Area poised for growth: Expansion across county’s economic landscape makes region attractive

crosenbl@centredaily.comFebruary 9, 2013 

Local health care providers these days look hale and hearty.

Mount Nittany Medical Center boasts a new Cancer Pavilion and larger operating room. Geisinger built a $42 million, 80,000-square-foot addition to its Gray’s Woods facility in Patton Township.

Both collaborate with the growing Penn State Hershey’s University Park regional medical campus, which has expanded its services.

It all adds up to a robust sector of the local economy. Compared to other industries, health care sailed through the recent downturn.

“We haven’t seen any radical changes that we could point to a recession here,” said Mount Nittany CEO Steve Brown. “It’s been a pretty normal couple of years.”

Today, health care has emerged as one of Centre County’s top industries, up there with education, construction, hospitality and retail.

And as with education, mainly represented by Penn State and the five local school districts, the health care field stands poised for further growth, according to one expert.

“The population has gone up in the area, and the size of the education and medical sectors will increase,” said Steven Zellers, a state labor market analyst for the State College area.

Zellers also foresees the hospitality sector expanding and more road and highway development as the local economy, formerly dominated by agriculture and Penn State, continues to evolve.

Changes are occurring across the county’s economic landscape.

The average size of local farms has decreased, but more are turning to production for farmers markets and direct marketing. Manufacturing, still among the top county employers despite losing several large companies in the last decade, has shifted toward smaller, high-tech or science-oriented firms.

Marcellus Shale natural gas drilling already is shaping the county’s economy, and is expected to be an influence for years to come. Highways and roads have played an important role, too, and state legislators would like to see more of the same. They’re lobbying Gov. Tom Corbett to increase funding for infrastructure improvements delayed by budget cutbacks.

Growing pains

Farming, long a local mainstay, is transforming.

County farmland acreage rose and fell from 1987 to 2007, ending close to where it started at 148,464 acres. For four years until 2010, farmlands actually increased a bit, likely because the economy slowed commercial and residential development.

At the same time, local farms on average have shrunk, probably from owners subdividing for income or to give land to children.

This bucks a national trend among conventional farmers, who’re running bigger operations than before to stay afloat.

On the other hand, interest in alternative agricultural outlets has grown.

Farmers markets and harvest co-operatives have proliferated, capitalizing on the local food movement. More farms also are branching out into retail.

Way Fruit Farm, near Stormstown, does both, selling at farmers markets and through its large store. In 2009, the 187-year-old farm transformed its roadside outlet into a local food market, craft store and cafe — a long way from its mainly wholesale business 60 years ago.

In the 1980s and 1990s, Way Fruit Farm began sending some of its produce to grocery stores.

“About 10 years ago, that started to change,” said co-owner Jason Coopey. “The Chinese started dropping a lot of juice apples and juice on the market. Prices were plummeting, so we started doing more retail.”

As a result, the farm expanded to growing more fragile fruit, such as strawberries and peaches.

“We’re able to pick and sell the same day,” Coopey said. “We can do it the way it was meant to be done.”

In with the new

Employing thousands, Penn State and education in general remain economic cornerstones in the region.

Banks also occupy a prominent position, with the Centre Region full of branches.

Like magnets, the area’s general affluence, relatively low unemployment and increasing numbers of retirees have drawn financial institutions to the area in the past decade.

Tourism is another stalwart industry. Visitors arriving for Penn State sports, cultural events and the surrounding countryside pumped about $650 million into the local economy in 2011, supporting and driving an increase in hotels, restaurants and convenience stores in recent years.

Also thriving is the retail industry. With the continued arrival of chain stores and big box emporiums, the State College area now serves as a commercial hub.

Though it’s taken some hits since 2000, manufacturing still represents a significant local industry — but with different faces these days.

Traditional large employers such as Corning Asahi, Murata, Jostens and Cerro Metal Products Co. are gone, and with them, more than half of the manufacturing workforce from 1998.

Science and technology-oriented companies now dominate the landscape. Older businesses such as AccuWeather, Restek and Raytheon share the market with smaller firms, some startups tied to Penn State and fostered by a comprehensive incubator formed by several of the area’s economic development providers.

Incubator and local business leaders say the university is helping drive the growth by supporting business ventures from research. Its facilities and resources also will be key to enticing high-tech companies to relocate to the county.

Paving the way

Interstate 99 has literally been a road to business.

Intended primarily to ease congestion and improve safety, Centre County’s stretch of the highway that links the Pennsylvania Turnpike with Interstate 80 has led to commercial development, most notably along the North Atherton Street corridor but also along Benner Pike near interchanges.

I-99 has made it easier for Philipsburg residents to commute to jobs in the Centre Region and for people to visit the borough’s downtown, Borough Manager Jan McDonald said.

But in Port Matilda, the highway bypass cut traffic in town along old U.S. Route 220 by about 85 percent from 2007 to 2010, though Port Matilda Hotel and Tavern owner Mark Belinda thinks it was for the best. Without rush-hour traffic backing up from U.S. Route 322 on Skytop Mountain, customers can reach his business easier, he said.

I-99, completed in 2008, has been the largest local transportation project in recent memory, but the county has seen a host of others.

In Ferguson Township, existing businesses and community growth have spurred the alignment of Science Park Road, Circleville Drive and Valley Vista Drive; the extension of Blue Course Drive between West College Avenue and Circleville; the extension of Old Gatesburg Road between Science Park and Blue Course; and other infrastructure development.

That’s coincided with new commercial development and additions along Science Park, and residential development, such as the Turnberry and Pine Hall projects, off Blue Course and Circleville.

“For employment purposes, these connections allow people to get to work easier,” said Trish Lang, township planning and zoning director.

Depending on funding and the state of the economy, future transportation projects could include improvements to the heavily used Waddle Road bridge and exit off I-99, high-speed interchanges where I-99 and I-80 meet, and improvements to U.S. Route 322 entering the county from the south.

Budding legislation

Local legislators see infrastructure projects paving the way to further growth.

They’re calling for more state funding this year to address the state’s aging transportation system. Such funds, they say, could stimulate the local economy.

“Transportation is an immediate job creator,” said state Rep. Scott Conklin, D-Rush Township. “The day you begin that job, you begin to employ people.”

In late 2011, State Rep. Mike Hanna, D-Lock Haven, and state Sen. Jake Corman, R-Benner Township, introduced legislation for more transportation funding that Hanna said would create an estimated 135,000 jobs statewide and hundreds of millions in sales tax and income tax revenue.

“Every dollar we spend improving infrastructure generates another 65 cents in the local economy,” Hanna said. “It’s a real multiplier effect.”

Last September, state Rep. Kerry Benninghoff, R-Bellefonte, introduced another measure intended to strengthen local economies.

Benninghoff proposed the Promoting Employment Across Pennsylvania program, a tax incentive that allows businesses to hold onto new-employee payroll taxes instead of giving them to the state — as long as the companies create a minimum of 250 jobs in the commonwealth within five years.

Gov. Tom Corbett signed the bill into law in October.

“They don’t get a single dollar until they come, build and hire people,” Benninghoff said.

Going forward, Corman said legislators should make the state tax code more friendly for small businesses starting out in the state.

“Normally most new businesses lose money in the opening stages,” he said. “We don’t necessarily have a great tax code that helps them offset that.”

Fueling the economy

Marcellus Shale natural gas could help fuel the local economy and drive savings for companies and municipalities — by powering their trucks.

State College-based Seraph Energy is working on plans to convert local truck engines from diesel to cheaper natural gas. The company and other local businesses are developing i

deas on how to take advantage of the state’s gas boom.

Bill Hall, executive director of the State College-based Ben Franklin Shale Gas Innovation and Commercialization Center, thinks the county could “set the pace for natural gas vehicle conversion and utilization.”

“Momentum is growing,” he said.

Centre County stands in the forefront. Two local companies partnering with Penn State won the center’s shale gas innovation contest last year. One made a leak-proof mat system for containing drilling mud and fracking fluid from the gas drilling process. The other created a conversion system for truck engines to run on compressed natural gas, as Centre Area Transportation Authority buses already do.

“We have a lot of gas,” Hall said. “We have to find ways to get it out of the ground and make money doing it. It pushes the need for innovation.”

But challenges await before natural gas becomes widespread. More local commercial fueling stations must be built to add to the one in State College. For personal vehicles, companies are working on streamlining the conversion of gas pressure to prepare the fuel for use, and developing inexpensive home-filling stations.

Though drilling activity has slowed in the county — down to two wells drilled last year — the industry still could benefit the local workforce.

The Central Pennsylvania Institute of Science and Technology in Pleasant Gap is helping its students secure jobs related to gas drilling by building the $10 million Transportation Training Center. When finished, the center will help train high school and post-high school students to become the truck drivers in demand in drilling regions.

‘Diamond in the rough’

Nobody has a crystal ball.

But as the county’s economy moves forward, newcomers such as natural gas and rising stars such as health care and high-tech companies should continue to play important roles alongside Penn State, retail, hospitality and other anchor sectors.

Tom Kearney, a West Penn Power area manager and board chairman of the Centre County Industrial Development Corp., sees a rosy future. Centre County’s major highways, strong commercial infrastructure and good schools make the area attractive to companies looking to resettle or start-ups leaning toward staying, he said.

“We’re a kind of diamond in the rough,” he said.

“We’ve got a lot to offer to businesses, and we’re going to see a lot of success in the coming years.”

Chris Rosenblum can be reached at 231-4620. Follow him on Twitter @CRosenblumNews.

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