Hartford Business Journal Special Editions

14 Hartford Business Journal • September 14, 2015 www.HartfordBusiness.com E. Hartford outlet developer not afraid of competition By Brad Kane bkane@HartfordBusiness.com D espite their research showing a region of Hartford's size only capable of support- ing one outlet mall, the developers of the Outlet Shoppes at Rentschler Field in East Hart- ford are boldly moving forward with their plans. Gary Skoien, CEO of Chicago-based Hori- zon Group Properties, said the new Tanger Outlet mall at Foxwoods Resort Casino in Mashantucket is far enough away from his company's planned East Hartford develop- ment. He also said the indoor and outdoor malls in the Greater Hartford area, such as Evergreen Walk in South Windsor, provide a different kind of shopping experience than the discount, name-brand merchandise the East Hartford shops plan to sell. Pending approval of its 410,000-square- foot site plan on Sept. 23, Horizon intends to break ground on the new facility in October. If the weather is mild, the outlet mall will open in late 2016 or early 2017, said Skoien. If all goes according to plan, the mall will create 1,208 construction jobs and another 1,628 permanent and seasonal jobs. Hori- zon estimates the property will generate $405 million over 20 years in sales, property, income, corporate and excise taxes. Those figures are based on the Outlet Shop- pes being the premier destination for outlet shopping in the region and attracting high- profile stores to the development; Skoien said he already has high-profile tenants lined up. Typically, metropolitan regions with less than 2.5 million people can only support one outlet mall, Skoien said, and with 1.2 million people, Greater Hartford certainly falls into that category. Skoien said his development has the advantage over any competition because it is closest to the urban core of Hartford, is adjacent to the already established Cabela's outdoor store, and will be in the midst of United Technologies Corp.'s expanded cam- pus for its new Pratt & Whitney and United Technologies Research Center. Because of its proximity to this large daytime population, the Outlet Shoppes will boast more restaurants than the typical out- door mall, Skoien said. Horizon has eight outlet malls across the U.S. totaling 2.5 million square feet with another 1 million square feet under construction. n from page 1 (Above and far left) Renderings of the proposed Outlet Shoppes at Rentschler Field. (Left) Gary Skoien, president, chairman & CEO of the Horizon Group, stands to the right of Phillip Waters, the company's senior vice president. P H O T O | C O N T R I B U T E D R E N D E R I N G S | C O N T R I B U T E D Making matters worse: The slow recovery has forced some workers to flee the state, creating personnel shortages in several key industries including health care and finance. "We are really behind the eight-ball here in Connecticut," said Donald Klepper-Smith, a New Haven economist. "Connecticut has had steady improve- ment but not very strong improve- ment," added Fred Carstensen, director of the Connecticut Center for Economic Analysis at UConn. "We have far more people who are now working outside of Connecticut." Jobs recovery By July, Connecticut had recovered 102,000 — or 85.7 percent — of the jobs lost during the Great Recession, according to a labor market report from the state Depart- ment of Labor, which was released on Aug. 20. The news was even better for the private sector, which recovered 97 percent of the 111,600 jobs lost in the recession, accord- ing to the DOL. The private sector will have to continue driving the jobs recovery, since the positions shed by state and local gov- ernments likely won't return in the imme- diate future because of continued budget restraints, Carstensen said. With the Connecticut jobs recovery now 65 months old and adding an average of 1,569 jobs per month, the state seems poised to complete its recovery sometime next year, Klepper-Smith said. Still, that will come two years after the U.S. economy returned to its pre-recession jobs level, Klepper-Smith said. The national jobs recovery is now at 145 percent. Having Connecticut so far behind the rest of the nation hurts the economy in the long run, Klepper-Smith said. Jobs and companies will be attracted to higher-growth markets. Connecticut is only one of 12 states that hasn't fully recovered all its job losses from the Great Recession, according to U.S. Bureau of Labor Statistics data through July. The summer started with 15 states having that dubious distinction but Maine, Wiscon- sin and Wyoming all achieved full jobs recov- ery over the last two months. Connecticut's recovery continues to be hampered by an unfriendly business environ- ment, Klepper-Smith said. The latest example is the state's adoption of an unitary report- ing tax that forces businesses to pay taxes on profits they make in other states. This constantly shifting tax structure makes it difficult for companies to consistently know what their operating expenses are going to be, Klepper-Smith said. This, along with other issues like the regulatory environment, make businesses seek out more stable states. "It is sort of like watching an accident unfold in slow motion," Klepper-Smith said. Economic recovery While the jobs recovery has been painfully slow, Connecticut's economic output — mea- sured by its gross domestic product — recov- ered from pre-recession levels in 2012, accord- ing to the U.S. Bureau of Economic Analysis. Before the economy went south, Connecti- cut's GDP in 2007 was $235 billion. While the economy stayed below that level for three years, it hit $240 billion in 2012 and grew to $253 billion by the end of last year. Even though this is a positive improvement, the GDP grew only 0.6 percent last year, which was less than half the national GDP growth. Part of the reason for this slow growth — which leads to, among other things, lower state revenue collections and an unstable tax environ- ment — is the lack of the jobs recovery, Carstensen said. The problem hasn't been Connecticut resi- dents finding jobs; it is Connecticut residents finding in-state jobs, Carstensen added. When looking at employment statis- tics, the number of Connecticut residents with a job is the high- est it has ever been since DOL started keeping track in 1982. In June, 1.809 million state residents had a job, which is a 2 per- cent improvement over the number of residents employed at the start of the Great Recession. More residents, though, are taking jobs in New York, Massachusetts, New Jersey and Rhode Island, so they aren't contributing fully to the Connecticut economic recovery, Carstensen said. Jobs holes With more talent working out of state, the Connecticut economy has vacancies in sev- eral skill positions. Connecticut employers are looking to fill more than 40,000 vacancies, with registered nurses leading the way as the most needed position, according to a new DOL survey. Other major job vacancies include health- care practitioners (3,815), business and finan- cial operators (3,523), computer and math- ematical jobs (3,402), and architecture and engineering positions (2,434). If these and other key positions were filled, the state's economy would be running stron- ger, which could lead to a quicker jobs recov- ery and more robust growth, Carstensen said. Instead, the skilled workers employers now need went looking elsewhere when the jobs they wanted weren't in Connecticut. "Here, in Connecticut, we are king of a snail's pace [recovery]," Carstensen said. "I don't find much here to be encouraged about." n CT jobs recovery slow Still Recovering With Maine, Wisconsin and Wyoming all recovering to pre-Great Recession jobs levels in July, there are only 12 states that have not had full recovery. December 2007 July 2015 Employment Employment Deficit State (in thousands) (in thousands) (in thousands) Arizona 2,719.7 2,562.8 -156.9 New Jersey 4,125.2 4,021.2 -104.0 Illinois 6,036.5 5,943.1 -93.4 Alabama 2,026.7 1,945.6 -81.1 Missiouri 2,822.3 2,754.8 -67.5 Ohio 5,471.6 5,420.4 -51.2 Nevada 1,300.4 1,253.9 -46.5 Mississippi 1,165.3 1,123.8 -41.5 New Mexico 855.3 821.0 -34.3 Connecticut 1,730.9 1,697.6 -33.3 West Virginia 770.5 740.8 -29.7 Rhode Island 492.5 487.2 -5.3 S O U R C E : U . S . B U R E A U O F L A B O R S T A T I S T I C S Fred Carstensen, director of the Connecticut Center for Economic Analysis, UConn

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