Checking the state of the Seacoast business climate

NHBR asked several members of the Seacoast business community to give their take on some of the key issues facing the region as well as to offer their views on how the area’s economy is faring.

Those taking part were:

• Keith Bamford, CEO, Daystar, Portsmouth

• Jane Bard, president, The Children’s Museum of New Hampshire, Dover

• Dan Barufaldi, Dover economic development director

• Sarah Brown, director, Green Alliance, Portsmouth

• Al Felgar, president/CEO, Frisbie Memorial Hospital, Rochester

• Daniel Morrison, CEO, Optima Bank & Trust

• David Mullen, executive director, Pease Development Authority

• Heather Tacconi, Tacconi Law LLC and board member, Greater Rochester Chamber of Commerce

What are the strengths and weakness of the Seacoast economy?

Dan Barufaldi: The strengths are its location to and proximity to population and cultural concentrations, the quality of life in the region, high education levels of the population, diversified manufacturing, proximity to universities and their research capabilities.

Weaknesses are high land acquisition costs, high electricity costs, an aging population and lack of highly compensated employment opportunities in rural areas.

Keith Bamford: We have a pretty balanced economy. Although some industries are more dominant, there is a variety that affords us some security to weather economic storms. And, even with a large amount of small to mid-sized businesses, we have a good mix – from large employers to young startups.

Our local economy is very relationship-driven – there’s a collaborative, community feel to doing business here. And that is a major strength to a service business like ours. If you invest the time and energy in getting to know your community and clients, you can succeed. Lastly, just our location itself is a major asset. Situated along I-95, the Spaulding Turnpike, and close to 101, the Seacoast can leverage the Boston-north, Portland-south, and the greater Lakes and Merrimack regions.

The main struggle we have is in finding the right people for our team. It will also be nice when the Spaulding Turnpike project is complete.

Sarah Brown: It is limited in scale. The strength is the same weakness. It is a very tight community, and people tend to respond in group to things. So if you capture the group’s attention, then you are kind of in. But if you don’t, then it’s more difficult because I think it is pretty cliquey, but a big strength is that it’s a really open-minded community, and I think they reward people who are trying to do innovative things.

Dan Morrison: Nationally, we’ve had some pretty tough economic challenges. Throughout all of that, New Hampshire has been the strongest part of the country and the Seacoast has been the strongest part of the state. It’s not just one industry and one company that drives the economy. Pease is a great example. At the height of the Cold War, the defense industry was driving it. Now there are many different companies there, more than 7,000, close to 8,000, employees working there, close to double the number when it was an Air Force base.

We really have a strong workforce here in the Seacoast. The unemployment rate in the greater Portsmouth area is 4.3 percent, compared to the New Hampshire statewide number of 5.1 and the national number of 7.3. It is three full percentage points lower here, and that has been consistent throughout the recession. There is some seasonality. Every January, unemployment jumps up about a half a point because of the weather in the winter.

David Mullen: Pease is certainly one of the strengths of the Seacoast economy. The tradeport has over 250 companies occupying in excess of 4.4 million square feet of office and industrial space and employing 7,800-plus people with an total annual wage base of $500 million.

One of the strengths of Pease is its location, location, location! Typically, many corporate decision-makers choose to live 15 minutes from their place of work, and 15 minutes from Pease provides access to downtown Portsmouth, the New Hampshire/Maine Seacoast and even equestrian or rural settings to the west.

The other great strength of the Pease location is having access to a three-state labor force. Within 45 minutes, employees can commute from as far north as Portland, as far south as Boston and as far west as Manchester, Concord and the Lakes Region. This demographic reach provides companies access to a very large diverse and highly skilled workforce providing them the needed workforce for continued growth.

Al Felgar: There’s a diverse economy — manufacturing, IT, tourism – and really no big negatives.

Jane Bard: A strength of the Seacoast economy is its strong tourism and cultural attraction presence, vibrant downtown areas and the variety of businesses of all sizes found in this area.

Heather Tacconi: Location. This is a primary factor for many new businesses starting and relocating to New Hampshire. We have access to all the amenities of a big city, but we also offer a quality of life that can only be found in New England.

If I have to state a weakness, I would say it is New Hampshire’s reputation outside the state. Coming from New York, when I told my family I was moving to New Hampshire, I received some very puzzled looks. People who have not visited the state don’t understand all we have to offer, and that is a perception issue. The state has taken steps to change the image with the Visit NH campaign.

What can be done to encourage emerging technologies in the region and the connection between educational institutions and businesses?

Barufaldi: BizEd Connect in Dover is doing just that on a local level with the CTC/business leader group facilitated by the Dover Business & Industrial Development Authority, with adjunct teaching by business leaders and the establishment of paid intern programs at local advanced manufacturing companies providing paid internships to high school students. The Community College System of New Hampshire has established a coordinated technical training center with high-tech industry in the area doing needed training in CNC, robotics and process control programming.

Bamford: There are a lot of exciting developments taking place in the Seacoast, both in startups and on college campuses, however it sometimes feels a bit disjointed. We have so much talent here; the challenge is bringing it all together.

Organizations like the NH-ICC (New Hampshire Innovation Commercialization Center) and Alpha Loft are doing an awesome job encouraging innovators and entrepreneurs. And public-private partnerships, like what has occurred between Great Bay Community College, Albany International, Safran and the city of Rochester, is really impressive. We need a proactive method of identifying where these partnerships make sense and further tying together Seacoast businesses with our educational resources.

Brown: I do feel the local government is trying to do what it can in supporting infrastructure so we have an educated pool of applicants as well as a successful pool of consumers, but this country in general does not value education.

The emerging technology for business is using social media properly, I do think that is going to come back around. People are going to get sick of technologies and do business with the companies that have a human face.

Morrison: Having a strong and diverse economy encourages emerging businesses of all kinds. Success breeds more success. The biggest education institution here is UNH. They have a new executive education push reaching out to help executives in various industries — health care, financial. At UNH, there is a great program, called the media farm. I’m chairman of the advisory board of that, and it’s another way to connect the university with area CEOs and brings them together into the university setting to network.

Felgar: It seems to be doing well – for example, Albany International/Safran is working with Great Bay Community College to train new workers. UNH could be more of an economic driver. Can they be paired with the PDA? Located so close to metro Boston, seems like more activity would be evident.

Bard: Here at the Children’s Museum of New Hampshire, we are focusing our efforts on exciting the next generation of innovators by exposing them to emerging technologies through programs such as the Dover Mini Maker Faire, our Make It or Break It afterschool club and working with the Dover Chamber of Commerce’s Business Education Committee to find ways to connect students and adults to businesses in the area.

Tacconi: Collaboration and awareness. When all key players get together in the same room, the obstacles faced are met with innovation and creative thinking. The Seacoast Exchange is a terrific example of just such a collaboration. Emerging technological-based businesses also need support on a municipal level with business-friendly regulations that would attract and incentivize technological based businesses to locate in the Seacoast.

What are the particular challenges that face the tourism industry on the Seacoast?

Barufaldi: Our short tourism season is challenged by weather conditions in both summer and winter and a lack of capital investment support from state government for tourism and public transportation systems to get tourists here.

Bamford: A lack of parking and the cost of living are definite challenges to our tourism industry. I am often amazed at how much our small region offers – restaurants, shops, theaters, attractions and outdoor activities. It’s no wonder people want to visit us. However, we have nowhere for them to park while they’re here, and that can leave a bad impression of the overall experience. The word “park” is our new four-letter word.

Also important is the cost of living. Employees are unable to afford living in our downtowns, and that is further stressing the available workforce, transportation and (dare I say it again) parking facilities.

Brown: Competition. Every state is working so hard to attract visitors. New Hampshire and Maine have to differentiate themselves. We have advantages on the Seacoast. This is a hip place. This is where tourists want to come. There is a lot of panache that goes along with New Hampshire and Maine that people are responding to, but I see a lot of heavy-duty promotion coming from all states so I think that New Hampshire and Maine have to do the constant promoting of the states as a whole, they will lose that advantage.

Morrison: The tourism industry seems to be doing quite well. There are a number of new hotels that have been built here in the Portsmouth area. There are plans in the works for some additional hotels, so if that is any gauge of the industry, I think it is pretty strong.

In terms of challenges — of course, the seasonality. That is one of the industries that is affected by that greatly. Another challenge is that housing is very expensive here. It can be a challenge to afford to be able to live close to where you work.

Felgar: There’s a heavy concentration of development in Portsmouth. Has it been overdone? There’s congestion, traffic, no parking, high real estate prices. Encourage more development in Dover/Rochester.

Bard: Speaking as an institution with a 30-year history in both Portsmouth and now Dover, the biggest challenge in my opinion is always staying front and center with your visitors and users and remaining both relevant and vital to your audience. I do not think that this is related to our location on the Seacoast, though. I believe the Seacoast offers a wealth of options for tourists.

Tacconi: Most people outside of New England don’t know where New Hampshire is on a map. Once they think of New Hampshire as a destination, they are faced with competing cities and towns all vying for the same business. Greater collaboration among neighboring communities will be needed to keep New Hampshire tourism strong.

What can be done to improve health care access and affordability on the Seacoast?

Barufaldi: Allow more than one health care carrier to operate successfully in the state and remove government from the insurance marketplace to allow the market to decide through real carrier competition.

Bamford: We’re lucky. We are able to offer our employees affordable access to health care and we work with a trusted insurance and benefits partner to help us. Not everyone has that. Until we rein in the costs of health care, access and affordability are always going to be an issue. This is a topic that directly impacts all of us and, as a small business owner, it is something we struggle with.

Brown: It’s called the ACA. Small business owners, and I consider truly small business owners those with under 50 employees, will really be helped by the ACA. I have never been able to offer health insurance to any of my employees or to myself, so the fact that now finally we are going to have a system where a business like the Green Alliance is actually having the government helping them out. That means I’ll be able to attract better workers. For truly small businesses, the ACA is going to be a gold mine once all the wrinkles get worked out.

Morrison: We have some great hospitals and doctors in the area and a healthy level of competition, and that’s good for keeping cost down. I think health care is facing some enormous challenges right now.

I have concerns about the Affordable Care Act. Clearly, there will be some winners and losers. Some people are going to be paying less than they do now and others are going to pay significantly more. In areas like the Seacoast, where there is a more affluent population, there are going to be more losers in regards to health care costs than winners relative to other places. That’s a challenge.

Felgar: Include all hospitals in the ACA-Obamacare (nine are excluded). And change the legal environment so we can attract more health insurance companies to improve competition.

Tacconi: Advocacy and accountability. Many hospitals and providers are taking action, but they need patients to speak up as well about the effects of changes on them and their families.

What, if anything, should the region be doing to prepare for rising sea levels and other effects of global warming?

Barufaldi: Begin to adjust building location requirements to place new buildings outside of rising flood zones to obtain certificates of occupancy. Begin to build shoreline protection such as sea walls and surge breaks and obtain some government financial support to get this done in time to do some good. This could also be viewed as a challenge to the tourism industry.

Bamford: As a technology company, we work hard to operate responsibly and employ green technologies and business practices, such as more remote support. Even in my non-scientific experience, I have seen more flooding and damage due to severe storms in this area during the last decade. However, I would defer to environmental experts and city and regional planners to design viable, appropriate solutions.

Brown: The region has to be doing a lot. A lot of companies that haven’t been on board with the sustainability piece are now on board on the preparation piece. We have seen it for the last couple of storms. If you lose power for a day or two, that is lost revenue.

Businesses really have to think about contingency plans, and that also affects businesses thinking where they are located. If a business is in a flood zone. I heard last week from some insurance people that soon being in a flood zone means you won’t be able to get insurance.

Morrison: Certainly we should all do things to try to minimize our impact on the environment. With regard to rising sea levels, I’m just not sure. I don’t know if we clearly defined the problem either. Some people are using lots of scare tactics that the world is going to be a disaster because of climate change and there are others who are minimizing that.

We need to scientifically define what the problem is before we take extreme measures to protect ourselves from the scare tactics.

Bard: Individual communities, businesses and citizens need to take these conditions into account when planning for their city’s future development, including new building, updating of existing structures and services.

Tacconi: There will always be a balance to be found between attracting business/manufacturing and environmental needs. But many businesses have taken measures to offset their waste production and energy usage. This is where the balance can be found. Anything that municipalities and local government can do to facilitate these discussions and options will help stave off the effects of global warming as the Seacoast continues to grow and develop.