Monday, May 09, 2016
Cunningham: Manufacturing Alive and Well in Lehigh Valley
Whether Democrat or Republican, Northampton County Council has historically been a very harsh critic of the Lehigh Valley Economic Development Corporation (LVEDC). They have long complained that Northampton County is Lehigh's ugly stepsister, and is too often overlooked by LVEDC when it comes to economic development. LVEDC, which is funded with hotel tax dollars from both counties, has also been slammed over the years for its complete lack of transparency and secretiveness. Has Don Cunningham, Lehigh County's former Executive and Bethlehem's former Mayor, turned things around now that he is at the helm? His nuts and bolts report to Council, full of details on job creation and retention here in Northampton County, is perhaps LVEDC's most effective explanation ever to Northampton County.
Cunningham explained that LVEDC is the "regional marketing entity" funded by both counties and the largest employers within the Lehigh Valley. Much of what it does is designed to attract business to the Lehigh Valley without regard to where the business is going. The Valley has experienced significant growth, as evidenced by a $35.4 billion GDP. This is larger than Vermont and 94 countries. Site Selection Magazine, which relies on hard empirical data, identifies the Lehigh Valley as the top performing area for economic development in the northeastern United States.
The Lehigh Valley is experiencing international growth. Out of 19 major projects last year, nine were international. . Northampton County's include Inditex (Spain), a clothing distributor located in Forks Tp; Defense and Aerospace contractor MBD - Safran (France), operating in Lower Nazareth; Primark Stores (Ireland), a clothing distributor in Bethlehem; Electronics company Ricoh (Japan), established in Hanover Tp; and Norac, a French-based bakery coming to Forks Tp.
The food and beverage business is booming, claims Cunningham. "It started in the Macungies, but we've seen a significant movement of food processing into Northampton County. In fact, in the last 12-18 months, the pendulum of development in the Lehigh Valley has really swung towards Northampton County."
Cunningham said that, unlike 20-25 years ago, the local economy is much more diverse. "We no longer have all of our eggs in one basket." It is instead balanced over several sectors: Finance and real estate ($5.24B); Business services ($5.01B); Manufacturing ($4.95B); Education and health care ($4.84B); Retail ($2.2B); Transportation and warehousing ($1.61B); Information ($1.53B); and Arts and entertainment ($1.36B).
There are fewer jobs in manufacturing because of automation and technology, "but the reality is that the Lehigh Valley is the 60th largest market for manufacturing in the United States," even though the Lehigh valley is not the 60th largest population base in the country.
"We're swinging well above our weight class in manufacturing," he observed. He added that the typical manufacturer these days employs 20-75 people in 20,000-80,000 sq ft. The work is heavily automated, and is growing because of proximity to New York and Philadelphia, and lower cost of production.
"It's a misnomer than many people believe that manufacturing is somehow dead here. It's quite the opposite." Though the warehouse industry attracts headlines, manufacturing is three times larger.
"The old manufacturing was everyone go down to the Bethlehem Steel," said Seth Vaughn. Cunningham stressed that it is now important for people to attend vocational and technical schools. "We are nearly at full employment in the skilled occupations," he said. "These smaller manufacturers require a higher level of skill than when my father worked at Bethlehem Steel.... Today the shop floor is highly automated, highly technical."
Hayden Phillips remarked that many people confuse small manufacturers with warehouses because they see tractor trailers and loading docks.
Cunningham has heard Northampton County's complaints, and has also embarked on marketing very specific locations within the Lehigh Valley. He agrees that different regions within the Lehigh Valley have their own attractive assets. In Allentown, it would be the NIZ. Bethlehem has two vibrant downtowns and has its own share of tax incentives. Easton is a river community that with a growing artist and restaurant scene. The slate belt has a large inventory of available commercial properties with fast and easy access to both Routes 33 and 80.
Cunningham has had brochures and sub-websites made up for each of these regions as well as Youtube videos highlighting the strengths of each specific community.along with the region as a whole.
He then ticked off some of the areas within the County that are experiencing job growth. South Bethlehem leads the field. Cunningham was Mayor in Bethlehem when the Steel company ceased operations. "If you would have told me 18 years ago that 80% of that land would be spoken for and re-used, I would have said you were crazy.," he remarked. But a former brownfield site is booming with job creation.
Zulily is an international e-commerce site, and its East coast operations are in Northampton County, along with 1,200 jobs. He also mentioned Curtis-Wright, which moved its operations into Bethlehem from New Jersey. REEB Millwork is a Lehigh Valley company that was persuaded to stay here after it outgrew its site in Fountain Hill. Tyber Medical is a start-up. "We helped fund their entry into the market in Northampton County," noted Cunningham.
In addition to the development in South Bethlehem, Cunningham pointed to expansions by C and S Wholesale Grocers (500 new jobs) and the retention of Guardian Life Insurance in Hanover Township (1,000 jobs retained)
LVEDC is also working on the redevelopment of brownfields like the Simon Silk Mill (Easton), Easton Public Market and GKEDC Industrial Park in Wind Gap.
Cunningham also highlighted the Fed Ex hub, which will be able to process 70,000 packages per hour and serve as a magnet for other retailers in the Lehigh Valley, seeking a means to quicker delivery.
Three hundred of the 800-acre Chrin site, located in the northern portion of Palmer Township, has been purchased. That is warehouse space, but the remaining 500 acres will go to manufacturing, office, hotels and other commercial uses.
Will an inland port in South Bethlehem lead to an explosion of warehouses? Cunningham noted that an inland port designation at the Norfolk-Southern terminal has yet to be decided. Something coming off a ship in Newark must first go by rail to an inland port near Carlisle, after which it is trucked back to the Lehigh Valley. Having an inland port designation in South Bethlehem would take those trucks off the road and would create more efficiency for local business.
Cunningham notes that several communities, including Binghamton in New York,are vying for an inland port designation. He added that e-commerce, which is growing 20% each year, will smile on the community that gets this designation.