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INTRODUCTION

Mosher Business Advisors Corp was retained by Jefferson County Industrial Development Authority (JCIDA), thereafter succeeded by Jefferson County Local Development Corp (JCLDC) to facilitate a strategic planning process and provide advisory services for the development of a business park to be located contiguous to the Watertown International Airport. The parties involved in the planning process, in addition to JCIDA include the County of Jefferson (owner and operator of Watertown International and the Town of Hounsfield (location of the Airport and proposed business park). The community generally refers to JCLDC as “the IDA”. The writer here refers to JCLDC as the IDA throughout this report although it may not technically correct given changes in corporate structure since the planning process began. This process evolved from strictly a planning effort to include initiating and working on certain action plans. As an example, the committee assisted in determining the best site for the park, lands have been acquired, infrastructure is being designed and sales/marketing efforts have been initiated. This planning process also differs from what would be found in the private sector. Capital for projects outside usual operating programs is limited. Recommendations were required here so that not only could the proposed business park planning process move forward but programs for existing businesses in the county could be enhanced as well. From another perspective, it was critical that the financial position of the IDA be considered. Recommendations needed to be developed so that the IDA’s other ongoing programs would not be jeopardized by future capital investments or commitments of other resources in the new park. All three entities approved and contributed to the process, both in terms of financial and administrative support. The process is ongoing. We wish to thank all the contributors to the planning effort for their support and ongoing cooperation that we know can result in the creation of hundreds of new jobs for our county in years to come. Collaboration of the Partners We began this process with the belief that collaboration of the principal partners would be critical to starting us down the road to a successful economic development project. We are 1

mindful that the real goal here is economic development and the creation of a variety of new jobs within Jefferson County. The development of a commercial business park is a “means to the end.” The partnership of the three entities has created an economic development team. This team has already contributed to an exchange of information that has led to the acquisition of lands by the IDA for the proposed park, an exchange of knowledge about infrastructure, financing and grant opportunities and FAA related issues that would affect the project, to name just a few items. It is clear to all that have worked on this effort that the team’s work has not only led to early success but that the team needs to continue working together until this project is completed. It would not be possible to establish a business park contiguous to an airport without close cooperation between the developer, airport operators and the town involved. FAA requirements, plans for runway and taxiway expansions, plans for commercial services for both passenger and cargo customers, water and sewer requirements and the need for roads and new buildings within the local areas all need to be shared between the parties. The fact is that all three entities share the goal of job creation. All will prosper if the project succeeds. The commitment to continue working together is a critical success factor going forward. The members of the committee include: Jefferson County Local Development Corp Don Alexander - CEO David Zembiec - Deputy CEO Town of Hounsfield Tim Scee - Supervisor Steve Lee - Deputy Supervisor Peter Bryant - Economic Development Director Jefferson County Robert Hageman – County Administrator Jim Lawrence – Airport Manager Don Canfield – Director Planning Carolyn Fitzpatrick – Legislator & Chair Person Barry Ormsby - Legislator Jim Nabywaniec - Legislator

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HOUNSFIEL D

JCIDA

JEFFERSON COUNTY

David Mosher, Pres, Mosher Business Advisors Corp

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Why consider a Business Park and locate it near the Airport? First, the primary objectives of the IDA, County and Hounsfield all deal with job creation and expansion of the tax base. Second, the existing business parks in the county are nearing capacity. In addition, we have the benefit of a currently expanding airport that is being effectively managed by our County legislators and administration. Many companies have found that locating near an airport can have advantages, especially when the Airport has an international identity. Watertown International has a customs presence and foreign trade zone status. We can and should work as a team to further enhance the airport’s international identity. There is a conception in the public that all businesses seeking to locate at airport parks have something to do with the aviation industry. This is not necessarily the case although many tenant prospects will seek services from the aviation industry. An example includes large warehouse/distribution and fulfillment centers that service a retailer’s e-commerce selling efforts. Another includes educational institutions that have located training and educational centers for the many types of aviation career training programs that they offer in some other airport parks. (Seeking out these types of businesses and opportunities should of course be in our sales & marketing plans going forward). The IDA has business park experience and land ownership next to Watertown International. The County owns and manages the current airport facility. It has lands available for future development and is developing expanded taxiways and hangars to house additional aircraft. It also has an effective airport committee that can assist the efforts of airport development and expansion. Hounsfield has experience working on infrastructure issues and outgoing sewer connections are critical to expanding the airport and supporting a new business park. For these and other reasons, which all would deal with creating a more healthy economic climate, it make sense to create and locate a new business park at Watertown International Airport. Business Park Planning Process and Planning Objectives The process involved representatives from the three entities meeting monthly with smaller group meetings occurring in between to work on specific areas of importance. In addition to meeting locally, a field trip was made to Griffiss International Airport at Oneida County, NY. We were guests there of Mohawk Valley EDGE (Economic Development Growth Enterprises Corporation), an organization similar to JCLDC today that has business park development responsibilities at Griffiths Airport as well as economic development roles in other locations in Oneida and Herkimer counties. Mosher also visited with other airport park persons and authorities in other locations. In addition to Griffiss there were telephone interviews, email exchanges and personal visits to Schenectady Airport Business Park, Airport Hill Industrial Park (Chautauqua Co Airport at Jamestown), Wellsville Airport Industrial Park (Wellsville Municipal Airport), Airport Corporate Park South (Elmira-Corning Regional Airport) and Airport Business Parks 1 and 2 (Rutland Southern Vermont Regional Airport, Rutland VT). Research was a part of the study at several other “local” parks located near airports at such places as Plattsburg and 4

Glens Falls, NY. Airport business parks in other parts of the country were visited “on line” to gain insight into marketing and incentive programs. In New York State the local county IDAs were often involved in development/operation of the airport business parks. It is the writer’s observation that many of the more rural parks are not particularly successful due to a lack of financing and staffing resources to develop the parks. Each location, with the notable exception of Griffiss, employs more of a passive marketing and development approach than an active and aggressive sales and marketing posture. When adopting a passive approach to development, park and IDA representatives report that one can expect it will take more than 20 years to sell off all lots, fill a park and consider a project “successful”. The principal objectives discussed below were developed by the planning committee during the early meetings of the process:  Determine size and scope of Business Park  Determine best potential contiguous location(s) and eliminate unsuitable locations  Develop action plans for infrastructure including internal roads and sewer. (These issues are needed for both the proposed park and future airport operations).  Develop recommendations concerning future park management, sales/marketing, finance and infrastructure development programs Other planning objectives will need to be addressed by a selected group of planning professionals such as engineering, architectural and construction firms. The scope of this assignment changed as the planning process evolved. There was work to be done that included much more than facilitating meetings and conducting research. Mosher acted as a project coordinator between the parties. Individual meetings were also held between Mosher and local companies including Jain Irrigation, New York Air Brake, Knowlton Technology and Timeless Frames. The purpose of these meetings was to hear their perspectives on the value of businesses being located near airports and to help us develop incentives that all businesses would require in order to consider locating at the proposed park. These businesses did meet with the entire group as well. Their input is discussed later in the report.

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RECOMMENDATIONS Size and Scope The Park should be not less than 100 acres and closer to 200 if that could be achieved. New job goals include 400 positions of varying categories and the time frame for these positions would be 5 to 7 years. Ideally, all of the businesses that locate at the Park should be new to the County but we appreciate the necessity of considering relocations from within in order to retain employers and assist them with their growth objectives when those cases arise. There may be an interest in some local companies to be able to take advantage of warehousing and distribution activities at or near the airport. This type of enterprise might be sought or considered by the developer in the early stages of planning in the marketing and sales efforts going forward. Location ( See following diagram page 7) Early in the process, the firm of Bernier and Carr was retained to study the contiguous lands to determine best potential sites. Here we call the three sides of the Airport boundary East (along Rt 12f), North (along Rt 180) and West (along Evans Rd). The West site was found not suitable while the North and East sites were of equal desirable quality. The engineering site selection process did not deal with sales and marketing issues so much as with infrastructure, wetland and other such criteria. The East site is also where the IDA already owned 39+/- acres of vacant land so this threw more weight to selecting the East as a higher priority for early development. The following diagram prepared by consultants shows the areas surrounding the airport evaluated and the blue shaded area is the East side recommended and selected to business park development.

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Land Acquisition ( See Following Map page 9) During the planning process it became known that certain acreage in the East site was being considered for sale by the owners. The IDA initiated negotiations and subsequently the IDA purchased 43 acres contiguous to its existing land bringing the land under ownership to more than 82 acres. Total acreage owned is seen in the following map and is the green shaded area. The IDA also retained a real estate brokerage firm to approach certain other landowners and negotiations are in process at this writing for an additional 19 contiguous acres. This land being sought is seen in the following map and is located in the blue rectangle. The map also shows the originally proposed 2000 ft extension of runway 10-28 (to the southeast) that borders land where the business park is planned. This extension is the gray shaded area on the map.1,000 ft of this extension was approved by the FAA and completed two years ago. It is the final 1,000 ft of the original proposal that are being sought at the present time. The newly proposed FAA safety zone is seen in the orange shade. This change in safety zone means that certain lands currently owned by the County may not be needed to satisfy future FAA safety zone requirements. If indeed this is the case, then the County may be 7

amenable to selling the acreage to the IDA for inclusion in the park boundary. This would add acreage (estimated at 30+/- acres) to the park and would serve to square it off and simplify design issues. This land is seen in Appendix B in the red rectangle. The total acreage anticipated if the additional parcels can be acquired would then exceed 130 acres. Additional acreage might also be obtained through future negotiations but it is premature to move forward on other acreage at this writing.

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The “Developer” Our recommendation is that the IDA be the lead party responsible for development of the park, including the upcoming sales and marketing efforts. The IDA is currently the entity with the experience to develop the proposed park. Economic development authorities are often the entities that have the earliest contact with companies that are considering relocation or expansion to a new market area. They are often contacted ahead of lawyers, accountants, bankers or brokers. The IDA has successfully developed other parks and is familiar with the issues of “filling” the parks. The IDA has the mission and experience to help business locate in our county. A word of caution however. While there are highly qualified personnel involved at the IDA, there must also be financial resources and personnel dedicated to the success of the project. It will help that there is now a very effective team (Jefferson County, Hounsfield and the IDA) working together but this project of developing the park is meant to be a job creation project, and not a profit making type enterprise project. There will necessarily be cost and work sharing between the parties. Should the effort become an IDA project alone, I fear the prospects for success in the time frames targeted will diminish significantly. Another important issue, and one of the reasons that the IDA should take the lead is that economic incentives need to be a major part of the future sales and marketing effort here. Incentives are the daily concern of the IDA, and they will also need to be offered to other businesses in the county regardless of their interest or ability to be located within the park. Incentives are discussed elsewhere in this report. Private enterprise developers would typically have different financial resources and objectives and could benefit from strategic type partnerships with economic development agencies to assist business with expansion or relocation activities. In this writer’s judgment, it is important that all future parks being developed by capable parties be successful given the job creation issues and objectives of the IDA and its partners. The IDA does not exist to compete with private enterprise but to find ways to help all businesses grow and create local employment. We should welcome the private sector to the job creation table and assist them as possible and appropriate. Second, we need to provide the same incentives to all businesses in the county regardless of their tenure or location. And third, there may be some strategic collaboration program found where all proposed parks can be developed together for the benefit of the local economy. Job Creation and Job Retention. In this report there are numerous recommendations for assisting with the overall objective of job creation. It is not lost with the planning group that it is equally important to recognize that we are constantly tasked with insuring that our existing employers stay and grow here in Jefferson County. While we are hoping to bring companies to the county, we must do what we can to keep the playing field level for new and older businesses. A new job is just as valuable when created by an existing employer as a new one and when we create incentives for new companies the programs must be offered to current employers as well.

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There is the issue of local businesses who may wish to take advantage of the foreign trade zone status proposed for the park. We foresee that some companies may want to consider warehousing space for this reason at the proposed park. A side note here is that the IDA understands the foreign trade zone issue very well and the organization can assist other park developers or businesses to achieve trade zone status. This status is, however a current strength and we should capitalize on it and prepare to extend the proposed park without delay. Sewer Infrastructure Issues Currently there is no sewer system at or nearby the Airport. Existing business and terminal facilities use septic systems that are antiquated. The Airport and the proposed business park both require a new system. Given current airport operations growth and possible short term demands for business park tenants, it is possible that the permanent sewage solution may need to be supplemented with shorter term relief in the form of temporary storage and trucking operations. Mosher assisted Hounsfield with initial meetings to explore current and future sewer requirements for both Watertown International and the proposed business park. Meetings were arranged and held with the Villages of Dexter, Brownville and the City of Watertown. A private nearby business was also included in discussions as it has an existing but inactive sewage treatment plant that could serve the airport as well. A professional engineering feasibility study is required at this time. Funding for this study and for any temporary or permanent sewage program remains an issue to be resolved however. Sales & Marketing The Marketing Effort Branding. The Park should be “Branded”, that is to say we should identify types of enterprises that would be good additions to our proposed park and county employer lists, direct our future sales and marketing efforts to these types of enterprises and develop an environment to which these types of companies will be attracted. We think that the location will of course, be conducive to the types of businesses that normally choose to be located near air travel and freight centers. Other types of business will not be so greatly interested and these would include heavy manufacturing, retail or local service businesses. Good prospects will likely include companies in the logistics and fulfillment industries, technology companies, importing/exporting companies, and aviation related businesses. The IDA today has targeted prospect lists that will work well here including some of these examples as well as Defense contractors and FIRE (finance, insurance and real estate) industry types of businesses. Website Development. The proposed park will require its own website and it can be an addition to the current IDA website. Other marketing materials will also need to be developed. The costs and commitments to this effort will need to be evaluated internally as part of a total budget for the project. 11

The Sales Effort. We know that the greatest number of new jobs for the county will come from finding park tenants from businesses that are outside the area. It would not be a priority to just relocate businesses from one part of the county to another. There are phases in the sales effort to fill a business park with good tenants The selling phases include the targeting and search phase, the negotiation and sales phase and the relocation assist phase. The search process should be professional and proactive. The IDA should not only respond to inquiries that are the result of a good marketing program, but think like a company searching for an acquisition. Investment banking firms use a sophisticated approach to reach out and identify prospects within targeted industry groups. It takes capital, up to date databases of enterprises on an international scale and personnel to seek out qualify and negotiate with prospects. To be proactive and effective requires trained and dedicated staff. The service to do the search phase can be outsourced but the serious and in depth negotiations must come from the local developer. I suggest that the “search” phase be outsourced to professionals until the park objectives are completed successfully. This time consuming and labor intensive part of any search process is best handled by trained staff where the commitment to this sort of overhead is temporary. The Negotiation and selling effort should be handled by a Dedicated Executive and Airport Park Manager. There are two parts to this recommendation. First the present load on the shoulders of current staff at the IDA will not allow for a person to concentrate on all that needs to be done on the Airport project, maintain other existing responsibilities and get it done within the time frame we have established. The IDA does have all the sales and marketing expertise and experience required, but to add all the job description requirements of an airport park manager to the shoulders of current staff will create a threat to the completion of the current mission objectives. This position would not need to be filled immediately but would be necessary once a commitment to a park is made and a proactive sales and marketing program is initiated. The third phase in the sales effort involves assisting a company with relocation services. The second role for an Airport Park Manager is that of a dedicated exec to assist prospect companies located outside the area with their efforts to research coming here and then to coordinate on their behalf with the local issues necessary for the opening of a new facility. A local “go to” person is worth cash to a prospective company. The IDA currently provides these types of services to new and existing businesses today. Assisting with financing or grant application issues, energy or training matters are examples of things companies typically seek with local development execs.

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Other Related Objectives Develop Strategic Relationships. It will take considerable time and expense to develop inroads into the best worlds of tradeshows, conferences and other arenas where business with intensions of expanding and relocating are found. Many trips can be non productive and expensive. There can be referrals as well from sister agencies in nearby parts of upstate New York. Additionally there are sometimes things to be learned from the successes and failures others have experienced in the area of economic development utilizing the vehicle of airport business parks. I believe that EDGE, referenced earlier, should be considered for a particular strategic partnership in the marketing effort for prospects. The organization has considered this idea and is willing to explore it further. The sharing of resources and knowledge between strategic partners puts the pedal to the floor in the marketing effort with fewer costs but with the added benefits and commitments of resources. NYS Certified “Shovel Ready” Status. This status would be a great advantage for the marketing and sales effort. The IDA staff is well aware of all that this status entails and the costs of achieving the designation. It is likely a six-figure expense. However, until the park configuration is known and layout can be determined the decisions about this status cannot be made. The option exists for designating part of the park or handling the certification in stages. A Local Extra “Incentive Toolbox”. This recommendation is most important for the success of a local sales and marketing effort. Businesses with intentions of expanding or relocating to an international airport business park will be evaluating many financial and operational incentive programs available to them during their site selection process. Today Jefferson County is on a par with the incentives offered by most other IDAs in NYS. So within NYS we are, as far as incentives are concerned, on a level playing field. Being located near the airport with foreign trade zone status may give the IDA an edge in cases where prospects want an import/export capability. However, New York State may be well behind many other states in incentives offered. We fall behind the curve when competing against other states. To win in the selection process we must be proactive in several areas. Building a better local “Incentive Toolbox” is one way (not the only way) we can tilt the scales in our favor. But to do so we must seek financial and non financial means to be successful. Examples of innovative incentive tools might include:  Adding bonuses to the already approved limits for new jobs created. After an FTE position is created and filled we might pay a cash award for training for every new hire.  A special Business Development loan or lease fund at no/low/deep discounted pricing.  Assistance with grant or loan applications  Assistance for importers/exporters  Engaging in or arranging for training for new hires (also see below)  Developing an program or source for lower cost energy (there is a special program under consideration by the IDA at the present time). 13

We must not overlook the commitment to existing local businesses. While this project is a job creation endeavor it is an equally important objective for the IDA and the partners to retain jobs already here and to provide incentives to existing businesses that have growth plans. We will be looking for incentives that can be used across the board for all companies in the county. On these last three points (website, Shovel Ready and special incentives) I would lead you to the website of the Warren/Washington Counties IDA www.warrenwashingtonida.com/airport-industrial-park.asp. They have put together a good site and achieved shovel ready status for their airport industrial park. In addition, they have worked on local incentives that exceed the incentives offered by some other agencies in the state. Training Assistance. We know that all businesses require that new hires be trained and that existing staff have training needs as well. During interviews with some of our largest employers (referenced earlier) training assistance was often referred to as one of the greatest aids that the local IDA might offer. In addition some other states and regions offer to train workforces if a company will agree to relocate to their areas. The recommendation here is that a strategic relationship be established with educational facilities at a variety of levels and that professional training programs be developed specifically for our existing and prospective employers. In more than one case Jefferson County businesses have been offered programs whereby their future staffs would be trained and “made ready” as an incentive if they would agree to relocate. This type of program would be important not only as an incentive tool for prospects but may help us keep existing companies here. This last point is critical because our best local employers are constantly being solicited to consider incentive packages to relocate to other areas. I do not think we should ever feel that none of our local companies are immune for the prospects of leaving Jefferson County in the future.

Project Development, Funding and other unanswered questions. There currently is not capital existing in the IDA for developing the business park proposed here. It was not the mission of Mosher to evaluate the financial position of the IDA and determine if it was financially capable of moving forward given its financial resources. It is assumed that all three partner entities would contribute to the costs and would provide appropriate people resources to the project but no agreements have been proposed at this writing about how, or to what extent each might participate. There are several aspects of development to be considered here which all require people and financial resources to complete. The services of Engineering, Architectural, Financial, Legal and other professional firms are naturally required. We cannot gage all the costs yet because we have these final land acquisitions, infrastructure requirements, and decisions yet to be made in such areas as staffing commitments and spec buildings. 14

Sources of capital There are some monies potentially available through grant programs, but there is a great deal of knowledge and experience required in the credentials of a dedicated grant writing specialist. There are also many sources of grants to be accessed but a specialist must know where to apply, when grants are available, award announcements and how to accumulate the points necessary for the grants to be awarded. David Zembiec, Deputy CEO at the IDA has the required credentials as does Don Canfield, County Planner for Jefferson County. Hounsfield has expertise in the grants area as does the County where infrastructure issues are concerned. The current workloads on all persons on the project team may not allow for any of the team members to be more dedicated to this project. While there are grants potentially available for direct costs of infrastructure as well as for other preliminary project expenses, this project has lost in its bid for grants during the past months. To be successful going forward, the combined knowledge of the team is critical in order to take advantage of all grant opportunities. It is important to be aware of timing issues related to application deadlines.There are also increased chances for approvals if the team stays together and becomes co-applicants when ever possible and appropriate. Other Unanswered Questions Land Issues 1) At this writing, there are about 50 acres (the 19 two parcel pieces and the estimated 30 acres owned by the county in the blue square area described earlier on pages 68) that are important to be acquired before moving forward. Until the runway is extended and the current protection zone is moved, the park will likely not be of adequate size to proceed. This is because the current runway protection zone extends through too much of the proposed park area. 2) There is a small scattering of Federal wetlands included on the property already owned by the IDA. This issue needs to be studied before proceeding. 3) There is a runway safety zone off the approach end of runway 25. This safety zone is seen on the map on page 8. It goes over IDA property already owned including the parcel owned for some years as well as the new parcel purchased this fall. Research needs to be conducted to determine what, if any, restrictions on building heights or new construction are currently in effect. There are also some easements that are likely related to the Runway Protection zone but the deeds or the consulting engineers that the cover these issues for the county need to be consulted. Infrastructure Issues 1) Which community will be the source of sewage treatment? How long before all piping and construction can be completed and is funding available for this project? 2) Roads. Internal roads have not been planned. Ownership of the roads (county owns in some other parks) and funding is not determined. Park Design 1) Clearly cannot be done by the proper professionals until the land issues are resolved. 15

2) Spec buildings are always an issue with park development. The relocationconsulting world holds that having buildings ready is a major benefit for developer parks. This is probably true. However, we have capital limitations and the dates for park development are not yet known. Financing for this type of need is far from a favorite type of loan investment for traditional lending sources. We have discussed this issue with other developers and have seen many buildings stay vacant for extended periods of time. This creates additional financial burden to keep specs in good repair. This is an issue that should be brought back to the table when park design and infrastructure matters are being addressed. Incentive Toolbox 1) A few suggestions were put forth earlier on this topic but this area needs specific attention from the IDA because the thinking process needs to include programs that also can be extended to existing local companies. Several innovative economic development agencies that have developed parks across the country were visited online and programs are often designed to be compatible with other local programs and available financial resources. 2) Included in this area of incentives is a needed discussion of energy costs. The IDA has had meetings with a private enterprise company that had developed the ability for us (on paper) to create our own energy company and supply electricity to park tenants at a lower cost that is proposed to be at materially lower rates than can be experienced from National Grid. This idea, on the surface, has a great deal of merit and needs to be evaluated. There is research and due diligence necessary but given the early stage of our project and the lack of people resources to do this work, the analysis will wait until the scope of the park project becomes more clear. Strategic Relationships 1) We have favorable indications from EDGE that a relationship is likely in the sales and marketing arena. It remains to be seen how this relationship could be designed. This unanswered question could be worked out quickly as the park does not need to be functional for an agreement with objectives to be formulated. Both organizations would benefit from a relationship. I also suspect there would be savings within our future project operating budgets found and we could learn from some of EDGE’s past experiences seeking prospects for their parks. 2) The need for more training assistance was covered earlier. There are already discussions and plans being formulated to assist more local companies with their training requirements. These efforts can be further expanded to potentially include training programs by local schools of all types, perhaps even locating a facility at the park. Negotiations can begin now in this area.

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Conclusion This project has confirmed our earlier belief in the value of the working relationship between the partners. It has identified the different but connected roles that each has in the process. If we were not sharing information about our various plans I am certain that the sewer project would not yet be in motion, the lands purchased may not have been acquired and we would not be in a position to take on a few new tenants at the park by next summer. (We could actually do this if necessary). Given the very real and significant resources required for the objectives of this proposed business park to be achieved in the time period proposed, the partnership needs to continue. Each entity will need to contribute to the financial analysis and budgets that are part of the upcoming planning process. The commercial growth and success of Watertown International is expected to continue. It would be a mistake not to capitalize on this success and make an associated business park with so many new jobs a part of the success story being written. The question now is if the three partners have the financial, human and other resources necessary to go forward with the next phases of this endeavor. Determining the overall levels of commitment and formalizing agreements to complete this project should be a priority for the partners today.

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