2011-2012 Annual Report - Lehigh Valley Industrial Park

2011–2012
Annual Report to the Community
Building Centers of Business
» PROMOTING ECONOMIC VITALITY
LVIP 2011–2012 » LETTER FROM THE CHAIRMAN & PRESIDENT
Deals Bring Economic Vitality to the Lehigh Valley
At Lehigh Valley Industrial Park, Inc., we haven’t been standing still in these economic
doldrums.
We are closing deals and creating jobs that will contribute to the economic vitality across
the region. We are regenerating job growth in LVIP VII, a 1,000-acre industrial site left vacant
in the Bethlehem Steel Corporation bankruptcy, as well as attracting new employers to fill
job centers that were emptied in the recession.
As a real estate development center, LVIP is helping to create a market when one may not exist.
For example, at LVIP VII we partnered with Liberty Property Trust, who constructed a 1.2 million
square-foot warehouse, the largest speculative real estate project in the nation. Construction
alone produced 400 jobs in 2011–12. Liberty Property Trust, a longtime partner of LVIP, is
investing $60 million in this project and has a successful track record for finding tenants/
buyers for its projects.
OUR MISSION
Smaller deals bring lasting economic impact as well. Vacant buildings in the LVIP system
allow for low-cost, expedient options for young companies seeking to grow during
» Create jobs
challenging times.
» Expand the regional tax base
EcoTech Marine, a small technology firm started in south Bethlehem, will move to LVIP III
» Diversify the local economy
near the Lehigh Valley International Airport with 46 employees to lease 36,000 square feet
» Promote the economic vitality
of space in a partially vacant, multi-tenant industrial building.
and enhance the quality of life
in the Lehigh Valley
The vacant Alcan Packaging facility in LVIP VI at Freemansburg Avenue and Route 33
represented a new opportunity for Daiichi Sankyo, Inc. to establish its roots in the Lehigh
Valley and perhaps center all U.S.-based manufacturing of this Japanese pharmaceutical
OUR SUCCESSES
company in our region.
Another LVIP VI manufacturer, Rotating Machinery Services, Inc., announced its second
Total acres in LVIP park system
expansion since it moved to the Lehigh Valley from New Jersey in 2007. Soon, the company will
» 2,500
expand from 30,000 to 45,000 square feet and boost its payroll from 45 to up to 80 employees.
Land and development costs
These are a few of the stories behind the approximately 470 small and medium companies
» $91,358,356
employing 22,000 people in our seven parks on 2,500 acres.
Federal, state, and local loans
and grants
» $41,984,000
Employers
» 470
Employees
As a non-profit, community-based organization, LVIP creates new centers of business for
expansion and relocation by all sorts of companies. We have more than 50 years experience
working with local developers, construction, and real estate companies. Our volunteer board
is drawn from the private and public sectors, and this year we welcome two new members.
Frederick C. Allerton, Principal of Spillman Farmer Architects, has a long history of service on
» 22,000
the LVIP Building Committee and previously served two terms on the LVIP Board of Directors.
Local annual tax revenue
Dr. Mark Erickson, President of Northampton Community College who succeeded
» $10,000,000
Dr. Arthur Scott at NCC in June, continues a long-standing tradition of NCC’s President
Private investment
serving on LVIP’s Board.
» $674,500,000
These two leaders will help us achieve our mission: Create jobs, expand the local tax base
and diversify the regional economy.
Jeffrey P. Feather, Chairman
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Kerry A. Wrobel, President
LVIP 2011–2012 » PARTNERSHIPS
Throughout this year, Liberty Property Trust directed significant
resources toward LVIP VII by purchasing nearly 150 acres for the
company’s expansion of warehousing/distribution facilities in the
Lehigh Valley. Liberty now has two separate projects underway in the
park.
After purchasing over 100 acres in LVIP VII (Lot 1) last fall, Liberty
Liberty Property Trust’s new 1.2 million
Property Trust recently completed construction of its $60 million,
1.2 million square-foot warehouse/distribution facility. This project
square-foot warehouse represents
will generate $1 million annually in city, county, and school property
$60 million in new investment in
site, adjacent to the park’s neighboring intermodal facility and one mile
LVIP VII, and the largest land sale
taxes and awaits new companies eager to locate on a rail-served
from I-78. The Class “A” facility was constructed according to LEED
“green” building standards for core and shell, and Liberty is pursuing
in LVIP’s history.
Energy Star Certification. This project represents the largest sale in
– Photos courtesy of Liberty Property Trust
construction process.
LVIP’s history and has already generated 400 jobs throughout the
Liberty initiated a second project in LVIP VII with its purchase of
an additional 42 acres (Lots 3, 4, and 5) in May. Liberty proposes a
warehouse/distribution facility of 800,000 square feet at full build-out.
The facility, not yet constructed, is also situated to take advantage of
rail access and a prime location near the intermodal facility and I-78.
These two projects combined are expected to create hundreds of new
jobs in LVIP VII and represent major investments in the regional
economy.
3
LVIP 2011–2012 » CREATING A FOUNDATION TO CONTINUE OUR MISSION
LVIP observed continued growth in our parks, both from existing companies seeking to expand their current operations, and
from new companies locating to the Lehigh Valley. While much of the new construction this year has focused on warehouse/
distribution facilities taking advantage of LVIP VII’s immediate access to I-78, many projects are utilizing existing buildings
in our other parks to fit their needs.
LVIP VII » Liberty Property Trust’s recent commitment of two
million square feet of new construction in the park will no doubt
bring job growth, an expanded tax base, and economic diversity
to the park. The company’s commitment provides future tenants
the opportunity to utilize the site’s advantageous location to the
region’s highways and railways.
Route 412 construction – While seeking to fulfill our mission, a
major part of LVIP’s daily work involves effectively managing site
preparation and infrastructure development to create shovelready parcels in our business parks. As the owner of the largest
privately-owned brownfield site in the U.S., this has been especially
true regarding LVIP VII. In conjunction with our on-going site
development, this year marked the start of another major project
that will greatly impact our park as well as the City of Bethlehem and
surrounding areas. PennDOT’s reconstruction of Route 412 involves
the widening of Route 412 from the I-78 interchange to the Daley
Avenue Bridge, and includes the installation of additional lanes,
crosswalks, landscaped medians, hundreds of trees, and new street
lighting. LVIP has dedicated many acres of land in LVIP VII toward
this project in an effort to join PennDOT and the City of Bethlehem in
recreating the gateway to the City, enhancing both drive-ability and
walk-ability. Construction commenced on this project in March and
is slated for completion in 2015.
LVIP VI » Daiichi Sankyo, Inc. – In June 2012, Daiichi Sankyo,
Inc., a global pharmaceutical company with U.S. headquarters
in Parsippany, NJ, received U.S. Food and Drug Administration
(FDA) approval to package product at its first United States-based
Daiichi Sankyo facility dedication ceremony and ribbon cutting
packaging facility located at 2400 Baglyos Circle. This approval
event in LVIP VI on July 11, 2012, from left to right:
expanded the company’s global supply chain capability and marked
Mr. Yuki Sato, Daiichi Sankyo’s Supply Chain Head in Japan,
the beginning of the pharmaceutical company’s strategic shift
Mr. John Gargiulo, U.S. President and CEO, Mr. George Nakayama,
from outsourcing exclusively for the North American market to
global Daiichi Sankyo President, Pennsylvania Governor Tom
in-house packaging for its cardiovascular and metabolic drugs,
Corbett, Jeff Lane, VP Supply Chain and Technical Operations,
and Mike Dornhecker, Senior Director, Plant Operations
including treatments for hypertension and heart disease, diabetes
and hyperlipidemia. While the company’s new 140,000 squarefoot facility demonstrates its commitment to enhance their
competitiveness within the U.S. pharmaceutical marketplace
and diversify its U.S. capabilities, DSI also is helping to maintain
and enrich the local community by supplying jobs to skilled
and dedicated workers from the region. The plant currently employs
approximately 39 full-time employees and will continue to add
employees until realizing its full operational goals. After purchasing
the existing facility at Baglyos Circle in February, 2011, the
company invested an additional $10 million in renovations.
4
RMS – One of the park’s most successful tenants is Rotating
Machinery Services (RMS), who opened their facility in the park in
May of 2007. The company had previously undergone one expansion
to their original building and is currently planning a second expansion
of $2 million to include an additional 9,000 square-foot high-bay
shop that will become their main assembly and disassembly area,
and a 5,500 square-foot office expansion that will allow for 30 more
offices. In total, the footprint of its current building will increase
from 30,000 to 45,000 square feet, and current employment of 45
will increase to between 70 and 80 to include mechanics, engineers,
and other technical and support staff. The company works on
compressors and a variety of turbines for the manufacturing and
power industries, and provides products used in oil refineries,
gas pipelines, power utilities, steel mills, and chemical plants.
By applying aftermarket engineering and services, RMS’ clients
benefit from the re-engineering of existing equipment without the
need for new equipment or additional space. RMS is located at
2760 Baglyos Circle.
LVIP III » EcoTech Marine – EcoTech Marine was established
in 2003 as a start-up company on Bethlehem’s SouthSide, initially
designing and manufacturing water-pumping products primarily for
salt water reef aquariums. Since then, the company has grown from
the original three founding partners to 23 employees at the end of
OAA Orthopaedic Specialists – In response to patients’ needs for
2011, and presently employs 43 people. In order to accommodate the
more accessible services, OAA Orthopaedic Specialists unveiled
quick growth of the company, EcoTech plans to expand its current
their second Lehigh Valley office at 2901 Emrick Boulevard in
4,000 square-foot operations by relocating its distribution and
November. As a satellite location to the company’s main facility
assembly operations to 999 Postal Road in LVIP III, increasing their
off Tilghman Street in Allentown, the Bethlehem office provides
space to 36,000 square feet. EcoTech’s VorTech pump line utilizes
patients, some traveling as far as Phillipsburg and Stroudsburg, the
an award-winning, patented through-the-glass torque transfer
same therapeutic services offered in Allentown. The new 5,855
design which allows the pump to make waves in the aquarium
square-foot site includes access to specialists in hand, joint, spine,
without drilling the tank or putting a motor in the water. The
podiatry, sports imaging, women’s health services, and physical
company has also developed wireless communicating modules,
and occupational therapy, and has created 10 jobs.
lighting, and battery back-up systems, and looks to begin designing
LVIP IV » Freshpet – This spring, Freshpet purchased the former
pumps for home spas, medical spas, and professional day spas.
Flavor Right Foods, Inc. building at 176 North Commerce Way, and
LVIP I » Gardner Cryogenics – Gardner Cryogenics is currently in
has plans to expand the existing 58,000 square-foot building to
the process of expanding its existing facility located at 2127 Avenue
70,000 square feet. At the new location, Freshpet will prepare all-
C – which signifies development of the final parcel of available land
natural pet foods and treats made of fresh meats and vegetables.
in LVIP I. Gardner, a subsidiary of Air Products, is a world leader in
Freshpet anticipates creating and/or retaining 80 jobs at their new
the design, development, and manufacture of high-performance
facility, which is slated for completion in June, 2013. The company
tanks and trailers for liquid helium and liquid hydrogen. The company
will be spending approximately $24 million to convert the facility
will construct the 33,000 square-foot office and manufacturing
to meet their needs. Freshpet food and treats are available in over
building on a 2.65-acre parcel of land it has owned for many years.
8,000 grocery, mass and pet specialty stores in the U.S. and Canada.
The expansion is part of the company’s land development plan to
Some of the local stores their products are available are Weis,
grow its business, and will add approximately 40 new jobs to the
Chaar Saddlery, Giant, Redner’s Market, Pet Supplies Plus, Petco,
park with employees working three separate shifts. Construction is
Petsmart, and King’s.
underway, with completion slated for early fall.
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LVIP History » STEADY GROWTH SINCE 1959
Lehigh Valley Industrial Park, Inc. was established in 1959 as a private, non-profit economic
development corporation to expand the region’s tax base, create new jobs, and diversify
the local economy by developing industrial sites for new and expanding business.
Since then, LVIP has been building high-quality, multi-use business centers that today
are home to approximately 470 small and medium companies that employ an estimated
22,000 people in seven parks on a total of 2,500 acres, generating well over $10 million in
annual payroll and property taxes.
LVIP I
Funding 2011–2012 (Unaudited)
LVIP generates revenue primarily through land
sales, interest income, and government grants.
The use of LVIP’s revenue is dedicated to
building infrastructure (road and utilities),
assessing the site’s environmental condition,
and paying property taxes and other land-
1959 » City of Bethlehem, Lehigh County: The first park on 220 acres east of
holding costs.
Lehigh Valley International Airport, today has over 75 firms employing more than
For additional financial information, please
4,500 people.
visit www.lvip.org.
LVIP II 1964 » Hanover Township, Lehigh County: Located north of the airport, 142
acres with 20-plus companies and some 1,050 employees.
LVIP III 1974 » Hanover Township, Lehigh County: Located on 318 acres south of the
airport along Route 22, this park is home to over 140 employers with about
6,000 employees.
LVIP IV
1987 » Bethlehem and Hanover Townships, Northampton County: The 430acre park east of Route 512 between Hanoverville Road and Route 22 has
120-plus companies and more than 4,500 employees.
LVIP V
1992 » Bethlehem Township, Northampton County: This 182-acre park along
SOURCES
Brodhead Road houses major facilities for Crayola, Kraft, Maiers Bakery, and a
new distribution facility for Just Born, Inc. The park’s 13 tenants employ over
1,300 people.
LVIP VI 1999 » Bethlehem Township, Northampton County: the 192-acre park, adjacent
.
to Route 33 and north of I-78, has more than 90 employers and 1,383 employees.
LVIP welcomes Daiichi Sankyo, Inc. to the park, congratulates RMS on their
continued expansion plans, and looks forward to complete build-out of the park.
$2,742
NET
CASH
$1,615
OTHER
INCOME
LVIP VII 2004 » City of Bethlehem, Northampton County: With 1,000 acres for
development, the park’s first 11 tenants are employing more than 2,400
workers and include Cigars International and Synchronoss Technology, Inc.
We anticipate great returns from Liberty Property Trust’s investment in the
park, and acknowledge their recent purchase of land as the largest sale in
LVIP’s history.
USES
$2,220
LAND &
DEVELOPMENT
$559
SGA
$1,578
DEBT
PAYMENT
Above charts shown in thousands.
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LVIP » BOARD OF DIRECTORS
CHAIRMAN
Jeffrey P. Feather » Vice Chairman, National Penn Bancshares, Inc.
President
Kerry A. Wrobel » President, Lehigh Valley Industrial Park, Inc.
Vice Chairman, Finance/Treasurer
Michael J. Gausling » Managing Partner, Originate Ventures
Vice Chairman, Marketing
Raymond B. Holton » Retired Editor & Senior Vice President, The Morning Call
Vice Chairman, Planning
Martin C. Gilchrist » President, Urban Research & Development Corp.
Assistant Treasurer
Scott V. Fainor » President & CEO, National Penn Bancshares, Inc.
Assistant Treasurer
Jan S. Heller » Former Executive Vice President Finance, St. Luke’s University Health Network
Assistant Treasurer
Margaret F. Plytmpton » Vice President Finance/Administration, Lehigh University
Assistant Secretary
Michael M. Albarell » President, Albarell Electric, Inc.
Assistant Secretary
David A. Nepereny » President & CEO, Buzzi Unicem USA, Inc.
LVIP welcomes Fred Allerton
back to our Board of Directors.
Mr. Allerton, Principal with Spillman
Farmer Architects, has served two
previous terms on the LVIP Board
and has been a member of the LVIP
Building Committee for over 15 years.
LVIP is pleased to welcome
Mark Erickson, Northampton
Community College’s fourth
President, to the Board.
LVIP STAFF
Kerry A. Wrobel
Frederick C. Allerton » Principal, Spillman Farmer Architects
President
Richard A. Anderson » President & CEO, St. Luke’s University Health Network
[email protected]
Curtis “Hank” Barnette » Of Counsel, Skadden, Arps, Slate, Meagher & Flom/Chairman
Emeritus, Bethlehem Steel Corp.
Justin C. Ryan
The Honorable John B. Callahan » Mayor, City of Bethlehem
Business Development Manager
Robert J. DeSalvio » President, Sands Casino Resort Bethlehem
Mark H. Erickson » President, Northampton Community College
M. Arif Fazil » President, D’Huy Engineering, Inc.
Vaughn C. Gower » Former Senior Vice President & CFO, Lehigh Valley Health Network
[email protected]
Michelle L. Frable
Director of Administration
[email protected]
Silvia A. Hoffman » Partner, MKSD Architects
Carmelo V. Huertas » Retired, U.S. Army/Former Bethlehem Parking Authority Chairman
1720 Spillman Drive, Suite 150
Timothy R. Kennedy » Former General Manager, Rodale.com/Rodale News Network
Bethlehem, PA 18015–2164
Ann McHale » Former President, Northampton County Council
T. 610-866-4600
James H. Miller » Former Chairman & CEO, PPL Corporation
The Reverend Bernard F. O’Connor » President, DeSales University
Arthur L. Scott » Former President, Northampton Community College
F. 610-867-9154
www.lvip.org
John J. Simon » President & CEO, General Supply Company
Lee F. Snyder » President, Snyder Hoffman Associates, Inc.
Mark D. Snyder » Former President, Lehigh Valley Building Trades Council
The Honorable John Stoffa » County Executive, Northampton County
7
1720 Spillman Drive, Suite 150
Bethlehem, PA 18015–2164
LVIP VII » BETHLEHEM COMMERCE CENTER
Phases 1 – 4 available
Lots from 2 – 60 acres
City of Bethlehem, Lehigh Valley, PA
» 1,000 acres located at the intersection of I-78
and Route 412 in Bethlehem, Pennsylvania
» Rail Service by two Class I railroads plus an
intermodal terminal
» Shovel-ready parcels
» Zoned Industrial Redevelopment (IR) and
Heavy Industrial (HI)
» Large capacity municipal water and sewer
» Gas, telecommunications, and electric on site
» Favorable financial incentives available,
including LERTA Tax Abatement Program
» Ideally located to serve the Northeast and
Mid-Atlantic
Top: LVIP VII at the Bethlehem Commerce Center
Phases of Development: 1,000 acres
Bottom: LVIP VII Phases 1 & 2
74 acres available
Watch for the launch of our new web site!
www.lvip.org