November 12, 2007
The L-A effect | In Lewiston-Auburn, the power of positive thinking has meant lots of new investment and a burgeoning local economy
By Kerry Elson
Maybe it is all happening in L-A.
When it was launched in 2003, the twin cities' marketing campaign, "L-A: It's all happening here!" may have seemed, well, like wishful thinking. But now it seems downright prophetic, especially according to a study released in late September from the Federal Bureau of Economic Analysis.
In its first-ever study of gross domestic product growth by metropolitan areas of at least 50,000 people, the BEA found that Lewiston and Auburn's GDP ˆ or the value of services and goods produced ˆ grew more than the Portland and Bangor metropolitan areas from 2001 to 2005.
"Lewiston has been aggressive in terms of economic development, and I think it's bearing fruit," says Lincoln Jeffers, assistant city administrator in Lewiston.
The Lewiston-Auburn region grew 10.7% from 2001 to 2005 to roughly $2.9 billion, while the Portland-South Portland-Biddeford region grew 9.3% to $19.8 billion and Bangor grew 5.4% to about $4.4 billion.
L-A saw the biggest GDP gains in manufacturing, which grew 29.7% to $488 million over the time period; health care, growing 23.3% to $401 million; real estate rental and leasing, growing 35% to $315 million; and transportation and warehousing, growing 7.2% to $89 million.
The boost in GDP followed years of economic decline in the twin cities, particularly in Lewiston, where the Bates Mill, which manufactured textiles and employed hundreds, closed in 1990.
To boost the area economy, the cities invested their own money in building new roads and office parks. Lewiston in 2005 also used a $17 million incentive package to entice retailer Wal-Mart into building a nearly $100 million distribution facility in the city.
Lewiston's record of commercial investment trumps that of other formerly industrial cities in Maine. From January 2000 through October 2007, more than $421 million has been invested in commercial construction and renovation projects in Lewiston, according to Jeffers. That compares to roughly $200 million in investments in Biddeford during the same time period, according to numbers provided by Bob Dodge, the city's economic development director.
Some explain that collective growth by pointing to the cities' relatively business-friendly regulations. The city of Lewiston, for example, has streamlined its development review process so that a project can be approved in one planning board meeting, says Jeffers. Tom Dunham, a commercial and industrial broker at NAI The Dunham Group in Portland, says that speed, compared to a months-long wait in places like Portland, has been a relief for some of his clients looking to expand or relocate.
Some businesses have been willing to relocate to Lewiston and Auburn, too, because the real estate can be cheaper than that in Southern Maine. Properties in the area can be about half as expensive as those in Portland, according to Dunham. As Portland and surrounding towns grow more crowded, businesses increasingly are considering L-A, he says.
Though not reflected in the BEA figures, L-A saw continued growth in 2006 and 2007 ˆ an expansion at Tambrands, a tampon factory in Auburn; construction of a $35 million dining hall at Bates College in Lewiston; and a $2.2 million expansion at manufacturer Wahlco-Metroflex in Lewiston.
Here's a breakdown of growth in three major industries in Lewiston-Auburn.
Manufacturing:
Up 32% from 2001 to 2005
2001: $376 million
2005: $488 million
Major investments include:
ˆ $5 million, Diamond Phoenix
104,000-square-foot expansion in Lewiston in 2000
ˆ $4.4 million, WahlcoMetroflex
Expansion in Lewiston in 2002
ˆ $1.5 million, Lepage Bakeries
21,900-square-foot expansion in Auburn in 2002
ˆ $1.6 million, World Harbors
Relocated from 25,000 sq. ft. in Winthrop to 40,000 sq. ft. in Auburn in 2001
ˆ $1 million, Tambrands
Expansion in Auburn in 2001
Shoe and textile manufacturing until the 1950s had been the mainstay of the economy in L-A. Since then, however, many of those manufacturers have moved their facilities off-shore. Meanwhile, niche manufacturers in the wood products, electronics and food industries have grown, along with others in the state.
It's hard to say why, exactly, manufacturing in the area is strong compared to Bangor, for example, where the industry's GDP declined 4.2% to $432 million in 2005, according to the BEA figures. One reason could be the availability of qualified workers, suggests Lisa Martin, executive director of the Manufacturers Association of Maine.
"[Lewiston-Auburn] is and was a traditional manufacturing center for many years, and the people that work there have those skills," she says.
Also, many manufacturers that have existed in the area for years have targeted markets outside Maine and the United States. For example, Lewiston's Wahlco-Metroflex, which makes machine parts for power plants, paper mills and other industries, has increasingly sold products abroad, says Martin.
Health care and social assistance:
Up 23.3% from 2001 to 2005
2001: $325 million
2005: $401 million
Major investments include:
ˆ $10 million, Sisters of Charity Health System
Construction of 36,000-square-foot women's health center in Lewiston 2001
ˆ $2.3 million, Central Maine Medical Center
Construction of 20,000-square-foot school of nursing in Lewiston in 2002
ˆ $7.6 million, Central Maine Medical Center
Construction of 125,000-square-foot cardiac care center in Lewiston in 2003
ˆ $3.4 million, Pediatric Associates of Lewiston
22,560-square-foot expansion in 2005
Health care is the biggest industry in Lewiston-Auburn, employing more than 8,000 people, according to the Lewiston-Auburn Economic Growth Council. That's partly because of population increases in southern Maine, which have led to crowding at some hospitals in the area. Central Maine Medical Center opened its cardiac care center in 2003, for example, to serve local patients who were traveling to Maine Medical Center in Portland, according Chuck Gill, vice president for public affairs at CMMC.
A concentration of schools ˆ including the University of Southern Maine's Lewiston-Auburn College, Central Maine Community College and Andover College ˆ helps sustain the industry by producing graduates in fields like nursing and medical assisting.
Transportation and warehousing:
Up 7.2% from 2001 to 2005
2001: $83 million
2005: $89 million
Major investments include:
ˆ $2 million, Butler Bros.
Relocation from 10,000 sq. ft. in Lewiston to 54,000 sq. ft. in the city in 2000
ˆ $1.2 million, Central Distributors
31,400-square-foot expansion in 2005
ˆ $1 million, Federal Express
33,000-square-foot expansion in 2005
ˆ $4 million, Safe Handling Inc. Expansion in 2005
Transportation, warehousing and product distribution is still a relatively small part of the economy in Lewiston and Auburn. Not every effort to promote trade in the twin cities has worked, either ˆ no businesses have taken advantage of the Auburn's Foreign Trade Zone status, which exempts companies from paying duties on foreign imports, partly because some aren't sure it would save them money, according to George Dycio, economic development specialist at the LAEGC.
But the cities' efforts to promote its central location have boosted transportation-related business. Rail-and-truck transporter Safe Handling Inc. has seen its client base grow 20% annually since 2004. The new business helped fund a $10 million expansion project in 2006 at its Auburn headquarters.
When it was launched in 2003, the twin cities' marketing campaign, "L-A: It's all happening here!" may have seemed, well, like wishful thinking. But now it seems downright prophetic, especially according to a study released in late September from the Federal Bureau of Economic Analysis.
In its first-ever study of gross domestic product growth by metropolitan areas of at least 50,000 people, the BEA found that Lewiston and Auburn's GDP ˆ or the value of services and goods produced ˆ grew more than the Portland and Bangor metropolitan areas from 2001 to 2005.
"Lewiston has been aggressive in terms of economic development, and I think it's bearing fruit," says Lincoln Jeffers, assistant city administrator in Lewiston.
The Lewiston-Auburn region grew 10.7% from 2001 to 2005 to roughly $2.9 billion, while the Portland-South Portland-Biddeford region grew 9.3% to $19.8 billion and Bangor grew 5.4% to about $4.4 billion.
L-A saw the biggest GDP gains in manufacturing, which grew 29.7% to $488 million over the time period; health care, growing 23.3% to $401 million; real estate rental and leasing, growing 35% to $315 million; and transportation and warehousing, growing 7.2% to $89 million.
The boost in GDP followed years of economic decline in the twin cities, particularly in Lewiston, where the Bates Mill, which manufactured textiles and employed hundreds, closed in 1990.
To boost the area economy, the cities invested their own money in building new roads and office parks. Lewiston in 2005 also used a $17 million incentive package to entice retailer Wal-Mart into building a nearly $100 million distribution facility in the city.
Lewiston's record of commercial investment trumps that of other formerly industrial cities in Maine. From January 2000 through October 2007, more than $421 million has been invested in commercial construction and renovation projects in Lewiston, according to Jeffers. That compares to roughly $200 million in investments in Biddeford during the same time period, according to numbers provided by Bob Dodge, the city's economic development director.
Some explain that collective growth by pointing to the cities' relatively business-friendly regulations. The city of Lewiston, for example, has streamlined its development review process so that a project can be approved in one planning board meeting, says Jeffers. Tom Dunham, a commercial and industrial broker at NAI The Dunham Group in Portland, says that speed, compared to a months-long wait in places like Portland, has been a relief for some of his clients looking to expand or relocate.
Some businesses have been willing to relocate to Lewiston and Auburn, too, because the real estate can be cheaper than that in Southern Maine. Properties in the area can be about half as expensive as those in Portland, according to Dunham. As Portland and surrounding towns grow more crowded, businesses increasingly are considering L-A, he says.
Though not reflected in the BEA figures, L-A saw continued growth in 2006 and 2007 ˆ an expansion at Tambrands, a tampon factory in Auburn; construction of a $35 million dining hall at Bates College in Lewiston; and a $2.2 million expansion at manufacturer Wahlco-Metroflex in Lewiston.
Here's a breakdown of growth in three major industries in Lewiston-Auburn.
Manufacturing:
Up 32% from 2001 to 2005
2001: $376 million
2005: $488 million
Major investments include:
ˆ $5 million, Diamond Phoenix
104,000-square-foot expansion in Lewiston in 2000
ˆ $4.4 million, WahlcoMetroflex
Expansion in Lewiston in 2002
ˆ $1.5 million, Lepage Bakeries
21,900-square-foot expansion in Auburn in 2002
ˆ $1.6 million, World Harbors
Relocated from 25,000 sq. ft. in Winthrop to 40,000 sq. ft. in Auburn in 2001
ˆ $1 million, Tambrands
Expansion in Auburn in 2001
Shoe and textile manufacturing until the 1950s had been the mainstay of the economy in L-A. Since then, however, many of those manufacturers have moved their facilities off-shore. Meanwhile, niche manufacturers in the wood products, electronics and food industries have grown, along with others in the state.
It's hard to say why, exactly, manufacturing in the area is strong compared to Bangor, for example, where the industry's GDP declined 4.2% to $432 million in 2005, according to the BEA figures. One reason could be the availability of qualified workers, suggests Lisa Martin, executive director of the Manufacturers Association of Maine.
"[Lewiston-Auburn] is and was a traditional manufacturing center for many years, and the people that work there have those skills," she says.
Also, many manufacturers that have existed in the area for years have targeted markets outside Maine and the United States. For example, Lewiston's Wahlco-Metroflex, which makes machine parts for power plants, paper mills and other industries, has increasingly sold products abroad, says Martin.
Health care and social assistance:
Up 23.3% from 2001 to 2005
2001: $325 million
2005: $401 million
Major investments include:
ˆ $10 million, Sisters of Charity Health System
Construction of 36,000-square-foot women's health center in Lewiston 2001
ˆ $2.3 million, Central Maine Medical Center
Construction of 20,000-square-foot school of nursing in Lewiston in 2002
ˆ $7.6 million, Central Maine Medical Center
Construction of 125,000-square-foot cardiac care center in Lewiston in 2003
ˆ $3.4 million, Pediatric Associates of Lewiston
22,560-square-foot expansion in 2005
Health care is the biggest industry in Lewiston-Auburn, employing more than 8,000 people, according to the Lewiston-Auburn Economic Growth Council. That's partly because of population increases in southern Maine, which have led to crowding at some hospitals in the area. Central Maine Medical Center opened its cardiac care center in 2003, for example, to serve local patients who were traveling to Maine Medical Center in Portland, according Chuck Gill, vice president for public affairs at CMMC.
A concentration of schools ˆ including the University of Southern Maine's Lewiston-Auburn College, Central Maine Community College and Andover College ˆ helps sustain the industry by producing graduates in fields like nursing and medical assisting.
Transportation and warehousing:
Up 7.2% from 2001 to 2005
2001: $83 million
2005: $89 million
Major investments include:
ˆ $2 million, Butler Bros.
Relocation from 10,000 sq. ft. in Lewiston to 54,000 sq. ft. in the city in 2000
ˆ $1.2 million, Central Distributors
31,400-square-foot expansion in 2005
ˆ $1 million, Federal Express
33,000-square-foot expansion in 2005
ˆ $4 million, Safe Handling Inc. Expansion in 2005
Transportation, warehousing and product distribution is still a relatively small part of the economy in Lewiston and Auburn. Not every effort to promote trade in the twin cities has worked, either ˆ no businesses have taken advantage of the Auburn's Foreign Trade Zone status, which exempts companies from paying duties on foreign imports, partly because some aren't sure it would save them money, according to George Dycio, economic development specialist at the LAEGC.
But the cities' efforts to promote its central location have boosted transportation-related business. Rail-and-truck transporter Safe Handling Inc. has seen its client base grow 20% annually since 2004. The new business helped fund a $10 million expansion project in 2006 at its Auburn headquarters.
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