The development, planned and built by Brandywine Realty as a so-called “vertical neighborhood,” has begun reinvigorating Philadelphia’s downtown with 2.7 million square feet of office space, retail property and residential condos.
In June, the FMC chemical company plans to move into its new 49-story headquarters. The opening of the 730-foot FMC Tower will symbolically complete the community, whose mix of mass-transit oriented logistics, livework-play design and flexible office space provides a template for 21st-Century urban planning—and economic hope for aging downtowns everywhere. Its location offers easy access to Amtrak service to the east, connecting businesses with East Coast cities from Washington to Boston. The residential build-up means workers can walk or bicycle to work, rather than buy cars.
Pierre Brondeau, CEO of FMC Corporation, links Cira Center’s contemporary mixed-use environment with his company’s decision to relocate into the new tower. “Our ability to retain and attract the best talent is critical to our success,” he said. The new headquarters “will provide an office environment that encourages employee collaboration, engagement and creativity.”
“Global companies like FMC have the opportunity to expand anywhere in the world,” said ex-Pennsylvania governor Tom Corbett. “FMC chose to grow here.” Other transit-centered, mixed-use neighborhoods have risen along the Northeast Corridor, notably Boston’s Innovation District, which occupies 23 acres of South Boston’s Fan Pier waterfront.
In mid-January, GE confirmed it was relocating its global headquarters from Fairfield, Connecticut to the seaport-based Innovation District. In announcing the move, CEO Jeff Immelt cited the appeal of being at “the center of an ecosystem” in a “dynamic and creative city.” With the relocation, GE becomes Massachusetts’ largest publicly traded company.
The District was effectively completed two years ago when Boston lured Vertex Pharmaceuticals from nearby Cambridge with $12 million in real estate tax breaks and job-creation incentive payouts. Vertex opened its $850 million corporate headquarters in February 2014, uniting its Massachusetts employees in a building featuring abundant natural light, trophy views of Boston Harbor and outdoor recreation spaces. Vertex also set aside about 3,000 square feet of classroom space for use by Boston educational institutions. The expectation is that the company will eventually hire some of their students.
“Making medicines is a team sport that requires hundreds of people working together for many years, and these buildings were designed to bring all 1,300 of our Massachusetts employees together in one space for the first time,” said Vertex CEO Jeffrey Leiden. “As a company committed to discovering new medicines, I can’t think of a more inspiring environment—the Innovation District—in which to do business.”
DELAWARE | #20 | DIMINISHING LUSTER
In 2014, a record 170,000 commercial entities named the Diamond State their official home, bolstering its rep as a business haven. But in some key categories that diamond is losing its luster. The number of fully operational companies—as opposed to shell corporations—registered in Delaware has shrunk by about 11% since the decade began.
A series of federal judicial decisions has loosened its grip on the corporate legal world. Delaware’s financial services industry, in part a reflection of its pro-business allure, has also weakened, eroding profits and payrolls; a stronger 2015 suggests recovery is in process. The state’s mature chemical cluster, which has been anchored by the Du-Pont family holdings, now faces instability and job losses due to fallout from the chemical giant’s planned merger with Dow Chemical. The aeronautics sector is outpacing manufacturing, contributing over $7 billion a year to the state’s economy. Liberalized casino gambling laws permitting blackjack and similar table games boosted the gaming industry.
Wilmington and Dover, the state’s largest Metropolitan Statistical Areas (MSAs), will “continue to enjoy modest labor market progress in the near term,” forecasts PNC Financial Services Group. Meanwhile, Wilmington struggles to reverse the perception that it is a dangerous town.
To ensure those improvements materialize, a transportation lock-box plan was floated this winter by the MetroHartford Alliance. Despite governmental stumbling, New Haven economist Donald Klepper-Smith forecasts 1% growth this year. Still recovering from the Great Recession are the Hartford and Norwich-New London areas. The Hartford-centered insurance industry, the state’s biggest cluster, is rebuilding. In December, Serta-Simmons agreed to hop the border and relocate 15 miles away to Windsor Locks. Norwich-New London, the state’s largest MSA, remains recession-mired, down 11,000 jobs since 2008. Greater New Haven is doing better, having recovered jobs lost in the downturn.
MAINE | #30 | TIGHT LABOR MARKET
MARYLAND | #40 | GROWTH AHEAD
Towson University economist Daraius Irani projects the labor market will grow under 2% this year and then fall below 1% in 2018. Anirban Basu, an economist with the Sage Policy Group in Baltimore, projects 25 GNP growth this year. Both see the state economy retrenching within several years.
Times have been tight in California-Lexington Park, the state’s largest MSA. Unemployment rose to 6.3% last year, from 4.8% the year before; job growth was 1.2%. Job growth in the Baltimore market picked up but continues to lag the nation, with payroll remaining static last year after growth in the beginning of 2014. The city’s reliance on federal employment and government spending—and weak positioning in high-tech and other cyclical industries—dulls growth prospects short-term.
MASSACHUSETTS | #46 | BURST OF ECONOMIC GROWTH
The Bay State economy is expected to add 200,000 jobs from 2015 to 2018. Fastest-growing clusters are technology, business and professional services, leisure and hospitality, education and healthcare.
Increasingly Boston and Cambridge compete to recruit fast-growth biotechs, pharmaceuticals and other high-tech employers. New waterfront construction in Beantown draws heavily from Cambridge; Cambridge continues generating entrepreneurs pursuing their life science dreams.
WHY WE’LL BE HERE / MASSACHUSETTS
SITE HISTORY The “world’s digital industry company,” as GE dubs itself, traces its origins to Thomas Edison’s laboratory in New York City. GE was incorporated in 1892 when Edison’s company merged with the Thomason-Houston of Lynn, Massachusetts, then took headquarters space in Schenectady, New York. In 1974, the company relocated to Fairfield, Connecticut. After last year’s tax hike, however, Immelt went public with his disappointment, launching a well-publicized search for a new home in June. Lured to Massachusetts by a $120 million incentive program, GE will move to an as-yet-undisclosed location in Boston’s waterfront Innovation District by 2017.
WHY MASSACHUSETTS? GE builds on what is already a significant presence in Massachusetts, with nearly 5,000 employees across the state in businesses including aviation, oil and gas and energy management. In 2014, GE moved its life sciences headquarters to Marlborough. Last year, GE announced it was relocating its energy services start-up, Current, to Boston.
REASON FOR LOCATION “Greater Boston is home to 55 colleges and universities. Massachusetts spends more on R&D than any other region in the world, and Boston attracts a diverse, technologically fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”
NEW HAMPSHIRE | #24 | LAGGING GDP
NEW JERSEY | #47 | BIOTECH PROMISE
Professional services, long a Garden State mainstay, show signs of recovery from recessionary doldrums. JPMorgan Chase’s decision to relocate to Jersey City from Manhattan yielded 2,100 jobs—and a jolt of optimism at a time when most corporate traffic was heading out of state.
While the Garden State is closely connected to both New York and Philadelphia metro economies, such local clusters as biotech and software development expect moderate growth, offsetting stagnation in pharmaceuticals, telecom and manufacturing. Infrastructure improvements, including port-facility upgrades, may fortify economic growth in the trade and transportation sectors. Regulatory changes from Washington have roiled the financial services industry, shrinking payrolls.
Native son site selector Dennis Donovan, of Wadley-Donovan-Gutshaw Consulting, praises the state’s incentive and subsidy programs, but wishes permitting could be sped up. Central-state MSAs, including Trenton and Edison, have grown fitfully; net growth lags behind the national pace.
NEW YORK | #49 | SOME GOOD MOVES
Employment grew about 2% last year, adding about 170,000 jobs as most metro areas experienced growth. Healthcare and social services led the gainers, followed by construction; Midtown Manhattan swarms with cranes. Professional, scientific and technical clusters pace expansion. The service industry, including jobs on Wall Street as well as in hospitals and social service agencies, drove New York City’s job growth in 2015, and should continue in 2016. Hospitality, food services and retail grew significantly as well, reflecting a surge in tourism. Last March, mayor Bill de Blasio announced a $150 million public-private partnership tasked with driving investment in life sciences. New York City’s surging economy bolstered local markets fanning out from midtown; the New York-Newark-Jersey City MSA is largest in the U.S.
PENNSYLVANIA | #35 | IMPROVEMENT ON THE HORIZON
Commercial development, such as FMC Tower and development in the Navy Yard approach completion. Northwest Pennsylvania, including Erie MSA, looks to enjoy “somewhat stronger economic growth” this year forecasts PNC Financial Services Group. The group sees manufacturing rebounding, professional and business services growing and consumer spending on the upswing. In Pittsburgh, gains in healthcare employment have offset losses from the natural gas sector.
Overall, Pittsburgh’s employment is at an all-time high. Harrisburg employment rose about 2% last year, reflecting government hiring, as well as payroll expansion in transportation and logistics. In Scranton, Tobyhanna Army Depot is moving forward with a $105 million renovation project slated for completion in 2017.
RHODE ISLAND | #37 | REBOUNDING FROM INFRASTRUCTURE NEGLECT
Business owners last year gave their state government an “F” in categories like ease of starting a small business, regulations, tax code, licensing and zoning in a study conducted by Thumbtack.com, a business services firm. Gov. Gina Raimondo, citing the Ocean State’s dead-last finish in a poll of entrepreneurs, champions initiatives like the Qualified Jobs Incentive Program. Tax reform over the past two years has slashed the corporate tax rate from 9% to 7%, introduced combined reporting and eliminated sales tax on utility bills. Now, “we have a much better tax climate and economic climate,” says House Speaker Nicholas Mattiello.
VERMONT | #41 | NEW TAXES AT A BAD TIME
Business owners, however, are antsy. The Green Mountain State finished 49th out of 50 states on economic outlook in an annual Rich States, Poor States survey tracking tax rates, labor policies and regulatory burden. Vermonters groused over last year’s $30 million tax hike, which increased sales taxes and reduced deductions. Advocates cheered the new southern Vermont economic zone established last year, though officials neglected to set goals and provide funding.
WASHINGTON, D.C. | POWERED BY POLITICS