News Articles

Mass. marketing

By Craig M. Douglas / News Business Writer
Sunday, October 5, 2003

Attention all biotechnology companies and cutting-edge employers: Maryland wants you!

Since early September, the Old Line State has been waging a $160,000 advertising campaign in Massachusetts and other regions to lure young and exciting companies to the mid-Atlantic, specifically to the Greater Baltimore area. The 30-second spots on local radio stations feature testimonials from successful biotech firms that have made the move to Maryland.

Gov. Robert L. Ehrlich Jr. can also be heard touting the state's corporate-friendly attitude. "Come discover how we're making Maryland work for business," he says during one commercial.

The ads are scheduled to run through this month and highlight the growing civil war among states hungry for economic development. Similar campaigns are being launched by other up-and-coming regions in the South and Midwest.

"We're absolutely planning on some sort of return. We've set very realistic goals, and I think we have a winning campaign," said Bill Askinazi, Maryland's assistant secretary for business and economic development.

Askinazi and a staff of 50 economic development specialists are managing Maryland's ad blitz, now running in Massachusetts, California, New York, New Jersey and Greater Chicago. The goal, he said, is to recruit enough companies to make Maryland the state with the most biotechnology firms in the country, a distinction currently held by California. Massachusetts falls second in Askinazi's rankings, which are based on the number of biotech companies headquartered in a given state. Maryland currently ranks third on the list, he said.

To lure companies to Baltimore, Askinazi is highlighting the economic and quality of life issues that most affect workers, namely cost of living, wages and taxes. The ads also make it clear that Gov. Ehrlich and Maryland's state agencies are ready to roll out the red carpet for companies willing to take the plunge.

In doing so, Ehrlich has made it a priority to meet face-to-face with each company's executives during fact-finding tours in the state.

"We hired an outside consulting agency to do an independent study comparing Baltimore's quality of life and cost of living with other areas," Askinazi said. "We win hands down in both indices."

Compared to the regions targeted by the ad campaign, Maryland stacks up well against the competition. The state's median household income -- $53,530 -- is 2.5 percent higher than Massachusetts' average of $52,253 and 13 percent higher than California's $47,262. In addition, Maryland's average home price is about $257,000 -- a number dwarfed by Massachusetts ($346,000) and California ($367,000).
Similar cost-of-living discrepancies exist in other states -- namely Virginia and North Carolina -- that are courting Massachusetts' companies.

Nonetheless, Massachusetts' supporters say they are unfazed by the ploys to plunder its commercial base. Their confidence was likely strengthened this week when Boston University won permission from the National Institute of Allergy and Infectious Diseases to build a $1.6 billion biotech lab in the city's South End. The project is expected to bring 1,960 new jobs to the area, 660 of which will be for research-related positions.

"Massachusetts is very open to businesses as well (as other states)," said Lynn Tokarczyk, owner of Business Development Strategies Inc., a consulting company in Bellingham.

A former regional director for the Massachusetts Office of Business Development, Tokarczyk currently navigates a maze of state agencies to locate financing and tax incentives for her clients, who are frequently courted by other regions, she said.

"Companies need a lot of hand holding. Many companies aren't even aware of the programs that exist," she said. "They need assistance, someone to provide coaching.

"Other states are realizing these programs are competitive tools. They realize companies are trying to lower their cost of doing business to stay competitive in a global economy."

To keep that competitive edge, Massachusetts has launched its own multimillion-dollar marketing campaign to attract and retain jobs and businesses. Called Mass Means Business and carrying the slogan "Massachusetts. It's All Here," the program is part of Gov. Mitt Romney's "Jobs First" initiative to strengthen the state's economy and quality of life.

A Romney spokeswoman said the governor's Jobs Bill, submitted recently to the Legislature, also addresses quality of life issues that are important to companies. The bill is centered around affordable housing proposals, the spokeswoman said.

Those kinds of incentives can make a difference, says Ross Gibson, a vice president and chief administrative officer at American Superconductor Corp.

Just three years ago, the Westborough-based company announced that it was looking for a 300,000- to 500,000-square-foot facility to manufacture its high-tech electrical wires. Within weeks, bids streamed in from New Hampshire, Mississippi, Pennsylvania and South Carolina, which offered to train local residents to work in the new plant.

Gibson said South Carolina officials even promised to pay for the training without obligating American Superconductor, once relocated, to hire the local workers.

"You have to keep in mind that these states need to attract manufacturing companies to support their constituencies," he said. "It's very, very important for them, and these offers were taken very seriously by American Superconductor."

Ultimately, though, it was the long-term stability and assistance offered by a variety of Massachusetts agencies that prompted American Superconductor to eventually build the facility in Devens. And contrary to public opinion, the state's resources and flexibility proved second to none, Gibson said.

"Quite honestly, the old knock on Massachusetts, that it's really 'Taxachusetts,' and that you can't do this kind of business here -- in reality you can," he said.

According to Mike Hogan, president of MassDevelopment, the state's public-private office for business development, the benefits of staying in Massachusetts can also translate into millions of dollars down the road.

As an example, he said a local biotechnology company with a corporate tax burden of $12 million over 20 years would pay seven times that amount -- nearly $80 million -- if they were to relocate to North Carolina.

"If a company's desperate for cash at the front end, these states can offer big incentives," said Hogan, the one-time mayor of Marlborough. "But over the long haul, you burn through that pretty quickly. When you load it all together, we come out ahead of the states we compete against."

Hogan will be teaming with Romney to create a database of pre-permitted properties that are ready for companies to set up shop. The move will shore up the state's main weakness, that being its somewhat disorganized licensing and permitting process, he said.

Hogan added that the recent competition has only strengthened the state's outreach and financing programs to retain and attract companies.

© 2003 MetroWest Daily News