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HOW Certified SitesSAVE TIME & MONEY

TECHNOLOGY

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NEW MANTRA“Logistics, Labor, Love”

Q3/2013

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CoverQ3 8/27/13 1:22 PM

INDUSTRIAL SITESREVIEWED, APPROVEDAND READY FOR YOUIN WISCONSIN.Businesses that open their doors in Wisconsin know they are

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AREA0155.indd 1 8/20/13 7:06 PM

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67 THE NEW LOCATIONMANTRA: “LOGISTICS,LABOR, AND LOVE”

A simple five-step analytic process willallow you to align your corporate realestate and organizational goals and provide a consistent roadmap to a successful location outcome.

71 THE ABCS OF “GREENING”THE WAREHOUSE FACILITY

Determining the warehouse facility’scarbon footprint — and then reducing it as much as possible — can put yourcompany on the road to environmentalsustainability.

84 WORK FORCEDEVELOPMENT PROGRAMSCAN MAKE OR BREAK THE DEAL

With scant time and resources forrecruiting and training workers, companies are looking at states that will help them to quickly satisfy theirlabor force needs.

Area Development® Site & Facility Planning (USPS 345-510) is published five times per year (Q1/Winter, Q2/Spring, Q3/Summer, and Q4/Fall — and Annual Directory in December) at Richmond, VA, by Halcyon Business Publications, Inc., 400 Post Ave., Westbury, NY 11590. Periodicals postage paid at Westbury, NY, and additional offices. Single copies, $10. Yearly subscription U.S. & Canada, $75; foreign, $95.

FEATURES57 CERTIFIED SITES PAVE

THE WAY FOR NEWBUSINESS

Companies seeking new locations hopeto save time and money by looking atcertified sites, which communities offerto lure in new business.

61 FINDING DATA CENTERLOCATIONS THAT FIT THE BILL

Although there is no perfect data center site, by vetting prospective sitesto see if they meet specific requirements,a company can find one as close to ideal as possible.

64 TECHNOLOGY TRENDS:REGIONALIZATION OF THE SUPPLY CHAIN

Technology companies are bringingproduct manufacturing and assemblycloser to the customer and — moreimportantly — to R&D.

Exclusive OONNLLIINNEE Content www.areadevelopment.comExclusive OONNLLIINNEE Content

CONTENTSCONTENTS

COVER STORY

13

THE TOP STATES FORDOING BUSINESS 2013Area Development presents theresults of its 4th annual survey of aselect group of highly respected location consultants who work witha nationwide client base. Theresults reveal their top choices in 17 site selection categories.

Reality Check: Making Data-Driven Decisions to Optimize Your SpaceThe use of both quantitative and qualitative metrics allows facility managers to make better use of their real estate footprints, positively affecting their businesses and their employees.

Intelligent Rural Cities Offer Big-City Benefits Without the Urban ChallengesThe broadband connectivity of the 21st century has made rural areas vital places to grow a business and a career.

Employers Grapple with Higher Workers’ Compensation CostsEmployers, who are getting hit with higher workers’ compensation costs as the insurance industry changes premium calculations, are instituting programs to control the impact of workplace accidents.

Hot Markets for High-Tech Manufacturing JobsAccess to skilled labor, customers, and suppliers is paramount to high-tech firms’ location decisions, often trumping cost considerations.

TOCQ3 8/27/13 1:12 PM Page 2

AREA DEVELOPMENT | Q3/Summer 2013 3

Volume 48 | Number 3

Q3/SUMMER 2013

FRONT LINE

“Failure is an option …If things are not failing, you are not innovating enough.”Elon Musk, inventor and entrepreneur known for founding SpaceX and co-founding Tesla Motors and PayPal, and for proposing the “Hyperloop” (1971– )

Quote:

12 NC’s Research Triangle To Land New Information Superhighway

6 IN FOCUSThe Changing Role of Architects in Building Performance Analysis

8 IN THE KNOW • The People-Intensive Factory of the Future• Business Location Tracker

DEPARTMENTS

POSTMASTER: Send address changes to Area Development, Circulation Department, 400 Post Ave., Westbury, NY 11590. Subscribers requesting address changes must provide both old and new addresses. © Copyright 2013 by Area Development® magazine. ISSN: 1048-6534. Printed in the U.S.A. Area Development® is a registered trademark of Halcyon Business Publications, Inc.

10 David Cox, President/CEO, Purple Platypus

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SPECIAL INVESTMENT REPORT

In Focus: Nature’s Cleanup Crew: Peace of Mind forSite Managers

Front Line: Momentum Builds for U.S.-India TradeAgreement

First Person: Eric Silagy, President, and Lynn Pitts, ED Director, Florida Power & Light

First Person: Kenny McDonald, CEcD, Chief EconomicOfficer, Columbus 2020

First Person: Michael A. Finney, President and CEO ofthe Michigan Economic Development Corporation(MEDC)

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4 EDITOR’S NOTE — Re-crunching the Numbers — With the Same ResultsEDITOR’S NOTE — Re-crunching the Numbers — With the Same Results

76 OHIO: A New DayThe nation’s eighth-largest economy is aligningitself to the demands of the 21st century.

88 Web addresses to this issue’s advertisers

EDITOR’S REPORT33 LOCATION CANADA

With its industry diversity and leadingadvantages for business,Canada continues to bea top destination foreigndirect investment.

Publisher’s Note: The 2013 Leading Locations Rankings (www.areadevelopment.com/LeadingLocations2013)In the initially released 2013 Leading Locations report, a data entry error resulted in the misalignment of rankings for some MSAs — these MSAs hadwrongly attributed rankings stated in each of the four indicators used within the “Young, Prime Work Force” and “Prime Work Force Inward Migration”sub-categories (see online methodology for details.) As a result of the corrections, the “Prime Work Force” category rankings and the overall rankings forall MSAs were minimally affected and have also been updated and restated.

E-mail [email protected] for more information or any questions related to the above.

TOCQ3 8/22/13 5:07 PM Page 3


Q3/SUMMER 2013

Re-crunching the Numbers — With the Same Results

According to Kiplinger’s economic outlook, the pace of U.S.GDP growth should be solidly established by year’s end, result-ing in approximately a 2 percent gain for 2013. Second quarterGDP growth registered 1.7 percent (although that figure may berevised upward), and third quarter GDP growth is projected tobe about the same, with the economy picking up steam in theyear’s final quarter.

These optimistic projections are based upon recent improvements in job creation, a surging stock market, and a more robust housing market. Americans are more opti-mistic about the economy this year than last, and businesses also expect a slight uptickin economic output over the remainder of the year. The second quarter BusinessRoundtable’s CEO Economic Outlook survey shows modest improvements in salesexpectations and hiring. Also, it appears Europe is beginning to recover from itslengthy recession, which bodes well for companies that sell to the European market.

Interestingly, changes in the way GDP is measured make the economic recovery seemstronger — or the recent recession appear less severe in retrospect. According to newmeasurements from the Bureau of Economic Analysis, the U.S. economy expanded at anaverage annual rate of 2.3 percent between Q2 2009 and Q4 2012 (previously publishedas 2.1 percent). Apparently the government has revised the figures to include data that itsays better capture the U.S. economy, including the “knowledge economy,” i.e., invest-ments in research and development (including software), as well as entertainment andthe arts. These sectors were previously included as components of other goods and serv-ices, but now will be measured as fixed assets to reflect their ongoing contributions toeconomic growth. Despite taking these new measurements into account, the current eco-nomic recovery is the weakest since WWII. As Bureau of Economic Analysis SeniorEconomist Brent Moulton explains, “We have not rewritten economic history.”

Despite the revisions to GDP measurements, the BEA notes that durable-goods manu-facturing is still the largest contributor to U.S. real GDP growth. The good news is thatorders for durable goods showed four straight months of gains. However, they droppedsharply in July. Chad Moutray, chief economist for the National Association ofManufacturers, notes in a recent interview that the economy is “not growing fast enough.”

What will it take to speed up economic growth? Robert Atkinson, president of theInformation Technology and Innovation Foundation, writes in IndustryWeek (8/16/13)that what’s needed is a national manufacturing strategy that addresses protectionisttrade policies and provides the necessary investment, infrastructure, and innovationsupport. There’s no time like the present to get this done.

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EDITOR’SNOTE

2013 EDITORIAL ADVISORY BOARD

Editor

Tim Feemster Managing Principal,Foremost Quality Logistics

Larry Gigerich Managing Director, Ginovus

Robert Hess Executive Managing Director, Newmark Grubb Knight Frank

Andy Mace Principal Consultant, Cushman & Wakefield Global Consulting, Supply Chain Solutions

Ed McCallum, Principal, McCallum Sweeney Consulting

John Morris, Leader of Industrial Services for the Americas,Cushman & Wakefield, Inc.

Kathy Mussio Managing Partner, Atlas Insight

Scott Redabaugh Managing Director, Jones Lang LaSalle

Andrew Shapiro Managing Director, Biggins Lacy Shapiro & Co.

Noah Shlaes Senior Managing Director, Newmark Grubb Knight Frank

Thomas Stringer, Esq. Director, Business Advisory Services, Ryan & Company

Dean J. Uminski Executive, Site Selection Consulting, Crowe Horwath LLP

James BergerJohn Borchardt Lisa BuddeckeDave Claborn Mark Crawford Clare L. GoldsberryGreg Guillot

Susan Kleeman Beth Mattson-TeigPhillip Perry Jim Romeo Mali R. Schantz-FeldMonique Silverio Steve Stackhouse

EditNoteQ3 8/26/13 2:13 PM Page 4

LUBBOCKEDA.ORG

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Workforce Data and Population Statistics

Cost of Living, Tax and Utility Information

Lubbock Business Park and Lubbock Rail Port

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The use of energy modeling as part of an integrated design process has becomeincreasingly important in the role of the architect, and firms are now realizing that theymust adopt new design practices to remain competitive. Incorporating performanceanalysis can seem like an added complication and is often perceived as laborious andtime-consuming. However, specialists in building performance analysis, such asIntegrated Environmental Solutions Ltd., have recognized this and are addressing theseissues by offering architects software packages that make it easier for them to adoptanalysis into their day-to-day practice.

The American Institute of Architects (AIA) release of “An Architect’s Guide toIntegrating Energy Modeling in the Design Process” is evidence of the growth insophistication of energy modeling among architects. The guide was released inOctober 2012 with the accompanying statement: “Energy modeling is fast becoming amore useful means to better inform major design decisions early and often throughoutthe building design process. It can provide a roadmap to help practitioners lead theirclients toward energy-efficiency goals, green code compliance, and building certifica-tion programs.”

Unfortunately, most building performance simulation tools are deemed not compati-ble with architects’ working methods and needs. From the perspective of many archi-tects, these tools are judged as too complex and cumbersome. This stems from the factthat most tools for analysis were developed by technical researchers, building scientists,or HVAC engineers concerned with empirical validation. There is a real need to fullycomprehend architects’ problems in interacting with performance simulation tools —architects have different backgrounds, different knowledge processing methods, and arevisually orientated. This is exactly what IES is trying to do with its new software pack-age, which not only provides tools for energy modeling, but also recognizes the broaderissues of daylight, solar shading, water, climate, and much more; it provides a fullycomprehensive package of analysis tools to allow architects to analyze the full perform-ance of an entire building in an integrated fashion.

Such tools help architects to incorporate data-driven and integrated design into theirprocesses from the opening charette. Being better informed on performance from thestart of the design process allows architects to retain control over their design and notsacrifice aesthetics for performance, but rather marry them together.

Imagine if you could use specific site understanding to automatically outline suitablebioclimatic architectural strategies for a project. Such pre-design sustainability directionis invaluable. Then once you have several viable options, the tools can help investigateand refine the most promising. In performance terms this means looking at the impactof different orientations, forms, constructions etc. and understanding potential passiveor active systems the engineer might want to investigate.

The world and economy are changing, and sustainable design is now on boardroomagendas. Building and architectural firms must adopt new design practices to remaincompetitive in this climate. Clients are demanding ever-higher energy and performancetargets designed to save them money and deliver on corporate targets. We’re seeing thatincreasingly architects are starting to embrace and understand the power of analysis.We are definitely seeing a shift, and this is very positive for the future of sustainablebuilding design.

By Dr. Craig Wheatley, Director, IES (Integrated Environmental Solutions Ltd.)

The Changing Role of Architects in Building Performance Analysis

Craig Wheatley is anexpert in environmentalengineering, with 14 years’ experience ofengineering consultancyin the UK at the seniorand executive levels. Healso spent three years inthe Department of Civiland BuildingEngineering atLoughboroughUniversity, England,undertaking a Ph.D. in the integration ofdetailed thermal andmoisture modeling.

IN FOCUS

InFocusChanging 8/15/13 12:21 PM Page 6

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Cardon Outreach Expansion in Utah to Create 308 Jobs

The provider of technology and services to healthcare facilities nationwide will invest $5.3 million to expand its processing facility in

Salt Lake County.

South Dakota Technology Center Under ConstructionEagle Creek Software Services

& the Vermillion Area Chamber are building the Vermillion Technology Center, which is expected to house

200 IT workers.

Construction Under Way on $155 Million North Dakota

BiorefineryMidwest AgEnergy Group has begun to build its new biorefinery that will

produce ethanol, distillers grains, and fuel-grade corn oil.

Trident Seafoods To Establish $41 Million Facility in

Carrollton, GAThe seafood harvesting and

processing company has selected Carroll County for its new seafood processing facility that will create

175 jobs.

GM Adds $167 Million to Its Spring Hill, TN,

Assembly PlantGeneral Motors will increase to $350 million investment in its Spring Hill assembly plant in order to produce

new vehicles, thereby creating or retaining about 1,800 jobs.

Honda Plans $215 Million Expansion at Its Ohio Manufacturing Plants

Honda’s investment in its Anna and Marysville facilities will add

new powertrain technologies and a technical training center.

German Automotive Supplier Establishing Kentucky

Manufacturing OperationDr. Schneider Automotive Systems

Inc. will build a $29 million manufacturing facility in Russell Springs, Kentucky, creating 155

full-time jobs.

Chrysler Group Plans $52 Million Expansion at Two Michigan Facilities

Chrysler investment in its engine plants in Trenton and Dundee will increase capacity of the Tigershark

engine and create nearly 298 new positions.

THE PEOPLE-INTENSIVE FACTORY OF THE FUTUREA new report from IDC Manufacturing Insights — “Business Strategy: The Journey Toward the People-Intensive Factory of the Future”

— claims that manufacturers, faced with tough economic challenges and a more complex marketplace — are rethinking how they operate.The survey points to the following key findings:

• The factory of the future will be measured according to its production capability and flexibility — not just its current efficiency and capacity.

• Going forward, manufacturers will produce modular platforms centrally while using local small factories, suppliers, and distributors to tailor final products for local demand.

• Although there has been increased plant automation, people — and the flexibility and decision-making capabilities they provide — willbe at the center of the factory of the future. Availability of skilled workers will be a key issue.

The report notes that although manufacturing has taken a back seat to other industries in recent years, governments worldwide havecome to the realization that their economies cannot be supported by service industries alone.

Manufacturers, in turn, have renewed their focus on production in order to protect and enhance their technology. They’ve come to therealization that direct involvement in production fosters innovation and improves customer service.

IN THE KNOW

Go to www.AreaDevelopment.com/NewsItems to track business expansion & relocation announcements

BUSINESS LOCATION TRACKER

Find Studies/Research/Papers on Area Development Online.

www.AreaDevelopment.com/Studies

Track business relocations and expansions on Area Development Online.

www.AreaDevelopment.com/NewsItems

NewsTrackerQ3 8/22/13 3:15 PM Page 8

Momentum.Companies of all sizes and industries

continue to choose the Tulsa

region for its resiliency, its growth

opportunities, talented workforce

and affordable business costs. Tulsa

ranked as a top metro area in more

than 20 publications in 2012 and 2013

for its economy, real estate and quality

of life – and people all over the world

are taking notice. For more information,

go to: growmetrotulsa.com.

Justin McLaughlin, CEcD | Senior Vice President | Economic Development | [email protected]

Tulsa Regional Chamber | One West Third Street, Suite 100 | Tulsa, Oklahoma 74103 | 800.624.6822

AREA0129.indd 1 8/8/13 3:59 PM



DAVID COX PRESIDENT/CEO PURPLE PLATYPUSFIRST PERSON

Can you explain a bit about thebeginnings of 3D printing and itsevolution?

David Cox: Additive manufactur-ing, as it’s called, or 3D printingbegan with the stereo lithographyprocess — or SLA system developedby 3D Systems — in about 1986 andhas progressed from there. However,it hasn’t been a smooth process; it’shad fits and starts. Today, in additionto SLA there are several other tech-nologies including Fused DepositionModeling (FDM), Selected LaserSintering (SLS), and some metalprinting (Direct Metal Laser Sinteringor DMLS). The equipment hasevolved as well, and today, in addi-tion to desktop printers, there aresmaller, DIY printers — some in thesub-1,000-dollar range marketed toinventors. There are even FDM print-ers in homes today for those techno-geeks who like to play with theprocess. SLA is still the prevalenttechnology. All the service bureaususe SLA. The medical device industry uses SLA for productdevelopment. The problem is that it’s a messy process.

Who are the major players in the industry?David Cox: Today, there are two major players in the

3D printing market – Stratasys and 3D Systems, which havecontributed to a lot of the consolidation that has taken placeover the past few years. Last year we saw the completion ofthe merger of Stratasys and Objet to create a $3 billioncompany. 3D Systems has been on a buying spree with itspurchase of some competing technology along with materialsdevelopers and service bureaus. Of course, the down side ofthis consolidation is that the price of the equipment and thematerials is going up.

AD: While it’s taken 25 years, 3D printing or “additivemanufacturing” is seeing some good success. What doyou believe has contributed to the technology’s successin recent years?

David Cox: The major contributor to the success of thetechnology is the fact that companies are able to compresstheir product development cycles and get their productsdeveloped and into the market faster and at reduced cost —particularly when companies are creating new products thatinvolve plastic components.

3D printing means you can create prototypeparts without having to build a mold first —which is expensive.

There is a lot of talk about making end-useparts using 3D printing. Where do you seemost of the activity in 3D — prototyping oractual end-use parts?

David Cox: Ninety percent of 3D printingis still done for prototyping and product

development — R&D activities. We seesome demand for end-use parts but

that’s few and far between. Thetypes of (polymer) materials avail-able are the number one reason,and cost is another. 3D printing isa one-off process. When you wantto make one of something it’s inex-pensive, but if you want 1,000, it’snot. Most people compare it toinjection molding in which themolds are expensive but molded

parts are pennies.

What will make 3D printed parts forend-use applications more common?

David Cox: Materials development and getting costsdown. There are more materials now than in the early yearsof the technology, such as polycarbonate, ABS, and higher-end engineering materials such as Ultem. As materials havegotten better and stronger, we are seeing some demand forend-use parts. The proprietary materials still rule the market,but there are major barriers to cost, for both the equipmentand the materials. The equipment manufacturers don’t wantto make the printers cheaper, and even the DIY printershaven’t made any big inroads into the market for the high-endprofessional-grade printers.

Will 3D printing ever be primarily for end-use parts? David Cox: Until materials get better and cheaper,

the answer is no. Moving forward, as materials are beingdeveloped there will be more and more opportunities forend-use part applications. The resolution has gotten thereand is good for 95 percent of companies. But most productdevelopers want the prototype in the material that the endproduct will be molded from for functional testing purposes.That’s been the big thing.

You’ve mentioned the cheap DIY 3D desktop printers,but you don’t seem real excited about the potential for any real market share there. Why?

FirstPersonDavidCox 8/15/13 5:53 PM Page 10


David Cox: I really don’t see these low-end printersgoing anywhere. The problem with DIY is they’re a flash inthe pan. They don’t make quality things. People think thismachine will sit on your desk and you can print everything;however, each system uses different materials so you can’tget one system to print everything. Even if you buy one ofthese for cheap up-front, there’s still cost involved for theequipment and material. It will be interesting to see whatwill happen with these “tinkering” machines.

Some people believe that 3D printing is the next big thing. Is it?

David Cox: Do I think 3D printing is going to take overand all plastic injection molders will be out of business? No.Whether the government will put in these centers, whoknows. There really hasn’t been any new 3D technology tocome out in a long time. Unless a new way to skin this catcomes out or we get new materials — manufacturers are init for the materials — it will remain to be seen.

THE ASSIGNMENT

Area Development’s staff editor Clare Goldsberry spokewith David Cox, president/CEO of Purple Platypus, whichhe founded in 2007, as an AM equipment seller and dis-tributor for Stratasys, developer and manufacturer of FDM,Polyjet, and Objet — 3D printing technologies; and Purple Porcupine, a service bureau with 12 machines thatprint 3D parts for a variety of customers and markets.

3D printing, also known as rapid prototyping and additive manufacturing (AM as opposed to subtractivemanufacturing), hasn’t exactly been an overnight success.After 25 years, the industry is finally getting the attentionit deserves — some good, some bad. In fact, last year thegovernment opened the first 3D technical institute inYoungstown, Ohio — the National Additive ManufacturingInnovation Institute — and plans 15 such institutes, if theadministration can get the $1 billion in funding.

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FirstPersonDavidCox 8/27/13 1:14 PM Page 11


N orth Carolina’s Research Triangle hopes to gain anedge with high-speed connectivity. The NC NextGeneration Network (NCNGN or “NC Engine”) is a

local public-private initiative aimed at providing openaccess, ultra-high-speed bandwidth at affordable prices toboth residents and businesses throughout the region.

Currently, typical bandwidth connections in the area runat 10 to 20 megabits per second. The NCNGN initiativewould expand that 100-fold by delivering a one-gigabit con-nection. “We want to make sure that our area is one of theleaders to keep us innovative and keep the reputation thatwe have for being a high-tech area of innovation,” saysMarc Hoit, vice chancellor for information technology andCIO at North Carolina State University in Raleigh.

NC State is one of four local universities that have band-ed together with the communities of Cary, Carrboro, ChapelHill, Durham, Raleigh, and Winston-Salem to spearhead theinitiative. University of North Carolina at Chapel Hill,Duke, and Wake Forest universities also are participating inNCNGN. Although the universities are already equippedwith super-fast bandwidth at 10 gigabits, the institutionsalso recognize the advantages of expanding that high-speedconnectivity to the broader community.

Some of the key goals behind the project are to reducethe digital divide by improving access to resources, enhancework force knowledge and skills, and promote economicdevelopment. “I believe this technology will attract industrythat relies upon high-speed Internet performance,” saysRuben Gonzales, business development administrator at thecity of Winston-Salem. “This infrastructure improvementwill also benefit our existing companies, and I believe willalso help keep companies here — especially those com-pelled to upgrade their own capacity to keep up withadvances in their industries.”

The key to executing the plan will be selecting third-party vendors that can both add new and leverage existinginfrastructure to create an affordable network. The schoolsand the communities involved will offer their logistical andother types of support, as will a national nonprofit group,Gig.U, a broad-based group of over 30 leading research uni-versities from across the nation that seeks to accelerate thedeployment of ultra high-speed networks to leading U.S.universities and their surrounding communities.

NCNGN issued an “invitation to negotiate” earlier thisspring with a submission deadline of April 1. The groupreviewed eight proposals, including one from Time WarnerCable. Unlike requests for proposals, which involve select-ing a winning bidder, the “invitation to negotiate” has addi-tional rounds of negotiations to reach best and final offers.

These negotiations were under way in August, and thecities involved are hoping to have final contracts signed byOctober 11. (Each city has the option to choose the vendor ofits choice.) Although completion of the project depends tosome extent on the vendors chosen and their strategy forbuilding new or leasing existing infrastructure, NCNGN ishoping that the higher connectivity will be available begin-ning in mid- to late 2014.

North Carolina joins other locations such as Kansas City,Seattle, Austin, and Chicago that have launched similarefforts. The demand for higher bandwidth and the need toprovide fiber connectivity is clearly the wave of the future,notes Hoit. “You can see that in everything you do fromonline storage to services in the cloud,” he says. High-speedconnectivity will provide greater access to a variety of appli-cations and resources ranging from in-home medical care tolong-distance learning. “There are a lot of things that this isgoing to open up and allow, and it is clear that we have tohead that direction,” he adds.

FRONTLINE

NC’s ResearchTriangle To Land

New InformationSuperhighway By Beth Mattson-Teig

FrontLineResearchTriangle 8/15/13 12:27 PM Page 12


A s the economy improves and states contin-ue to vie for new investment and jobs, theyalso seek the attention of site consultants

who help companies make their new facility andexpansion decisions. With that in mind, Area Development’s fourth annual Top States forDoing Business survey of site consultants ranks thestates based on their number of mentions in 17 categories (scores were weighted based on posi-tion in each category and then overall).

States were ranked on factors in the following categories: Business Environment (costs, taxes and regulations, incentives, etc.), Labor Climate (diversity, costs, development programs,etc.); and Infrastructure and Global Access (rail/high-way access, shovel-ready sites, utility rates, logisticsaccess). Following is more detailed information onthe attributes of the top-10 states that providesinsight into the rankings. Additionally, several siteconsultants who participated in the survey offertheir comments.

1 . T E X A S

Simply put, it’s hard to beat Texas — whichmaintains is number-one ranking among thesurveyed consultants.

“We've worked hard to make Texas the beststate in the nation to raise a family and own abusiness,” says Governor Rick Perry. “We’llcontinue to strengthen the economic pillarsthat have helped us become a national exam-ple of job creation and economic strength.”

Those pillars include a pro-business envi-ronment, strong work force, and an infrastruc-ture that allows efficient access to global mar-kets. Texas has no personal income tax and nocorporate income tax — a huge incentive for

1. TEXAS 2. Georgia 2T. South Carolina 4. Alabama 5. North Carolina 6. Louisiana 7. Tennessee 8. Florida 9. Mississippi 10. California

TopStatesArticle 8/16/13 2:53 PM Page 13


companies to locate or expand in Texas. Therefore, it is notsurprising that Texas has accounted for 33 percent of thenation’s net job gains over the past decade. It also sweetensthe pot with the Texas Enterprise Fund (TEF), which pro-vides funding and incentives to close deals on high-valuebusiness locations or expansions. To date TEF has investedabout $500 million that has resulted in $20 billion in capitalinvestment and more than 67,000 new jobs.

Texas also offers a highly skilled, productive work forceof over 12 million people with a wide range of skill sets. Theunemployment rate is currently about 6.5 percent — thelowest of the 10 most-populated states. The state’s SkillsDevelopment Fund has provided more than $22 million tohelp companies offset the costs of employee training. FromMarch 2012 to March 2013, Texas employment grew thefastest of the 10 largest states.

Key growth industries include energy, advanced manu-facturing, aerospace and defense, biotechnology and life sci-ences, electronics, and IT. Manufacturing and distribution arewell-supported by a modern, highly integrated transporta-tion infrastructure of rail, highway, air, deepwater ports, andseveral large, well-planned intermodal complexes. Texas’central location within North America facilitates domesticand international transportation, as well as easy access tomarkets. This infrastructure support has helped Texas be thenumber-one exporting state in the U.S. for 11 years in a row,with more than $264.7 billion in exports in 2012.

2 . G E O R G I A

Georgia’s “pro-business” environment is the result ofstate statutes and sound economic development practices.

1- TEXAS

2- SOUTH CAROLINA 3T- GEORGIA 3T- LOUISIANA

4- ALABAMA 5- FLORIDA

1- Texas 4- Louisiana

2- South Carolina 5T- Georgia

3T- Alabama 5T- Mississippi

3T- North Carolina 5T- Tennessee

1- Texas 4- North Carolina

2T- Georgia 5T- Mississippi

2T- Louisiana 5T- Oklahoma

3T- Alabama 5T- Tennessee

3T- South Carolina

1- Texas 4- Georgia

2- South Carolina 5- Florida

3- Nevada


2- South Carolina 5- Alabama

3- Georgia

1- Texas 4T- California

2- Florida 4T- Georgia

3- North Carolina 5- Virginia



2T- South Carolina 5T- Tennessee

3- Georgia

1- Florida 4T- Michigan

2- Louisiana 4T- South Carolina

3T- Indiana 5T- Arizona

3T- Texas 5T- Ohio

1- Texas 3T- South Carolina

2- Arizona 4- Georgia

3T- Alabama 5- Mississippi

3T- Louisiana

NEXT BEST: North Carolina, Arizona, Mississippi

Overall Cost of Doing Business

Incentive Programs

Corporate Tax Environment

Cooperative State Government

Access to Capital & Project Funding

Speed of Permitting

Renewed Consideration Post-Recession

Most Favorable Regulatory Environment

Overall Business Environment


AREA0071.indd 1 5/8/13 8:30 PM



1- TEXAS

2- SOUTH CAROLINA 3T- ALABAMA 3T- GEORGIA 3T- NORTH CAROLINA

4- CALIFORNIA 5- KENTUCKY

1- Texas 3T- Michigan

2- North Carolina 4- Georgia

3T- California 5- Massachusetts

1- Alabama 5T- Georgia

2- South Carolina 5T- Louisiana

3- Mississippi 5T- North Carolina

4- Texas

1- Georgia 4- Alabama

2- South Carolina 5T- Florida

3T- Louisiana 5T- Virginia

3T- North Carolina

1- Texas 4- New York

2- California 5- Georgia

3- Florida

1- South Carolina 4- Georgia


2T- Texas 5T- Tennessee

3- North Carolina

1- Kentucky 4T- Pennsylvania

2- Ohio 5T- Colorado

3- New Mexico 5T- West Virginia

4T- Missouri

NEXT BEST: Florida, Louisiana, Mississippi, Ohio

Availability of Skilled Labor

Competitive Labor Costs

Leading Work Force Development Programs

Most Diverse Labor Pool

Right-to-Work Environment

Non-Right-to-Work Environment

Overall Labor Climate

1- TENNESSEE

2T- GEORGIA 2T- TEXAS 3T- ILLINOIS 3T- SOUTH CAROLINA

4- ALABAMA 5T- INDIANA 5T- NORTH CAROLINA

1- Georgia 4T- Indiana

2- Texas 4T- Tennessee

3- Illinois 5- Ohio

1- South Carolina 4T- North Carolina

2- Georgia 4T- Texas

3- Tennessee 5- Alabama

1- Tennessee 4- Georgia

2- Texas 5- North Carolina

3- Alabama

1- Tennessee 4- Illinois

2- Texas 5- Indiana

3- Georgia

NEXT BEST: Ohio

Rail & Highway Accessibility

Certified Sites/Shovel-Ready Program

Competitive Utility Rates

Distribution & Logistics Access

Overall Infrastructure & Global Access


AREA0141.indd 1 8/17/13 1:34 PM



For example, Georgia was the first southeastern state to passsingle-factor corporate tax apportionment. This legislationapplies the 6 percent corporate tax rate only to the portionof income earned inside the state. Georgia also consistentlymaintains one of the nation’s lowest debt-per-capita levels.

A modern and extensive transportation and logisticalinfrastructure allows Georgia to compete effectively in aglobal marketplace. Hartsfield-Jackson International Airportis the world’s busiest passenger airport and 10th-largest inthe nation for cargo. Georgia’s deepwater ports and inlandbarge terminals are a major reason Georgia now ranks sec-ond nationally in exports. Atlanta is also the rail center ofthe South, with nearly 5,000 miles of railroad track and thelargest intermodal facility on the East Coast.

Quality and cost of labor is a key driver in every locationdecision. Georgia’s Quick Start work force development

program is one of the best in the nation and provides cus-tomized training at no cost to qualified companies in anarray of industries. Nearly one million workers at 6,200companies of all sizes have benefited from Quick Start.

Georgia’s pro-business policies continue to attract newbusiness investment. Thirty Fortune 1000 companies haveheadquarters in Georgia. General Motors, Hitachi, andGreenway Medical Technologies are just some of the compa-nies that continue to invest and expand in Georgia. AT&Trecently announced plans to build a research center in Atlantato develop the company’s latest technologies and applications.

“AT&T has been investing and innovating in Georgia since1879,” comments Sylvia Russell, President of AT&T Georgia.“Our decision to locate this unique facility in Atlanta is recogni-tion of the hard work Georgia has done to create a welcomingenvironment for businesses to invest, innovate, and create jobs.”

Change has its advantages. For yourbusiness, South Carolina and Santee Cooperoffer change in the form of an attractive taxbase; low-cost, reliable electricity; right towork workforce; development opportunitiesand a host of other competitive advantages.Plus, a quality of life graced with Southernhospitality that will, well, change your life.And Santee Cooper, South Carolina’s largestproducer of electricity, will be there to poweryour success.

For more information, contact us at:www.santeecooper.com/AD

NEW ENERGY

AWAITS.

AREA0158.indd 1 8/22/13 10:03 PM


EVERYTHING WEDO IS ORIGINAL.

What does it take to compete with the best? It takes aworkforce driven by pride to do things right. It takes

relevant training programs that equip workers with theskills of tomorrow. And it takes leadership

that’s ready and able to find solutions – no matter thechallenge. Mississippi has what it takes to help your

business compete with anyone.

Find out why our workforce isready for you at mississippi.org.

1.800.360.3323

mississippi .org

© Mississippi Development Authority 2013

AREA0138.indd 1 8/14/13 7:18 PM



2 T. S O U T H C A R O L I N A

The Palmetto State has one of the fastest-growingeconomies and one of the fastest-growing manufacturingsectors in the country, according to the U.S. Department ofCommerce. South Carolina’s real GDP growth rate of 2.7percent in 2012 put it above the national average of 2.5 per-cent and the southeastern regional average of 2.1 percent.

South Carolina exports totaled a record of more than$25.1 million in goods in 2012, thanks in part to a highlyefficient transportation infrastructure, which includes thebooming Port of Charleston. An inland port will open inSeptember that will extend the capabilities of the Port ofCharleston 212 miles inland, enabling goods to be shippedvia container overnight along an existing Norfolk Southernrail line between Spartanburg and Charleston. The inlandport will convert an estimated 25,000 containers that are cur-rently being trucked on Interstate 26 to rail in one year.Annual capacity is estimated at 40,000 containers initially,with potential for expansion.

As a right-to-work state, South Carolina has the lowestprivate-sector unionization rate in the country, at 1.3 per-

cent. ReadySC™, a work force development program thatoperates through the technical college system, is a key partof South Carolina’s economic development success. In fiscalyear 2011–2012, readySC provided recruiting, assessment,training development, management, and implementationservices for nearly 4,500 workers from 82 companies.

A friendly business climate, highly integrated transporta-tion network, and capable work force are key drivers for theresurgence of manufacturing in South Carolina — especiallyaerospace and automotive. Boeing is investing $1 billion inits operations and adding an engineering design center. Forthe second consecutive year, South Carolina ranked first intire exports with close to a 30 percent share of all U.S. tireexports. When new Bridgestone, Continental, and Michelinplants coming online, it is predicted that South Carolina willbe the biggest tire-producing state.

4 . A L A B A M A

Alabama has a proven track record in economic develop-ment and 2013 promises to be another strong year. State andlocal leaders are working together to carry out Accelerate

2013 TOP STATES COMMENTARY

By Ann Petersen, Senior Associate, Business and Economic Incentives,

Jones Lang LaSalle

As the Top States for Doing Business survey indicates, companies continue to be attracted to states with the ideal

combination of shovel-ready sites, infrastructure, labor availability, and competitive operating costs. While those key

preferences are not new, the survey underscores an overarching new trend of increasing demand for conducting

business in the South and Southeast. In general, we are seeing a shift in corporate relocations toward these southern

areas, indicating that business-friendly initiatives in these states are having a visible effect on attracting companies.

Texas has been actively recruiting companies in other markets through a national advertising campaign, which may

have contributed to its high placement in the survey rankings. Beyond Texas, such states as Georgia, North and

South Carolina, and Tennessee have been aggressive in providing the ideal characteristics and demonstrating their

responsiveness to business needs — and their success also is reflected in the survey results. North Carolina has

created numerous successful corporate relationships in recent years.

Of course, a challenge for all state economic development teams is the local political dynamic. States ranked highly

for doing business today may increase or lose their appeal as the political winds blow. It is important for companies

and their consultants to stay abreast of state and local trends that may affect incentive programs, taxes, zoning, and

other site selection considerations. Many of the top-ranked states, and the municipalities within them, have proven

their willingness and ability to create successful partnerships with companies. A growing emphasis on work force

development, training, and education programs to strengthen the labor pool will only further solidify these states’

standings as great places to do business.


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AREA0131.indd 1 8/8/13 4:17 PM



Alabama, the state’s long-term economic development planbased on three economic development drivers: recruitmentof new business and industry, retention and expansion ofexisting businesses and industry, and creating jobs throughinnovation, entrepreneurship, research and development,and commercialization.

Alabama is well known for its skilled work force andAIDT, one of the top training programs in the country thatprovides innovative solutions for Alabama’s new andexpanding businesses, especially manufacturers. These com-panies are also attracted to Alabama’s solid transportationand shipping infrastructure — an asset that is increasinglyimportant in a competitive global economy. Located on theGulf Coast, Alabama has over 4,000 acres of port — includ-ing the Port of Mobile, an intermodal facility that willbecome the sixth-busiest port in the world after a $300 mil-lion expansion. Alabama’s ports are also connected to a3,000-mile rail system and six interstate highways.

Aerospace, automotive, bioscience, advanced manufac-turing, distribution, IT, and chemicals are key, high-growthindustries for Alabama. Major investments by Mercedes,Honda, Hyundai, and Toyota continue to drive the automo-tive sector. The new $600 million Airbus assembly facilitybeing developed in Mobile will start producing the A320family of jets in 2015.

“The site was perfect, with an airport and ocean port andadequate land,” indicates Allan McArtor, chairman forAirbus Americas. “Work force was also vital — we were

encouraged by the auto industry’s success in Alabamabecause its manufacturing aspect is a trained skill similar tothat of aircraft assembly.”

5 . N O R T H C A R O L I N A

North Carolina’s diverse economy is supported by pro-business economic policies, a strong work force, and a modernand efficient transportation infrastructure. The state wasranked fourth-best state for business and second-best state forbusiness costs by Forbes in December 2012. Key growth indus-tries include advanced manufacturing, aerospace, automotive,biotechnology, sustainable energy, and information technology.

A big reason North Carolina is a good place for businessis because its business tax rate is one of the lowest in thecountry — and it just got even lower. In July, GovernorPatrick McCrory signed legislation further reducing the cor-porate income tax from 6.9 percent to 6 percent in 2014, andthen to 5 percent in 2015, a 29 percent tax decrease.

North Carolina also has a world-class transportation sys-tem for shipping products around the globe. The state iswithin a two-day drive of 170 million U.S. and Canadianconsumers and 65 of the country’s top 100 metropolitanareas. International trade is boosted by two deepwaterports, two strategically located inland terminals, and thesixth-largest major airline hub in the nation.

North Carolina is a right-to-work state and has the low-est overall unionization rate in the nation at 2.9 percent.

States Most-Mentioned By Respondents

(without regard to ranking in 17 categories)

1. TEXAS

9. Indiana

10. Virginia

11. Mississippi

12. Ohio

13. Kentucky

14. Arkansas

15. Oklahoma

15T. Michigan

2. SouthCarolina

3. Georgia

4. Alabama

5. NorthCarolina

6. Tennessee

7. Louisiana

8. Florida


“Texas is a state where a dream can be put to work.”- Texas Governor Rick Perry

It’s a commitment to create and sustain an environment that fosters business and entrepreneurship, trains the workforce of the future, and helps

turn a dream into a realit o ma er what the industr , we are commi ed to your growth and success Come to Texas, we’re

Wide Open for Business

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Employers are attracted to North Carolina’s diverse pool ofhighly skilled and productive workers, as well as the state’scomprehensive work force development network and excep-tional educational opportunities.

Many of the state’s workers have the experience and tech-nical training for advanced manufacturing operations, includ-ing automotive and aerospace. For example, GE Aviation willbe expanding its manufacturing operations at four facilities inNorth Carolina. The project, which will create 242 new jobs ata capital cost of $195 million, will be assisted by a JobDevelopment Investment Grant from the state.

6 . L O U I S I A N A

Since January 2008 Louisiana has enjoyed 33 consecutivemonths of private-sector job growth, an unemployment ratewell below that of the nation and the South, and record lev-els of business investment and job creation. In the past fiveyears, Louisiana has secured economic development proj-

ects that are creating more than 63,000 new direct and indi-rect jobs and more than $28 billion in new capital invest-ment, along with hundreds of millions of dollars in newsales for Louisiana’s small businesses.

This resurgence is largely due to the innovative economicpolicies put forth by Governor Bobby Jindal and the statelegislature. Action items have ranged from removing uncon-ventional business taxes to reining in government spending,reforming governmental ethics laws, revamping work forcedevelopment programs, and implementing landmark educa-tion reforms for Louisiana students.

These initiatives — combined with a highly productiveand well-trained work force and a modern rail-air-highwaytransportation infrastructure that is well connected to morethan 30 bustling ports — make Louisiana an ideal location formajor capital investment. Key sectors are energy, IT, digitalmedia, aerospace, automotive, and advanced manufacturing.

Louisiana has also averaged 10 FDI projects per year overthe last decade, with an average of 271 jobs per project and

2013 TOP STATES COMMENTARYBy Dan Levine, Principal, MetroCompare LLC

Each site selection engagement begins with the corporate client specifying project requirements that tend to

limit search areas to a relatively few number of states. This year’s survey of consultants captures this dynamic

more effectively than has sometimes been the case in years past.

Massachusetts and Michigan, for example, rank among this year’s leaders in availability of skilled labor. Similarly,

Illinois and Indiana are in the top tier for distribution and logistics. Not surprisingly, the survey results rank the

southern states as national leaders in the overall cost of doing business and for favorable regulatory climate. But

strong though the South might be, does anybody really believe that any of these states deserves a higher ranking

than does New York City or Los Angeles in terms of global access?

Similarly, it is not true that utility costs are always lower in the South as the results suggests, and some north-

ern states (think South Dakota) have every bit as competitive a state tax climate as do any of the survey leaders.

Nevertheless, Texas getting top honors as the best state for doing business should come as no surprise to anyone,

whereas California ranking in the top ten is certainly an unexpected result.

One of the most interesting variables to watch during the upcoming year is the availability of basic industrial space.

The availability of suitable existing industrial space has proven to be a critical limitation during several recent

engagements. Similarly, as domestic energy production soars and natural gas prices decline, those states that pass

these savings along to industrial users will find their competitive positions greatly enhanced.

Finally, a comment on incentives: It seems that the states that ranked well in the survey were those that not only

offer significant incentives but tend to make their best programs available to most projects. In many other states

that offer equally large incentive awards as do the survey leaders, it is much more of a hit or miss proposition as to

whether your particular project will qualify for the most significant programs.



capital investment totaling $45 billion. One of the largestprojects is Sasol’s gas-to-liquid and ethane cracker complexin Southwest Louisiana, worth an estimated $16 billion to 21billion. The South African company’s facility will be one thelargest manufacturing projects in state history and one of thelargest foreign direct investments in the history of the nation.

“Working with Louisiana Economic Development hasbeen really a pleasure for us,” says André de Ruyter, seniorgroup executive for Sasol’s Global Chemicals and NorthAmerican Operations. “We found them to be very busi-nesslike, focused, supportive, and understanding of theneeds of a major investor.”

7 . T E N N E S S E E

Low taxes and fiscal stability are key reasons why many

companies choose a city or state for expansion or relocation.According to Fitch Ratings, one of the country's top bondrating agencies, Tennessee has the lowest debt ratio of anystate in the country. In 2012 Barron’s magazine rankedTennessee as the third-best-run state. Tennessee is a right-to-work state, has no personal income tax, and enjoys the sec-ond-lowest cost of living in the United States.

Tennessee is also known for its manufacturing — thenumber of workers employed in manufacturing inTennessee is almost a third greater than the national aver-age. Education and work force partnerships that advancemanufacturing in the state include the Regional Center forAdvanced Manufacturing in Kingsport, a state-of-the-arttraining facility that helps create a pipeline of well-preparedapplicants for manufacturing positions. In Chattanooga,Volkswagen and Chattanooga State Community College

2013 TOP STATES COMMENTARYBy Robert Hess, Executive Managing Director, Consulting; Newmark Grubb Knight Frank

Consistency and confidence are two major intangible business location drivers for our corporate clients these days.

The results of the 2013 Top States for Doing Business survey demonstrate that the southeastern region of the U.S.

really gets it. Risk management and certainty around investment decision-making is rising as a critical location factor,

and Texas, Georgia, the Carolinas, Alabama, Tennessee, and Mississippi continue to maintain their business climate

“edge” through focused advancement of their “business-friendly” policies as well as overall low structural costs.

Recent entrant Louisiana into this mix of pro-business climate states is exciting and refreshing — not because I am

biased – rather a demonstration that leadership does matter. Louisiana has aligned its public and private sectors

across a number of target industries, tackled tough systemic issues like work force/skill development with positive

results, invested in a world-class training capability, and structured aggressive targeted incentive programs that have

resulted in marked improvement to the state’s survey ranking.

I think many of my colleagues in the site selection business struggle with surveys, especially at the state level,

because many of our clients look at clusters, eco-systems, or other spatial contexts like edge cities or urban core strat-

egies. In addition, it does depend on the industry, the asset type, and tactical issues like supply-chain infrastructure,

venture capital, site availability/readiness, and quality of life. You can take these geographic constructs and specific

business condition needs and overlay them on the survey results and see why places like California, Michigan, Arizo-

na, and Florida emerge throughout the survey as leading states for business development. Our business at Newmark

Grubb Knight Frank in the last two years has taken a intentional turn toward deep labor analytics and talent attraction/

retention due diligence, and this trend will bode well for many of the states not on the list to compete for small and

medium enterprise expansions and relocations that are less sensitive to business climate dynamics.

Lastly, I am convinced that last-minute capital spending for many business sectors and complex corporate decision-

making processes for public companies will continue to showcase states like Texas, Alabama, South Carolina, Georgia,

Mississippi, and Tennessee. Why? Because these states understand that the speed of business through streamlined

permitting and reasonable regulatory policy supports meaningful and sustainable job creation and investment.


AREA0069.indd 1 5/8/13 8:19 PM



have partnered to create the Volkswagen Academy, whichprepares new employees to work at the Volkswagen plant.

Nissan, Volkswagen, and General Motors all have majorproduction hubs in Tennessee. In fiscal year 2012–2013, 44automotive projects created 6,662 new jobs in Tennessee andinvestments totaled nearly $1.1 billion. The state’s more than900 auto manufacturers and suppliers are supported by awell-maintained transportation infrastructure that is one ofthe top-ranked in the country. Components include threerail systems, six commercial airports (including the world’ssecond-busiest cargo airport in Memphis), over 1,000 milesof navigable waterways, and interstates 24, 40, and 75 — allof which improve access to global markets.

8 . F L O R I D A

Florida is starting to get some serious attention as a placeto do business. Over the last two years, Florida has added

330,000 private-sector jobs and unemployment currentlystands at about 7 percent. Florida’s Consumer ConfidenceIndex rose to 82 points in June 2013, the fourth straightmonth of increases and the highest level in six years. Thisoptimism is also reflected in migration patterns. TheDemographic Estimating Conference expects more than177,000 people will move to Florida by the end of this fiscalyear and more than 200,000 per year until the end of thedecade, resulting in a net in-migration.

Governor Rick Scott has cut taxes and streamlined regu-lation and government operations. In 2012 he doubled thetax exemption for business income, eliminating the businesstax for more 70 percent of businesses. So far the state legisla-ture has eliminated about 2,500 regulations on business,including a tax on manufacturing equipment.

A strong business climate only goes so far — a state alsoneeds a talented work force and strong transportation infra-structure. Florida has a large pool of highly skilled workers

2013 TOP STATES COMMENTARY

By Andrew Shapiro, Managing Director,

Biggins Lacy Shapiro & Company

Reviewing the 2013 survey results, I am struck by the consistency with which the southeastern states have captured

the top spots in almost every category. There can be only one of two explanations for this: either Texas, South

Carolina, Georgia, Louisiana, Alabama, and Florida indeed comprise the best locations for all manner of new jobs and

investments, or these states are simply better at promoting themselves. While I have high regard for the business

climate across much of the Southeast (indeed our firm just had two project announcements in South Carolina and

Florida), I tend to favor the latter explanation.

The fact is that we consultants are no more immune to persuasive marketing than are any other site selectors.

Yes, we have our data and our models and our years of cumulative experience; however, we also tend to be more

frequent readers/viewers of the trade journals and websites that economic developers use to position their markets;

and let’s face it, we are much more likely to host a southeastern delegation in our offices, and share the podium with

such colleagues at conferences. What other explanation can there be when Colorado does not show up at or near

the top for skilled labor availability (Denver has one of the highest concentrations of engineers in the country), or

when South Carolina and Georgia are rated as having one of the most favorable corporate tax environments despite

the fact that the Tax Foundation places both states well in the bottom half of its rankings? And, finally, how is that

New Jersey is absent from the rankings of top state incentive programs when its BEIP program has enabled com-

panies to benefit from as much as $50,000 in grants for each new job created, its Urban Transit Hub Tax Credit can

erase between 80 percent to 100 percent of qualifying investments in the major cities, and its BRRAG incentive has

been among the strongest state job retention programs in the country?

Looking at the big picture, what this survey says to me is that economic developers in the Northeast, Midwest, and

even the West need to take a long hard look at the effectiveness of their marketing campaigns. They are just not

working very well, are they?



that is especially strong for high-tech industries and interna-tional trade. Workforce Florida also provides customizedtraining programs and incentives to help companies becomemore efficient and profitable.

Florida has one of the world's most extensive multimodaltransportation systems, including international airports,deepwater shipping ports, extensive highway and rail net-works, and multiple hubs. Over $162 billion in products weretransported through Florida's airports and seaports in 2012.

These business advantages are giving companies confi-dence to invest in Florida again: announcements includeAmazon (3,000 jobs, $300 million), Hertz (700 jobs, $50 mil-lion), Boeing (550 jobs, $163 million), Navy Federal (700jobs, $6 million), and Verizon (750 jobs, $50 million).

For Verizon, its new location in Orlando will centralizeits accounting, finance, and back office operations. “Theregion’s talent pipeline, which is full of finance and account-ing graduates, was an integral factor in Verizon choosing toinvest in Central Florida,” states Senior Vice PresidentMichelle Robinson.

9 . M I S S I S S I P P I

Mississippi is on an economic roll. So far in 2013, 22 com-panies have announced new locations or expansions in the

state, totaling more than $663 million in new investmentand 3,700 new jobs. One of the biggest projects is YokohamaTire Corporation’s plan to build a $300 million commercialtruck tire plant in the city of West Point. The first phasealone will create 500 new jobs, with the possibility of anadditional 1,500 jobs as the plant expands.

Governor Phil Bryant was recently ranked 14th by OnNumbers for job creation among current governors.Mississippi offers customized incentive packages that fit theindividual needs of companies looking to expand or locatein the state. Mississippi’s low energy costs, low cost of liv-ing, and competitive tax structure make it a prime locationfor facility location or expansion. The Kauffman Indexranked Mississippi fifth in its Index of EntrepreneurialActivity — an indication that the state supports all levels ofbusiness growth, including small start-ups.

Manufacturing is one of Mississippi’s specialties, thanksto the pro-business environment, highly skilled work force,and outstanding shipping infrastructure. The state has a lowrate of unionization among its workers. Partnerships withstate colleges and universities have developed trainingopportunities for workers, attracting high-tech industries tothe state. Mississippi’s modern highway-rail-air transporta-tion system connects to all major U.S. markets, as well as theMississippi River, Tennessee-Tombigbee Waterway, and



major ports along the Gulf of Mexico. In May, the Governor signed landmark legislation that

positions Mississippi as a leading destination for energy-related economic development. It provides sales-tax exemp-tions on energy for manufacturing and a 25 percent rebateon research and development costs for companies.

1 0 . C A L I F O R N I A

California added jobs at the fastest year-over-year pace inmore than a decade, thanks to strong growth in key indus-tries and several important economic policy changes by

state government that have incentivized companies toinvest in the state. Recent relocation and expansionannouncements include Samsung (2,000 jobs, $300 million),Amazon (1,785 jobs, $450 million), Advanced Call CenterTechnologies (2,000 jobs, $25 million), Vision ServiceProviders (400 jobs, $50 million), and Caterpillar (150 jobs,$25 million).

The state government also recently passed legislationthat will phase out the enterprise zone program and replacethis dated incentive with statewide sales tax exemptions onmanufacturing, biotech, and R&D equipment; a hiring creditfor businesses in existing challenged areas on wages

between $12 and $28 per hour; and anew unit that will offer corporationsand small businesses tax credits aspart of a new, more flexible incentiveto create jobs in California.

California continues to be a globalexport leader, with over $162 billionin annual sales of goods and services.It has the modern infrastructure tosupport high levels of trade, includ-ing 11 cargo airports and 11 cargo sea-ports. The ports of Los Angeles, LongBeach, and Oakland are among thebusiest in the country. California alsohas 18 foreign-trade zones that facili-tate shipping on goods and raw mate-rials.

With this high level of economicactivity, it is no surprise thatCalifornia is the number-one state forforeign direct investment. Accordingto Ernst and Young, Californiareceived almost 50 percent of all ven-ture capital financing in the U.S. in2011. Much of this is invested inhigh-tech industries — especiallyinformation technology. Californiaremains the top state for IT jobs,which continues to drive venturecapital investment, patents, innova-tion, and the development of a well-educated and highly skilled workforce.

And there have been other recentsigns that California is on the righttrack: Governor Brown’s recent trademission to China secured over $1.8billion in deals, and California alsoopened a foreign-trade office inShanghai — the first for the state in adecade. •••

THIS REPORT WAS PREPAREDBY GERALDINE GAMBALE, EDITOR, AND CONTRIBUTING EDITORMARK CRAWFORD.

Businessleaderswelcomedhere

Businessleaderswelcomedhere

317.745.2400 | hcedp.org

Hendricks County, Indiana

Hendricks County, Indiana is a premier location for business thanks to a skilled workforce, a location close to population centers, and a transportation network that includes access to four interstate highways, a CSX rail system, and the Indianapolis International Airport and FedEx Freight Terminal.

Our workforce is among the best in the nation, due to our exceptional schools and the resources of excellent postsecondary institutions. The Hendricks College Network connects companies and residents with Indiana colleges and universities to ensure a well-educated workforce.

What are you waiting for? Give us a call.

Area_Template.indd 1 8/17/13 1:43 PM



A L A B A M AAIDT •• AIDT is responsible for recruiting,training, and developing Alabama’s work forcefor new and expanding industry. AIDT has pro-vided thousands of skilled, motivated employeesto Alabama industries since 1971. Training servic-es are offered in many areas, at no cost, to newand expanding businesses throughout the state.

ED CASTILE, Dir., AIDTOne Technology CourtMontgomery, AL [email protected]

ALABAMA DEPARTMENT OF COMMERCE•• The Alabama Department ofCommerce helps bring jobs and invest-ment to the state by recruiting some ofthe finest companies in the world tolocate within the state’s borders and byhelping companies located hereexpand. Call us to find out how we canhelp your company grow.

GREG CANFIELD,Sec. of CommerceAlabama Dept. ofCommerce401 Adams Ave.Montgomery, AL 36130800-248-0033 or 334-242-0400Gerri.Miller@commerce.alabama.govwww.madeinalabama.com

C A L I F O R N I ACITY OF RANCHO CORDOVA •• RanchoCordova is effectively known as the center ofit all for businesses in Northern CA. Connectivityand affordability are the premier reasons busi-nesses have chosen to locate in this city alongUS Highway 50. Discover how you can belong,prosper, and even play in this young and inno-vative community.

City of Rancho CordovaEconomic DevelopmentDepartment 2729 Prospect Park Drive Rancho Cordova, CA95670916-851-8780econdev@cityofranchocordova.orgbusiness.cityofRanchoCordova.org

F L O R I D AENTERPRISE FLORIDA •• Florida — ThePerfect Climate for Business. With our climate,business grows year round in Florida. We havethe #1 tax climate in the Southeast, America’s#1 infrastructure, 0% personal income tax,and the nation’s #4 largest economy. Andwe’re just getting warmed up. Learn moreabout Florida's rich business landscape.

CRYSTAL SIRCY, Senior VPBusiness DevelopmentEnterprise Florida800 N. Magnolia Ave., Ste. 1100Orlando, FL 328031-877-YES-Florida • Fax: [email protected]

GREATER FORT LAUDERDALE ALLIANCE•• Greater Fort Lauderdale offers “Life. LessTaxing” to more than 150 corporate and inter-national regional headquarters includingAutoNation, Citrix, DHL, Emerson, Microsoft,and Nipro Diagnostics through a cost-competi-tive business climate and no state personalincome tax, combined with robust domesticand international air and seaports and excep-tional quality of life.

PEGGY DOTY, CEOCouncil Executive AssistantGreater Fort LauderdaleAlliance110 East Broward Blvd.,Ste. 1990Fort Lauderdale, FL [email protected] www.lesstaxing.com

G E O R G I AGEORGIA POWER •• Georgia Power is thelargest subsidiary of Southern Company, oneof the nation’s largest generators of electricity.With an international reputation for excellencein economic development, the company hashelped bring more than 100,000 jobs and $21billion in investment to Georgia over the lastdecade.

JONATHAN SANGSTER,General Mgr., Economic DevelopmentGeorgia Power75 Fifth Street NW, Ste. 175Atlanta, GA 30308404-506-7502 • Fax: [email protected]

GEORGIA PORTS AUTHORITYThe Georgia Ports Authority (GPA),including a dedicated economic devel-opment team, fosters international tradeand new industry for state and localcommunities; promotes Georgia's agri-cultural, industrial, and naturalresources; and maintains the naturalquality of the environment. GPA’s effortsalong with the state incentives for newand expanding industries have made theSoutheast an attractive business option.

STACY WATSON, Gen. Mgr.,Econ. & Industrial Dev.Georgia Ports AuthorityP.O. Box 2406Savannah, GA 31402912-964-3879 • Fax: [email protected]

I N D I A N AHENDRICKS COUNTY ECONOMICDEVELOPMENT PARTNERSHIP ••Hendricks County, Indiana — A perfect placeto do business and better place to live. With alocation that’s close to so many of the nation’spopulation centers, an extensive transportationnetwork, a skilled work force, and an out-standing quality of life, we have become oneof the nation’s premier business locations.

CINDA KELLEY-HUTCHINGS, Exec. Dir.Hendricks County Econ.Development Partnership5250 E US Hwy 36, Ste. 1103Avon, IN 46123317-745-2400 • Cell: 317-313-7381 • Fax: [email protected]

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HOOSIER ENERGY •• Hoosier Energy is acooperative wholesale power generator whosediverse, reliable wholesale electric system gen-erates and transmits electric power to 18 elec-tric cooperatives serving 700,000 customermeters. From auto assembly plants tofoundries to casinos, Hoosier Energy serves avariety of power needs and supports thegrowth of its members with numerous services.

HAROLD GUTZWILLERHoosier EnergyP.O. Box 908Bloomington, IN 47402812-876-0294 • Cell: 812-360-4796 • Fax: [email protected]

INDIANA ECONOMIC DEVELOPMENTCORP. •• Indiana has the business environ-ment companies need to grow: a central loca-tion; a trained and talented work force; industryinitiatives designed to stimulate growth, innova-tion, and profits; and a quality of life that’s sec-ond to none.

KELLY NICHOLL, VP of MarketingIndiana EconomicDevelopment Corp.1 N. Capitol Ave., Ste. 700Indianapolis, IN 46204317-232-4950 • Fax: [email protected]

K E N T U C K YKENTUCKY CABINET FOR ECONOMICDEVELOPMENT •• Many of the world’smost successful companies have discoveredthat Kentucky — land of the thoroughbred —is a great place to build their businesses. Weinvite you to write your own success story inKentucky. We’re confident you’ll find theBluegrass State has the winning traditionyou’ve been seeking.

ERIK DUNNIGAN, Comm.,Business DevelopmentKentucky Cabinet forEconomic DevelopmentOld Capitol Annex300 West BroadwayFrankfort, KY [email protected]

L O U I S I A N AACADIANA ECONOMIC DEVELOPMENT ••Acadiana Economic Development representsthe primary economic development organiza-tions in the Acadiana parishes (counties) ofIberia, St. Martin, Vermilion, St. Landry,Lafayette, Evangeline, and Acadia. AED’s mar-keting, advocacy, and business outreach stim-ulate long-term economic growth and job cre-ation throughout the region.

REBECCA SHIRLEY,DirectorAcadiana EconomicDevelopment211 E. Devalcourt St.Lafayette, LA 70506337-769-7646 • Fax: [email protected]

M I S S I S S I P P IMISSISSIPPI DEVELOPMENT AUTHORITY•• International industry leaders chooseMississippi for our dedicated work force,prime geographic location, and supportivebusiness climate. But they also look to us forour innovative solutions to businesses’ needsand our passion for surpassing expectations.To learn more about the benefits of aMississippi location, visit our website.

MARLO DORSEY, Chief Marketing Officer Mississippi DevelopmentAuthorityP.O. Box 849 Jackson, MS 39205 601-359-3962 [email protected]

N O R T H C A R O L I N AELECTRICITIES OF NORTH CAROLINA, INC.•• ElectriCities is a not-for-profit govern-ment service organization representing 70+N.C. cities and universities that own electricdistribution systems. A site selection profes-sional can receive detailed reports from ourextensive databases on dozens of N.C. sites,from mountains to coast, within 48 hours of arequest. We’re your turnkey services partner.

BRENDA DANIELS, Mgr., Economic Development ElectriCities of NorthCarolina, Inc.1427 Meadow Wood Blvd.Raleigh, NC 276041-800-768-7697 ext. 6363 • Mobile: 919-218-7027 [email protected]

S O U T H C A R O L I N AMARION COUNTY ECONOMICDEVELOPMENT COMMISSION ••Minutes from I-95 in the heart of theCharlotte-Raleigh-Charleston triangle, MarionCounty offers quick access to rail, three sea-ports, and four commercial airports. Its dedi-cated work force, industry incentives, andSouthern hospitality make it a win for businessand those seeking a rich quality of life.

MS. JULIE NORMAN, Exec. Dir.Marion County Economic Development CommissionP.O. Box 840Marion, SC [email protected]

readySC™ •• South Carolina providescomprehensive work force solutions fromentry-level training through advanced skill levels. Our internationally recognizedreadySC™ and Apprenticeship Carolina™ programs come together to successfully meeteach organization’s work force needs.readySC™ delivers customized recruitment andtraining solutions for companies creating newjobs in the state. Apprenticeship Carolina™helps client organizations create demand-driv-en registered apprenticeship programs.

SUSAN PRETULAKVP of EconomicDevelopmentreadySC™[email protected]

SANTEE COOPER •• South Carolina’slargest power producer provides electricity totwo million people and businesses directly andthrough the state’s 20 electric cooperatives;partnering low-cost, reliable power with ourstate’s attractive tax base, relocation incen-tives, and an unparalleled quality of life.

GEORGE HAYGOODSantee CooperOne Riverwood DriveMoncks Corner, SC 29461800-833-7797www.scprimesite.comgeorge.haygood@santeecooper.com

SOUTH CAROLINA POWER TEAM ••The South Carolina Power Team represents theelectric cooperatives and Santee Cooper intheir industry recruitment efforts for SouthCarolina. The South Carolina Power Team pro-vides professional, cost-free site location coun-seling to help new industrial and distributionfacilities find a home and existing ones expand.

FRED GASSAWAY, Exec. VP MarketingSouth Carolina Power Team1201 Main St., Ste. 1710Columbia, SC 29201-3212803-254-9211 • Fax: [email protected]

T E N N E S S E E TENNESSEE DEPARTMENT OF ECONOMICAND COMMUNITY DEVELOPMENT ••When you select Tennessee for your expansionor location, you’ll find a strong transportationnetwork connecting to markets around theworld, low business costs, flexible incentives,and a high quality work force. Visit our websiteto learn more about how we can help yourcompany succeed and grow in Tennessee.

W. ALLEN BORDEN, Asst.Commissioner, BusinessDevelopment DivisionTennessee Dept. ofEconomic and CommunityDevelopment312 Rosa L. Parks Ave.Nashville, TN 37243-0405615-532-1294 • Fax: [email protected]/ecd

T E X A SLUBBOCK ECONOMIC DEVELOPMENTALLIANCE •• With a highly skilled andeducated work force, proximity and connec-tion to major national and international mar-kets, and affordable utility and living costs,Lubbock, Texas, is the ideal place to grow abusiness. Lubbock’s size affords businessesaccess to dedicated community leaders andpersonalized service, while providing a pipelineof personnel to fill work force needs.

JOHN OSBORNE,President & CEO Lubbock EconomicDevelopment Alliance1500 Broadway, 6th Fl.Lubbock, TX 79401806-749-4500john.osborne@lubbockeda.orgwww.lubbockeda.orgMIDLOTHIAN ECONOMIC DEVELOPMENT••Midlothian, Texas, offers thousands of acresof developable property centrally located within theDFW Metroplex with major highways and rail in acommunity prepared to help industrial, distribution,and retail businesses Make Something Great Here— for their business, employees, and customers.

LARRY BARNETT,President/CEO310 North 9th Street, Ste. AMidlothian, Texas 76065972-723-3800 • Fax: [email protected]

PLANO ECONOMIC DEVELOPMENT ••Plano, Texas, located 19 miles north of Dallas,is home to 265,000 residents. It has a nationalreputation as one of the best places to liveand work, with excellent schools, low crimerate, and affordable homes. Plano offersincentives on a case-by-case basis to stimulatebusiness attraction, retention, and expansion.

SALLY BANE, Exec. Dir.Plano Economic Development5601 Granite Parkway,Ste. 310Plano, TX 75024972-208-8300 • Fax: [email protected]

SHERMAN ECONOMIC DEVELOPMENTCORPORATION •• The Sherman EconomicDevelopment Corporation is a resource forbusiness considering a new location in theNorth Texas region. SEDCO represents theSherman area for new investment and jobs,manages and promotes real estate in ProgressPark, and provides incentive funding for quali-fied projects.

SCOTT CONNELL, Pres.Sherman EconomicDevelopmentCorporation (SEDCO)307 W. Washington, Ste. 102Sherman, TX 75090903-868-2566 • [email protected]

TEXAMERICAS CENTER •• TexAmericasCenter, a land resource of nearly 12,000 acres,is located in Northeast Texas, 18 miles west ofTexarkana, in New Boston, Texas. TexAmericasCenter is central to the U.S. population, within500 miles of the country’s geographic andpopulation centers, and within 200 miles offive major cities.

DERRICK MCGARY, VP ofPublic and BusinessEngagementTexAmericas Center 107 Chapel LaneNew Boston, TX 75570903-223-9841 • Fax: 903-223-8742derrick.mcgary@texamericascenter.comwww.texamericascenter.com

TEXAS OFFICE OF THE GOVERNORECONOMIC DEVELOPMENT & TOURISM•• The Texas economy continues to thriveacross a wide range of industries. While Texasleads the nation with a diverse and robustenergy sector, the state’s large work force andnation-leading infrastructure create a thrivingnetwork that supports IT operations, plasticsmanufacturing, call centers, and chemical projects — making Texas truly Wide Open for Business.

AARON DEMERSON,DirectorOffice of the Governor -Economic Development & [email protected]



E conomic development organizations are working to give companies the onething that everyone wants today — more time. Tools such as expedited per-mitting and fast-track programs are becoming standard in the industry.

Communities are now taking that focus on speed a step further as they continueto roll out certified sites that have fulfilled all of the development requirements,ranging from soil testing and entitlements to the installation of necessary infra-structure and utilities.

These pre-qualified sites can be a big incentive for companies, especially thoselooking to move quickly on getting a new facility up and running. Working with acertified site that is “shovel-ready” can shave months off of a development sched-ule. That time-savings is a valuable commodity.

“Today’s companies operate in a global market, and when they have neworders or a new contract, they want to be able to get to market quickly,” says JohnHutchinson, director of public affairs and economic development for Gulf PowerCompany in Pensacola. “So, being able to quickly have a new business site readyto go is at the top of their minds.”

In April, Gulf Power Company launched its new “Power Up” Site CertificationProgram. The “Power Up” program is designed to accelerate the development ofindustrial and large commercial sites for new business development and expansion

Certified Sites Pave the Way for New BusinessCompanies seeking new locations hope to save time and moneyby looking at certified sites, which communities offer to lure innew business.

By Beth Mattson-Teig

in Northwest Florida. Gulf Power cur-rently has 14 applicants for its site certi-fication program. It could take up to ayear for those sites to work through theapplication and review process beforemeeting the requirements and qualify-ing for that certification designation.

According to news sources, this isthe first certified sites program to beoffered by Gulf Power, as well as thefirst program of its kind to be offeredin the state of Florida. Gulf Power rec-ognized that in order for local commu-nities to be more effective in their mar-keting efforts, they needed a productto sell. “When companies come andyou show them a cow pasture, youdon’t get a second look,” saysHutchinson.

Although site certification initia-tives have been around for years, suchprograms have been on the rise inrecent times. Public-private venturesas well as city and state programshave been proliferating fromOklahoma City to Louisiana. NorthCarolina, for example, launched one ofthe first statewide certification pro-grams in the country. Since 2001,North Carolina’s Certified SitesProgram has certified more than 95sites spanning almost 25,000 acres.

The program provides another rea-son for companies to consider locatingin North Carolina. For example, lastfall Altoona, Pa.-based Sheetz Inc.announced its plan to build a new dis-tribution and food manufacturingfacility on a certified site inBurlington, N.C. The company expects

SITE SELECTION

Memphis Megasite

CertifiedSites 8/20/13 3:39 PM Page 57


to invest $32.8 million in the facilityand create 254 jobs by the end of 2018.Sheetz Convenience Restaurants,which operates more than 425 loca-tions across six states, will use the newfacility to service its growing base ofrestaurants in North Carolina andVirginia. The company broke groundon the new facility in June, with anopening scheduled for December 2014.

And in June, the TennesseeDepartment of Economic andCommunity Development announcedthe first six Select Tennessee CertifiedSites, under a program that waslaunched about a year ago with thegoal of helping the state’s communi-ties prepare available sites for invest-ment and expansion.

Vetted Sites Provide IncentiveCertification provides a standard-

ized tool by which both developmentprofessionals and business prospectscan review prospective sites for com-patibility with their needs. A certifiedsite is a property that has gonethrough a rigorous pre-qualificationprocess. Although standards can varydepending on the individual state orindividual economic developmentagency, certified sites have met alengthy list of readiness criteria andhave the documentation to prove it.For example, under Tennessee’s certifi-cation program, a site must have atleast 20 developable acres with properzoning in place, all utilities — or a for-mal plan to extend utilities — must bein place at the site, and it must pro-vide truck-quality road access.

Certifications are typically conduct-ed by site consultants and oftentimes ateam of consultants that might include

engineering and environmental pro-fessionals, representatives from thelocal utilities, and members of thelocal economic development organiza-tion. “The skill, depth, thoroughness,and market value of certificationsvaries widely,” says Mark M. Sweeney,a senior principal at McCallumSweeney Consulting in Greenville,S.C., which has been doing site certifi-cation work for the past 15 years.

The certification process works toassemble current and accurate infor-mation into a single, useable packagethat makes it easier for businesses tocompare and contrast their options.“The removal of uncertainty and speedare the two main calling cards for thisinitiative,” says Mike Downing, actingdirector of the Missouri Department ofEconomic Development (DED). Since itwas introduced five years ago, the

MEGA SITES LURE BIG FISHEconomic development organizations are hoping to hit a home run in attracting super-sized projects. But in order to play in the big leagues, they need to have the “mega sites” ready and waiting for those opportunities.

The super-sized success stories make it easy to understand why tackling the hefty job of readying mega sites remains a worthwhile endeavor. Case in point is the Tennessee Valley Authority’s Megasites Certification Program. Since 2004, seven sites in the TVA region totaling more than 12,000 acres have been certified. Ultimately, those sites have helped to attract more than $5 billion in new investment from firms such as Volkswagen, Toyota, and Severstal.

“We knew the market was ripe when we started this program. We studied the automotive market and

knew that more original equip-ment manufac-turer (OEM) projects were coming, were likely to consider the Southeast, and would be in a hurry. So that motivated us to get prepared with a catalog of large, ready

sites,” says TVA Senior Vice President of Economic Development John Bradley. “We still think there are more transportation-related manufacturers coming and we are ready.”

Although TVA’s Megasites Certification Program has officially ended, TVA Economic Development continues to market two available certified mega sites — the I-24 Megasite featuring 2,100 acres in Hopkinsville, Christian County, Ky., and West Tennessee’s Memphis Regional Megasite that includes 1,720 acres in the core site with additional surrounding acreage.

Such mega sites have emerged around the country from Florida to Indiana. For example, CSX Corp. has certified mega sites in six states: Kentucky, Florida, Virginia, South Carolina, Alabama, and Indiana. In particular, the South has a high concen-tration of mega sites with more than a dozen certified mega sites.

Mega sites are not defined by any national standard. However, they are generally known as sites of 1,000 or more acres. Although not all mega sites are also certified, a number of them have gone through the process of obtaining a certification by fulfilling certain prerequisites such as environment assess-ments, soil testing, permitting, and the installation of necessary infrastructure.

One recent addition is the new 1,800-acre mega site at the Crawford Diamond Industrial Park in Nassau County, Florida. In June, Crawford Diamond

became the state’s second certified mega site. The site is approved for up to 10.5 million square feet of industrial land use, which can include manufactur-ing, assembly, warehous-ing and distribution, logistics, or an intermodal inland port. The mega site was certified by property owner TerraPointe LLC, which is a real estate subsidiary of Jacksonville, Fla.-based Rayonier Inc.

Certified sites do have a leg up on the competition because companies know that they are not starting from scratch. “Users can see the value in having a site certified, because they recognize their ability to be up and operational in a faster time frame,” says Dan Camp, director of project management with TerraPointe. “Folks are about risk-reduction wherever possible, and the shorter the time frame that you can make for a company to make a decision, and then have them be up and opera-tional, is very important.”



Missouri Certification Program has certified 16 sitesencompassing more than 2,800 acres with an addi-tional four applicants that are in various stages ofthe review process. Those certified sites are playinga bigger role in attracting new business, addsDowning.

If a company is looking at building a facility inan open cornfield, it would have to do its own duediligence in terms of land surveys and environ-mental engineering assessments. It would also have to checkfor clear property and title, and check that the currentcapacity of the infrastructure such as power and water areadequate for the company’s needs. All of this has alreadybeen done and independently tested on certified sites.

“I won’t say that companies only locate on certified sites,because there is a lot more to site selection than that. But, ifthey are looking at a specific community and it has a certifiedsite, that will be the first one that they always look at,” saysDowning. For example, Columbia, Mo., currently has threecertified sites under the Missouri Certified Site Program thatspan 510 acres. That certified site status has allowed the cityto gain the attention of companies looking for specific siterequirements. In fact, Columbia’s certified sites are on theshort list for two current site selection projects.

Weighing the Pros & ConsIn sum, the main advantages of certified sites for the end

user are time-savings and cost savings. “Some companies

have been quoted as saying such sites save many weeks inthe site selection process and many months — six or more— in the site development process,” says Sweeney. Cost sav-ings will vary widely, but can reach $50,000 or more formega sites (see sidebar), he adds.

Another big advantage of certification programs, particu-larly for industrial users, is greater access to informationthat is both reliable and thorough. Certified sites are attrac-tive to businesses because of the readiness of information,accuracy and depth of information, identification of proper-ty risks, and even mitigation of those risks.

“The thorough due diligence process that these siteshave undergone removes risk and uncertainty by uncover-ing and addressing potential obstacles that can delay aproject,” says Brandon Talbert of Austin Consulting, whichworked on Tennessee’s certification program along withThe Foote Consulting Group.

Certainly, one question that remains is what happens if atsome point in the future there is a problem with the site. That

Like much information provided in

the real estate business, the data

is presumed accurate at the time

of collection and certification.



varies depending on the individual program and entities involved. “Inmost cases, the certification program is owned by the property owneror economic development agency contracting for the certification,”says Sweeney. However, their liability is largely limited by caveatsassociated with property information provided to prospective users.

Like much information provided in the real estate business, thedata is presumed accurate at the time of collection and certification.“Typically, no warranty is given or implied,” says Sweeney.Companies that decide to purchase or lease a certified property do soonly after their own assessment. One potential negative is that somecompanies may take the certification at face value and not do any oftheir own evaluations or check to make sure that facts are accurateand current. Nonetheless, there is a clear trend of more sites goingthrough some level of site-readiness assessment, including full certifi-cation. To some extent, such certification programs are raising the barfor those communities or states competing for business.

One of the drivers behind the new Gulf Power certification pro-gram is that the company recognized that it needed certified sites inorder to compete with neighboring states such as South Carolina,Alabama (known as AdvantageSites), Mississippi, and Georgia thatall have robust site certification programs. Gulf Power officials alsohope that because of its certification program, area communities willbegin to give more consideration to preparing for new growth.

“When you ask some communities where their next commercepark is going to be, they haven’t a clue, because they haven’t thoughtabout it,” says Hutchinson. So, an added benefit is helping communi-ties think about growth in an orderly way that ultimately makesthem more competitive to attract new business, he concludes.

ALABAMA

FLORIDA

Bay Minette, Baldwin County: 3,020 acres

Crawford Diamond Megasite, Callahan: 1,800 acres

Cecil Commerce Center, Jacksonville: 1,500 acres

INDIANA Chinook Mine Site, Clay/Vigo Counties: 4,500 acres

VIRGINIA Mid-Atlantic Advanced Manufacturing Center, Greensville County: 1,545 acres

TENNESSEE Memphis Regional Megasite, Memphis: 1,720 acres (plus 3,000 under option)

NORTH CAROLINA

Mid-Atlantic Logistics Center/Int’l Logistics Park, Brunswick County: 2,200 acres

SOUTH CAROLINA

I-95 Megasite, Dillon County: 1,920 acres

I-95 Megasite, Clarendon/Sumter Counties: 1,400 acres

Conder Megasite, Kershaw County, 1,468 acres

White Hawk Commerce Park, Florence: 1,200 acres

KENTUCKY Chinook Mine Site, Clay/Vigo Counties: 4,500 acres

Glendale Megasite, Glendale: 1,551 acres

West Kentucky Megasite, Graves County: 2,130 acres

I-24 Megasite, Hopkinsville: 2,100 acres

MEGA SITES

Columbia, MissouriRanked on Area Development Leading Locations.

Centrally located on major highways. Highly educated workforce, low cost of living.

Ewing Industrial Park

Discovery Ridge Research Park

Sutter Industrial Site

For more information, contactJ. Michael Brooks, President

AREA0152.indd 1 8/20/13 6:54 PM


D ata center location searches begin with a seeminglyendless list of requirements. By the time one rulesout all areas with any chance of flood, hurricane,

tornado, ice storm, wildfire, earthquake, or lightning — andrules out all areas near a rail line, gas transmission line, oilpipeline, airport, or nuclear generation site — there’s notmuch left — and this is before factoring in cost and avail-ability of utilities, tax structures, economic developmentincentives, or the exhaustive design requirements for thebuilding itself, whether new or existing,

In other words, there is no perfect data center location.Acknowledging this at the outset allows the site selectionteam, including those internal to the company as well astheir external advisors, to focus on determining which char-acteristics are preferred versus required, which flaws arefatal, and which can be mitigated at a reasonable cost.Budget, infrastructure availability, design requirements, anddisaster risks demand compromises on every data centersite search. However, where to make those compromises is adecision that is unique to each project and driven by thebusiness objective of the facility (disaster recovery, financialtrading, records storage, cloud applications, multitenant,etc.) and the individual preferences of the company, itsCIO/CTO, and other team members.

The Need for Due DiligenceThe need for due diligence, however, does not vary. Data

center operations are highly risk-averse — it’s not possibleto overemphasize this point. If there is one thing less tolera-ble than a known risk associated with a site, it’s the pres-ence of an unknown risk. Mission-critical facility operatorsare rigorous in their review of potential locations.

Partners who understand the unique business structures,infrastructure requirements, and operating standards thatdrive mission-critical facilities, and who thus can effectivelyfacilitate the due diligence process, are highly valued. Thishas led some utilities, developers, and economic developersto establish programs to proactively identify potential datacenter sites and have them vetted by an independent firm.

The location selection process and accompanying duediligence won’t result in a perfect data center location, butthey will lead the company to the optimal location for theproject. Additionally, any compromising on site criteria willhave been done deliberately (rather than unintentionally),allowing the company to consider options for offsetting anyless-than-optimal attributes, such as mitigating weak powerredundancy infrastructure with enhanced back-up genera-tion capabilities and utilizing economic development incen-tives to compensate for the additional cost.


Finding Data CenterLocations that Fit the BillAlthough there is no perfect data center site, by vetting prospective sites to see if they meet specific requirements, a company can find one as close to ideal as possible.

By Tracey Hyatt Bosman, Managing Director and Midwest Practice Leader, Biggins Lacy Shapiro & Co. (BLS & Co.)

SITE SELECTION

DataCenters 8/16/13 2:47 PM Page 61


Power, Speed, Uptime, and Talent Are Required

Many factors affect the selection ofa data center location, but utility infra-structure, uptime, talent, and speedare always the focal points.

Utility InfrastructureFew people are unaware of the

large electric loads (usage) of datacenters. Naturally, due to the amount

of power they need, data centers arevery price-sensitive to a location’scost of electricity. The cost is morethan centers per kWh, though. Datacenters have unique ramp-up needsand reserved capacity demands. Theutility’s ability to accommodatethese requirements can have a signif-icant impact on cost. Likewise, themission-critical aspect of the datacenter, requiring it to be online at all

times, drives rigorous power redun-dancy and reliability requirements.The utility’s “cost-to-serve” and rev-enue credit policies must be factoredinto the overall cost of providing therequisite power.•• New Trend: Increased powerrequirements — Whereas previously,data centers may have only required 100Wor 150W per square foot, many of today’sdata centers must have between 200W and300W per square foot. This presents prob-lems for many existing facilities lookingfor new users, as the power distribution toand through the building was typicallybuilt for lower power densities.

Data centers also require robustfiber infrastructure. The speed atwhich data can be transferred to otherlocations (referred to as “latency”) iscritical. Data centers also requireredundant fiber routes to the facilityand have a strong preference for mul-tiple providers. •• New Trend: Microwave tech-nology — Microwave and millimeterwave technology are being deployed tomove data faster, offering point-to-pointtransmission of data and avoiding thetraffic and limitations of having to followexisting fiber routes. Financial exchanges,in particular, have been early adopters ofthese technologies. Microwave technologyis allowing companies to consider loca-tions once thought too distant or tooremote for a data center.

The computer servers in the datacenter generate an immense amount ofheat, driving the need for powerfulcooling systems to prevent the com-puting equipment from overheating.Many (but not all) data centers usewater-based technology for the cool-ing system, making a plentiful andcost-effective water supply an impor-tant location consideration.Increasingly, data center operators areutilizing outside air (“free cooling”) tocool the equipment, resulting in afocus on locations in cooler climates.

UptimeData centers are expected to be “up”

and running at all times. No serviceinterruption of any kind is tolerable, sodata centers are extremely risk-averse.A thorough review of the potential fornatural or man-made disasters will bean integral component of any data cen-

Brenda DanielsManager, Economic Development800.768.7697, ext. [email protected]

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ter site selection process. The need tobe constantly online is also reflected inthe redundancy requirements of theutility infrastructure and the ability ofstaff and vendors to be able to reachthe data center at all times.

PeopleTrue, data center operations don’t

focus as heavily as other industries onthe availability of labor when choosinga new location. That should not, how-ever, be interpreted to mean that ITtalent isn’t a critical component in thefacility’s success. Historically, mostcompanies have made the assumption,and reasonably so, that due to the lowheadcount required to run the facility,they would be able to either locate theneeded talent in the local market orrelocate a few people to the chosenlocation.•• New Trend: Need for IT talent —Increasingly organizations are collocatingmore staff with the physical data center.Companies providing Internet, cloud com-puting, or related services are locatingsales staff at “customer experience cen-ters” at the data center to showcase thecompany’s technological capabilities.Collocation facilities are providing officespace for their customers’ IT staff and ven-dors. These trends, combined with today’sshortage of certain IT skill sets, is causingdata center operators to place greateremphasis on labor considerations whensiting a data center. This includes analyz-ing the availability of IT talent in the localmarket, as well as paying more attentionto the attractiveness of the location andthe building itself in order to attract topIT talent to work at the facility.

Speed•• New Trend: CompressedTimeframe — As with many corporateprojects in the current economy, it is fre-quently difficult to obtain internalapproval to improve or acquire new realestate assets until and unless the need isurgent and critical. This hesitancy resultsin drastically compressed timeframes.Companies simply cannot wait while autility or economic development organiza-tion looks for a site that, even if found,hasn’t been vetted. They want fastanswers and a high level of confidencethat there won’t be any deal-crashing sur-prises during the due diligence phase.

Tracey Hyatt Bosman, ManagingDirector and Midwest Practice Leader ofBLS & Co. (www.blsstrategies.com), devel-ops and executes incentives and locationselection strategies for BLS’ corporate andinstitutional clients. She has 20 years ofprofessional experience across a wide rangeof sectors, including data centers, manu-facturing, headquarters, back office andcontact center operations, and logistics.

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Technology Trends:Regionalization of the Supply ChainTechnology companies are bringing product manufacturing andassembly closer to the customer and — more importantly — to R&D.

By Steve Stackhouse

T he pace of technology innova-tion seems to grow continuous-ly, as high-tech products get

ever-more powerful yet increasinglyaffordable. And in recent years, it hasbeen getting ever-more difficult to findtech products made somewhere nearhome — if your home is not in Asia,that is. In that respect, times certainlychanged over the past few decades.

Now, it seems, times are starting tochange back. Consider the announce-ment from Apple last December. Asone of the world’s most admired techcompanies, Apple turned heads whenit pledged to begin making some of itsMac computers in the United States,and said it would pump $100 millioninto the effort. It’s a relatively smallsplash, considering the fact that Macsare far from the biggest part of Apple’sbusiness these days, but the symbol-ism was powerful.

Greg Matter, vice president at JonesLang LaSalle, who advises technologyfirms on their real estate needs, alsopoints to the example of MotorolaMobility. The company announced inMay that it would make its Moto Xsmartphone in Texas, creating some2,000 jobs. “That’s something that 12years ago you would never haveseen,” he comments. And a smart-phone assembled in the United States?Unheard of, until now, despite the factthat the U.S. is one of the world’sbiggest smartphone markets.

Indeed, a May 2013 report fromJones Lang LaSalle called“Perspectives on Technology

Manufacturing” proclaims “Americanhigh-tech manufacturing is on therebound.” A slow rebound, to be sure,with a growth rate averaging just 0.7percent over the next five years, butany growth is a big deal, consideringwhat’s been happening during thepast decade or two.

Shuffling the Supply ChainDoes that mean technology compa-

nies will be shutting down big facili-ties in lower-cost countries and bring-ing all their business to America? Notnecessarily. “What we’re seeing is a

regionalization of the technology sup-ply chain,” Matter says. “It’s not nec-essarily re-shoring of the supplychain, but right-shoring. That entailshaving production in close proximityto consumers.”

“It’s less about companies leavingChina and Asia; it’s that the marketscontinue to evolve,” agrees Raj Vohra,manager in Deloitte Consulting’s RealEstate and Location Strategy practice.Tech companies, he says, “have aninfrastructure set up throughout theworld. How can they refine it to betterserve the markets they’re in?”

INDUSTRY REPORT

TechnologyTrends 8/16/13 11:45 AM Page 64


That means some of the productionin China, for example, will serveChina itself and other Asian markets,and more of the work in Brazil will bedestined for nearby locations.Facilities in Central and EasternEurope will potentially serve thatregion in this kind of supply chain,and North America might be servedby an increasing amount of manufac-turing in Mexico — and the UnitedStates.

If you’re feeling a bit of déjà vu,you’re not alone. “If you look at thehistorical transition of global supplychains, we’re looking more like we didin 1950 than we did in 2000,” Matterobserves. Not the same, by any means,but increasingly similar.

There are a number of reasons forthis noteworthy shift. A significant fac-tor is the cost differential — it hasbeen shrinking, thanks to rapid wageinflation in China. Back in 2000, U.S.labor costs were 23 times what theywere in China, according to JonesLang LaSalle, but they’re now justeight times higher and the narrowingcontinues. At the height of the migra-tion of technology manufacturingtoward China, wages there were about60 cents an hour, but they’re now $3 oreven $6 an hour in some places.

“Labor rates along the coast ofChina have reached closer to paritywith labor costs in some other parts ofthe world,” says Clarence Chen, princi-pal at PricewaterhouseCoopers. “Chinaisn’t the default simple answer any-more. In the grand scheme of things,things aren’t that clear anymore.”

It doesn’t help that transportationcosts are skyrocketing. According toJones Lang LaSalle’s report, back in2005, Chinese-produced parts arrivedat U.S. ports costing 22 percent lessthan comparable parts made inAmerica. By 2008, that gap had closedto less than 6 percent — but eventhat’s just part of the story.

Manufacturing NearDevelopment

As tech products get increasinglycomplex, it becomes more importantthat production not be so far awayfrom R&D — or, that at least someproduction takes place closer to wherethe product was developed. “Firms

are looking at having their R&D closerto their production lines and pilotlines,” Matter observes.

Indeed, a November 2012 reporttitled “Manufacturing the Future: TheNext Era of Global Growth andInnovation” — from the McKinseyGlobal Institute and McKinseyOperations Practice — found thatindustries with simple processes andfairly low-intensity R&D can separateproduction from development fairlyeasily. However, “the complexity ofthe production process and the degreeof innovation required in the industrydictate strong links between R&D andproduction,” the report states.

That doesn’t necessarily mean allproduction needs to take place nearR&D. McKinsey notes that many com-panies have established a “lead facto-ry” model, so that process develop-ment can happen in the same vicinityas product development. Once pro-duction processes are perfected, theycan then be spread to manufacturing

operations around the world, closer tothe end markets and in keeping withthe regionalization model.

Bringing manufacturing closer toR&D is causing some counterintuitivethings to happen, according to Matter.“Silicon Valley has seen a resurgenceof technology manufacturing, and thisis contrary to people’s belief system ofwhere manufacturing will landbecause it has such a high cost ofoperation.”

But the idea can work both ways. “Ithink another trend is reverse innova-tion, and that’s not helpful for NorthAmerica,” Vohra says. The traditionalmodel, he observes, has involved con-ducting R&D in the company’s estab-lished big market in North America orEurope, then pushing the product outto the world. “But a lot of companiesare [developing products] in the localmarket to meet the local market’scharacteristics,” he explains. In this sit-uation, a locally developed productcan then go global. One company,

TechnologyTrends 8/19/13 5:40 PM Page 65


Vohra says, was having trouble sell-ing its x-ray equipment in China.“They locally developed a smallerportable machine to serve that marketbetter, and that product has gotten alot of global traction as well.”

“One thing has become veryclear,” says Alex Blanter, principal atPricewaterhouseCoopers. “Decidingwhere to locate an R&D facility ismore complex than it was five or 10years ago. The last several years, as inmanufacturing, the cost comparisonhas shifted, not just because of directcosts but training.”

Vohra says the traditional U.S. hotspots for technology R&D will contin-ue to be strong. That, of course,includes Silicon Valley and the Bostonarea, and Austin also is a strong con-tender, he says. “These have criticalmass and have had good success,”according to Vohra, who also cites Atlanta as being onthe move.

The Jones Lang LaSalle report notes, “When a strongsupply of college-trained workers is critical to a company’ssuccess, nobody provides more than the U.S. This Americanintellectual capital advantage makes it easier to develop pro-

totypes and test models of productshere.” Though the United States hasjust 5 percent of the world’s popula-tion, it has a third of the high-techresearchers, who together perform 40percent of the world’s R&D, thereport states, citing economistRichard Freeman.

Factors to ConsiderThe volume of American R&D is a

real key to future technology prosper-ity, according to Dr. William Harris,the president and CEO of ScienceFoundation Arizona, who formerlyhelped appropriate federal grantsthrough the U.S. National ScienceFoundation. In his view, it’s not somuch that technology manufacturingis returning to the United States.“However, the next generation ofhigh value-added production and

manufacturing will develop here,” he says. “Intellectualproperty issues trump any labor cost savings, and as tech-nology development costs increase as a share of total prod-uct cost, the benefits of remote, low-labor-cost productiondiminish.”

Labor quality will increasingly become more importantthan labor cost, according to Matter. The challenge, addsHarris, is providing that quality labor. “The quality of theavailable work force is driven by quality of the K-12 educa-tion and community college systems, especially in the STEMdisciplines,” he says, referring to science, technology, engi-neering, and mathematics.

That’s why training incentives can be a vital factor in alocation decision, according to Matter. So can such consider-ations as taxes. “The factor of sales and use taxes is some-thing people are definitely focusing on because of the capi-tal investment required to develop these facilities,” he says.“Many are very automated and require significant capitalinvestment.”

“It is important for states to be truly business-friendly,”Harris says, “Excessive or unreasonable business regulationsare poisonous to establishing new manufacturing opera-tions.” On the other hand, “increasingly, successful states aregoing to establish independent entities that can help buildsuccessful university-industry research partnerships, particu-larly in the engineering and computer science areas,” Harrisexplains. An example is his organization, Science FoundationArizona, which connects industry with university researchand focuses on helping the state’s education system build thekind of work force required to succeed in the future.

“All locations will offer state and location incentives insupport of a new manufacturing operation,” the Jones LangLaSalle report notes, “and in today’s competitive climate,areas newer to high-tech manufacturing often offer the bestpackage of incentives that can include tax concessions, eco-nomic grants, reimbursements, and training partnershipsthrough local institutions.”

Rancho Cordova is effectively known asthe center of it all for businesses in the Sacramento Region. Connectivity and affordability are the premier reasons businesses have chosen to locate in this city along US Highway 50.

Business parks dominate the landscape with Fortune 500 companies that are proud to call the city home. Discover how you can belong, prosper, and even play in this young and innovativecommunity.

Visit business.cityofranchocordova.org or contact the City ofRancho Cordova’s Economic Development Department at

(916) 851-8780 or [email protected].

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AREA0102.indd 1 5/16/13 3:09 PM

“It’s less about

COMPANIESLEAVING

China and Asia;

it’s that the

markets continue

to evolve.”

TechnologyTrends 8/16/13 11:46 AM Page 66

F ashion trends and site selection are similar — what’s hot this year may notbe in vogue the next — and definitely not in the next five years. For manyorganizations, corporate real estate philosophy hasn’t evolved much. They’re

still following the old mantra of “location, location, location.” However, more pro-gressive companies are beginning to change their corporate real estate philosophyto catch up to the 21st century idea of “logistics, labor, and love.” They are bring-ing logistics and real estate under one roof, and building an organizational con-sensus on strategy that aligns the goals and objectives of both groups.

While many organizations like to showcase their collaborative spirit, we’vefound many continue to operate with silos. The functional areas of an organiza-tion are hardly aligned to the overall goals or with the other functional areas. Partof this stems from the fact these functions don’t sell, produce, or operate anything— they are simply overhead. In addition, many organizational goals revolvearound sales growth and profits within certain customer service criteria. It’s thisgray area of “within certain customer service criteria” that causes misalignedgoals between the functional areas.

For instance, corporate real estate is typically charged with managing all realestate tasks for the organization. Essentially the corporate real estate team negoti-ates leases, finds properties, buys land and/or buildings, etc. Its overall perform-ance is assessed by its ability to get tax and labor incentives, low rent, and lowprices, inevitably leading it to pick the lowest-cost provider. While these inten-tions are noble, they are not necessarily in step with the overall goals of the organ-ization and with other functional areas.


The New Location Mantra:“Logistics, Labor, and Love”A simple five-step analytic process will allow you to align yourcorporate real estate and organizational goals and provide a consistent roadmap to a successful location outcome.

By Tim Feemster, Managing Principal, Foremost Quality Logistics Inc.; and Joseph Tillman, Senior Researcher, Supply Chain Visions

Consider a recent case of a realestate VP who was chided in her per-formance review because she didn’t gowith the lower rent rate of $2 persquare foot. The 750,000-square-footfacility she chose was a buck more persquare foot or $3. On the surface itappears she just cost the organization$750,000 annually, but by understand-ing the new site selection mantra of“logistics, labor, and love,” she mayhave just made an exceptional deal.

Logistics, Labor, and LoveThis new mantra of “logistics, labor,

and love,” for industrial and manufac-turing site selection, puts the shift incorporate real estate philosophy intofocus. The logistics function has theresponsibility to deliver the organiza-tion’s products at the lowest total costwithin “certain customer service crite-ria.” Therefore, the big drivers inchoosing any site for warehouses anddistribution centers (DCs) are trans-portation and labor costs. According tothe latest “State of Logistics Report”from the Council of Supply ChainManagement Professionals, transporta-tion costs are 62.8 percent of total logis-tics cost. Labor and customer servicecosts totaled an additional 5.9 percent,and rent is only 3.9 percent. Rent is onlya very small piece of a DC's “total” cost.Figure 1 provides a breakdown of allcosts for a DC or warehouse.

Understanding and finding ways tomitigate transportation and labor costsshould be the focus. The facility at $2 persquare foot was located in an area with

LOGISTICS/DISTRIBUTION

NewLocationMantra 8/19/13 4:37 PM Page 67


no easy direct access to a major highwayinterchange and a long way away from acritical intermodal ramp. The annualtransportation cost differential for the $2site was over $4.5 million per year.

Be careful of local governments anddevelopers who may sing a siren songto beguile you to invest in their com-munity. When you ignore logistics andlabor costs and base your site selectiondecisions on local governmental“love” and/or incentives alone, youmay incur higher costs in later years.Love is an important criterion in thesite selection process, but the financialimplications of free land, tax abate-ments, and other incentives should beamong the last criteria considered inorder to achieve a total cost analysis.

Five Steps to the Right SiteThere is no simple formula for

choosing the right site. Many compa-nies leave money on the table becausethey jump too fast to the end of theprocess. We have outlined a five-step

Figure 1

Pe

rce

nt

of

Lo

gis

tics

Co

st

Transportation Inventory Warehouse Warehouse Administration OtherLabor est. Fixed est.

Cost Category

Breakdown of Distribution Center Costs

70%

60%

50%

40%

30%

20%

10%

0%

62.76%

22.90%

5.86% 3.90% 3.83% 0.75%

NewLocationMantra 8/20/13 11:21 AM Page 68


process that will maximize the benefitto your organization, while minimiz-ing the risks of making a mistakearound this deceptively complex andcritical decision. It will ultimately helpyou align your corporate real estategoals to the overall corporate goals.

STEP 1: Strategic Context and Criteria Development

First, create a strategy for the siteselection process designed to supportyour business strategy and run the sitelocation mathematical model to projectsupply chain costs. Next, assemble the

team, articulate your basic requirements,and develop preliminary cost profiles todetermine the relative importance ofsuch factors as labor quality, logisticsand operating costs, quality of life, andquality of operating environment.

Time to complete this step will bedependent on available cost data andthe length of time to run the site loca-tion analysis. Multiple iterations of the“model” are common due to thetweaking of the input data elements.While this step is being completed,you can start step two and run it inparallel with the data gathering.

It’s a goodidea to have

a backup site incase you cannotcome to terms witha specific landlord or owner.

“

Figure 2 ABC Co.MSA Screening

Scenario A

1. Baltimore 5.0 1.0 7.0 7.0 7.0 5.0 5.0 3.0 1.0 5.14

2. St. Louis 5.0 1.0 7.0 7.0 5.0 5.0 5.0 5.0 3.0 5.10

3. Louisville 7.0 5.0 3.0 5.0 7.0 5.0 3.0 5.0 3.0 5.10

4. Indianapolis 7.0 3.0 5.0 7.0 5.0 5.0 3.0 5.0 3.0 4.90

5. Cincinnati 3.0 3.0 7.0 5.0 7.0 5.0 3.0 5.0 3.0 4.80

6. Lexington 7.0 5.0 3.0 3.0 7.0 5.0 1.0 5.0 5.0 4.70

7. Kansas City 5.0 3.0 5.0 5.0 5.0 5.0 5.0 5.0 3.0 4.70

8. Charleston, WV 7.0 1.0 1.0 5.0 7.0 5.0 1.0 5.0 5.0 4.70

9. Richmond-Petersburg 5.0 1.0 3.0 5.0 7.0 3.0 3.0 5.0 3.0 4.56

10. Philadelphia 5.0 3.0 7.0 3.0 7.0 1.0 5.0 5.0 1.0 4.52

11. Columbus, OH 3.0 3.0 5.0 3.0 7.0 3.0 3.0 7.0 3.0 4.42

12. Nashville 7.0 5.0 5.0 5.0 3.0 5.0 3.0 5.0 5.0 4.40

13. Norfolk, VA 5.0 1.0 3.0 1.0 7.0 5.0 5.0 7.0 1.0 4.36

14. Jackson, MS 7.0 5.0 3.0 3.0 3.0 7.0 3.0 5.0 7.0 4.34

15. Dallas 5.0 1.0 7.0 7.0 3.0 5.0 7.0 5.0 1.0 4.30

16. Washington, D.C. 1.0 N/A 7.0 3.0 7.0 1.0 3.0 5.0 1.0 4.27

17. Birmingham 5.0 5.0 3.0 5.0 3.0 5.0 3.0 7.0 5.0 4.26

18. Oklahoma City 5.0 5.0 5.0 5.0 3.0 7.0 3.0 3.0 5.0 4.18

19. Biloxi 5.0 5.0 5.0 1.0 3.0 5.0 3.0 7.0 7.0 4.16

20. Shreveport 7.0 5.0 3.0 3.0 3.0 5.0 5.0 5.0 7.0 4.10

RankLabor Labor Road Overall

Availability Quality Airport Access WeightedScore Score Score Score Score Score Score Score Score Average

Labor Market Accessibility Labor Bilingual Operating Regulatory QualityTraits Cost Work Cost Environment of Life

Force Structure

MetropolitanArea

Weighting 10.00% 5.00% 5.00% 15.00% 25.00% 7.00% 15.00% 8.00% 10.00%



Step 2: Initial ScreeningMake an initial screening of locations that meet your requirements. Rate communities in a specific geographic area on each

key requirement on a scale from 1 to 10: labor attributes, cost structure, operating environment, access to infrastructure, etc. Listthe top four or five candidates and analyze their benefits based on such variables as number of overall and average distances tocustomers and expected delivery time. Use the results of this step and Step 1 to narrow the list of possible locations. See Figure 2

for an example initial screening chart.

Step 3: Location Assessment and Process Planning

Create a qualitative-cost matrix foreach location on your list, showing thetrade-offs. If, for example, the matrixshows “city 4” rates 20 percent lowerfor quality (of labor force, operatingenvironment, etc.) than “city 5,” butthat “city 5” costs 10 percent more,you now have a clear idea of the trade-offs between the two cities. You usethis matrix to create a shorter list oflocations. See Figure 3 for an exampleof a qualitative-cost matrix.

Step 4: Field VisitsConduct field visits to the remain-

ing locations on your list. Assess themfor potential site-building operations,incentive possibilities, a deep dive intothe labor market, and logistics infra-structure and costs. This is the first

time you should be in contact with the local economicdevelopment offices. Distribute requests for proposals andanalyze the proposals you receive.

Step 5: Negotiation and SelectionPrioritize and finalize the negotiation process relative to

the final two or three locations. After the final incentive pack-ages are presented, the team meets to make the final choicebased on all the components — logistics cost, qualitative ele-ments, and economic incentives. While the negotiation isbeing done with the economic development representatives,you are also negotiating with landlords for leases and/orpurchase of a site. In addition, develop a letter of intent togive to the two or three finalist sites. It’s a good idea to have abackup site in case you cannot come to terms with a specificlandlord or owner. Once you have your lease/constructioncosts in hand, you go back to the winning economic develop-ment group to sign up for your incentives.

A Consistent RoadmapThis five-step process should take your company from

defining for itself the key business success attributes,through translation to location attributes, and the vettingof potential markets and locations against these to yield anoptimal place and site to do business. Attributes and theirweightings vary across business types, but the repeatableanalytic process will provide a consistent roadmap anddiscipline to ensure a successful outcome. Don’t forget“logistics, labor, and love” as the key strategy and processfor industrial/manufacturing site selection.

Figure 3 Qualitative Cost Matrix

Qualitative Factors

$5.0 million

$5.5 million

$6.0 million

$6.5 million

$7.0 million

$7.5 million

$8.0 million

$8.5 million

$9.0 million

Low High

• City 2

• City 1

• City 4

• City 3

• City 6 • City 5

1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00

• City 7

AREA0135.indd 1 8/12/13 8:52 PM



The ABCs Of “Greening” the Warehouse FacilityDetermining the warehouse facility’s carbon footprint — and thenreducing it as much as possible — can put your company on theroad to environmental sustainability.

By Rajiv Saxena, Vice President, Global Supply Chain Engineering,APL Logistics

Material-handling equipment: It’snot just about how many pieces ofindustrial equipment a facility uses. It’salso about whether those piece ofequipment are forklift or pallet jacks;how they’re powered (propane or elec-tricity); where they’re operated (in somee-grid sub-regions, propane and electricpower sources are roughly equal, and inothers, i.e., the higher power gridregions, propane is going to have thelower level of carbon emissions); andwhether they’re sit-down or stand-up(the latter is generally more energy-effi-cient). Each piece of equipment’swattage or gallons per mile/gallons perhour, whichever is applicable, is anotherimportant consideration.

Warehouse, office, and miscella-neous equipment: Plugging in keydata about heat-shrink machines, con-veyors, layer-picking devices, or othermachines that might be in use on awarehouse floor may be the mostimportant aspect of this particular cate-gory. However, it’s important not toforget that even small pieces of equip-ment operating in other areas of a facil-ity, such as breakroom refrigeratorsand microwaves or office computersand printers, are carbon footprint con-tributors, too, even if they are fairlynegligible ones.

Heating, cooling, and insulation: Asimple assessment of a facility’s heat-ing and cooling systems and their ener-gy-efficiency ratings is merely the tipof the iceberg. A thorough assessmentalso must examine how many expo-sures a facility has to the outer envi-ronment — windows, truck doors,doors for personnel to travel in and outof — as well as what kinds of materialswere used for a facility’s walls (andhow thick they are), what types ofroofing shingles have been used (and

I f businesses’ energy consumption stories were best-selling mysteries, it would-n’t be difficult to figure out “whodunit,” because the terms “supply chain”and “carbon footprint” often seem to be synonymous. In fact, according to

some estimates, transportation and logistics may account for up to 75 percent ofmost companies’ carbon emissions.

While it’s true that supply chains will always involve higher-than-averageenergy demands, that doesn’t mean your company can’t find multiple ways to“green” its logistics from end to end. And one good place to start is with yourwarehouses — or, more specifically, your warehouses’ carbon footprints.

What Goes Into a Warehouse Carbon Footprint Calculation?To some people, the concept of a carbon footprint calculation requires no intro-

duction. Simply put, it’s a way to measure the impact that a particular function,facility, or activity has on the environment so that a company, department, orindividual can make better, more sustainable decisions.

In the case of warehouses, some of the key ingredients besides square footage,headcount, and total hours of operation include:

E-grid emissions: Here in the United States, all men may have been createdequal — but all megawatt hours are not. Each of the 26 sub-regions within ourcountry’s three power grids emits a different level of carbon dioxide — rangingfrom a high of more than 2,000 pounds per megawatt hour in Pennsylvania to alow of just over 819 pounds per megawatt hour in New York State. As a result, anelectrical appliance or forklift operating at a facility in one area of the country isgoing to account for a considerably different level of greenhouse gas than thatsame appliance or forklift operating in another area.



what their R factor is), and how manydays per year each system is in use.

Lighting: In addition to tallying thenumber and wattage of fixtures used,companies also must distinguishbetween the type of lighting used —metal halide or fluorescent/incandes-cent (which is considerably more ener-gy-efficient) — and factor in thingslike the hours these lights are used,and whether or not energy-savingdevices like auto-sensors are in place.The importance of this particular cate-gory cannot be stressed enough,because it usually is the single largestcontributor to a warehouse’s carbonfootprint.

Waste: Unless a warehouse isactively participating in a recyclingprogram, it could be sending tons ofplastic, cardboard, and other waste tolandfills each year — as much as onepound per 100 square feet of ware-house, according to The RosenthalGroup, a waste and recycling manage-ment firm — with an equally dramaticimpact on the environment. Thus, it’s

essential to record and capture whattype of trash compactor a company isusing (including the type and com-paction ratio), the size of dumpstersit’s using in tons, and the frequency ofhow often its trash is collected.

Real-world, reliable references:When it comes to assigning the propervalues or ratings to all of the afore-mentioned things, there are severalhighly helpful primary and secondarysources available. Some — including

the Environmental Protection Agency,Department of Energy, NationalInstitute of Standards and Technology,and National Oceanographic DataCenter — are government agencies.Others, such as LEED and Energy Star,are private or government initiatives.Plus, there are many academic organi-zations, e.g., Utah State University’sClimate Center, and private companiesthat specialize in things like lightingdesign, roofing and climate control,etc. — specialties that could enablecompanies to drill down into certainareas of their calculations more quick-ly or thoroughly.

How Can a Warehouse CarbonFootprint Calculation Be Used?

By now, it should be clear thatwarehouse carbon footprint calcula-tions are multifaceted, many-layeredprocesses, ones that are usually bestundertaken with the help of sophisti-cated algorithms. Their potential appli-cations and benefits are just as diverse— and as relevant for companies thatare locked into longtime leasing agree-ments or purchases as they are forthose that are in a state of facility-relat-ed expansion or transition. Amongother things, they can be used to:• Compare the environmental meritsof one facility versus another;• Choose the most sustainable struc-tural attributes for a facility duringconstruction or renovation;• Evaluate different kinds of material-handling equipment with sustainabilityin mind; and• Select the most environmentallyfriendly heating and cooling solutions.They also can be used to gain impor-tant sustainability insights such as: • Figuring out which facilities in acompany’s network have the largestcarbon footprints and therefore aremost in need of “greening”;• Identifying which areas within aparticular facility are the most — or least — sustainable; and• Determining how many carbon off-sets should be purchased for a particu-lar facility.

Just as important, they could beused for all of the above. The key thingis to actually use them because whethera warehouse’s carbon footprint figurewinds up being far larger or smaller

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Unless it’sparticipating

in a recycling pro-gram, a warehousecould be sendingtons of waste tolandfills each year.

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than initially expected, one thing iscertain: In order to be consideredpart of the sustainability solutioninstead of the sustainability problem,the calculations should be regardedas a springboard, not just considereda fait accompli. In other words, evenwarehouses that are green enough toearn Energy Star ratings or LEEDcertifications will usually have plen-ty of room for environmentallyfriendly improvement.

For example, since doing carbonfootprint calculations at 35 of ourfacilities in North America, APL Logistics has reconfirmed theenvironmental value of investing in lighting conversion initia-tives wherever we can — especially now that we know thatmetal halide lighting has a carbon footprint that is nearly threetimes greater than that of fluorescent lighting. More of ourfacilities also have launched more ambitious recycling pro-grams, including some that feature partnerships with polymercompanies that will come and pick up all of those facilities’baled plastic waste and use it to make new products. And sev-eral of our facilities in the North have reconfirmed the impor-tance of using roofing materials with higher R factors orgreater insulation in order to ward off heat loss. Just as impor-

tant, we’ve now made doing at leastone green project per year a requiredcomponent of our ongoing Lean SixSigma and JDI programs.

The Last (Green) WordObviously warehouses are not

the only places in supply chainswhere opportunities for sustainableimprovement abound. From con-ducting better transportation opti-mizations to implementing morefuel-efficient mode shifts, there arenumerous ways companies can

reduce the environmental impact of their logistics — andmany reasons why they should. However, it is somethingthat you as real estate and site selection professionals areespecially qualified to advocate and oversee, not to mentionan important step in the right direction.

Realistically speaking, logistics may always have one ofthe world’s larger carbon footprints, because you can’t getproducts from point A to B without some form of trans-portation and (usually) at least some degree of warehousing.However, with a little work and a lot of cooperation from allinvolved, there’s no reason why logistics can’t tread a littlemore softly.

Warehouses arenot the only

places in supply chainswhere opportunities for sustainableimprovement abound.

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OHOHIOHIO:




ANEWDAY

OBy Dave Claborn

The Great Seal of the state of Ohio depicts a

rising sun over Mount Logan in southern Ohio’s

Ross County — a new day. Ohio Secretary of

State William Creighton, Jr. first sketched the

scene in 1803 as this territory west of the

Alleghenies turned into the country's 17th

state. The symbolism is as apt today as it was

then, as the nation’s eighth-largest economy

aligns itself to the demands of the 21st century.

Sixty percent of the U.S. and Canadian popu-

lation lies within a day’s drive, making Ohio an

ideal location for manufacturing — machinery,

automobiles, plastics, appliances, and steel,

among others. It has been that heavy reliance

on manufacturing that is both Ohio’s strength

and, at times, its Achilles heel. Because of

Ohio’s manufacturing concentration, “We are

known as a pro-cyclical state,” explains Dr.

Richard Vedder, an Ohio University economist

specializing in U.S. economic history. “In peri-

ods of upswing, Ohio is, historically, prone to

move a little faster than the national average.”

On the other hand, “when we have a recession,

we’re really clobbered.”

Ohio 8/23/13 11:14 AM Page 77

MANUFACTURING78 AREA DEVELOPMENT FOR FREE SITE INFORMATION, CALL 800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

So, it was no sur-prise that betweenJanuary 2007 andJanuary 2009,Ohio’s gross domes-tic product dropped

from $467 billion to under $452 billion, a loss of 3.4percent in two years. But since then, Ohio’s recoveryhas outpaced national growth rates (Ohio, 13 per-cent; the U.S., 8 percent) with GDP close to $510 bil-lion by January 2012 (Economic Analysis, FederalReserve Bank of St. Louis, http://research.stlouis-fed.org/fred2/series/OHNGSP).

Despite the steep losses from the GreatRecession, manufacturing remains a mainstay of theOhio economy, accounting for 16.7 percent of thestate’s GDP. “The fact is, if Ohio stops being a manu-facturing state, we’re going to become a bankruptstate,” notes Dr. Edward W. (Ned) Hill, dean of theMaxine Goodman Levin College of Urban Affairs atCleveland State University. “It’s what we do,” saysHill. “It’s what our competitive advantage is. Butrealize that being a manufacturing state is a very dif-ferent set of skills and opportunities than it was 10years ago.”

ADVANCED MANUFACTURING

Bronson Jones, VP & general manager of BannerMetals Group in Columbus, couldn’t agree more.What started as a tool and die shop in 1921 is thriv-ing today as an example of Ohio’s robust advancedmanufacturing capabilities. Banner makes metalparts for diverse industries ranging from constructionand lawn care to aircraft brakes, with Boeing andAirbus as major customers.

The company employs 52 in a 72,000-square-foot building tucked into the rapidly gentrify-ing Grandview suburb. To stay competitive,Banner recently added three robotic weldcells to its lineup of large presses, CNC, andstamping machines.

Banner is a member of the Edison WeldingInstitute (EWI) located just a few blocks away. EWI isthe largest engineering and technology organizationin North America dedicated to materials joining. In2012, Banner teamed with EWI to use simulation to

develop thick material applications and improve itswelding operations. In March of this year, the com-pany accepted EWI’s Edison Center InnovationAward at Ohio’s Advanced Manufacturing Luncheon.

“Manufacturing is much more automated, muchmore sophisticated,” says Jones. “The safety require-ments are top-notch.” The Banner Metals generalmanager says it is time to dispel old perceptionsabout manufacturing. “It’s not dirty. It’s a clean, air-conditioned environment. Companies that havestayed up with the times and kept current — they’rethe ones that are doing well.”

To stay current, Jones has taken advantage ofOhio’s Incumbent Workforce Training Program thatpays half the cost for existing employees to upgradetheir skills. Banner is sending several employees torobotic and CNC training utilizing state grants.Statewide, the first $20 million was spoken for thefirst day the grants were available. The OhioDevelopment Services Agency (DSA) is offeringanother $30 million this year. “It’s a huge investmentin our existing work force,” says DSA Director DavidGoodman.

Banner’s success has been a case study in the judi-cious use of state programs. The training grants andlow-interest loans the company received for technol-ogy purchases have helped Banner win growingaerospace business. Sales have increased 75 percentin the last three years, according to Jones. Banner isjust one of the state’s metals companies that keepOhio ranked first in ferroalloy output (59.4 percentof U.S. production) and products made from pur-chased steel such as pipes, tubes, and stampingsand assemblies.

But metals and advanced manufacturing are justone piece of a complex web that is Ohio’s econ-

omy, says Cleveland State’s Professor Hill.“Ohio is very much a ‘portfolio’ economy.It’s not one-size-fits-all because we’re so bigand so diverse as a state. The things that

work well for Columbus or well for Clevelandaren’t going to work well for Marion or Dayton.”

AUTOMOTIVEOhioans built 1.4 million light trucks and cars in

six assembly plants during 2012. The number looks

OHIO:ANEWDAY

:

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ENERGY80 AREA DEVELOPMENT FOR FREE SITE INFORMATION, CALL 800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

to increase signifi-cantly in 2013.Honda, GM,Chrysler, and Fordaccount for the 13models produced in

the state. Over 85,000 Ohioans are employed mak-ing vehicles or parts for them.

Honda, alone, accounts for 16 percent of Ohio’sautomotive work force — 13,500 people are employedmaking Accords, Civics, and CRVs — not to mentionthousands more making fuel tanks, seats, brake assem-blies, and the other parts required in a modern auto-mobile. Fifty-seven of Ohio’s 88 counties claim at leastone Honda supplier plant. Ohio is ranked secondnationally in Tier 1 automotive suppliers.

Ohio’s automotive industry is supported by robustresearch and development. In fact, the new AccuraNSX super car was designed entirely at Honda’s R&Dfacilities near Marysville, Ohio. It will be produced ina new $70 million assembly plant nearby.

Nearly every U.S. carmaker utilizes the unique 7.5-mile oval in Union County, northwest of Columbus,that is the Ohio Transportation Research Center. In apublic-private partnership, the state of Ohio andHonda earlier this year completed a $16 millionrepaving project, allowing for test speeds of up to200 miles per hour.

Down the road, in the center of Columbus, OhioState University’s Center for Automotive Research isbreaking new ground, producing the “BuckeyeBullet,” the world’s fastest electric-powered landvehicle with a top speed of nearly 315 miles perhour. The Buckeye Bullet project is led by Dr.Giorgio Rizzoni and is a joint effort withMonaco’s Venturi Automobiles. The team ofOhio State engineering students hopesimprovements in design and power compo-nents will send the new Buckeye Bullet 3 beyondthe 400 mph mark on the Bonneville Salt Flats inSeptember 2013.

AEROSPACE AND AVIATIONJust over a century ago, from their Dayton bicycle

shop, Orville and Wilbur Wright produced theworld’s first successful airplane. Ohioans have been

about the business of “slipping the surly bonds ofearth” ever since — among them, astronauts JohnGlenn and Neil Armstrong. Over 100,000 Ohioansare employed in the aerospace industry today. Theyinclude those building the world’s most sophisticatedjet engines in Cincinnati’s GE Aviation plant to theaerospace engineers at the Air Force ResearchLaboratory housed at Wright-Patterson Air ForceBase near Dayton.

Six hundred companies spread across the statemanufacture aerospace and defense products, manyof them supplying Boeing and Airbus, which makesOhio the top state supplying the two major aircraftmanufacturers.

Aerospace manufacturing is coupled with researchin Ohio. Cleveland’s NASA Glenn Research Centerboasts 33 specialized testing facilities, from hyper-sonic wind tunnels to the 152,000-square-foot engineresearch plant. Twenty Ohio colleges and universitieshave aerospace engineering and research programs.Recently, for example, Ohio State University won a$2.5 million award from the Air Force’s AerospaceSystems Directorate to develop computational tech-nologies that will be used in designing what the AirForce calls low-speed, long-endurance, highlymaneuverable vehicles as well as hypersonic flightand space vehicles.

The Ohio Department of Transportation is lead-ing a teamed effort with Indiana to become one ofsix test sites across the country for unmanned air-craft. Research would be conducted at aSpringfield, Ohio, facility, while drones would be

tested in restricted airspace over Indiana. Thecenter, if approved by the FAA, would study

how unmanned aircraft as big as airliners toas small as model airplanes can mix withthe nation’s air traffic.

ENERGYOhio has been in the energy business since its

founding in 1803, building mills, digging coal, findingways to shape the raw energy above and belowground into systems that could fuel the agriculturaland industrial revolutions of the past — as well astoday’s information technology and advanced manufacturing economies. It was Ohioan Thomas

OHIO:ANEWDAY

:

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INFORMATION82 AREA DEVELOPMENT FOR FREE SITE INFORMATION, CALL 800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

Edison, after all,who pioneered themass distribution ofelectricity. Today,that spirit of innova-tion continues to

thrive throughout Ohio. Quietly, day in and day out, the 159,200 solar pan-

els positioned on 83 acres adjacent to the WyandotCounty Airport emit enough electricity, when the sunshines, to power over 9,000 homes. They do it with-out burning anything or creating a carbon footprint.PSEG Solar Source based in Newark, N.J., owns the12-megawatt solar farm that began operations in2010 and sells the power to Columbus-basedAmerican Electric Power. The photovoltaic cells weremade by First Solar in Perrysburg, Ohio.

It was Charles Brush of Cleveland who designedone of the world’s first electricity-generating windturbines in 1886. Today, 127 years later, hundreds ofmodern wind turbines spin in Northwest Ohio, gen-erating 426 megawatts of electricity with anotherthousand megawatts under construction.

In Ohio’s eastern and southeastern counties, theoil and gas play in Ohio’s Marcellus and Utica shaledeposits is generating income and excitement. In2012, 625 new wells were drilled, providing 4.85 mil-lion barrels of oil and over 73 billion cubic feet ofnatural gas. The shale play is bringing new wealth tolandowners and jobs to many Ohio companies, suchas engineering firms and steel tubing manufacturers.

AGRIBUSINESS AND FOOD PROCESSINGCampbell’s soup, Bob Evans sausage, Orville

Redenbacher popcorn, Smucker’s jam, andDannon yogurt are just a few of the iconicfood products made in Ohio. Food process-ing is a $9.5 billion industry across the state.

With 14.5 million acres in agriculture, it isthe combination of that rich farmland coupledwith proximity to the eastern U.S. market and a denseweb of rail, waterways, and highways that allowsagribusiness and food processing to thrive in Ohio.Close to 60,000 Ohioans are employed in the sector.

Ohio’s low tax structure makes the state attractiveto food processors. The corporate franchise tax has

been eliminated. Under the broader-based commer-cial activities tax, products shipped outside the state(a significant portion of Ohio food production) aren’ttaxed at all.

Recent additions to Ohio’s food processing sectorinclude an $88 million, 100-job expansion to Dannon’syogurt plant in Minster. The company claims it is thelargest yogurt manufacturing plant in the world. And,Daisy Brand announced in June that the company’sthird sour cream manufacturing plant would be built inthe Northeast Ohio town of Wooster. The $116 mil-lion, 200,000-square-foot investment creates 89 jobs.The new plant will serve the company’s East Coastmarkets when it opens in 2015.

INFORMATION TECHNOLOGYOhio is rich with colleges, both private and public.

The 80,000 graduates who emerge from thoseschools each year are an intelligent and creativework force for Ohio’s growing IT sector.

The presence of Ohio State University and theschool’s willingness to leverage multiple disciplinesinto a data analytics curriculum was a key factor inIBM’s recent decision to locate its global data analyt-ics center in Columbus. The tech giant expects toemploy 500 in the new center. IBM found a readycustomer base for its “Big Data” solutions in compa-nies like Cardinal Health, Limited Brands, andNationwide Insurance headquartered in Columbus.

Ohio-born companies such as CompuServe,LexisNexis, and CheckFree paved the way for IBM’sinvestment in the state. Collaboration among IT pro-fessionals is fostered through local organizations

such as Cincinnati Tech, TechColumbus, GlobalCleveland, and the Northeast Ohio SoftwareAssociation.

Cleveland State University economist NedHill says Northeast Ohio has had a data ana-

lytics cluster for many years centered aroundthe insurance companies located in the Cleveland

area. “Allstate has a massive data center here, as wellas Progressive and a few others,” says Hill.

BIOMEDICALCleveland, once known mostly as a steel town, is

becoming much more diverse. A major catalyst for

OHIO:ANEWDAY

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TECHNOLOGYAREA DEVELOPMENT | Q3/Summer 2013 83

that is the Cleveland Clinic — Ohio’s second-largestemployer (behind Wal-Mart).

Richard Vedder, the Ohio University economist, iswell aware of the influence of the world-class med-ical institution. “We all know about the growth of thehealthcare industry,” explains Vedder. “That’s some-thing of a national phenomenon, though Ohio hasdone better than the average state in that. TheCleveland Clinic is rated by U.S. News and WorldReport as the best medical place in the UnitedStates for [its heart program]. You know, when theking of Saudi Arabia needs an operation, he stops inCleveland. He doesn’t go to New York or London —he goes to Cleveland.”

Not surprisingly, the Global Center for HealthInnovation is located next to Cleveland’s ConventionCenter, showcasing the latest in healthcare technolo-gy, education, and commerce.

South on I-71, biomedical innovation is happeningin Columbus as well, particularly in and around OhioState’s construction of a billion-dollar addition to itsmedical center.

Ohio conducts 17 percent of all U.S. clinical trials,ranking the state first in the Midwest and seventhnationally. One of those trials is generating lots ofexcitement at Ohio State: thus far, 900 leukemiapatients have been tested at Ohio State’sComprehensive Cancer Center with the drug Ibrutinib.So far, says the center’s Dr. John Byrd, every patienttested has seen his/her leukemia go into remission. “Itcauses the cells to regress and stop growing,” henotes. The FDA is fast-tracking Ibrutinib for approvalbased in part on the OSU trials.

Ohio’s Third Frontier innovation funding is also amajor catalyst to biomedical research and commer-cialization. At the University of Cincinnati (UC), forexample, $5.9 million from Ohio’s Third FrontierWright Projects Program has established the OhioCenter for Microfluidic Innovation. Microfluidicsinvolve the manipulation of tiny amounts of fluidsinside polymer-microchips. Applications includebiosensors and medical devices.

UC is also home to an Ohio Center of Excellencein Nanoscale Sensor Technology. UC microfluidics andnanoscale research has led to dramatic breakthroughsin the speed and sensitivity of immunoassay diagnos-

tics. Cincinnati-based Siloam Biosciences is commer-cializing the UC research through a “lab-on-a-chipbased Point-of-Care test platform” that it expects willrevolutionize bedside diagnostic abilities.

POLYMERS AND CHEMICALSIn 1870, when the city fathers of Akron enticed

Benjamin Franklin Goodrich to bring his rubber com-pany to their town, the die was cast for Ohio tobecome a leader in the rubber, polymer, and chemi-cal industries. While tire-making has moved to otherlocales, its legacy is seen in the 1,300 polymer andchemical firms calling Ohio home and the nearly90,000 people who work in them.

The industry is supported by robust research. TheUniversity of Akron’s College of Polymer Science andPolymer Engineering is globally known and rankedamong the United States’ top five graduate pro-grams in the field. Battelle Memorial Institute inColumbus, Ohio State’s Center for AdvancedPolymer and Composite Engineering, Bowling GreenState University’s Center for Photochemical Sciences,and Kent State’s Liquid Crystal Institute are amongthe research centers developing the next generationof advanced materials.

FINANCIAL SERVICESIn reality, it is a small city, perched on the north-

ern edge of Columbus in southern Delaware County.If it had a name, it might be Chaseville. It is 10,000people who converge daily to form JPMorganChase’s back office operations center in what isknown as Polaris — a highly successful mixed-useshopping, restaurant, housing, and office complex.

Statewide, Chase employs 23,000 — it’s Ohio’sthird-largest private-sector employer. The financialservices sector is one of Ohio’s largest, employing173,000 people and adding $34 billion to Ohio’sgross state product. The 230 banks, 350 creditunions, and 250 insurance companies in Ohio makethe state one of the most concentrated centers forinsurance and financial services in the nation.


:SPONSORSColumbus Region/Columbus2020www.columbusregion.com • [email protected]

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Ohio 8/23/13 11:19 AM Page 83


Work Force DevelopmentPrograms Can Make or Break the DealWith scant time and resources for recruiting and training workers,companies are looking at states that will help them to quickly satisfy their labor force needs.

By Mark Crawford

L abor is almost always the num-ber-one priority for every majorsite selection decision. Many con-

sultants start the screening process fortheir clients by defining work forcedensity within geographic regions —this is especially important for largerprojects of 500 employees or more.Once a potential pool of reliable andproductive workers is identified, thenext major consideration is the abilityof the state or region to help recruitand train the work force.

“Some companies have stronginternal training resources,” says BuzzCanup, founder of Canup andAssociates in Greenville, S.C.“However, many businesses are very

lean today when it comes to design-ing, developing, and implementingtheir own training programs and relyon outside assistance.”

Most site selection consultantswould agree that only a handful ofstates do an outstanding job at workforce training and development. Manyof these programs are in the South,including Georgia, Alabama, Louisiana,and North and South Carolina, andserve as models for other states.

“These programs work so wellbecause the states individualize train-ing initiatives to meet the needs ofcompanies,” comments LarryGigerich, managing director forGinovus in Indianapolis. “The states

design and deliver the curriculum tonew employees, based upon the spe-cific needs of the company. Thesestates also have the ability to providephysical space for training activities,as well as training manuals for use onan ongoing basis. There is also astrong emphasis on meeting the certi-fications and credentials that compa-nies require for their employees.”

Providing state resources to effec-tively meet a company’s work forcetraining needs is a win/win situation.

“Through their business investmentsin capital, plant operations, businesspurchases, and employee payrolls,these companies will generate a signifi-cant return on investment for the state,”indicates Gary Perilloux, press secretaryfor Louisiana Economic Development.“For that reason Louisiana developedFastStart®, our turnkey training pro-gram, to help companies become moresuccessful, and to help Louisianabecome more prosperous.”

The South Leads the WayThe South, without question, is the

leader in state-run work force develop-ment programs. Many of these statesprovide well-funded, centralized,mobile, and flexible training depart-ments that custom-design materialsand programs to meet a company’sneeds. This training is typically free ofcharge to employers that meet staterequirements for job creation, and helpsoffset location or expansion costs.

LABOR

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“Other states may try to make thesame kind of presentation,” saysCanup, “but they don’t have samelevel of experience or a central train-ing group. Some just work through atechnical college and only rely on thecapabilities of an individual educa-tional institution. Success varies withthis approach. Some colleges do a real-ly good job, but others don’t — it isdifficult to maintain statewide consis-tency with this kind of system.”

In 1961 South Carolina became thefirst state to create a centralized, state-supported work force developmentgroup to work with new and existingbusinesses. The program operatesthrough the South Carolina technicalcollege system.

“The South Carolina program hasbeen very successful over the yearsand was instrumental in developingnew industries after the state’s textileindustry went overseas,” statesCanup. “The program is especiallyskilled at developing training andoperating procedures for advancedmanufacturing plants.”

Today the program is calledreadySC™ and provides recruiting,screening, and training for employeesthat is custom-designed to meet acompany’s needs. Since its inception,the program has trained about 270,000employees for more 2,000 companies.

Jason Premo, owner of ADEXMachining Technologies in Greenville,first learned about readySC™ from theGreenville Chamber of Commerce andGreenville Technical College. “It’schallenging for small companies likeus to work on a lot of the internaldevelopment that’s needed becausewe don’t have the internal resourcesor budgets that larger companies do,”says Premo. “We’ve been leveragingthe resources readySC™ provide forfree to train our leadership team andour associates on the factory floor.This has helped us grow and actuallycreate more jobs faster than we wouldhave on our own.”

In the late 1060s, Georgia initiated asimilar program called Quick Start,which provides free work force trainingservices to qualified businesses in thestate. A company’s training needs aredetermined through a project analysisthat often requires an on-site visit todetermine any processes or technolo-gies that might need to be adapted toan operation in Georgia. A trainingplan is then submitted to the company.

“Quick Start designs pre-employ-ment training, assessment, and selec-tion processes that enable client com-panies to attract, assess, and select thebest applicants according to compa-ny-defined criteria,” says RodgerBrown, executive director for market-

ing for Georgia Quick Start. “Ourtraining professionals work withcompany leadership and subject-mat-ter experts to develop and deliverperformance-based training on thecompany’s own equipment andprocesses, using the latest trainingmaterials and methodologies.”

A good example is Caterpillar’snew $200 million, 1,400-employeemanufacturing facility in Clarke andOconee counties. The company reliedon Quick Start and Athens TechnicalCollege to set up a state-of-the-arttraining facility, including a mockassembly line.

“As we hire employees and bringthem in, every employee, includingmyself and members of my manage-ment team, will go through that simu-lated work environment,” says ToddHenry, manager for the Athens plant.“It not only teaches the hands-on skillsthat we need to assemble our equip-ment, but also the principles of theCaterpillar production system, whichis really the backbone of our manufac-turing operation.”

In Louisiana, FastStart™ providescustomized employee recruitment,screening, training development, andtraining delivery at no cost to compa-nies that meet eligibility requirementsand are aligned with Louisiana's eco-nomic development targets — espe-cially digital media, software develop-ment, service industries, advancedand traditional manufacturing, ware-house and distribution/logistics, andresearch and development. So far, afterfour years of operation, FastStart™has provided 18,000 workers withmore than 225,000 hours of trainingand instruction.

“A key component to FastStart™ isthat it does not box companies into apreconceived program,” says Perilloux.“Each client is unique and benefitsfrom a highly customized approachthat captures the culture and prioritiesof the organization and delivers theproper amount and type of training.”

In 2010 Paris-based Gameloft, aleader in digital gaming, was consider-ing a number of U.S. sites for a newgame development studio, includingNew Orleans. The company placed ahigh priority on selecting an area witha pool of young talent and an enriching

Kentucky launched its Work Ready Communities initiative in 2012. To date, 75 of the state’s 120 counties have joined the program, which was developed by business leaders, education leaders, and economic development experts. Only a few states have begun certifying counties as “work-ready” based on the quality of their labor force. Kentucky has one of the most rigorous certification programs in the nation. Certification requires that counties must meet a two-year commitment that includes gathering local support from education and business leaders as part of the application for a Kentucky Work Ready Community designation. Counties must meet requirements in six areas, including high school graduation rate, National Career Readiness Certificate holders, demonstrated community commit-ment, educational attainment, soft-skills development, and digital literacy.

“When we look at the role work force plays in corporate decision-making, we see a common theme — that a well-trained work force is critical to where companies choose to locate or expand,” says Erik Dunnigan, commissioner for the Kentucky Department for Business Development. “The Kentucky Work Ready Communities certification assures companies that we’ve aligned our education and economic assets to provide the most qualified talent.”

Certified Work-Ready States



lifestyle. In response, FastStart™ designed a custom websitethat included an overview video about Gameloft. Within twomonths, these efforts attracted more than 60,000 page views,two million impressions, and 1,700 job applicants. Mostimportantly, nearly 700 of these applicants were highly quali-fied and possessed the skills Gameloft required. As a result,Gameloft selected New Orleans for its development studio.

“FastStart is a very experienced group of people thathelped us brainstorm and find ideas for hiring staff,” indicatesSamir El Agili, Gameloft’s general manager for the UnitedStates and South America. “We’ve been constantly impressedwith the amount of work they’ve done — whether it’s printads, social media sites, or film. It’s great to work with them.”

Other States Are Catching OnSite selection consultants have noticed that a number of

other states — including Indiana, Iowa, Kansas, Kentucky,Tennessee, Colorado, Idaho, New Mexico, Texas, Arizona,Oregon, and Utah — are also accomplishing good thingswith their work force development programs.

“Work force development has been a pivotal site selectiondeterminant for a number of our site selection projects overthe years,” indicates John H. Boyd, principal with The BoydCompany in Princeton, N.J. “Among our clients, I wouldpoint to the effectiveness of Arizona's work force develop-ment program in its support of Progressive Insurance’s poli-cyholder service center in Phoenix.”

Arizona’s Job Training Program is a reimbursable grant pro-gram that supports the design and delivery of job-specific cus-tomized training. “Clients can apply for grants that return upto 75 percent of the costs of training net new employees,” saysBoyd. “Training that upgrades the skills of our clients’ existingemployees can be reimbursed up to a maximum of 50 percent.”

In Oregon, Business Oregon connects companies with thestate’s network of community colleges for training. “OurRoyal Caribbean Cruises client benefited from this programduring the start-up of its new customer service center inSpringfield,” adds Boyd. “The college contracts directly withthe client and training programs take place either on campusor at our clients’ office or plant.”

Utah is also coming on strong. Its Custom Fit program,which is a partnership that includes the Utah College ofApplied Technology, other academic institutions, and localbusiness communities, assists companies with a variety oftraining costs. The state also just passed legislation to createand fund a $10 million STEM Action Center, whose goal is tobuild a highly capable work force for industries that requireemployees with strong education in science, technology,engineering, and math (STEM). The state currently has ashortage of STEM-savvy workers and hopes the action centerwill help close STEM education achievement gaps in bothpublic and postsecondary education.

“The STEM Action Center will be a hub of collaborationfor communities, industries, higher education, and publiceducation,” says Carol George, Utah’s state science advisor.“The essential goal of this legislation is producing a college-educated STEM work force that can meet the needs of ourgrowing high-tech industries, including medical devices,software development, and biotechnology.”

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q3 / 2013

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