gemmen- industrial site certification & site readiness

Roundtable in the Desert Scottsdale, Arizona

Jonathan Gemmen

Senior Location Consultant

Austin Consulting

October 6-9, 2014

Markets Served:

Food and Beverage

General Manufacturing

Aerospace / Aviation

Logistics and Distribution Centers

Research and Development

Pharmaceuticals

Office / Back Office

Information Technology

Energy / Renewable Energy

Designers | Engineers | Constructors | Consultants

The Austin Company

Full service design, engineering and construction management firm

Founded 1878 in Cleveland

Initiated Design/Build project delivery method 1901

Member of Kajima family of companies - Tokyo based engineering/construction giant

is the site selection arm of

Austin Consulting – Strategy to Implementation

Short List

Cities /

Sites

Favorable Region

Long List Regions

Stay in the race

by IMPROVING

COMPETITIVE

STANDING

Selected Location

Location Selection is a Process of Elimination

October 2014 5

Location Selection Process

3. Deliver on Your

Promises - (a.k.a.)

“Close the Deal”

1. Get on the Radar

Screen with Your

Brand 2. Demonstrate You

are the Right Place

Evaluate Strategic

Alternatives

Screen & Evaluate

Communities/Sites

Negotiate Incentives

Conduct Due Diligence

Avoid Giving

Prospects a Reason to

Walk Away from Your

Community

Strategy

Development Location

Investigation Due

Diligence Implement

Project

MINIMIZE OPERATING

COSTS

MINIMIZE RISK

MINIMIZE ONE-TIME

COSTS

Identify location

through an “apples to

apples” comparison of

alternatives

OPTIMAL LOCATION

Optimal Location Balances Competing Interests

Current Site Certification Experience

October 2014 8

1. Control of the property

– Community owns or has property under contract

– Willing seller with published asking price

2. Utility access

– All utilities at site or near with construction plans

designed and approved

– System capacity & delivery capacity

3. Developable

– Environmental & cultural

– Transportation access

– Community in step

Basic Elements of Certification

Tennessee Valley Authority’s (TVA) Megasite Program

One of the oldest (2002), most specialized, and

most successful in the country

Designed to develop large industrial

sites (1,000 acre minimum) to attract

large automobile manufacturers

Successful in attracting major employers:

– Toyota

– Volkswagen

– Paccar

– Hemlock Semiconductor

– Severstal*

TVA Megasite Program

October 2014 11

Introduction

Asking the “Frequently Asked Questions”

Three elements of a certified site

Brief Review of “Best Practices Analysis” of six site

certification programs

Site size & utility requirements

“To Preserve & Align”

Some examples:

─ Straightening the channel

─ The Mega Site alibi

The reasonable next step

Presentation Outline

October 2014 12

• What is a “certified” or “shovel-ready” site?

• What is the national standard for such

programs?

• What sets a “certified” site apart?

• In what ways are most certification programs

similar?

• Can any site become a “certified” site?

• Do all end-users demand a “certified” site?

• Does my community have to have a

“certified” site to be competitive?

Frequently Asked Questions

October 2014 13

Mitigates risks for the prospect

Help get more prospect visits

Great marketing tool

Conversation starter

Sends a message that you are committed

to attracting new business

Note: The effort and investment should pay off,

but the ROI will likely not be immediate.

What sets a “certified” site apart?

Iowa City Area Shovel Ready Sites Program

Best Practice Analysis

15

Comparison Areas

16

Commonalities

At least 5 of the 6 programs . . .

• are built around the regional or state industry targets and/or competitive advantages

• use their shovel-ready sites program to drive its marketing message on the worldwide web

• follow utility requirements

– Minimum thresholds for electricity, water, wastewater

– Access to natural gas service

– Fiber optic (usually T-1)

– Minimum proximity to interstate or four-lane highway

17

Commonalities

• Required the following documentation:

– Surrounding land use (including maps and aerials)

– Utilities at, adjacent, or near to site

– Floodplain maps (outside of 100-year floodplain)

– Clean environmental assessment (minimum Phase I)

– Soils report (usually soil borings report)

– Archeological/historical clearance

– Endangered species

– Written permitting process with probable timelines

– Land price

18

Differences

• Number of categories (low 1, high 8)

• Varying application processes

• Professional assistance with reviewing applications

• Grant monies for infrastructure improvements

• Certification timeline after application approved

• Minimum acreage (3 acres to 1,000 acres)

• Documentation

– Wetland Delineation

– Workforce Data

– Restrictive Covenants

19

Conclusions

• TVA Megasite Program - by far most successful in terms of sites sold, jobs created, and capital investment attracted

• Ohio Job Ready Sites Program - most successful in terms of new sites spurred by infrastructure grant funding

• 3rd-party consultants - promote more location/expansions and maintain an objective process with minimal political intrusion

20

Conclusions

• Oklahoma Site Ready - most inclusive in terms of the categories of sites (and detail of application)

• Build Now-NY - greatest benefit has been to expedite permitting time, thereby getting projects to market sooner

• Missouri’s Certified Sites - encouraged good cooperation between competing utility companies and economic developers.

21

Conclusions

• Oregon Certified Industrial Site Program - offers stringent environmental requirements consistent with new sustainable or “green” practices.

• Direct program ties to other state and local incentive programs help promote development.

• Time requirements can affect project outcomes, and, therefore, must be set carefully and updated regularly.

22

Recommendations

• Focused target industries and a good understanding of their site/building needs

• Create a well-planned program criteria (due diligence checklist)

• Diverse sites for the market and a method to replenish the pool of sites

• Infrastructure grant fund and other funding

• Utilize a “3rd-party site selection consultant”

23

Recommendations

• Develop a thorough and graduated pre-application and application process to minimize administrative costs

• Well-defined schedules, timelines, and deadlines for the certification process

• Professional methods designed to expedite the development process (i.e. permitting)

• Good regional cooperation and participation

• Sustainable or “green” practices

End of Best Practice Analysis

October 2014 25

Other Certification Program’s Utility Criteria

West & Mid-Tennessee Deal Ready Sites

Minimum Site Size: 50 acres

Utility Minimums:

• Electricity: 7,500 KVA

• Natural Gas: Available

• Water: 250,000 GPD

• Sewer: 250,000 GPD

• Telecom: T-1 Line

October 2014 26

October 2014 27

Build Now – NY Certified Sites

Category: High-Technology Manufacturing Sites

Minimum Site Size: 25 acres

Utility Minimums:

• Electricity: 7,500 KVA / 15 kV line /

substation <3 miles

• Natural Gas: 9,300 CFH

• Water: 20,000 GPD / 10’ diameter line

• Sewer: 20,000 GPD

• Telecom: T-1 Line

Other Certification Program’s Utility Criteria

October 2014 28

Oregon Industrial Site Certification

Category: Heavy Manufacturing Sites

Minimum Site Size: 25 acres

Utility Minimums:

• Electricity: 1 MW

• Natural Gas: -

• Water: 36,100 GPD

• Sewer: 32,500 GPD

• Telecom: -

Population ≥ 30,000 within 50-radius

Other Certification Program’s Utility Criteria

October 2014 29

Mississippi Power – Project Ready

Categories: Industrial Large Industrial

Minimum Site Size: 100 acres 250 acres

• Electricity: - -

• Natural Gas: Available Available

• Water: 100,000 GPD 500,000 GPD

• Sewer: 100,000 GPD 500,000 GPD

• Telecom: - -

Other Certification Program’s Utility Criteria

October 2014 30

Ohio Certified Job Ready Site Program

Category: Manufacturing Sites

Preferred Minimum Site Size: 200 acres

Utility Minimums:

• Electricity: 6 MW

• Natural Gas: 300,000 CFH

• Water: 500,000 GPD

• Sewer: 300,000 GPD

• Telecom: Reliable Service

(fiber optics preferred)

Other Certification Program’s Utility Criteria

September 2014 31

Eastwood

Commerce Center ______________________________

Wood County, OH

September 2014 32

Lemoyne Substation:

• First Energy’s largest

substation in Ohio is

adjacent to the site.

Eastwood Commerce Center

Wood County, OH

September 2014 33

• Owned by Dominion East Ohio Gas

• 30-inch natural gas transmission line

crosses neighboring property

• $3.9 million Job Ready Site (JRS) grant

recently brought both water and sewer

service to the site

446 Acres

Eastwood Commerce Center - Wood County, OH

September 2014 34

151± acres

Eastwood Commerce Center - Wood County, OH

N

1,625,000 SF

October 2014 35

Scrap yard across

the street

Well-used road

without curb and

gutter

Multiple power

easements across

the most level

portion of the site

No wetland

delineation study

No soil boring in a

rocky region

October 2014 36

CSX Select Site:

Belfast Commerce Centre

Richmond Hill, GA

Belfast Commerce Centre Richmond Hill, GA

306 Acres

Belfast Commerce Centre Richmond Hill, GA

• Memorandum of Understanding between the developer and the City of Richmond Hill for water and sewer expansion.

• Purchase right-of-way for off-site utilities

• Design and permit for future off-site utility installations

Belfast Commerce Centre Richmond Hill, GA

Certification required significant clearing and thinning of forested land.

Belfast Commerce Centre Richmond Hill, GA

Approval of interchange justification report (IJR), which results in the U.S. Dept. of Transportation allowing new interchange on Interstate 95 to be built, once funding is identified.

Belfast Commerce Centre Richmond Hill, GA

Identifying Pockets of Suitable Fill

Belfast Commerce Centre Richmond Hill, GA

Belfast Commerce Centre Richmond Hill, GA

Belfast Commerce Centre Richmond Hill, GA

CSX Select Site:

INland Logistics Port – Kingsbury

LaPorte County, IN

INland Logistics Port - Kingsbury LaPorte County, IN

INland Logistics Port - Kingsbury LaPorte County, IN

INland Logistics Port - Kingsbury LaPorte County, IN

INland Logistics Port - Kingsbury LaPorte County, IN

Assisted in drafting the new Kingsbury Overlay District - a less restrictive land

use ordinance specific to this industrial re-development

Questions?

Thank You

Jonathan Gemmen Senior Location Consultant

Austin Consulting 6095 Parkland Blvd. Cleveland, OH 44124 Phone: 440-544-2254

Jonathan.Gemmen@theaustin.com