Business crosses the Delaware

By Adam Clark, OF THE MORNING CALL

Big-name corporations, hundreds of jobs and thousands of dollars in tax revenue are coming soon to the Lehigh Valley.

All at the expense of New York and New Jersey.

With state grants, tax incentives and some luck, Lehigh County secured relocation commitments from four out-of-state companies in about an 80-day span earlier this year.

Between mid-February and early May, juicemaker Ocean Spray, credit and debit payment processor United Bank Card and chemical company Avantor Performance Materials announced they will leave New Jersey for facilities in the Valley. Iconic Yankee Stadium peanut provider A.L. Bazzini said it will transfer its nut production from New York to a plant it already operates in Upper Macungie Township.

"It was a pretty good three-month run for us," Lehigh County Executive Don Cunningham said. "You need a strong corporate presence and continued growth to ensure that the quality of the life of the area and the stability of the area continues to move forward."

The Lehigh Valley is benefiting from a nationwide trend of companies moving to cut costs, said Mark M. Sweeney, senior principal at McCallum Sweeney Consulting, a site selection firm in Greenville, S.C.

Sweeney, who helps companies around the world find more efficient and cost-effective locations, is familiar with the Lehigh Valley's appeal. Earlier this year, he helped Japanese drugmaker Daiichi Sankyo Inc. locate its new packaging plant inBethlehem Township.

Proximity to New York and other major East Coast markets makes the Lehigh Valley attractive, but the region has many other lures.

When compared with New York and New Jersey, real estate taxes and state income taxes are lower, housing is more affordable and the labor pool is cheaper, said Tony Ianelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce.

Distribution and travel are easy because of Interstate 78, and goods also can be sent by air through Lehigh Valley International Airport and by ground along the Norfolk Southern Railway, which runs through the heart of the Lehigh Valley.

"When you add it all up, it becomes appealing," Ianelli said. "From a New York and New Jersey standpoint, we're very tough competition."

Incentive packages doled out by the state have helped too.

In February Lehigh County commissioners signed off on a $3 million state grant to allow Avantor Performance Materials to transfer 140 jobs from Philipsburg, N.J., to the Stabler Corporate Center in Upper Saucon Township.

The grant, which comes from the Redevelopment Assistance Capital Program, is on top of $600,000 in job creation tax credits, a $200,000 opportunity grant and $90,000 in job training assistance the company also secured from the state.

United Bank Card also received financial assistance to move corporate and warehouse operations to Hanover Township, Lehigh County, from two facilities in Hunterdon County, N.J. The Lehigh Valley Economic Development Corp. helped the company score $778,750 in funding from the state Department of Community and Economic Development, including a $350,000 grant and $78,750 for job training assistance.

Another $350,000 in tax credits came after the company promised to create 175 jobs at the new location within three years.

"On the incentive side, Pennsylvania has had some good tools in the tool box," Sweeney said."

Sweeney worries that Pennsylvania's budget woes may prompt it to skimp on business incentives. As long as that does not happen, he said, the Lehigh Valley will continue to be attractive to businesses.

Sweeney said a strong "economic development infrastructure" also has helped the region. Groups such as the LVEDC, which serves as a bridge between businesses and governments, aren't as established in New Jersey, he said.

The first few months of 2011 proved to be the LVEDC's busiest stretch in years in terms of fielding interest from companies, said Pete Reinke, the organization's vice president of regional development.