Newport: Economy

Major Industries and Commercial Activity

Since the days of the Civil War, Newport has been an important naval base, and the United States Navy is still a major employer in spite of the closing of several installations in the 1970s. Today, the Naval War College, the Naval Education and Training Center, and the Naval Underwater Systems research center continue to stimulate the economy in Newport, particularly in the area of technological research and application related to national defense. The adjacent communities of Middletown and Portsmouth experienced a high-tech boom in the 1980s spurred in part by the location of the Naval Underwater Systems Center in Newport, and Aquidneck Island as a whole is becoming a high-technology hub with more than 80 software and engineering firms employing a large portion of the labor force.

Internationally known as a summer resort and yachting center, Newport depends heavily on wholesale and retail trade and services catering to summer residents and tourists. Some light industry plus fishing and lobstering also contribute to Newport's economy.

Items and goods produced: electronic equipment, health and beauty aids, fabrics

Incentive Programs—New and Existing Companies

Most incentive programs for development in Newport are offered at the state level. The Rhode Island Economic Development Corporation provides direct access to state economic and business resources including finance, export trade, federal procurement, and marketing. The Rhode Island Small Business Development Center provides services to businesses with fewer than 500 employees, including the presentation of training seminars and workshops in business planning, marketing, financing, and other business subjects, as well as free consultations by experts in all aspects of business.

Local programs

The City of Newport offers private businesses access to low cost capital through the Economic Development Revolving Loan Fund, with the intent of creating and retaining jobs. Businesses that are just starting up or expanding can utilize the funds to come up to compliance with the State Fire Code. Recipients can take up to 5 years to pay back the loan at 3.5 percent interest. Newport City also provides tax relief to encourage the reuse of historic properties, including expansion, renovation and development that fit within the Historic District Commission standards. To be eligible for the tax exemption, the property must increase in value no less than $100,000. Newport has consistently been a recipient of a pool of Community Development Block Grant (CDBG) monies that it has parceled out to support development projects that benefit low and moderate income residents.

State programs

Rhode Island provides a corporate income tax rate reduction for those firms increasing employment. Manufacturers and traded service firms paying above average wages or investing significantly in work training are able to take a 10 percent credit on purchased or leased equipment. Businesses may also take a significant credit for expenses for approved job training programs. Creativity is rewarded by income tax exemption for writers and artists who sell their works. Research and development activities may also be eligible for tax credits under a variety of programs administered by the Rhode Island Economic Development Corporation. Restoration of historic buildings as businesses or residences may qualify for tax breaks, as may businesses residing in certified mill buildings. Other state programs offer benefits to businesses that provide adult education, that create apprenticeship opportunities, or that are engaged in manufacturing, particularly within the areas of defense, medical instruments, or pharmaceuticals.

Job training programs

The Rhode Island Department of Labor & Training provides employers and small businesses with counseling and direct access to federal and state training, labor market information, recruitment and skills enhancement programs, and grants. The state additionally coordinates services to dislocated workers, foreign workers, youth who wish to be employed, and military veterans. The state maintains a large database of available jobs that can be accessed by those seeking employment. The Workforce Partnership of Greater Rhode Island supports the Department of Labor & Training by assisting businesses and industries in grant writing, goal-setting, job fair coordination, creation of school-to-work linkages, and employee training to address critical skill shortages.

Development Projects

In the early part of the twenty-first century, Newport and other Aquidneck Island communities received a $50,000 grant as part of the Aquidneck Island Planning Commission (AIPC), allowing for a thoroughly researched and thoughtfully implemented plan for the former Navy lands on the west side of the island. Stated goals include preservation of open space and ocean views, economic development that is controlled and compatible with Naval Station Newport, increased passive and active recreation opportunities, and affordable housing. The planning process, which began in 2000, was ongoing as of 2005.

An associated project involves analysis of the island's primary water source, Bailey Brook; funding from the Natural Resources Conservation Services has allowed the AIPC to develop an environmental management plan that will ultimately lead to cleaner drinking water. The AIPC has a Transportation Improvement Plan prepared for implementation in 2006-2007, involving a study of current traffic patterns and usages of existing roads and paths, analysis of the data, rerouting of vehicular traffic to maximize efficiency, and creation of bike paths to encourage use of alternate modes of transportation.

The Washington Square Historic Restoration Project seeks to revitalize the historic downtown area with improved parking and traffic flow, restored historic buildings, enhanced signage that will better connect destinations and facilitate traffic movement, and to overall beautify area amenities. Construction started in 2004 and, accounting for cessations in work due to winter weather, the project is expected to be complete by fall of 2005.

The City of Newport has continued its ambitious North End Redevelopment Plan, which will promote jobs, education, and housing opportunities. By 2005 the city created space for a Newport branch of the Community College of Rhode Island, completed work on the Maple Avenue Ball Fields, and realigned the Pell Bridge. Ongoing projects include redevelopment of the old Navy Hospital facility, market analysis for the entire area, an enterprise zone, Pell Bridge land redevelopment, and affordable housing replacement unit construction. Altogether, millions of dollars have been allocated to restoration and renewal projects such as reinforcement of the Cliff Walk, updating of Goldberg Field, paving of historic Southern Thames Street, construction of quality affordable housing within Newport Heights, redevelopment of former military housing, and creation of a new harbor shuttle system to alleviate vehicle congestion.

Economic Development Information: Newport County Chamber of Commerce, 45 Valley Rd., Middleton, RI 02842; telephone (401)847-1600. City of Newport Planning, Zoning, Development and Inspection, City Hall, 43 Broadway, 3rd Floor, Newport, RI 02840; telephone (401)846-9600

Commercial Shipping

Logan International Airport is approximately two hours from Newport and provides access to a number of national and international cargo carriers. On an annual basis, Logan moves more than 364,000 metric tons of cargo and mail. The airport is part of Foreign Trade Zone #27, allowing for temporary storage of imported goods that are exempt from full U.S. Customs scrutiny. The Port of Providence, easily accessible from Newport, has been increased to a 40-foot depth in order to accommodate medium and deep-draft vessels. The Port can handle any type of cargo, has approximately 300,000 square feet of warehouse capacity, and offers twenty-five wharves and docks. In addition, Newport offers docking facilities suitable for barge transportation or smaller ships. Excess Navy bases operated by the Rhode Island Economic Development Corporation in Portsmouth, Middletown, and North Kingston can handle bulk and general cargo. Two trucking firms serve the area.

Labor Force and Employment Outlook

Approximately 87 percent of Newport's residents possess a high school diploma or its equivalent; about 41 percent hold a bachelor's degree or higher, making for a well-educated workforce. Statewide, it's anticipated that overall employment will increase by 11.5 percent by the year 2012, with significant gains in construction, professional and technical services, healthcare and social assistance, leisure and recreation businesses, and accommodation and food service industries. It is anticipated that manufacturing jobs will fall by approximately 13.5 percent by 2012, the only employment sector in which there are projected losses.

The following is a summary of data regarding the Providence-Fall River-Warwick, RI-MA metropolitan statistical area labor force, 2004 annual averages.

Size of nonagricultural labor force: 581,300

Number of workers employed in . . .

natural resources and mining: 300

construction: 25,600

manufacturing: 75,700

trade, transportation, and utilities: 102,700

information: 11,700

financial activities: 37,200

professional and business services: 60,900

educational and health services: 106,900

leisure and hospitality: 58,900

other services: 26,500

government: 74,900

Average hourly earnings of production workers employed in manufacturing: $13.45 (April 2005)

Unemployment Rate: 4.8% (April 2005)

Largest employers (2004)	Number of employees
Naval Underwater Services Center	2,824
Naval Station Newport	950
Newport Hospital	804
James L. Maher Center	700
Salve Regina University	460
Newport Public Schools	380
City of Newport	346
Naval War College	250
WalMart	225

Cost of Living

The following is a summary of data regarding several key cost of living factors in the Newport area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: 3.75 to 9.9%

State sales tax rate: 7%

Local income tax rate: None

Local sales tax rate: None

Property tax rate: $13.72 per $1,000 of assessed value (2004)

Economic Information: Newport County Chamber of Commerce, 45 Valley Rd., Middletown, RI 02842; telephone (401)847-1600