County economic development scorecard posts another healthy year

Michael Bradwell
Observer Reporter

Despite the downturn in natural gas production last year, Washington County attracted 80 economic development and infrastructure projects that amounted to more than $1.1 billion in capital investments.

The tally, which was spread over several different sectors, was presented Thursday by the Washington County commissioners during their annual economic update at the Hilton Garden Inn in Southpointe.

The event, attended by more than 250 business leaders, also underscored how two programs – the Local Share Account and impact fee money returned to the county from natural gas drilling companies through Act 13 – have helped to create an economy that has continued to perform well over the past decade.

“Washington County has been the true exception in the Greater Pittsburgh region in creating new economic growth, new job opportunities and countywide expansion,” said commission Chairman Larry Maggi.

“In 2016, our public and private partners announced $1,179,658,675 in new business investment and an additional 1,062 created or retained jobs in Washington County.”

Maggi added the investment was well diversified, including energy, commercial/retail development, infrastructure and manufacturing.

Specific projects included three new manufacturers in Donora Industrial Park, numerous restaurants, microbreweries and distilleries, expansion of Starpointe Industrial Park infrastructure and development of the Washington County Airport’s northside hangar.

Despite the downturn in natural gas spending and production, Maggi indicated the slowdown appears to be temporary.

Quoting figures from the state Department of Environmental Protection, he said the county led the state in the number of unconventional wells drilled in 2016 with 136 out of a statewide total of 502; and led the state in the number of permits issued. As a result of the drilling activity, the county led the state in the amount of Act 13 money received last year – $5,688,943.

“Our success in the energy sector, even with the downturn, has enabled many of our residents to find new opportunities and jobs,” Maggi said, noting that five of the state’s top shale gas producers, ranked by amounts of natural gas produced statewide, are located in Washington County: Range Resources, Rice Energy, Consol Energy, Noble Energy and Vantage Energy Appalachia.

Funding growth

Commissioner Diana Irey Vaughan noted the county’s LSA fund, derived from slots revenue generated by The Meadows Casino, has been a significant contributor to the local economy.

“Since 2008, the LSA has invested more than $84 million in new economic, community and industrial development projects,” she said. “In that same time frame, we have been able to match our $84 million in LSA funds with nearly $355 million in additional federal, state and local monies for a total of $439 million in total impact.”

She added in 2016, the LSA invested $6.7 million and leveraged more than $12 million in economic and community projects for the county, including the Greater Washington Area Business Incubator in Washington and the Charleroi facade improvement program as well as the Brownson House recreation facility project.

During a question-and-answer portion, commissioners acknowledged there are moves afoot in Harrisburg that could negatively impact both Act 13 and LSA funding.

Legislators have been given until May by the state Supreme Court to correct the current funding scheme for LSAs, which it ruled as unconstitutional.

Casinos are continuing to pay into the fund as legislators seek a solution, but if none is reached by May, Irey Vaughan said funding will cease.

“If this were to go away, there would be a slowing of growth in many areas of the county,” she said.

As for Act 13, Gov. Tom Wolf has proposed retaining the money that counties impacted by drilling receive, but wants to add a 6.5 percent severance tax that would credit the amount that companies spent through Act 13.

While acknowledging the state has a $3 billion budget deficit, Maggi said, “We don’t want to scare away our energy companies.”

Visitor spending

The county’s tourism promotion efforts are paying substantial dividends, according to commissioner Harlan Shober.

He cited a report from the state Department of Community and Economic Development that noted direct visitor spending in the county’s tourism industry is $760 million per year. Spending, which comes from both business and leisure travel, supports nearly 6,000 jobs and generates more than $152 million in federal and state taxes.

While The Meadows and Tanger Outlets are the major drivers of tourism, each attracting millions of visitors a year, Shober said other tourism assets such as the Pennsylvania Trolley Museum, Aquatorium in Monongahela and the LeMoyne House in Washington “are treasures that can only be found in Washington County.”

Part of Thursday’s presentations included an update of the Shell ethane cracker plant in Beaver County, which is in the early phases of construction.

Ate Visser, vice president of Pennsylvania chemicals for Shell Chemical LP told the audience the company will begin major construction of the cracker this year, a process that will last about three years.

He said conversion of ethylene into polyethylene will commence at the start of the next decade, but will produce 52 different products which will be pelletized and shipped by road and rail to supply about 70 percent of the polyethylene demand in the region.

The plant’s demand for ethane, which will come from producers in Ohio, West Virginia and Western Pennsylvania, is estimated to be about 50 billion cubic feet per day.

He cited a study that Shell commissioned from Robert Morris University which found the cracker, which is expected to create 600 permanent jobs, will also create an additional 5,300 to 6,700 jobs in the region not directly related to the project.

While he couldn’t be more specific about the jobs – commissioners said they expect to see more manufacturing as a result of the cracker – Visser said the impact will be widespread.

“This has more impact than just Beaver County,” he said.

During Thursday’s event, David Mariner, chairman of the Southpointe CEO Association, announced the three commissioners will be this year’s recipients of the association’s World Class CEO of the Year award, to be presented in June.