The economic divide between North and South Jersey is clearly evident, but the gap could be closing thanks to new strategies to put our area firmly on the map.
In the longstanding duel between North and South Jersey, South Jersey might outshine when it comes to sprawling grass fields and devotion to sports teams, but when it comes to economic comparisons, North Jersey trumps South Jersey, hands down. With its proximity to New York City, North Jersey has a clear advantage, and other major drivers such as higher average household income, higher average home prices and a denser population help propel its economic growth.
“South Jersey will never have the same economic power as North Jersey,” says Joe Cardona, vice president for university relations at Rowan University. “The only way to get there is to have the density of North Jersey, but we don’t want that density. We love our open spaces and our ecotourism, so the question becomes: How do we increase the economy in a smart way that makes sense?”
And he’s right—South Jersey boasts only 25 percent of the state’s 8.9 million residents. So what’s missing from South Jersey’s economy that has the power to push it over the edge in terms of being able to compete with North Jersey?
From the mayor of Atlantic City to the intellectuals at Rowan University to local economists, we chatted with some of the region’s most influential individuals to find out what South Jersey can do to get a leg up on the competition—also known as North Jersey.
A Larger Footprint in the Biotechnology and Technology Fields
Many area leaders believe South Jersey should claim a bigger slice of the biotechnology industry, which is poised to exceed $320 billion globally by 2015, according to Global Industry Analysts.
“Biotechnology is one area that we should really focus on and make some progress,” says Louis Cappelli Jr., Camden County Freeholder Director. “We should work on positioning ourselves to be a region that is very accommodating to the biotech industry.”
Cappelli suggests that if the state were to provide economic incentives specifically designed for biotech companies to locate in South Jersey, it could be a step in the right direction.
“This is an area of the local economy where we are losing companies rather than gaining companies,” he says. “This should not be the case, especially considering our region’s outstanding medical schools, universities and scientists.”
Les Vail, president and CEO of Gloucester County Chamber of Commerce, also touted the potential local impact of the biotech industry. “I believe what’s truly missing, and a component that is on its way, is a stronger presence in the biosciences, pharma and technology,” Vail says. “I believe in the next 10 to 20 years, South Jersey will become a major player in that area.”
Vail’s hope for South Jersey’s advancements in the biotech field rides on Rowan University’s recent designation as a research facility. This avails Rowan better access to research dollars, which will incentivize private industry to relocate here.
As Rowan positions itself as a leading health care and research institution, it has taken steps to expand its partnerships in these fields, similar to the relationship it developed with Coriell Institute for Medical Research several years ago. This alliance affords Rowan medical students the opportunity to learn from Coriell’s world-renowned “human genome” scientists and researchers serving on biomedical science faculty, and the hope is that other relationships will do the same.
“We don’t have a strong presence in biotech right now, but the future will bring that with Rowan University as the students benefitting from the partnership with Coriell enter the workforce,” Vail says.
A Revamped Atlantic City
Michael Wolf, economist at Wells Fargo, says that Atlantic City, challenged by the rise of online gambling and the legalization of gambling restrictions in nearby states such as Maryland and Pennsylvania, should be a major focus when considering ways to strengthen South Jersey’s economy. Casino struggles, along with Hurricane Sandy’s damage, really weighed on South Jersey’s economy, according to Wolf.
“I think exploring options for Atlantic City, particularly to improve the lack of revenue growth and dip in visitors coming to Atlantic City, could help change things,” Wolf says. “A key is finding a way to get more people there and shifting Atlantic City’s emphasis away from being a mini Las Vegas on the beach to being more of a family beach destination.”
While Wolf suggests diversifying away from just casinos and gambling, Mayor Don Guardian of Atlantic City seems to be on the same page.
“Atlantic City has made its existence as a tourism destination,” Guardian says. He explains that short-term, Atlantic City is working on continuing to do that well, through factors such as a lineup of special events that include recent Blake Shelton and Lady Antebellum concerts, a triathlon and the Miss America pageant, but the city also plans to shift its focus to “grow culturally as a city.”
This includes last year’s opening of a garage that houses a dozen artists on Mississippi Avenue, welcoming the Atlantic City Ballet Company and plans for an Atlantic City symphony by the end of this year.
Guardian mentions that the Showboat’s concert venue, House of Blues, which offers an appealing setting for concerts and other entertainment acts, also makes “a whole lot of sense” and that the city is exploring the concept of something similar. They are focused on a center called Latitude 360, which is a state-of-the-art restaurant and family entertainment destination that may include an HD sports theater, a luxurious dine-in cinema, bowling and an interactive game room. Such centers have already opened in Florida, Indiana, New York and Pennsylvania.
To further boost the economy, Guardian says he plans to ask the federal government to help establish a port in the northeastern section of the Atlantic City, near the Golden Nugget casino, with historic Gardner’s Basin, a park in that portion of the city, serving as a hub. Guardian says the city plans to seek proposals to develop 16 additional acres near the basin, which will make it roughly the same size as Baltimore’s Inner Harbor.
Guardian is also hopeful about a potential opportunity to become a port of entry for commercial cruise ships such as Carnival Cruise Lines and Norwegian Cruise Line.
“Most cruise ship passengers don’t arrive in the city of their port of entry and board the ship that same day, for fear of travel delays or cancellations,” he says. “This would give Atlantic City the added benefit of having people arrive, stay a night and shop, maybe gamble, eat out, and then board the ship the following day.” He says many passengers would likely do the same thing on the day they disembark from the cruise ship, spending an additional night in Atlantic City before flying home.
If not a major port of entry, then Guardian is hopeful that Atlantic City can at least be a port of call, becoming one of several stops in cruise ships’ itineraries.
Along with these steps, the city also plans to build out its convention business by appealing to industry conferences and meetings to attract more business travelers, especially in the off-season months.
“This is something we haven’t paid much attention to in the past 25 years because of our focus on gambling, but we now realize that selling conferences and conventions could be a big boost for us,” Guardian says.
Developing Ports as Economic Engines
Atlantic City is not the only area of South Jersey with port potential.
There has been progress on the new Port of Paulsboro, as a contract was recently awarded to construct a wharf at the port and the first tenant, Holt Logistics Corp., was signed. “The first tenant will help bring over 850 new jobs to the region,” Gloucester County Freeholder Heather Simmons says.
Paulsboro’s port location has been vacant for more than a decade, after the BP oil refinery that was once located there shut down.
When complete, it will mark the first new marine terminal to be built in South Jersey in the last 50 years. The terminal is expected to cover 150 acres of waterfront land, with the possible expansion to 190 acres.
The Holt announcement at Paulsboro was made in conjunction with Holtec International committing to a new manufacturing plant in Camden.
The New Jersey Economic Development Authority recently approved $260 million in tax breaks, to be granted over a 10-year period, to Holtec International to build a manufacturing facility on the Broadway Terminal at the Port of Camden.
“These two ports are economic engines for South Jersey and are going to create hundreds of jobs in this region,” Simmons adds.
A new pier will be built within the next 18 to 20 months, and tenants will begin filling the port shortly after, according to Holt.
The project is expected to implement economic growth along the Delaware River and throughout the region.
A More Educated Workforce
One major obstacle experts point to for South Jersey’s growth is lack of an educated workforce.
“One of the biggest problems we have here in South Jersey is the lack of degrees,” says New Jersey Senate President Steve Sweeney, noting that North Jersey has almost two times the amount of higher education degrees population-wise compared to South Jersey.
“We need to create the workforce for the opportunities that are out there, particularly in the technology and energy fields,” Sweeney adds.
Others say that with more degrees will come more corporations, and thus, more jobs.
“We need to have more companies in South Jersey,” says Ken Blank, senior vice president for Rowan University. “We need to create an educated workforce here in South Jersey that will make companies want to come to South Jersey and expand in South Jersey.”
Rowan is creating ways to make this goal a reality in the near future. For starters, they upped the size of their college of engineering to create more engineers for an available workforce.
“We are expanding our engineering program because engineers are critical to large companies,” Blank says.
The university has also developed a unique model where they collaborate with Lockheed Martin to develop a curriculum where their faculty is teaching right alongside Rowan’s faculty. This ensures a workforce is being developed that can be productive for a company like Lockheed.
The partnership facilitates innovative projects such as the development of new technologies for a broad range of radar system applications in support of national defense.
“We want to make sure the students graduating from our university have the knowledge base and experience to benefit the company immediately rather than having a rather long ramp-up period where the students are not necessarily being productive for a couple years,” Blank says.
“We hope this becomes a model for industry-university interaction everywhere,” Blank adds.
As a whole, New Jersey’s economy was hit much harder than other states over the past few years, particularly by the housing crisis, and has been slower to recover, according to Wells Fargo’s recent June 2014 report on New Jersey’s economic outlook. “Just as the state was beginning to get back on its feet, it was hammered again by Hurricane Sandy, which diverted resources toward rebuilding activity rather than economic growth,” the report explains.
However, there’s a silver lining: Increased pace of business expansions, the continuing strength in the stock market and growing international trade and investment should help quicken the pace of economic growth throughout the state in the near future, says Wells Fargo.
With North and South Jersey both hopeful about making advances in their economies, it is possible with a few strategic moves, South Jersey will eventually at least become even with its competition.
As Simmons suggests, “I don’t think there is one magic bullet that will help anyone overcome the economic climate, but a series of consistently well-thought out and developed plans will promote growth.”
Published (and copyrighted) in South Jersey Biz, Volume 4, Issue 8 (August, 2014).
For more info on South Jersey Biz, click here.
To subscribe to South Jersey Biz, click here.
To advertise in South Jersey Biz, click here.