Sep. 10--PROVIDENCE -- Rhode Island may be facing tough economic times, but the state's real estate assets hold promise for future development, a business consultant told the governor and his advisers Wednesday.

"I know your present is a challenge, but we're going to look to your future," John M. Rhodes, senior principal at the Florida-based Moran, Stahl and Boyer, said to Governor Carcieri during a meeting with the state Economic Policy Council.

Rhodes, a business relocation expert, spoke at the meeting in the offices of the Rhode Island Economic Development Corporation about an assessment he is conducting of developable land in the state.

Work on the "Statewide Strategic Plan for Commercial and Industrial Site Development" started in May and, according to a spokeswoman for the EDC, will culminate in a final report within two months. EDC interim executive director J. Michael Saul said the report will include six to eight recommendations that could be implemented relatively quickly.

Rhodes is basing the study on meetings with state and local planners, business leaders at companies like Amgen and Fidelity, small-business owners, chambers of commerce and real estate developers.

On Wednesday, he discussed in general some of the issues facing Rhode Island as it tries to position itself to recover from a recession that has hit all sectors of the state economy.

Surprisingly, he said, despite the gloom surrounding manufacturing, the industry has held up better than expected. Although the state has lost 20,000 manufacturing jobs in the past seven years, total revenues in the sector have increased, according to figures presented by Rhodes.

The state has seen more jobs since 2001 in biotech production and medical equipment fabrication.

"Manufacturing is not dead," Rhodes said. "I think manufacturing will come back."

He cautioned that the knowledge economy, widely believed to hold the most promise for growth in Rhode Island, will be a challenge to develop. Although the state has prestigious research institutions, including Brown University and the University of Rhode Island, connecting academics doing cutting-edge work with investors can be difficult. It will take more than a few years before there will be any sort of surge in research jobs, he said.

Paul J. Choquette Jr., chairman of Gilbane and a member of the Economic Policy Council, asked how Rhode Island compares to its neighbors in terms of operating costs. Rhodes told him that business taxes are generally higher than Massachusetts and Connecticut and that energy costs, though competitive, are still high.

As it stands, he said, Rhode Island still has enough to offer to compete regionally, including a very good transportation system, but it probably cannot compete globally.

"You need to go in another direction," he said.

akuffner@projo.com

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