ITHACA, N.Y. — Sometimes, an article gets inspired by the Facebook comments of readers. That was the case with this piece. The comment was posted on the piece regarding the move of the Ben Weitsman steel collection and scrap processing facility from Ithaca’s Cherry Street to the town of Lansing.
“Diversifying the tax base shouldn’t include the relocation of industry to the outskirts. While the land is arguably better suited for residential (along a waterway), we need to set aside land for industrial purposes which bring in far more tax revenue than homes.”
There is some food for thought there. The local economy is built on education, medical services, commercial services and leisure and hospitality. Industrial types — the makers, the processors, the crafters and builders — often seem to be shortchanged in the local economic picture. In the city of Ithaca, that seems especially true.
Sixty years ago, the visitor to the city of gorges would have found Ithaca Gun footsteps from Cornell’s Campus, Morse Chain on South Hill, National Cash Register’s sparkling new facility up the road in the town, and any number of smaller factories and warehouses scattered about the urban fabric. Groton, with the Smith-Corona typewriter factory, was practically a company town.
Of course, times change, and not always for the better. Morse Chain would become part of Borg-Warner and move to Lansing in the early 1980s, selling its stake in the old plant to Emerson Power Transmission, which then laid off hundreds when it closed its doors over ten years ago. Ithaca Gun closed its Ithaca factory in 1986, tried to make things work up in Kings Ferry, and later sold off its intellectual property to an Ohio firm. National Cash Register shipped its jobs overseas, and the plant was sold to Axiohm, which became CognitiveTPG, in 1994. Smith-Corona had its mass layoffs in the early 1980s, and not even the movement of hundreds of jobs to Singapore and Mexico was enough to revive its fortunes as typewriters were replaced by computers. The company is now a mere shadow of its former self, making barcode label supplies in Cleveland.
In 1960, manufacturing, the quintessential representation of industrial activity, made up 36% of the Tompkins County’s job count. By 2010, it was less than 6%. Just prior to the pandemic, Tompkins County had quadrupled the number of jobs within its boundaries since 1960, while manufacturing was down by nearly 50% in that same period.
For one reason or another, industry has been a hard thing for Ithaca and Tompkins County to nurture. It’s something Tom Knipe, the city of Ithaca’s Deputy Planning Director, is well aware of.
“In terms of the issues, it’s really hard to combat issues like cheap labor, environmental regulations, and state incentives in places that don’t have the same structures for how they’re supporting economic development. We actually have a really robust state economic development program here, and we’re a state that recognizes it’s not just about tax incentives, but investment in workforce development and education, and businesses that recognize that and value that continue to locate here. But some of the more traditional manufacturing has gone where labor’s cheaper.”
Knipe was frank in his assessment of the issues, some local, and some from the bigger picture. Tompkins County and Ithaca especially have higher land values, which makes it more costly to set up a large-scale operation. The area’s relative isolation makes it harder to attract firms with heavy transportation needs. We live in a high-tax state (and yes, industrial uses do tend to be more cost-efficient, because they don’t utilize services the way residents do; the businesses aren’t the ones sending kids to school). Globalization has created an unbalanced playing field.
“We want to do everything we can to maintain and support the manufacturing industry that we have, but we’re not about smokestack chasing, that’s not our mentality. By and large, in terms of business expansion and retention, we want to support the manufacturing that we have continuing to locate here and grow here.”
Perhaps part of the problem is not so much industry, but the perception of what industry is. Industry — that manufacturing, processing and crafting — doesn’t have to be a big, dirty operation. The image of a smoke-belching factory with guys in overalls showing up, lunch pails in hand to punch a clock for their shift is largely obsolete.
Ithaca is not a city of heavy industry. It hasn’t been a city of big factories for a long while, and likely will never be one again. However, a diversified economy is important, especially when higher education is as threatened as it is now. And so in place of large-scale manufacturers, the city builds industry by leveraging what it has — a location in a major agricultural region, with lots of brainpower and young talent up on the hills.
“A really robust economic development program should be focused on growing startups and then having a strong business retention and expansion initiative. Most business growth is going to come from existing businesses and existing industries. In terms of strengths here and how we approach that, a lot of it is, we have a really strong startup environment. The fact that we’re located where Cornell is, 80% of startups here have some kind of connection to Cornell,” said Knipe.
“It’s really three things. One is access to intellectual property. Cornell and other local organizations have good tech commercialization support for high-tech manufacturing. Second is, you also have a lot of businesses that grow here because people come to school here and they gain an affinity for the community. So when they’re ready to grow their business, they take a serious look here because of the emotional connection. And third is access to talent, university and home-grown. That helps us to have a strong startup ecosystem. So intellectual resources, having good support for startups and an entrepreneurial ecosystem, and access to workforce, coupled with an attractive place and great value of life. I think that gives us a great value proposition for those working to work and grow here.”
Let’s boil that down. Essentially, industrial work here isn’t the traditional assembly line. It’s the boutique made-to-order kind of stuff. The chair you’re sitting in? Probably not going to be made here. Some sophisticated scientific equipment or custom tooling? Quite possibly. And those are the types of work Knipe sees as being a good fit with the increasingly mixed-use environment Ithaca officials seek.
“People think of the brick kiln or the big plant with tractor trailers. But to me, they’re all kinds of different industries. And even within those, like manufacturing, the specific impacts on adjacent uses like residential or other commercial, really depends on the other industry that you’re talking about. Weitsman on Cherry Street, yeah that’s probably not a great fit with commercial and multi-story residential next door, and they understood that.”
“But I think there are industrial uses down there that would be, like Vector Magnetics and Precision Filters. They’re not producing noxious fumes or malaises. They’re not pumping out commodity materials, they’re doing much more products with custom specifications, there aren’t really tractor trailers going in and out (of their places). Those uses are very compatible. Also, note that housing isn’t allowed on Cherry Street south of Cecil Malone, and that’s to help maintain some of those types of industries.”
Perhaps less obvious than the much-vaunted tech and tech-adjacent industrial businesses — the food on your plate. All those artisanal food and beverage makers around Ithaca and Tompkins County pack a punch in job totals, with several hundred local jobs and a steadily increasing share of Tompkins County’s industrial base. Food production and processing firms are a form of industry too, and for their line of work, business has been booming.
The person who would know their work the best would be Amina Omari, the Program Director for Cornell Cooperative Extension’s Food Business Incubator Program (FoodBIP).
“Food processing is huge in Tompkins and the Finger Lakes. That comes from having a lot of consumer support, to having good regional distributors, to agritourism, as well as world-class resources like Cornell and the GROW-NY competition. All these things combine to make this a really great place to start a food processing business,” said Omari.
“I love working in this area because folks can start small and grow at the Ithaca Farmer’s Market, the ‘great business incubator’, and they can choose to stay there or get even bigger. In terms of growth, I work with dozens of food processing businesses, and that’s a part of the reason my position was created, was all that growth. We see a lot of growth with “wholesome foods,” consumer-packaged goods (anything you get in a package at a grocery store, like snack foods), local agricultural products and processed foods from those products. We have an awesome hub of beverage companies, from Ithaca Beer to South Hill Cider, even a meadworks. There’s all these factors in the mix, the agricultural bounty and the scientific mix and the foodies here make for a good environment.”
Heather McDaniel, the President of Tompkins County Area Development, hit along similar lines as Knipe in terms of issues the city faces. A high tax rate and high land values, lack of accessibility for freight, and a new one – lack of suitable buildings, unless you have the funds to build brand new. That might seem like a good problem to have, but it’s cost the city and county plenty of jobs; Ithaca Hummus expanded so much, they couldn’t find a local facility capable of handling their needs, so production decamped to Rochester. In another recent case, a lithium-ion battery maker, Lionano, struggled to find a building that could house its equipment as it expanded manufacturing. It moved out as well, in this case for the Boston suburbs.
“With property values being higher here than neighboring counties, we don’t have a lot of vacant manufacturing space. So if a company is looking at the region for a manufacturing facility, they’re likely looking at Binghamton or Syracuse,” said McDaniel. “Right now, we have three industrial buildings for sale in Tompkins County. That’s three more than usual. Other than that, the buildings are full. The old NCR factory, that’s now the South Hill Business Campus, and it’s over 90% occupied.”
Even for those with the money, building new comes with its perils. Take Emmy’s Organics, who wanted to build a warehouse and food processing plant in the city, but had to give up because the land they wanted turned out to be waterlogged mush that made the foundation they needed impossible to do within budget. At least the Emmy’s situation has something of a happy ending. TCAD was able to assist them in a move to a recently-vacated warehouse in Dryden, which was big enough that they could bring some of their food manufacturing back in-house, and growing their staff to handle the workload.
(In case you’re wondering, Knipe doesn’t fault them for moving out to Dryden, given the circumstances. “We’re a regional economy. If they stay locally, that’s fine. I have nothing but love for Emmy’s Organics. They could have gone through co-packers, but they said they wanted control of production and stay in our local community and employ local people. To me, they’re a wonderful success story. The city is part of a much larger economy than just its borders.”)
McDaniel also cited another obstacle Knipe did not. “There’s one other issue – quality and reliable utility infrastructure. I don’t want to open a can of worms, since natural gas is a real hot-button issue, but manufacturing and processing use machinery and equipment with intense utility needs. The business park in Lansing has a moratorium on natural gas, and wind and solar just aren’t there yet in our community. It adds to the cost to development to look at alternative energy sources, and it may be too much.”
That comment is squarely taking aim at the West Dryden gas pipeline controversy. MACOM-Binoptics planned a major expansion in Lansing, only to give up and opt for Massachusetts because the only thing that could power their equipment within budget was natural gas – a plan that collapsed with the halting of the West Dryden gas pipeline.
“They did a 1300 square-foot lab expansion here, and the cost of putting in electrical in place of natural gas, it was almost prohibitive, so the parent company looked at that and decided to expand in Lowell. We lost over 100 jobs to that. It was a cost decision,” McDaniel added.
Still, McDaniel did express reasons for optimism, mostly for that boutique manufacturing of sophisticated parts and equipment spun off from Cornell research. “We are really good at spinning tech out of Cornell’s world-class research into little companies. For people who have an affinity for this community and Cornell, they’re going to start their companies and grow here. We know not every company will stay. They’ll take on venture capital from elsewhere and they’ll be pulled from outside, and it may make sense for them to move. But our goal is that we are able to have a higher number of startup companies at any one time. Organizations like Rev, and other partnerships have helped to accelerate the growth of startups. For example, you have Transonic, their founder stayed because he loves it here. It is easier to do manufacturing in other areas, but he loves it here. Rheonix, Q2 Solutions (formerly Advion), CBORD. We have the highest per-capita research dollars of anywhere in New York State thanks to Cornell.”
McDaniel was less optimistic than Knipe regarding the meshing of industrial firms with the city’s increasingly mixed-use urban environment, saying that for truly industrial processes, it’s best not to mix them with housing. However, she did note a big exception on South Hill. “Therm has proven to be a really good neighbor. It’s clean and organized and they’re able to co-exist even with two or three work shifts. They even did a little expansion a few years ago, and one of their decision-making factors was how the neighborhood might react and if it would impinge on their co-existence. That weighed heavily on them and we helped them navigate that. Therm was probably the first Cornell spin-out, three generations ago.”
The gist of it seemed to be something like this: For the existing manufacturers, the Borg-Warners and the Therms, the county and city would do whatever it could to support them and keep them here, but both McDaniel and Knipe acknowledged that their history within, and fondness for the Ithaca/Tompkins community is a big part of what keeps them around (both of them attributed that to the area’s “high quality of life”, citing the outdoor activities and Downtown Ithaca). For grittier operations like Ben Weitsman, the local facility helps fill out their network, but Ithaca and Tompkins County aren’t the most appealing for their line of work.
The new generation of industrial uses is a different breed. They tend to be smaller, if still home-grown. They’re heavy on brainpower and cutting-edge research to make something new and different, whether a complex electronic component or new kinds of pre-prepared food dishes, snacks and beverage varieties. Some of these find the city a good fit, some prefer the outlying towns, and it all depends on their wants and needs.
“If it weren’t for the manufacturing factor, we wouldn’t be able to support our quality of life. These are good-paying jobs that generate wealth in our community and support other jobs. It’s a small but critical part of our economy. With the recent losses in education due to COVID, do we buckle down on what we have, or diversify more? If we diversify, the place we do that is manufacturing and tech. But these aren’t the big smokestack companies anymore,” said McDaniel.