The economic ice seems to be cracking.
As the year ends, Morris County business and government leaders say there is the sense the economy in the state and county has turned a corner.
They're not expecting a boom, but they're predicting steady economic improvement for 2012, and they're crediting in part the efforts of the Christie Administration to improve the state’s business climate.
Paul Boudreau, president of the Morris County Chamber of Commerce, said the consensus from a year of meetings with county businesses was “they had a better 2011 than 2010.”
That is also the assessment of several other economic agencies and organizations, whose end-of-the-year reports indicate positive movement in the state’s economy in the areas of employment, sales and business attitude.
Monday through Wednesday of this week, Patch looks at the state of Morris County economic development at the close of 2011.
The announcements that several international businesses were moving to or redeveloping sites within Morris County got most of the recent attention.
Bayer HealthCare LLC moved to the former Alcatel-Lucent complex in Hanover. Watson Pharmaceuticals arrived in Parsippany. BASF continued its march from west to east, from Mount Olive to Florham Park, where the chemical company is constructing a new U.S. headquarters. The opening Dendreon in Hanover brought Lt. Gov. Kim Guardano to the ceremony. And then there's the announcement that brought Gov. Chris Christie and the Morris County freeholders to Morris Township: Honeywell International would redevelop its headquarters.
Those well-advertised moves overshadowed more than 20 relocations, expansions or new companies in the county in 2011 that were factors in the drop of the county’s unemployment rate from a peak in February 2010 of 8 percent 6.6 percent in October.
Freeholder Director William Chegwidden was pleased to see the renewed economic activity, but was concerned that in many cases the jobs created were in service or retail industries, which pay less. That concern is outlined in the job projections of the state’s Department of Labor and Workforce Development, which estimate that a large share of the jobs that could be created in the county by 2018 are going to be at the lower end of the pay scale.
Chegwidden is also concerned about the impact of education budget cuts on the ability of the county to produce a highly educated, creative workforce.
“The quality of Morris County’s workers has always been a huge positive,” he said.
The New Jersey Economic Development Authority said in 2010 that 20 businesses that received its financial assistance in 2010 chose to relocate operations to New Jersey from Pennsylvania, New York, California, North Carolina, Georgia, Tennessee and Maryland.
The authority completed $567.3 million in financing assistance, business incentives and tax credits in 2010 to support New Jersey-based businesses, not-for-profit organizations and municipalities.
This support served as a catalyst that is expected to lead to the creation of an estimated 5,200 new, permanent jobs and the retention of 12,200 existing jobs, the authority said.
A survey of members by the New Jersey Business and Industry Association projects a “moderately improved outlook overall for sales, profits and spending in 2012." It cites the goverment funding effort, as well as a business-friendly approach by the Christie administration, as reasons.
The “2012 Business Outlook Survey” showed that, “New Jersey businesses saw a second year of improved sales, profits, spending and employment in 2011, moving the state one more step away from the recession bottom recorded in 2009.” However, the survey said, “the outlook for employment remains weak and at low levels for an economic recovery.”
Wells Fargo Securities, in an end-of-the-year assessment of the national economy, said, “Our key theme in the second half of this year was one of moderate, subpar economic growth accompanied by modest inflation pressures.”
The bank predicted more of the same for the year ahead.
“We expect approximately 1.5 million jobs to be added over next year, for an average of 123,000 jobs per month,” the report said.
Nationally there has been positive job growth for 21 straight months, while in New Jersey, the growth has been spotty, as new private sectors jobs are balanced by the loss of public or government jobs. The state’s unemployment rate was 4.5 percent in 2008, rising to 9.8 percent in late 2009, before easing somewhat to 9.1 percent in October.
Some of Morris County economic activity has been very visible, like the redevelopment of Morristown sparked by the opening of luxury condominiums at 40 Park and the Highlands at Morristown apartment complex, which in turn has helped fill storefronts on South Street and around the Morristown Green with restaurants and new shops.
Another ongoing notable effort is being made by Novartis Pharmaceutical Corp. in East Hanover Township, which began a multiyear phased redevelopment of its 176 acre U.S. headquarters campus in 2005. Phase I of East Village is complete. Phase II of East Village is currently under construction, the county reported in its annual summary of development activity.
Commuters on Route 10 also daily pass the construction of the Shoppes at Randolph, a retail complex on Route 10 near County College of Morris.
Further, as a signal of future economic activity, Morris County, Morris Plains, Morris Township and Hanover are joining in a study of the East Hanover Avenue corridor from Whippany Road in Hanover to Speedwell Avenue in Morris Plains.
The study is a result of interest by big-box retailers in several sites along the road that is already the home to numerous businesses and is a major cut-through road for drivers from Morristown and surrounding towns. The study will measure the potential impact of the new developments.
A second study for 2012 is planned for the NJ Transit stations in Chatham, Madison, and Convent Station in Morris Township. The study aims to measure the needs for parking at the stations, and the potential for transit-oriented development near the stations.
How Sites Are BEing Used
Freeholder Gene Feyl said the keys to many of the developments that have been completed, and those planned for the East Hanover corridor, have been the “adaptive reuse” of existing sites, or redevelopment projects.
Since the passage of the Highlands Water Protection and Preservation Act in 2004, Morris County has seen a shift of development activity away from areas with watershed regions or steep slopes to areas that have public water and sewer systems, and parking.
Feyl said his concern is that as sites are redeveloped, the activity leaves other sites behind which might become less desirable.
The moves made by BASF are an example, Feyl said. While he approves of their move to a new address at the Green at Florham Park, home to the New York Jets, Feyl said the company has left behind its world headquarters in Mount Olive, which at 1 million square feet is one of the county’s largest vacant office parks. The company also left second large office at the Rockaway Townsquare Mall.
Boudreau said that with 28.5 million square feet of office space available, and 15.6 million square feet of that Class A office space, companies were taking advantage of the supply and lower rental and construction costs to relocate and upgrade their offices.
They are also redeveloping the sites to reduce energy costs through green energy practices and construction, and better communications systems, he aid.
Those elements were factors in the announced by Realogy Corp., a real estate and brokerage firm that will move to Madison from Parsippany by 2013. The company, with 950 employees, will rent a 270,000 square foot office at 175 Park Ave., a former telephone company facility.
The Realogy relocation was one of several developments assisted by the state’s business retention and financial support network.
Other key moves supported by the state are Honeywell with 1,200 employees; Bayer, which could add 500 jobs to its 1,004 workers; the shift of 225 jobs to Madison by Pfizer; the retention of Evonik Degussa of 298 jobs in Parsippany; and an expansion planned by Robertet Inc., which plans to add 40 workers to its 150 employees in Mount Olive.
Boudreau said the Chamber’s Listening to Business effort with the freeholders generated 77 visits in Parsippany this year.
In general the business leaders said they see improvement in the state’s approach to business development, exampled by the governor’s efforts with Honeywell and Bayer.
But key issues remain, Boudreau said, especially transportation and the cost of housing.
The work started in the past two years to shore up on the underpinnings of the economy must continue, Boudreau said.
“It is a time for leadership and collaboration,” he said.