Area Development Q4 Issue 2024

Is Automation Actually Helping?

America’s Fastest Growing Cities

Master Climate Incentives

Page 18

Page 24

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AREA DEVELOPMENT SITE

AND

FACILITY

Q4/2024

PLANNING

Can the

United States Catch Up on

Minerals?

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S P E C I A L R E P O R T:

Workforce 2024

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Balanced.

Personalized.

Growth.

Partner with JobsOhio and see how your business and life work better together. We’ll connect you to the best sites, earlier funding, and the top-tier talent you need to grow your business. Ohio is the place where your team can succeed at work and have a life they’ll love.

Take the first step to grow your business at JobsOhio.com

Contents | Volume 59 Number 4 | Q4/2024 COVER STORY

Material Pursuits

page 42

China controls the flow of advanced materials for batteries and magnets. Can the United States create a supply chain and compete?

FEATURES PAGE 18

PAGE 68

PAGE 74

How Automation Is Actually Closing the Labor Gap

Why Decarbonization Starts with Site Selection

Max Your Tax Credits

Robotics and automation offer solutions to the critical labor shortage in the U.S., enhancing efficiency and worker safety and preparing the workforce for the future.

Sustainability goals have become a critical component of corporate strategy and have led industrial manufacturers to reevaluate how they approach site selection.

Area Development’s annual ranking of the fastest growing cities found some surprising trends for America’s metro areas

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Large-Scale Projects Face Financing Challenges

PAGE 24

Leading Metro Locations

Read these insider tips from EY and successfully take advantage of complex federal incentives to achieve your sustainability goals

PAGE 70

Beyond Square Footage

How values and mission-driven differentiation helps buildings stand out to companies that are choosing a new HQ

By understanding investor requirements and utilizing non-traditional strategies for reducing costs, executives can enhance the financial viability of their projects and drive successful outcomes.

Area Development® Site & Facility Planning (USPS 345-510) is published four times per year (Q1, Q2, Q3, and Q4) at Lancaster, PA, by Halcyon Business Publications, Inc., 30 Jericho Executive Plaza­– Ste 400W Jericho, NY 11753. Periodicals postage paid at Jericho, NY, and additional offices. Single copies, $20. Yearly subscription U.S. & Canada, $75; foreign, $95.

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1.7 million

that’s the number of Americans missing from the labor force, according to the latest figures from the U.S. Chamber of Commerce. America is facing a labor crisis, where we have 8 million open jobs but just 6.8 million unemployed people.

DEPARTMENTS 4 Editor’s Note

Jobs for a New Generation

6 Contributors

Get to know the authors

8 In Focus

Partnering up to control costs

10 Frontline

Can Three Mile Island work?

12 Frontline

Dayton’s “Doomsday” Planes

14 Around the Horn

Our guest editors discuss incentives

16 First Person

Steven Wu, COO of American Battery Tech Company talks scale

79 Ad Index

SPECIAL REPORTS

Workforce 48 How States are Competing to Train Talent

50 Evaluating a Workforce Development Program

56 Structuring a Successful RFP

58 Salary Transparency in Job Postings

60 Inside the Brooklyn Navy Yards’ CNC Training Program

62 Data Centers are Facing a Labor Cliff

64 Looking for Employees in Nontraditional Spaces

80 Last Word

America’s Uncivil Discourse

Meet our guest editors Amy Gerber, Executive Managing Director at Cushman & Wakefield, has over 25 years of experience in corporate site selection and incentives procurement. Known for her strategic insight into workforce development and regional growth, she partners with corporations and agencies across diverse industries to secure optimal locations.

Kathy Mussio, Managing Partner at Atlas Insights, brings over 20 years of expertise in economic development and incentives consulting, helping companies navigate complex programs to optimize location strategy.

Both Amy and Kathy are respected voices in their fields, frequently speaking at national conferences and contributing to Area Development Magazine on best practices in site selection and economic incentives.

Printed in the USA. Copyright 2024 Area Development® magazine. All rights reserved. No part of this publication may be reproduced or transmitted win any form or by any means, electronic or mechanical, including photocopy, recordings, or any information storage or retrieval system, without permission. Area Development® magazine does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of causation. The views and opinions in the articles herein are not those of the publishers, unless indicated. The publishers do not warrant, either expressly or by implication, the factual accuracy of the articles herein, or of any views or opinions offered by the authors of said articles.

POSTMASTER: Send address changes to Area Development, Circulation Department, 30 Jericho Executive Plaza­– Ste 400W Jericho, NY 11753. Subscribers requesting address changes must provide both old and new addresses. © Copyright 2024 by Area Development® magazine. ISSN: 1048-6534. Printed in the U.S.A. Area Development® is a registered trademark of Halcyon Business Publications, Inc.

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Editor’s Note | Q4/2024

Raising a Future American Worker Our dear readers know that, at its core, site selection is about betting on the future. Business owners must decide if a location offers the right space, resources, and people to support growth.

There are parallels to parenting. I often daydream about the world my kids will grow up in and what life might look like when they’re my age. What will the United States be like during their prime years? What jobs will be available, and how will automation and AI affect their lives? What can I do now to prepare them?

In putting together this issue, focused heavily on workforce, I spoke with dozens of experts and I came away with at least one skill I could embrace and pass on to my children: welding.

While welding may seem like an oldschool trade, it’s a skill in high demand across industries—from manufacturing to infrastructure repair—and one that’s surprisingly resilient to automation. But beyond the job itself, welding represents a broader set of skills critical in today’s economy: problem-solving, adaptability, and technical proficiency.

Raising a future American means instilling timeless qualities and fostering a mindset

that values learning, creativity, and grit. With technology rapidly evolving, resilience and adaptability will be as essential as digital and academic skills. Leaders across workforce development echo this: while automation and AI continue to reshape the landscape, they are also opening new doors in fields that require a human touch—whether that’s welding, robotics maintenance, or biotech.

As site selectors, we seek communities that nurture versatile talent pools. And as parents, we’re working to prepare our kids to be part of that future workforce.

In the end, both parenting and site selection come down to building for the future— making the best possible choices today to ensure a thriving tomorrow. Whether in family or industry, our goal is the same: a sustainable, prosperous future for the next generation of Americans.

Editor Andy Greiner

2024 EDITORIAL ADVISORY BOARD

Scott Kupperman Founder

KUPPERMAN LOCATION SOLUTIONS

Eric Stavriotis Vice Chairman,

Courtney Dunbar Site Selection & Economic Development Leader BURNS & MCDONNELL

Chris Schwinden Partner SITE SELECTION GROUP

Chris Volney Managing Director,

Advisory & Transaction Services

Stephen Gray President & CEO GRAY, INC.

CBRE

Brian Corde Managing Partner

Bradley Migdal Executive Managing

Matthew R. Powers Partner

CBRE

ATLAS INSIGHT

Amy Gerber Executive Managing

Director, Business Incentives Practice

CUSHMAN & WAKEFIELD

Alexandra Segers General Manager TOCHI ADVISORS

Dennis Cuneo Director, Site Selection

Services

WALBRIDGE

Director, Business Incentives Practice

CUSHMAN & WAKEFIELD, INC.

Brian Gallagher Vice President, Corporate Development

GRAYCOR

Marc Beauchamp President SCI GLOBAL

David Hickey Managing Director

Americas Consulting

ONPACE PARTNERS

Scott J. Ziance Partner and Economic

Incentives Practice Leader

VORYS, SATER, SEYMOUR AND PEASE LLP

Chris Chmura, Ph.D. CEO & Founder

Lauren Berry Senior Manager, Location Analysis and Incentives

MAXIS ADVISORS

Courtland Robinson Director of Business Development

BRASFIELD & GORRIE

Dianne Jones Managing Director, Business and Economic Incentives

JLL

Joe Dunlap Chief Supply Chain Officer, LEGACY INVESTING

CHMURA ECONOMICS & ANALYTICS

Alan Reeves Senior Managing Director NEWMARK

HICKEY & ASSOCIATES

AREA DEVELOPMENT Publisher Dennis J. Shea dshea@areadevelopment.com

Editor Andy Greiner editor@areadevelopment.com

Production Manager Jessica Whitebook jessica@areadevelopment.com

Sydney Russell, Publisher 1965-1986

Staff and Contributing Editors Dan Emerson Amy Matias Kimberly Graulein Kathy Webster Garrison Partridge Gabriella Ianetta.

Web Designer Carmela Emerson

Events / Business Development Director Matthew Shea (ext. 231) mshea@areadevelopment.com Media / Accounts Director Justin Shea (ext. 220) jshea@areadevelopment.com

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Circulation/Subscriptions circ@areadevelopment.com

Print Designer Victoria Corish Business/Finance Assistant Barbara Olsen (ext. 225) olsen@areadevelopment.com finance@areadevelopment.com

Halcyon Business Publications, Inc. President Dennis J. Shea Correspondence to: Area Development Magazine 30 Jericho Executive Plaza­ Suite 400 W Jericho, NY 11753 Phone: 516.338.0900 Toll Free: 800.735.2732 Fax: 516.338.0100

for free site information, visit us online at www.areadevelopment.com

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VIEW SITES

Contributors

Adam Glatz With nearly 20 years in site selection and incentives, Glatz assists clients at Strategic Development Group in maximizing capital investment opportunities, negotiating complex incentive packages, and ensuring incentives compliance across diverse industries and states.

Alfredo Valadez An Automation Consultant at Burns & McDonnell who brings extensive experience in industrial automation solutions. Previously a mechanical and controls engineer, he specializes in designing, specifying, and integrating automated systems for various industries.

Charles H. Johnson A partner of World Trade Center Chicago who has over 30 years in real estate consulting. He brings deep expertise in public assembly and urban development, serving as Global Chair of the WTCA Real Estate Member Advisory Council.

Courtney Dunbar Site Selection Leader at Burns & McDonnell who specializes in industrial development, site certification, and economic analysis. She is a noted speaker and writer, contributing to Area Development and instructing at the University of Oklahoma’s Economic Development Institute.

Jacob Everett The Founder of Corsa Strategies provides site selection and incentive advisory services across North America. A Certified Economic Developer, he has 15 years of experience in economic development, renewable energy, and private-public sector collaboration.

Mac Farr Principal at Strategic Development Group, he specializes in manufacturing site selection for U.S. and international clients in chemical, metal, and automotive sectors. He previously led commercial real estate development projects and holds a degree in Business Administration.

Matt Landek Managing Director at JLL, he oversees strategy for the Data Center business within Work Dynamics. He provides leadership in portfolio expansion, technology implementation, and outsourcing initiatives, delivering enhanced outcomes for data center clients.

Steven Tozier Managing Director at Ernst & Young LLP, he leads the Credits & Incentives Practice in the Eastern U.S., focusing on multi-billion-dollar incentive projects. He maintains strong economic ties with regional governments and advises on optimizing tax and non-tax incentives.

Vince Giovannini Senior Consultant at Deloitte, he specializes in workforce and location strategies, leveraging labor market intelligence. His experience spans 200+ projects, previously leading data science at CBRE, and includes economic impact modeling and workforce analytics.

Dan Pickel Daniel Pickel, Director of Certification at NFPA since 2021, leads programs in fire, life, electrical safety, and renewable energy. He excels in workforce development, certification innovation, and strategic partnerships, driving adoption and aligning programs with organizational goals to empower individuals through education

Richard Mailhot Richard Mailhot is a Senior Project Manager at Dresdner Robin with more than 25 years of experience working within the environmental due diligence industry

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In Focus

The Rise of Joint Venture Agreements Collaboration spreads risk and ensures successful project outcomes

By Amy Gerber Executive Managing Director, Business Incentives Practice, Cushman and Wakefield

B

uilding a new facility can be a daunting and risky task. It’s often too much for one party to handle alone. In response, manufacturers, suppliers, and developers are increasingly using joint venture (JV) agreements to bring new construction projects to life.

This shift towards collaborative financing helps spread the risk and boost the chances of success, especially in capitalintensive fields like cold storage and advanced manufacturing.

From Speculative Development to Joint Ventures Speculative (spec) development is common in real estate, especially around big-box logistics facilities. With the scope of today’s industrial projects, spec development can be risky. So many of the industrial deals being completed today are in the Advanced Manufacturing sector where it is hard to know what to build for.

Many of the Advanced Manufacturing projects nowadays have unique facility characteristics such as height, column spacing, slab thickness or office space.

Construction costs are escalating and the additional requirements to accommodate automation could present a significant impact to a developer’s P&L. These risks have made the old spec model less viable, leading to a rise in JV partnerships, especially in sectors needing hefty upfront investments.

Financial Structure of Joint Venture Partnerships At the core of JV partnerships is costsharing. This approach allows developers and end users to pool resources and share risks. Developers don’t have to bear the entire financial burden of building a facility, while end users, who might be investing hundreds of millions, can mitigate their risks while securing the infrastructure they need.

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Manufacturer-Supplier JV Partnerships A notable trend within JV partnerships is the partnership between manufacturers and suppliers. These partnerships offer significant benefits, like reduced outbound transportation costs for suppliers by co-locating with their primary client. For instance, one JV partnership enabled a manufacturer to defer building a new facility while a supplier used an existing asset that was underutilized, highlighting the flexibility and mutual benefits of such partnerships.

However, this can also limit the supplier’s ability to serve multiple clients.

[W]ith construction costs escalating and the additional construction requirements to accommodate automation, the cost to construct a building has a hefty price tag and could present a significant impact to a developers P&L. Impact of Federal and Local Incentives Federal funding is crucial for supporting JV agreements, especially in industries like electric vehicle (EV) manufacturing.

Companies often seek state and local incentives alongside federal funds to maximize support. However, navigating these incentives can be tricky, as states have varying rules. Companies must creatively phase their projects or negotiate terms to align with both federal and state criteria.

Local Government’s Role in Supporting JVs Local governments can significantly boost the success of JV partnership by acting as third partners. They can

support projects by funding construction, and offering property tax abatements, and through programs like Tax Increment Financing (TIF), that provide upfront cash for pre-vertical activities.

Some communities have even funded building construction and leased them back to companies, supporting local economic development and maintaining valuable community assets.

Capital Markets and Commercial Banks in JVs Capital Markets Groups are vital in facilitating JV partnerships, connecting companies with investors willing to finance new projects. This funding is often more flexible than traditional bank financing, which demands stringent commitments. For startups and smaller suppliers, traditional bank funding is challenging, but programs like new market tax credits can provide crucial support, enabling participation in JV partnerships.

Long-term Viability and Success of JV Projects The benefits of JV partnerships are substantial. Sharing financial risks and pooling resources can speed up project timelines, start production sooner, and generate revenue quickly. These agreements also allow for phased expansions, letting companies scale operations as demand grows. For example, a manufacturing facility might initially occupy a smaller shared space, delaying the need for a larger investment until the business stabilizes financially. This approach mitigates risk and positions companies for sustained growth.

Joint venture agreements offer a strategic and financially sound approach to new construction projects in the manufacturing and supply sectors.

By fostering collaboration between developers, manufacturers, and suppliers, these partnerships spread risk, enhance project viability, and support long-term growth. As the industrial landscape evolves, JV partnerships present a compelling model for sustainable and successful development.

for free site information, visit us online at www.areadevelopment.com

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Frontline

Big Tech Partners with Nuclear A power-hungry hungry sector looks past the grid

By Gabriella Iannetta Area Development Staff Writer

A

s big tech seeks clean power for its massive data centers and continued innovation in AI, owners of shuttered power plants are finding incentives to reopen.

Microsoft inked a deal with Three Mile Island to purchase power from the plant over the next 20 years. The U.S. Nuclear Regulatory Commission still needs to approve the deal, which is expected to bring 3,400 jobs.

“As good as renewable energy has been... we need baseload power in this country. We need power that runs 24/7,” Joseph Dominguez, CEO of Constellation, told Bloomberg Markets about the need for clean energy that does not rely on wind or solar.

Constellation had previously stated that restarting Unit 1 was “technically feasible,” but the company’s official position was that no decision had been made.

Despite no confirmation at the time, antinuclear groups quickly presented arguments to officials in Harrisburg, Pennsylvania against the potential reopening.

Loan guarantee for repowering Palisades Nuclear Plant.

“We were told: let the marketplace decide. The market decided, and they decided it’s not nuclear,” Eric Epstein, chairman of the watchdog group Three Mile Island Alert told reporters on Sept. 6, 2024.

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shutting down the plant five years ago.

Rivals offered cheaper products as natural gas prices hit historic lows and demand for nuclear power flatlined.

Nuclear power peaked above 20 percent of U.S. electricity in the 1990s, but 12 reactors shut down between 2012 and 2021.

However, the boom in clean-tech manufacturing — along with advancements in AI and other technology that rely heavily on data centers — has exposed the need for the U.S.’s outdated power grid to be upgraded to remain competitive. The federal government is taking notice. “[The Microsoft deal] begins to get the country off its heels and maybe away from outdated stigmas when it comes to powering the U.S. market via nuclear,”

Courtland Robinson, Director of Business Development at Brasfield & Gorrie, told Area Development.

“These hyper-scalers are spending $25 billion a quarter this year on data center development.”

In March, the U.S. Department of Energy announced a $1.5 billion loan guarantee for the repowering of Palisades Nuclear Plant in Covert, Michigan.

Palisades, once named one of the worstperforming reactors in the U.S., would be the first shuttered power plant to reopen, likely leading to a complex process.

While Palisades’ history hasn’t received the same media attention as Three Mile Island, the plant’s community remains divided over its restart. The 52-year-old facility had experienced equipment failures, broken fuel rods, and fuel spills. In 2008, five workers were trapped in a high-temperature area for 90 minutes due to a malfunctioning hatch. No major injuries were reported but the incident led to an inspection from federal regulators.

Nevertheless, the reopening of Palisades may inspire similar federal incentives for Three Mile Island shareholders. As tech giants like Bill Gates and OpenAI’s Sam Altman invest in nuclear power affiliates, owners of decommissioned plants are eager to form partnerships.

“There is already a co-location of data centers with nuclear facilities that have been built,” Dominguez said.

Co-locating data centers near nuclear power plants can reduce energy delivery costs. Earlier this year, Talen Energy sold a data center campus near its Susquehanna plant to Amazon Web Services. The trend of co-locating data centers with nuclear facilities makes former energy-generating sites more attractive to companies like Constellation.

“If nuclear operators are ready to receive that capital [from big tech] and reinvest it into their facilities, it will inspire other markets,” Robinson added.

The Microsoft deal with Three Mile Island could pave the way for closer partnerships between nuclear power and emerging industries.

for free site information, visit us online at www.areadevelopment.com

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Frontline

Dayton Ohio Poised to Build “Doomsday” Planes

By Amy Matias Area Development Staff Writer:

D

ayton, Ohio, has long been recognized as the birthplace of aviation, and it is once again proving its strategic importance to the aerospace industry.

This historic city, home to the Wright Brothers and a center of innovation since the dawn of flight, is now positioning itself as a key player in military aviation with the latest expansion of Sierra Nevada Corporation’s (SNC) facilities at the Dayton International Airport. SNC’s new Aviation Innovation and Technology Center is poised to boost both the local economy and national defense efforts.

This hangar, the first of several planned expansions, will support SNC’s new $13 billion contract with the U.S. Air Force. The facility will be responsible for modifying Boeing 747 aircraft into the Survivable Airborne Operations Center, known as the “Doomsday” plane, ensuring command and control capabilities in the event of a national emergency.

SNC’s recent investments underscore Dayton’s continued relevance in the aerospace industry. The newly opened 100,000-square-foot maintenance, repair, and overhaul (MRO) facility marks the first large-scale aircraft MRO project in the region since World War II. Dayton’s deep roots in aviation make it an ideal location for the types of projects SNC is spearheading. The city’s access to Wright-Patterson Air Force Base, the Air Force Research Laboratory, and the Life Cycle Management Center provides essential resources for military aviation.

The region is further bolstered by its proximity to a strong, specialized workforce skilled in aerospace technologies, positioning Dayton as a unique competitive advantage for companies like SNC. Dayton City Manager Shelley Dickstein said, “SNC’s significant investment in Dayton will be a transformative step for our regional strategy around the aerospace and defense industries.“

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The economic impact of SNC’s investment in Dayton is substantial. The project is set to create approximately 350 high-paying jobs, offering opportunities for local talent in aerospace engineering, maintenance, and logistics.

For site selectors and economic developers, SNC’s move highlights Dayton’s strength as a logistics and innovation hub, with modern infrastructure that can support large-scale aviation projects. The Dayton International Airport’s extensive runways and aircraft support services make it an attractive location for companies seeking to expand operations in military and commercial aviation.

For the aviation industry, this development reinforces the trend of increasing demand for military aircraft MRO services. JLL aviation specialist Tom Taylor put it this way: “The Sierra Nevada Corporation’s (SNC) recent award of a $13 billion contract to deliver the Air Force’s new Survivable Airborne Operations Center (SAOC) exemplifies how growth in the Aerospace & Defense (A&D) Industry is increasing real estate needs in a growing number of markets throughout the United States. The SNC’s new contract

is expected to drive facility and infrastructure needs and employment opportunities in Dayton, OH, Denver, CO and Dallas, TX. Continued growth in A&D facility needs is expected as the DoD makes planned investments to modernize its equipment and infrastructure.“ As the defense sector modernizes, the need for facilities capable of handling large-scale, complex projects like the “Doomsday” plane continues to grow.

SNC’s new Dayton facilities will play a key role in addressing this need, positioning the company—and the city—to meet the evolving challenges of national defense.

Dayton’s history as a leader in aviation innovation makes it uniquely suited to support the growing demands of the aerospace industry.

The city’s legacy, combined with its modern capabilities, ensures that it will remain a critical location for aviation and defense companies. For those in the business of site selection and economic development, Dayton’s partnership with SNC offers a model for how regions can leverage their historical strengths and infrastructure to attract major investment in cutting-edge industries.

for free site information, visit us online at www.areadevelopment.com

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Around the Horn

Incentives and Workforce Development Area Development sits down with two leading experts in economic development incentives, Amy Gerber of Cushman & Wakefield and Kathy Mussio of Atlas Insight, to discuss the evolving landscape of tax incentives and workforce development. This Q&A has been edited for space and style; for a full transcript head to Area Development.com

Area Development: How have tax incentives evolved to address the unique needs of different industries, especially in advanced manufacturing?

Kathy Mussio: Renewables has been a focus for years—solar, EVs, batteries, and now clean tech.

States are creating specific legislation and programs to cater to these emerging industries. For example, Illinois created the REV program for EVs, and shortly after, they expanded it to include energy projects.

Amy Gerber: Tennessee, for example, has created a nuclear fund to attract projects related to nuclear energy. It’s the same story across various states—wind, solar, EVs—these incentives are designed to shape behavior, and states are putting their best foot forward to capture these industries. Demand in these industries has also grown. Recently, some big tech companies have even announced partnerships for small modular reactors (SMRs), as they seek sustainable energy sources to power high-demand operations like data centers.

Area Development: How are states adapting their tax incentives to attract businesses focused on sustainability?

Kathy Mussio: The big federal push right now is the 48C tax credits, but companies themselves are increasingly focused on sustainability, whether it’s driven by investor demands, customer expectations, or simply their internal culture.

Amy Gerber: Companies are pushing sustainability more than states. Companies vet utilities to ensure they can meet sustainability requirements. Federal incentives are driving a lot of the action here.

Area Development: Are we seeing incentives tied more closely to workforce development, especially for industries requiring specialized skills?

Amy Gerber: That’s a huge focus. Georgia’s Quick Start and Virginia’s Talent Accelerator Program are great examples of how states are supporting companies by training workers with the skills needed for advanced manufacturing and tech. What’s exciting is that this isn’t just a state effort anymore. Cities and utilities are getting involved, offering programs to help upskill the workforce. The goal is to ensure companies can stay competitive as skill demands evolve.

Kathy Mussio: Who can argue with investing in people? We see all sorts of workforce training programs, whether through community or technical colleges or straight cash reimbursements to companies for more customized training. Programs can even be funded from future employee withholding taxes, like the 260E program in Iowa, which secures bonds for training, funded through expected future employer withholding taxes.

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11/27/24 2:19 PM

Area Development: Are companies leaning more towards training over cash payouts?

Kathy Mussio: In Virginia, you can pick between the Virginia Jobs Investment Program (VJIP) or Talent Accelerator. VJIP offers up to $1,000 per job, and it’s simple. When it comes to training, states often offer multiple funding streams like grants for new jobs, retraining funds, or OJT training. These different buckets of money can be used together to maximize the impact of the training needed.

Amy Gerber: And let’s not forget partnerships with higher education. In Indiana, for instance, Ivy Tech works with companies to create custom training programs.

Area Development: Are we seeing a shift toward creating “good jobs,” those with living wages and benefits, as opposed to just hitting numbers for job creation?

Amy Gerber: Most states have wage thresholds that companies must meet to qualify for incentives. Texas, for example, looks closely at that wages in its Skills Development Fund program. It’s not just about the number of jobs anymore, but the quality of jobs created.

Kathy Mussio: Right, and some states are flexible. Illinois’ REV program allows you to use either Bureau of Labor Statistics (BLS) data or the state’s IDES (IL Dept of Employer Services) local occupational wages to meet wage requirements. Flexibility is key here because what qualifies as a “good job” can vary from region to region.

Area Development: That flexibility seems critical. Are you seeing more states tightening purse strings or placing more scrutiny on incentives?

Amy Gerber: Not so much tightening, but a shift toward performance-based incentives.

Companies only receive the incentive once they’ve met their goals—whether it’s job creation or investment milestones. This helps mitigate risk for both the company and the state.

Kathy Mussio: And states have been doing more due diligence for a while now. After a few unfortunate very public failures, states have increased scrutiny upfront to ensure they’re backing solid projects. But it’s hard to measure the true long-term impact of incentives. You can track jobs and investments, but not sure there is a way to quantify exactly how much of that growth was driven wholly from the incentives offered.

Area Development: If you could change one thing about the current economic development incentive landscape, what would it be?

Amy Gerber: I’d say the approval process. It can be frustratingly slow, especially when companies are moving quickly to secure real estate. Some states require multiple meetings before they can approve incentives, which doesn’t always match up with the speed of business today.

Kathy Mussio: Another challenge is the timing of public announcements. Companies don’t always want their names out there before they’ve secured a deal, but sometimes final approval requires the company to disclose. There can be a mismatch between when incentives need to be formally approved versus when companies are ready to announce.

To read the full, unedited transcript of this conversation, head to areadevelopment.com.

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11/27/24 2:19 PM

First Person

Steven Wu Area Development spoke with this seasoned executive who just joined the company, about scaling operations to meet the growing demand for battery recycling. Wu shared insights on workforce development, logistics challenges, and site selection, as well as the increasing pressure from the electric vehicle (EV) market and government incentives to boost onshore production. This conversation has been edited for space. Find the full conversation online at AreaDevelopment.com.

Area Development: You’re joining ABTC as COO at a “transformative stage.”

Can you tell us more about what that means and the specific goals you’re focusing on?

Steven Wu: I think of it as part of a company’s journey. Stage one is proof of concept—showing that the technology works. ABTC has done that through extensive R&D and partnerships, including one with BASF, a major player in chemical refining. Stage two is productmarket fit—securing customers who want what we produce.

Now, we’re at the transformative stage, where the focus is on scaling. We need to take the product we’ve developed, which has proven demand, and scale it for mass production. Our current plant is in Reno, and we’re expanding its capacity to meet demand. We’ve also received a $150 million Department of Energy grant to build a new facility in South Carolina, and our goal is to ensure we can generate revenue, scale operations, and lay the foundation for future growth.

AD: You mentioned that logistics is a critical part of your operations, especially as you scale. Can you talk more about the logistics challenges ABTC faces?

Steven Wu: It’s a big challenge. Think about the amount of freight, carts, trucks, 16 AREA DEVELOPMENT

D - First Person - Steven Wu.indd 16

COO of American Battery Technology Company (ABTC)

and loads that come into a facility like ours—it’s a massive chain. The logistics of moving materials, ensuring everything is processed efficiently, and scaling the workforce to support all that require significant capital. Additionally, we need to fund the ingestion process, create jobs, and build out a system that can handle the scale-up.

Our focus is on demonstrating success at our Reno facility. As we prove that we have a scalable process there, show strong revenue projections, and meet our goals, we’ll earn the right to secure more capital. That’s how we’ll continue to invest in future facilities and ensure that ABTC is set up for long-term success.

AD: Site selection is another critical factor. You’ve talked about the importance of selecting a strategic location for your second recycling plant. Can you explain what you’re looking for in a new site?

Steven Wu: The ideal location for any battery recycling facility needs to be near a partner. Logistics and transportation costs are huge factors in the recycling chain. Think about all the feed material coming in—Tesla cars that broke down, GM Chevy Bolts, or even random power generators using batteries from places like Wyoming—all that material must be aggregated. The location needs to be

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11/27/24 2:16 PM

strategic in terms of where you’re gathering these materials, but it also must be close to the partners you’ll be delivering the product to.

You don’t want to be located thousands of miles away from your customers.

Co-locating near a partner or another company is a high priority for us. We’ve got some public partnerships, but we’re also in private discussions with other potential partners that will help us determine the best location.

AD: Given the need for safe transportation of lithium batteries, what considerations are you making in terms of transport modalities?

Steven Wu: When it comes to transporting lithium batteries, safety is our top priority. We have to consider what’s the safest mode of transportation for these materials, especially since there are safety regulations that govern the handling and movement of lithium batteries. States also have different regulations around transporting these goods, so we need to be flexible in how we approach logistics.

Building strong relationships with the states is critical. We’ve developed a

very strong partnership with the Nevada Division of Environmental Protection, for example, and that’s allowed us to ensure that we’re complying with all regulations while building trust with local authorities.

We need to do the same when it comes to transportation partners, like rail companies. They need to feel confident that they can safely transport lithium-ion batteries, and it’s on us to ensure we’re meeting those safety standards.

Ultimately, the mode of transportation will vary depending on the state and the partners involved. It’s all about flexibility and working closely with both state regulators and transportation companies to make sure everyone feels comfortable and safe throughout the process.

AD: Workforce development is a crucial issue for manufacturing executives. How does ABTC approach building a highly productive and engaged workforce?

Steven Wu: One of the biggest opportunities is upskilling. In manufacturing, designing a production line is one thing, but maintaining and getting it to peak efficiency is a whole different challenge. We need to invest

in training programs that teach people not just to operate the line but to take ownership of it. The joy that comes from getting a line to operate at peak efficiency is just as important as chasing the next big technological innovation. We need to build training programs and university pipelines that focus on this mindset— teaching people that achieving 99.9 percent efficiency is just as valuable as developing the next big breakthrough.

We should also focus on developing reliability and repeatability in the machinery. Investing in people who care about those details is what will make U.S. manufacturing succeed. The companies that thrive are the ones that are obsessed with quality and efficiency and invest in their workforce to make sure they can achieve those goals.

The Assignment: Area Development spoke with Steven Wu, the newly appointed COO of ABTC, about scaling operations to meet the growing demand for battery recycling. Wu shared insights on workforce development, logistics challenges, and site selection, as well as the increasing pressure from the electric vehicle (EV) market and government incentives to boost onshore production. This conversation has been edited for space. Find the full conversation online at AreaDevelopment.com.

We’re committed to Economic Development and a clean energy future in New York State.

We offer a wide range of economic development grants, rate discount programs, and energy efficiency rebate programs to help grow your business.

Learn how our programs can benefit your business. Visit www.shovelready.com

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11/27/24 2:16 PM

Automation and AI

How Automation Can Close the Labor Gap Enhancing efficiency, worker safety and preparing the workforce for the future.

By Courtney Dunbar, Director of Site Selection, & Alfredo Valadez, Automation Consultant and Project Manager, Burns & McDonnell

I

ndustrial automation and robotics offer huge benefits to manufacturing and warehouse distribution and fulfilment operations. This is not a new concept; articles going back decades have explained how these applications can improve quality and consistency, optimize productivity and throughput, increase worker safety, and reduce direct labor cost.

The topic has gained currency and urgency in today’s dynamic industrial landscape because of the dramatic labor gap in the U.S. The gap is a critical issue affecting the U.S. economy, and automation and robotics can be a strong part of the solution.

About the Labor Gap

Entering the summer, there were 8.1 million job openings in the U.S. but only 6.8 million unemployed workers, according to the U.S. Chamber of Commerce. Even if the country achieved an unrealistic 0 percent unemployment level, millions of open positions would remain.

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Workforce participation is a contributing factor; the labor force participation rate recently stood at 62.7 percent, down from 63.3 percent just before the COVID-19 pandemic and 67.2 percent in January 2001.

Traditional labor models are facing unprecedented challenges.

Factors such as an aging workforce, skill shortages and evolving market demands have created a pressing need for innovative solutions to close the labor gap.

Addressing these demographic challenges to bridge the gap will require strategic efforts. By analyzing workforce demographics, skill requirements and industry trends, manufacturers can identify the specific pain points impeding productivity and growth and putting business continuity at risk. Automation and robotics stand out as potentially transformative tools to supplement the existing workforce to provide efficiency, scalability and adaptability to fill the labor gap and meet the demands of modern manufacturing.

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11/25/24 2:14 PM

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Automation and AI Enabling More Effective Resources

Automation technologies encompass a spectrum of solutions, ranging from semiautomated machines and autonomous vehicles to fully automated warehouses as well as advanced systems driven by artificial intelligence (AI). Through strategic deployments, manufacturers can optimize workflows, minimize downtime and enhance output consistency. Automated processes also mitigate reliance on manual labor, thereby reducing the impact of workforce fluctuations.

Automated firms tend to become more productive, which can enable them to keep costs from increasing and thus keep product pricing competitive. Growing sales can drive business expansion and increase employment accordingly.

In contrast, failing to address the labor gap with automation could result in a loss of sales because of potential production capacity reduction. Those who do not invest in technology and suffer from lower productivity risk declining business, which can lead to layoffs.

By automating challenging tasks, turnover dropped below 10 percent.

Applications of automation extend beyond traditional manufacturing domains — they can include related sectors such as logistics, healthcare and agriculture. From warehouse automation for distribution and fulfilment operations to surgical robotics, there are numerous ways robotics and automation can revolutionize operations in diverse settings.

Despite common popular misconceptions, automation is much more about job evolution than job displacement or elimination.

The Association for Advancing Automation (A3) has found a strong correlation between increasing industrial robot shipments and civilian employment over the last few decades. As repetitive tasks become automated, the workforce can focus on higher-value activities, such as process optimization, data analysis and strategic decision-making.

Reduction in a company’s building footprint traceable to automation Automation technology tends to work for specific tasks, rather than all tasks within a job, according to a 2020 report from the Brookings Institution. It is rare for entire jobs to be eliminated because of automation.

Upskilling initiatives and workforce development programs have a pivotal role to play in empowering employees to leverage these newer technologies effectively. Strategic planning for the use of automation should also focus on moving workers away from monotonous, ergonomically challenging and dangerous tasks.

In one example of the efficiencies that can be unlocked through automating warehouse operations, we found that one large consumer goods company we studied could reduce the footprint in the building by 65 percent. These reductions could free up significant space to establish additional manufacturing or warehouse operations.

We also recently helped a food manufacturer that had been experiencing a high turnover rate in its packing and palletizing operations, which had been forcing it to use contract labor to offset the gap in full-time employees. By automating ergonomically challenging and monotonous tasks — and training the manufacturer’s operators to run the automation equipment — the manufacturer was able to reduce its turnover rate to below 10 percent, securing and enhancing several permanent positions.

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Preparing for the Potential

While the benefits of automation are compelling, implementation hurdles abound, ranging from capital expenditure considerations to the intricacies of technological integration. Upfront investment can be substantial, depending in part on the complexity of the processes being automated.

Manufacturers can navigate these challenges by fostering a culture of innovation, collaborating with technology partners and leveraging industry best practices. Steps that area developers and manufacturers can take to establish an appropriate automation strategy to optimize operations and mitigate potential labor gaps include: • Develop master plans that incorporate automation where it makes sense. Not all processes require automation. For example, if a company is co-manufacturing various products at very low production volumes, it might not make sense to automate due to technical complexity and high costs. However, intensive and repetitive tasks are good candidates for automation because they offer higher ROIs. • Support organizations that help train the technology-based workforce of the future. This could include local universities, community colleges and other organizations that offer training for automation.

• Explore existing and emerging technology solutions that can help automate current processes. Achieve this by attending industry conferences, researching suppliers — more easily achieved now with the support of generative AI — as well as hiring consultants with in-depth knowledge to help identify potential solutions.

• Offer training programs for current employees. Such programs can help prepare teams to support automation and automated processes.

While the labor gap in manufacturing poses many opportunities, it ultimately serves as a catalyst for transformation. Through strategic investments in automation and robotics — and workforce education and upskilling — manufacturers can maintain business continuity while achieving new levels of efficiency, agility and competitiveness. Prioritizing workforce empowerment and technological integration will help them attain the vision of a harmonious future in which humans and machines collaborate synergistically and unlock ongoing value. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:14 PM

Best Practices in Incentives Procurement Securing economic development incentives is a key part of site selection strategies. The right incentives can offset costs, speed up timelines, and support long-term growth. However, the process is often complex and full of challenges. Transparency, strategic timing, and due diligence are essential. Area Development Guest Editors Kathy Mussio and Amy Gerber, rounded up industry leaders to share their best practices for navigating economic development incentives.

Clarity and Transparency in Incentive Offers Dianne Jones,

Managing Director, Business and Economic Incentives, JLL

Incentives don’t make a bad location good, but they can make a good one great—if clearly presented. Dianne Jones highlights the need for detailed incentive offers from the outset. Vague offers can lead to delays. “Clarity and transparency lay the groundwork for enduring partnerships,” Jones says. The best incentive offers include projected annual benefits, draft agreements, and compliance details.

This fosters mutual trust and clear expectations.

Strategic Planning and Compliance Minah Hall,

Partner, Compass Key Solutions

Incentives must align with a company’s broader strategy. Minah Hall advises determining upfront what the company values most—whether tax savings, cash grants, or infrastructure improvements.

Equally important is planning for compliance, which can be overlooked. “The time investment upfront and ongoing monitoring can pay dividends throughout the incentives lifecycle,” Hall notes.

Early planning for compliance reporting is crucial.

Timing is Everything in Incentives Procurement Stephanie Yarbrough, KS Law

Timing plays a crucial role in incentive success. Stephanie Yarbrough emphasizes the importance of aligning project schedules with state and local approval processes. Companies should avoid hiring or announcing projects prematurely. “Premature disclosures can jeopardize the entire deal,” she warns.

Timing considerations should be central to any incentives negotiation.

Simplicity and Flexibility for Long-Lasting Programs

Building Partnerships Through Due Diligence Monty Turner,

Lindsey M. Cannon,

Senior Vice President, Principal, Colliers Site Selection

Economic development incentives should be simple yet flexible. “Cash is king, but time is also money,” says Lindsey M. Cannon, urging governments to streamline application processes and offer quicker approvals. Cannon highlights South Carolina’s annually updated tax incentive manual as a valuable resource, demonstrating how clarity and simplicity benefit both companies and governments.

Building strong relationships is key to successful incentive negotiations, according to Monty Turner. “We approach each community as a potential partner,” Turner says. Site selectors should foster longterm relationships based on mutual respect and clear communication.

These relationships help align interests, ensuring success beyond the initial groundbreaking.

Quest Site Solutions

MultiDisciplinary Approach to Incentive Compliance Eric Dantzler,

Director of Incentives Compliance, Atlas Insight

Incentive compliance is a long-term effort requiring coordination across teams. Eric Dantzler stresses the need for clear planning and continuity in personnel handling compliance. On the government side, best practices include regular communication, clear guidelines, and proactive administration. This ensures that companies can confidently access the incentives they’ve earned.

The Takeaway

Experts agree: securing and managing economic development incentives requires clear communication, thorough planning, and strong relationships. By focusing on transparency, timing, and compliance, companies can maximize the value of incentives and foster long-term partnerships with communities.

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11/27/24 2:15 PM

Kentucky’s Investment in Quality Sites is an Investment in its Future We prioritize development-ready sites to attract businesses and jobs

By Kentucky Cabinet for Economic Development

I

n Kentucky, economic momentum is laying the groundwork for future growth. The past four years have marked an unparalleled period of economic success, with over 1,000 private-sector new-location and expansion projects announced, totaling more than $32.8 billion in investments and creating over 55,000 jobs.

This success stems from Gov. Andy Beshear’s leadership and the state’s business-friendly environment, including its ideal location, skilled workforce, and focus on speed-to-market initiatives.

Kentucky’s emphasis on site development has driven continuous investment in communities across the state. As the economy grows, so does the need for businesses to expand, bringing quality jobs and opportunities with them.

Leadership in Kentucky has aggressively addressed the growing demand for speed-to-market solutions, expediting project timelines in ways other states cannot match. This has opened doors to significant investment and job creation.

“In Kentucky, we know how important it is for your company to get up and running quickly,” Gov. Beshear said. “That is why we are working closely with existing businesses and prospective companies to ensure they have every advantage to start turning a profit as fast as possible. We’re growing together here in the commonwealth.”

Build-Ready and KPDI: Catalysts for Growth

Kentucky’s site selection initiatives, led by Build-Ready sites and the Kentucky Product Development Initiative (KPDI) program, are paving the way for future development.

KPDI, launched in partnership between the Kentucky Cabinet for Economic Development and the Kentucky Association

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for Economic Development, provides matching funds for communities to upgrade sites and buildings. During the program’s initial round, 82 projects were approved for over $62 million in funding, generating $426 million through local contributions.

An additional $33 million was allocated this year to support 30 more projects.

In 2024, the General Assembly approved $70 million in KPDI funding to sustain the commonwealth’s economic momentum and provide prospective companies with high-quality sites that encourage growth.

Transformative Results

The KPDI program has supported transformative projects, including Build-Ready-certified sites, which ensure that construction can begin immediately. To qualify, sites must include essential infrastructure, a building pad, and permits for development.

In August, Kentucky announced its largest Build-Ready site in Henderson County, featuring a building pad with over 1.1 million square feet of available space. The $1.4 million project received $700,000 in KPDI funding.

To date, 12 Build-Ready sites have been selected for new-location projects, enabling companies to start operations efficiently while creating jobs for Kentuckians.

Adding to these resources is SelectKentucky.com, a comprehensive tool for site selectors to identify the perfect location for any project.

Kentucky’s commitment to speed-to-market development ensures the state remains a top choice for businesses, fostering continued economic success and high-wage job opportunities.

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11/26/24 4:04 PM

‘Tis the Season for Overnight Shipping

CED.KY.GOV

Even Saint Nick knows Kentucky is the best location to ship products anywhere in the world in a single night C E D. KY. G OV

U.S. Cities on the Rise Amid an Economic Reshuffling

By Area Development Research Desk, and Chmura Economics & Analytics

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for free site information, visit us online at www.areadevelopment.com

11/27/24 1:49 PM

A

Area Development’s 2024 Leading Metro Locations report reveals shifting dynamics in America’s cities

merica’s metropolitan areas are resilient, and adaptable, but the economic power of the United States has been shifting to some new and surprising cities.

Area Development’s 2024 Leading Metro Locations report, compiled with data from Chmura Economics & Analytics, provides an in-depth look at which cities are thriving, which regions are gaining ground, and what key factors are driving growth in today’s economic landscape.

With a special emphasis on factors like prime workforce availability, economic strength, and affordability, this year’s report offers helpful insights for corporate site selectors, businesses looking to expand, and economic development professionals nationwide.

Top Overall Performers: Steady Growth and Rising Stars

Unsurprisingly, some of the most familiar cities remain at the top of the list, but the 2024 rankings also reveal several emerging hotspots that are gaining ground in the evercompetitive world of economic development.

Leading the overall rankings, Brownsville-Harlingen, TX, takes the top spot, reflecting the growing economic significance of the Southwest, particularly thanks to the SpaceX effect. The company’s operations in nearby Boca Chica have transformed Brownsville into a high-tech manufacturing hub, with SpaceX investing more than $3 billion in infrastructure and driving job growth across the region. With over 21,000 indirect jobs supported and a growing focus on advanced manufacturing, Brownsville exemplifies how strategic investments in key industries can propel smaller metros to national prominence.

“The number of SpaceX jobs has helped Brownsville stand out in the research—job ads are a leading indicator of future employment, and SpaceX accounts for more than 12% of total job STEM job ads in the metro area, ” says Patrick Clapp, a Senior Economist at Chmura Economics. The Starbase complex in Boca Chica, the sole private facility for SpaceX, is focused on commercial launches, and “the additional regional spending from high-wage jobs generates ripple impacts that support additional growth in the area.”

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11/27/24 1:50 PM

Leading Metro Locations 2024

Top 50 Metro Locations Rank 1

MSA Brownsville-Harlingen, TX

Region

Size

Total Score

Prime Workforce Score

Economic Strength Score

Southwest

Small

81.7

93.1

88.6

2

Miami-Miami Beach-Kendall, FL

South Atlantic

Large

81.4

88.8

92.6

3

Olympia-Lacey-Tumwater, WA

Pacific

Small

76.2

94.0

82.2

4

Tallahassee, FL

South Atlantic

Small

75.9

93.1

82.8

5

Gainesville, GA

South Atlantic

Small

75.6

93.4

82.2

6

Savannah, GA

South Atlantic

Small

74.0

89.7

84.3

7

Wildwood-The Villages, FL

South Atlantic

Small

73.6

96.1

77.5

8

Chattanooga, TN-GA

South

Medium

72.9

89.7

83.2

9

Houma-Bayou Cane-Thibodaux, LA

South

Small

72.2

86.1

86.2

10

Bend, OR

Pacific

Small

72.1

93.3

78.7

11

Topeka, KS

Plains

Small

71.6

86.3

85.3

South Atlantic

Large

71.2

91.4

79.8

Southwest

Small

70.3

90.4

79.9

South Atlantic

Small

69.9

95.8

74.2 83.8

12

West Palm Beach-Boca Raton-Delray Beach, FL

13

College Station-Bryan, TX

14

Punta Gorda, FL

15

Michigan City-La Porte, IN

Midwest

Small

69.7

85.9

16

Salt Lake City-Murray, UT

Mountain

Medium

69.5

91.2

78.3

17

St. Petersburg-Clearwater-Largo, FL

South Atlantic

Medium

69.3

93.3

75.9

18

Lake Havasu City-Kingman, AZ

19

Hammond, LA

20

Fort Lauderdale-Pompano Beach-Sunrise, FL

Southwest

Small

69.2

90.2

79.0

South

Small

69.2

85.6

83.6

South Atlantic

Large

69.0

87.1

81.9

21

El Paso, TX

Southwest

Medium

68.9

86.6

82.3

22

Burlington, NC

South Atlantic

Small

68.7

82.1

86.6

23

Palm Bay-Melbourne-Titusville, FL

South Atlantic

Medium

68.7

93.7

75.0

24

Auburn-Opelika, AL

South

Small

68.5

90.0

78.5

25

Wenatchee-East Wenatchee, WA

Pacific

Small

68.3

89.3

79.0

26

Stockton-Lodi, CA

Pacific

Medium

68.2

85.3

83.0 76.3

27

St. George, UT

28

Sebastian-Vero Beach-West Vero Corridor, FL

29

Ogden, UT

30

San Angelo, TX

31

Naples-Marco Island, FL

32

Mountain

Small

68.1

91.8

South Atlantic

Small

68.0

88.7

79.2

Mountain

Medium

67.9

89.5

78.5

Southwest

Small

67.8

87.5

80.2

South Atlantic

Small

67.5

92.9

74.7

Missoula, MT

Mountain

Small

66.6

94.9

71.8

33

El Centro, CA

Pacific

Small

66.2

90.3

75.9

South Atlantic

Medium

66.0

91.5

74.5

Midwest

Small

66.0

84.5

81.5

34

Deltona-Daytona Beach-Ormond Beach, FL

35

Kenosha, WI

36

North Port-Bradenton-Sarasota, FL

South Atlantic

Medium

65.7

93.8

71.9

37

Goldsboro, NC

South Atlantic

Small

65.7

85.1

80.6

South Atlantic

Medium

65.6

88.9

76.7

Southwest

Medium

65.6

83.5

82.1

38

Cape Coral-Fort Myers, FL

39

McAllen-Edinburg-Mission, TX

40

Las Vegas-Henderson-North Las Vegas, NV

Mountain

Large

65.6

85.4

80.1

41

Corpus Christi, TX

Southwest

Small

65.4

82.6

82.8

South Atlantic

Small

65.3

87.5

77.8

Plains

Small

65.1

91.5

73.6

42

Huntington-Ashland, WV-KY-OH

43

Rapid City, SD

44

Tuscaloosa, AL

South

Small

65.0

90.1

75.0

45

Grand Island, NE

Plains

Small

64.9

89.7

75.3

46

Tampa, FL Metro Div

South Atlantic

Large

64.9

90.1

74.8

47

Brunswick-St. Simons, GA

South Atlantic

Small

64.8

82.4

82.4

48

Lafayette-West Lafayette, IN

Midwest

Small

64.4

84.3

80.0

South Atlantic

Medium

64.2

91.0

73.1

Mountain

Small

64.1

93.3

70.8

49

Charleston-North Charleston, SC

50

Helena, MT

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11/26/24 4:19 PM

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Leading Metro Locations 2024

Big / Giant Metro Metro Locations Top 15 Rank

Total Score

MSA

Overall Rank

1

Miami-Miami Beach-Kendall, FL Metro Div

81.4

2

2

West Palm Beach-Boca Raton-Delray Beach, FL Metro Div

71.2

12

3

Fort Lauderdale-Pompano Beach-Sunrise, FL Metro Div

69.0

20

4

Las Vegas-Henderson-North Las Vegas, NV

65.6

40

5

Tampa, FL Metro Div

64.9

46

6

Phoenix-Mesa-Chandler, AZ

62.6

54

7

Austin-Round Rock-San Marcos, TX

62.3

55

8

Dallas-Plano-Irving, TX Metro Div

62.1

56 63

9

Orlando-Kissimmee-Sanford, FL

61.3

10

Nashville-Davidson--Murfreesboro--Franklin, TN

60.1

76

11

San Antonio-New Braunfels, TX

57.3

108

12

Fort Worth-Arlington-Grapevine, TX Metro Div

57.0

94

13

Houston-Pasadena-The Woodlands, TX

55.9

110

14

Seattle-Bellevue-Kent, WA Metro Div

55.7

120

15

Philadelphia, PA Metro Div

54.6

135

Other top overall performers include Salt Lake City, UT, and Miami-Miami Beach-Kendall, FL, two metros that have consistently ranked highly because of their balanced economic growth, diverse industries, and ability to attract high-skilled labor.

Salt Lake City stands out for its long-term resilience, having shown steady economic growth across

Nearly four years after COVID locked down the U.S. economy, the top 50 Leading Metro Locations in 2024 still depict the ripple effect of the shift to remote work. The large population and business centers of New York City, Los Angeles, and San Francisco were again absent from the top 50 list. Only five large metro areas were scattered among the top 50 and four of them were in Florida where social distancing rules were relatively lax during COVID. Outside of Florida, Las Vegas was the remaining large metro area ranked 40th overall.

Small population regions dominated the top 50 list with 33 metro areas. Leading the list is the small metro area of Brownsville, Texas which catapulted from a ranking of 17 in 2023 to first in 2024. It benefited from large growth in STEM job ads and advanced industry job growth thanks in large part to SpaceX. Rounding out the top three metros, Miami, Florida inched up from fourth in 2023 to second in 2024. Olympia, Washington slipped to third in 2024 from a second-place ranking in 2023.

tech, healthcare, and finance sectors. Miami, on the other hand, continues to attract major investments in tech and climate innovation, solidifying its reputation as a second-tier tech hub with a focus on climate resilience and fintech​.

Prime Workforce Availability: The Cities Attracting Top Talent

One of the strongest indicators of a metro’s economic health is the availability of a prime workforce, and the 2024 report highlights several metros that are excelling in this regard. Salt Lake City ranks highly because of its strong educational institutions, affordable cost of living, and diversified industries, all of which have made it a magnet for tech talent. Similarly, Olympia-LaceyTumwater, WA, which secured the No. 3 spot in the overall rankings, has become a key player in the STEM fields, particularly in research and development and advanced manufacturing. With a wellmatched workforce for critical industries, Olympia has established itself as a hub for long-term growth.

Meanwhile, cities like Austin, TX, and Seattle, WA, lag in workforce strength even though they are bolstered by major tech companies like Amazon and Microsoft and enjoy a strong pipeline of talent from local universities. Austin’s rank belies its reputation as a tech startup haven with an influx of venture capital and high-salary job opportunities​.

Two of the top three metro areas in 2023 dropped significantly in 2024. First ranking Salt Lake City, Utah fell to sixteenth in 2024 as relative growth in advanced industries did not keep up with other metro areas. Decatur, Alabama plummeted to a ranking of 152 as COVID reshuffling led to a decline in working age population and an increase in youth and retirees. Growth in STEM jobs over the last few years was relatively low and the unemployment rate did not decline as much when compared to other metro areas.

The South Atlantic region was by far the most attractive location with 21 metros in the top 50 followed by the Southwest region with six of the metros in Texas and the seventh in Arizona. Only two regions were not represented in the top 50 locations. The Mid-Atlantic failed to make the list with Buffalo-Cheektowaga, New York ranking the highest at 70 with a score of 60.7. New England was also absent with Norwich-New London, Connecticut scoring 61.2 and ranking 64.

Dr. Chris Chmura Founder, CEO, and Chief Economist, Chmura Economics & Analytics 28 AREA DEVELOPMENT

A - Leading Metro Locations.indd 28

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Leading Metro Locations 2024

Medium Metro Locations

Top 15 Total Score

Overall Rank

Chattanooga, TN-GA

72.9

8

2

Salt Lake City-Murray, UT

69.5

16

3

St. Petersburg-Clearwater-Largo, FL Metro Div

69.3

17

4

El Paso, TX

68.9

21

Rank 1

MSA

5

Palm Bay-Melbourne-Titusville, FL

68.7

22

6

Stockton-Lodi, CA

68.2

26 29

7

Ogden, UT

67.9

8

Deltona-Daytona Beach-Ormond Beach, FL

66.0

34

9

North Port-Bradenton-Sarasota, FL

65.7

36

10

Cape Coral-Fort Myers, FL

65.6

38

11

McAllen-Edinburg-Mission, TX

65.6

39

12

Charleston-North Charleston, SC

64.2

49

13

Port St. Lucie, FL

61.3

62

14

Spokane-Spokane Valley, WA

61.1

65

15

Wichita, KS

61.1

66

Small Metro Locations

Top 30

MSA

Total Score

1

Brownsville-Harlingen, TX

81.7

1

2

Olympia-Lacey-Tumwater, WA

76.2

3

Rank

Overall Rank

3

Tallahassee, FL

75.9

4

4

Gainesville, GA

75.6

5 6

5

Savannah, GA

74.0

6

Wildwood-The Villages, FL

73.6

7

7

Houma-Bayou Cane-Thibodaux, LA

72.2

9 10

8

Bend, OR

72.1

9

Topeka, KS

71.6

11

10

College Station-Bryan, TX

70.3

13

11

Punta Gorda, FL

69.9

14

12

Michigan City-La Porte, IN

69.7

15

13

Lake Havasu City-Kingman, AZ

69.2

18

14

Hammond, LA

69.2

19 22

15

Burlington, NC

68.7

16

Auburn-Opelika, AL

68.5

24

17

Wenatchee-East Wenatchee, WA

68.3

25

18

St. George, UT

68.1

27

19

Sebastian-Vero Beach-West Vero Corridor, FL

68.0

28

20

San Angelo, TX

67.8

30

21

Naples-Marco Island, FL

67.5

31

22

Missoula, MT

66.6

32

23

El Centro, CA

66.2

33

24

Kenosha, WI

66.0

35

25

Goldsboro, NC

65.7

37

26

Corpus Christi, TX

65.4

41

27

Huntington-Ashland, WV-KY-OH

65.3

42

28

Rapid City, SD

65.1

43

29

Tuscaloosa, AL

65.0

44

30

Grand Island, NE

64.9

45

30 AREA DEVELOPMENT

A - Leading Metro Locations.indd 30

Economic Strength: Long-Term Stability in Key Regions

In terms of economic strength, the 2024 report emphasizes the importance of long-term stability and the ability to sustain growth across multiple sectors. Salt Lake City and Brownsville-Harlingen not only excel in attracting talent but also in maintaining stable economic growth across diverse industries, from aerospace to advanced manufacturing. Similarly, Tallahassee, FL, has emerged as a surprise contender, benefiting from its strong government and education sectors, which provide a stable foundation even during broader economic upheavals​.

One of the more unexpected results is the high performance of El Centro, CA, one of the few California cities to rank strongly, largely due to its affordable housing and strategic location near the U.S.-Mexico border, which supports its robust logistics and trade industry​.

“Digging into the story behind the economic fundamentals revealed some exciting opportunities in the region,” says Clapp. The Salton Sea in El Centro contains the highest concentration of lithium in geothermal brines in the world. Lithium is a key component of batteries in electric vehicles, smartphones, and clean energy technologies. But unfortunately, just 1 percent of global supply is from the U.S, he explained.

The federal government is putting millions of dollars in investments to secure a domestic supply, and this area has enough to meet domestic and even global demand for decades. The Department of Energy calls it potentially among the most important energy projects of the 21st century. As Clapp summarized, “in addition to the existing strengths in advanced manufacturing and

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Plains Region

Leading Metro Locations 2024

Rank

Mountain Region MSA

Total Score

Overall Rank

1

Salt Lake City-Murray, UT

69.5

16

2

St. George, UT

68.1

27

3

Ogden, UT

67.9

29

4

Missoula, MT

66.6

32

5

Las Vegas-Henderson-North Las Vegas, NV

65.6

40

6

Helena, MT

64.1

50

Rank

7

Lewiston, ID-WA

62.0

57

8

Cheyenne, WY

59.4

85

9

Reno, NV

58.7

88

10

Casper, WY

58.2

92

MSA

Total Score

Overall Rank

1

Topeka, KS

71.6

11

2

Rapid City, SD

65.1

43

3

Grand Island, NE

64.9

45

4

Wichita, KS

61.1

66

5

Minot, ND

60.2

75

6

Grand Forks, ND-MN

57.8

99

7

Manhattan, KS

57.8

100

8

Lincoln, NE

57.2

109

9

Lawrence, KS

52.1

180

10

Fargo, ND-MN

44.6

266

Pacific Region Rank

MSA

Total Score

Overall Rank

1

Olympia-Lacey-Tumwater, WA

76.2

3

2

Bend, OR

72.1

10

3

Wenatchee-East Wenatchee, WA

68.3

25

4

Stockton-Lodi, CA

68.2

26

5

El Centro, CA

66.2

33

6

Redding, CA

63.3

53

7

Spokane-Spokane Valley, WA

61.1

65

8

Tacoma-Lakewood, WA Metro Div

59.0

86

9

Longview-Kelso, WA

56.3

116

10

Seattle-Bellevue-Kent, WA Metro Div

55.7

120

Southwest Region Rank

Total Score

MSA

Overall Rank

1

Brownsville-Harlingen, TX

81.7

1

2

College Station-Bryan, TX

70.3

13

3

Lake Havasu City-Kingman, AZ

69.2

18

4

El Paso, TX

68.9

21

5

San Angelo, TX

67.8

30

6

McAllen-Edinburg-Mission, TX

65.6

39

7

Corpus Christi, TX

65.4

41

8

Phoenix-Mesa-Chandler, AZ

62.6

54

9

Austin-Round Rock-San Marcos, TX

62.3

55

10

Dallas-Plano-Irving, TX Metro Div

62.1

56

Over the last five years there has been a record number of industrial project announcements, with a heavy focus on electric vehicles and battery, clean tech and green energy. Whether related to the large acreage, infrastructure or cost requirements, many of these projects have located in small metro locations.

The 2024 metro rankings reflect a number of small metros that have successfully attracted these industrial projects or are within a commuting distance of these projects. Burlington, NC moved up 120 positions from last year’s ranking. In 2022, Burlington announced 8 new projects and it is clear that the workforce is growing as a result.

Similarly, Savannah was ranked 154th last year and has improved to 6th this year. With Savannah’s success in attracting notable companies such as Hyundai, there is a tremendous amount of energy in attracting new workforce, expanding training opportunities and creating new real estate opportunities.

Another interesting observation, with the shift to remote work during COVID that brought on the wave of relocations out of many of the large metro areas, with so many companies announcing return to office it will be interesting to see how that affects next year’s rankings.

By Amy Gerber Executive Managing Director · Cushman & Wakefield 32 AREA DEVELOPMENT

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Midwest Region Rank

New England Region Rank

MSA

Total Score

Overall Rank

1

Norwich-New London, CT

61.2

64

2

Bangor, ME

51.7

186

3

Barnstable Town, MA

50.4

200

4

Portland-South Portland, ME

50.0

204

5

Worcester, MA

47.0

232

6

Boston, MA Metro Div

46.7

237

7

New Haven-Milford, CT

44.3

272

8

Pittsfield, MA

44.2

273

9

Amherst Town-Northampton, MA

44.1

275

10

Providence-Warwick, RI-MA

42.8

299

Total Score

MSA

Overall Rank

1

Michigan City-La Porte, IN

69.7

15

2

Kenosha, WI

66.0

35

3

Lafayette-West Lafayette, IN

64.4

48

4

Janesville-Beloit, WI

61.6

58 67

5

Bowling Green, KY

61.0

6

Racine-Mount Pleasant, WI

61.0

72

7

Bloomington, IL

60.6

60

8

Sheboygan, WI

59.5

83

9

Lexington-Fayette, KY

58.3

90

10

Lansing-East Lansing, MI

58.3

91

11

Youngstown-Warren, OH

57.8

98

12

Paducah, KY-IL

57.4

106

13

Kalamazoo-Portage, MI

55.4

125

14

Champaign-Urbana, IL

54.9

128

15

Muskegon-Norton Shores, MI

54.5

137

16

Grand Rapids-Wyoming-Kentwood, MI

54.5

139

17

Mankato, MN

54.1

147

18

Springfield, OH

54.1

148

19

Flint, MI

54.1

149

20

Indianapolis-Carmel-Greenwood, IN

53.9

150

21

Canton-Massillon, OH

53.7

154

22

Springfield, IL

53.3

158 160

23

Appleton, WI

53.2

24

Iowa City, IA

53.0

167

25

Duluth, MN-WI

51.9

182

Mid Atlantic Region Rank

MSA

Total Score

Overall Rank 70

1

Buffalo-Cheektowaga, NY

60.7

2

Albany-Schenectady-Troy, NY

60.6

71

3

Altoona, PA

57.5

103

4

Lexington Park, MD

56.7

113

5

Trenton-Princeton, NJ

55.5

121

6

Lebanon, PA

55.0

127

7

Utica-Rome, NY

54.8

130

8

Philadelphia, PA Metro Div

54.6

135

9

Allentown-Bethlehem-Easton, PA-NJ

54.5

140

10

Lancaster, PA

54.3

143

South Atlantic Region Rank

South Region Rank

MSA

Total Score

Overall Rank

1

Chattanooga, TN-GA

72.9

8

2

Houma-Bayou Cane-Thibodaux, LA

72.2

9

3

Hammond, LA

69.2

19

4

Auburn-Opelika, AL

68.5

24

5

Tuscaloosa, AL

65.0

44

6

Daphne-Fairhope-Foley, AL

61.4

61

7

Knoxville, TN

60.8

69

8

Nashville-Davidson--Murfreesboro--Franklin, TN

60.1

76

9

Montgomery, AL

60.1

77

10

Dothan, AL

59.7

78

MSA

Total Score

Overall Rank 2

1

Miami-Miami Beach-Kendall, FL Metro Div

81.4

2

Tallahassee, FL

75.9

4

3

Gainesville, GA

75.6

5 6

4

Savannah, GA

74.0

5

Wildwood-The Villages, FL

73.6

7

6

West Palm Beach-Boca Raton-Delray Beach, FL Metro Div

71.2

12 14

7

Punta Gorda, FL

69.9

8

St. Petersburg-Clearwater-Largo, FL Metro Div

69.3

17

9

Fort Lauderdale-Pompano Beach-Sunrise, FL Metro Div

69.0

20

10

Burlington, NC

68.7

22

11

Palm Bay-Melbourne-Titusville, FL

68.7

22

12

Sebastian-Vero Beach-West Vero Corridor, FL

68.0

28

13

Naples-Marco Island, FL

67.5

31

14

Deltona-Daytona Beach-Ormond Beach, FL

66.0

34

15

North Port-Bradenton-Sarasota, FL

65.7

36

16

Goldsboro, NC

65.7

37

17

Cape Coral-Fort Myers, FL

65.6

38

18

Huntington-Ashland, WV-KY-OH

65.3

42

19

Tampa, FL Metro Div

64.9

46

20

Brunswick-St. Simons, GA

64.8

47

21

Charleston-North Charleston, SC

64.2

49

22

Parkersburg-Vienna, WV

64.0

51

23

Myrtle Beach-Conway-North Myrtle Beach, SC

63.7

52

24

Greenville, NC

61.4

59

24

Jacksonville, NC

61.4

59

AREA DEVELOPMENT 33

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Leading Metro Locations 2024

Prime Workforce Score Rank

MSA

Top 30 Prime Workforce Score

1

Wildwood-The Villages, FL

96.1

2

Punta Gorda, FL

95.8

3

Myrtle Beach-Conway-North Myrtle Beach, SC

95.4

4

Missoula, MT

94.9

5

Logan, UT-ID

94.2

6

Olympia-Lacey-Tumwater, WA

94.0 93.8

7

North Port-Bradenton-Sarasota, FL

8

Palm Bay-Melbourne-Titusville, FL

93.7

9

Gainesville, GA

93.4

10

St. Petersburg-Clearwater-Largo, FL Metro Div

93.3

11

Bend, OR

93.3

12

Helena, MT

93.3

13

Tallahassee, FL

93.1

14

Brownsville-Harlingen, TX

93.1

15

Sebring, FL

93.0

16

Naples-Marco Island, FL

92.9 92.7

17

Lewiston, ID-WA

18

St. George, UT

91.8

19

Rapid City, SD

91.5

20

Deltona-Daytona Beach-Ormond Beach, FL

91.5

21

West Palm Beach-Boca Raton-Delray Beach, FL Metro Div

91.4

22

Salt Lake City-Murray, UT

91.2

23

Charlottesville, VA

91.0

24

Charleston-North Charleston, SC

91.0

25

Sherman-Denison, TX

90.8

26

Clarksville, TN-KY

90.8

27

Pinehurst-Southern Pines, NC

90.7

28

Austin-Round Rock-San Marcos, TX

90.6

29

Waco, TX

90.6

30

College Station-Bryan, TX

90.4

When we examine the rankings of Area Development’s 2024 Leading Metro Locations report, it’s quite clear; simply put, companies want to locate and expand in places where people want to move to and live. Based on the Report, small and medium metros are winning… by a landslide. In fact, the only large metro making the top 10 was Miami at #2. Moreover, there were only a mere three large metros in the entire top 40, with Fort Lauderdale coming in at #20 and Las Vegas at #40. This preference for small to medium size metros can largely be attributed to the fact that they continue to be more attractive to talent, with lower cost of living, including more affordable housing options. What was surprising in the Report is that the Northeast - from New England down to the

logistics in the region, this supply of a critical element has the potential to completely reshape the region.”

Small, Medium, and Large Metro Leaders

When looking at metros by size, the 2024 report reveals interesting dynamics across small, medium, and large metro areas.

• Small Metro Leaders: Brownsville-Harlingen, TX, tops the list for small metros, powered by its high-tech investments and proximity to SpaceX’s operations. Olympia, WA, also emerges as a top contender in this category, benefiting from its growing STEM industries and relatively affordable housing market​in the Pacific region.

Mid-Atlantic – ranked so poorly that the highest ranking of a metro for the entire area was Norwich-New London, and it was ranked only #64. The Southeast unsurprisingly continues to be the preferred area of the country, taking all but three of the top 10 spots. The perception of the Southeast as a lower cost location and a place that people want to live is actually reality, as the Southeast for more than 10 years has seen an influx of business and population. The throughout the rankings of small to medium metros preferred over large metros is not surprising. For the past several years, Atlas Insight’s site selection projects have had our clients preferring - and landing - in small and medium markets much more frequently than in large cities.

By Kathy Mussio

34 AREA DEVELOPMENT

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Leading Metro Locations 2024

Economic Strength Rankings Rank

MSA

Top 30 Economic Strength Score

1

Miami-Miami Beach-Kendall, FL Metro Div

92.6

2

Brownsville-Harlingen, TX

88.6

3

Burlington, NC

86.6

4

Houma-Bayou Cane-Thibodaux, LA

86.2 85.3

5

Topeka, KS

6

Janesville-Beloit, WI

84.7

7

Savannah, GA

84.3

8

Michigan City-La Porte, IN

83.8

9

Hammond, LA

83.6

10

Chattanooga, TN-GA

83.2

11

Stockton-Lodi, CA

83.0

12

Tallahassee, FL

82.8

13

Corpus Christi, TX

82.8

14

Brunswick-St. Simons, GA

82.4

15

El Paso, TX

82.3

16

Olympia-Lacey-Tumwater, WA

82.2 82.2

17

Gainesville, GA

18

McAllen-Edinburg-Mission, TX

82.1

19

Fort Lauderdale-Pompano Beach-Sunrise, FL Metro Div

81.9

20

Kenosha, WI

81.5

21

Goldsboro, NC

80.6

22

Minot, ND

80.3

23

San Angelo, TX

80.2 80.2

24

Altoona, PA

25

Las Vegas-Henderson-North Las Vegas, NV

80.1

26

Santa Cruz-Watsonville, CA

80.1

27

Lafayette-West Lafayette, IN

80.0

28

College Station-Bryan, TX

79.9

29

West Palm Beach-Boca Raton-Delray Beach, FL Metro Div

79.8

30

Norwich-New London, CT

79.5

and workers alike, particularly in the logistics and manufacturing sectors​.

The Rise of Climate Innovation: New Opportunities in Tech

A key trend identified in this year’s report is the rise of climate innovation as a major economic driver, particularly in regions like South Florida and California. Miami’s designation as a Climate Ready Tech Hub underscores the growing importance of climate resilience technologies, from clean energy solutions to coastal defense systems. This is a trend that is likely to accelerate, as cities look to balance economic growth with sustainability in the face of growing climate challenges​.

A New Economic Map for U.S. Metros

The 2024 Leading Metro Locations report paints a dynamic picture of economic growth across the U.S., highlighting both familiar leaders and new contenders. Regions like Salt Lake City, Brownsville, and Olympia have proven that long-term planning, strategic investments in key industries, and maintaining affordable living conditions can propel metros to the top of the rankings. Meanwhile, the growth of climate tech and the increasing challenges of housing affordability present new opportunities and hurdles for metro areas in the coming years.

For businesses and site selectors, the key takeaway is clear: while traditional powerhouses like Miami and San Francisco remain important, the future lies in cities that can offer a combination of workforce strength, economic stability, and livability. As the U.S. economy continues to evolve, these metros will be the ones shaping the next decade of growth.

• Medium Metro Leaders: Among medium metros, Chattanooga leads the pack, offering long-term growth and a highly skilled workforce. The city’s economy has weathered the pandemic well, continuing to attract tech companies and advanced manufacturing investments​.

• Large Metro Leaders: For large metros, Miami continues to dominate because of its established tech industry and growing finance industry, but it faces significant challenges in terms of housing affordability, as the city is struggling with rising housing costs despite its economic growth, presenting a critical challenge for local businesses looking to attract and retain talent.

Housing Affordability: A Growing Divide

One of the most significant challenges highlighted in the 2024 report is the growing divide between economic growth and housing affordability. Cities like Miami and San Francisco offer abundant high-paying jobs in sectors like fintech and tech, but their rising housing costs are creating barriers for lower- and middle-income residents. In Miami, nearly half of all households are housing cost-burdened, and while the city continues to see strong growth in tech and climate innovation, housing affordability threatens to undermine that progress​.

By contrast, smaller metros like El Centro, CA, and Brownsville, TX, have managed to keep housing costs more affordable while still experiencing significant economic growth. This makes them attractive options for businesses 36 AREA DEVELOPMENT

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5 Key Takeaways from the report Broad Success of Smaller Metro Areas: Smaller metro areas such as Gainesville, GA and Tallahassee, FL performed surprisingly well, ranking higher than many larger cities. These

are driving workers and companies out of major California cities to more affordable regions in the Southeast and Southwest.

smaller metros seem to benefit from lower costs of living, focused

Housing Costs as a Major Factor: Across multiple

workforce development programs, and industries such as

regions, affordable housing appears to be one of the key

advanced manufacturing. This counters the common expectation

differentiators for economic performance. In areas like

that economic strength is concentrated in large cities.

Brownsville, TX and El Centro, CA, more affordable real estate options have allowed for stronger economic growth compared

Increased Emphasis on STEM and Tech Industries: Many top-ranking metros, including

to high-cost cities like San Francisco and Los Angeles. Even cities that are experiencing growth, such as Miami, are facing

Olympia-Lacey-Tumwater, WA, are driven by the growth of

significant challenges as housing affordability threatens to

high-tech and STEM-related industries. The concentration of

undermine their long-term growth potential​.

research and development and advanced manufacturing in these areas highlights how regional economies are

Infrastructure and Trade as Key Drivers: Regions

aligning with national trends of automation and technology-

with strong trade infrastructure, such as Brownsville, TX

driven innovation.

(driven by SpaceX and its port), saw significant boosts in economic activity. Similarly, other regions near ports or with robust logistics

California’s Underperformance: Despite its historical economic dominance, California metros like Los Angeles

networks, such as El Centro, CA, have managed to attract and retain industries that depend on smooth supply chains. This focus

and San Francisco did not perform as well as expected in the

on logistics and trade connectivity has helped certain areas to

rankings. The data shows that housing costs and high taxes

outperform despite their smaller size or lower national visibility.

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Leading Metro Locations 2024

METHODOLOGY

Area Development ranked 410 MSAs and metropolitan divisions across 24 economic and workforce indicators pulled from eight (8) data sets — each set containing a five-year change, a three-year change, and a one-year change indicator — originating from the U.S. Bureau of Labor Statistics, U.S. Census, and JobsEQ® by Chmura Economics & Analytics.

Each metro area earned a ranking within each of the 24 indicators based on its statistical performance within that indicator. The metro area with the best performance in a certain indicator earned a ranking score of “1” and the metro area with the worst performance earned a ranking score of “410.”

To calculate “Overall Ranking,” we created a score of total ranking across all indicators for each MSA. The indicators were weighted with five-year change indicators carrying the most weight and the one-year indicators carrying the least weight.

We also calculated overall ranking across two categories: “Prime Workforce” and “Economic Strength.” Within the “Prime Workforce” category we calculated rankings within two sub-categories: “Workforce Readiness” and “Wage and Salary Growth.” Within the “Economic Strength” category we calculated rankings within two sub-categories: “Core Economic Indicators” and “Job Growth Indicators.”

To calculate the overall ranking within these two categories, and four sub-categories, we produced a score and average ranking across only certain indicators.

We have also produced a set of lists, using overall ranking, grouping the MSAs by each of the 9 U.S. regions and by size: “Small” (population < 160,000), “Mid-sized” (population 160,000-600,000), and “Big/Giant” (population > 600,000).

Indicators Used in the Leading Locations Report:

PRIME WORKFORCE Workforce Readiness • STEM Workforce (Employment in STEM Occupations) as Percentage of Total Workforce 5-Year Change Rank (Q1 2024 – Q1 2019) • STEM Workforce (Employment in STEM Occupations) as Percentage of Total Workforce 3-Year Change Rank (Q1 2024 – Q1 2021) • STEM Workforce (Employment in STEM Occupations) as Percentage of Workforce 1-Year Change Rank (Q1 2024 – Q1 2023) Data Source: Chmura’s JobsEQ, STEM occupations based on BLS definition, excluding healthcare. See https://www.bls.gov/oes/topics.htm#stem

• Labor Force Size 5-Year Change Rank (Avg. through June 2024 – June 2019) • Labor Force Size 3-Year Change Rank (Avg. through June 2024 – June 2021) • Labor Force Size 1-Year Change Rank (Avg. through June 2024 – June 2023) Data Source: U.S. Bureau of Labor Statistics Metropolitan Area Employment and Unemployment (Monthly)

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Wage and Salary Growth

• Average Hourly Earnings 5-Year Change Rank (Q1 2024 – Q1 2019) • Average Hourly Earnings 3-Year Change Rank (Q1 2024 – Q1 2021) • Average Hourly Earnings 1-Year Change Rank (Q1 2024 – Q1 2023) Data Source: Bureau of Labor Statistics, Chmura’s JobsEQ

ECONOMIC STRENGTH Core Economic Indicators • Local Area Unemployment Rate 5-Year Change Rank (Avg. through June 2024 – June 2019) • Local Area Unemployment Rate 3-Year Change Rank (Avg. through June 2024 – June 2021) • Local Area Unemployment Rate 1-Year Change Rank (Avg. through June 2024 – June 2023) Data Source: U.S. Bureau of Labor Statistics Local Area Unemployment Rate

• Gross Metro Product from Advanced Industries as Percentage of Population 5-Year Change Rank (2023 – 2018) • Gross Metro Product from Advanced Industries as Percentage of Population 3-Year Change Rank (2023 – 2020) • Gross Metro Product from Advanced Industries as Percentage of Population 1-Year Change Rank (2023 – 2022) Data Source: Chmura’s JobsEQ, Advanced Industries are defined based on Muro, Mark et. Al, “America’s Advanced Industries: What They Are, Where They Are, and Why They Matter.” The Brookings Institution, February 2015

Job Growth Indicators • Advanced Industries Job Growth as Percentage of Employment 5-year Change Rank (Q1 2024 – Q1 2019) • Advanced Industries Job Growth as Percentage of Employment 3-year Change Rank (Q1 2024 – Q1 2021) • Advanced Industries Job Growth as Percentage of Employment 1-year Change Rank (Q1 2024 – Q1 2023) Data Source: Chmura’s JobsEQ, Advanced Industries are defined based on Muro, Mark et. Al, “America’s Advanced Industries: What They Are, Where They Are, and Why They Matter.” The Brookings Institution, February 2015

• Employment Growth as Percentage of Population 5-year Change Rank (Q1 2024 – Q1 2019) • Employment Growth as Percentage of Population 3-year Change Rank (Q1 2024 – Q1 2021) • Employment Growth as Percentage of Population 1-year Change Rank (Q1 2024 – Q1 2023) Data Source: U.S. Bureau of Labor Statistics Current Total Non-Farm Employment Statistics – CES (Non-seasonally adjusted)

• Change in STEM Job Post Volume Percentage 5-Year Change Rank (August 2024 – August 2019) • Change in STEM Job Post Volume Percentage 3-Year Change Rank (August 2024 – August 2021) • Change in STEM Job Post Volume Percentage 1-Year Change Rank (August 2024 – August 2023) Data Source: Real-Time Intelligence (RTI) in Chmura’s JobsEQ Editor’s Note: The research for this report was conducted and compiled

by Patrick Clapp of Chmura Economics & Analytics and the Area Development Research Desk.

for free site information, visit us online at www.areadevelopment.com

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North Port: a prime location offering unmatched opportunity for logistics and distribution

SOUTHWEST FLORIDA’S STRATEGIC ADVANTAGE WELCOME TO NORTH PORT, FLORIDA: YOUR NEXT LOGISTICS AND DISTRIBUTION HUB North Port is rapidly becoming the strategic choice for logistics and distribution in Southwest Florida. With a pro-business environment, low taxes, minimal regulations and targeted workforce development programs, North Port offers a compelling location for businesses looking to thrive. Key industry leaders, including King Plastic Corp., Euro-Wall, Lolablue, and Adams Group, have already established their operations here. Located between Tampa and Fort Myers on Florida’s Gulf Coast, North Port provides seamless access to regional markets, supported by robust infrastructure and a skilled workforce.

A STRATEGIC LOCATION WITH GROWTH POTENTIAL North Port, a young and dynamic city, has been strategically growing over the past 65 years. Covering 104 square miles, the city boasts a burgeoning population with the youngest median age in the region. The population has surged to nearly 95,000 with projections indicating a rise to 100,000 in the next two years, North Port is the most populous city in its MSA, which ranks among the fastest-growing in the United States.

INFRASTRUCTURE READY FOR EXPANSION In 2023, North Port invested heavily in critical infrastructure, opening thousands of acres of shovel-ready sites along I-75, perfectly suited for logistics, distribution, industrial and commercial uses. The city’s forward-thinking leadership, coupled with strong partnerships, has created a business climate ripe for investment. North Port’s strategic location makes it an ideal hub for logistics and distribution operations.

To explore opportunities in North Port, contact Vinnie Mascarenhas at VMascarenhas@NorthPortFL.gov or 941-429-7029.

Home to Wellen Park, a top 10 master-planned community, North Port attracts younger, affluent families, resulting in an increasing average median income of nearly $80,000. The city’s leadership is committed to expanding amenities and job opportunities to match the growing demand.

DevelopNorthPortFL.gov

Economic Development

AGE How Virginia Develops Sites and Mitigates Risk Prepared sites are key to Virginia’s business and economic success

I

n July, CNBC ranked Virginia as America’s Top State for Business for the sixth time, the most of any state. CNBC cited infrastructure as a key factor in the commonwealth’s win, and Virginia’s infrastructure — from The Port of Virginia and its highways to its international airports and excellent internet connectivity — played a major role in securing that honor.

But it was another form of infrastructure that truly sealed Virginia’s ranking: prepared sites.

The Virginia Economic Development Partnership identified site development as an issue several years ago, with a particular focus on the megasites that are ready for major manufacturing facilities. Virginia has won only one such project in recent years — the $1 billion LEGO Group factory currently under construction at Meadowville Technology Park in Chesterfield County.

The solution to that problem came in the form of the Virginia Business Ready Sites Program (VBRSP).

The VBRSP identifies and assesses the readiness of potential industrial sites with at least 100 acres — or 50 acres in the more mountainous western portion of the commonwealth.

The program has awarded more than $200 million in grants over the past two years, helping to develop the sites and obtain permits and approvals to make for a smoother construction process. One of the main priorities for the VBRSP is speed-tomarket, and its preparation efforts are aimed at helping companies get new facilities up and running as efficiently as possible.

$200 million in VBRSP grants awarded in the past two years.

A robust inventory of project-ready sites is a competitive advantage for a state or region in driving economic growth. Companies usually look to make investments quickly, and sites that allow for facilities to become operational 12 to 18 months from a decision stand out. To be considered market-ready, sites generally need to have appropriate zoning, utilities, and transportation infrastructure fully planned — and, in many cases, built to the site.

These are significant expenditures. Up-front site development reduces businesses’ costs and time to open a new facility, 40 AREA DEVELOPMENT

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an attractive proposition given the massive amounts of capital invested in economic development projects. Site preparation, with key utilities and infrastructure in place, makes it easier for decision-makers to visualize success at any given location.

10,000 acres of developable land are represented in the 2024 grants.

Virginia has ramped up VBRSP funding over the past two years, and the investments are already generating results. Since the program’s inception, 45 sites have received development grants. To date, nearly 10,000 direct jobs have been announced on sites that have received VBRSP grants, which also include site characterization funding. The 2024 grants went to 23 sites collectively representing more than 10,000 acres of developable land.

The VBRSP has made a noticeable difference in how Virginia competes for transformative projects. Across the commonwealth, VBRSP investments in due diligence and infrastructure prepare dedicated sites for industrial and commercial use.

Ultimately, site selection is an exercise in risk avoidance.

Preliminary site engineering and infrastructure development significantly mitigate risks for companies and inspire confidence that a site won’t present development risks. Virginia’s status as a premier business destination is in no small part due to its ability to minimize those risks, allowing companies to focus on construction and serving their customers.

VBRSP investments have helped create nearly 10,000 direct jobs so far. for free site information, visit us online at www.areadevelopment.com

11/26/24 4:10 PM

AMERICA’S TOP STATE FOR BUSINESS

Cover Story

The Battle to Break China’s Rare Earth Supply Chain Dominance U.S. faces challenges in reducing reliance on China for rare earths

By Catherine Tymkiw Area Development Staff Writer

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for free site information, visit us online at www.areadevelopment.com

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s the world grows increasingly reliant on technology, the United States faces an urgent challenge: breaking China’s dominance in the rare earth supply chain. Rare earth elements (REEs)—critical components in electric vehicles (EVs), wind turbines, and defense technologies—are abundant in the Earth’s crust but notoriously difficult to mine and process. For decades, China has controlled the majority of that supply chain, leaving the U.S. and other nations dependent on Beijing for these essential materials.

The Scale of China’s Rare Earth Dominance

In 2023, the United States had approximately 1.8 million metric tonnes of rare earth reserves and produced 43,000 metric tonnes that year—the second-highest output globally. In comparison, China mined 240,000 metric tonnes, making it the world’s largest producer, according to the U.S. Geological Survey. This production gap reflects a larger issue: while the U.S. has the raw materials, it lacks

rare earth supply chain. Extracting rare earth elements from the earth is only the first step. The real challenge lies in processing them into oxides, metals, and alloys used in high-tech manufacturing.

“The availability of concentrates from mines all over the world is a given,” said Thomas Kruemmer, director of Ginger International Trade & Investment PTE, Ltd. “The trouble begins with, if you produce rare earths, who do you sell it to? You don’t have a market.”

China’s advantage comes from its dominance of the midstream processing stage. The country’s vast network of refining facilities allows it to control the value chain, from raw material extraction to finished products like NdFeB magnets. These magnets are found in everything from electric vehicle motors to wind turbines, drones, and medical devices. As a result, any disruption in China’s rare earth supply chain could have widespread consequences for industries worldwide.

“Our over-reliance on foreign sources and adversarial nations for critical minerals and materials posed national and economic security threats.” the infrastructure and capacity to process and refine rare earth elements on a large scale.

China’s dominance extends far beyond mining.

The country controls about 85 percent of the global processing capacity for rare earth elements and produces around 90 percent of the world’s rare earth magnets.

These magnets—composed primarily of neodymium iron boron (NdFeB)—are crucial components in advanced technologies like wind turbines, robotics, smartphones, and defense applications. This concentration of control gives China a significant advantage in both the civilian and military technology sectors.

A Complex and Concentrated Supply Chain

Despite being the world’s largest producer, China still imported 217,000 metric tonnes of raw rare earth materials in 2023. This paradox highlights the complexity of the

U.S. Rare Earths Production Lags Behind China

While the United States has substantial reserves of rare earth elements, its production and processing capabilities remain limited compared to China. The Mountain Pass mine in California, operated by MP Materials, is the only significant U.S. facility capable of mining and separating rare earth elements. However, much of the ore extracted from Mountain Pass is still shipped to China for processing, highlighting the U.S.’s dependence on foreign infrastructure.

Processing rare earth elements is a complex, multistep process that involves separating raw materials into their constituent elements and then transforming them into oxides, metals, and alloys. Each of these steps requires specialized facilities, which have been outsourced to China over the past few decades. This outsourcing has left the U.S. vulnerable to supply disruptions and price fluctuations in the global market.

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Cover Story

An overhead look at MP Materials’ Mountain Pass, California mine.

The limited domestic processing infrastructure in the U.S. is a key factor that has hindered the country’s ability to compete with China. Building the necessary facilities requires significant capital investment, technological expertise, and regulatory approvals, all of which take time to develop.

Demand for REEs Set to Skyrocket

The amount of rare earths used in one U.S. F-35 fighter jet.

The demand for rare earth elements is expected to grow by 400 percent to 600 percent over the next few decades, driven by the global push toward electrification and renewable energy, according to a White House report. As industries shift away from fossil fuels, rare earth elements are becoming increasingly critical in technologies like electric vehicles, wind turbines, and energy storage systems.

A single 3-megawatt direct-drive wind turbine can use up to 2 metric tonnes of rare earth magnets, according to Lynas Rare Earths Ltd. The demand for rare earth elements is not only growing in the energy sector but also in consumer electronics, defense technologies, and medical devices. In fact, nearly all electric vehicles use permanent magnets in their motors due to their efficiency, compact size, and power.

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Market analysts project that the global rare earth market could top $21 billion by 2033, according to investment research firm The Oregon Group. The increased demand for neodymium and praseodymium (NdPr)—essential components of high-performance magnets—is expected to drive much of this growth, particularly as the electric vehicle industry continues to expand.

Critical for National Security

Beyond consumer technology, rare earth elements are vital for national security. The U.S. Department of Defense relies on rare earths for a wide range of military applications, from missile guidance systems to advanced aircraft.

For instance, an F-35 Lightning II fighter jet contains more than 900 pounds of rare earth elements, while a Virginia-class submarine requires 9,200 pounds.

In a 2021 supply chain assessment report, the BidenHarris Administration underscored that “our over-reliance on foreign sources and adversarial nations for critical minerals and materials poses national and economic security threats.” The U.S. government has since made securing domestic supply chains for rare earth elements a top priority, recognizing the strategic vulnerabilities posed by China’s dominance in this field. for free site information, visit us online at www.areadevelopment.com

11/27/24 11:15 AM

NORTH CAROLINA’S WORKFORCE DIDN’T BECOME #1

BY PROCRASTINATING. Talent is flocking to North Carolina to jump on the career opportunities that come with a booming economy and a thriving job market.

CNBC Top State for Business, 2022 & 2023

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Cover Story

Barriers to Competing with China

The projected rare earth market value by 2033.

China’s grip on the rare earth supply chain is reinforced by its ability to operate at very low costs. The country’s rare earth sector benefits from extensive government subsidies, state-owned enterprises, and a well-established infrastructure that spans mining, processing, and manufacturing. Competing with China’s vertically integrated supply chain is a monumental challenge for the U.S. “The issues around reintroducing rare earth value chains in the West are an enormous task,” said Kruemmer of Ginger International Trade and Investment. For example, while the U.S. has the capacity to mine certain rare earth elements, such as lanthanum and cerium, producing these materials domestically is not economically feasible at current market prices. Over the past 15 years, the price of lanthanum and cerium has fallen from $12 per kilogram to less than $1 per kilogram, largely due to China’s efficient processing capabilities.

Lanthanum and cerium are used in a variety of industrial applications, including oil refining and automotive catalytic converters. However, their low market value makes it difficult for U.S. producers to compete with China, where the costs of production are significantly lower. Reintroducing large-scale rare earth production in the U.S. would likely increase costs for manufacturers, which could ultimately be passed on to consumers in the form of higher prices.

The demand for rare earth elements is expected to grow by as much as 600 percent in the coming decades.

U.S. Efforts to Rebuild Supply Chain

To reduce its dependence on China, the U.S. Department of Defense (DoD) is spearheading efforts to create a “Mineto-Magnet” supply chain. Since 2020, the DoD has awarded more than $439 million to rare earth companies to help develop domestic mining, processing, and manufacturing capabilities. This initiative is seen as a critical step toward ensuring the U.S. can meet its own demand for rare earth elements, particularly for defense applications.

One of the most prominent projects involves the construction of a new magnet manufacturing plant in South Carolina, operated by e-VAC Magnetics, a subsidiary of Germany’s VAC Group. The DoD has invested $94.1 million in this facility, which will produce NdFeB magnets for electric vehicles and defense technologies.

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VAC has already signed long-term supply agreements with automakers like GM, securing contracts to provide magnets for a range of electric vehicles, including the Chevrolet Silverado and GMC Hummer EV. MP Materials, the only integrated rare earth mining and separation facility in the United States, is another key player in the effort to rebuild the domestic supply chain.

Located in Mountain Pass, California, MP Materials has one of the highest-quality rare earth deposits in the world, with a rare earth content averaging around 6 percent. The company has ramped up production in recent years and now produces roughly 15 percent of the global supply of rare earth elements.

MP Materials is also building a manufacturing facility in Fort Worth, Texas, where it plans to produce NdFeB magnets by 2025. These magnets will be used in electric vehicles and defense applications, including contracts with General Motors and defense contractors. MP Materials’ goal is to build a fully integrated “Mine-to-Magnet” supply chain, ensuring that rare earth elements extracted from Mountain Pass are processed and manufactured into finished products domestically.

New U.S. Projects Aim to Reduce Reliance on Imports

In addition to MP Materials and e-VAC Magnetics, several other companies are working to develop rare earth processing and manufacturing capabilities within the U.S. Lynas USA, a subsidiary of Australian-based Lynas Rare Earths Ltd., is building a rare earth processing plant on the Gulf Coast in Seadrift, Texas. The facility will separate rare earth elements sourced from Lynas’s mines in Australia for use in U.S. commercial and defense manufacturing.

However, Lynas has faced challenges in securing environmental permits for its Texas plant, particularly concerning wastewater management. The project, initially expected to begin operations in 2024, has been delayed due to regulatory hurdles, underscoring the complexities involved in building new rare earth facilities in the U.S. Meanwhile, American Rare Earths Ltd. is exploring a deposit at its Halleck Creek location in Wyoming.

The company’s early-stage exploration indicates that the deposit contains approximately 7.48 million metric tonnes of rare earth oxides, making it one of the largest known rare earth deposits in North America. But a large deposit like this one doesn’t necessarily translate to a high grade deposit.

The total rare earth oxide (TREO) grade of the deposit is 0.32%, according to the company’s technical report from February 2024. They estimate a recovery rate of 63.9% for NdPr oxide and projected NdPr oxide output of 1.5 million metric tonnes per year. Recovery rates for other REE include Terbium: 70.2 percent, Dysprosium: 66.5 percent, SEG: 70.1 percent, and Lanthanum: 68.6 percent​.

American Rare Earths plans to move forward with for free site information, visit us online at www.areadevelopment.com

11/27/24 11:15 AM

a feasibility study and is actively seeking partnerships with magnet manufacturers and automotive companies to establish a complete value chain.

Another significant project is the Bear Lodge mine in Wyoming, owned by Rare Element Resources (RER) and backed by General Atomics, a key supplier of drones to the Pentagon. Bear Lodge contains an estimated six million metric tonnes of rare earth resources, including 50,000 metric tonnes of NdPr. RER has begun building a demonstration plant to advance the development of the mine, with plans to produce rare earth materials for use in defense applications like missile systems and aircraft.

Environmental and Economic Challenges Ahead

While these efforts are promising, the environmental challenges associated with rare earth mining and processing cannot be ignored. Mining rare earth elements generates significant amounts of waste, including hazardous materials like radioactive residue. According to the Harvard International Review, mining just one tonne of rare earth elements can produce nearly 30 pounds of dust, up to 12,000 cubic meters of waste gas, and roughly a tonne of wastewater. Balancing the need to secure critical materials with environmental sustainability will be a key challenge as the U.S. works to rebuild its rare earth supply chain.

Creating a Circular Economy through Recycling

Recycling could be part of the answer. Consider the wind turbine, which contains a significant amount of NdFeB permanent magnets. What happens to those parts when the turbine, which has a lifespan of about 20 years, is no longer functional?

A small amount -- somewhere between 1 to 5 percent -- of the world’s rare earth elements are recovered or recycled, which means that hundreds of thousands of tons of end-of-life NdFeB rare earth magnets are scrapped and sit idle in landfills or are exported overseas to China and other less developed economies, says Noveon Magnetics, which is on a mission to change that. Their new 145,000 square foot recycling facility in San Marcos, Texas, is expected to produce roughly 2,000 tons of magnets annually through recycling.

“Our process introduces a new methodology within our waste infrastructure by optimizing material recovery while also lowering energy consumption and bypassing many of the fundamental steps in magnet manufacturing that make traditional magnet manufacturing processes so hazardous to the environment,” said Noveon CEO Scott Dun in 2023. For every ton Noveon recycles, 11 tons of CO2 emissions are cut, the company notes.

Rebuilding the Supply Chain Will Take Time

As global demand for rare earth elements continues to grow, the U.S. faces significant challenges in reducing its dependence on China’s supply chain. Rebuilding domestic production and processing infrastructure will require sustained investment, technological innovation, and regulatory approval. While efforts are underway to develop a domestic “Mine-to-Magnet” supply chain, the road ahead is long, and success will not come quickly.

An exterior of the Noveon facility in San Marcos, Texas.

China processes roughly 85 percent of rare earth elements and produces 90 percent of the world’s rare earth magnets.

With right strategies and long-term planning, the U.S. has the potential opportunity to reclaim a portion of the rare earth supply chain, safeguard its technological future, and strengthen its national security by reducing reliance on foreign sources, but it’s not going to be easy.

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Workforce

The Workforce Factor:

States Are Competing to Build Tomorrow’s Talent

By Andy Greiner Editor, Area Development

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for free site information, visit us online at www.areadevelopment.com

11/25/24 2:18 PM

W

hen companies look to expand or relocate, workforce development is no longer an afterthought—it’s a primary factor in site selection. The days of simply considering grants or tax breaks are gone. For many businesses, especially in sectors like manufacturing and advanced technologies, the question is: Can you provide the skilled workers I need today and train the workforce I’ll need tomorrow? Five states—Georgia, Virginia, South Carolina, Louisiana, and Alabama—lead the way in workforce according to Area Development’s Top States for Doing Business rankings. But what makes these programs stand out?

Customization: The True Differentiator

The most successful workforce development programs aren’t cookie-cutter. They are highly flexible and customizable, designed to cater to the unique requirements of each industry and company. This level of customization is why programs like the Virginia Talent Accelerator and Georgia Quick Start have maintained their position at the top of the rankings.

Virginia, and South Carolina have such strong programs— they customize the training to each company’s needs, down to the specific tools and technologies being used.”

In South Carolina, the ReadySC program excels in developing custom curricula in partnership with local businesses. The state’s ability to adapt training for different industries—from automotive to high-tech manufacturing—has made it one of the top workforce programs in the country​.

The Shift from Grants to Services

Historically, workforce development incentives were primarily grant-based, but that model has evolved. Today’s leading programs deliver hands-on services that go beyond what a typical grant can provide.

Scott McMurray, Deputy Commissioner of Georgia’s Quick Start, attributes the program’s success to its ability to adapt to the specific needs of each industry.

Quick Start has been evolving since 1967, and much of its strength comes from its hands-on approach and deep integration with the companies it serves.

“The most successful workforce development programs aren’t cookiecutter—they are highly customizable.”

“What makes Virginia’s program stand out isn’t just the quality of training—it’s the level of customization they offer,” explains Jacob DiMattia, Vice President-Location Strategies at Evergreen Advisors. “From developing industry-specific video training to creating custom equipment simulations, Virginia goes above and beyond to tailor their approach.”

Lauren Berry, Senior Manager, Location Analysis and Incentives at Maxis Advisors, agrees: “It’s one thing for a state to offer training funds. It’s another thing entirely to build a training program that fits exactly what a company needs, whether that’s for advanced manufacturing, biotech, or any other specialized field.

That’s where the best programs excel—by being flexible and truly customizable.”​

Why Customization Matters: Addressing Industry-Specific Needs

Customization is particularly important for industries that require specialized skills—think advanced manufacturing, pharmaceuticals, or aerospace. While some states rely on off-the-shelf training from community colleges, the most effective programs work directly with businesses to create industry-specific training materials.

“In manufacturing, you can’t have generic training,” says Brian Corde, Owner and Managing Partner at Atlas Insights. “You need trainers who understand your specific equipment and processes. That’s why states like Georgia,

“We don’t offer off-the-shelf training. Our approach is to form partnerships with companies, customize training programs to meet their specific needs, and ensure their workforce is ready from day one,” says McMurray.

Case Study: Customization in Action with Kia Motors

One of Georgia Quick Start’s landmark partnerships is with Kia Motors, a relationship that began in 2008 and has helped cement Georgia as a leader in automotive manufacturing.

When Kia first opened its plant in West Point, Quick Start developed a state-of-the-art training center for the automaker. As Kia shifted to manufacturing electric vehicles, Quick Start quickly adapted, sending teams to Korea to study Kia’s processes for building electric vehicles (EVs).

“We sent our team to Korea to document the assembly of EVs, and we developed customized training materials to ensure that Georgia’s workforce could handle this new technology,” says McMurray. “That’s the level of partnership we’re committed to—deep, seamless integration”​ Georgia’s Quick Start not only customized the training for EVs but also developed a Battery Safety Program, a critical component given the risks associated with lithium-ion batteries.

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Workforce best, and every Kia employee went through the program, including the company’s president,” McMurray adds.​ The success of Quick Start is evident in its long track record of helping companies set up shop in the state, but it›s also clear that other states are catching up. Virginia, for example, has taken the service-based approach to a new level with its Talent Accelerator program.

“Virginia doesn’t just offer training; they bring an entire recruitment and training infrastructure,” says Kris Weidling, Chief Human Resources Officer at Civica Rx, who has firsthand experience with the program. “They helped us recruit workers, trained them in-house with customized materials, and even developed video and 3D animations for our unique processes. It’s like having your own dedicated workforce development agency.”

Grant-Based vs. Service-Based: Finding the Right Fit

While the trend is moving toward service-based programs, grant-based incentives are still in play and often more familiar to companies. However, the challenge is that grant-based programs often come with strings attached, and their actual value can be difficult to quantify.

In Louisiana, FastStart combines both grant and service-based elements, offering companies flexibility.

Berry notes that this hybrid approach can be particularly beneficial in industries where job roles are varied.

“Some clients prefer the grant-based programs because they want control over their training. Others prefer the service-based options because they don’t have the internal infrastructure to handle complex training needs,” says Berry. “The key is finding the balance between the two.”

Case Study: Civica Rx in Virginia

Civica Rx, a pharmaceutical company that recently expanded into Virginia, found the state’s Talent Accelerator program to be an invaluable partner as they navigated the complexities of building a workforce from scratch.

According to Weidling, the company was facing a unique challenge: They were a startup with no parent company to lean on for recruitment or HR support. They needed to hire over 360 employees, and they needed help—fast.

“We had 35 employees and no real hiring infrastructure. The Talent Accelerator team came in and immediately provided the kind of support you›d expect from a full-scale HR department,» explains Weidling.

“From recruitment strategies to onboarding, they were there every step of the way.”

One of the standout aspects of Virginia’s program was its ability to create high-quality training materials.

Civica Rx needed detailed, industry-specific training modules, and the Talent Accelerator didn’t disappoint. The program produced everything from recruitment videos to training animations that were on par with what Civica Rx had seen at much larger pharmaceutical companies.

“Their audiovisual team delivered work that rivaled what I’d seen from big pharma companies,” Weidling continues. “It’s rare to get that level of support from a state-run program.”

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How to Evaluate a Workforce Development Program Customization to Industry Needs: A top-tier workforce development program is tailored to the specific needs of the industry and company. Customization ensures that training is relevant to the company's operational requirements, including specialized equipment, processes, or safety protocols.

Recruitment Marketing Support: The top programs offer comprehensive recruitment and screening support to attract qualified candidates to all the new job opportunities. Virginia’s Talent Accelerator Program offers marketing support that rivals what you get from a professional agency.

Pre-Employment Training: Effective programs provide pre-employment training to ensure employees are job-ready from day one. Programs like Alabama’s AIDT ensure workers have the necessary skills before production begins.

Partnerships with Companies: High-quality programs form deep partnerships with companies, working hand-in-hand to develop training plans. They involve both leadership and operational staff to ensure the training scope matches the specific demands of the business.

Integration with Technical Colleges: The best programs integrate with local technical colleges, ensuring long-term workforce sustainability. Initial training may be handled by the workforce development program, but technical colleges provide a pipeline of skilled workers for future needs.

No-Cost Training: The best programs are fully taxpayer-funded, providing training at no cost to companies. This reduces the financial burden on businesses while ensuring high-quality, customized workforce development.

Scalability: Top programs are scalable, with the ability to expand their training capabilities quickly to meet the needs of large or growing companies. This often involves hiring industry-experienced contractors to deliver training at scale.

Limited Bureaucracy: Effective programs have minimal bureaucratic hurdles, making it easy for companies to access the training they need without excessive paperwork or delays.

Ongoing Support and Adaptability: The best programs evolve alongside industry changes, offering continuous support. For example, Georgia’s Quick Start adapted promptly to the rise of electric vehicles, developing specialized training for EV battery safety.

for free site information, visit us online at www.areadevelopment.com

11/25/24 2:18 PM

PREPARED TO SOAR

Georgia’s technical colleges and universities enrollment increased by more than 5% last year. The innovative GEORGIA MATCH program connects students with education opportunities, providing them with a bright future and ensuring Georgia businesses have access to a highly-skilled workforce.

Discover more reasons why Georgia is No. 1 for business.

Pre-Employment Training: A Key Differentiator

What sets the top workforce programs apart isn’t just what happens after employees are hired. Increasingly, states are focusing on pre-employment training to ensure that workers are ready to hit the ground running. Virginia, for example, offers customized pre-employment training through its Talent Accelerator program.

“The fact that they were able to train people before they even walked through the door was huge for us,” says Weidling says. “It saved us months of ramp-up time.”

Similarly, Corde remembers working with a manufacturing client who chose Virginia over other states precisely because of the state’s pre-employment training focus.

“We were looking at several states—Georgia, North Carolina, and Virginia. The deciding factor was Virginia’s ability to deliver ready-trained workers. Their Talent Accelerator wasn’t just filling seats; they were actively preparing people to succeed in our client’s facility,” says Corde.

Case Study: Virginia’s Flexibility with Training Modalities

number of employees that CivicaRX needed to recruit with Virginia’s help.

DiMattia recalls a recent project where Virginia’s flexibility was the tipping point for choosing it over other states. The company was in advanced manufacturing, and it required highly specialized training that could not be delivered by traditional community college programs.

“What Virginia offered was next-level customization. The Talent Accelerator wasn’t just pushing prepackaged solutions. They developed custom video training modules specific to our client’s machines. That level of detail made all the difference,” says DiMattia.

Virginia’s ability to offer this level of customization is what has helped its Talent Accelerator program gain ground on Georgia’s Quick Start, which has long been considered the gold standard.

The Role of Technical Colleges: Outsourcing vs. Skilled Trainers

In many states, community and technical colleges are often the backbone of workforce development efforts.

These institutions provide crucial job-specific training for local industries, particularly in sectors like manufacturing, aerospace, and automotive. However, while technical colleges can be an essential part of a state’s workforce strategy, over-reliance on them without specialized expertise can limit the effectiveness of training programs. Several consultants we interviewed pointed to the pitfalls of states that simply funnel workforce development efforts through the community college system without customizing or upgrading the level of instruction.

Corde explains the issue clearly: “A lot of states just hand workforce training over to the community colleges. The problem is, while these colleges are great for general education, they don’t always have the specific skills required for highly technical industries. You can’t have a community college professor 52 AREA DEVELOPMENT

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teaching a curriculum designed for advanced manufacturing or pharmaceutical biotech—it’s a completely different skill set.”​ This outsourcing model may check the box for state programs, but it often doesn’t meet the practical needs of companies. When training programs lack depth and customization, companies have to fill in the gaps, costing them more time and money.

Skilled Trainers vs. Professors: The Expertise Gap

One of the core complaints about states that rely heavily on community colleges is that the instructors often don’t come from the industries they’re tasked with training for.

While professors at these colleges may have academic knowledge, they may lack the hands-on, real-world experience that industries require. As Mike Grundmann from Virginia’s Talent Accelerator puts it: “In Virginia, we’ve built an expert team of instructional design, talent acquisition, video production, graphic design, and organizational development professionals.

They were all hired from the private sector having worked in advanced manufacturing, biotech, and high-tech fields.

This expertise enables us to deliver services as good and often better than what you would get from top private sector vendors.”

By contrast, in states that rely primarily on community colleges, companies may find that the instructors simply don’t have the level of expertise needed to train workers on complex machinery or proprietary processes.

“What you often see with community college-based training is that the curriculum is too generalized. A professor teaching a standard class may not be able to adapt to a company’s specific needs. That’s where states like Georgia and Virginia shine—they go beyond that.

They either bring in experienced trainers from the private sector or develop custom solutions that target the exact needs of the business,” Berry said.

Feedback Loops: How the Right Trainers Can Feed Back into College Programs

One innovative aspect of the leading workforce programs in states like South Carolina is how they create a feedback loop with community colleges and technical schools. Instead of relying on the colleges to lead the training, these states involve industry professionals to develop specialized curricula that the colleges can then adopt for future training needs. This integration ensures that the academic programs evolve in line with industry standards.

In Virginia, the Talent Accelerator doesn’t just train employees for immediate hiring needs; it also works with community colleges to upgrade their programs so that future students are better prepared for the workforce.

“In Virginia, they send skilled trainers—people with real-world experience—to work alongside community college instructors. After the initial training, the colleges often adopt parts of the customized curriculum. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:19 PM

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Workforce This means that the next generation of workers is already getting the specialized skills that companies need. It’s a sustainable model that benefits both the company and the local workforce in the long run,” DiMattia said.

South Carolina’s ReadySC program operates similarly by partnering with companies to develop training modules that are then implemented across the state’s technical college system.

As Berry notes, this kind of collaboration ensures that both the immediate and future workforce needs are met: “States like South Carolina get it. They bring in the experts to develop industry-specific training, and then they make sure that the local colleges can carry that training forward. It’s not about outsourcing everything to the colleges—it’s about building the expertise in-house and making sure the community benefits long-term,” Berry said. ​

Case Study: Alabama’s AIDT Program

Georgia’s Quick Start program has been evolving since 1967 to meet industry needs.

One of the best examples of this integrated approach comes from Alabama’s AIDT program, which is often hailed as one of the most effective workforce training initiatives in the country. Alabama works directly with companies to create bespoke training programs, but it doesn’t stop there. The state also invests in equipment and curriculum development for its community and technical colleges, ensuring that they can continue to provide top-tier training after the initial workforce has been prepared.

Geoff Troan, Managing Director, Site Selection at Vista Site Selection remembers a visit to one of Alabama’s training centers: “What struck me about Alabama was their willingness to invest in real equipment. The workers were training on the same machinery they would use in the plant. It wasn’t some simulation—it was the real deal. And then, once the initial training was done, that equipment stayed with the local technical college, so they could train future workers on the same high-tech machines.”

This hands-on approach, which integrates private sector expertise with state and college resources, is becoming a hallmark of the top-ranked workforce programs. It’s a model that not only meets immediate hiring needs but also builds a pipeline of skilled workers for the future.

The Pitfalls of Over Reliance on Colleges

States that rely too heavily on community colleges without integrating industry expertise often struggle to deliver the same results. In some cases, companies have had to retrain workers after they’ve completed community college courses because the training didn’t match the needs of their specific industry. Sara White, Principal, VP of Site Selection at Global Location Strategies, has seen this happen firsthand.

“In states where they just leave training up to the colleges, you see a lot of mismatches. A company will hire someone who has a technical degree, but that person still needs extensive retraining because the com54 AREA DEVELOPMENT

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munity college program wasn’t tailored enough to the industry’s needs. It’s frustrating for both the employer and the worker.”​ States like Texas, which primarily funnel workforce incentives through community colleges, often face this challenge. Without a system in place to provide specialized training or to involve industry professionals, the workforce development program can fall short.

Recruitment and Marketing: A Full-Service Solution

Another area where workforce development programs are evolving is in their support for recruitment and marketing efforts. Virginia’s Talent Accelerator has become a leader in this space, offering companies marketing support that rivals what they’d get from a professional agency.

“When we had a hiring spike, they didn’t just help us train people—they helped us market the jobs,” explains Weidling from Civica Rx. “They developed a full campaign, complete with Hulu ads and billboards. It was like having a full-service marketing agency in-house.”

This multi-faceted approach is increasingly becoming the norm among top-ranked states. In Georgia, Quick Start also offers recruitment support, although it has historically been more focused on large projects.

According to Corde, one area where Quick Start may be falling behind is its reluctance to engage smaller projects.

“Georgia has traditionally been great with large projects, but if you’re a smaller company, you may not get the same level of service. Virginia, on the other hand, treats every project like it’s the next big thing,” says Corde.

The Future of Workforce Development

As the competition between states heats up, workforce development programs will continue to evolve. The trend toward service-based incentives shows no sign of slowing, and states that invest in high-quality training, marketing, and recruitment services will continue to lead the pack.

Looking ahead, the states that succeed will be the ones that can balance flexibility with quality, offering both grant-based and service-based solutions to meet the diverse needs of today’s industries. Virginia, Georgia, South Carolina, Louisiana, and Alabama are already setting the standard—but as demand for skilled workers grows, other states will need to catch up.

The Big Takeaway

For companies considering where to expand or relocate, workforce development is critical. The best programs— those in Georgia, Virginia, South Carolina, Louisiana, and Alabama—don’t just offer grants or basic training.

They provide comprehensive, customized solutions that meet companies’ specific needs, from pre-employment training to marketing and recruitment. These states have shown that workforce development isn’t just about filling jobs—it’s about building a skilled workforce that can adapt to the needs of tomorrow. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:19 PM

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Workforce

How to Structure a Successful RFP:

What Not to Do

Creating a successful RFP for a workforce development program requires attention to detail and clarity in expectations. However, many RFPs make common mistakes that lead to ineffective partnerships and subpar workforce solutions. Here’s a guide on what NOT to do, along with best practices for achieving the most effective outcomes.

1. Avoid: One-Size-Fits-All Solutions What NOT to Do: Don’t ask for generic training programs that may not meet your specific industry needs. A broad request without customization will result in workforce solutions that don’t fully address your company’s unique challenges.

What TO Do Instead: Clearly specify the need for customized training tailored to your industry and operational requirements.

Sample Question: How will your workforce development program customize training to match our specific operational needs?

Best Practice: Customization ensures that training is relevant and that workers are prepared to meet the demands of your facility from day one.

2. Avoid: Overlooking Long-Term Workforce Sustainability What NOT to Do: Don’t ignore the long-term sustainability of your workforce pipeline. Many RFPs focus solely on immediate workforce needs, failing to ask about how the program will support your workforce over time.

What TO Do Instead: Include questions about how the workforce development program will integrate with local technical colleges and educational institutions to create a steady flow of qualified workers for years to come.

Sample Question: How will your program partner with local institutions to ensure a continuous pipeline of talent for ongoing workforce needs?

Best Practice: Building long-term partnerships ensures that your workforce program doesn’t end after the initial hires, but continues to feed new talent into your company over time.

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3. Avoid: Lack of Scalability What NOT to Do: Don’t forget to assess whether the program can scale to meet future or unexpected demands. RFPs that don’t address scalability risk running into major delays if the workforce program is unable to accommodate sudden growth.

What TO Do Instead: Ask for clear details on how the program will scale as your business grows or if hiring needs increase.

Sample Question: How does your program scale to meet the needs of larger or growing projects?

Best Practice: A scalable program ensures that your company can continue hiring and training at a rapid pace, even if project needs change unexpectedly.

4. Avoid: Not Emphasizing Recruitment and Screening What NOT to Do: Don’t assume that workforce development programs will automatically assist with recruitment and screening. Some programs only offer training once candidates are hired, leaving recruitment as a company’s sole responsibility.

What TO Do Instead: Clearly ask about the extent of the program’s recruitment assistance.

Sample Question: Does your program offer recruitment and screening support to help source and select the right candidates?

Best Practice: Effective recruitment support ensures that you start with high-quality candidates, making the training process more efficient and reducing the risk of turnover.

for free site information, visit us online at www.areadevelopment.com

11/25/24 2:20 PM

5. Avoid: Focusing Solely on Financial Incentives What NOT to Do: Don’t focus too heavily on grants and financial incentives without considering the program’s actual training effectiveness. Some RFPs overly emphasize the financial perks, such as tax credits or reimbursements, which may not translate into real workforce improvements.

What TO Do Instead: Prioritize programs that offer hands-on training and workforce development services over those that only provide financial incentives.

Sample Question: What specific workforce training services does your program provide, and how are these services customized for our project?

Best Practice: While financial incentives are important, hands-on training and development services provide more tangible, long-term benefits for building a skilled workforce.

6. Avoid: Unclear Reporting and Accountability What NOT to Do: Don’t overlook the importance of compliance and reporting mechanisms. If the RFP doesn’t ask for transparency in progress tracking and compliance, it will be difficult to assess whether the program is meeting its goals.

What TO Do Instead: Request clear details on how the program will report progress and track key performance indicators (KPIs).

Sample Question: What are your compliance reporting requirements, and how will the success of the workforce development program be measured?

Best Practice: Establishing transparent reporting mechanisms ensures that both the company and the program are accountable for the workforce’s success.

7. Avoid: Ignoring High-Demand Skill Training What NOT to Do: Don’t fail to inquire about how the workforce development program can prepare employees for emerging skills and technologies. Many RFPs focus too narrowly on basic training, missing out on opportunities to future-proof their workforce.

What TO Do Instead: Ask how the program addresses training for high-demand and emerging skills, such as advanced manufacturing, clean energy, or technology.

Sample Question: How will your program help prepare workers for emerging skills and technologies needed for our industry?

Best Practice: Workforce programs that focus on high-demand skills ensure that your workforce remains competitive as industries evolve.

A Balanced RFP for Workforce Success Structuring an effective RFP for a workforce development program is about more than just finding the cheapest option or securing the biggest grant. By avoiding common mistakes—like relying on generic solutions or focusing too heavily on financial incentives— you can ensure that the workforce program you select will deliver customized, scalable, and sustainable solutions. Focus on customization, long-term planning, and emerging skill needs to set your workforce up for success, both now and in the future.

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11/25/24 2:20 PM

Workforce

What to Make of the Rising Salary Transparency in Job Descriptions Today’s listings offer new insights into wages

By Vince Giovannini Senior Consultant, Human Capital Analytics & Insights, Deloitte

I

s it rude to talk about money? Certain states and companies don’t seem to think so. In recent years, the trend of salary transparency in job descriptions has seen a significant rise, reflecting a broader shift towards openness and fairness in the workplace. According to an analysis conducted

by Deloitte’s Labor Market Intelligence team after delving into publicly available job postings, salary ranges were listed in 29 percent of all U.S. job posts in 2023, a considerable increase from only 10 percent in 2021. This change indicates a growing belief that salary transparency can benefit both employers and potential employees. However, certain roles and locations are more prone to salary transparency than others.

years, reducing the disparity between the upper and lower ends. In 2022, there was an average 46% difference between the high end of the salary band and the low end of the salary band. That number decreased to 42 percent in 2023 and is currently 40 percent in 2024. In addition to the advertised salaries matching top industry wage estimates, the narrower salary bands are enhancing the precision of these estimates.

What conclusions could you draw from salary transparency data?

1.

Is salary transparency limited to specific states?

In 2024, Hawaii, Illinois, Minnesota, Vermont, and Washington, DC, joined California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington in enacting salary range transparency laws. While there are no legal requirements for salary transparency in 38 other U.S. states (other than a few local municipality laws), salary transparency is making its way across the country. Since the beginning of 2023, the average state has seen 22 percent of job posts include salary ranges. The state with the lowest coverage is Alabama, at 15.1 percent.

The current average gap between the high and low ends of salary bands, down from 46 percent in 2022.

2.

Which jobs have the highest salary transparency?

Government jobs such as protective service, transportation, judicial, and public works occupations all have high representation for salary transparency, attributed to government regulations on the issue. For private sector jobs, Sales and Marketing professional job postings have the highest concentration of salary transparency at 31 percent. Other top occupations include Production Occupations, Cooks and Food Preparers, Business Operations Specialists, and Financial Specialists.

Occupations with the lowest salary transparency include construction workers, architects, healthcare practitioners, and manufacturing supervisors.

Is salary range data accurate?

Deloitte’s research suggests that advertised salaries align with market rates. From 2019 to 2024, job postings show an average salary discrepancy of just 5 percent compared to Bureau of Labor Statistics wages. Furthermore, the salary ranges listed in job descriptions have narrowed in recent 58 AREA DEVELOPMENT

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3.

An Additional View of Market Conditions - The rise of salary transparency has provided an additional source of insight into labor market dynamics, with timely wage range estimates by location, role, and company. Job seekers, economists, and human resource strategists can benefit from accessing the salary analytics available through job postings.

Persisting Wage Inflation – According to Deloitte research from job postings and the Bureau of Labor Statistics, wages are continuing to rise at rates higher than core inflation, with growth rates per year from 2019-2023 averaging 5 percent and 4 percent, respectively. While the Job Openings and Labor Turnover Survey suggests the labor market has been easing in recent months through rising unemployment and lower job openings, wage increases continue to be above historical averages, according to both job postings and the Occupation Employment and Wage Statistics.

A Source for Competitor Analysis – Historically, tracking wages at the company and skill level for competitor benchmarking has been challenging for business strategists. However, the rise of salary transparency has cultivated a path for data-driven wage insights that use more granular job details to build an informed talent strategy.

Despite an easing labor market with rising unemployment and fewer job openings, wages continue to grow at rates higher than core inflation and are now more widely available through legislation and company actions. The rise of salary transparency has introduced a new dimension to understanding labor market conditions, providing timely wage range estimates by location, role, skillset, and company.

This information offers a new avenue to cultivate competitor and market analysis, enabling data-driven insights for talent strategy and workforce development. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:23 PM

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8/10/23 2:54 PM

Workforce

Brooklyn Navy Yard’s CNC Training Fuels Its Resurgence Workforce investments drive modern manufacturing innovation

By Kimberly Graulein Area Development Staff Writer

C

an the Brooklyn Navy Yard revitalize New York City’s industrial workforce and make the Big Apple an attractive destination for manufacturers?

The historic naval site has been undergoing a transition into a thriving center for innovation, sustainability, and workforce development, offering cutting-edge training and employment opportunities tailored to meet the demands of modern manufacturing.

A legacy of manufacturing, a future in innovation

The yard has long been synonymous with industrial activity, and today it serves as a hub for advanced manufacturing. Under the leadership of Lindsay Greene, President and CEO of the Brooklyn Navy Yard, the space has adapted to the 21st-century economy by

“The CNC training program aims to equip local workers with in-demand skills.”

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investing in real estate and infrastructure while attracting a diverse range of tenants, from tech startups to established manufacturers.

This mix of industries has not only revitalized the area but also positioned the Navy Yard as a leader in urban manufacturing innovation.

The centerpiece of the workforce initiative is the CNC (Computer Numerical Control) training program.

This program offers free upskilling opportunities for individuals with some experience in CNC operations, aiming to bridge the gap between basic operational skills and advanced CNC programming.

The Brooklyn Navy Yard invested in CNC training to address the growing need for skilled labor in advanced manufacturing.

The rise of automation and precision machining in industries such as aerospace, medical devices, and electronics has created a chasm between the skills workers traditionally had and the skills modern manufacturing now requires. CNC technology is central to this transformation, allowing businesses to produce parts with greater accuracy and efficiency than manual methods.

The Navy Yard recognized that its tenants, many involved in high-tech manufacturing, needed a workforce capable of operating and programming CNC machines, Greene said. By offering a CNC training program, the Navy Yard aimed to equip local workers with these indemand skills.

for free site information, visit us online at www.areadevelopment.com

11/25/24 2:26 PM

The program focuses on upskilling individuals with basic CNC experience, teaching advanced techniques like CAD/CAM design, 2D and 3D milling, and lathe operations, and prepares them for Mastercam certifications.

“We invested in the workforce side of it, so that local community members and people from Brooklyn could attach themselves to all the new stuff. While they may have been able to get a welding job, we are now focusing on life-sustaining, working-class careers in modern industries like CNC machining.”

This investment also aligns with the Navy Yard’s broader mission of community inclusivity. The CNC training provides residents, many of whom might not have access to such specialized training, with career pathways in stable, well-paying industries.

As Greene explained, the program helps individuals “attach themselves to all the new opportunities” within advanced manufacturing sectors, ensuring that the benefits of the Yard’s growth extend to the surrounding community.

By developing a pool of skilled CNC operators and programmers, the Navy Yard not only supports its tenants but also strengthens New York City’s position as a hub for modern manufacturing. This training initiative is critical for helping manufacturers stay competitive by ensuring they have access to a local, trained workforce capable of meeting the demands of

“We are now focusing on life-sustaining, working-class careers in modern industries like CNC machining.” precision and efficiency required in today’s automated production environments.

A model for urban manufacturing hubs

As manufacturing executives weigh their options for facility planning and site selection, the Brooklyn Navy Yard offers a compelling model, while maintaining a deep connection to its historical roots.

Greene’s vision for the Yard is one where both businesses and workers thrive. By focusing on both the technological and human elements of manufacturing, the Brooklyn Navy Yard has created an environment where companies can grow and innovate, supported by a local workforce that is equipped to meet the challenges of modern industry.

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11/25/24 2:27 PM

Workforce

Five Strategies to Tackle the Data Center Talent Shortage The booming data center industry urgently needs more skilled workers to sustain growth

By Matt Landek Managing Director, U.S. Data Center Work Dynamics and Project Development and Services Lead, JLL

T

he data center industry’s long-standing talent shortage is becoming increasingly acute as digitization and AI drive record demand. With more facilities coming online, the need for skilled technicians and engineers is soaring, especially in rural areas with limited labor pools.

Studies show that only about 15 percent of applicants meet the minimum job qualifications for data center jobs, so positions often take at least two months to fill.

Meanwhile, the competitive labor market has driven wages higher and made it harder to retain talent as companies poach workers from each other.

As detailed in JLL’s Midyear 2024 United States Data Center Report, attrition is particularly acute among younger workers, with only 18 percent staying in their jobs after their first year. Employees list pay, burnout and career development as their top three reasons for resigning.

Nearly 33% of the technical workforce in the data center industry is at or nearing retirement age.

Complicating matters, nearly 33 percent of the technical workforce in the data center industry is at or nearing retirement age. The talent shortage is poised to worsen if companies don’t take swift action to recruit, upskill and increase retention of workers.

These five strategies can help bridge the talent gap: 1.

2.

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Recruit and retrain technicians from other industries: The fast-growing data center industry offers a rewarding career transition for technicians in other real estate asset classes, such as hospitals, retail centers and class A offices. With a strong training program, experienced professionals can quickly ramp up their skillsets to meet the demands of data center jobs.

Broaden the pipeline: The industry needs more qualified candidates to fill the growing number of

openings. Partnering with trade schools and veteran employment agencies offers a way to recruit employees with transferrable skills to be trained for data center roles.

3.

Enhance the employee experience: Today’s workforce expects more than just a paycheck. Employees expect their employers to invest in their physical and mental wellbeing. Attracting and retaining workers requires not only a competitive wage but also high-quality amenities such as healthy food, meal vouchers, and access to fitness centers and mental health programs.

4.

Foster a culture of continuous learning: With technology evolving rapidly, continuing education and leadership development ensures your workforce remains educated and qualified as data center processes change. As an added benefit, investing in employees’ career development can enhance engagement and experience.

5.

Educate rising generations: Until recently, many individuals were unaware of data center career opportunities, but that’s changing as the AI movement brings more attention to the industry. Educating young people about data center career paths can help create a larger talent pipeline for the long term.

A thriving data center industry relies on a Large talent pool. By investing in recruitment, training and a positive employee experience, companies can strengthen their workforce to sustain growth for years to come. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:29 PM

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Workforce

Looking for Employees in Nontraditional Spaces

F

rom construction to healthcare to hospitality, the U.S. is grappling with a labor shortage, with 8.2 million job openings and only 7.2 million unemployed workers, according to the U.S. Chamber of Commerce.

The post-pandemic labor landscape has seen a decline in participation in the workforce, prompting many to re-evaluate their career choices and forcing employers to seek out unconventional sources to fill positions across various sectors.

By Kathy Webster Area Development Staff Writer

Employers are increasingly Justice-impacted individuals— those who have been previously offering remote On the Horizon incarcerated—represent a significant and often-overlooked group. industries have turned to work options to While This population possesses diverse nontraditional labor sources, relief skills that can be valuable in many may be on the horizon. Lauren industries. While many of these Berry, Senior Manager of Location retirees, enabling individuals are eager to reintegrate Analysis and Incentives with Maxis into society and join the worknotes that signs point to companies to tap Advisors, the labor shortage easing. force, they face barriers such as limited access to job training and “From my current client into their vast projects, support services. we’ve seen workforce Several programs aim to fashortages easing, and the marexperience. cilitate the reintegration of jusket seems to be much less tight Thinking Outside the Box

tice-impacted individuals into the workforce. Initiatives like the Reentry Success Program (RSP) and JUMPSTART focus on providing job training, employment opportunities, and support services.

The Reentry Success Program (RSP), funded by community solar developer Cultivate Power in Illinois, helps those transitioning from incarceration back into society. Participants are recruited through the Chicago Coalition for Intercommunalism, a network of more than 70 grassroots organizations across the city.

The program partners with local employers and offers mentoring, counseling, and resources like housing and transportation assistance.

Another program, JUMPSTART, equips justiceimpacted individuals with the skills they need to secure employment and reintegrate into their communities. It provides workshops on financial literacy, conflict resolution, and connects participants with employers willing to hire people with criminal records.

the number of job openings in the U.S. compared to 6.8 million unemployed.

responsibilities. Employers are increasingly offering remote work options, giving retirees greater control over their schedules and enabling companies to tap into their vast experience.

People with disabilities also provide significant value in fostering a diverse workforce. Organizations like the Job Accommodation Network ( JAN) promote inclusive employment practices and offer resources to help employers create more accessible work environments.

Embracing this diversity not only helps companies meet legal standards but also enhances workplace culture.

than in 2021 and 2022,” Berry shared with Area Development via email. “Some clients have retained strategies they implemented during the shortage—like automation, adjusted shift schedules, and creative recruiting—but the urgency has decreased.”

While the labor shortage may be subsiding, the expansion of labor recruitment into nontraditional areas might contract. However, by exploring untapped talent pools and fostering inclusive practices, companies can create a more resilient workforce. In the evolving labor market, ongoing adaptation will be key to sustainable growth and success.

Tapping into Other Talent Pools

Retirees, many motivated by financial need or the desire to stay active, are also re-entering the workforce. They often seek part-time or flexible positions that allow them to balance work with personal interests or caregiving

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Workforce

Run a Job Task Analysis Use this method to address skills gaps and boost retention

By Dan Pickel Director of Certification and Accreditation at NFPA

I

n today’s fast-evolving skilled trades industry, employers are navigating significant challenges, including labor shortages, high turnover rates, and widening skills gaps. To address these issues effectively, companies must prioritize talent management strategies that foster recruitment, retention, and ongoing employee development. A key component of this approach is job task analysis, a systematic process that helps organizations pinpoint the exact skills and knowledge workers need to excel in their roles.

“Certified professionals improve efficiency, drive down costs, and enhance customer satisfaction.”

The role of job task analysis in workforce development

Job task analysis is a powerful tool that enables employers to break down each role into specific tasks and identify the knowledge, skills, and abilities (KSAs) required for successful job performance. This detailed understanding not only informs hiring and training

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decisions but also forms the foundation of professional certification programs that are both relevant and specific to workers.

How companies can conduct a job task analysis

A job task analysis serves as the backbone for creating effective certification programs based on informed insights, diligent research, and subject matter expertise. While this is a standard undertaking for organizations that develop professional certifications, companies can conduct their own job task analyses.

To start, identify a specific role within your organization using various methods, such as conversations with management, employees, or customers. Focus on a role critical to your company’s success and performed by more than one person.

One crucial aspect of conducting a proper job task analysis is compiling relevant data and developing a thorough list of tasks required for the role. In the certification world, this is referred to as a “task inventory.” This process helps companies understand employees’ needs and identify certifications to enhance their education, resulting in a more efficient and productive workforce. While this once took many hours, much of the process can now be completed online or with the help of AI. Reviewing job task analyses from leading certification organizations can also provide helpful insights.

Once you’ve gathered your data, assemble a team of subject matter experts (SMEs) to review the task inventory and formalize it into a comprehensive job task analysis. This team should include staff or individuals with direct knowledge of the role and its responsibilities. For example, at NFPA, we recruit SMEs to form a Certification Advisory Group (CAG).

The CAG refines the job task analysis and develops reliable certification exams.

Your team should review the task inventory, retaining tasks that are actually performed and discarding irrelevant ones. They can do this based on their own experience or by consulting others familiar with the role.

The next step is categorizing tasks into relevant groupings, known as content domains (e.g., electrical tasks or mechanical tasks). At NFPA, we take it a step further by sending the job task analysis as a survey to industry-specific individuals, asking two key questions about each task: How often is the task performed?

How critical is the task?

While companies may not need to send surveys, doing so can provide valuable insights if you have the right audience. When reviewing survey results, remove for free site information, visit us online at www.areadevelopment.com

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tasks that are rarely performed or unimportant, and highlight those performed frequently and deemed critical.

At NFPA, the CAG uses these results to determine the weight of each task and domain, informing the number of questions on the “exam blueprint.” This blueprint helps create exams that align with the tasks professionals perform and their importance.

Building a talent management strategy

Once you have a job task analysis and a list of related certifications, create a talent management strategy around them. A strong talent management strategy is a well-coordinated system that includes the following steps: • Skills gap analysis: Identify specific skills and education required for the workforce, such as relevant certifications.

• Customized training programs: Determine which training methods work best for your organization— online, in-person, or hybrid learning.

• Financial assistance and incentives: Demonstrate commitment to employee growth by offering financial assistance or incentives for certification programs.

15% Average reduction in rework and inspection failures attributable to certified workers.

• Track and measure success: Monitor the impact of certification programs through methods such as tracking incidents, productivity, and retention rates.

The role of certifications in job task analysis

Certifications hold tremendous value in real-world applications and job skills. They focus on industry-specific knowledge and best practices, equipping skilled trade workers with the tools needed to meet industry demands.

A comprehensive job task analysis that leverages role-specific data provides employers with a deeper understanding of the certifications required to upskill their workforce. This talent management approach fosters loyalty among workers, helps retain top talent, and reduces costs associated with rework and failed inspections. Certified professionals improve efficiency, increase customer satisfaction, and strengthen your company’s brand.

percentage of how much certified workers reduce rework and inspection failures

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11/26/24 4:08 PM

Site Selection

Why Decarbonization Goals Start with Site Selection

By Mac Farr, Principal, Strategic Development Group

S

ustainability goals have become a critical component of corporate strategy and have led industrial manufacturers to reevaluate how they approach site selection. The need for reliable access to skilled labor, logistical infrastructure, and utilities remains crucial, but a new factor has taken precedence: decarbonization.

In response to ambitious carbon reduction commitments, manufacturers are increasingly focused on selecting sites that provide pathways for industrial decarbonization—a trend that has far-reaching implications for companies and communities alike.

At Strategic Development Group, we’ve observed a shift in site selection priorities for process manufacturers. Land, labor, logistics, and utilities remain key, but our heavy industrial clients are now prioritizing sites and regions that provide pathways for industrial decarbonization, both in the short and long term. This dynamic and evolving landscape is reshaping the way we evaluate sites and assess risk during site selection engagements. What follows is an analysis of the current state of industrial decarbonization in the U.S. and its impact on companies considering location and expansion initiatives.

strategies. Several trends have emerged over the past 24 months: • End-of-life material feedstock: Projects that utilize end-of-life materials as feedstock instead of virgin material are gaining traction.

These processes often result in fewer emissions by reducing waste and are typically less energy-intensive. This trend is expected to continue as technologies for reusing materials reach commercial scale.

• Availability of low-carbon fuels: The market for commercial-scale low-carbon hydrogen, particularly blue and green hydrogen, is still emerging. Currently, there’s an imbalance between supply and demand as industries rapidly seek low-carbon hydrogen, both as an energy source and feedstock. Sites near proposed blue and green hydrogen projects, or with pipeline access to them, will be highly valued.

State of Industrial Decarbonization

The industrial sector is responsible for 1.41 billion metric tons of energy-related carbon dioxide emissions annually—about 30% of the U.S. total. More than half of these emissions come from hard-to-abate sectors like iron, steel, chemical, and cement manufacturing. Through legislation like the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL), the U.S. government is directing significant capital to decarbonize these sectors.

Recently, the Department of Energy awarded up to $6 billion in direct project support for decarbonization technologies within energyintensive industries. The Rocky Mountain Institute estimates that by 2030, public funding from Residential the IRA could reach $1 trillion. As of mid-2024, business and consumer investment in clean technologies since the IRA’s enactment totals $493 billion—an impressive 71% increase over the previous two years, according to a report by the Rhodium Group in partnership with the MIT Center for Energy and Policy Research.

Commercial This surge in attention—and funding—has had a noticeable impact on site selection among Chemicals heavy industries. The ability of a site to provide Refining decarbonization options has become a critical factor in many capital-intensive manufacturing Iron & Steel 7 location decisions.

Food & Beverage

Sustainability Trends and Location Strategy

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Cement & Lime

• Carbon capture and sequestration (CCS): Not all regions of the U.S. are equally suited for CCS. Permanent underground CO2 storage requires specific geological conditions, as well as regulatory approval.

Currently, only four federally permitted Class VI wells exist in Illinois and Indiana, with a backlog of permit applications. States pursuing Class VI primacy, like Louisiana, North Dakota, and Wyoming, are better positioned to implement CCS in the near term.

• Renewable and carbon-neutral electricity: Electrification of manufacturing, along with a shift away from combustible energy sources, is driving the demand for renewable power. Sites that can offer multiple pathways to competitively priced renewable energy are increasingly attractive to manufacturers with decarbonization goals.

Transportation

20 17

6

2 31

Other Manufacturing Non-Manufacturing Industrial

Site Selection and Economic Development Considerations

Industrial

20

For organizations considering a pivot toward decarbonized manufacturing, the key takeaway is that the cost of decarbonization technologies will continue to decline, and industry standards will eventually stabilize around technologies like green hydrogen and electrolysis. In the interim, we are witnessing a significant industrial energy transition.

From a corporate executive’s perspective, the most important factors are cost optimization and flexibility when it comes to decarbonization pathways. For economic development practitioners, communities that recognize and adapt to this transition—by preparing sites for decarbonization and ensuring readiness—will be best positioned to attract manufacturing capital investment and job creation in the years ahead.

for free site information, visit us online at www.areadevelopment.com

11/25/24 2:37 PM

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Construction

Beyond Square Footage Companies prioritize values and mission when choosing modern headquarters locations

By Charles Johnson, President & CEO of Johnson Consulting and Chair of

the World Trade Centers Association (WTCA) Real Estate Member Advisory Council

T

he North American commercial real estate (CRE) market has evolved post-COVID amidst a unique era of technological revolution, remote work, and AI integration. Pressure is intensifying for properties to stand out in attracting company headquarters to multi-tenant buildings. The days when square footage or address alone determined desirability are over. Today’s businesses are looking for more than just an address—they want to be part of an amenitized ecosystem that reflects their values and mission.

Here are three key mission-driven differentiation factors that are helping building owners compete in today’s tightened North American commercial office market:

1. A Global Approach to Business

In some scenarios, the building name itself can reflect the values of the company choosing to locate within it. For example, companies located in World Trade Center (WTC) facilities send a message about their desire to engage and connect beyond their local market. These companies benefit from a blend of leasable space, amenities, educational resources, and networking connectivity tailored to support their global mission.

ronmentally friendly materials—not only enhance a building’s value but also reduce operational costs over time.

These visible sustainability features, like green terraces, integrated plant systems, and solar panels, showcase to visitors and stakeholders that a company is serious about its environmental commitments.

New and updated office developments increasingly highlight these sustainability features, ensuring they stand out in a competitive market.

3. Culture & Quality of Life

Cultural placemaking has emerged as a valuable tool in attracting corporate headquarters. By developing or updating buildings near culturally rich environments where people want to spend their free time, companies publicly demonstrate that they care about the quality of life for their employees and the broader community.

The Dallas Arts District is an excellent example of this, with the city enhancing its cultural assets—including entertainment and event venues, public art, and vibrant retail—to attract corporate headquarters.

Similarly, Tucson’s focus on cultural placemaking, using tax increment financing (TIF) to fund entertainment venues, public art spaces, and

“Sustainable design elements not only enhance a building’s value but also reduce operational costs over time.”

Through the World Trade Centers Association (WTCA), tenants gain access to a network of over 300 WTC businesses internationally and more than a million affiliated companies across nearly 100 countries. This global connectivity supports their growth and reinforces their international vision. These kinds of mission-driven environments help companies actualize their global ambitions while sending a message to the world.

2. Environmental Sustainability

Sustainability is another key differentiator that reflects a company’s values. Many organizations are embedding environmental responsibility into their core mission and expect their physical spaces to do the same. Modern office buildings now incorporate green technologies and certifications like LEED, appealing to organizations committed to corporate social responsibility. Sustainable design elements—such as energy-efficient systems, water conservation measures, and envi70 AREA DEVELOPMENT

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transportation hubs, has driven more aggressive office development growth. Companies that locate in these areas send a strong message about their focus on employee well-being and community connection.

A Mission-Driven Path Forward for Successful HQ Development

As the North American CRE landscape evolves, and as younger generations like Millennials and Gen Z take over decision-making for their companies’ locations, mission-driven differentiation will continue to be a key factor when signing long-term HQ leases. Properties that consider global connectivity, sustainability, and cultural vibrancy are not only positioned to weather today’s market challenges but will be better prepared for future storms. A building headquarters is no longer just a shell, just as business culture is no longer a logo, and the CRE market is poised to embrace this shift in values. for free site information, visit us online at www.areadevelopment.com

11/25/24 2:39 PM

Capital

Large-Scale Projects Face Financing Challenges Executives have been forced to find new ways to finance projects

By Adam Glatz Managing Director at Maxis Advisers

L

ately, securing financing for large-scale development projects has become increasingly complicated and nuanced. Executives looking to expand facilities or select new locations must navigate myriad challenges, from volatile capital markets to stringent investor expectations.

That’s because in 2023, capital markets encountered disruptions reminiscent of the 2008 global financial crisis. The Federal Reserve’s ongoing efforts to combat inflation through interest rate hikes resulted in borrowing costs reaching their highest levels in over a decade. The cumulative effect of these measures made it extraordinarily difficult for companies and developers to secure the necessary funding for their projects. Money was essentially frozen.

For corporate executives, this tightening of capital availability means that traditional avenues for financing, such as bank loans and equity investments, are less accessible. The increased cost of capital also translates into higher project costs, making it imperative to explore alternative financing strategies and sources.

projects and investments in technology and certain sustainability initiatives. These programs offer financial incentives, tax breaks, and grants that can offset the higher costs of capital and make projects more attractive to investors.

Corporate executives should actively engage with these programs to maximize their benefits. Understanding the specific requirements and opportunities associated with each initiative can provide a competitive edge in securing funding and moving projects forward.

Additionally, state and local economic development agencies can be valuable partners in navigating the regulatory landscape and accessing available resources to reduce project costs and increase returns.

While the federal programs typically get the most media attention, the state and local offerings are more widely applicable to a larger swath of project types and often more impactful to the project’s successful implementation.

“Corporate executives must present compelling business cases to attract investment.”

Investor Behavior and Selectivity

In this challenging environment, investors have adopted a highly selective approach to deploying their capital. Despite having significant funds at their disposal, investors are demanding higher returns to compensate for the perceived risks associated with large-scale projects. This cautious stance is driven by the need to ensure that investments are not only profitable but also resilient to economic fluctuations.

Corporate executives must present compelling business cases to attract investment. This involves demonstrating strong financial metrics, robust risk management strategies, and alignment with current market trends. Investors are particularly interested in projects that offer clear paths to high returns and have built-in safeguards against potential disruptions.

Regulatory and Economic Incentives

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Mitigating Financing Risks

Given the current economic conditions, companies must employ strategic approaches to reduce financing risks and enhance project viability.

Several effective strategies include:ž 1.

Cost Reductions • Cash Grants: Securing direct financial support through cash grants can significantly improve project financials. While not universally available and often tied to job creation requirements, cash grants can be a critical component of the funding mix.

• Fee Reductions and Speed to Market: Reducing permitting fees and expediting the approval process can lower upfront costs and accelerate project timelines, making projects more appealing to investors. Securing a property’s entitlements as quickly and efficiently as possible is crucial to a development’s success.

• Infrastructure Improvements: Preemptive site improvements, such as upgrading utilities and transportation access, can enhance site readiness and reduce project delays. for free site information, visit us online at www.areadevelopment.com

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“Money was essentially frozen, making it extraordinarily difficult to secure funding.”

2.

Leveraging Public-Private Partnerships • Collaborating with local governments and economic development agencies to share risks and benefits. Successful examples include projects where public entities have contributed to infrastructure costs, significantly lowering the financial burden on private developers.

3.

Diversified Funding Sources • Combining traditional financing with alternative sources such as bonds, private equity, and public funding. This diversification can spread risk and provide a more stable financial foundation for projects.

Examples of Successful Strategies

A developer-owned property in North Carolina with prohibitive infrastructure costs sat undeveloped for years. Through a public-private partnership with the county, the site received $7 million in infrastructure development, which made further development feasible.

This collaboration resulted in a $160+ million investment and the creation of 400 new jobs for the county,

demonstrating the potential of public-private partnerships to overcome financing hurdles.

Similarly, an office building in Texas sat vacant for years, in desperate need of a remodel even before the current office vacancy crisis. Thanks to a novel application of a new city-level incentive designed to assist with the renovation and modernization of corporate office campuses, the developer was able to secure financing to convert the property’s use from office to industrial. This partnership provided the city with a highly desired industrial site that immediately received interest from multiple potential tenants even before construction commenced. the number of To be sure, the current economic landscape presents jobs that were significant financing challenges for large-scale developcreated after ment projects, requiring corporate executives to adopt innovative strategies to secure necessary financing. a modest $7 By understanding investor requirements and utilizing infrastructure non-traditional strategies for reducing costs, executives can investment enhance the financial viability of their projects and drive sparked a new successful outcomes. As the market continues to evolve, life for the long proactive and strategic approaches will be key to securing dormant site. the necessary funding and achieving long-term growth.

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Taxes

Max Your Climate Incentives How to successfully take advantage of complex federal incentives for achieving sustainability goals

By Steve Tozier, Executive Director, Global Location Investment, Credits and Incentives Services at EY

T

he Infrastructure Investment and Jobs Act (IIJA) and the IIJA Federal Grants and Loans Inflation Reduction Act (IRA) offer unprecedented opSince the passage of the IIJA in 2021, announcements of new funding opportunities have been emerging from various offices portunities for businesses of all shapes, sizes and sectors to within DOE, such as the Office of Clean Energy Demonstraexecute on their sustainability goals. The IIJA, enacted in November 2021, authorized approximately $200 billion of funding, mostly in tions (OCED) and Energy Efficiency & Renewable Energy the form of competitive grants and loans through the US Depart(EERE) among others. These grant programs support a variety ment of Energy (DOE), for public and private applicants planning of climate change priorities – renewable energy, energy storpilot-scale, demonstration projects across a variety of sustainability age, industrial decarbonization, hydropower, grid resilience in rural communities, decarbonization of port operations, critical topics. The IRA, passed into law in August 2022, offers another $280 minerals, low- or no-emission buses, carbon capture, and many billion in tax credits to organizations engaged in decarbonizing their others. These programs, in many cases, are intended to offset as operational footprint or scaling up the manufacture of advanced much as half of the cost associated with implementing innovaenergy technologies within the United States. tive projects targeted to new or improved technologies not yet The federal government developed these various cash and tax widely commercialized. benefits to encourage and facilitate the sustainability ambitions of both public and private enterprises. For example, these incentives The grant application process requires a detailed and technical support a variety of activities including the implementadescription of the proposed project. Application narratives tion of clean energy systems, the installation of energyare expected to specify the beneficial impacts of the efficient properties in commercial buildings, the transition proposed projects on their host communities, includto electric vehicles (EVs) and the infrastructure needed to ing meaningful two-way engagement with grassroots charge them, the production of sustainable fuels, and the leaders and key stakeholders, quality local employment development and manufacture of new advanced energy opportunities, and environmental stewardship. If awarded, technologies and components. the DOE also encourages applicants to partner with While the opportunities to enhance the economics of other parties – “subrecipients”– in executing the projsustainability projects and initiatives are many, capturing these ects. Application submission deadlines may only span benefits is not without complexity. The IIJA federal grant apseveral weeks after funding rounds open. Therefore, the short-fused nature of the call for applications requires plication process is technical, time-sensitive, and competitive. the amount proactive ongoing monitoring of DOE announcements Nearly all the IRA tax credit programs now employ a twoauthorized by tiered tax credit framework involving bonus credit value if new and pre-identified internal process owners, partners, two recent laws prevailing wage and apprenticeship (PWA) requirements are and 3rd party advisors to move swiftly if a well-suited for sustainability met in connection with projects greater than 1MW. If certain opportunity surfaces. projects.

The DOE’s Loan Program Office (LPO) also ofsustainability projects are in low-income census tracts or the fers favorable financing for sustainability projects, such site of abandoned coal mine land or power plants (so-called as the LPO’s Title 17 Clean Energy Financing Program. Title “energy communities”), the likelihood of grant awards may increase, and 17, originally authorized by the Energy Policy Act of 2005 and the value of certain tax credits may be enhanced or unlocked altogether. more recently amended by IIJA and IRA, now has an expanded An additional 10 percent tax credit adder is available to projects if the scope to support investments in innovative energy technologies structural steel and manufactured products used on them meet certain domestic content sourcing thresholds. Finally, many of the tax credits and legacy energy infrastructure. The program focuses on four under IRA can now be transferred to unrelated parties for cash, offering project categories: Innovative Energy, Innovative Supply Chain, State Energy Financing Institution-Supported, and Energy Inthe ability for public sector and non-profit entities that are generally immune from taxation and private sector enterprises that are not in a frastructure Reinvestment. As with federal DOE grants, the Title federal taxpaying position to still participate in the incentives.

17 application process is a high hurdle. But the program offers A proactive and informed approach is key to successfully navigatattractive rates and terms compared to what may be available ing this complex landscape of financial opportunity. from commercial banks.

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for free site information, visit us online at www.areadevelopment.com

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IRA Tax Credits – Documentation Intensive

Unlike the DOE’s grants and loans, most of the tax credits under the IRA are not application-based and are instead claimed directly on federal tax returns. Tax credits exist for implementing qualifying clean energy systems (Sections 48/48E, 45/45Y), producing and selling qualified clean energy products (Section 45X), purchasing clean commercial vehicles (Section 45W), installing EV chargers (Section 30C), producing and blending sustainable fuels (Sections 40A, 40B, 45Z), carbon capture and sequestration (Section 45Q), and hydrogen production (Section 45V), among others. The onus is on the tax owner of the qualifying assets to properly document, calculate, and claim these credits to enhance their value and defend them if audited by the IRS. Proper documentation of eligible cost is important. It does not, however, begin and end with the invoice line items for purchased equipment and contracted labor in the case of an Investor Tax Credit (ITC); nor is it limited to production and sales volumes in the case of a Premium Tax Credit (PTC). For projects with system capacity of 1MW or greater, tax owners must pay the prevailing wage to all who are conducting physical labor at the site throughout the course of the construction project to claim the ‘5X multiplier’ bonus credit. The difference can be significant – using the Section 48 ITC as an example, it would equate to a 30 percent credit versus the 6 percent base credit. This prevailing wage requirement includes the wages and fringes paid to the tax owners’ employees work-

monitor, identify, apply for and comply with federal sustainability incentives is more likely.

Multi-disciplinary collaboration – Frequent interaction between sustainability, operations, tax, finance and other groups improves awareness of new sustainability initiatives and proposed projects, as well as the types of incentives which may support them. A tax executive at a Fortune 500 industrial company mentioned to me that, until recently, he had never met the VP of Sustainability in his organization despite their offices being on the same floor for multiple years. Today these two executives make a point to invite each other to their team meetings and compare notes regularly on IRA incentives. This type of cross-functional collaboration is a key success factor.

Partnerships with 3rd parties, vendors and contractors – Many organizations planning multiple sustainability projects over the next decade are taking a long-term view. Wherever feasible, they are exploring mutually beneficial partnerships with vendors and contractors to create efficiencies and improve visibility into documentation required by IRA. They are also looking to 3rd party consultants to help build repeatable internal processes. This is particularly helpful with the monetization of tax credits through the direct pay and transferability provisions of IRA, which requires additional diligence and specialized knowledge.

“A proactive approach is key to navigating financial sustainability opportunities.” ing on the project, as well as the workers employed by contractors and subcontractors. Qualifying projects must also utilize apprentices during construction, and the number of apprentices required is determined by specific ratio-based tests that compare against the number of journey workers operating onsite. Tax owners must therefore have a recurring process to monitor and document the extent to which prevailing wage and apprenticeship (PWA) requirements are being met and fix any issues within the timeframe defined in the IRS regulations or face penalties and perhaps even lose the bonus credit status in some circumstances.

Tax owners interested in claiming the incremental 10 percent domestic content bonus credit must also maintain documentation that demonstrates the country origin of structural steel and iron, as well as the manufactured products and component parts being installed on the project. This documentation may be difficult to obtain especially as it relates to manufactured products since the IRS guidance focuses on a US versus non-US ratio test using a vendor’s direct cost. Vendors may be hesitant to share this type of information with their ultimate customer if they regard it as sensitive or proprietary.

Practical Guidance for Executives

Organizations can take steps to better position themselves to claim these financial incentives.

Executive sponsorship – If the C-suite prioritizes the decarbonization of operations and organizational objectives are aligned to execute on this goal, internal support for needed investments in resources to

Technology-enabled processes – Reliance on search engines for DOE opportunity spotting and use of PWA surveying tools have become more prevalent in the marketplace. High performing organizations are leveraging their internal systems to ensure the data required for applications and compliance is more accessible to their teams. These technology investments help enable the entire incentives lifecycle.

State and local incentives layering – Stacking federal, state and local incentives opportunities together helps overall project economics.

Engaging with state and local officials can also help garner support for the other critical needs of a project, such as permitting and approvals.

To be sure, federal incentives under IRA and IIJA may offer a wealth of opportunities for public and private organizations looking to achieve their sustainability goals. However, organizations must be prepared to navigate the complexities of claiming and applying for these benefits and complying with programmatic requirements. By understanding, anticipating and properly executing on these incentive programs, organizations can enhance the financial feasibility of their projects and initiatives, increase investment, and contribute to a more sustainable future.

The views reflected in this article are those of the authors and do not necessarily reflect those of Ernst & Young LLP or other members of the EY organization. The information in this article is provided solely for the purpose of enhancing knowledge. It does not provide accounting, tax, or other professional advice. Copyright 2024 Ernst & Young LLP. All rights reserved.

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11/25/24 2:44 PM

Automation and AI

Do Your Environmental Due Diligence … Or Else This one practice ensures compliance, mitigates risks, and protects investments

By Richard Mailhot Dresdner Robin, Senior Project Manager, Dresdner Robin

I

n today’s world, where the intersection of business and sustainability is under more scrutiny than ever, companies face mounting pressure to ensure their operations are not only profitable but also environmentally sound. With growing public awareness of climate change and stricter regulatory standards, environmental due diligence has become a critical step in mitigating risk and fostering long-term resilience. But what exactly does it entail, and why is it more relevant now than ever?

At its core, the primary objective of environmental due diligence is to identify and quantify environmental risks, such as contaminated soil or groundwater, and to obtain legal protection under federal and state regulations prior to property acquisition. It is typically conducted at the request of land developers, lenders, attorneys, or private owners intending to purchase or refinance a property.

2. The likely presence of hazardous substances or petroleum products due to a likely release.

3. Conditions posing a material threat of a future release of hazardous substances.

Although Phase I ESAs do not involve sampling or lab analysis, these services may be recommended based on findings. Importantly, Phase I ESAs provide legal protections under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund. Protections include: Innocent Landowner Defense: For buyers unaware of contamination after due diligence. Contiguous Property Owner Defense: For owners of properties adjacent to contaminated sites. Bona Fide

New lead-in-soil standards could affect 3,000 remediation projects statewide.

In New Jersey, many projects may require preparation of a Preliminary Assessment (PA) Report in accordance with New Jersey Department of Environmental Protection (NJDEP) requirements.

Recent regulatory changes, including the NJDEP’s revised residential remediation standard for lead in soil, make this process even more critical.

Effective May 6, 2024, remediation standards for lead in soil will decrease from 400 mg/kg to 200 mg/kg, with a six-month phase-in period. The NJDEP estimates that approximately 3,000 active remediation projects in New Jersey exceed the new 200 mg/kg standard.

The role of Phase I ESAs in due diligence

Another crucial step in due diligence is the Phase I Environmental Site Assessment (ESA), conducted under ASTM International’s E1527-21 standards. This non-invasive review includes: Site reconnaissance, regulatory and historical records review, and interviews with key stakeholders The Phase I ESA identifies Recognized Environmental Conditions (RECs), defined as: 1. The presence of hazardous substances or petroleum products on the property due to a release.

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Prospective Purchaser Defense: For new owners of contaminated properties who comply with cleanup requirements.

Phase I ESAs have a shelf life of 180 days, after which certain components must be updated.

New Jersey’s PA report and its protections

In New Jersey, a PA report includes similar elements to a Phase I ESA but follows the New Jersey Technical Requirements for Site Remediation (N.J.A.C. 7:26E). The PA identifies Areas of Concern (AOCs)—locations where hazardous substances or pollutants are present or suspected.

The PA also provides legal protection under New Jersey’s Spill Compensation and Control Act (Spill Act).

This includes the “innocent purchaser defense,” shielding buyers from liability for pre-existing contamination if they were unaware of the contamination at the time of purchase number of and followed due diligence procedures. days after Unlike the Phase I ESA, the PA may include an which Phase order-of-magnitude analysis to evaluate whether previously I ESAs must remediated areas exceed current remediation standards be updated to by more than 10 times.

Sampling and lab analysis are not remain valid. included but may be recommended based on findings. for free site information, visit us online at www.areadevelopment.com

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Avoiding common due diligence pitfalls

Environmental due diligence is only effective when conducted thoroughly and accurately. Common issues include: Incomplete reports: Phase I ESAs or PAs that fail to meet regulatory requirements can leave buyers without full legal protections. Lack of expertise: Consultants without local knowledge or sufficient training may overlook critical details. Time constraints: Rushed processes often result in inadequate reviews.

Why due diligence is essential

Environmental due diligence is not just a regulatory formality—it’s a safeguard for buyers to understand and mitigate risks before acquiring property. It ensures compliance with federal and state regulations, provides critical legal protections, and reduces the likelihood of costly surprises.

To achieve these outcomes, buyers must partner with qualified environmental consultants with local expertise and a skilled team capable of delivering thorough assessments. In an era where environmental liabilities can make or break a deal, cutting corners is a risk no buyer can afford to take.

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11/26/24 4:07 PM

Cut through the noise.

Get actionable talent benchmarks, competitive intelligence, and firmographic data with JobsEQ technology or by working with our team of economic consultants.

Chmura’s consulting team, including Ph.D. and Blue Chip economists, can provide economic and fiscal impact studies, industry & labor market analyses, competitor benchmarking, and economic development & strategic planning. They can also help you draw your own insights through our powerful JobsEQ software platform. Learn more at www.chmura.com.

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Access JobsEQ from anywhere, at any time.

Answer your research questions with guided prompts from JobsEQ.

Chat live with economists and get responses in under a minute.

Create custom regions, industry groups, occupation groups, forecasts, and more.

Tell your region’s story with clear maps and charts.

Forecast which industries and skills will be in demand in the future.

8/20/24 2:17 PM

AD INDEX Advertiser

Page

ALABAMA Opelika Economic Development

Advertiser

Page

NEVADA 29

City of North Las Vegas

37

NV Energy

C3

ARIZONA Arizona Commerce Authority

59

NEW JERSEY

Salt River Project

Choose New Jersey

19

27

Middlesex County

65

ARKANSAS Arkansas Economic Development Commission

53

NEW YORK National Grid

17

CONNECTICUT AdvanceCT 63

NORTH CAROLINA Economic Development Partnership of North Carolina

45

FLORIDA City of North Port

39

OHIO

Miami-Dade Beacon Council

31

JobsOhio

C2, 1

One Columbus

69

GEORGIA Georgia Department of Economic Development Norfolk Southern Corporation

51 5, 7, 9, 11, 13

TENNESSEE Tennessee Department of Economic & Community Development

71

KENTUCKY Kentucky Cabinet for Economic Development

22, 23

VIRGINIA Chmura Economics & Analytics

LOUISIANA

78

Virgina Economic Development Partnership

Lafayette Economic Development Authority

67

Louisiana Economic Development

35

40, 41

WISCONSIN Wisconsin Economic Development Corporation

55

MICHIGAN Flint & Genesee Economic Alliance

61

Michigan Economic Development Corporation

C4

LOCATION. LOCATION. LOCATION. The best LOCATION on the web to help with your corporate LOCATION needs.

The best LOCATION to start your site and facility search.

The best LOCATION to stay on top of industry needs.

The best LOCATION for the newest and most relevant industry produced studies and research papers.

Visit www.areadevelopment.com

AREA DEVELOPMENT 79

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11/27/24 1:13 PM

Last Word

Uncivil Discourse Threatens the U.S. Economy “There is a false notion that democracy means that ‘my ignorance is just as good as your knowledge.’”

—Isaac Asimov

By Jacob Everett Founder of Corsa Strategies

Y

ou can’t raise real cows in Indiana. And you can’t create fake cows in Alabama. This anti-everything sentiment can be observed across the U.S. Why? A new form of NIMBYism. The result? A challenging landscape for private sector investment and potential death knells for hundreds of communities.

A few months ago, I sat with a well-educated executive. A topic I specialize in came up, and I presented a cold, hard, indisputable fact. He looked at me and said, “I don’t believe that.” My response? “That’s the problem today—no one believes anything.”

This rejection of legitimate information, even when it’s clear, stifles business investment and cripples communities.

In the past three years, local government meetings have become standing-room-only events. While that level of engagement could be seen as positive, the atmosphere has become increasingly negative. People show up angry, and that anger gets directed at anything unfamiliar.

For example, in Tennessee, a rezoning request to convert agricultural land into warehouses was denied after neighbors opposed it. But even after the “victory,” they’re now unhappy about the agricultural use of the land. This kind of anti-everything attitude is prevalent, and in some places it has even crossed into dangerous territory.

Healthy skepticism is vital, but relying on facts and expertise should be the bedrock of decision-making. Communities must embrace technological advancements to position themselves for success, rather than succumbing to fear and misinformation.

NIMBYism has been around for decades. While some concerns were legitimate, much of it was rooted in personal biases.

Today, though, NIMBYism has morphed into something more dangerous. Now, facts and expertise are outright dismissed. If people see something online—no matter how unfounded—they expect it to be given equal weight with information from experts.

This leads to a dangerous standstill, which is why I call it “NEW NIMBY: No Expertise Wanted.”

Standing still is death for any community, especially rural America, where many places are already in a downward spiral.

The 2020 Census recorded the first decade of population loss in rural America. More than two-thirds of non-metropolitan counties lost residents between 2010 and 2020. Once population loss gains momentum, it’s hard to stop. Schools consolidate, businesses shutter, and people leave.

Rural America must evolve or risk disappearing. When a community becomes insolvent and irrelevant to the modern economy, it’s only a matter of time before it vanishes from the map. The American economy doesn’t stand still, and neither can these places.

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Moving Forward

NEW NIMBYism isn’t just a rural problem—it exists everywhere.

The question is, how do we navigate it? First, companies need to assess community fit earlier in the development process. There’s no such thing as a slam-dunk project anymore, and anticipating opposition is critical.

Elected officials, meanwhile, must rise to the challenge.

They’re tasked with separating fact from fiction and making decisions that benefit the entire community, even if they’re unpopular. They have to learn from other communities that have faced similar challenges.

Finally, citizens need to engage with the process consistently—not just when something impacts their backyard. Democracy demands active, informed participation.

NEW NIMBYs have one thing in common: they’re afraid of something different. But we all want what’s best for our families and communities. By focusing on that common ground, we can work together to support resilient communities and a thriving economy.

for free site information, visit us online at www.areadevelopment.com

11/25/24 2:45 PM

THERE’S A LOT ON THE LINE. From maintaining the bottom line for small businesses to keeping the assembly line moving for our major industries, NV Energy is powering Nevada’s future.

Our economic development experts work strategically to facilitate business location and expansion within Nevada. We can assist with pricing and renewable tariffs, site visits and provide the data critical to making an informed decision for business investment in Nevada.

We know there’s a lot on the line. That’s why we’re always there to power it.

Learn more at nvenergy.com/econdev.

Area Development Forum ad_2024-10.indd 1

10/23/2024 10:04:23 AM

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