Getting down to business: Group lures firms to area

IT STARTED LIKE most courtships: a few awkward phone calls, a couple of get-togethers and long nights spent wondering what the other person was thinking.

And one day, it just clicked.

Officials from Tokyo Chemical Industry decided to set up a distribution center - its first on the East Coast - in Montgomery County after being wooed for months by Select Greater Philadelphia, the job-luring nonprofit created by the Greater Philadelphia Chamber of Commerce.

The courtship played out last winter and spring. Tokyo Chemical announced the big news at the chamber's 14th annual Economic Outlook conference last week.

Select, a low-profile arm of the chamber, calls Tokyo Chemical another victory in the effort to attract companies and jobs to Philly and 10 neighboring counties in Pennsylvania, New Jersey and Delaware.

That's no small task. With New York City to the north, and Washington to the south, the Philadelphia region has long been overlooked by firms that want to set up shop on the East Coast.

"We did a perception study about seven years ago," said Thomas Morr, Select's president and CEO. "What we found is that the region didn't have a bad reputation. We just weren't on people's radar."

Select says it has lured 74 companies to the 11-county region since the chamber created the outfit in 2003. It projects that 3,284 jobs will be created in the region by 2014 by companies it has recruited.

After raising about $32 million to operate for eight years, that comes out to about $10,000 spent for each job.

Select's economists estimate that the 74 companies created an additional 6,700 "indirect or induced jobs" - such as construction and technology jobs to help recruited companies set up shop along with service jobs created for the employees brought to the region.

Select is mostly funded by corporations, although it won't release a full list of the corporations because some of their efforts were covered by confidentiality agreements.

Joseph "Chip" Marshall calls the launch of Select in fall 2003 the "the first big challenge to the business community to put its money where its mouth was."

Story after story in local newspapers told of companies being poached across county or state lines within the region. Marshall recalls the AAA mid-Atlantic office getting lured that fall from Center City to Wilmington, Del.

"There was this sense of 'Why are we all competing to just move pieces around in the area?' " said Marshall, a vice chairman at law firm Stevens & Lee who was involved early on in Select.

The idea: The city would put up $1 million in seed money; corporate honchos would raise an additional $15 million; and then a new arm of the chamber, Select Greater Philadelphia, would spend four years collecting information to help sell the region to companies around the world.

It worked so well, Select decided to raise another $16 million for another four years.

And now Select is starting a third four-year cycle with the same fundraising goal.

Hugh Long II, northeast regional president for Wells Fargo, served as Select's first chairman and now heads the finance committee. He said Select has raised about 10 percent of the money needed for the first year of the next four-year cycle. He declined to identify the group's funders.

The organization, Long said, has plowed through a staggering recession undaunted.

"What we did was keep our heads down," Long said. "We kept our feet moving and continued to call investors. What was very interesting was even in the darkest time, we didn't have anyone turn us down. We just had some people taking extra time to decide."

To get the Philly region on the business world's radar, Select started by emphasizing the obvious: If you have to deal with financial titans in New York or politicians in Washington, the Delaware Valley is smack dab in the middle and cheaper to call home.

Select embraces a team-first mentality to trump the individual, competing merits of Philadelphia and its neighboring counties in New Jersey and Delaware.

Pennsylvania has reaped most of the benefits, with more than 85 percent of the companies lured by Select locating here, while 11 percent went to New Jersey and 3.7 percent went to Delaware.

Select offers a map of real estate it has presented to potential recruits from mid-2010, showing that the group is pushing locations all over the region.

"We're not selling so much as we're helping," Morr said. "We try to understand what a company is trying to do. Our job is to show them the options. They decide what's best for themselves."

The fact that Pennsylvania landed the majority of businesses that were courted by Select did not go unnoticed by business leaders in other states' counties, some of whom grumbled in private.

"That was an observation that you heard with regularity," said Mark Schweiker, the former governor who led the chamber when Select got started.

The griping faded as the years passed and Select's success began to grow, Schweiker said.

"Keep in mind, [Select] has only been at it for five or six years, in terms of getting out in the field, traveling the world and telling the Philadelphia region's story in a compelling fashion," he said.

"That's a nanosecond compared to other regions that have been doing that kind of stuff for decades."

County officials outside of Philadelphia seem content with Select's efforts.

"I don't see it as Select Philadelphia exercising any prejudice against one county or another," said Lou Cappelli, freeholder director in Camden County, where 6 percent of Select's recruits have located. "What's good for Camden County is good for the region. Everything is regional now."

Tom Kovach, president of the New Castle County Council in Delaware, said companies Select recruited in other states can provide jobs for commuters who live in his area. New Castle County got 3.7 percent of the 74 companies recruited by Select

"Although the numbers are not where I would like them to be, anything that comes into the area is good for our regional economy," Kovach said.

Robert Damminger, freeholder director in Gloucester County, praises Select for putting up marketing dollars his county can't afford to finance, even though the group has brought no companies to his area.

Tokyo Chemical is an 89-year-old company that manufactures laboratory chemicals, with offices or plants in Japan, China, India, Germany, Belgium, Massachusetts and Portland, Ore.

Tokyo Chemical decided last January to look for an East Coast site for a distribution center because a large portion of the company's U.S. clients are there, said Tom Hoshiba, a Tokyo Chemical general manager.

Hoshiba said Tokyo Chemical considered setting up shop in Massachusetts, but ultimately chose Montgomeryville after being wowed by the efforts of Troy Adams, who focuses on business development for Select.

"Troy connected us with the right local people [who] showed us the ins and out of the government and the township," said Rebecca McKechnie, an assistant general manager of organizational development for the company.

The distribution center will employ 15 workers, a figure that could double within the next few years, she added.