">Behind the Counter:

Medina’s Plans

About the EDA

Corrections or additions?


The state takes a nimble, business-like approach

To attract and retain high technology enterprises

by Barbara Figge Fox

Government — all governments — have a


for sluggishness that is hard to shake, and New Jersey’s is no


The word "bureaucrat," "red tape," and, yes, even

"state worker" evoke the stereotype, deserved or not, of


paper-pushers who block the wheels of progress.

Last week Governor Christie Whitman and Commerce Commissioner Gil

Medina announced they want to streamline government so it can more

efficiently attract and retain business, especially high tech


They plan to abolish the Department of Commerce and Economic


and reorganize it as an independent publicprivate commission.

Will that make a big difference? It could. A commission has more


than a department and as a public-private organization it would be

in a position to recruit significant support from corporations.


would chair the commission and Medina would be CEO. Among its first

moves would be to hire technical specialists who can help draw more

high tech firms to New Jersey.

"We have an intransigent bureaucracy in place that does not allow

us the ability to react quickly to help businesses and ward off


before they turn into crises," said Medina at last week’s press

conference. "We do not have the people on staff with the knowledge

about the major industry sectors such as pharmaceutical or technology

that are important to our economy."

In the same announcement Whitman proposed "One-Stop Shopping for

Businesses," to consolidate the payments to three departments

with 11 forms to one department and four forms. All payments —

tax, unemployment and disability, workers compensation, and


fees for trade names and annual reports — would go to the


of Treasury’s Division of Revenue, created last year.

These sweeping changes stem from Whitman’s 1995 master plan for


development, and they have been engineered by Prosperity New Jersey,

a public-private partnership. Medina and Finn Casperson, chairman

of Beneficial Corporation, are co-chairs, and Stephen J. Kukan was

brought in from the private sector to be the executive director.

"I see the new commission as the ultimate in terms of being


to economic development questions and servicing clients who are


both in retention and retraction," says Kukan, who had served

on the master plan committee. An industrial engineering major from

NJIT, Class of 1967, he has an MBA from Fairleigh Dickinson and worked

for Public Service Electric & Gas.

Kukan spent virtually his entire career trying to attract business

to the state, to "sell" New Jersey. He calls it "a


product." He wholeheartedly agrees with the new, unusual strategy

and believes the commission will provide the tools to convince


that New Jersey is indeed "open for business."

"The people at the level the governor is talking about will enable

government to think like a business and business to understand more

of government’s role," says Kukan.

The proposed commission is not without precedent. The

concept was based on the Michigan Jobs Commission, created in 1993

to consolidate all the opportunities (worker training, economic


grants, etc.) available to corporations thinking of moving to


It is also not without controversy. Abolishing the department will

eliminate 120 staff jobs. Every current staffer can apply for a


job, but these jobs will be non-union and have flexible hiring and

firing rules, and the Communications Workers of America union already

has raised the predictable fuss.

Others question the plan as well. Jon Shure, president of New Policy

Perspective and formerly Governor Florio’s communications director,

points out that it was a Republican governor, Tom Kean, who divided

the Department of Labor and Industry to create the Department of


and Economic Development.

"You have to wonder what will result from losing the commitment

to a separate department," says Shure. "The extra


that you have from being an official department of state government

can be a helpful thing. It gives you equal status with other cabinet

departments." Medina will retain his seat in the cabinet, but

the next governor might not continue that arrangement. "Down the

road, when you are looking for a high powered person, you would be

hiring the head of a commission, not a member of the governor’s


Yet in 1994 Whitman eliminated a department, Higher Education, and

replaced it with a commission, and she seems bent on doing it again.

In fact, some of the elements of the future commission are already

in place. Gerald A. Janssen heads a team of six regional account


and five industry account managers (see sidebar, page 49).

But when you look closely at how New Jersey supports high tech


you realize that two important commerce organizations were already

freeing themselves from the bureaucratic mire. One is a commission,

the New Jersey Commission on Science and Technology, and one is an

authority, the New Jersey Economic Development Authority.

A commission receives its budget from the legislature, whereas an

authority, such as the Port Authority and the Turnpike Authority,

raises its own funds. Both are under Medina’s supervision and both

are public-private partnerships. Both are efficiently oiling the


of New Jersey’s high tech cart.

The New Jersey Commission on Science and Technology, headed by Jay

J. Brandinger (executive director) and Irwin Dorros (formerly


vice president of Bellcore), has just six staff members. It gets about

$15 million from the legislature, including nearly $12 million for

R&D programs and $2.7 million for business assistance programs, and

it attracts matching funds from private industry, philanthropy, and

the federal government.

Last year it gained some nimbleness for its granting procedures.


of being tethered to "line items" on a budget passed by the

legislature, it now gets a lump sum. Now, says David R. Eater,


director, it can respond more quickly to changes on the technology


The New Jersey Economic Development Authority, directed by Caren


and chaired by Anthony Coscia, is able to sidestep the legislative

funding process completely. It uses no taxpayer dollars and raises

its own money. Then it reinvests to support business ventures that

need more help than commercial sources can give. In 23 years it has

provided more than $12 billion to more than 600 entrepreneurs and

corporations. (See Survival Guide, page 6, for examples.)

"For years the private sector has been trying to get the attention

of the public sector in terms of being responsive to private sector

needs," says Kukan. "We at Prosperity New Jersey say that

economic development has to be the governor’s bag, and the private

sector has to be an active participant in terms of resources and


I look at this, the proposal for the commerce department, as the


point. It shows that all bets are off," says Kukan. "It is

not business as usual in New Jersey."

Top Of Page
Behind the Counter:

Caren Franzini

Call her the unflappable Franzini. As executive director

of the New Jersey Economic Development Authority, Caren S. Franzini

works with bankers, lawyers, accountants, and CEOs to arrange


of more than $600 million a year to more than 200 companies. But


she has a dinner meeting she manages to leave her office at 5 p.m.

sharp to pick up her two school-age children and her three-month-old


"She’s a cool cat . . . she never gets flustered," says one

of her employees.

"As far as I’m concerned, she walks on water," says a former


"Hers is one state agency that really works," says a prominent

venture capitalist.

With its impressive list of accomplishments the EDA has been making

news on its own, but the proposal to change the commerce department

to be more like the EDA, an independent public-private partnership,

makes it an even more intriguing subject. Add a much-admired executive

director who balances the needs of private business with the goals

of the state — and juggles her work schedule with being a mother

of three — and it’s a fascinating story indeed.

Her vision for the EDA? "I like to keep pushing it in new


says Franzini, "to be responsive to and adhere to policy


that the governor and Commissioner Medina set forth, and to work with

the business community to implement them. We are really that middle

ground. It’s great fun."

Fun for someone as unflappable as Caren Franzini. "She is an


women," says Alison Harris, former director of McCarter Theater,

now director of business development for the Mapleton Road architect,

Ford Farewell Mills & Gatsch. Harris and Franzini had served together

in the Kean administration as assistant state treasurers under Feather

O’Connor. "There are a lot of good women in state government,

but she is a shining example of someone who is nonpartisan and has

deep roots in the state but understands the way the state operates

and knows how to make everybody around her do their best work. As

far as I am concerned she walks on water."

Franzini credits O’Connor with being an important mentor who showed

her how to empower others to be creative. "At a young age for

me, she gave me a lot of independence to think for myself and come

up with ideas to present to her. It made me rise to the occasion and

to try that with people I work with as well, to let other people share

in the glory."

But she was also strongly influenced by her parents. One aspect of

her success is her ability to build consensus, to sell an idea to

everyone who will be at the table before they get to the table. That

came from her father. "My father was in politics for a long time.

He knew how to get everyone on your side before you walk in the door

— and I grew up selling. That is part of my personality."

Another success factor is being able to come up with creative


to conflict. That came from her mother, who served as the problem

solver in an extended family of 12. "Her technique was to let

people talk and try to come up with a solution so that each party

knew they were giving up something." For instance, her mother

solved a continuing squabble over whether Caren could borrow her older

sister’s clothes with the compromise that Caren was allowed to wear

one of the coveted outfits — but only once a week.

Her mother’s conflict solving translates to: "Before you sit down

with a client who is mad at you, find out where they are coming from,

and know how to listen."

The day before this interview an attorney had called about a client,

an elderly gentleman who wants to build a shopping center but refuses

to personally guarantee the loan. "I understood he did not want

to jeopardize his estate or have his wife worry about the loan if

he passed away, but I also knew we had to have collateral. I told

the attorney we don’t have to have his personal guarantee if he gives

me a CD or a letter of credit that would equal the value of what we


That simple change, to separate the loan from the estate, was


"I got what I needed by thinking out of the box and being


Caren S. Raphel Franzini grew up in Atlantic City, where her family

started out living "over the store," Gordon’s, a


store with clothing for infants through adults. The family consisted

of her parents and two siblings plus an aunt and uncle and three


in another apartment, and grandparents who lived in a third apartment.

Everyone ate dinner together, and when they moved to a house, they

all moved together.

"When I was really young I would help do things like check in

the clothes and gift wrap, and when I was 11 or 12 I started selling.

I was tall," she remembers, "and I could get away with looking


With six years of experience at the cash register,


went to University of Pennsylvania, Class of 1980, to major in urban

studies. She was influenced by a Wharton professor, Anita Summers,

to choose a Wharton MBA rather than a graduate degree in public


"She said that Wharton would help me understand how the private

sector thinks, and that I should take the nuts and bolts, finance

and marketing courses, to learn how to apply the skills of private

business to government."

Her first job was as a consultant with Public Financial Management,

a financial advisory firm in Philadelphia, and then she worked in

the finance division at the Port Authority of New York and New Jersey.

After a stint as assistant state treasurer in the New Jersey Treasury

Department she joined the New Jersey Economic Development Authority

in 1991. She was appointed executive director of the NJEDA by


Medina in January, 1994.

Last year the EDA’s financial activity totaled $790 million, making

it one of the most aggressive and diversified financing and real


development agencies in the country (http://www.njeda.com).

With 1997 financing to more than 300 businesses and not-for-profits

it helped generate $1.27 billion in new investments that will create

4,000 permanent new jobs and employ 7,200 construction workers on

expansion projects.

It creates public-private partnerships to bridge financing gaps and

increase access to capital for small and middle-size businesses and

not-for-profit borrowers. It arranges low-cost financing, loan


creative financing packages. It provides a full range of real estate

development services, and it offers technical support to strengthen

targeted business sectors important to the state’s economy.

Franzini is past president of the National Council of Development

Finance Agencies, a member of the Edison II Advisory Committee, a

director of the New Jersey Technology Council, and president of the

Corporation for Business Assistance in New Jersey. The AFL-CIO


Investment Trust recently honored her, along with Mayor Willie Brown

of San Francisco, with the Golden Investment Partnership Award for

her part in innovative investment partnerships that create jobs in

New Jersey. Her salary is on the brink of six figures.

She is married to an attorney, and their three children are ages 7

1/2, 5, and 3 1/2 months. She did some work from home during maternity

leave and returned to the workplace full-time when the baby was 10

weeks old. Her day starts at 6 a.m. "Every day is a new


says Franzini. "If I have to be at a breakfast meeting, my husband

will take all three kids; they get dropped off at three places. We

work with each other’s schedules."

Her strict rule is to leave on the dot of 5 p.m., unless she has a

dinner meeting, to pick up the children. During the day she has


stickered" articles she wants to read from the EDA’s assortment

of newspapers and periodicals, and she reads them and answers memos

after the children are tucked in.

She advocates the same flexibility for her staff, "whatever you

need to get the job done, get it done. Everyone has their own needs

and work habits."

Her goal for the EDA? "To never lose the excitement for the staff,

that when they come to work they are helping the businesses of New


Part of the excitement is empowerment. "I want people to come

to me, as some do now, and say, `Caren, why don’t we start this new

area,’ to be proactive in the marketplace." Part is creativity,

"to understand the gaps in the marketplace and come up with the

right way to fill them."

Part is "getting out there" to talk and listen to people.

Franzini increased EDA’s outreach by one-third last year, going from

160 speaking engagements in 1996 to 240 in 1997 (which, it must be

noted, was an election year). "We get out in the trenches, to

speak to all kinds of professionals — lawyers, accountants,


county and municipal development authorities, business groups —

to understand what they need and tell about our programs."

Part of the success secret is just plain being likable. "I get

a lot of letters saying, for instance, `I worked with this loan


and he or she was helpful, and that makes them feel good about New

Jersey. Commissioner Medina wants people and an organization that

is proactive and that will make people feel good about the business

community. Bankers and lawyers and accountants like dealing with us,

and you want to keep them happy to deal with us."

It comes from her father’s slogan: "find out what your customer

wants, and give it to them." Caren Franzini is selling New Jersey.

Top Of Page
Medina’s Plans

Prosperity New Jersey is, says Governor Whitman,


the book on how to do economic development in the state of New


Commissioner Gil Medina — an alumnus of Rutgers and Temple who

is both an attorney and a CPA — planned the creation of Prosperity

New Jersey, and several of its major initiatives are already in place.

It has accomplished a technology promotion strategy called the Edison

Partnership, a tourism master plan, and research and recommendations

for regulatory reform, a $1.8 million image marketing campaign, a

business resource center, and a system of accounts managers. The


of Accounts Management, launched last September, is modeled after

corporate sales organizations and organized by geographical territory

and business type.

"The account executives are going to give New Jersey a true


edge," says Medina. He appointed Gerald A. Janssen to be executive

director of the accounts management office. Janssen spent seven years

at Sarnoff and was most recently senior vice president of human


and facilities operation. He had also worked for Pullman Company (a

diversified merger and acquisition manufacturing firm), PTC Aerospace

Inc. (a Pullman subsidiary and a manufacturer of commercial aircraft

interior products), and UOP Inc. (a petrochemical research unit of

Allied Signal).

The account executives are charged with providing a 24-hour guaranteed

response for requests for assistance so that any business with a


will hear from the appropriate person in government. Industry


will focus on the largest employers and those with the greatest growth

potential. Already appointed are John Celentano (food processing),

Jim Donnelly (telecommunications), Sophia Koch (F.I.R.E. —


insurance, and real estate), Charles Lynch (petrochemical), and Keith

Moore (urban). Yet to be covered are business services,


and biotechnology.

Janssen has also appointed regional account managers to work with

companies with less than 100 employees. They include Maryann Buga

(for Hudson, Essex, Morris, Warren counties), Edward Dietz


Camden, Gloucester, Salem), Gary Marx (Bergen, Passaic, Sussex), Paul

Shaffery (Middlesex, Monmouth), Charlotte Tomaszewski (Mercer,


Hunterdon, Union), and James Waldron (Ocean, Atlantic, Cape May, and


A Business Resource Center has centralized all the current information

on site availability, tax incentives, local zoning and regulation.

This year a multimedia tool for the account executives is planned.

By answering a questionnaire based on a company’s statistics and needs

they will be able to produce a custom CD-ROM — overlaid with a

message from the governor — for any client. A less detailed


will be for general use on the Internet.

Says Medina: "We want to make sure that no business falls through

the cracks."

Top Of Page
About the EDA

EDA programs pave the way for businesses to get the capital they need

to invest in New Jersey. It has a Commercial Lending Division

with more than a dozen programs, including the Statewide Loan Pool for

Business, which works with New Jersey banks to arrange loans of up to

$3 million; long-term financing through the federal SBA 504 program of

up to $750,000 for fixed assets; loan guarantees of up to $1 million

for working capital and $1.5 million for fixed assets; and direct

loans of up to $500,000 for fixed assets and $250,000 for working


The Community Development and Small Business Lending Division

offers financial and technical assistance to start-up and

micro-businesses located in qualified municipalities. New this year: a

$36 million EDA regional venture capital fund, GS Capital, targets

women’s and minority businesses. Organized as a Small Business

Investment Company the fund has $12 million from the EDA and private

banks and $24 million from the federal Small Business Administration.

It aims to help minority and female entrepreneurs get into business in

such tested franchise products as fast food restaurants and service

stations, and it provides financing below conventional venture capital

market costs.

The Real Estate Development Division supports projects of

significant economic impact by helping with land assembly, site

improvements, construction, and renovations. Princeton area projects

range from a loan of $162,500 for the Association for the Advancement

of Mental Health’s purchase of a headquarters building on Alexander

Road to a $12,000 site remediation loan for a Princeton borough

homeowner. In Trenton, site remediation loans total $154,000 and $1.35

million has been loaned to Roebling Urban Renewal Associates.

The Investment Banking Division offers long-term, lower interest

rate bond financing for a minimum of $750,000 for a wide variety of

businesses and not-for-profit corporations including the New Jersey

Performing Arts Center in Newark and the 50-acre Technology Center of

New Jersey in North Brunswick (Franzini is justifiably proud of both

these projects). Bonds are financing a total of $19.3 million for the

Peddie School and Lawrenceville School.

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