The push for sustainable growth: With plenty of assets to market, many agree north country should diversify for future economic development

From the vibrant lake and riverfront destinations of Sackets Harbor and Clayton, to sprawling new housing developments cropping up across Watertown to the bustling commerce on Arsenal Street, Jefferson County’s growth over the past two decades has been noticeable and transformative. While the narrative follows a somewhat different line in Lewis and St. Lawrence counties, business owners, educators and economic development officials paint a picture of vibrancy in the tri-county region, and pin hopes on entrepreneurship, education and natural resources as future drivers. Though Jefferson County is the fastest growing in the state in terms of population, its progressive growth over the past 25 years could be bounded in the future by a struggle to attract new businesses because of New York’s historically unfavorable business climate and uncertainties over troop levels at Fort Drum.

Crews work on Interstate 781, also known as the Fort Drum connector road, in March 2012. The limited access, four-lane highway opened to traffic Dec. 6, 2012. Until its completion, the post lacked direct access via an Interstate highway. The project was in the works for several years. Justin Sorensen/ NNY Business

Crews work on Interstate 781, also known as the Fort Drum connector road, in March 2012. The limited access, four-lane highway opened to traffic Dec. 6, 2012. Until its completion, the post lacked direct access via an Interstate highway. The project was in the works for several years. Justin Sorensen/ NNY Business

Tied to post

Few could deny that Fort Drum is to credit for much of Jefferson County’s transformation. It has left an indelible mark since the Sept. 11, 1984, announcement that the north country would become home to the 10th Mountain Division, with about 29,000 people arriving to live and work on or near post by 1988.

Since fiscal year 1988, the post has injected a staggering $18,345,535,016 into the local economy, as of the most recent economic impact statement officials released in March for fiscal year 2012. That report credits the post with $1,441,992,825 in economic impact for the north country in fiscal 2012, accounting for the presence of about 19,000 soldiers and 20,000 family members.

But with two opposing forces — federal sequestration threatening cuts on one hand and September’s announcement that Fort Drum was one of five sites chosen by the Missile Defense Agency as a potential East Coast missile defense site — the looming question is whether the county’s economic development can continue or if the area has arrived at somewhat of a tipping point.

The impact in 2012 represented a roughly $63 million decline from 2011 and 2010, when $1,505,857,420 was generated.

But, “we really haven’t gone down in any significant way,” said Carl A. McLaughlin, executive director of the Fort Drum Regional Liaison Organization.

Still, no new military construction was planned for fiscal year 2014 until the announcement of about $4.7 million for a hanger expansion at Wheeler-Sack Army Airfield, and only $15.8 million is listed for fiscal years 2015 through 2019, compared with $137.5 million for fiscal year 2013.

As a result of sequestration, post officials announced in June a net loss of approximately 1,500 soldiers by the end of fiscal year 2017 as part of Army-wide restructuring, about an 8 percent cut.

“I don’t think we’re going to see a precipitous drop as the plan is implemented,” Mr. McLaughlin said of the troop reduction’s effect on the post’s economic impact. “Are we going to feel it? Sure, you never want less.”

Long term, though, he called it a “much more confusing picture.”

“It’s very, very unclear what the general direction is,” he said. “Where we go from here is really dependent on the way Congress moves, the president moves, the Department of Defense moves. There are still big issues. There simply isn’t a clear path.”

He also said the decline in military construction will have a noticeable impact because most contractors who work on post are either from the area or from New York state, and become part of the north country’s economy when doing so.

If Fort Drum is selected for the missile test site, it would mean a “major construction effort and a major acquisition on the part of the Army,” but once it’s built and established, such sites typically don’t result in significant increases in soldiers, support personnel or local jobs, Mr. McLaughlin said.

Regardless of the federal government’s budget decisions or the feasibility of the missile site, he believes Fort Drum’s caliber as a training facility means it’s here to stay.

“I think of Fort Drum as permanent,” he said. “It’s a pretty special place.”

James W. Wright, executive director of the Development Authority of the North Country, noted that a 1,500 troop reduction might not have a significant impact on the population, depending on deployments, which in the past decade have resulted in the post being about 4,000 below its total number of assigned troops on average. If the post did close, Mr. Wright cited Plattsburgh as an example of a city that has been able to recover from the loss of its Air Force base.

“The dynamics there are not necessarily different than Watertown,” he said. “Initially it was a slow start, but it has picked up momentum.”

Some studies have shown that military communities end up with a stronger economy that’s more diversified and less subject to the whims of a single employer after the loss of an installation, he said.

Key to this could be marketing the north country’s quality of life as technology makes it less essential for employees to be located in the same place as businesses, he said.

“People have a growing recognition of that and where it fits in business attraction,” he said. “More and more as we become dependent on technology, that puts us in a strong position to compete because you no longer have to physically be someplace to produce value.”

While these are likely to be smaller businesses, Mr. Wright said that’s not necessarily negative, as it diversifies the economy so it’s not as dependent on one large employer.

Positive growth needs to be a community-wide effort focused on cultivating strengths outside the post, said Donald C. Alexander, CEO of the Jefferson County Industrial Development Agency.

“I don’t see a great risk of losing Fort Drum. I do, however, see a point, and we’re there or coming there quickly, where we’ve reached a plateau,” he said. “Now how do we get to the next level? Fort Drum has provided energy to help us get there. We need to use that as a springboard.”

Mr. Wright subscribes to an 80-20 theory on job growth. As he sees it, 80 percent of growth is likely to be native, like businesses hiring additional employees or the result of entrepreneurial efforts, while 20 percent is likely to be from companies that locate in the area.

“Job development is really one job at a time — growth occurs slowly for the most part. Rarely are we ever going to get a GM or a Toyota to locate a plant here,” he said, but companies such as Current Applications or New York Air Brake may add a few new jobs if JCIDA helps them do it, thereby slowly expanding the workforce over time.

“We’re more likely to be witness to successful growth by cultivating our own than we are by attracting from outside the area — there are companies internally who we are more likely to get to expand and get jobs than we are to attract someone from Hoboken up here,” he said, noting that that doesn’t mean JCIDA shouldn’t try to attract new firms to the area.

Drum Country Business, a tri-county marketing campaign between the Development Authority of the North Country, JCIDA, the Lewis County Office of Economic Development and Planning, the St. Lawrence County IDA Local Development Corporation, the Fort Drum Regional Liaison Organization and National Grid, has invested about $180,000 to trumpet the area’s strengths since it launched marketing strategies and a website in 2011.

While Mr. Wright called the success of the initiative “marginal,” in part because of the time it was launched, Michelle L. Capone, director of regional development for DANC, said the Drum Country brand is gaining traction.

“It’s raising our profile, it doesn’t happen overnight,” she said. “It’s provided the north country with visibility that it otherwise wouldn’t have had as a region,” she said. Businesses outside the area don’t look for a “dot on the map,” but for regions and their assets, she said, noting the north country’s strengths in education, dairy production, agriculture, telecommunications and energy.

Crews work at Emerald Acres, a 53-home project at Route 37 and Graham Road, Pamelia, this July. Justin Sorensen/ NNY Business

Crews work at Emerald Acres, a 53-home project at Route 37 and Graham Road, Pamelia, this July. Justin Sorensen/ NNY Business

Also key to Jefferson County’s ability to attract new business is the availability of affordable housing, a perennially vexing issue. Businesses are hesitant to locate in the county without an available supply of housing for employees, local officials say.

Significant progress has been made on that front, according to Mr. Wright, who said that once the development and downtown revitalization projects now under way come online, housing will become significantly less of an obstacle. When vacancy rates get to about 5 percent, it becomes possible to replace existing inadequate housing; the present rate is about 4 percent, and has consistently been as low as less than 1 percent, he said.

Those projects include Beaver Meadows Apartments, a 298-unit complex on outer Arsenal Street that broke ground in December 2011. Its developer, COR Development Co., Fayetteville, is also working to redevelop the former Mercy Hospital property in downtown Watertown into a mixed-use complex that is expected to have about 168 rental housing units in addition to retail space.

The Community Rental Housing Program DANC created in 2006 contributed $2 million for the Mercy redevelopment project. The program will also contribute $250,000 to help restore Public Square’s Lincoln Building.

Morgan Management, Pittsford, is also building a massive complex at Autumn Ridge on County Route 202, next to Sam’s Club, which started to open this summer. The project includes 294 units in two phases; the first phase of 244 two- and three-bedroom townhouses is slated for completion next fall.

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