By Dave Gardner
The City of Scranton’s label as a distressed city is only applicable to its government and the condition of the private sector does not relate, said Robert Durkin, president of the Greater Scranton Chamber of Commerce. Educational and medical communities are leading the way with new investment and growth, and even though the downtown is not a prime retail hub as during the city’s heyday, varied businesses are emerging, he said
Examples include the renovation at Green Ridge Corners, the Scranton Lace Building project, the West Side Medical Corridor and the South Side United Neighborhood Centers renovation project,” Durkin said. “Diversity also now rules within the city, which is a huge change.”
Taxation and parking obstacles still remain as thorns in the sides of developers as demand for downtown residential housing booms. Interest is already being generated by prospective buyers for the county’s soon-to-be-vacated office buildings, and cultural events such as First Friday are bringing dollars into the city.
Durkin urges anyone who analyzes Scranton’s financial future to consider the upcoming role of the millennials.
“The millennials lifestyle is very different from their parents,” said Durkin. “They have a positive view of city life and different appetites that will fuel this growth potential.”
Durkin repudiates the charge that Scranton and NEPA offer no quality jobs. In reality, area employers consistently say they cannot find enough trained talent to fuel their employee needs, such as with tech-based manufacturing and utility companies.
“This mismatch is very real and is being caused by an old belief that a person can just float through high school and then get a great job in the old manufacturing sector,” Durkin said. “Job applicants today must have a decent base in STEM technology to succeed.”
Durkin is optimistic with his 10-year forecast for Scranton. He sees a thriving central business district filled with small business, plus booming eds and meds. This will be enhanced by elected leaders not following populist demands, but instead making hard decisions that generate long-term gains.
“Real tax incentives for business are one of the only tools we have to create opportunity and offset our kids leaving the area,” said Durkin. “If this occurs, we will see many of them leave for a bit, taste the ‘buffet,’ and then return.”
Expanse of healthcare
One of Scranton’s big economic guns, its health care community, continues to expand. The Geisinger Health System is proceeding with plans to invest more than $158 million in the Scranton area, and has opened an $18.1 million, 45,000-square-foot facility named Geisinger Mount Pleasant for primary care practices and other services.
Delta Medix, a regional independent multi-specialty medical practice, is relocating most of its operations to the new Marketplace at Steamtown. Delta will utilize at least 40,000 square feet where as many as 100,000 patient visits per year will be seen in medical specialties such as surgery, urology and pulmonology, breast care and allergy care.
Harrisburg has also awarded $2.5 million from the state Redevelopment Assistance Capital Program funds for an envisioned “medical corridor” in West Side. This $5.5 million project initially calls for a 15,000-square-foot physical therapy and rehabilitation center, plus space marketed to the bioscience industry.
Education is Scranton’s other big gun, and the system of schools operates with enormous financial stakes. Wendy Hinton, director of external relations with Lackawanna College, said her school generates an estimated statewide economic impact of $36.3 million annually, delivers local and state payroll taxes of $410,000 and creates an annual employee payroll impact of $8.9 million.
Not to be outdone, Luzerne County Community College (LCCC) is now conducting classes within 15,000 square feet of space within the bustling Marketplace at Steamtown. The school is offering a wide variety of degrees at the site, including business, accounting, human services, criminal justice, and electrical construction.
Within 2.5 miles of Lackawanna College is the historic campus of Marywood University. Sherry Frable, public relations coordinator, provided data which indicates the school annually pays state and local government payroll taxes of $1.35 million while generating a student spending impact of $8.8 million, visitor spending impact of $603,000, a total payroll impact of $30.3 million and a total statewide economic impact of $119 million.
More than 50 percent of the quality jobs now being created nationally require a two-year technical degree or technical certification, and tech schools such as Johnson College are cashing in on this reality. Katie Leonard, executive vice president, noted that Johnson now enrolls more than 450 students within a student base that is 26 percent female.
The college, with an annual tuition of less than $17,000 and a $9 million annual budget, enjoys a freshman retention rate averaging 73 percent, a current graduation rate of 76 percent and a student employment rate over the last three years of 90 percent. The school’s total enrollment actually climbed during the Great Recession as students continued to search out education that would generate less debt than a four-year college.
“We market the school as a hands-on place with equipment that has a direct connection to industry, and as a primary commute campus the parents want to see this equipment and not building and activities,” Leonard said. “We also deliver an extensive emphasis on soft employment skills, although the students may not immediately appreciate their return on this.”
Geisinger Health System and The Commonwealth Medical College (TCMC) have formed the new Geisinger Commonwealth College of Medicine, and according to Ida Castro, vice president of community/government relations and chief diversity officer, the school can expect to further increase the $28.4 million direct impact and $36.9 million indirect impact it is already generating each year, plus a statewide government revenue impact of almost $3.3 million.
The school has a limited student base, thereby creating a modest demand within the Scranton rental market. However, since the medical college’s charter class of 2013, 254 students have received 300 master’s degrees and 254 medical degrees, including 141 from Pennsylvania.
TCMC also has a very high percentage of first-generation college students. It’s also a fertile environment for spin-off businesses, it conducts a wide variety of student volunteer services such as mentoring and promotes a community focus on prevalent diseases and education.
“Our mission will be unchanged with the merger,” said Castro. “We will continue to be a community-based school striving to improve regional health and replenish the physician workforce. Students later practice medicine where they were raised and do their residency, and Geisinger has hundreds of residencies available.”
University has immense impact
The University of Scranton, continues to be an economic powerhouse. According to Julie Schumacher Cohen, director of community and government relations, the school generates a total statewide impact of $310 million annually, which incudes student spending of $14 million, an institutional expenditures impact of $119 million, visitor spending of $2 million and an employee payroll impact of $70 million.
During the last fiscal year, wage tax payments for employees living in Scranton totaled $615,000, with local services taxes on university employees of $212,000. Construction spending for the new Edward R. Leahy Jr. Hall produced an estimated economic activity of $87 million, according to a study prepared by the NEPA Alliance, with building permit fees and taxes of $900,000.
“Our students often walk to the downtown and patronize the businesses there — they cannot have a car on campus during their first two years” Cohen said. “Many of these businesses work with us to offer the students a 10 percent discount on purchases.”
Cohen’s wish list for enhanced growth at her school, as well as for Scranton, centers on one big development.
“Institution of a passenger train to New York City would greatly bolster all of the city,” Cohen said.
John Basalyga, owner of the Marketplace at Steamtown, has taken the facility from near-death to ongoing site use by a wide variety of tenants, such as the familiar Boscov’s, Delta Medix and Phoenix Theatres Entertainment which will offer first run movies, luxury seating, small-plate food items and alcoholic beverages.
Other Steamtown tenants include Crunch Fitness, Bee’s Backyard indoor playground, Revello’s Pizza, the Scranton Public Market and LCCC. Joe Gibbons, owner of the Gibbons Co.m which manages Basalyga communications, explained that the facility is fulfilling the mission of creating a diverse neighborhood for commercial and community life that is a genuine destination for people.
“We have never approached this project as a series of obstacles to be overcome,” said Gibbons. “It is an opportunity with challenges to create open growth using proprietary techniques.”
Gerald Cross, executive director with Pennsylvania Economy League’s central division office, indicated that Scranton’s City Hall now has its head above water, can meet its current obligations and is stable. This all is possible because Harrisburg’s PUC has approved the sale of the Scranton Sewer Authority to Pennsylvania American Water, even though legal challenges may still arise.
“This deal will stabilize Scranton’s financial situation and reduce long-term budget pressure,” said Cross. “The pensions, debt service, and capital improvements with infrastructure will all benefit from this. If we dwell on just the pension bailout it overshadows the city’s investment problems.”