased by The Provident Bank, were issued for 10 years with a fixed, low-interest rate and interest-only payments due for the first three months. The EDA also provided a $1 million guarantee.” Innovation Fund to Aid Tech Company Expansion In April, the New Jersey EDA closed a $1 million Edison Innovation Fund […]
With the familiar dread of my 5pm drive home on the New Jersey Garden State Parkway hovering, I have decided to blog about the state of U.S. highway infrastructure. A gloomy topic on a sunny day. Yesterday, I received Walker Industrial‘s spring newsletter called “Outlook,” which provides a brief, but potent picture of the traffic and roadway problems facing the nation right now. With so many relocating and expanding companies looking for easy access to transport routes for their shipping and distribution centers, I found it troubling, though perhaps not surprising, that our major cities and ports are suffering from the severe congestion of their surrounding highways, many of which are operating at 90% or more of their traffic capacity. Almost the whole stretch of Interstate 95 from New York City to Richmond, VA is exceeding its capacity, as are highway connections snaking around Los Angeles, Seattle, Chicago, Dallas, and Atlanta, among others. Road congestion is also slowing up port activity in New York, New Jersey, and southern California, according to the Walker report. Here is the kicker: in 2005, President Bush commissioned a team to examine the U.S. highway infrastructure problems. Three years later, the findings still have not been released—that’s a long time to be sitting in gridlock!
Mark O’Connell is the CEO of OCO Global, a consulting firm he founded in 2001 that specializes in international investment and trade. O’Connell also oversees the operations of Mintel International Group in Ireland. BF: In 2007, the United States saw a 20% increase in FDI from 2006. Is this an unusually large increase and, if so, what factors do you think account for it? O’Connell: The United States currently offers a bargain to international investors; the weak dollar, combined with the slowdown in the U.S. economy, is creating a unique opportunity for foreign companies to establish a U.S. presence. Property is relatively cheap and investors can negotiate since it’s a buyer’s market. Skills are abundant since many U.S. firms are not hiring, and some in the financial services are shedding jobs, making labor costs more competitive. Economic development organizations in the worst-affected states will sell their grannies to get new jobs and investment, so big incentives are on the table. We expect 2008 to be another strong year for inbound FDI to the U.S. BF: California, New York, and Texas attract the most U.S. FDI. What other states can you identify as possible alternatives for foreign companies to consider? O’Connell: Arguably, some of these front runner states are over shopped and over heated from an FDI perspective. We are seeing shrewd investors look at overspill states like Arizona and Nevada, where you can still find skills and quality without paying California prices. Florida and Georgia also offer excellent gateways for investors to the wider Southeast U.S. and Latin America. Lastly, New York has some stiff competition in financial and business services from Pennsylvania, New Jersey, and New England, which offer lower costs with often better operating environments and skills. BF: What can states with smaller economies do to lure foreign investment? O’Connell: The best advice here is to specialize—choose one or two sectors or activities where you can shine and demonstrate competitive advantage to investors. Get to know those sectors and the business issues that need to be addressed. Then prepare your short list of active companies and build relationships directly with these companies and their advisors. BF: Why do you think the Asia-Pacific region attracts 40% of the world’s FDI? (I assume it’s more complicated than just being the largest land mass.) O’Connell: Many commentators assume all the FDI flows to Asia are cost seeking projects. Undoubtedly, in the past much of the volumes of FDI flowing into China and India have been precisely that. However, we are increasingly […]
Saw this article in The New York Times today; it’s about how New Jersey’s brownfield redevelopment incentives didn’t do much during the 1990s, but now that there’s hardly any greenfield space left in the state, developers are giving them a shot. I think it’s kind of unfortunate that the easiest way for a developer to earn back their 75% of cleanup cost is by putting retail on the site. I live in New Jersey, and let me tell you, we have enough retail. Can’t they change the way the money is generated to give a boost to industrial or high-tech office work development? Companies that build a factory or research center on a brownfield site should be able to get their three-quarters cleanup reimbursement faster, not slower, than a speculative developer building yet another strip mall. Oh, and I should say (in defense of the Garden State) that when I wrote that there’s no greenfield space left to develop on, that’s not because we have no green space at all–it’s just that so much of the prime stuff has been protected by law (hurray). As the most densely populated state in the country (“New Jersey’s density is currently 1,165 people per square mile—denser than both India (at 914) and Japan (835). No other state even comes close.” – NY Times), we could be at the forefront of what development along the Bos-Wash corridor is going to look like soon.
Ezra Green has been involved with renewable energy companies for seven years and founded Clear Skies in 2003. Prior to Clear Skies, Green was a successful entrepreneur who founded TAL Design & Construction in 1990. AMERICA’S 15 “GREENEST” STATES 2007-2008 1. Vermont 2. Oregon 3. Washington 4. Hawaii 5. Maryland 6. Connecticut 7. New Jersey 8. Rhode Island 9. New York 10. Arizona 11. Massachusetts 12. Idaho 13. Colorado 14. California 15. Minnesota Source: Forbes, October 2007 States were ranked in six equally weighted categories: carbon footprint, air quality, water quality, hazardous waste management, policy initiatives, and energy consumption. BF: Besides being environmentally responsible, what are some reasons or incentives for businesses to go green? GREEN: Money is a huge factor. If someone is in business, you need to assume they are a capitalist of some sort. Solar energy, for example, saves large sums of money on monthly utility bills as time goes on, and it also adds to the value of the real estate. Furthermore, businesses can advertise that they are using solar energy, which is gaining respect and growing by leaps and bounds in the business arena. As such, companies receive recognition as being good corporate citizens and stewards of the environment. BF: How can businesses reduce their upfront costs when going green or, more specifically, installing solar energy systems? GREEN: Several forms of financing are available for businesses to install solar energy systems, making it so businesses incur little, if any, upfront costs for installing the system. These financing options are structured in accordance with businesses’ individual needs. If a business is very profitable, we recommend self-financing. If they have little or no profit, we suggest leasing, and in a few years they will start increasing their savings, which is as good as cash. The Power Purchase Agreement exists for non-profits who have a system installed at no cost and then purchase the electricity produced from the system at a predetermined discounted rate. The Clear Skies Group’s experts can help clients determine which form of financing will best suit their needs. BF: What advice would you give to a business that wants to go green, but doesn’t know where to start? GREEN: I suggest starting with solar and have a utility-provided efficiency person to inspect the premises for money-losing issues, such as poor insulation or window and door leaks. Since electricity is the most expensive form of energy that we use and cannot do without, why not make it yourself? With generous rebates available and high costs […]