Park may mean millions in payroll - pressofAtlanticCity.com: Press

Park may mean millions in payroll - pressofAtlanticCity.com: Press

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Posted: Saturday, October 17, 2009 11:00 pm

The primary economic impact of the NextGen Park can be summed up in one word: jobs.

Area economists have warned for decades that the region needs to diversify, to add another strong economic sector to its dominant casinos and tourism. The unprecedented cooperation among local, state and federal entities on the NextGen Park reflects broad agreement that bringing high-paying, high-tech jobs to the region is the best way to accomplish that and boost growth.

The benefit of those jobs won't be clear until aviation companies commit to the park, build facilities and staff them. But the potential impact can be estimated from job projections and existing data on employment in Atlantic County.

The South Jersey Economic Development District overseeing the park expects it to create a "minimum of 2,000 highly paid engineering/technical jobs." Such jobs in Atlantic County in 2008 paid on average $88,000 a year, according to the federal Bureau of Labor Statistics.

The annual payroll for 2,000 such jobs at that salary would be

$176 million.

That's a lot of money, and equal to 3 percent of the $5.8 billion total earnings of all Atlantic County workers that year.

For another perspective, compare the potential research park payroll with that of casinos in Atlantic County. The tech park payroll would be about 14 percent of casino industry's $1.3 billion - with only 5 percent of the number of workers.

Joel Naroff, president of Naroff Economic Advisors, has followed its economy closely, including the aviation park. He said the park's benefit to the region in additional jobs and economic activity will exceed the usual spinoff effects of, say, a similarly sized factory.

"This is something that will have a larger multiplier because so much of the salaries and goods are being paid for from outside," Naroff said last week.

The impact will be lasting, too, he said, since aviation research has a strong and long future, unlike other forms of business development that may or may not be around in another five years.

Oliver Cooke, who tracks the regional economy as associate professor of economics at The Richard Stockton College of New Jersey, also sees great value in the research park.

"This project is a perfect example of the type of economic diversification that should help improve the region's long-run growth prospects," he said last weekend.

Cooke said the project is a first step toward creating a "significant, high-end, professional/business services-type industry." And the kinds of spillover effects possible are evident in the nation's other high-tech corridors in North Carolina, Massachusetts and California.

Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College and dean of facilities there, has been working in regional economic development for more than three decades.

He said that in 1982, when he began talking about the need to diversify the area economy, most people thought he was crazy. Now, all the major stakeholders are working to make it happen.

The NextGen Park's first benefit to the area will be the estimated $300 million in private investment companies locating there are expected to make.

Perniciaro said research labs can be much more expensive to create than ordinary office space, even tech-centered offices. "A real lab with sophisticated equipment costs $500 to $600 a square foot, whereas general offices with computers are about half that."

Aviation research would also create a rare opportunity for people with advanced degrees to work in the area, he said, and schools such as Stockton and the Atlantic County Institute of Technology are looking into programs to put students on the paths to such degrees.

"These companies like hiring locals because they stay longer," Perniciaro said. "Outsiders might come here for a year or two and then leave."

Area retail could also see a major boost from the large incomes brought in by the park, he said.

The challenge will be to keep the park focused on aviation research and not let it become just another industrial park with other kinds of development, since research companies like to be near other research companies.

"That's why it's so hard to get off the ground," Perniciaro said. "It's a chicken and egg thing. You've got to get a start and get a couple of companies in there. It will be those companies plus the FAA that attract other companies."

Contact Kevin Post:

609-272-7250

KPost@pressofac.com

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Incentives needed

State and federal agencies have provided preliminary funding for NextGen Aviation Research Park, but two experts say the government must also provide incentives for companies to locate there if it's going to succeed.

"The problem is not if it will take incentives, but that somewhere else is going to be offering them," said Joel Naroff, head of Holland, Pa.-based Naroff Economic Advisors.

"Given the economy, governments are willing to pony up more money," Naroff said. "That's the reality and if you're going to spend the tax credits (the most common kind of incentive), this is the kind of project you spend it on."

John Boyd Jr., vice president of corporate relocation consultant Boyd Co. of Princeton, said incentives can offset New Jersey's negatives - such as its Tax Foundation ranking this fall as the most inhospitable state for businesses.

"As dreadful as New Jersey is, there are some very attractive incentive packages which could help underwrite the cost of moving to the new business park," Boyd said.

Substantial incentives encouraged Boeing to move its headquarters to Chicago, he said, and "that's the type of thing New Jersey can do when a very lucrative project is on the horizon."

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Funding sources

The funding sources, which will cover road, water, sewer and other development expenses, include:

  • $2.5 million from the U.S. Economic Development Administration
  • $2.5 million from Atlantic County government
  • $1.6 million from the Casino Reinvestment Development Authority
  • $1 million from the state Department of Transportation
  • $200,000 from the South Jersey Transportation Authority for street intersection by Amelia Earhart Road
  • $490,500 from the U.S. Department of Housing and Urban Development to defray planning and building costs
  • $441,000 from the U.S. Department of Education and Small Business Administration to develop education programs and encourage minority and disadvantaged businesses to work at the park
  • $4.6 million in financing from The Bank, of which 90 percent is a U.S. Department of Agriculture loan

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NextGen Technology

The Next Generation Air Transportation System will do for airplanes what a GPS navigator does for a car only much, much more: pinpointing all vehicle locations, planning optimum routes, managing traffic flow most efficiently, minimizing weather problems, and allowing safer and more extensive automatic flight.

The vast, multiyear project is divided into five transformational programs:

Automatic Dependent Surveillance Broadcast: Highly accurate displays for pilots and controllers of satellite-generated data showing current air traffic, weather, terrain and flight information services - giving pilots the ability to choose more efficient routes with less help from controllers.

System Wide Information Management: All systems on the ground and in the air will share common standards and operate seamlessly with each other, despite being developed and manufactured by numerous corporations.

Data Communications: Extensive digital information sharing will enable the negotiation of individual trajectories for each flight from takeoff to landing, instead of running it through radar corridors and at set altitudes. Data Comm will also automate repetitive tasks, supplement voice with data communications, and allow ground systems to use real-time aircraft data to increase capacity, improve efficiency and enhancing safety.

NextGen Network Enabled Weather: A vast array of ground-, airborne- and space-based weather observations and forecasts will be consolidated to form a virtual 4-D Weather Data Cube. This improved aviation weather will be available simultaneously throughout the system, feeding into automated decision-support tools to minimize weather interference with flights.

National Airspace System Voice Switch: The 17 voice communication systems in current use will be replaced with a digital system that provides flexibility, increased capacity and better security, and requires less training for users.

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The traffic circle

The airport traffic circle connecting Amelia Earhart Boulevard to Delilah and Tilton roads will be renovationed at about the same time that construction will be under way for the Next Generation Aviation Research and Technology Park.

Four new traffic signals will be installed along the circle and Delilah Road will be fixed so that it cut through the center of the circle, according to Joe D'Abundo, the Atlantic County engineer.

The renovations are planned to improve traffic by the airport circle, which is a major travel thoroughfare and entryway to the Atlantic City International Airport, the Federal Aviation Administration's William J. Hughes Technical Center and the upcoming Next Generation aviation park.

The project is being funded by $6.4 million in federal funds channeled through the state Department of Transportation, according to Joe Maher, director of Atlantic County's department of regional planning and development. Construction should start next year and last about six months, Maher said.

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