Location, location, location. Sounds like a business cliché, doesn't it?
However, location in relation to regional operations, customers, and the nation's capital make Maryland's mid-Atlantic business climate more than a figure of speech.
"Our headquarters staff does quite a bit of traveling," explained Chuck Kanach, executive vice-president of Magellan Behavioral Health in Columbia, Md.
"Washington National Airport (now known as Ronald Reagan Airport), Washington Dulles Airport and Baltimore-Washington International are within 15 minutes of our offices," said Kanach. "We have 30 operations throughout the country. Executives have to get there about once a week, so we need the convenience of reaching our major locations."
In late 1997, Magellan began purchasing its competition and grew from 1,700 to 6,000 employees nationwide. As a result, the managed health care provider claimed administrative hubs in Maryland, Utah and Missouri. Executives decided to consolidate headquarters in the East and expand Magellan's existing presence in Howard County, Md.
Near the action
"Incentives were the sweetener to have this as our hub, but it's all the factors that went into the decision that made us decide to expand in Maryland: employee base, good schools so we can attract executives and quality of life," said Kanach.
"The alternative site was St. Louis, Mo., because it was clearly our largest base of operation and had the benefit of a central location for transportation. But
we looked for a place that had things that would be important to an executive, like the culture of Washington, D.C., and sailing in Chesapeake Bay. You want to attract and retain key management, and Maryland allows you to do that."
| Maryland's Work Force |
| Total labor force
3,895,080 |
| Jobs by Place of Work (1,000) |
| Farm | 19.9 |
| Ag. Serv. For., Fish., & Other | 28.9 |
| Mining | 2.7 |
| Mining | 2.7 |
| Construction | 171.5 |
| Manufacturing | 184.3 |
| Transportation, Public Utilities | 124.4 |
| Wholesale Trade | 114.4 |
| Retail Trade | 483.4 |
| Finance, Insurance, Real Estate | 227.2 |
| Services | 930.9 |
| Government | 502.9 |
| Source: Maryland Office of Planning,
Planning Data Services |
Magellan completed its 205,000 square foot campus last fall.
In Baltimore, W.W. Grainger's new facility opened a showroom/warehouse facility in the Carroll-Camden Industrial Park, which is located in the city's empowerment zone.
The project cost on the new site is approximately $1.5 million. Grainger, which employs 13, is one of North America's leading distributors of maintenance, repair and operating supplies.
"We are proud to play a role in Baltimore's thriving business community and especially in the growth in South Baltimore," said Wes Clark, Grainger group president. "The need for a full-time distributor to serve this area is evidence of the excellent business health of the community."
Baltimore is
also seeing an impressive mix of
business growth
in the city's Canton area. Business is expanding eastward along the coast in the form of light industrial space, office space, new restaurants and retail.
DAP Products is just one of the companies taking advantage of this emerging hot spot.
The company, which is the nation's leading manufacturer of caulks, adhesives, sealants and other home improvement products, relocated its headquarters from Tipp City, Ohio, to Baltimore in June of 1998.
The company's headquarters and lab space are housed in 39,000 square feet of an old canning factory which has been extensively renovated into office and lab space.
Nearly 123 positions were expected to be filled by the end of 1998.
"We are thrilled that the city of Baltimore has approved our request for funding to help us move into Baltimore," said James Slattery, DAP Products' chief financial officer. "The move has gone quite well, most of our sales associates have completed their move and have begun to enjoy all that Baltimore has to offer. We are excited about being a part of the Baltimore community for many years to come."
| Did you Know?
Maryland's work force is projected to swell to more than 4 million by the year 2000,
with over 1 million employees in
service industries. |
Comparative costs
Maryland's mid-Atlantic location also provides cost benefits not readily found in the Northeast, according to David Landsberger, president of Bel-Art Products in Pocomoke City in southeastern Maryland.
The manufacturer of laboratory equipment and rehabilitation aids for the disabled built a 30,000 square foot plant in 1994 and leased half of it to another company. In 1996, the New Jersey-based manufacturer bought the tenant company and added 30,000 square feet.
Landsberger said the company considered expanding elsewhere in the Northeast, but the price of growing in Maryland was dramatically cheaper.
For example, electricity rates through Conectiv, Bel-Art's electricity provider, are half that of some Northeastern utilities. In addition, utility incentives for Bel-Art included a $50,000 rebate program for heavy equipment and discounts on peak usage rates.
Low utility costs often help seal the deal for companies locating in Maryland.
For Bethlehem Steel, a cold steel mill which is building a $300 million facility in the Baltimore area, energy costs were important.
"We gave them incentives on power rates and we provided a new substation," said John Sundergill, director of economic development for Baltimore Gas & Electric.
For Bel-Art, it was easy to visualize the savings.
"The bottom line is that I save $170,000 per year on electricity. The building cost me $500,000," Landsberger said. "Do the math. I've got a two-and-a-half-year pay off, and then my plant is paid for."
MARYLAND Facts & Contacts
DEMOGRAPHY AND ECONOMY
Population: 5.1 million
Capital: Annapolis
Three Largest Cities: Baltimore, 675,401; Frederick, 46,227; Rockville, 46,019
GSP: $132 billion
Per Capita Income: $27,618
Percentage of Private Manufacturing Labor Force Organized: 20.0%
Right to Work State: No
Avg. Unemployment Rate: 4.1% (October 1998)
Average Hourly Manufacturing Wage: $14.26
Population Age 25 and Over With a Bachelor's Degree or More: Baltimore, 15.5%; Frederick, 24.0%; Rockville, 45.4%
Corporate Income Tax Rate: 7.0%
Percentage Employment by Sector: construction, 6.2%; manufacturing, 7.7%; mining, 0.05%; service industries, 33.3%; transportation/public utilities, 4.7%; wholesale/retail, 23.8%
Primary Industries: manufacturing, agriculture, mining, services, tourism
BUSINESS ASSISTANCE
Major Financial Incentives: Job Creation
Tax Credit, income tax credits, property tax credits, The Day Care Facilities Loan Guarantee Fund, The Child Care Facilities Direct Loan Fund, The Child Care Special Loan Fund
Worker Training Programs: Maryland Industrial Training Programs, Partnership
for Workforce Quality
Enterprise Zones: 35
Foreign Trade Zones: 3
QUALITY OF LIFE
Average Price for a Single-Family Home: Baltimore, $134,596
Cost of Living Index: Baltimore, 97.4
FOR MORE
INFORMATION CONTACT
Richard C. Mike Lewin, Secretary, 217 East Redwood Street, Baltimore, MD 21202, phone (800) 541-8549, fax (410) 333-8628 |
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