Then and now, lack of economic diversity

The more things change …

Last week Robert Santy, president and chief executive officer of the Connecticut Economic Resource Center, told those at the regional chamber's annual economic-forecast breakfast something that most in attendance probably knew.

"You need to diversify the economy down here," said Mr. Santy, noting local dependence on such major employers as Electric Boat, Pfizer Inc., the two tribal casinos and its submarine base.

Flashback to December 2006. Southeastern Connecticut had only recently survived a harrowing experience - the near closing of the Naval Submarine Base in Groton. A broad and bipartisan coalition of business, civic and political leaders had rallied in defense of the base and obtained a reversal of the closing decision.

With that threat behind it, times were good. A labor report described New London County as "the state's good news story," with job growth up 19.2 percent from January 1990 to October 2006, compared to 1.3 percent in the state overall during that time.

The Mohegan Sun and Foxwoods Resort casinos were growing, the Sun's Project Horizon expansion expected to add 1,500 jobs, and Foxwoods undertaking construction of the MGM Grand Hotel. There were hints that Pfizer might begin downsizing its research and development operations in Groton and New London, but the potential for serious staff declines seemed remote.

The base decision had bolstered prospects for submarine builder EB, the close collaboration between base and builder cited as among the primary justifications for keeping the Navy facility in operation.

Yet for all the silver linings, there was that dark cloud.

"There are reasons for significant concern," stated a report in December 2006. "The regional economy is overly dependent on just a few employers."

In other words, it lacked economic diversity.

After nearly seeing the submarine base close and realizing how devastating that would have been to the local and state economy, then-Gov. M. Jodi Rell formed the Governor's Commission for the Economic Diversification of Southeastern Connecticut. She gave it two tasks - suggesting steps to help reduce the region's dependence on a handful of large employers and finding ways to protect the submarine base during future rounds of base closings.

After more than a year of work by the 50-member commission and its many subcommittees came the December 2006 report. However, while its recommendations to bolster the submarine base gained traction, the recommendations to help diversification went largely ignored.

The legislature did create an Office of Military Affairs to make sure the Groton base and other military operations, along with the state's defense industry, remained in the state's focus. Lawmakers created a unique-in-the-nation $40 million line of credit to help pay for infrastructure improvements at the base, an effort to insulate it from any moves to close it. Connecticut has invested about $12 million.

But the Rell administration and lawmakers from outside the region had no stomach for the kind of infrastructure investments called for in the report to encourage economic diversity, not for a region that was doing relatively well at the time.

Those recommendations included state assistance to pay for expansion of sewer, water and other utility infrastructure in the region to make more land available for business and industrial development.

Also urged were changes to planning and zoning laws in suburban communities to allow the type of affordable housing - rental and owner occupied - necessary to grow a workforce. Few zoning rules have changed.

The commission saw the need to reset technical school and community college training to better supply workers the skills necessary for modern, high-tech manufacturing.

Finally, it called for development of a marketing and branding strategy emphasizing the region's strengths - its location near major population centers, quality of life, and a well-educated populace - and targeting businesses and industries that appeared a good match. That never happened.

Much has changed. Pfizer underwent dramatic downsizing. EB now occupies Pfizer's former New London offices. The Sun's Project Horizon expansion did not happen and the casinos' workforces continue to shrink in the face of interstate competition.

And there was the Great Recession.

Unchanged is the need for a strategy to get the region's economy growing again and provide diversity. Staying the same is not an option.

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