Keeping Score On Communities
In the first few months of 2012, several economic indicators seem to point to sustainable growth. Some corporations, which have been sitting on cash, are moving forward with expansion plans or at least exploring the possibility of adding new operations.
As your company begins researching prospective business locations you will find that free online data is abundant. In fact, it can make for an overwhelming process when researching prospective communities. What data sources and sets are the most important when researching business destinations? Do community rankings or indicators matter? Where do social media sites figure into the research?
A panel of veteran site selection consultants discloses insights to these questions, as well as innovative approaches communities are executing to attract your attention.
Global Corporate Xpansion: What are the most important data sets to consider when reviewing local markets and trends?
Didi Caldwell: County business patterns for employment and number of companies in particular sectors; census data for population statistics, educational attainment, income levels, etc.; company listings like www.manta.com to find where particular activities are taking place (wet corn mills for example).
Brian Corde: Population, demographics, wage rates, unemployment rate, taxes, vacancy rates, propensity for natural disasters, climate and quality of life.
Jay Garner: We use our own data analysis using labor and wage data, workforce patterns, cost data, etc.
Mark Sweeney: We use secondary source information, much of it U.S. Census based, in our in-house GIS screening (labor, demographics, transportation, education, some utility info, etc.). We use locally sourced information once areas of interest and candidate locations have been identified.
Joe Vranich: To varying degrees I use www.ZoomProspector.com, www.SpatialMatch.com, Tax Foundation, ACCRA, U.S. Census Bureau, FBI, Official Airline Guide, FAA, NOAA, and information posted by state and local economic development agencies. Once we are past the initial stage, I turn site selection over to site selection companies that subscribe to a number of databases.
GCX: Where do community rankings or indicators fit into the research? How about social media sites, especially those posting as to why they like or dislike a community they are living and/or working in?
Caldwell: Community rankings are interesting, but not a part of our analysis. Social media sites are not important for us in analyzing a community. We have face-to-face meetings with business and political leaders in communities that are short listed. This is where we get the information about how the community is working (or not working) together for the advancement of economic development.
Corde: Very rarely do these [components] factor into the decisions. Sometimes for tax comparisons we will use an outside ranking for determining overall tax burden.
Garner: We will not use social media in our searches. We do look at each region’s and communities Web sites and we do read the newspapers online to review issues of concern.
Sweeney: Rankings and indicators are not used much at all, although because of their profile they often have to be addressed due to client exposure to them. Social media sites with community commentary are rarely used by MSC, although that is likely to evolve in the future.
Vranich: I find social media sites to be of little value because so many postings are hugely subjective in nature.
GCX: What will automatically weed out communities during the site search process?
Caldwell: We try to get past the lack of information because we are often looking for sites that are hard to find. So, if the information is not there, we need to push hard to get it. However, a lack of or lackluster response from economic developers doesn’t help. Presenting inaccurate information will automatically weed out a site. And if communities do not submit an RFP, even if it is incomplete, we can’t consider the site.
Corde: The inability to respond quickly and accurately. Limited local information on similar businesses in the area. Also, the lack of contact information on the Web.
Garner: Not returning phone calls, or completing our community questionnaire, or not having the appropriate site or building we may need.
Sweeney: At MSC there are few “automatic” disqualifiers that are not tied to the project; i.e., not having a site that meets the project’s needs. Lack of stats or a crummy Web site won’t help a community, but would not automatically disqualify them.
Vranich: What will automatically weed out communities is a high crime rate, poor domestic or poor international air service, or a forced-unionism state that has a history of being harsh on certain industries such as aerospace and manufacturing.
GCX: What information posted at these sites is most useful and pertinent to a site search?
Caldwell: We occasionally use economic development Web sites to look for sites or get a feel for what is out there. For us, site specific information that includes details about utilities, not just that they exist, but explains source, capacity, excess capacity, etc., is very helpful.
Corde: Incentive frameworks, availability of buildings and/or sites and existing industry profiles.
Garner: Sites and buildings.
Sweeney: Local information that cannot be obtained elsewhere — sites, buildings, infrastructure, detailed employer and labor data, education, housing, etc. Local taxes and incentive information is important.
Vranich: What I am looking for varies greatly when I go to such sites. In one case it may be the types of university research facilities in that location. In another case it could be accessibility to rail service or a port. Still another could be average housing costs.
GCX: Outline the leading criteria when conducting a corporate site search, and a bit about why they are essential. Provide an example for a manufacturing or distribution operation; or an example for an IT related or financial services project.
Caldwell: I focus on industrial projects. The top criteria include: utility and industrial infrastructure; concentration of similar heavy industrial companies (helps with workforce, industrial services, etc.); and transportation infrastructure (highway, rail and barge). The first is very important because the capital costs involved in developing industrial infrastructure, if it doesn’t already exist, are high. The second because companies want to work in a place where there is already a knowledge base in manufacturing and heavy industrial activities. This makes construction, recruiting, training and operating easier and more efficient, even if the rates are a little higher in these areas. Transportation infrastructure is important because they need to be able to move raw material in and finished goods out, and these are often large shipments and large portions of their operating costs. Of course, every project is unique, but these are the ones most common to my projects.
Corde: For manufacturing:
1. Availability of skilled labor
2. Proximity to interstate
3. Overall cost of operations (labor/real estate/taxes/incentives)
4. Proximity to key customers/raw materials
For IT/financial services:
1. Overall cost of operations (for an IT data center this would be sales tax, property tax, utility rates)
2. Available incentives to offset costs
3. Ease of access (proximity to reasonable airport)
4. Propensity for natural disasters
5. Availability of labor
Garner: It really depends based on the client’s musts and wants. Usually, cost of doing business trumps everything. Labor availability is equally important. If it is an IT/data center, redundant and reliable electricity is important.
Sweeney: As always, it depends — on the company, the project, and where in the process we are. We examine physical factors (site and infrastructure); operating factors (labor, utilities, transportation, taxes); and living factors (quality of life/quality of place). Generally, top criteria include ready sites, available quality labor, and business climate (taxes and incentives).
Vranich: Top criteria for a corporation (especially manufacturers) are taxes, the regulatory environment, land or building costs, workforce compatibility and distribution. For a family-owned business, lifestyle preferences can overshadow those factors somewhat. Community priorities become clear based on a matrix of numerous factors that vary company by company.
GCX: Please include information as to trends or new and innovative approaches communities are implementing to attract the attention of growing companies.
Caldwell: I avoid a lot of the “innovative” approaches like e-marketing. It tends to be impersonal and there’s just too much of it. I think southwest Indiana does a good job of direct mail. They send out postcards that are very eye-catching and unique. And, they send them out regularly. Persistence really pays off. I can’t tell you what product they have, but I know that they have an aggressive economic development agency that I could call on to answer my questions.
Corde: Better incentives, and more collaboration with local educational institutions.
Garner: Workforce recruitment and training, and deal closing funds.
Vranich: One item that has captured attention lately is that Indiana has become a right-to-work state, which has prompted inquiries about what states are right-to-work states.
About The Panel
* Didi Caldwell, senior principal/ partner of Global Location Strategies, Greenville, S.C., www.globallocationstrategies.com
Caldwell has led consulting projects in North America and South America, Canada, Europe and Asia in industries including automotive, renewable energy, pulp and paper, chemicals, mining, textiles, logistics, consumer products, power generation and biotech.
Caldwell is also a member of the Site Selectors Guild, an internationally recognized organization comprised of the world’s most respected site location consultants.
* Brian Corde, managing partner, Atlas Insight LLC, Freehold, N.J., www.atlasinsight.com
Corde has advised companies of all sizes and from various industry sectors on site selection and incentives for 18 years. Clients have included Wells Fargo, Allstate, The Hartford and Yahoo!, among many others.
* Jay Garner, CEcD, CCE, president and founder of Garner Economics LLC, Atlanta, www.garnereconomics.com
Garner Economics assists clients throughout the United States, Asia and Europe on a variety of projects. Clients have included Anchor Glass, Academy Sports, Hatfield Quality Meats, Stork Food Systems, Future Pipe Industries and others. The firm is the exclusive provider of site location services for Primus Builders — a global leader in architecture, engineering and construction management specializing in food processing manufacturing, and their worldwide clients.
Garner is also a member of the Site Selectors Guild, an internationally recognized organization comprised of the world’s most respected site location consultants.
* Mark Sweeney, senior principal, McCallum Sweeney Consulting Inc., Greenville, S.C. , www.mccallumsweeney.com
The firm provides site selection services to companies worldwide, with the majority in North America. The firm provides services for manufacturing, distribution and office (primarily headquarters) projects. Clients have included Nissan, Michelin, Boeing and Dollar General.
Sweeney is also a member of the Site Selectors Guild, an internationally recognized organization comprised of the world’s most respected site location consultants.
* Joseph Vranich, principal, Spectrum Location Solutions, Irvine, Calif., www.spectrumlocationsolutions.com
Spectrum Location Solutions enters projects early to determine whether companies should think about expanding in a new location or relocating because of the costs involved. Once a decision is made to look for a new location, Spectrum Location teams with site selection and incentive negotiating experts to complete the project. Spectrum Solutions also specializes in assisting in making announcements to the media, employees and other stakeholders about an expansion decision.