Providing the Ingredients for Business Success

A business starting or expanding at the Carbondale Technology Transfer Center is looking at financing possibilities well beyond those available in most other areas.

"The state and federal economic development programs are available here, as are regional and county programs," CTTC Executive Director Paul Browne said, "but they're not the only sources available. There are other funds that can be used within the city of Carbondale or within the Carbondale Enterprise Development Zone."

The EDZ offers low-interest loans in categories from equipment purchases to working capital. The Carbondale Lackawanna Industrial Development Company lends money to help fund building projects, while the CTTC offers loans to be paid back traditionally or under a royalty agreement.

"At the Carbondale Technology Transfer Center," Mr. Browne said, "we have funds that can serve at the earliest stages. Most other sources require you to be further along in development."

The center can assist with financing for working capital, equipment, and development of land and buildings. The structure of the financing can be as important as its availability and its cost.

"We can do more than just make low-interest loans," Mr. Browne said, "because we have a royalty component to our financing package. If a business needs funding above what we can provide as a loan and it has a product or technology that's suitable for a royalty agreement, additional CTTC financing then becomes possible."

The amount and structure of financing through the CTTC are not the program's only benefits.

"We have control of our own funds," Mr. Browne said, "so we can make our own decisions without having to go outside. With our incubator function, we help you to the stage where your business plan is ready to be submitted to our board, but there is a stringent review process because we need to be sure we're making a worthwhile investment.

"Our involvement, too, can sometimes help accelerate the funding being received from other agencies or from sources in the private sector."

Established in 1995, the center is the most recent addition to the array of organizations and programs that moved Carbondale's economic life away from dependence upon a narrow base. From the early 1800s, Carbondale was built on coal and its supporting railroad and machine industries, but mine-closings became frequent after World War II and the downturn rippled through the economy. Carbondale focused on reinvigorating itself, beginning in 1950 via the Scranton Chamber of Commerce's Lackawanna Industrial Fund Enterprise. In 1961, community leaders launched the Carbondale Lackawanna Industrial Development Company, which raised funds to help finance buildings for companies locating in Carbondale.

"These programs required tremendous vision and confidence," Mr. Browne said. "The community leaders had to see beyond what the city had always been."

CLIDCO President Donald Hoyle said the organization's job-development mission has enabled it to participate in a wide range of projects with a major one - Hendrick Manufacturing Company's 1976 relocation into a modern facility - anticipating what's recognized today as job-retention. Later CLIDCO loans helped other firms to adapt and reuse portions of Hendrick's former complex in the city.

In some cases, CLIDCO funding has had a larger focus. It assumed a major financing role, for example, in revitalizing the former Delaware & Hudson Railway Carbondale Yard as the Business Park at Carbondale Yards. The Carbondale Industrial Development Authority was the lead on that project in 1991, three years after it became active and two years after Carbondale received its Pennsylvania Enterprise Development Community designation. The business park's opening symbolized the change in the city's economy.

"I think that was the most important loan," Mr. Hoyle said. "The railroad yard was sitting there for years and look at the number of companies that are in there now."

CLIDCO operates a revolving loan fund, where low-interest loans serve as part of a funding package for businesses purchasing or erecting buildings. The Enterprise Development Zone through a similar structure lends money that can be used to provide working capital or finance machinery and buildings.  

"With any loan we make," EDZ Program Coordinator Nancy Perri said, "one full-time job has to be created for every $10,000 that we lend, but it doesn't have to happen initially. The jobs can be created over the period of the loan."

The EDZ requires creation of jobs in numbers based upon the amount of funding provided and, like CLIDCO and the CTTC programs, it's one of the reasons behind the city's success in overcoming the loss of its dominant industry.

"Carbondale made the transition from depending on coal and railroads to supporting a more diverse economic base," Mr. Browne said, "and it continues to evolve to keep in step with the changes in technology and business."

The tools Carbondale used to broaden its economy are available to businesses today and the financing component offers some perhaps unexpected benefits, placing the city in a highly competitive position. The Carbondale-specific programs, Mr. Browne said, are not contingent on receipt of county, state, or federal funding since they have no direct relationship to any of those sources.

"We can bundle any and all of these programs," he explained. "The people at the different Carbondale agencies can help a business to assemble a package.

"Say a business needs $500,000 and the most we can provide is $200,000. To make up the difference, we can help that business to put together a bigger package and take advantage of a wide range of programs. If building a package requires going to more than one program, the business can get some special assistance in doing that."

Depending upon the firm's needs, it might obtain all of the necessary money within the city or it might take advantage of available local funding as an addition to that already arranged. In fact, for a business otherwise unable to reach its required funding total, a Carbondale program could be the single component that makes the project work.

"Carbondale," Mr. Browne said, "has a flexibility that few other localities could match on their own."

The center's support for new businesses is enhanced in other ways, thanks to Pennsylvania's position as the most small-business-friendly state in its market.

"In national statistics that rate states on their environments for small business, we see Pennsylvania as the best among those it competes with," Mr. Browne said. "Narrowing that into Pennsylvania, statistics bear out that Lackawanna County is notable as a small-business-friendly county, and closer to home, the city of Carbondale has demonstrated its competitive advantages. When you look at those benefits and the advantages that the CTTC's incubator offers, it's easy to see that this is a premier location for start-up companies and small businesses to develop."

That kind of direct improvement of the business climate is backed up with other commitments, such as Carbondale schools' seamless integration of computers into classrooms to give students the necessary technology skills.

"Computers are used across the curriculum," said Patricia Franks-Evanish, business communications teacher at Carbondale Area High School. "The computer's not only business-oriented. You use it in English. You use it in foreign languages. You use it in science. Our students are becoming well aware that computers are part of our everyday lives."

"You need to be able to use computers as a tool not only in high school, but also in college," said Sister Grace Surdovel, technology coordinator and computer teacher at Sacred Heart High School. "We're training them to use them confidently as opposed to being afraid of them."

The schools' approaches are similar as, for example, both strongly emphasize building the skills to take advantage of the Microsoft Office suite and both require students to develop Microsoft Power Point presentations. They also believe that simply being able to use computers is not enough, so students learn to employ them in studies as diverse as science and English. The faculties know that pays off.

Sister Grace spoke of a college admissions office asking a student to supply her multimedia presentation on a disk. Other students, she said, are considering careers using their computer-related skills in engineering, programming, and drafting.

"They just think it's the most fascinating thing in the world to incorporate computers," she said, "which is great because it means they'll be able to use them as tools out there."

Carbondale Area students won first place among some 20 regional schools in the first computer contest sponsored by the Scranton Chamber of Commerce and the Greater Wilkes-Barre Chamber of Business and Industry. The contest allowed students to demonstrate skills in everything from spreadsheet preparation to web page design. The victory is important to the students and to area businesses.

"The Carbondale region produces people who are equipped to do well in technology-based industries," Mr. Browne said. "They're entirely capable of participating in the new economy and doing so successfully."

On a more long-term basis, Sacred Heart and Carbondale Area valedictorians and salutatorians from the 1990s have earned degrees in fields as technology-weighted as computer science, bioengineering, molecular replication, electrical engineering, and medicine.

"This shows the quality of education here," Mr. Browne said, "particularly the way that the local schools are producing people with strong backgrounds in science, math, and technologies. There's a knowledge base here to provide support to the developing technology industries."

Some requirements for businesses' success are less technology-driven - and perhaps less glamorous - but no less important. That sums up the Lackawanna Valley's transportation network, which gives CTTC clients a strong competitive tool and helps attract new business.

"When you look at the excellent highway system together with the excellent rail system, you really have a win-win situation," explained Attorney Lawrence Malski, executive director of the Lackawanna County Railroad Authority. "The Business Park at Carbondale Yards is a prime example of a place where you have the rail system, you have the highway system, and it's ready to grow."

Efficient transportation isn't new to Carbondale. Over 150 years ago, the privately built Milford & Owego Turnpike served the area as part of the shortest Great Lakes-Atlantic Ocean route, while the Delaware & Hudson Canal Company tied Carbondale to New York City specifically to carry coal to markets. The road system steadily grew, so that by the 1980s, the Pennsylvania Turnpike's Northeast Extension and Interstate Routes 80, 81, 84, and 380 served the region.

The rail network also grew, but then saw gradual cutbacks in lines and service. In 1985, though, Lackawanna County officials recognized the importance of rail transportation to the area's economic life and established the railroad authority. The goal was to prevent the then-impending abandonment of the Delaware & Hudson Railway's line from Scranton to Carbondale and to use it as a business-development tool over the long run. CLIDCO was a key player in the authority's acquisition of the railroad.  

"The rail system ties Carbondale to the rest of the country through rail transportation," said Mr. Malski. "The major benefit, obviously, of the county saving the rail line was to keep this link in place."

The Delaware-Lackawanna Railway operates the line - now extending into the Pocono Mountains - and interchanges with Norfolk Southern, Canadian Pacific, and Reading & Northern. As proof of the railroad's impact, Mr. Malski cited Tredegar Film Products and Schoenburg Salt Company, both in Carbondale.

"Tredegar is a perfect example of the industry that was saved because the rail was restored," he said, "but there's also the example of a new industry in Carbondale, Schoenburg Salt. They needed rail service."

Three years after the railroad's acquisition, a new Carbondale-to-Scranton highway was placed on Pennsylvania's 12-Year Transportation Plan. The $475 million Governor Robert P. Casey Highway opened in 1999 as a four-lane, limited-access section of U.S. Route 6 tying Carbondale directly to the Interstate system.

"It's really tailor-made for business," said Charles Mattei, district engineer at the Pennsylvania Department of Transportation's District 4-0. "It's a 65 mph road for 16 miles and it's built to Interstate standards. For truck traffic, it's ideal."

Trucking isn't the only beneficiary, though, as Mr. Mattei said 17,000 vehicles daily over the section closer to Scranton and 8000 on the Carbondale section mean less traffic on Business Route 6 and other main Carbondale-Scranton routes. The result is that those who commute to businesses at the CTTC from area communities can do so far more easily than they could have before the highway's completion.

"From the standpoint of traffic generation in terms of providing relief and economic development," Mr. Mattei said, "it's doing the project expectation. We feel it's been a big success. It's going to do everything we want it to do."

Mr. Malski knows that efficient transportation systems make the area more attractive.

"When we started in 1985," he recalled, "we'd get a couple of calls a year. Now, we can get numerous calls per month. Obviously, you don't get every one, but you have to pursue them. It shows that when you have the infrastructure in place, it really is an incentive to bring new industry in."