New Bedford Well-Positioned for Economic Growth
August 22, 2010 : By Charis Anderson
Since 2006, New Bedford has:
- Attracted almost $300 million in private investment and $42 million in public investment.
- Created about 1,400 construction jobs.
- Created or retained about 2,000 permanent jobs.
Source: New Bedford Economic Development Council
NEW BEDFORD — Over the past five years, New Bedford has attracted hundreds of millions of dollars in private investment and established a reputation among developers and business executives as an excellent place to do business.
The continued new growth the city has experienced — projects like Wamsutta Mills, Riverside Landing, the new downtown hotel — have created jobs and increased the city’s tax base, all during an economic downturn unmatched by anything since the Great Depression.
“You’ve got a lot of life here,” said Peter Barney, the city assessor. “This area is one of those areas that just has it. It’s remarkable really.”
“In the past usually when the economy goes downhill, New Bedford goes right along with it,” he said. “But this time, it’s not falling true to form. It’s going in the other direction.”
In 2006, shortly after Mayor Scott W. Lang first took office, he worked with the New Bedford Economic Development Council to develop a strategic plan to attract investment to the city.
That 10-year plan — a multi-pronged approach that focuses on areas such as supporting existing businesses, attracting new companies in emerging sectors and creating plans for future development — has already achieved results, according to the NBEDC.
Almost $300 million in private investment and another $42 million in public investment has surged into the city since 2006, creating about 1,400 construction jobs and creating or retaining about 2,000 permanent jobs, the NBEDC stated.
The effect of that investment is reflected in the city’s tax base: Even as the bottom has dropped out of the country’s real estate market, the assessed value of all property in New Bedford has held fairly steady as new projects are added to the city’s tax rolls, offsetting the broader dip in values, according to Barney.
“Look what’s happened in the Upper Harbor; look at what’s happened in the downtown,” said Matthew Morrissey, executive director of the NBEDC. “It’s this broad, diverse base of economic development … (and) it puts us at a very real competitive advantage as we move into the next five years.
“Is it enough? No, it’s not enough,” he said. “But directionally, the data can speak for itself.”
New Bedford, a city that at times struggles to overcome negative biases held by outsiders, has now developed a reputation as a city that supports appropriate and thoughtful development, a city that makes good on its promises.
The Lang administration has placed an emphasis on being open, transparent and accessible — “Ripping the curtains down in Miss Havisham’s ballroom (to) let the light in,” Lang said in a reference to Dickens’ “Great Expectations” — and developers currently investing in New Bedford said the city is now known as a place where it is possible to get things done.
“The administration is a major differential with many other cities in how they at look at development,” said Steve Ricciardi, the developer behind the Lofts at Wamsutta Place and Victoria Riverside, a total investment of about $49 million.
“The Lang administration with Matt Morrissey at the head of economic development has really thrust the city ahead. I don’t think people truly appreciate how much they have moved the economic ball ahead for New Bedford.
“It’s been a delight to work with a city that wants to work.”
Measure of strength
There are any number of ways to gauge the strength of a community, and across multiple measures, New Bedford is more than holding its own when compared to 10 other original Gateway Cities.
The Gateway City designation was created in a 2007 MassINC-Brookings Institution report to identify a group of the state’s traditional manufacturing cities that were missing out on the knowledge-driven economy.
The state recently passed legislation that creates a set of tax incentives and grants intended to help the Gateway Cities attract investment.
New Bedford did not wait for that legislation to get started on its economic development strategy.
From fiscal 2006 through fiscal 2010, the city had an average rate of growth — the percent change in the total assessed value of its property, both residential and commercial — of about 4.8 percent, placing it above all other Gateway Cities, according to data from the state Department of Revenue.
In fiscal 2010, the city’s assessed value dipped only 1.7 percent, placing it behind only Pittsfield and Holyoke.
In comparison, values in Fall River fell almost 5 percent, and in Brockton they plummeted 18.2 percent; Lawrence saw its assessed value drop 14.4 percent, and Lowell lost 9.1 percent of its value, according to the DOR.
The number of building permits issued by New Bedford’s Building Department has remained fairly stable over the past few years, dropping slightly from 2,302 in 2007 to 2,250 in 2009, according to department data.
Statewide, building permits are down by half from the peak in 2007, according to Ben Forman, research director with MassINC, a public-policy think tank based in Boston.
“New Bedford’s have held fairly steady, so I think that’s a real positive sign,” he said.
While the value of the projects tied to the permits has dropped more significantly — from $51 million in 2007 to $40 million in 2009 — there is still a strong pipeline of projects that will be captured on the city’s tax rolls in the next few years, according to Barney, the city assessor.
Development, whether it’s a multimillion-dollar renovation of an old mill building or an addition onto a residential home, is captured by the city assessor in two ways.
The year a project is completed, the assessed value of that project is added to the city’s tax levy limit as “new growth,” which is calculated by multiplying the value of the project times the city’s tax rate.
The city captures “new growth” from a project just one time, but the value of the project is also rolled into the total assessed value of all property in the city, increasing the overall tax base.
“As the value of the city goes up, the tax rates hold down so even if the tax levy’s going up on one side, increasing the value on the other side holds the tax rates in check,” Barney said. “That’s the key.”
For fiscal 2010, the city had about $68 million in new value, which added about $1.15 million to the levy limit, according to data from the state Department of Revenue, and for fiscal 2011, the city is on track to capture about $800,000 to add to the levy limit, Barney said.
However, there are a number of projects ongoing right now — Riverside Landing, Victoria Riverside — that, because of the way new growth is calculated, will not show up on the city’s tax rolls until fiscal 2012, according to Barney.
“There is a lot of activity here which you don’t see directly from the numbers,” he said. “There is a strong pipeline here. We have a lot of construction.”
Bringing people in
City officials attribute the city’s performance over the past several years to the economic development strategy it adopted in 2006.
“We just set about from the first day to show that New Bedford was pro-business, a friendly atmosphere as far as city government,” Lang said.
Lang said that when he took office, the city’s approach to economic development was focused on the status quo instead of proactively seeking out new opportunities.
Additionally, development in the city was heavily dominated by local interests, Lang said, a culture he felt needed to change.
“So what I did was change the economic development council to being a much more participatory type of an agency, much more proactive, much more energized as far as its approach to outside investors,” he said.
Matthew Morrissey, who was named interim director of the NBEDC in July 2006 before being appointed to the permanent position in October of that year, said there was no clear, existing strategy to attracting jobs or development to the city when he started at the council.
After reviewing policy research, Morrissey said the mayor and the council started to develop an approach founded on public safety and educational attainment and focused on six areas including maintaining and supporting existing businesses, developing emerging industry sectors, and investing in the city’s workforce.
It is an approach that is focused on smaller projects — singles and doubles in Lang and Morrissey’s words — and on using targeted public funding to support significant private investment.
“It’s an incremental strategy that looks at: what are the essential building blocks of rebuilding a city, or attracting economic development to a city that hadn’t experienced substantial growth,” said Joe Nauman, clerk of the NBEDC’s board of directors.
“It’s borne out that it’s a good (strategy) by the growth we’ve experienced.”
Spreading the word
Having such a plan in place was an important way to communicate to developers and business executives that the city had its act together, according to Morrissey.
“A ‘cowboy up’ approach is not exactly going to work when you’re trying to attract millions of dollars from thoughtful people,” he said.
State Secretary of Housing and Economic Development Gregory Bialecki said the city has done a good job at candidly assessing its strengths and effectively focusing its development efforts on those strengths.
“That again makes it very easy for us to partner with (the mayor) because he has very clear, focused priorities,” Bialecki said.
The city’s approach to economic development mirrors the strategy of Gov. Deval Patrick’s administration on multiple fronts, from the need for public subsidies to go hand-in-hand with private investment to the importance of cultivating a broad base of projects instead of one “silver bullet” project, according to Bialecki.
According to Bialecki, New Bedford also has done a good job at emphasizing areas — tourism, the creative economy, advanced manufacturing — that align naturally with the state’s strengths.
“Companies that may want to do their research and development in Cambridge, there’s a very different set of decision factors as to where you locate your manufacturing and (New Bedford is) thinking about how to take advantage of that,” Bialecki said.
Richard Henderson, executive vice president for real estate at MassDevelopment, a quasi-public economic development agency, said the city has been particularly good at thinking and planning for the long term, as opposed to simply chasing the opportunity of the day.
“I think they’ve done well at brining businesses in and investment in,” he said. “Developers and investors are impressed by having a plan in place.”
Howard Berke, executive chairman and co-founder of the solar power firm Konarka, said that while the availability of the Polaroid facility, which the company took over in 2008, was a major factor in Konarka’s decision to locate its first manufacturing facility in New Bedford, there were other available sites in the U.S. and abroad.
The New Bedford site’s proximity to the company’s headquarters in Lowell made it quite desirable, said Berke, and the tax increment financing, or TIF, agreement the city approved helped with the project’s finances, both factors which helped swing the decision to New Bedford.
Additionally, he said, the Lang administration has been and continues to be very supportive of the company as it continues to settle into its site in the New Bedford Business Park.
“CEOs have ways of sending out signals to other CEOS,” he said. “There are cities that the word gets out that they’re industry-friendly and have a supportive set of leaders.”
Other developers who have invested in the city over the past few years echoed Berke’s praise for the city’s leadership team and the role that team played in their decision-making process.
Promoting the city
Larry Curtis, president of Boston’s Winn Development, said one of the things that differentiates New Bedford from other cities is the degree to which its leaders promote the city to potential investors.
Winn has worked on the Whaler’s Place development and is collaborating with Keith Construction in Stoughton on a plan to transform the Cliftex 1 mill building into rental apartments.
“Some cities we have to find them; we have to seek out the hidden jewel,” he said. “New Bedford is such that they’re out there promoting the city, not in a deceptive way, but in a truthful way that it’s open for business, and it’s a good place to do business.”
Additionally, Curtis said, the city is very effective at helping developers make the case for the state or federal subsidies that are critical to making project economics work in a community like New Bedford.
“The mayor and Matt Morrissey and others, I think, have been instrumental,” he said. “They’ve been able to convince the powers-that-be at the state and, for that matter, the federal level, that the monies need to be spread around.”
The first time Patrick Lee, principal and executive vice president at Trinity Financial, a Boston-based development company, was presented with an opportunity in New Bedford, his first thought was: Isn’t that city the foreclosure capital of the world? Why would we want to spend time and money there?
Trinity passed on that opportunity — the former Fairhaven Mills parcel — but came back a few years later when the Regency Tower was going out to bid.
This time, Lee came down to the city, and one of the first people he met was Matt Morrissey, who gave him a tour of the city.
“That guy is like a bulldog,” he said. “He gets a bite, and he doesn’t let go.”
By the end of the tour, Lee said his impressions of the city as a whole, and particularly the downtown, had changed dramatically.
Trinity ended up purchasing the Regency and is now in the midst of a $32 million renovation of the building.
“We’re not a big development company, so we have to pick and choose where we place our bets,” Lee said. “These are bets where you’re spending hundreds of thousands — in this case millions — of dollars before we get to a construction start. So part of what we look at is how the government and how the community is organized.”
According to Lee, in New Bedford, the government is very proactive, understands public-private partnerships, and can coordinate support at multiple layers of government.
“I wouldn’t describe it as typical,” he said. “It’s a big difference. … We like communities like New Bedford when they’re led by good government, and we sort of feel that there is stability there in the support that we need.”
Lee said Trinity is interested in doing more projects in New Bedford.
But, he added, “If the city administration changes and goes in a different direction, it’s going to be less of an attractive place for us.”
Lang will finish his third term at the end of 2011, and he has already indicated that he will not run again.
Exactly how the mayoral election in 2011 will shape up is still unclear, as no one has formally announced a candidacy although there is widespread speculation that some members of the City Council, including John Saunders and Linda Morad, will throw their hats in the ring.
Morrissey, who has made no public statements about his intentions, is also widely thought to be considering a run for the office. He ran unsuccessfully for mayor in 2005, finishing third in the preliminary election behind Lang and former Mayor Frederick M. Kalisz Jr.
Anthony Sapienza, chairman of the NBEDC board, said the city has done an excellent job of establishing credibility within the business and development communities over the past few years, and there is no doubt about the importance of political leadership to maintaining that credibility.
“Certainly we’ve built the foundation for (the next) mayor to go forward on,” he said. “We certainly will need a political leader who can continue in his or her own way the legacy that Mayor Lang has left behind.”
Â© Copyright 2010 The New Bedford Standard Times.