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2013 Annual Investors’ Meeting focuses on future of economc growth in the Lehigh Valley

By LVEDC Staff on March 28, 2013

The Lehigh Valley Economic Development Corp. announced the 2013-2014 Executive Officers and new members of the board of directors at the 2013 Annual Investors’ Meeting held Thursday at The Historic Hotel Bethlehem. The annual investors’ meeting is held each year to give a year in review of accomplishments, discuss future goals and report changes in board leadership. This year’s theme was “The Future of Economic Development in the Lehigh Valley and the Role of LVEDC.”

The presentation was led by LVEDC President and CEO Don Cunningham, who presided over his first Annual Investors’ Meeting since assuming leadership of the organization on July 9, 2012.

“LVEDC is committed to making the Lehigh Valley a top-flight place to do business not only for new companies, but also for existing ones,” Cunningham said. “I am excited to have the opportunity to work with the new chairman, and all the executive officers and board of directors to accomplish that agenda.”

Thomas Garrity, managing partner of Compass Point Consulting, LLC, was named chairman of the board. He replaces Donald Bernhard, director of community affairs for PPL Corp., who served two years as chairman.

Also elected as new Executive Officers for the organization were: Vice Chairman, Stephen Kalamar, vice president – commercial lending, TD Bank; 2nd Vice Chair, William Michalerya, associate vice president – government relations and economic development, Lehigh University; Treasurer, Michael Gigler, senior vice president, senior relationship manager, Wells Fargo Commercial Banking; and Secretary, Jane Long, chairwoman, corporate, business and banking group, Fitzpatrick, Lentz & Bubba, P.C.

Seven new members were elected to the board. They include Angie Brong, global real estate manager, Air Products; Edward Dougherty, senior vice president, business and network development, Lehigh Valley Health Network; Dr. Mark Erickson, president, Northampton Community College; Mark Jobes, senior vice president, commercial loans, Lafayette Ambassador Bank; John Nespoli, president and CEO, Sacred Heart Healthcare System; Marilyn Rettaliata, former president and chief executive officer, Pocono Medical Center; and Phillip Schenkel, vice president, CBRE, Inc.

“It is a privilege to be able to chair an organization committed to fostering economic development throughout the Lehigh Valley,” Garrity said. “I pledge to listen to all members of the business and public-sector community who want to see our region thrive in an ever-changing economic climate and offer my input and direction to foster the growth we all want and deserve to see.”

Garrity is a strategy and succession expert with extensive experience in middle market organizations, working with ownership and their executive teams with Compass Point. He is the former president/CEO of two middle market manufacturing companies, and has an extensive family business background. In addition to his work with LVEDC, he gives back to the Lehigh Valley community through a number of volunteer commitments, including serving as a board member for The Forum for Ethics in the Workplace and the Presidents Council at DeSales University. Compass Point is an affiliate of one of the Lehigh Valley’s leading professional firms, Concannon Miller Co.

During Bernhard’s tenure as chairman the agency became one of only 29 economic development organizations across the United States to receive accreditation with the International Economic Development Council. LVEDC was also selected twice in the top 10 during his two-year term by national commercial real estate magazine Site Selection for attracting businesses to region. And was the driving force behind the hiring of Cunningham.

“When I initially became chairman a top priority was the help raise the creditability and profile of LVEDC,” Bernhard said. “I’m pleased to report that goal was accomplished.”

The event set new records for attendance and sponsorships. Cunningham articulated his vision to create six new councils that will increase participation and expertise from a gamut of fields to advance regional economic development. The councils will focus on aiding local governing entities, assisting the broker and developer community, advancing innovation and entrepreneurship, developing coordinated regional planning, abetting sustainable development and advancing growth in women- and minority-owned businesses.

“I envision these councils fostering substantive discussions that will result in plausible actions that will impact future economic development and job creation,” Cunningham said.

In addition, Cunningham noted the organization increased their marketing budget to tell the success stories of Lehigh Valley companies throughout the region and nationally. He also designated the creation of a full-time staff position to direct research and data gathering and approved the allocation of fund to add a staff position to the organization’s Finance Department to help put additional money on the street for qualified businesses seeking capital.

To that end, Vice President of Marketing John McGran, Director of Research and Innovation Matthew Tuerk and Vice President of Economic Development Finance John Kingsley provided attendees with an individual synopsis of those departmental plans during the presentation.

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Staff presentations in their entirety are below:

“The Future of Economic Development in the Lehigh Valley

and the Role of LVEDC” Presentation

LVEDC Annual Investor Meeting 2013

March 28, 2013, The Hotel Bethlehem

DON CUNNINGHAM, PRESIDENT AND CEO: We are living through a transformational time in the history of the American economy, and, for that matter, the world. Tomorrow’s historians will look back upon today in the same way we look upon the industrial revolution.

It’s not just a new chapter, but a new unit in the textbooks.

The smart phone hyper-launched an era that began with the Internet, cell phones, super-speed computers, GPS systems and the instant connection of everyone to everyone else, every consumer to every company and every consumer to every other consumer.

If we think it just gave us the ability to text our kids or friends — or Skype with our cousin in Europe — we need to think again. We will never work the same way again. Businesses now grow and develop differently. Retail and product manufacturing will continue to change dramatically during the next decade with a tremendous effect on economic development here in the Lehigh Valley.

There is an underlying reality that gets lost in endless reports and discussions about unemployment numbers as a measure of the strength of the economy. Many of the jobs lost in the last five years weren’t due to a recession or economic downturn. They are gone because the economy technologically transformed. They are not coming back because they are no longer needed, just as we no longer need anyone to put shoes on horses.

We can lament the past – that is normal – but the key to a strategy of success is to understand today’s landscape and craft a plan for tomorrow. The successful quarterback in football doesn’t throw the ball to where a receiver was; he throws it to where he’s going to be.

It’s the same in economic development.

The regions that will win the economic development battle are the ones that understand in the end that it comes down to two factors: quality of place and quality of people. Businesses – whether deciding to expand, relocate or start-up – want the same things that people want: a good, safe place to live in a quality environment with quality people in a supportive community. For business, there are added needs, such as access to market, access to capital, overall cost, a qualified workforce, a supportive network to access technical assistance and cooperation from government. All of which comes down to quality of place and quality of people, and the Lehigh Valley wins in both these areas. Why? First, we are not a suburb of anywhere else. We benefit from proximity to larger markets but we are not encompassed by them. Our cities, small boroughs and farmlands are unique. Our schools are good and our neighborhoods safe, particularly relative to other regions of our size. Second, we can supply a quality workforce, with a heralded work ethic. Businesses need employees. The regions that offer the best trained and hardest working employees will win the battle for new jobs and business growth.

We are well-positioned to continue to win but that won’t happen without continued attention to detail, improvements where needed and broad regional cooperation. And, we need to tell our story. We need to shout it from the rooftops. This is a special place; a place that has always adapted. A place where leaders during the height of the Steel’s manufacturing heyday of the late ‘50s had the wisdom to diversify our economic base and build our first industrial parks. Some may lament the explosion of industrial parks that followed in decades to come but it was that diversification of businesses, using new lands with access to major transportation networks that not only created the jobs that sustained us through down times but laid the foundation for continued economic success.

It was also the beginning of a regional approach; the sense that the Lehigh Valley – the counties of Lehigh and Northampton – can only be as strong as our weakest link. It was the business leadership that created the regional organizations, such as this one, that developed the regional brand of the Lehigh Valley.

The jobs needed in this new economy are different than those of just five to seven years ago.  And, if we are to succeed, education can never be the same. Curriculums need to change.  Many of the sweat and dirt manufacturing jobs of yesterday don’t require as strong of a back but they do require technical skills in machinery or computer operating systems. Employers simply don’t need as many people. Technology is displacing people in the same way machines replaced them in the last economic revolution. Retail is quickly moving from big boxes to either small shops with low inventory or direct retail where the “store” is on your computer and the “clerk” is the FedEx driver. This translates to more jobs in fulfillment, logistics, warehousing and distribution, as product moves direct to consumer.

What is important is that we understand where the economy is going, strengthen our regional approach, improve our workforce training, continue to grow all of our downtowns and urban cores – that make us unique — and never stop working to improve. We need to redevelop our industrial sites, support the renaissance of our cities, promote our urban boroughs, and regions like the Slate Belt, as the light industrial and distribution sectors continue to blossom on the suburban rim and the I-78 corridor.

We need to recruit companies to bring their corporate offices, research and development and manufacturing and production operations here to go with their product distribution. That’s why the timing is perfect for the development of the regional plan that is under way as part of the recent HUD Envision grant.

We can offer companies all the best that they can get elsewhere: quality higher education, excellent health networks, great public schools, charming downtowns and the best infrastructure, access to market and people they are going to find in the Northeast, along with helpful governments and supportive economic development entities. And, the core role of LVEDC is to tell that story – to market our region both inside and out – to new companies, existing companies and to those entrepreneurs who want to start-up here. And, to make it easy for companies to come here, grow here or start here. I will let John McGran, our vice president of marketing, Matt Tuerk, our first-ever director of research and innovation, and John Kingsley, our vice president of finance, share with you some of the ways we intend to get that done.

JOHN MCGRAN, VICE PRESIDENT, MARKETING: Good afternoon, I’m John McGran. On February 1st I became vice president of marketing for the Lehigh Valley Economic Development Corp.

I accepted this role because Don Cunningham sold me on a vision and a plan – to go back to the future, if you will, and to return LVEDC to its original mission. When our organization’s founders created LVEDC in 1995, they wanted the newly formed organization to be a marketing tool for the entire Lehigh Valley.

Fast forward to now, and that is exactly what we’ve set out to do in 2013 – to beef up the marketing budget substantially and to promote the Lehigh Valley and its many business successes through a number of high-profile channels. After 30 years in newspapers, magazines, news weeklies and on-line publishing, I’m excited about being able to tell the story of the Lehigh Valley, and all of you, in as many ways as we can afford. We are developing a plan to remind people here and tell people out there: that there’s no better place to do business than the Lehigh Valley. Here’s a sneak peak:

First, we need to ensure that all of you – our investors, board members and partners – are the best informed about what is developing in Lehigh and Northampton counties. So, we’ve launched four targeted e-newsletters to provide news about LVEDC happenings, spotlight developing businesses and business people here, and, in general, give our investors the first look at what’s developing in the Lehigh Valley.

Once a week, every Tuesday, a newsletter will go out. The Investors’ Edge will publish the first Tuesday of this month. On subsequent Tuesdays, The Real Deal, which highlights our commercial real estate market, Industrial Strength, to focus on the Industrial sector of manufacturers and warehouse/distribution centers, and then Small Talk which keys on the many small businesses that serve as the foundation for significant job growth here in the Valley.

As you can see from the slide above me, we’ve fine-tuned and upgraded our newsletters for a better reader experience that’s easier on the eyes. April is our first month of publication for this new brand.

We are also building a better website: the most important point of entry to LVEDC. It is the place where site selectors and corporate consultants will look to find information and to see if they are interested in us. It needs to be better than it is now.  We will be featuring our success, and the stories of what’s happening in Allentown, Bethlehem, Easton, the Slate Belt and beyond. It’s the most cost-effective way for us to ensure the Lehigh Valley story is there for all interested to see. Stay tuned.

We’re also in deep dive right now on pieces that promote the Lehigh Valley, our cities and our sub-regions for all to see. We want companies that are not here to want to be here and those that are here to always want to stay and to grow. There are incredible stories of rebirth and development in Allentown, Bethlehem and Easton. Stories of national, even international caliber for uniqueness.

In addition to the story of the Lehigh Valley, there is the story about how we can help a company come here, grow here or start here. You will soon hear more about John Kingsley’s vision for broadening our one-stop financing tools. We need good communications to explain and promote access to capital in the Lehigh Valley.

As Don has been talking about, the strength of LVEDC is as a public-private coalition that everyone interested in development can be part of, to ensure a true regional effort. There is a brochure in your packets on your seat detailing the new Councils of LVEDC, where non-board members can participate in quarterly sessions of specific focus to share cutting edge information on various aspects of economic development. Let us know if you are interested in participating.

The strength of our story here is the uniqueness and diversity of it. Our two counties are really a series of sub-stories, all with unique characteristics. We are creating communications that specifically cover the Slate Belt, Allentown and its unique Neighborhood Improvement Zone, Bethlehem and the opportunities that abound on both sides of the river, Easton, and its tremendous rebirth, the industrial lands of central Northampton County, anchored by the new Rt. 33 interchange at the Chrin development and western Lehigh County and its booming food and beverage sector. There are many great stories to tell and we will tell them all.

Our marketing efforts cannot merely aim for outside interests. Eighty percent of our job creation comes from retaining and expanding companies already here, and those willing to start here. We will cover the Valley with messaging that reminds us why we are here, and why we should stay. You will begin to see not so subtle reminders of that on the billboards of the Lehigh Valley, like some of these examples. There’s also a prominent outfield sign in the works for Coca-Cola Park and a two-page spread in the Commonwealth’s upcoming Economic Development publication that is making its way to all the major trade shows and recruitment forums this year. We also are developing a fresh, new promotional video that promotes business development in the Lehigh Valley, along with some video features on economic development success stories.

I’ve been here two months now as VP of Marketing after spending a year on the turnaround of Lehigh Valley Business. I’ve been meeting with our public and private partners and the greater community to learn all I can so we find the best way to tell our story. I’ve been amazed at all the great work that goes on here behind the scenes at Ben Franklin Technology Partners, Manufacturers Resource Center, Discover Lehigh Valley, the Da Vinci Center, and the Lehigh Valley Industrial Parks, I could go on. I will continue to reach out and to partner. In the meantime, if you have a great story to share, PLEASE reach out to me. It’s my promise to promote the Lehigh Valley through these channels and others. Thanks for your help and your support.

MATTHEW TUERK, DIRECTOR, RESEARCH AND DEVELOPMENT: I’m Matthew Tuerk, LVEDC’s director of research and innovation, a brand new position here at LVEDC. Some of you may know me from my time at the Allentown Economic Development Corporation, where Scott Unger and I worked on projects that broadly support LVEDC’s mission of promoting economic prosperity in the Lehigh Valley. I’ll continue and expand on some of that work in my role as a liaison to the region’s start-up and entrepreneur community, working with our Innovation, Talent and Entrepreneurship Council. Our mission is to make the Lehigh Valley the best place to start and grow a business on the East Coast, and we plan to do that by supporting our start-up community, strengthening our entrepreneurial culture and developing our innovation ecosystem. We’re looking for our local entrepreneurs to lead and push a bottom-up approach to economic development. It’s a good model that has worked elsewhere and we think we have the tools we need to succeed here.

Tonight I want to spend a little more time talking to you about my other major responsibility at LVEDC: research. It really means two things to me. 1) providing our regional development team with high-quality data that they need to quickly respond to inquiries about the region and 2) giving our marketing team the research that they need to effectively target the industries and companies that are going to drive economic development in the Lehigh Valley.

There is a ton of information out there about our region. You can go to census.gov or bls.gov or bea.gov and find some pretty remarkable facts about the Lehigh Valley. Let’s do a quick quiz. Lehigh Valley’s economy, bigger or smaller than Estonia? It’s bigger. Bigger or smaller than Jamaica? Bigger. You’re probably following developments in Cyprus. Our metropolitan-area GDP of thirty billion dollars is greater than GDP for a country that has the world holding its breath. We’re for real. Let’s talk about our labor force. It’s bigger than you think and bigger than we’ve represented in the past. We have a bad habit of not thinking past the boundaries of Lehigh and Northampton counties. The business people here don’t think that way. So we’re really drawing on a group of people much larger than the three hundred thirty thousand members of the labor force living in Lehigh and Northampton counties. If you take a few major employment centers in the Lehigh Valley and look at everyone within a forty five minute drive, you’ll find more than double that number. We’ve been selling ourselves short. I’ve got a lot more of this stuff, but the point is that we need to understand ourselves better. I will focus on really understanding our local economic development assets, including our stocks of human capital, natural capital, financial capital and intellectual capital.

As we better understand our region, we can start to get a little more creative with the analysis of the information and start building new data sets that provide real value to Lehigh Valley businesses and that distinguish our region in the minds of corporate real estate managers. So many of the data that we will be aggregating over the next few months are available to anyone willing to look for them. The site selection industry grows more sophisticated every year, and they have access to all the same public data that we do. Our competitors have access to those data as well. If we want to effectively communicate the essential value of our region, we’ll need to develop new data and present them in novel ways. That will involve understanding the questions that our customers have and creating the tools necessary to answer those questions. A revamped business retention and expansion program will go a long way toward understanding the needs of our existing businesses and our research function will help us meet those needs.

With better information about our region and with new descriptive data at our disposal, we can be highly responsive to inquiries coming in. The operational efficiencies that we achieve in that area combined with a concerted strategic effort to determine where we will compete will allow us to go on the offensive as a region. Knowing our economic composition and getting actionable intelligence from our business community will allow us to pinpoint expanding firms in other regions around the country. We will focus on firms that can make effective use of the existing economic development assets and are compatible with the existing industry clusters of the Lehigh Valley. We’ll build from a position of strength.

JOHN KINGSLEY, VICE PRESIDENT, ECONOMIC DEVELOPMENT FINANCE: Good evening, I’m John Kingsley. I manage LVEDC’s Finance Division, which oversees more than a dozen federal, state and local economic development financing programs and administers a loan portfolio of approximately $30 million. Our job is to help you find the capital you need to come here, grow here or start here. And that job has changed dramatically during the last few years. Just four years ago, our focus was meeting with lender and community leaders in search of ways to encourage banks to lend and make credit available to cash-starved companies. The current environment is quite different.

There are more than 30 commercial lending institutions in the Lehigh Valley, all seemingly flush with capital to lend, and looking for good deals to finance.  Access to capital is not the overriding issue it once was.  For the economic development finance community, it is now a matter of trying to create efficiencies in access to capital and provide the lowest cost of borrowing to incent companies to expand their businesses.

On the government-side, once well capitalized, resources are now dwindling at the State-level to finance economic development activity.  We no longer have a variety of grant programs to assist in providing for funding gaps in an otherwise important project and the legacy incentive loan programs are becoming ever more conservative in their lending philosophy due to losses they have sustained in their loan portfolios. As a result, we need to be more and more creative in marshaling resources to incent development.  The time is now to think creatively and regionally, utilizing our extensive relationships with our local economic development partners in the public and private sectors, to aid economic activity.

We are developing a new vision for the role LVEDC can serve in providing access to low-cost financing and in developing new and underutilized resources in our region. First, the key is the cooperative coalition of lenders that come together under the roof of LVEDC. We have the resources in the Lehigh Valley to get our clients quick access to the financing resources they need to locate and grow here. We envision a sophisticated integrated networking solution – a one-stop portal, if you will — to allow borrowers the opportunity to place a loan request before an array of economic development and commercial lending institutions simultaneously.  What we are proposing is a new and innovative tool that would not be possible without the embrace and participation of our region’s commercial lenders and economic development partners. This program will allow us the chance to tailor financing structures based on the lowest possible costs of funds and, where possible, employ long-term fixed rates to allow our clients a hedge against rate increases. This new endeavor will also allow our member commercial lenders to benefit from LVEDC’s extensive marketing initiatives with a stream of prequalified leads.

While it is important that we organize our lending efforts, we also need to be aware that not all financing needs of a company can be addressed via the extension of credit.  Some great ideas and great companies require the injection of more risk tolerant capital.  Peter Lynch, the renowned fund manager, argued that an investor should invest in what they know.   LVEDC is exploring an equity network to allow Lehigh Valley investors an opportunity to put their money on Main Street instead of Wall Street

In addition, this year, we will evolve our finance division into a consultative organization prepared to assist a borrower in planning for growth and providing long range financing plans to achieve a company’s goals.  We want to be more than a transactional entity we want to serve our businesses as a trusted advisor, and find new ways to add value. Toward that end, LVEDC is adding a new professional position to our division. We are currently interviewing candidates for a new Director of Finance position. This person will help our team drive awareness of our financing programs and the overall Lending Network. At the end of the day, what matters is that we provide customers who want to grow here, come here or start here the quickest and easiest access to the best sources of capital for their need, whether they be government ED funds or private capital.

LVEDC, in coordination with the leaders of our Area Loan Organizations in both counties, has been working with our state partners to help improve the loan programs to make them more accessible and beneficial to our clients. This year, we will be arguing for improvements to legacy funding as well as the development of new resources.

Finally, we will be working closely with John McGran and our marketing team to promote all options of financing available to economic developers, and to help in the understanding of those tools. As contract staff to the Lehigh County Industrial Development Authority, we are deeply involved in consulting on the utilization of tax increment financing to assist in offsetting exorbitant costs of upgrading public infrastructure to allow community supported development to occur.  While many are aware of the projects in Weisenberg and Lower Macungie Townships, many do not understand these tools and how they can bring a community together to promote quality economic development.  With this in mind, LVEDC offer, later this year, a series of educational forums to inform our constituents on programs including Tax Increment Financing, New Markets Tax Credits and Keystone Opportunity Zones.  It is our obligation to let you know how these tools can be used in your communities and how we can help make them available.

Under Don Cunningham, this will not be your father’s economic development Finance Department. We look forward to working with all of you to make LVEDC’s economic development financing resources the most comprehensive and efficient in Pennsylvania and beyond.

 

 

 

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