Gassed up and Ready for Business

Penn’s Northeast Economic Development
Written by Jessica Ferlaino

Penn’s Northeast Economic Development is a non-profit economic development agency that exists as a public / private partnership of organizations from the Lackawanna, Luzerne, Monroe and Wayne Counties, as well as the communities of Berwick and Forest City. The group is dedicated to assisting businesses interested in locating in Northeastern Pennsylvania.
The agency was created through a joint effort in the late 1990s, to work in the best interests of Northeastern Pennsylvania. Local and state governments, chambers of commerce, economic development groups, utility companys and leaders from private enterprisees came together to market the region’s collective assets and facilitate the creation and retention of high quality jobs to expand the overall size of the business community.

What started as a committee, formally became a stand-alone organization in 2002. It was geared toward coordinating marketing activities amongst the various existing economic development organizations and helping to brand the region as a welcoming place to do business, providing incentive financial assistance, aiding in site selection as well as addressing any other emerging needs.

Since then, the nature of Penn’s Northeast has evolved based on the needs of the counties in the region. Though it still coordinates, markets and brands, the emphasis has shifted to targeted business recruitment. The agency wants more than just being the first point of contact in the region, rather it now initiates contact through what President Ron Maloney calls “unique leads.”

The mission of Penn’s Northeast Economic Development and a large part of President Maloney’s mandate is to: “Enhance the region’s economy through investments, job creation, increasing the amount of potential business opportunities for regional businesses though targeted business recruitment and unique lead generation activities.”

Unique leads are achieved by interacting with executives or companies and their intermediaries. According to Maloney, the agency functions much, “like a consultant or broker, and we work with them. We help them understand the business case for operating here in our region and we help them meet their various needs regarding real estate, workforce and incentives.”

Pennsylvania’s Northeast region boasts a number of assets for the business community. Not only is the geographic location desirable in terms of its unparalleled highway convergence of the I-80, I-81, I-84 and I-380 interstates, it also has railway connectivity, an international airport and access to shale gas reserves. The gas reserves present great operational cost advantages over surrounding states, attracting industries such as manufacturing, defense and security, food and beverage, biosciences, as well as natural gas intensive industries.

The region enjoys labour costs that are twenty percent lower than the national average and forty percent less than metropolitan areas, a good value for above average quality labour and a lower than average turnover rate. There are nineteen colleges, universities and community colleges in the region helping to create an educated, trained workforce and the cost of living remains five percent below the national average, contributing to a high quality of living.

Penn’s Northeast has maintained a focus on project goals through superior project management, a deal closing mindset and seamless collaboration amongst partners. In order to promote the region’s assets and achieve the organization’s goals, partnerships are a necessary part of Penn’s Northeast’s economic development method. The agency does the front end work, originating the unique leads and helping prospective businesses to understand the region and how the agency can serve a business’s best interests.

“Our job is to get that company and those executives more familiar with the region – to understand it – that it is the right place for them to operate. Then we work with our partners who then close the deal,” detailed Maloney.

Maloney is confident that the agency is on track to meet its goals over the next four years as it is already ahead of its goals for this fiscal year. It hopes to be responsible for $500,000,000 of new investment in the region by June 30, 2017. Though it has no specific job creation numbers’ goal, its primary goal is to have at least fifty new companies coming to the region as the result of its shale gas initiatives.

Prior to implementing organizational changes to its mandate, the organization was primarily reactive to leads coming to it from the state of Pennsylvania or the Office of International Business Development. Now, through its attraction programs and targeted business initiatives, every county in the partnership has an opportunity to submit proposals on unique leads that Penn’s Northeast generates, as opposed to submitting only on leads provided by the state system where the over sixty counties are competing for the same economic opportunities.

“We’ve retooled the organization with resources and the right people with the right processes,” Maloney explained. As shale gas has helped to create thousands of jobs in the United States over the last five years – $1 billion in revenue to the state of Pennsylvania – and given Penn’s Northeast’s proximity to the Marcellus Shale formation, a change in approach was necessary to fully capitalize on the opportunity that shale gas has presented.

The Marcellus Shale formation has the potential to not only serve the gas needs of Pennsylvania, but also to turn the state into an exporter of the resource. Gas intensive industries can benefit by having close proximity to the drilling platforms, which helps to drive down costs, while enjoying the guarantee of abundant supply and the convenience of metropolitan areas and associated infrastructure and services.

Maloney explained how when one has had these industries in the area for a long time, a whole business culture is created around them, citing the the examples of Dallas and Oklahoma. “The nice thing is, for instance, when you locate in our region, you are close to gas – the best pricing possible. You’ve got the best supply availability possible, in a great business park, all the business amenity services around you that you need, and you’ve got good housing and good schools for your kids.”

The smaller bi-metro area of Wilkes-Barre / Scranton already has fully developed business areas and infrastructure to support the growth associated with shale gas in the region. Each county has fully developed business areas with significant infrastructure and industrial parks that are mapped for its utility capabilities, which you will not find in the rural areas where the drilling occurs. If you need to be close to the platforms, Northeast Pennsylvania is the place to be.

When discussing the availability of business parks and infrastructure in relation to the drilling platforms, Maloney detailed: “You are in the counties right next to it – with the pipelines travelling through them, with the highest amount of pressure, the greatest volume – and because of the unique pricing structure of our delivery company, you’re not only guaranteeing availability – assuring accessibility at all times – but you’re also getting it at the most favourable price.”

UGI Gas is the provider to which Maloney made reference, as a delivery company that has a unique and aggressive pricing strategy that he has not seen in his fifteen years of regional economic development, across four states. This has proven to be a unique selling point upon which the agency can draw, and one that has great appeal for businesses that rely on natural gas for operations.

When development in the gas fields began in Northeastern Pennsylvania, there were few indigenous workers in the area with the necessary skills and experience to fulfill jobs in the gas industry. As a result, the initial promise of job creation required importing skills and talent from other regions of the country, such as Dallas and Oklahoma, areas with experience developing oil and gas fields.

In order to fully support the shale gas industry in the area, Lackawanna College and Johnson College are taking strides to develop workforce training programs directly related to educating and training prospective students for gas production and technician jobs. By gearing education programs to gas-specific industries, Penn’s Northeast and its partners can better take advantage of the prospective jobs appearing in the region.

President Ron Maloney is optimistic that the work it is doing will have significant economic outcomes for Northeastern Pennsylvania. “I see a day – not too far off – where this region will be a repository of talent for production, testing, marketing, sales, research, development, finance and management, in relation to jobs for the gas industry.”



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