Section title

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Together 202: Business Roundtable

February 21, 2013

Why are we here?

Why are we here?

“Merck officials said the decision to consolidate in Summit rather than Readington was based on several factors, including the existing company divisions already there, the room for growth and access to major transportation hubs and New York City.”

Why are we here?

The loss will not only impact the local tax base, but have a spillover on other local businesses like coffee shops, bagel stores and gas stations dependent on Merck employees who now shop there.

"The impact of that business leaving is a decline in the business climate around Merck headquarters," said Robert Walton, the Hunterdon County freeholder director. "All the businesses up and down Route 22."

Together North Jersey

What is Together North Jersey?• A planning initiative currently underway in the 13-county North Jersey

Transportation Planning Authority region of New Jersey• In November 2011, the U.S. Department of Housing and Urban

Development (HUD) awarded Together North Jersey a $5 million grant to develop a Regional Plan for Sustainable Development (RPSD)

• Create a comprehensive and balanced plan that invests in the region’s existing communities where housing, jobs, educational, cultural, and recreational opportunities are made more easily accessible to most residents without having to drive to them

What are Local Demonstration Projects?• The LDP is intended to provide technical assistance to local partners

throughout Northern New Jersey to undertake strategic planning activities promoting sustainable and livable, transit-oriented development and advance the broader goals of the RPSD

• Potential LDP projects include a variety of local planning activities to make transit corridors and communities more livable

Project Team and Partners

- Project Team:• Regional Plan Association• The Williams Group• Arup• Level G Associates

- Steering Committee: • Somerset County• NORWESCAP• Somerset County Business

Partnership• Hunterdon County Chamber of

Commerce• Raritan Valley Community

College• HART TMA• Ridewise TMA• Flemington Borough

• Trans-Bridge Bus• Hunterdon County • Bridgewater Township• Somerville Borough• Raritan Borough• Branchburg Township• Readington Township• Raritan Township• NJTPA

The Study Area

Together 202 Mission

This project proposes to:

1. Foster a working and collaborative network of interested citizens, residents, business owners, property owners, advocates and stakeholders living in the targeted communities participate in the process and support project actions and outcomes

2. Develop a deep understanding of the Route 202 Corridor, including demographic, land use, transportation and market trend analyses to understand the opportunities for growth and connectivity along the corridor

3. Develop a stakeholder-driven vision for the corridor that identifies opportunities and provides recommended strategies that link land use to business development, redevelopment and transportation enhancements

Together 202 Scope & Timeline

Phase I: Research & Analysis – Where are we now? Where are we headed?• Review of Master Plans, Studies and Reports• Demographic/economic profiles• Corridor Tour

Phase II: Outreach & Ideas - Where do we want to go?• Focus Groups (Mayors, Transportation, Business)• Community Workshops

Phase III: Implementation Strategies - How do we get there?• Corridor Vision Plan

Together 202 Goals & Objectives

Getting Places Expanding Economic Opportunities

Connect workers, residents and employees to key employment and commercial destinations

through enhanced transit

Make recommendations for existing businesses to capitalize

on transit/corridor improvements

Growing in Place Working Together

Identify target opportunity sites for redevelopment, reinvention

or repositioning

Work closely with state agencies to implement

recommendations

Together 202 Goals & Objectives

Together 202 Goals & Objectives

Keeping Healthy, Safe & Vibrant

Find ways to improve connectivity along the corridor

KEY ACCOMPLISHMENTS

• Convened governmental, NGO, community, and business partners

• Met with local representatives and transit officials to identify key corridor obstacles and opportunities

• Completed economic and demographic analyses of corridor trends

• Organized a public workshop that gathered public input and concerns

KEY FINDINGS

• Land uses have to change in order for there to be better connectivity and enhanced service

KEY FINDINGS

• Most significant growth should be concentrated in centers (Somerville, Flemington) and should capture demographic and economic trends.

Centers

KEY FINDINGS

• There are opportunities for reinvention at the edges and should reflect demographic and economic trends.

Edges

KEY FINDINGS

• The land uses in the middle should largely be maintained, leveraging open space and agro-economy opportunities, while knitting together existing uses at the crossroads.

Crossroads, Rural & Parkway

ECONOMIC ISSUES

What is the economic future of the Route 202 corridor?

What investments will secure a vibrant future here?

How can existing amenities be reinvented to address changing demand?

Together 202: The Economic Future of the

Route 202 Corridor

The Williams Group Real Estate Advisors LLCFebruary 2013

“Flemington-Somerville 202 Gateway”

Edges

• Downtown Venues• Gateway Tourism• Historic , Adventure, Eco,

Cultural ,Epicurean, Agri, Bicycle, Beer /Wine, Transit, Health & Rural Tourism

• Gateway to Hiking Sports Venues

• Historic Building Renovation

Parkway

• Green space Plan• Mixed-Uses connected by

walking & bike trail loop• New entrance to Flemington

& Somerville• Access to transit options

Crossroads

• Pharmaceutical• Green Tech• Sustainability• Green Energy• Green and organic consumer

products• Bio Tech• IT• Health Care• R&D• Manufacturing

Centers

Transit Corridor CommunityTown Center• Hotel Conf. Ctr.• Mixed-Use Residential• Retail Shops/Restaurants &

Market• Fitness Center to Attract Young

Professionals• Parking & Sports Ctr.• Downtown Culture & History

Rural

• Highway Scape• Seasonal Variation• Tourism & Recreational• Bike Trails• Art in the Fields

RT 202

Mobility

• New Transit Facility• Rail Trails• Separate Auto from

Pedestrian• Shuttle Connecting Town

Centers

Route 202 Corridor Executive Summary

• TWG Goal is to determine how to attract new business and development to the corridor and to the towns/boroughs at the north and south ends, Flemington and Somerville.

• The Scope to meet the goal is to develop a regional market analysis and business attraction analysis to evaluate the corridor

• The approach utilized a ten (10) step screening process and scored the corridor on the screening to determine strength and weaknesses

• Demographic, economic, and other market data parameters were utilized to support the approach

• Overall the corridor scored well:– Quality of life, interstate access and educated workforce scored high for business

attraction– However, there are weaknesses related to housing and transit that need to be

mitigated:The fastest growing demographics—empty nesters have unmet demand in the regional urban centers at the end of the corridorTransit is not supported by current sprawl and lacks corporate support through bus stops at businesses and shopping center for example and more stop-and-rides neededSome strong tourism and lifestyle amenities are in place but need to be expanded to provide stronger corporate image attraction component

Adapted from: Metrocouncil.org

Route 202 CorridorHistorical Perspective--Cap Rates and Property Value

Route 202 CorridorExisting Conditions --Cap Rates and Property Value

Route 202 CorridorCap Rates and Property Value

• $4/SF less rent is 30% less value• Recent Sales average $125/SF for I-

78/I-287 sub-market

Cap rates

Q3 Q2 Q1 Q4 2011

6.50%7.00%7.50%8.00%8.50%9.00%9.50%

Central NJ Office Cap Rate Trend

RegionalEvaluation

CorridorEvaluation

StationEvaluation

Market Assessment

& SWOT

Market Development

Potential

Market Supportable Real Estate

System Wide

Synergies

Go-No Go Assessment

Real Estate Opportunities for Specific Station

Industry Targets

Changing Values by Attracting Business

Route 202 Corridor10 Steps to Process for Corridor SuccessThe Corridor 10-Step Program will be scored to high light areas of strength and opportunities for improvement:1. Foster downtown growth to support transit and business success2. Support health, environment and energy business sectors as growth

opportunities3. Support positive image and business attraction with linked trail system trough

businesses along corridor4. Provide incentives for businesses to embrace transit with green ribbon awards,

taxes breaks and corporate support5. Spark demographic growth by keeping older baby boomers in downtown with

targeted housing6. Attract graduating college professionals with downtown housing and amenities7. Maintain downtown densities to support transit8. Provide convenient intermodal connections 9. Support existing transit opportunities with park and rides, stops, assets local

opportunity areas10. Support infill development to focus on business clustering rather than sprawl

Adapted from: Metrocouncil.org

Route 202 Corridor Score Card

Route 202 Score Card of Attracting Business and Supporting Transit

Category # Category Description

Score ( 5 best, 1 lowest attributes for Success) Commentary

1Downtown growth to support transit and business success 5

This has great possibilities as long as zoning to encourage empty nester housing is encourages. More housing supports more businesses and creates efficient transit densities

2Health, environment and energy business sectors as growth opportunities 5 Some existing clusters in place but more needs to be done to

incentives businesses including zoning and transit connections

3Positive image and business attraction with linked trail system trough businesses along corridor 1 Businesses and transit need to work together through park and

rides, stops and shuttles

4Incentives for businesses to embrace transit with green ribbon awards, taxes breaks and corporate support 2 This is very possible and attractive for corporate marketing but

the process needs to get started

5

Demographic growth by keeping older baby boomers in downtown with targeted housing

5

The potential is very strong here as long as incentives are included to encourage downtown multifamily mixed use housing to provide a product for young college graduates looking o live in a more urban environment and aging baby boomers looking to sell their large houses north and south of route 202 but stay in the same area--independent senior housing is positive for growth

6Graduating college professionals with downtown housing and amenities 2

This can be harnessed and will supply the business workforce but targeted housing needs to be encouraged in the neighboring downtowns

7 Downtown densities to support transit 3 More, more density

8 Convenient intermodal connections 4 Add more park and rides at shopping areas, business and large density residential

9Existing transit opportunities with park and rides, stops, assets 1 Structure is existing but more corporation rom business is

required to make it work

10Infill development to focus on business clustering rather than sprawl 3 Areas of opportunity around Old York Road, downtowns and

existing business campuses

Total Score 31   Total Maximum score Possible 50  

Overall, the corridor scored highest for strong demographic support for businesses and intermodal connections for the workforce in place but potential for improvement and growth exist

Route 202 Corridor Score Card1. Foster downtown growth to support transit and

business success

• Population: Density in the anchoring urban towns(cities) will support transit and intermodal facilities especially in Raritan. From here, connections can be made along the corridor– Residential densities need to be at least 7 to 12 units per acre along bus

routes. For higher-frequency bus ways or rail service, a minimum average of 20 to 30 units per residential acre is needed.

– (TMS Report—Transit Supportive Land Use)• Density can be supported through multi family housing that compliments the

growing demographics of aging boomers and young singles

Household Income (est)

Monthly Affordable Rent

Population at 6 miles out by 2018

over 55 years $160,000.00 $4,400.00 18000Age 21 to 24 $49,000.00 $1,347.50 3500

Source: TMS Report and Clarita's Demographic Snapshot Dec 2012

Route 202 Corridor Score Card2. Support health, environment and energy business

sectors as growth opportunitiesRoute 202 Business Clusters --Health/Pharm primarily. :

– Pharmaceutical examples, Janssen PharmaceuticalsImclone SystemsLifecell CorporationRocheOrtho Mc Neil PharmVeridex –a Johnson and Johnson CoWF Fischer –lab animal diets

– TechVerizon Delta Soft (combo health and tech)Signal Control Products (traffic control)

– HealthEnvironmental ServicesEnergy including Green

– Other Inc. ManufacturingUS Bronze Powders

GM Stainless Inc.Falcon Safety ProductsChubbSpecified Technologies—fire stopping

Roche Molecular, Branchburg

Route 202 Corridor Score Card2. Support health, environment & energy business sectors as growth opportunities

• It is essential that the Route 202 Corridor Enhance Its Attractiveness in the Competitive Market. In general, the Top Priorities for Attracting Businesses include:

1. Labor2. Education3. Quality of Life4. Cost of doing business5. Affordable Supply real estate market and labor pool6. Financial Incentives Available7. Infrastructure—utilities, internet8. Existing Clusters

1. The corridor has strengths in the area of labor force, quality of life and existing clusters, but weaker in cost of doing businesses

Route 202 Corridor Score Card2. Support health, environment and energy

business sectors as growth opportunities

Many of the Things That Are High priorities to Business Attraction Can be Controlled or Mitigated as Needed to Increase Attractiveness, for example:

1. Regional Priorities: Create a Regional Development Organization to compete within New Jersey and to coordinate with State incentives

2. Environmental: Site readiness would make Route 202 move to the front of the pack in this area

3. Physical: north and south truck access as well as public transportation would substantially improve the attractiveness of the sites

4. Permitting: A streamlined and quick permit process means business can get up and running fast

5. Urban Planning and Zoning: zoning to compliment the market supportable uses6. Economics: Theming of the Corridor to attract targeted industries7. Education: Community College training of critical size to match businesses8. Quality of Life: Downtown living opportunities to match market through zoning9. Ownership: Competitively prices lots sized to meet market—all with access10.Funding: Incentives for utility costs

Route 202 Corridor Score Card2. Support health, environment and energy business

sectors as growth opportunities

• The Route 202 Corridor scores high for health/pharm and related tech. from demographics and quality of life– Highly educated– High White Collar workforce– Strong workforce skills in

computer, math, life sciences and education

– Strong home ownership• However, scores low for empty

nester housing at 19% below USA average

Neilson/Clarita's/site reports 2012

Dr. C Steindel, Chief Economists, November 2012 NJ Economic insights

Route 202 Corridor Score Card2. Support health, environment and energy business

sectors as growth opportunities

Corridor Clusters :– Top growth industries in the USA are

as follows:Financial ServicesEnergyIT ServicesHealth Services

– Top Growth States are:FloridaGeorgiaTexas and Tennessee for these sectors

– Top Growth in New JerseyEnvironmental ServicesEnergy including GreenIT ServicesHealth Services

– Route 202 hasHealth /Pharmaceutical presence

And Environmental

Route 202 Corridor Score Card3. Support positive image and business attraction with linked trail system through businesses along

corridor– Delaware Raritan Canal Park—could be extended to 202 and through businesses– Historic Downtown Flemington—65% of Flemington Borough is on National Register– Quaint River Town images can be marketed– Highlands– Golf– NorthLandz—model railroad --largest– Fertile local farmland—sustainable local produce is attractive to many green visioned businesses

Main Street Manor B&B, Flemington

Extend Trail along 202

Route 202 Corridor Score Card4. Provide incentives for businesses to embrace transit with green ribbon awards, taxes breaks

and corporate support

Source: 2011 new Jersey migration Survey, Office of the Chief Economist

New Jersey Migration Survey--Summary Adaptation

Top Reasons for Leaving the StateTop Reasons for Staying in the State

1

Income taxes--state and local--primarily affecting those earning over $100,00 and mostly higher Quality of Life

2 Property Taxes Family reasons

3 Housing Costs Cannot sell a business

4 Corporate Taxes less costly than NYC

5 unaffordable economic climate Incentives

Route 202 Corridor Score Card5. Support Population Growth Trends

– New graduates (age 21-24 yrs.) and aging baby boomers over 65 are the fastest growth categories

– The family age group of 35 to 44 is declining

– The household incomes are very strong for the corridor and anchoring cities-- supporting good quality housing and services

– Average of the population is 5 years older than the USA suggesting decline in support for suburban housing

Route 202 Corridor Score Card6. Attract graduating college professionals with

downtown housing and amenities

• Young professionals are increasingly residing in downtown neighborhoods. …25 and 34 represented nearly 25 % of the downtown population…, up from 13 % in 1970. .. 44% of downtown residents in the sample had a bachelor’s degree or higher .

• Educational attainment is one of the primary drivers of a region’s income and economic growth.

• Younger workers are one potential source of labor for filling anticipated worker shortages created by retiring Baby Boomers.

% of PopulationPop. 3 miles

from Center 202 Pop. 6 Miles USAEducational Assets Collage Graduates 30% 29.4% 17.7Masters Degree or Betters 15.9% 15.7% 7.3Professional Degrees 3% 3.5 1.9Doctorate Degree 3.2 3 1.2

Route 202 Corridor Score Card7. Maintain downtown densities to

support transitAverage per capital retail is more than 50% higher than USA averages, at 32sf/person vs. 23sf/person in the USA• There is no overall Opportunity Gap in retail as it is $133Million in

oversupply• Clothing is most oversupplied• However, based on spending, 110,000 sf of specialized retail can be

supported in the downtowns• General merchandize and office is undersupplied

Route 202 Corridor Score Card7. Maintain downtown densities to

support transitThe existing office market is mixed for Demand. • At 25% regional vacancies are high for new construction

Source: REIS Dec 2012

Central NJ Office Vacancy Actual rents Rents Actual AverageHunterdon County -250BPS 23% -0.80% $23

The existing apartment market is strong for Demand. • Rents are rising in the region at 4.6% which is well above national trends• Demand for rental housing can be targeted to growing demographics of urban empty

nesters

Source: Loopnet and Branchburg

Route 202 Corridor Score Card8. Provide convenient intermodal

connections –Previous reports and Stakeholder interviews support enhanced stops and connections along the corridor

Source: Parson Brinckerhoff Flemington Corridor Study

Route 202 Corridor Score Card9. Support existing transit opportunities

with park and rides, stops, and local opportunity areas

Source: Flemington Corridor Transit Study by Parson Brinckerhoff

Bus stops at Shopping Centers

Park and

Rides along

Corridor

Mixed use housing

with parking around

intermodal

Example:  Business and transit together: Translink Employer Benefits Program

The Employer Benefits Program provides savings for both the employees and employer. The employee's TransLink Card is loaded monthly on a pre-tax basis, (which is about a 40% savings, implemented in the same way as a health savings account). The employer saves on payroll tax on those amounts, at 7.65%. The program is implemented seamlessly using a web-based platform. The employer cost is $3 per month per participant, which should be more than offset by the payroll tax savings. (Source: California)

Shuttle to office parks

Route 202 Corridor Score Card10. Support infill development to focus on

business clustering rather than sprawl

– Most people do NOT travel to urban cores for work (Manhattan, Newark, Philadelphia or Trenton, for example)

Corporate Sprawl has discouraged efficient transitOver 82% of both Somerset and Hunterdon Counties use single occupancy vehicles to travel to workBetween 2 and 4% only use transitWork travel trips account for primary vehicular usage

Route 202 CorridorAssets and Opportunities

• Clustering of health/pham. businesses• Route 202 is old “freeway”• Intermodal connections at Raritan• Quality suburban housing stock• High HH Income• Strong Primary/secondary Education in Raritan Twp• Strong higher educational component to population• Aging population gives rise to Senior Housing opportunities• Growing 21-24 age category supports young educated workforce with proper

downtown housing and amenities• Tourism and Amenities including :

• Delaware Raritan Canal Park• Historic Downtown Flemington• Quaint River Town image• Highlands

Route 202 CorridorIssues and Constraints• As a destination, distance and commute to Manhattan is longer than prime

• North and South of route 202 includes significant housing but mixed sprawl with farms—lacks density along the corridor to efficiently support significant public transportation

• Access to airports is limited to regionals

• Significant community college presence but lacks direct access to universities except for Princeton to the south

• High overall taxes compared to many other states

Route 202 CorridorGoing Forward• Mitigation

• Cost of business=incentives• Development around the cores=keep young labor pool

• Next Steps• Marketing Plan to Attract business• Zoning and Incentives to locate businesses in targeted locations• Link to transit connections improved• Zoning to discourage sprawl• Support Quality of Life by comingling nature along the 202 spine