Scranton Looks to Shed its Industrial Image

By Paula Seligson

Empty lots line the main road of the Valley View Business Park northeast of Scranton, part of a 1,300-acre tract that overlooks the scenic Lackawanna River Valley. The land is ready for business to move in, says facilities manager Aaron Whitney. Some companies already have. Whether companies will come remains uncertain – much like the future of Scranton. But one thing is a sure bet: the next businesses that move in won’t be the same ones that defined the region in the last 50 years.

In a July campaign stop in Scranton, Donald Trump promised miners he would “bring back coal” – an industry that disappeared from the region in the 1960s – and would return the manufacturing jobs sent overseas. In their first joint campaign stop in August, Hillary Clinton and Joe Biden spoke to a crowd with a “Welcome Home” sign and appealed to local roots. Biden is from Scranton, and Clinton spent her summers there, where her grandfather worked in a lace factory.

None of the politicians gave a viable plan to help a city with shuttered stores and high poverty. Both missed the story of Scranton today: that its future does not lie with the past, but instead with education, medicine and technology.

Scranton struggles with a mismatch in available jobs and the skills of the workforce, retaining young people and an economy that never recovered from the loss of coal and manufacturing. Pennsylvania designated the city financially distressed in 1992, a label the local government is still trying to shed by raising taxes to pay off debt and a budget gap that reached $20 million in 2013. Today’s population is about 76,000 people, half of the city’s peak in the 1930s.  Scranton has a 22.1 percent poverty rate and $37,551 median household income, compared to Pennsylvania’s 13.5 percent poverty rate and $53,115 median household income, according to the 2010-2014 5-year census estimate.

Nevertheless, Bob Durkin, president of the Greater Scranton Chamber of Commerce, sees a bright future for the city in “eds and meds” – education and medicine.

Six universities and colleges call Scranton home, including a Penn State campus, the University of Scranton and Marywood University. In addition, The Commonwealth Medical College welcomed its first class of MD students in 2009. The city is home to three hospitals with a supporting network of medical professionals located nearby.  Establishments under the “health and medical services” category make up 14 percent of businesses in Scranton, according to state data, and Durkin expects the medical industry to grow.

Durkin said this mix brings opportunities in medicine, pharmacy and biotechnology. The city is “trying to promote and grow businesses that can connect and strengthen the medical industry itself,” he said.

The hope then is that these ventures will attract and retain talent to boost the city’s sagging economy.

“I think we’re at a tipping point,” said Robert Naismith, a local businessman on the board of trustees at The Commonwealth Medical College.

Scranton faced a shortage of doctors, Naismith said, as the local specialists and surgeons aged with few young doctors there to replace them. Patients traveled to Philadelphia and New York City for treatment – the two cities doctors often chose over Scranton, he said.

The medical school helps keep that talent in town, Naismith said, as doctors often stay where they perform their residencies. Companies in biotechnology and biopharmaceutical also appear around medical schools, he said, and he believes this medical infrastructure will help Scranton.

“There’s no question that there’s a lot of not only poverty,’’ said Naismith, “but the south end of the middle class, where people still struggle on $30,000, $40,000 a year and so forth because the jobs aren’t here, the discretionary income isn’t here. But that’s beginning to change.”

Whether more students will stay in the area after graduation is an open-ended question.  “I think there’s talent, but unfortunately I think the talent is moving on us,” said Gino Piccolino, founder of Precision Point of Sale, a software company that builds ordering systems for restaurants.

Piccolino grew up in the restaurant business in Scranton – pizza sauce is in his veins, he said – and he employs four people to serve about 250 customers.  Finding talent can be a challenge, despite the low cost of living.  “Software engineers, especially the talented ones, see the allure of New York City or out West where they’re getting out making $100-some thousand dollars a year,” he said.  “Since the cost of living is so low here, currently salaries aren’t a New York City salary.”

Piccolino operates out of the TekRidge Center in the Jessup Small Business Center, next to the Valley View Business Park, one of the Greater Scranton Chamber of Commerce’s two incubator sites. The incubator program provides subsidized rent and help in finding grants, tax credits and networking opportunities with other technology talent. “Innovation can happen here and it does happen here,” said Aaron Whitney, the facilities manager at the Chamber who maintains the spaces.

Built in 2013, TekRidge is home to seven companies and has room for up to two more, Whitney said. Another three companies reside in the downtown Scranton Enterprise Center incubator location, which can house up to 17. In total, 34 companies have graduated from the program since it began in 2003.

Durkin, the head of the Greater Scranton Chamber of Commerce, believes perception is part of the city’s problem.  Scranton has jobs, he said, but a skills mismatch means they can’t always be filled, such as in medicine and advanced manufacturing.  “If you don’t have the qualified workers, you’re not going to have the jobs,” he said, “and if you don’t have the jobs, then how do you attract qualified workers?”

On Nov. 1, a search on Pennsylvania’s CareerLink job board showed 679 jobs openings within 10 miles of Scranton posted in just the last 30 days:  170 in the “Office and Administrative Support” category, and 99 in the “Healthcare Practitioner and Technical” category. Durkin said CareerLink is an underestimate, with the biggest employers posting on their own websites.  Students need higher education, not just high school, to take on these quality jobs, he said.

Jim Mulligan, an attorney who lost the mayor’s race in 2013 and is running again next term, said the challenge is creating family-sustaining jobs as young people move away for better economic opportunities.  “Our tax base is shrinking, it’s elderly, the taxes keep going up, people are leaving the city,” he said.

Nevertheless, Mulligan is hopeful that medical and technology companies will grow and retain the students who fall in love with Scranton while in school but leave for better jobs.

Mandy Pennington, 28, grew up 40 minutes away in Dallas, PA, and stayed in Scranton after attending Marywood University even while commuting to work in nearby towns after college. She joined Scranton company Net Driven two years ago, bringing her downtown to the Scranton Enterprise Center, and worked her way up to director of internet marketing.

An incubator success story, the company builds websites and provides digital marketing for auto companies. “Because of the internet, there are jobs here if you look back 10, 20 years ago you would have had to go to a major city to be able to find,” she said.

Founded in 2007 by a Scranton local, Net Driven was bought by California-based Internet Brands last year. The company employs 62 in Scranton, plus another seven in Duluth, MN.

The Friday before Halloween, the Net Driven office was decked out with Harry Potter decorations. Fake barbed wire fence hung over cubicles to look like a scene from Jurassic Park.   The scene looked like a company and culture one would find in Silicon Valley – far from the image of the city painted by the presidential candidates. Despite what Trump says about coal and manufacturing, and the nostalgia Clinton and Biden describe, some of today’s Scrantonians see a different future for the city.

“When I talk to people who are in my age group or people who are currently living or working in Scranton, I don’t think anybody is looking for these manufacturing jobs to come back,” Pennington said. “We’re looking ahead and saying, ‘What can we do with the resources we have to redefine our region?”

The Net Driven office Halloween party on Oct. 28. Photo by Jessica Zampetti.