Q2 / Spring 2013

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THWARTING THE Transportation HQ Location Decision— POWER THREAT Sector on the Move RISKS & REWARDS

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Q2/ SPRING 2013

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2013

Gold & Silver Shovel Awards 19 states are recognized for their achievements in attracting business investment and creating high value-added jobs.

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C A N A DA Albany 9.2 hours

Toronto 7 hours

New York City 8.4 hours

Detroit

Madison

3.25 hours

8 hours

Philadelphia 7.25 hours

Chicago 5.5 hours

Indianapolis

Washington, D.C.

2.75 hours

6.5 hours

St. Louis 6.5 hours

Nashville

Charlotte

5.6 hours

6.7 hours

DRIVE TIMES 500 mile radius from Columbus

Memphis 8.6 hours

Atlanta Birmingham

8.3 hours

8.5 hours

Maybe it’s time to put the Columbus region on your map.

Find out for yourself what a strong centralized location can do for your bottom line. To learn more, visit columbusregion.com.

Where the new Midwest begins.

NETWORK PARTNER

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CONTENTS

58 FORGING A WINNING

FEATURES 14 A BALANCED APPROACH TO THE HEADQUARTERS LOCATION DECISION

A relocation of a company’s headquarters should not be undertaken without careful consideration of the risks involved, but with proper planning, the advantages can make the move worthwhile.

Although a company should never select a location solely based upon incentives, financial assistance to offset project and/or operating costs is important when the final decision is made.

76 THE POWER OF 3D:

19 TRANSPORTATION

USING BIM FOR FACILITY MANAGEMENT

EQUIPMENT SECTOR ON THE MOVE

Automotive assembly and supplier manufacturing is on the upswing in America, while aerospace manufacturers are increasingly looking at opportunities in the commercial sector.

56 THWARTING THE POWER

THREAT: SMART BUILDINGS AND GRIDS

81 COVER STORY

BUSINESS-COMMUNITY PARTNERSHIP THROUGH INCENTIVES

Smart-grid technologies could not only prevent or alleviate outages, but also save companies money while capturing and marketing wasted energy.

Building owners and facility managers can reap the benefits of using building information modeling (BIM) long after construction is complete.

78 MARKETS MATTER IN THE DATA CENTER LOCATION DECISION

An understanding of the data center marketplace and its supply/demand dynamics will help both site selectors and their attractors move beyond the checklist and find the right fit.

104 ACHIEVING PLATINUM-

RATED CONSTRUCTION

Volkswagen of America earned LEED® Platinum certification due in part to recycled and regional materials and construction waste management.

Exclusive O N L I N E Content

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FEATURES NOW ONLINE...

Constructing a Mobile Project Plan Mobile technologies can assist in all phases of the construction process, helping to make the workflow seamless while simultaneously keeping costs in check.

How Is E-Commerce Changing Distribution Site Selection?

Retailers and supply chain and logistics experts explore the challenges brought about by new consumer markets and their demands for quick product delivery.

Managing Successful Plant Shutdowns The temporary shutdown of a manufacturing plant for improvements in equipment and processes must be made with the utmost planning and coordination to achieve the desired aims in the most timely, safest, and cost-efficient manner.

Innovations in Food Processing Help to Meet Economic Challenges While food processors are not sugar coating the realities of the evolving economy, they continue to devise ways to make it more palatable.

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

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“Business opportunities are like buses, there’s always another one coming.”

Richard Branson, British business magnate and founder and chairman of the Virgin Group of more than 400 companies (1950– ) Volume 48 | Number 2

Q2/ SPRING 2013

4 EDITOR’S NOTE — States and MSAs Recognized for Their Economic Growth and Job Creation Efforts

FIRST PERSON 10

Noel Ginsburg, CEO & President, Intertech Plastics

FRONT LINE

DEPARTMENTS

12

6 IN FOCUS In Focus Reshaping the Landscape

8 IN THE KNOW • Jones Lang LaSalle Identifies Global CRE Risks • New AlixPartners Study Examines Whether Now Is the Time to Reshore • PwC’s 1st Quarter Manufacturing Barometer Reflects Increased Optimism • Deloitte/WEF Report Highlights Teamwork Boosts Manufacturing

9 BUSINESS LOCATION TRACKER Business expansion & relocation announcements

Immigration Reform Would Impact Manufacturers

SPECIAL INVESTMENT REPORTS 61 TEXAS TODAY —

Texas’ stable business climate, low taxes, outstanding transportation infrastructure, and skilled work force are helping companies to succeed and create jobs.

106 LOCATION CALIFORNIA — Sheer size alone is enough to land California on the short list for relocation and expansion options.

AD INDEX/WEB DIRECTORY 112 Web addresses to this issue’s advertisers

SPECIAL REPORT

2013

27

GOLD&SILVER SHOVEL AWARDS

First Person: Supisara Chomparn, Director, Thailand Board of Investment, New York

Gold & Silver Shovel Awards — 19 states are recognized for their achievements in attracting business investment during 2012 and creating high value-added jobs.

Join Our Newsletter areadevelopment.com/newsletter

Front Line: Will Businesses Feel the Bite of Sequestration?

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Location Notebook: New Orleans’ BioDistrict Is a Model for Industry Collaboration

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

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EDITOR’S NOTE

Q2/SPRING 2013

States and MSAs Recognized for Their Economic Growth and Job Creation Efforts April was the fifth consecutive month of manufacturing activity expansion, according to the latest ISM (Institute for Supply Management) report. And, the U.S. economy as a whole grew in April for the 47th consecutive month. More importantly, the ISM’s Business Survey Committee projects U.S. economic growth to continue through the rest of 2013 in both the manufacturing and non-manufacturing sectors.

The pace of U.S. economic growth is evident in the 19 states receiving 2013 Shovel Awards from Area Development magazine for their efforts in attracting business investment and creating high value-added jobs last year. Their qualified work forces, well developed infrastructures, pro-business policies, creative incentives, and other advantageous attributes convinced companies to locate new facilities or expand existing ones within their borders. In recognition of these efforts, for the eighth year in a row, Area Development awarded a Gold Shovel to one state in each of four population categories and a Silver Shovel to each of 15 runner-up states. We also recognized five “Projects of the Year” within these states in varied industrial sectors for their sizable investment and job-creation numbers. (See report beginning on page 27.)

Also in this issue is Area Development’s second annual 100 Leading Locations report.

This year we ranked 380 MSAs nationwide against 21 economic and work force indicators to determine the 100 leaders, as well as leading MSAs overall in three population groups and for their “Prime Work Force Growth,” Economic Growth/Year-OverYear Growth,” and “Recession-Busting” indicators. (See report beginning on page 81.)

As we went to press on the Q2/Spring 2013 issue, it was reported that 200,000 jobs were created in the past month, helped along by discoveries of vast U.S. oil and gas reserves; unemployment had dipped to 7.5 percent; and there was a record rally in the stock market, which closed above 15,000 for the first time.

“There is now more money out there that can be lent, it can be lent to businesses so businesses can hire,” said Ben Chuckrow, senior vice president and resident branch manager, Saratoga Springs, N.Y., for Wells Fargo Advisors. “The expectation now is that the economy may pick-up steam in the second half of the year, and I think that’s what the stock market is indicating right now,” he added. Maybe this will be the year we can stop referring to MSAs’ “recession-busting” tactics and safely say that period is behind us.

www.areadevelopment.com EDITORIAL

E-mail: editor@areadevelopment.com Editor Geraldine Gambale Staff and Contributing James Berger John Borchardt Lisa Buddecke Dave Claborn Mark Crawford Clare L. Goldsberry Greg Guillot

Editors Susan Kleeman Beth Mattson-Teig Phillip Perry Jim Romeo Mali R. Schantz-Feld Monique Silverio Steve Stackhouse

DESIGN/PRODUCTION Art & Design Patricia Zedalis Production Manager Jessica Whitebook Production Assistant Talea Gormican EXECUTIVE Publisher Dennis J. Shea

dshea@areadevelopment.com Sydney Russell, Publisher 1965-1986 ADVERTISING SALES William Bakewicz (ext. 202)

billbake@areadevelopment.com Valerie Krpata (ext. 218)

valerie@areadevelopment.com ONLINE SERVICES Digital Media Manager Justin Shea (ext. 220)

jshea@areadevelopment.com Business Development Matthew Shea (ext. 200)

mshea@fastfacility.com Web Designer Carmela Emerson

BUSINESS SERVICES Reader Service Barbara Olsen (ext. 225)

olsen@areadevelopment.com Circulation Gertrude Staudt

circ@areadevelopment.com CONFERENCE SERVICES Program Manager Annie Gregson (212) 579-4469

annie@areadevelopment.com EXECUTIVE OFFICES Halcyon Business Publications, Inc. President Dennis J. Shea

Editor

Finance Mary Paulsen

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2013 EDITORIAL ADVISORY BOARD Tim Feemster Managing Principal, Foremost Quality Logistics

Ed McCallum, Principal, McCallum Sweeney Consulting

Andrew Shapiro Managing Director, Biggins Lacy Shapiro & Co.

Larry Gigerich Managing Director, Ginovus

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

Noah Shlaes Senior Managing Director, Newmark Grubb Knight Frank

Robert Hess Executive Managing Director, Newmark Grubb Knight Frank Andy Mace Principal Consultant, Cushman & Wakefield Global Consulting, Supply Chain Solutions

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Kathy Mussio Managing Partner, Atlas Insight Scott Redabaugh Managing Director, Jones Lang LaSalle

Thomas Stringer, Esq. Director, Business Advisory Services, Ryan & Company Dean J. Uminski Executive, Site Selection Consulting, Crowe Horwath LLP

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InFocusReshaping

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Reshaping the Landscape

By Kelli Delozier, VP of Real Estate Management, IDI

You might think landscaping an industrial property is fairly simple — a few shrubs here, a tree or two there. In reality, professional landscaping for Class A buildings is an art and science that requires careful planning, correct installation, and strict maintenance.

That’s because landscaping can do more than just enhance a building’s exterior. If done right, landscaping can also improve energy efficiency and make the environment more pleasant for workers and visitors. The economic rewards are not bad either; good landscaping can boost a property’s value by up to 15 percent.

Essential Elements

Kelli Delozier manages more than 10 million square feet of IDI-developed property and several third-party facilities in Dallas, Ft. Worth, and Houston, Texas.

In addition to managing day-to-day operations and tenant relations, she is actively involved in green initiatives across IDI’s property management portfolio.

A comprehensive landscaping plan has many elements, each with its own visual and functional purposes. The three primary elements are vegetation, landforms, and water features.

Vegetation consists of trees, shrubs, ground covers, annuals, perennials, vines, and turf.

Strategically placed, they can add visual interest, deflect wind, control erosion, and reduce noise around the building. The shade vegetation provides can lower temperatures, which reduces the demand on air-conditioning systems. Foliage and shade also soften glare and reflection from man-made materials. Finally, vegetation naturally removes dust and pollutants from the air and provides habitats for wildlife nesting, shelter, and food.

Landforms are elements such as earth berms, terracing, and retaining walls. When designed in harmony with the site’s natural topography and architecture, they can create spatial enclosures, screen undesirable areas from view, and reinforce architectural forms and features. These structures can create useable areas on slopes, which preserves vegetation, minimizes grading requirements, and offers visual interest in strategic sites on the property.

Water features include ponds, lakes, fountains, and pools located along green space corridors or in plazas. Aesthetically pleasing water features provide visual enjoyment and create focal points in the landscape. Functional benefits include masking vehicle and equipment noises, providing a localized cooling effect, providing onsite storm water retention and detention facilities, and reducing the demand for potable water resources.

What To Consider

Quality, low-maintenance landscaping is very market-specific and site-specific. Among the variables that must factor into landscaping plans are local and state regulations affecting everything from irrigation to the percentage of native plants required in various locations.

Other issues to consider when choosing vegetation and other elements include: • Desired aesthetic value: The types of plants used in a landscape changes from city to city.

Desert-like yucca plants would never be planted in Philadelphia, and hydrangeas, which need sun and warm temperatures, would not be found in Seattle.

• Upkeep requirements: Concerning grass, winter rye seed could be the right approach for a facility. Selecting this annual option provides green grass year-round and displays a lush appeal. Although this is more expensive option, the appearance is worth the investment.

• Tendency to attract undesirable pests: For example, birds can be a hazard to parking lots and cause roof damage. Pests can eat newly planted flowers and cause major issues with their digging, which can affect electrical and irrigation lines.

• Soil support: In developing a large facility, many berms and detention ponds are created.

Planting material in these areas is of the utmost importance in the beginning of a project to prevent mudslides and parking lot issues.

• Length of growing season: Seasonal color is best displayed in flowers located at tenant entryways and park entrances. All regions have different seasonal months that require a plethora of plant material.

Landscaping should not be an afterthought, but rather a part of your facility’s blueprint.

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IN THE KNOW JONES LANG LASALLE IDENTIFIES GLOBAL CRE RISKS “We believe with increased risk comes even greater reward,” say the authors of the latest annual report on global corporate real estate (CRE) trends from Jones Lang LaSalle titled “Risks Ahead.” It’s all about understanding the risks and making the right decisions, according to the report. “Those who effectively manage the risks will be rewarded with the opportunity to drive productivity enhancements and corporate competitiveness.”

1. Corporate leaders are ramping up their expectations, and the more they expect, the more risk there is that the CRE team won’t be able to perform up to those expectations. Jones Lang LaSalle advises being clear about priorities. “Leverage and partner with your supply chain and create capacity so that you can focus on managing internal stakeholders.”

2. The evolution of CRE outsourcing is happening at a faster pace, thanks to increased demand. The risk is that these external contributions might wind up being undervalued. The answer, according to the report, is to be proactive and partner with members of the procurement team, so they fully grasp CRE and its potential contribution to corporate strategy.

3. Workplace transformation and its potential to enhance worker productivity is the third trend. The risk is that there won’t be enough capital invested in workplace transformation to have a big impact. The advice: “Embrace big data, analytics, and performance tracking to demonstrate value.”

4. “CRE must become a collaborative change agent.” There’s plenty of interest in workplace transformation, but the CRE team can’t make it happen alone, and the risk is losing influence as a specialist. “Use real estate and the workplace as the common ground for greater collaboration.”

5. Finally, delivering operational platforms in emerging markets can really help drive corporate competitiveness, according to the report.

The problem is that emerging markets are challenging, increasing the risk of failure and the chance of damaging CRE’s reputation. The answer: “Educate the business about the challenges of delivering real-estate solutions in less transparent markets… early in the process.”

NEW ALIXPARTNERS STUDY EXAMINES WHETHER NOW IS THE TIME TO RESHORE The trend toward nearshoring — bringing overseas manufacturing operations back to closer-to-home locations — has North American economic development officials and economists thinking hopeful thoughts. The latest AlixPartners ManufacturingSourcing Outlook finds that the United States has actually hit parity with Mexico as a preferred location for nearshoring.

The report includes a survey of C-level executives from across more than 10 manufacturing-related industries, and 37 percent of the respondents cite the U.S. as the preferred nearshoring spot, the same percentage that prefer Mexico. Just about half of the respondents now see nearshoring as an opportunity for serving domestic demand — and of those respondents, a third are already in the process of nearshoring, while another 57 percent expect they will be within three years.

The AlixPartners report warns that it would be a mistake to take a broad-brush approach and consider the U.S. as the most competitive bet for all products. The equation is different, for example, depending on whether you’re making fabricated parts, consumer products, or assemblies. And, at the moment, the total landed costs for each of those product types remain lower in Mexico, China, and India than in the United States.

With regard to China, AlixPartners notes that its exchange rate has been strengthening against the dollar since 2005. If that trend continues, along with typical wage inflation trends and the expected increase in ocean freight costs, China’s landed cost will be approaching parity with America’s by 2015.

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PWC’S 1ST QUARTER MANUFACTURING BAROMETER REFLECTS INCREASED OPTIMISM The majority of the manufacturing executives who are part of the quarterly “Manufacturing Barometer” research conducted by PricewaterhouseCoopers LLP seem to be feeling better about the economy. The report for the first quarter of 2013 finds 55 percent optimistic about the American economy’s outlook for the next year, up from 48 percent the quarter before and definitely better than the past three quarters. Just 5 percent report being pessimistic, and the rest aren’t sure. These execs also are feeling ever so slightly better about the global economy, but that’s not saying much — their first quarter optimism is at only 36 percent.

Overall projections for 12-month revenue growth dropped from 5.2 percent to 4.3 percent. Still, 78 percent do expect at least some increase in revenues, while just 5 percent think revenues will head south. And the surveyed executives will be spending money over the next year — 71 percent expect that their operational budgets will grow and 43 percent plan some major capital expenditures. They’re looking to the future, too, with 52 percent saying they’ll boost their R&D budget, while 38 percent plan to unveil new products or services.

As for the employment outlook, “new hiring plans over the next 12 months were reported by 45 percent of industrial manufacturers, off 13 points from its above-trend line 58 percent in the prior quarter,” according to the PricewaterhouseCoopers report. The best news is that “only 3 percent are reducing their work forces.”

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Track business relocations and expansions on Area Development Online.

Studies/Research/Papers on Area Development Online.

We track announcements of all significant investment and job-creation projects throughout the United States and Canada at www.AreaDevelopment.com/NewsItems.

We cull insightful corporate real estatefocused studies, research, and papers from credible industry sources at www.AreaDevelopment.com/Studies.

BUSINESS LOCATION TRACKER Construction Under Way on United Natural Foods’ Wisconsin Facility SolarWinds To Invest $50 Million in Salt Lake City Hub A Texas-based company, SolarWinds, will establish an operations hub in Salt Lake City, Utah, with plans to create 1,040 jobs in the region during the next two decades.

The company’s new 425,000-squarefoot distribution facility near Racine, WI, is expected to bring 220 new jobs to the region.

Subaru Creating 900 Jobs in Lafayette, IN Japan-based automaker Subaru will invest $400 million to increase its Lafayette work force and bring production of its popular Impreza model to North America

ASMO North America Expanding in Greenville, NC A global auto supplier, ASMO North America, is investing $50 million to expand its manufacturing operations in Pitt County, with plans to create 200 new jobs at the facility.

400 Jobs To Be Created at New Reno Call Center GreatCall, Inc. will open a call center in Reno, NV, that is expected to create 400 jobs during the next five years, including 75 jobs within the first six months.

Middle East Manufacturer to Manufacture in GA Ford Invests $1.1 Billion & Adding 2,000 Jobs in Kansas City, MO Ford is retooling and expanding its Kansas City, MO, Assembly Plant to meet demand for its Ford F-150 and planned production of its new Ford Transit.

Hertz Relocates World Headquarters To Florida Hertz Corp. will relocate its worldwide headquarters from New Jersey to Estero, Florida, near Fort Myers, with plans to relocate up to 700 jobs over the next two years.

Dubai and Saudi Arabian-based carpet backings producer, Mattex, will invest $60 million to build a 200-employee extrusion manufacturing plant in Murray County, GA — its first manufacturing facility outside the Middle East.

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

DELOITTE/WEF REPORT HIGHLIGHTS TEAMWORK BOOSTS MANUFACTURING It takes teamwork to succeed in the highly competitive global manufacturing environment. That’s a key finding of “Manufacturing for Growth: Strategies for Driving Growth and Employment,” a new World Economic Forum report produced in collaboration with Deloitte Touche Tohmatsu Ltd. “Increasingly, businesses, government, and academia are partnering to make strategic choices about how to develop and sustain the knowledge and capabilities necessary to be leaders in the advanced manufacturing economy.”

The report was a yearlong effort that involved feedback from about 70 multinational manufacturing executives, as well as data and input gathered at workshops and through research. Nearly all of those who took part in the study said they worry about how they’ll be able to attract and retain the kind of talent they need to succeed, and they expressed concern about driving their organizations’ innovation agendas. The solution, according to the respondents, is collaboration between the public and private sectors, and also involving universities, research centers, national labs, and other nonprofits. Many of the executives pointed to existing public-private partnerships as examples, noting “these organizations address relevant, timely, and current issues while anticipating future demands and trends.”

The report also identifies public policy as a major factor determining global manufacturing competitiveness: “The impact that government policies can have across a number of competitiveness drivers — including trade; financial, monetary, tax, and legal systems; infrastructure; education; labor markets; and science and technology — is significant.” Needless to say, public policy can be quite complicated, but the plan for making it work for business is rather simple, according to the report. Once again, it’s teamwork: “As the strategic use of public policy intensifies, collaboration between policymakers and business leaders to create win-win outcomes becomes more essential.”

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First Person_Noel Ginsburg

FIRST PERSON

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NOEL GINSBURG

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CEO & PRESIDENT INTERTECH PLASTICS

Are there any reasons to reshore besides cost?

Ginsburg: Speed-to-market is another big one, but it’s cost-related as well. As the world moves forward and advances, time-to-market becomes part of the cost equation.

Why did so many manufacturers move their manufacturing offshore in the first place?

Ginsburg: Originally, they moved for lower costs. It was all cost-related. For many that started 10–15 years ago, and it became a big trend to manufacture in low-cost countries.

Everyone wanted the “China price,” and to be competitive, they had to go there.

Has the resurgence of ‘”Made in the USA” had any influence on manufacturers bringing manufacturing back to the U.S.?

Ginsburg: Yes it has. One customer that serves big-box retailers is moving manufacturing back in response to Walmart’s “Made in America” initiative.

Another customer moved all their molding offshore and they’re also responding to Walmart by saying, “We can make it in the USA and be cost-competitive.”

Let’s face it, though — no one would be doing this if it didn’t make sense from the cost perspective.

That seems to be changing. We’re hearing a lot about the reshoring of manufacturing from China and other Asian countries.

Is this trend a reality? And how has it impacted your particular business?

Ginsburg: It’s absolutely a reality.

We’re a turnkey solutions provider, which means we not only mold parts, but we provide decorating, printing and labeling, assembling, packaging, and distribution. That’s the value of being a regional supplier — a shorter supply chain that can provide a range of services. Last year, due to several customers moving their manufacturing back to the U.S., we invested $2 million in new injection molding equipment and auxiliary equipment.

Nonetheless, do you believe that consumers really care about the “Made in the USA” label?

Ginsburg: You bet they do! I can tell you the pride that one of our customers felt when they reshored 70 percent of their molding and were able to create jobs when they came back. People do care. We don’t want to see our neighbors out of work. This reshoring trend isn’t about philanthropy — it’s about building a strong economy and about people working. If they can buy something made in the USA and it’s only 1–2 percent more, they’ll buy it. And more and more we’re seeing prices equal to the China price.

Why do you think your customers have come back to the U.S. to engage with Intertech as a supplier?

Ginsburg: It’s really twofold. First, these OEMs are experiencing increased costs in China, such as double-digit rising wages along with the other costs of infrastructure. Transportation logistics are also problematic and the costs involved with shipping have escalated.

Can you give us an example?

Ginsburg: One customer was spending a million dollars a month to fly parts in from Asia. When they looked at their cost structure of manufacturing offshore versus what they can get [parts] for from a local supplier, the decision was easy. They have now reshored 70 percent of their product line. It’s simple math.

When our customers account for their total cost of doing business, we are now very competitive with China and other Asian suppliers.

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Do you think the government and manufacturing trade organizations are doing enough to encourage the trend going forward?

Ginsburg: I’m involved with the Manufacturing Initiative of the National Governor’s Association, which is doing a lot to promote reshoring by helping to modernize manufacturing in America. However, the government is beginning to realize that if we make everything overseas,

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the total cost to our country is greater than just the cost to go offshore. We’ve lost jobs and consumer confidence.

But if we have policies that incentivize bringing manufacturing back, we’ll have a healthy economy. This is really important because the social cost of unemployment is massive.

THE ASSIGNMENT Intertech Plastics Inc., is a Denver, Coloradobased plastic injection molding company that specializes in consumer and household products

How has this reshoring trend and your subsequent business expansion helped your business?

Ginsburg: The expansion allows Intertech to support our customers’ requirements for high-volume production, warehousing, and distribution to the western United States, within a cost structure that keeps the company competitive in a global marketplace. We’re investing in our plant and our employees. Combine that with the fact that the American worker is up to three times more productive than their Chinese counterpart, and this means we are competing successfully.

sold in “Big Box” stores nationally, in addition to a variety of industrial and packaging products sold directly to OEMs. Area Development interviewed Noel Ginsburg, CEO and President of Intertech Plastics, to ask him about the reshoring trend, why OEMs are returning to the U.S. to manufacture their goods, and the impact that’s having on his business.

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AREA DEVELOPMENT | Q2/Spring 2013

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FRONT LINE

Immigration Reform Would Impact Manufacturers

C

omprehensive immigration reform is one of the top priorities of the Obama administration. This includes reforms that will keep highly skilled workers in the United States, as well as the creation of a new system to bring skilled workers into the country when Americans aren’t available to fill jobs.

Reforming immigration policy that improves Visa access and a pathway to citizenship for highly skilled workers is one important aspect that could impact industry as well as foreign workers. U.S. manufacturers are experiencing a shortage of skilled workers, and skilled workers are vital to promoting business growth and market competitiveness — even the future of America’s manufacturing economy.

However, immediate immigration reform that would put highly skilled immigrant workers on the fast track for Visa access is not supported by everyone.

The Information Technology and Innovation Foundation (ITIF) also has called on Congress to include specific changes to the immigration system for highly skilled workers in any comprehensive reform package. Immigration reform, specifically addressing those in high-skilled STEM fields, is needed in order to meet work force needs and bring technically skilled talent workers to the United States, according to ITIF. While other nations have policies to attract foreign high-skilled workers, the U.S. does not — and that’s hurting our global competitiveness.

“Improving the system regulating high-skilled immigration needs to be a key focus of any immigration reform bill,” according to Robert Atkinson, president of ITIF “We cannot continue to fall behind other nations in attracting the highly skilled individuals to our shores.”

Current special Visa laws addressing skilled foreign workers allow for temporary U.S. employment in fields where domestic workers don’t meet industry demand. According to

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By Lisa Buddecke

ITIF, the current 65,000 cap on Visas allowed under this scenario does not satisfy the domestic worker shortage. Both IT businesses and manufacturers are looking for effective reforms that will fix flaws in the current system, while strengthening the economy and helping expand our work force without impacting American workers.

In mid-April, comprehensive immigration reform legislation developed by the bipartisan Gang of Eight — Senators Marco Rubio (R-FL), Jeff Flake (R-AZ), John McCain (R-AZ), Lindsey Graham (R-SC), Charles Schumer (D-NY), Robert Menendez (D-NJ), Michael Bennet (D-CO), and Dick Durbin (D-IL) — was welcomed by many. The National Association of Manufacturers (NAM) announced their support of the bill as it appears to address many of the necessary reforms.

“In today’s competitive global marketplace, small and large manufacturers in the United States need workers at every skill level,” said Caterpillar Inc. Chairman and CEO and NAM Board Chair Doug Oberhelman. “Immigration reform needs to work for manufacturers and our employees, not against us.”

Some of the bill specifics include recognition status for those living in the United States; increased access to highly skilled individuals who drive research and production; a new program to address future work force needs for differing skill levels; a more robust verification system; and increased border security. It’s hoped that the bill will not only help immigrant tech-savvy workers fill open positions now, but will also address delays in Visa processing.

While efforts are already under way by pro-legislation groups to gather support for the reform bill, those opposed to the bill are planning to make their concerns heard as well.

Nonetheless, the bipartisan proposal may be the most concrete step so far in addressing the many complex challenges of comprehensive immigration reform.

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Headquarters

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SITE SELECTION

A Balanced Approach to the Headquarters Location Decision A relocation of a company’s headquarters should not be undertaken without careful consideration of the risks involved, but with proper planning, the advantages can make the move worthwhile.

By Kathy Mussio, Managing Partner, Atlas Insight, LLC

Citing the international access provided by the airport in Charlotte, N.C., among other factors, Chiquita moved its headquarters from Cincinnati (shown here) to Charlotte in 2012.

H

eadquarters relocations are relatively rare when compared to the total annual number of site selection/relocation and expansion projects. And, the same can be said about entering into a corporate HQ relocation project as entering a marriage, i.e., “…not by any to be entered into unadvisedly or lightly...” In fact, companies should only consider headquarters relocation after careful and meticulous analysis of the risks versus the rewards. While companies can do a great deal to mitigate risks, an HQ relocation project always involves some disruption to business.

Companies are constantly tasking senior management to find savings. In the past few years, we have seen an increasing number of relocations based largely on cost. Typically the headquarters location is among the most costly real estate in a company’s

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portfolio, as HQs tend to be located in higher-cost cities. There are HQ functions, however, that could be moved to other less costly locations, creating operating cost savings through reduced real estate costs, wages, and taxes. Divisional headquarters locations seem to be more the norm. These projects tend to be located closer to where the industry is clustered. For example, we recently worked with an oil and gas equipment manufacturer on an HQ location project that represented one division of a very large conglomerate. The headquarters project criteria included only those locations with large oil and gas customers.

Not surprisingly, the cities that have the greatest number of Fortune 1000 headquarters are Tier I cities: New York, San Francisco/San Jose, and Chicago, with Houston, Dallas, Philadelphia, and Minneapolis/St. Paul also having large concentrations.

Texas has been the big winner in recent years with the sheer quantity of HQ projects the state has attracted.

Why Do HQs Relocate?

Corporate relocations are not entered into lightly or without a serious time-consuming analysis. There are high nonrecurring one-time costs associated with the relocation and risks that must be analyzed. Rarely is there only one reason driving the decision to undertake an HQ relocation.

Companies are motivated by a variety of reasons including strategic objectives and the need to re-brand or repoFOR FREE SITE INFORMATION, CALL

sition; however, we come across two or more of the following relocation drivers most often.

First, corporate HQ relocations are frequently driven by real estate needs, i.e., a company has outgrown its current footprint and needs to expand to a larger space. Many companies will simply choose to stay put and expand in their current city by leasing or buying a larger facility. However, sometimes the necessity for more space creates an opportunity to consider other cities that could either address any issues at the current location or offer new advantages at a different location.

Secondly, work force, especially lately with respect to IT functions, has been an issue for a number of companies. If it becomes a challenge to find the necessary skills within the local work force, companies will look to leave the current city behind and look for a location where the requisite labor is more readily available. However, cities can become saturated, i.e., too many companies with the same work force needs appear in the same geographical market, making it increasingly difficult to find and keep labor.

Companies are often interested in “hot” markets; but when too many companies come into that market drawing on the same labor pool skill sets, the market can quickly become saturated. Once this happens, a company can find itself in the same type of difficult labor situation that it was looking to escape. A company must fully vet out not only the current work

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It’s more than a dot on a map.

It’s a bull’s eye for top talent.

There’s a place in the Midwest, rich in business resources, where some of the nation’s most successful companies and brands are being created. In fact, the Minneapolis Saint Paul region is home to the most Fortune 500 headquarters per capita in the nation. With its perfect blend of talent, rich culture and high standard of living, it’s the ideal place for businesses to prosper.

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Ranked among the top 25 on Fortune’s Most Admired Companies list, Minneapolis-based Target owns and operates more than 1,750 stores nationwide with expansion plans for the U.S. and Canada. Target employs more than 350,000 people throughout North America. It attracts and retains some of the brightest minds in retailing today.

Shawn Gensch, Vice President of Marketing

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Headquarters

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force situation in a given market, but also the longer-term work force outlooks in a number of markets.

Additionally, mergers and acquisitions can often create HQ projects as two companies look to consolidate into one combined headquarters location, with the other location kept as a regional or divisional HQ. We also have been working lately with companies that are seeking to consolidate multiple statewide facilities into a unified HQ facility in order to cut costs as well as to create greater synergy between departments and divisions.

What Are the Most Common Factors?

There are a number of factors that impact most HQ projects. The factors that are typically part of HQ projects include: • Ability to attract and retain labor • Operating costs • Quality of life • Proximity to a major airport • Tax advantages • Incentives Work force: As explained, work force — the ability to attract and retain labor — is always crucial and heavily weighted in an HQ analysis.

Specifically, the ability to retain a certain percentage of key executives is critical when a company is considering a corporate HQ relocation. The locations under consideration must be as or more attractive to these executives than the company’s current location in order to encourage key individuals to relocate and stay with the firm.

Company goals vary from project to project, but we often see executive and key employee retention targets of 30–50 percent.

In addition, the type of new talent that is needed will often dictate the particular cities to be added to the prospective list. Companies in search of a younger, more “hip” work force may look to move to the central business district (CBD) of a vibrant city in order to attract and retain talent. In fact, there has been a migration away from suburban locations to city centers in order to attract this young work force who wants to work in the center of the action, and also closer to where

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they live. There has also been a trend in which companies will split operational functions and move or keep operations that need to draw from a younger work force into the CBD, while moving operations that do not need to be in the CBD to lower-cost locations elsewhere.

Operating costs: Relocating from higher-cost locations to lower-cost locations is another key factor that drives HQ relocations. A recent relocation project involved moving a company’s tech divisional HQ from New York City to Atlanta was based on cost savings related to both real estate and labor. The move saved $5/per square foot in leasing expenses, and the wage savings were also considerable; e.g., one tech job classification in Atlanta was estimated at 100K, whereas the same job in New York City was estimated at 140K. However, costs alone rarely drive an HQ project, since the one-time relocation costs squeeze most operational cost savings that can be achieved, especially in the first four to five years after relocation. Utah, Arizona, and Texas have had recent success in enticing California companies to relocate.

Quality of life: Almost all communities tend to lead with, “We have great quality of life” — a line that can make a site selector cringe…except when working on an HQ project. A good quality of life is always an important factor to these types of projects, and companies tend to gravitate to established pro-business cities with other Fortune 1000 companies already present. Cities with HQs already established will have the infrastructure in place to easily assimilate corporate executives into the community; importantly, there will be lifestyle amenities already in place to attract and retain the executive work force.

These executives are looking for a reasonable cost of housing, good quality and choices of schools as well as universities, low crime rates, cultural and recreational opportunities, and other quality of life attributes that typical HQ cities already feature.

One unique example is the program set up by the Georgia Lottery.

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The program guarantees free prekindergarten education to all Georgia school children; and, more impressively, it also guarantees paid college tuition for all Georgia high school students who graduate with a 3.7 or better grade point average. While the benefit of this program may not be quantifiable, it is an impressive selling point for Georgia when recruiting companies to relocate to the state.

Proximity to a major airport: Having multiple flights to key domestic and international destinations is almost always an important factor for companies, both for employee travel as well as for key customers’ convenience when traveling to the headquarters. Management wants to be able to fly nonstop wherever and whenever needed. Connecting flights and/or long drives to and from the airport are serious handicaps. If a foreign company is looking to set up its North American HQ, international nonstop flights to the country of the parent company will obviously be important.

Both Charlotte and Atlanta have had continued success in attracting the North American HQs for European companies.

Tax advantages: In the United States, where corporate tax rates vary dramatically from state to state, tax rates and related costs play a prominent role in relocation decisions.

Significant tax savings can sometimes be achieved by moving an HQ from a higher-tax to a lower-tax state. There is also the case of moving the HQ outside the U.S. for tax savings.

In the last year, much was written about Aon Corp.’s move of its Chicago HQ to London. While Aon indicated that the move to London was to be closer to “one of the key hubs of insurance and risk brokerage,” it is widely speculated that Aon had a large sum of cash abroad that would be subject to U.S. taxes if it had to be brought onto the company’s U.S. balance sheet.

By moving its HQ outside of the U.S., $300 million could be used without tax penalty for share repurchases and other share increases.

Continued on page 24

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INDUSTRY FOCUS

Transportation Equipment Sector On the Move Automotive assembly and supplier manufacturing is on the upswing in America, while aerospace manufacturers are increasingly looking at opportunities in the commercial sector.

By Steve Stackhouse

T

he road ahead is brighter than it has been in a good while for the transportation-equipment manufacturing sector, at least in America.

Car shoppers are buying, automakers are hiring, various metrics continue to point in a positive direction, and some of the activity that had been moving generally away from the United States appears to be heading back.

Though the economic recovery is not as robust as most would like to see, manufacturing in general is leading the way, according to The Kiplinger Washington Editors’ April forecast. The auto industry, in particular, is expected to grow 4 percent this year and 5 percent in 2014, after posting astounding 19 percent growth in 2012.

KPMG found much the same sentiment in its annual survey of automotive executives. Carmakers are ramping up production to serve the American market, increasing their hiring and thinking about whether they need to construct additional capacity.

The researchers say capacity is a longer-term issue worldwide, but the United States is where the crunch is most acute. Meanwhile, the forecasting firm R.L. Polk & Co. expects to see U.S. vehicle sales in the neighborhood of 15.4 million this year, about a million more than last year, and about five million more than when the industry bottomed out in 2009. The forecast grows again to top 16 million in 2014, which would be the first time that has happened since 2007.

Chrysler’s $374 million investment in its Indiana transmission plants will create 1,200 new jobs.

Automakers/Suppliers Reshoring “We went through this period when so much manufacturing was offshored; a significant amount migrated offshore,” says John Morris, leader of the Industrial Services Group for the Americas at Cushman & Wakefield.

“Now we’re talking about reshoring.”

Aleksandra Miziolek, who directs the Automotive Industry Group at the Dykema law firm, says both original equipment manufacturers and suppliers are eyeing growth in America. “We are seeing an interest in coming back to the United States,” she says. “U.S.

companies and suppliers had been very much interested in growing outside of the United States, primarily in Asia but also South America, Eastern Europe, etc. Everybody recognized the industry was becoming more global.”

OEMs tended to steer toward countries with lower labor and construction costs, as well as countries with enticing local markets. “A lot of companies gravitated to China and India,” she says. “But what we’re seeing now is, as you see improvement in U.S. light vehicle sales in general, you’re seeing interest by suppliers to get closAREA DEVELOPMENT | Q2/Spring 2013

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R.L. Polk & Co. expects to see U.S. vehicle sales in the neighborhood of 15.4 million this year, about a million more than last year. er to the domestic OEMs.” For example, some South Korean companies — as well as some from Europe —may have renewed interest in U.S. locations, she says. “This is especially true as Europe is having its difficulties. It’s not just suppliers but European manufacturers. It’s nice to see a trend coming back for increased opportunities in the United States.”

Some of the moves reflect growth in the American market, but there are other factors at work as well, says Morris. “Labor’s significance in the equation is gradually going down; the

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average labor cost per piece in durables manufacturing is going down,” thanks to increased automation, he points out. You can see the rise in automation by checking the stats of those companies that make the necessary equipment, he adds. “The automation industry is up 34 percent — robotics, storage and retrieval, parts picking. The headcounts associated with manufacturing are going to be declining on a per-unit basis.”

Potential U.S. growth opportunities have state and local governmental officials eager to talk, according to Miziolek. She says she saw lots of economic development networking happening at the last Center for Automotive Research Management Briefing Seminars event in Michigan.

“There’s a real fight between the states. More and more you see representatives from places like Tennessee, Virginia, and Kentucky, all setting up shop and being aggressive in offering

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significant tax abatements or grants.”

However, it’s not just the United States that may benefit from industry growth, she adds. “Everybody is thinking pretty favorably about opportunities in North America, and Mexico seems to be a real hot spot. The work ethic is very good, and there is a significant amount of auto presence.”

Among the auto-related developments in Mexico are several at Amistad’s Industrial Park Bajio in Guanajuato, Central Mexico, including: • Yorozu’s investment of $70 million to produce shock absorbers for Honda; • NKP Mexico’s new 123,000-squarefoot facility to provide logistics services to Honda; • G-One’s purchase of land for a facility that will produce metal-stamped automotive doors and chassis for Honda; • Yachiyo’s $20 million investment to produce gas tanks and sunroofs for Honda; • Metal One’s purchase of land for a facility to supply tubes and pipes to Japanese, North American, and European automakers;

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The Kiplinger Washington Editor’s April forecast expects commercial orders for aerospace products to be healthy.

• Yutaka Technologies $40 million investment for the production of exhaust parts and motor and braking systems for motorcycles and autos; • Tachi-S’s new facility for auto seats for OEMs in the region.

Also, in Durango, Mexico, Leoni AG is expanding the facility where the German company produces cables and wire harnesses for major auto assembly plants in Mexico.

Across the Atlantic, things are less rosy, Miziolek says. “The European problems are having an impact even on the U.S.-headquartered companies, because everyone has operations in Europe as well. People are saying Europe is not going to recover for two or three years at best. You’ll see people being extremely cautious.”

But in America, the business is running on all cylinders. Here are just a few of the significant headlines from recent months:

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• Mercedes-Benz is planning a new parts consolidation center at its Alabama assembly plant that could run $70 million and create 500 jobs. The assembly operation there continues to grow, with the addition of a fourth model next year and a fifth in 2015, on top of record production last year.

• Nissan last year broke ground on an expansion at its engine plant in Decherd, Tennessee, with plans to start building an additional quarter million engines annually within a few years. Many of those engines will wind up in Mercedes-Benz C-Class sedans assembled in Alabama. Later in the year, Nissan added a third shift at its Smyrna assembly plant in Tennessee, adding more models to the mix and more than 800 names to the payroll. Nissan also announced plans to make the Sentra at its plant in Canton, Mississippi, adding about a thousand jobs.

• Chrysler is spending $374 million upgrading two Indiana transmission plants and buying and equipping another, creating more than 1,200 new jobs. The once-struggling automaker is growing elsewhere, too, including in Toledo, Ohio, where more than a thousand new jobs are tied to the manufacture of Jeep Wrangler and Cherokee models. When production is up to full speed, the company

expects to make nearly half a million vehicles a year in Toledo. Chrysler also has added shifts in Detroit to make more Jeeps.

• Toyota is pumping $131 million into its Indiana assembly plant in Princeton and adding more than 400 jobs. Also in Indiana, Subaru is spending $75 million expanding its plant in Lafayette, with 100 new jobs in the works. That plant makes both Subaru and Toyota models, and company officials recently suggested more expansion may be in the offing.

• Ford is spending $200 million revamping a Cleveland, Ohio, engine plant to build turbocharged engines, with new jobs expected.

• General Motors is investing $600 million at its plant in Kansas City, Kansas.

• BMW is pumping $600 million into growing its assembly plant in Spartanburg, S.C., creating about a thousand jobs. Demand is high for the vehicles made there, up 40 percent in March compared to a year earlier.

• Kia’s $100 million expansion in West Point, Georgia, completed early last year, has led to additional shifts, with as many as a thousand new jobs resulting. The company has spent more than $1 billion on its facility there, which can turn out 360,000 vehicles a year.

All in all, industry analysts are marveling at the strength of the auto industry and the contrast with its state just a few years ago. “Clearly,” says Morris, “the health of the industry is strong.”

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half the time.

There’s been a lot of debate in political circles about military drones, but Crenshaw says there are lots of opportunities ahead in the manufacture of unmanned aircraft for non-military uses.

“Unmanned aeroThe Airbus final assembly plant in Hamburg, Germany, services the A320 family of aircraft and resembles the $600 million facility to be space has been hot built in Mobile, Alabama. in the U.S.,” he says.

“More and more we’re going to see the civilian sector picking up on that. It Aerospace Businesses Looking appears restrictions are being lifted for New Opportunities against some types of surveillance.”

The aerospace end of the transAll of this spells potential growth portation sector has been a bit on in aerospace — but where? “A lot of edge, with all of the recent employers on the manufacturing side Washington debate about budget cuts are doing near-shoring,” Crenshaw and sequestration. “In the aerospace says. “Certainly in aerospace, nearworld, whither goes defense, there shoring is going to have some signifigoes aerospace in general,” says Lou cant impact. Mexico is going to Crenshaw, principal at Grant Thornton become extremely attractive.” and national industry partner for aeroOne challenge facing the sector is space and defense. But that axiom labor availability, he says. “The skilled may not hold true forever. “Many work force tends to be in shortage, aerospace companies have begun to and I believe that shortage has been look at insulating themselves from more in the commercial side.” defense cuts by looking at other Here are a few highlights from the opportunities and spinning off busiaerospace world: nesses they think could be losers.”

• A $600 million investment in Mobile, Many of those other opportunities Alabama, by the European aircraft could be in the commercial aviation maker Airbus is worth about 1,400 sector, where rising fuel costs are causjobs. It will be the company’s first U.S. ing increased interest in the purchase production facility, intended to build of new, more efficient planes. The the A320 single-aisle jet.

Kiplinger Washington Editors’ April • In West Palm Beach, Florida, a $63 forecast expects commercial orders for million expansion at the Pratt & aerospace products to be healthy, Whitney aircraft engine plant includes enough so that they’ll more than make construction of a new building and up for the expected decline in U.S. improvements at another. military orders caused by budget cuts.

• Rockford, Illinois, has been preparing “The trend is going to be to buy for takeoff in the aerospace business. new,” Crenshaw says. “There are pretLast year Woodward, Inc. announced it ty strong orders in the commercial secwould add to its existing facilities there tor and they’re trying to get rid of by investing $200 million to build a secdinosaurs. Airlines are trying to figure ond campus as part of its aircraft turout how they can get more efficiencies. bine systems business. Creation of the The demand for new aircraft will stay Rockford Area Aerospace Network has strong.” That’s not just in the United led to thousands of additional aeroStates, either. Crenshaw says overseas space jobs and greater visibility, includsales in aerospace were more than $40 ing an upcoming presence at the billion in 2011, and the figures from the International Paris Air Show. first half of 2012 matched that figure in

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Headquarters Continued from page 16 Incentives: While incentives play a less important role in corporate relocation decisions, they are often a differentiator when it comes down to two or three finalist cities. Since HQs are highly coveted, there are a number of states that have specific HQ-targeted incentives for corporate or regional headquarters that can be very lucrative. In the U.S., with often drastically different tax and regulatory state environments, companies tend to favor relocating from high-tax, high-regulation states to low-tax, low-regulation states.

Other Recent Trends Additionally, the trend has been — and continues to be — to favor rightto-work states over non–right-to-work states. With Indiana and Michigan joining the ranks in the past year, there are now 23 right-to-work states.

Companies also place a heavy weighting on states with favorable pro-business climates in terms of regulations, permitting, etc.

A greater emphasis is also being placed on flexibility, both in terms of the size of the building as well as the interior configuration. Companies are moving away from the traditional office setups of yesteryear to more flexible interior configurations that encourage collaboration and teamwork.

Some in our industry feel that there have been fewer HQ projects since the 2008 recession and there may be pentup demand. However, since the disruption to business activities and costs associated are so high for HQ relocations, it seems unlikely that there will be a greater demand than we have seen in the past. What remains a constant in HQ site selection, however, is that these types of projects are not undertaken often or without careful consideration of the risks involved.

That said, with careful consideration and in-depth analysis of the key factors, HQ relocations can be positive game-changers.

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2013

SPECIAL REPORT

GOLD&SILVER SHOVEL AWARDS When the economy is bustling, many people tend to take economic development successes for granted — growth happens, it’s a good thing, everyone’s happy about it, but it’s easy to overlook the work that goes into making it occur. On the other hand, when the economy is struggling, or perhaps taking baby steps toward recovery, every job created is truly something to savor and celebrate.

Our annual Shovel Awards are, indeed, a celebration of the kind of economic development success that should never be taken for granted. The 19 states we honor with Gold or Silver Shovels were stars in 2012, making growth and investment happen in a climate that — going on five years after the bottom dropped out — is still far from hospitable. These are states whose economic development leaders have been building relationships with existing businesses and newcomers alike, making strong cases for their communities, working to become ever-more business-friendly, crafting enticing deals and incentive packages…and hitting pay dirt. They’ve landed big projects worth millions or even billions of dollars in investment, creating jobs by the thousands. Growth doesn’t just happen — these states have shown that they know how to make it a reality.

10+ MILLION POPULATION CATEGORY

TEXAS — GOLD SHOVEL Texas is far ahead of the game when it comes to economic recovery, according to the latest statistics from the office of the Comptroller of Public Accounts. “Employers are looking at the recent recession through a rear-view mirror,” according to the

office’s “Economic Outlook.” The report continues, “Texas replaced all of its recession-hit jobs by December 2011.” By March 2013, the state’s unemployment rate had dropped to 6.4 percent, more than a percentage point below the national average — it’s been below

STATES WITH POPULATIONS

TEXAS

(pop. 26 million) 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

COMPANY

CITY/COUNTY

Apple, Inc. Southwest Airlines Ericsson Visa Maruchan, Inc. Exxon Mobil

Austin Dallas Plano Austin San Antonio The Woodlands Baytown Freeport Point Comfort Clear Lake

Chevron Dow Chemical Formosa Celanese

* PROJECT OF THE YEAR Represents a state/local sponsor

10+

MILLION

GOLD

Shovel Winner N/E # JOBS

INV. AMT.

N 3,635 E 1,000 E 1,600 N 800 N 600 N N/A

$304 million $100 million $34 million $27.5 million $330 million $1 billion

E N E N

14 150 200 N/A

$5 billion $1.7 billion $1.9 billion $1 billion

INDUSTRY

IT Operations Center* Headquarters Telecom Headquarters IT Center Noodles Oil & Gas Campus Chemicals Chemicals Chemicals Methanol

Apple, Inc. Austin, Texas Apple, Inc. is building upon its already significant presence in Austin, Texas, where it’s constructing its Americas Operations Center. The $304 million investment is slated to add 3,635 jobs to its operations there, the largest single jobs announcement ever in Austin. The first phase, now under way, comprises about 200,000 square feet in two buildings that should be completed by the end of 2015.

According to Apple planning documents, “Phase II will be up to 800,000 square feet in several buildings,” and that’s to be finished by 2021.

The company is tightlipped about many things, and has made little public comment about the Austin project. But Apple did e-mail a statement to Wired last December, offering a bit of detail: “Our operations in Austin have grown dramatically over the past decade, from less than 1,000 employees in 2004 to more than 3,500 today. We’re looking forward to building a new campus in Austin, which will more than double the size of our work force there over the next decade.”

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the national average for more than 75 consecutive months now. The state’s gross domestic

Samsung Semiconductors San Jose, California

product was up by 3.2 percent last year, well ahead of the national growth rate.

Fueling the way toward the Lone Star State’s Gold Shovel award has been the energy sector, along with chemicals, IT, and other varied sectors. Austin is the home of one of the latest Projects of the Year — Apple’s new IT operations center and its 3,600-plus jobs — as well as an 800-job Visa IT center. Another 2,600 jobs come by way

The Samsung Semiconductors presence in San Jose is making a giant leap forward, thanks to a $300 million investment that is expected to translate into 2,000 jobs where about 300 exist presently. The company is working on a 1.1 millionsquare-foot sales and R&D headquarters at the current site of its semiconductor and display panel operations.

The subsidiary of Samsung Electronics had considered a move to another state but was persuaded to stay and grow, thanks in part to local economic development incentives. “We are now ready to prepare for the next generation by expanding our current facilities here in San Jose,” Jong-Joon Kim, Samsung’s president of device solutions, told the local media in making the announcement in August 2012.

The San Jose project is not the only Samsung investment in Silicon Valley. Also in the works is a major Mountain View project that will house Samsung Information Systems America.

of headquarters expansions at Ericsson in Plano and Southwest Airlines in Dallas.

When it comes to oil and chemicals, that’s where the really big-dollar investments come into play — they’re all in the billions of dollars.

Texas has quite a top-10 list — with investments worth more than $11 billion and some 8,000 new jobs. And there’s a lot more where that came from. As Gov. Rick Perry proclaimed at a recent business event, “Texas’ economy has become the envy of the nation.”

CALIFORNIA — Silver Shovel Silver Shovel winner California has had remarkable success in growing high-wage jobs in recent years, which has propelled its economic output at a rate faster than the nation’s as a whole for the past two decades, according to a report published by the San Francisco Federal Reserve Bank. In 2011, the most recent calendar-year results available, the state’s gross domestic product was up by 2 percent, beating the national growth rate by a third. Analysts expect even greater things for the future. For example, the Anderson Forecast expects nonfarm jobs to grow by 1.4 percent this year, 2.1 percent next year, and 2.3 percent in 2015. And economists note that technological developments are likely to fuel growth well into the future in this tech-heavy state.

Analysts at the University of California Los Angeles say the future is bright. Though it’s currently slow going for the national economic expansion, they believe that once things pick up nationally, California will gain a disproportionate share of the good news. They expect exports to be a source of ongoing prosperity,

10+

STATES WITH POPULATIONS

CALIFORNIA (pop. 37.2 million)

COMPANY

CITY/COUNTY

MILLION

noting that they’ve been growing throughout the recovery.

It should come as no surprise

SILVER

that IT and e-commerce are lead-

Shovel Winner

ing the way for California. One

N/E # JOBS

INV. AMT.

INDUSTRY

of this year’s Projects of the Year is a California standout — the

1. Samsung San Jose Semiconductors 2. Advanced Call Sacramento Center Technologies 3. Amazon San Bernardino 4. Amazon Patterson 5. Sutter Health Roseville 6. Castle Rock Water Co. 7. Advanced BioHealing 8. Caterpillar 9. Belcampo Meat Co. 10. Quick Mount PV

E 2,000 $300 million

Semiconductor R&D*

N

2,000

$25 million

Call Center

N

700

$100 million

Fulfillment Center

N N

385 1,000

$150 million $30 million

Dunsmuir

E

25

$1 million

Fulfillment Center Administrative Service Center Bottling Plant

San Diego

E

300

$100 million

Regenerative Medicine

Kern Cty. N Yreka N Walnut Creek E

150 30 65

$25 million $4 million $7.5 million

Distribution Center Food Processing Solar Mounting Eqpt.

*PROJECT OF THE YEAR Represents a state/local sponsor

28

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$300 million Silicon Valley research and development center planned by Samsung in San Jose. Also delivering good news in California is Amazon, which announced fulfillment centers in Patterson and San Bernardino that together represent an investment of about $250 million and the creation of nearly 1,100 jobs. Analysts expect the mailorder giant to build a few more California distribution facilities in the not too distant future.

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

“Texas is a state where a dream can be put to work.”

- Texas Governor Rick Perry

dĞdžĂƐ tŝĚĞ KƉĞŶ ĨŽƌ ƵƐŝŶĞƐƐΡ ŝƐ ŵŽƌĞ ƚŚĂŶ ũƵƐƚ ŽƵƌ ŵŽƩ Ž͘ It’s a commitment to create and sustain an environment that fosters business and entrepreneurship, trains the workforce of the future, and helps turn a dream into a realitLJ͘ Eo maƩer what the industrLJ, we are commiƩed to your growth and success͘ Come to Texas, we’re Wide Open for Business͘ To learn more about opportuniƟes in Texas visit

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Meanwhile, San Diego — one of the nation’s largest biotech hubs — continues to achieve success. Advanced

FLORIDA — Silver Shovel In Florida, growth continued through the latter part of

BioHealing is establishing an office and manufacturing facili-

2012 even as it slowed on a national level. The housing mar-

ty in San Diego worth about $100 million and 300 jobs — the

ket is on the rebound, and economists at the Florida

regenerative medicine company is working on living cell-

Chamber of Commerce predict that 2013 will bring 170,000

based therapies.

new nonfarm jobs to the Sunshine State. The University of Central Florida’s latest forecasts

10+

STATES WITH POPULATIONS

FLORIDA (pop. 19 million)

COMPANY

CITY/COUNTY

expect the state’s GDP to acceler-

MILLION

year to 4.1 percent in 2015. The

Shovel Winner

Florida jobless rate this spring

N/E # JOBS

INV. AMT.

INDUSTRY

Doral Melbourne

N E

346 100

3. BI-LO 4. Pratt & Whitney

Jacksonville West Palm Beach Ave Maria Port Manatee

E N

100 230

$274 million TV Broadcasting $100 million Corporate Hdqtrs./ Engineering $83.7 million Corporate Hdqtrs. $63.7 million Aircraft & Parts

N N

600 250

$50 million Medical Devices $53.6 million Chemical Process Eqpt.

E 1,000

$3 million Business/Office Services

8. L-3 Crestview Aerospace 9. Navy Federal Credit Union 10. Medtronic

cent this year to 3.3 percent next

SILVER

1. Univision Network 2. Harris Corp.

5. Arthrex 6. Air Products and Chemicals 7. Digital Risk

ate dramatically — from 1.8 per-

Boca Raton, Maitland, Jacksonville Crestview

E

340

Pensacola

E

700

$6.8 million Business/Office Services

Jacksonville

E

175

$14 million Hdqtrs./Medical Devices

$13.7 million Helicopters (M)

dropped below the national average for the first time since 2008, and the University of Central Florida expects the rate to continue dropping for at least the next three years.

Among the success stories behind Florida’s recognition this year is a $274 million investment by broadcaster Univision worth 346 jobs in Doral. Corporate headquarters investments on the list include $100 million pledged

by Harris Corp. in Melbourne and $83.7 million from BI-LO in Jacksonville, where the grocer

Represents a state/local sponsor

moved its headquarters as part of a merger with Winn-Dixie.

10+

STATES WITH POPULATIONS

PENNSYLVANIA (pop. 12.7 million)

COMPANY

1. Monroe Energy LLC 2. Ocean Spray Cranberries, Inc. 3. PetSmart 4. Ahold USA/ Vantage Foods 5. Volvo Construction Equipment 5. Bimbo Bakeries 5. Dollar General 8. Aquion Energy, Inc. 9. Mylan 10. Westport Axle

CITY/COUNTY

MILLION

in West Palm Beach with a $63.7 million investment and 230 new

SILVER

jobs. “This expansion involves

Shovel Winner N/E # JOBS

Pratt & Whitney is expanding

INV. AMT.

Pratt & Whitney’s most advanced INDUSTRY

commercial and military engines

Trainer Breinigsville

E N

400 165

$350 million $110 million

Petroleum Refining Beverages

and builds upon the great work

Bethel Township Camp Hill

N

545

$87.1 million

Warehouse/Distribution

United Technologies Corp.

N

850

$63 million

Shippensburg N

300

$100 million

Construction Eqpt.

N N

95 500

$100 million $90 million

Food Processing Warehouse/Distribution

N N N

341 200 518

$70 million $60 million $5.2 million

Batteries Pharmaceuticals Axle Forging & Stamping

Breinigsville Bethel Township Mt. Pleasant Canonsburg Breinigsville

already being done here,” said Chairman and CEO Louis

Food Processing

Chênevert.

PENNSYLVANIA — Silver Shovel At the top of Pennsylvania’s Silver Shovel success list is a $350 million investment by Delta Airlines subsidiary Monroe Energy in its petroleum refining

Represents a state/local sponsor

30

AREA DEVELOPMENT

operation in Trainer. Monroe

FOR FREE SITE INFORMATION, CALL

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acquired the idled facility about a year ago in order to land a more affordable supply of jet fuel for Delta, and it invested heavily in infrastructure to maximize jet fuel production, which began in the fall. And the energy story in Pennsylvania is still just taking shape, as economists expect to see many positive headlines in the coming years tied to development of the Marcellus Shale.

Baxter International Metro Atlanta, Georgia

The state’s food and beverage sector also has been enjoying growth, with a $110 million investment by Ocean Spray Cranberries in Breinigsville and a $100 million Bimbo Bakeries investment in the same community. Meanwhile, Ahold USA/ Vantage Foods chose to pump $63 million into a Cumberland County meat-processing and packaging operation that will create 850 jobs.

5+ TO 10 MILLION POPULATION CATEGORY

GEORGIA — GOLD SHOVEL If you ask an economist to tally the state’s gross domestic product in current dollars, you’ll find that Georgia has weathered the recent economic storm quite well, and much better than average. Its GDP dropped only one year (2009), and since

then has grown at an average annual clip of 3.8 percent. That’s some solid performance, but not surprising for a Gold Shovel winner. In delivering the most recent economic outlook late last year, Dean Robert Sumichrast of the Terry College of Business at the University of Georgia predicted the state would outpace the national economy this year, as it often has. “There are two main reasons. First, the massive restructuring of the state’s private sector is now complete. Our real estate bubble is in the past. The second reason is the opening of several large relocation and expansion projects, which will provide a tailwind to Georgia’s economic growth,” he explains.

The demand for plasmabased pharmaceutical products is the driver behind Baxter International’s new plant investment plans in Georgia. The company says it will spend a billion dollars building new manufacturing capacity near Atlanta to create treatments for immune disorders, trauma, and other medical needs. Baxter will create up to 1,800 jobs as the facilities begin production over the next five years.

In announcing the investment, Robert Parkinson Jr., Baxter chairman and CEO, told analysts that there’s a huge need for the kinds of products Baxter will produce in Georgia, noting that the investment “represents our confidence in the long-term global growth of the plasma protein business. Over half the world’s population remains undiagnosed and certainly under-treated for many of the conditions that are treated with therapeutics proteins.”

The biggest project is actually a collection of pharmaceutical manufacturing projects

STATES WITH POPULATIONS

GEORGIA (pop. 9.9 million)

COMPANY

1. Baxter

2. Caterpillar 3. Kia Motors Mfg. Georgia 4. Mando 5.

6.

7.

8.

Mohawk Carter’s Toyota Industries Voestalpine Stamptec 9. Starbucks 10. Carter’s

CITY/COUNTY

TO

10 MILLION

Shovel Winner

great economic success story with projects that will create 1,400

N/E # JOBS

INV. AMT.

$1 billion

INDUSTRY

Pharmaceuticals*

jobs. And the fast-growing auto industry is an engine of Georgia growth, too, worth a thousand new jobs at the Kia plant, plus a

$200 million

Construction Eqpt.

$100 million

Automotive

E

660

$80 million

Automotive Parts

E E N N

500 200 320 220

N/A** N/A** $350 million $62 million

Floor Coverings Headquarters Automotive Automotive

Richmond Cnty. N Jackson Cnty. E

140 250

$172 million $50 million

Food Processing Distribution Center

total of 1,200 more at Toyota Industries and a pair of suppliers.

The cream of the crop here is a diverse list that also includes floor coverings, food processing, and distribution.

Indiana — Silver Shovel Looking ahead to 2012, the head of the Indiana Business Research Center at Indiana

Represents a state/local sponsor

AREA DEVELOPMENT

new jobs. Caterpillar is not far behind, though, constructing a

*PROJECT OF THE YEAR **CONFIDENTIAL

32

lion-dollar investment and 1,800

GOLD

Jasper, N 1,800 Morgan, Newton, & Walton Cntys.

Clarke & N 1,400 Oconee Cntys.

Troup Cnty.

E 1,000 Meriwether Cnty.

Chattooga Cnty.

Fulton Cnty.

Jackson Cnty.

Bartow Cnty.

5+

from Baxter that add up to a bil-

University, Jerry Conover, predict-

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

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ed just modest economic improvement. “I’m glad to report

than a year earlier, and the increase was accelerating.

now that I underestimated the state’s rebound,” Conover

Moreover, according to Conover, “Job growth has been

said in releasing the 2013 outlook. By that time the state’s

spread across nearly all sectors.”

employment was averaging more than 50,000 jobs higher

Manufacturing has been picking up nicely, though it still has a long way to go to make up for recessionary losses. Health

STATES WITH POPULATIONS

INDIANA (pop. 6.5 million)

COMPANY

1. Roche Diagnostics Operations, Inc. 2. Amazon.com.indc LLC 3. Farbest Foods, Inc. 4. ExactTarget, Inc. 5. Toyota Motor Mfg. Indiana, Inc. 6. Advanced Metal Technologies of Indiana, Inc. 7. Supreme Indiana Operations, Inc. 8. The Finish Line, Inc. 9. Steel Dynamics, Inc. 10. Subaru of Indiana Automotive, Inc.

CITY/COUNTY

Indianapolis

5+

TO

10

MILLION

state’s GDP took a bigger hit

Shovel Winner

E

as have the advances in professional and business services. The

SILVER N/E # JOBS

services growth has been robust,

during the recent downturn than

INV. AMT.

INDUSTRY

100

$300 million

Jeffersonville N 1,050

$74.9 million

Biotechnology/ R&D/Hdqtrs.

Distribution

Vincennes Indianapolis Princeton

the nation’s GDP, but the manufacturing recovery helped the GDP rebound faster than the nation as a whole, too.

Indiana’s economic success

E E E

600 500 421

$69.2 million $55 million $131 million

Food Processing IT/ Hdqtrs.

Automotive

owes a lot to the rebounding

Jeffersonville N

350

$19.2 million

Automotive

related manufacturing is huge in

automotive industry, as autothe state. Expansions at the

Goshen

E

350

$7.7 million

Automotive

Indianapolis Pittsboro Lafayette

E E E

327 50 100

$32.4 million $75.8 million $75 million

Hdqtrs.

Steel Automotive

Toyota plant in Princeton and the Subaru plant in Lafayette were among Indiana’s recent success stories, as were expansions at other automotive operations.

Even so, the top economic

Represents a state/local sponsor

development news of the past year or so has been a real show-

STATES WITH POPULATIONS

MICHIGAN (pop. 9.8 million)

COMPANY

1. Detroit Manufacturing Systems 2. Sakthi Automotive Group 3. Brose

CITY/COUNTY

5+

TO

10

MILLION

SILVER Shovel Winner N/E # JOBS

INV. AMT.

INDUSTRY

N

572

$29.2 million

Auto Interiors

Detroit

N

183

$18.6 million

Automotive Parts

N

450

$60 million

Auto Supplies

AREA DEVELOPMENT

Michigan — Silver Shovel It shouldn’t come as too big of a surprise that Michigan makes the Silver Shovels list, given its strong ties to the dramatically rebounding automotive industry. Eight of the state’s 10

E

350

$11 million

Technology Hdqtrs.

E N

184 177

$6.2 million $10.1 million

Web Security Sunroof Technology

N E E N

225 200 158 120

$10 million $80 million $68 million $31.9 million

Fiber Products Nutritionals Auto Supplies Auto Supplies

most prominent success stories have ties to motor vehicles, primarily makers of auto parts and supplies — everything from power trains to sunroofs to sound insulation. In the last quarter of 2012, the nation’s auto industry had an output nearly three times what it had

Represents a state/local sponsor

34

from steel to biotech, from IT to food processing and more.

Detroit

New Boston, Auburn Hills, Warren 4. Mahle Industries Farmington Hills 5. Barracuda Networks Ann Arbor 6. Magna Sealing Holland & Glass Systems Township 7. Janesville Acoustics Southfield 8. Alticor Ada 9. Henrob Corp.

Lyon Township 10. Lacks Enterprises Cascade Township

case of the diverse drivers —

been at the worst part of the

FOR FREE SITE INFORMATION, CALL

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16

WE

SPEAK YOUR LANGUAGE

The fastest-growing port in America.The busiest and most efficient airport in the world. A highly skilled and competitive workforce. These are a few of the assets that define Georgia. Discover why 440 Fortune 500® companies already call Georgia home. Let’s talk about how we can take your company to the next level.

Visit Georgia.org to find out how you can become our state’s next success story.

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recession, and the best since 1995 — and much of that

but Michigan has come a long way from the days when its

growth was felt in Michigan. It’s not all automotive in

unemployment rate was the highest in the nation at 14.2

Michigan, though. There is growth in the tech sector too,

percent. Michigan engineers commanding six-figure salaries

such as the expansion at Web security firm Barracuda

are finding that they can land a job in a week or less. The

Networks in Ann Arbor.

state’s GDP grew by 4.9 percent in 2010 and 2.3 percent in

The signs of a strengthening economy are everywhere.

2011, in both cases higher than the national figures. And by

There are certainly plenty of people still looking for work,

2012, the professional hockey team in Detroit was selling more tickets than it had in years.

STATES WITH POPULATIONS

NORTH CAROLINA (pop. 9.7 million)

COMPANY

CITY/COUNTY

1. Aramark Healthcare Mecklenburg Cnty.

2. Ashley Furniture Davie Cnty.

3. AT&T Cleveland Cnty.

4. Denver Global Lincoln Cnty.

Products 5. Herbalife Winston-Salem 6. Polo Ralph Lauren Guilford 7. Sierra Nevada Henderson Brewery Cnty.

8. MSC Industrial Mecklenburg Direct Cnty.

9. Red Hat Wake Cnty.

10. Sentinel NC One Durham Cnty.

5+

TO

10

“Michigan has been experi-

MILLION

ured in comparison to the

Shovel Winner

E

INV. AMT.

80

formance since 2000, both on an absolute basis and when meas-

SILVER N/E # JOBS

encing its best economic per-

$150 million

INDUSTRY

Life Sciences

N N

550 19

$80 million $851 million

Furniture Data Center

N

450

$30.6 million

Machinery/Eqpt.

N E N

493 $130 million 500 $142 million 95 $107.5 million

Nutritional Products Inventory Mgmt./R&D Food/Beverages

N

400

$31.3 million

Headquarters

E N

540 19

$109 million $180 million

ICT Data Center

national average,” economic journalist David Sowerby wrote in Crain’s Detroit Business recently. “Encouragingly, the economic performance of Michigan over the last three years, and our prospects for continued growth in 2013, has a stronger foundation than any time in the last 15 years.”

North Carolina — Silver Shovel Like most other states, North Carolina is pulling out of the

Represents a state/local sponsor

downturn bit by bit, and is mak-

STATES WITH POPULATIONS

TENNESSEE (pop. 6.4 million)

COMPANY

1. Nissan North America, Inc. 2. Volkswagen Group of America 3. Parallon Business Solutions, LLC 4. Magnetti Marelli Suspension USA, LLC 5. Saks, Inc. 6. Agero 7. U.S. Solutions Group, Inc. 8. Access America Transport 9. La-Z-Boy Co. 10. Team 3 Logistics

CITY/COUNTY

5+

TO

10

ing the kind of solid gains need-

MILLION

ed to land on the Silver Shovels list. A recent report from the North Carolina Justice Center’s

SILVER

Budget & Tax Center found that

Shovel Winner

the state’s business climate is in N/E # JOBS

INV. AMT.

INDUSTRY

fine shape, with some of the

Smyrna & Decherd Chattanooga

E 2,200 $325 million

Automotive*

E

Automotive

Nashville

N

800 $87.6 million

Healthcare Hdqtrs.

like to see is a reflection of its

Pulaski

E

800 $53.7 million

Automotive

manufacturing heritage and that

LaVergne Clarksville Bristol

N N N

313 549 548

$13 million $8.2 million $4.1 million

Distribution Center Call Center Call Center

Chattanooga

E

450

$3.2 million

Headquarters

Dayton Chattanooga

E E

436 425

$2.4 million $993,000

Furniture Automotive Logistics

1,000

N/A

region’s fastest economic growth. The fact that its jobless rate is higher than many would

many companies in the manufacturing sector took big hits during the economic downturn.

That said, manufacturers still have a prominent role on the state’s list of recent success stories, and there’s even one in the traditional sector of furniture-

*PROJECT OF THE YEAR

making, a 550-job announce-

36

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Logistics operations have special considerations when relocating or expanding. Indiana is known for excellent road, rail, and air transportation, as well as a favorable business climate and abundant sites. Better yet, Hoosier Energy can help facilitate every step of the process.

Learn more at tdl.HoosierSites.com.

www.tdl.HoosierSites.com Call 812-876-0294

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ment from Ashley Furniture that is expected to be up to full speed by 2016. If all goes well with this phase, there has even been talk of significant expansion.

Manufacturing growth is diverse, with significant investments in everything from beer to nutritional products to machinery.

But North Carolina growth also reflects the sectors of tomorrow and the state’s

Nissan North America Smyrna/Decherd, Tennessee

prominent place in the knowledge-based economy. Red Hat, for example, announced a move to downtown Raleigh that promises to create more than 500 new jobs. And two data centers (AT&T and Sentinel NC One) add up to a billion dollars in technology investment in the state.

Tennessee — Silver Shovel Growth was solid in Silver Shovel winner Tennessee in 2012 — that’s why the state’s economy was judged one of the nation’s most improved by the financial network CNBC last year. While things are expected to slow a bit this year, the path remains positive. The University of Tennessee Center for Business and Economic Research, in its annual economic report to the Governor, said the economic recovery is chugging along. “For Tennessee, the economic outlook calls for modest growth in 2013 followed by substantially stronger growth in 2014,” said the report’s author and the center’s Director Matthew Murray. The center expects the jobless rate to drift downward to 7.9 percent for this year and 7.5 percent for 2014, still higher than prerecession levels but headed in the right direction.

The rapidly recovering automotive industry has been quite good to the Volunteer State. One of this year’s Projects of the Year is here — the Nissan expansion in Smyrna and Decherd that is creating more than 2,000 jobs. And Volkswagen’s quest to take on the world’s biggest automakers is paying dividends in Tennessee, where its

STATES WITH POPULATIONS

VIRGINIA (pop.8.1 million)

COMPANY

CITY/COUNTY

1. Green Mountain Coffee Roasters 2. Health Diagnostic Laboratory (HDL) 3. Bechtel Corp.

Isle of Wight Cnty.

City of Richmond Fairfax Cnty.

4. Metron Aviation

Loudoun Cnty.

Danville

5. Web Parts LLC 6. McKesson Corp.

7. Ply Gem Windows 8. The Vitamin Shoppe, Inc. 9. Phoenix Packaging Operations, LLC 10. BAE Systems Ordnance Systems

5+

TO

10

MILLION

thousand jobs. That kind of

Shovel Winner INV. AMT.

N

800

$180 million

E

706

$68.5 million

N

625

$18 million

E

350

$2 million

N

Frederick N Cnty.

Franklin E Cnty.

Hanover N Cnty.

Pulaski E Cnty.

Montgomery N Cnty.

260

$10 million

205

$36.9 million

200

$9 million

174

$39.4 million

100

$20 million

N/A

$240 million

activity helps to propel all kinds INDUSTRY

Coffee Roasting/ Grinding/Pkg. Clinical Lab/ Diagnostics Services Hdqtrs./ Project Management Aviation Services Computer Programming/Data Center Distribution Windows & Doors

AREA DEVELOPMENT

of other activity, including growth in auto parts manufacturing as well as in auto-related logistics, such as the more than 400 new jobs planned by Team 3 Logistics in Chattanooga.

Still, Tennessee growth is multifaceted. The state that FedEx calls home has an ever-growing distribution sector and the call center industry is phoning in healthy results as well.

Distribution Headquarters Ordnance

Virginia — Silver Shovel If there’s one word to describe Virginia, it could be “diverse.” From an economic

Represents a state/local sponsor

38

Chattanooga plant is still young and already expanding by a

SILVER N/E # JOBS

Within two years, Nissan hopes that 85 percent of the vehicles it sells in America will be built domestically. To get there, more capacity is needed, and its plant in Smyrna is a logical place to add it. The plant turns out more than half a million vehicles a year and provides work for more than 6,000 people, and the company has added some 2,000 jobs in Tennessee in the past couple of years.

“Our investment in creating hundreds of new jobs demonstrates Nissan’s longtime commitment to our employees, Smyrna, and the state of Tennessee,” Bill Krueger, Nissan vice chairman, said in a news release last October as the company added a third shift in Smyrna for the first time in the three decades it has been there.

Meanwhile, in May 2012, Nissan broke ground on an expansion to its Decherd engine plant. All told, Nissan’s latest expansion plans will add some 2,200 jobs in the state.

point of view, that’s a great

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thing. There’s growth to be found in many corners of the

weapons and ordnance, window and door manufacturing,

economy, and that bodes well for prosperity as well as for

aviation services, medical diagnostics, and computer pro-

making it onto the Silver Shovels list. The growth in the pri-

gramming, among other sectors. Certainly no problem with

vate sector is a positive sign, as Virginia is more vulnerable

too many eggs being in the same basket.

than many states when it comes to federal budget cuts.

The most recent annual Virginia Economic Forecast, pro-

3+ TO 5 MILLION POPULATION CATEGORY

duced last year by Chmura Economics & Analytics for the Thomas Jefferson Institute for Public Policy in Charlottesville, was expecting a solid 2013. Employment growth in the forecast was expected to be 1.9 percent this year, a faster pace than the previous couple of years, with the possibility that

ALABAMA — GOLD SHOVEL Planes, ships, and automobiles.

They are the economic movers most responsible for earning Alabama a

employment could soon be back at pre-recession levels.

Gold Shovel. “Transportation equip-

Salary growth was projected to be healthy, too, along with

ment manufacturers will be responsible for much of the out-

growth in retail sales. Meanwhile, the Virginia Council of

put and job gains,” report economists at the Center for

CEOs and the University of Richmond’s Robins School of

Business and Economic Research in The University of

Business check in with the region’s top executives on a quar-

Alabama’s Culverhouse College of Commerce. A thousand

terly basis, and the most recent report found the economic

jobs from European aerospace giant Airbus in Mobile, anoth-

outlook on the rise. According to the group’s Executive

er 1,000 in Mobile pledged by shipbuilder Austal USA, and

Director Scot McRoberts, “This data reflects what many of

nearly 900 joining the automaking and engine-building pay-

the CEOs I work with tell me — they are as busy as they have

roll at Hyundai. Not to mention another 650 at two auto

been in years.”

suppliers that made the state’s top 10 list.

As for economic diversity, consider some of the top recent

Given that boost, the economists expect to see 2.0 percent

projects cited by state officials as exemplary of recent

growth in GDP this year, similar to what happened last year. If

progress. The $180 million investment by Green Mountain

the state ends the year 10,000 to 15,000 jobs richer, as the

Coffee Roasters in Isle of Wight County is reported to be the

economists expect, that will be a bit stronger than job growth

state’s largest project of the year. There’s also growth in

in 2012. Of course, it’s not just transportation behind the growth. On the manufacturing side, new plants producing cop-

STATES WITH POPULATIONS

ALABAMA (pop. 4.8 million)

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

3+

TO

5

per tubing and biomedical prod-

MILLION

ucts are bringing prosperity. So are expansions in financial servic-

GOLD

es, customer contact operations,

Shovel Winner

plus a new coal-mining project.

COMPANY

CITY/COUNTY

N/E # JOBS

INV. AMT.

Airbus Mobile Austal USA BBVA Compass Golden Dragon Precise Copper Tube Hyundai Motor Mfg. Alabama LLC Johnson Controls REHAU Automotive LLC SiO2 Medical Products Walgreen’s Health Initiatives Walter Energy (Blue Creek) Inc.

Mobile Mobile Birmingham Pine Hill

N 1,000 E 1,000 E 300 N 300

$600 million $5 million N/A $100 million

INDUSTRY

Aircraft Shipbuilding Financial Services Copper Tubes

There’s been good news, for sure, but also some room to grow, according to an analysis from J.P. Morgan Chase.

“Alabama’s economy is supported somewhat by the reviving

Montgomery E

877

$23.5 million

Automotive/Engines

Clanton Cullman

E E

400 251

$14 million $119 million

Automotive Parts Automotive/Plastics

Auburn

N

300

$90 million

Biomedical Products

Muscle Shoals E

350

$3.5 million

Customer Contact Center

Berry

450

$1.1 billion

Bituminous Coal Mining

motor vehicle industry,” the analysis notes. Now, the report says, the housing market needs more momentum to help speed

N

up the recovery.

Kentucky — Silver Shovel You know the economy is on the rebound when people start

Represents a state/local sponsor

40

AREA DEVELOPMENT

buying appliances again. And

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people buying appliances made it possible for GE Consumer and Industrial to make plans for about 1,200 new jobs in Louisville â&#x20AC;&#x201D; at a facility the company seriously thought about abandoning only a few years earlier, recovering from near-certain doom to being named one of the Projects of the Year and helping land Kentucky on the Silver Shovels list. The Kentucky economy also has been on the rebound, and a forecast released earlier this year by the University of Kentucky Center for Business and Economic Research was posi-

STATES WITH POPULATIONS

KENTUCKY (pop. 4.3 million)

COMPANY

CITY/COUNTY

3+

TO

Shovel Winner N/E # JOBS

INV. AMT.

1. GE Consumer & Industrial 2. Westlake Vinyls Inc.

Louisville

E 1,214 $649.8 million

Calvert City

E

3. Metalsa Structural Products Inc. 4. Berry Plastics 5. Florida Tile Inc.

Elizabethtown E & Hopkinsville Madisonville E Lawrenceburg E

420 123

$96 million $77.5 million

6. Lâ&#x20AC;&#x2122;Oreal USA 7. iHerb 8. Bingham McCutchen LLP 9. Amazon.com

Florence Hebron Lexington

E N N

211 600 250

$42.1 million $29.7 million $22.5 million

Winchester

N

550

$20.7 million

Shepherdsville N

300

$18 million

should outperform the national economy, with the fastest growth likely in central

10. Nasty Gal

MILLION

SILVER

N/A

$217 million

389 $104.5 million

tive about 2013. The Bluegrass State, according to the forecast,

5

INDUSTRY

Household* Appliances Commodity Chemicals Automotive Stamping/ Parts Plastics Ceramic & Porcelain Tiles Cosmetics Distribution Global Services Center Back Office Technology Center Distribution & Call Center

*PROJECT OF THE YEAR Represents a state/local sponsor

Kentucky.

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Plenty of positive trends are making growth happen in Kentucky. There seems to be ever-increasing interest in natural remedies and supplements, and that translates into 600 new jobs at an iHerb distribution facility in Hebron. The online retailer picked Kentucky for its work force and central location, according to Cliff Cowing, iHerb’s director of strategic planning and analytics, commenting, “We know the Northern

GE Consumer & Industrial Louisville, Kentucky

Kentucky work force is strong and the geography favorable — two primary factors for choosing our location.”

Beyond the healthy market for appliances and natural supplements, the Kentucky economy is benefiting from strong sales in cars, cosmetics, and vintage clothing, along with a wide range of goods available on Amazon.com, which added more than 500 new back-office tech jobs in Winchester.

Louisiana — Silver Shovel When Loren Scott talks, the business and academic communities in Louisiana listen closely. The retired professor from Louisiana State University is well known for preparing the Louisiana Economic Outlook. The latest report, authored by Scott and LSU Economics Professor James Richardson, paints a healthy picture for Louisiana — the state is expected to add 22,700 jobs this year, leading to a record total employment number, and then it will add another 27,500 jobs in 2014, according to the economists. The job total has continually increased since 2008, and could surpass two million next year. Seven of the eight metro areas in the state are expected to gain jobs both years. “Louisiana is doing way better than the national economy,” Scott told observers, as the report was unveiled in Baton Rouge.

Petroleum and petrochemicals are the drivers of much of Louisiana’s prosperity, and are represented in the majority of the state’s biggest economic development success stories. Yes, the good news includes 675 new steel jobs in Caddo Parish, 300 IT jobs in

3+

STATES WITH POPULATIONS

LOUISIANA (pop. 4.6 million)

COMPANY

CITY/COUNTY

1. Benteler AG 2. Sasol Ltd.

Caddo Parish Calcasieu Parish Orleans Parish Ascension Parish Cameron Parish Ascension Parish Ascension Parish Jefferson Parish Ascension Parish St. James Parish

3. General Electric Capital Corp.

4. Avalon Rare Metals Processing LLC 5. Sempra Energy 6. Methanex Corp.

7. CF Industries 8. Dyno Nobel 9. Westlake Chemical Corp.

10. Mosaic Fertilizer, LLC

TO

5

MILLION

SILVER Shovel Winner N/E # JOBS

INV. AMT.

INDUSTRY

N N

675 403

$890 million $4.4 billion

Steel Mill Industrial Gas

N

300

$12.1 million

Orleans Parish, and 225 jobs in the

N

225 $352.9 million

E

130

$6 billion

Software Development & IT Support Nonmetallic Mineral Mining Natural Gas

E

120

$400 million

the Louisiana economy revolves

E

93

$2.1 billion

E

60

$768 million

Chemicals & Allied Products Nitrogenous Fertilizer Synthetic Rubber

E

60

$467 million

Petrochemicals

N

53

$700 million

Nitrogenous Fertilizer

AREA DEVELOPMENT

mining of nonmetallic minerals in Ascension Parish, but the rest of the top 10 reveals just how much around petroleum and chemicals: jobs and heavy investment in natural gas, nitrogenous fertilizers, synthetic rubber, industrial gases, chemicals and allied products, and petrochemicals.

The Deepwater Horizon oil drilling disaster continues to play

Represents a state/local sponsor

42

Back in the recessionary days of 2008, GE pondered getting out of the appliance business, and had its Appliance Park complex in Louisville on the market. But a couple years later, the company had reversed course and was pumping new money into its Louisville operations, hiring more people and adding products to the mix. GE started making a water heater based on heat-pump technology last year, and added a new refrigerator with French doors, a new dishwasher, and a new washing machine. Next, it started making front-loading washers and dryers in Louisville.

GE’s $649.8 million expansion created 1,214 jobs. It’s part of an even bigger picture — the company has invested about $800 million in Appliance Park since 2010 and added about 3,000 jobs. GE Appliances President and CEO Charles “Chip” Blankenship addressed the media when production of the new refrigerator launched in 2012. “When businesses, unions, and employees work together, we can deliver innovative solutions to the marketplace and demonstrate that U.S.-based manufacturing can be competitive. GE Appliances is a shining example of what is working in U.S. manufacturing.”

into the economic story. For one

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positive economic growth since the beginning of 2011.”

thing, fines and settlement payments are still circulating

The developments that earned South Carolina a Silver

through the local economy. Also, the oil business is picking up again in the Gulf of Mexico, as oil companies return fol-

Shovel included a 1,000-job, $900 million expansion at the

lowing a drilling moratorium and strict new federal permit-

BMW plant in Spartanburg, preparing for production of

ting standards.

the BMW X4 there. It’s been two decades since the automaker first announced plans to produce vehicles in

South Carolina — Silver Shovel

South Carolina, and as the company shared its latest expansion news in early 2012, it passed a significant pro-

It was a great year in South Carolina in 2012, according to economists at the University of South Carolina. Economic

duction milestone. “Two million vehicles have prepared

growth was about 3 percent, employment growth nearly

our team well to meet the new opportunities that lie

doubled what it was in 2011, the unemployment rate

ahead for our plant,” Josef Kerscher, president of BMW

dropped, and growth was spread nicely across multiple sec-

Manufacturing, said at the time. “We look forward to a

tors, from manufacturing to healthcare to construction to

new model with great anticipation.”

There were more new automotive jobs elsewhere in

education. And, as 2013 began, the economists noted that South Carolina’s leading economic indicators were just about

South Carolina, but also plenty of prosperity in other sectors,

the best in the country.

including technology-based strategic marketing, software development, and medical laboratory services.

As spring approached, the picture remained pretty. The state Department of Commerce updated its index of leading indicators and found it at its highest level since 2008. Among the

UNDER 3 MILLION POPULATION CATEGORY

things on the rise were personal income, nonfarm employment, manufacturing hours, and online job postings; and the unemployment rate ticked downward. According to the department, “The South Carolina Leading Index has been above the 100 mark for 15 consecutive months and has consistently forecast

KANSAS — GOLD SHOVEL Unemployment should continue to edge downward in Kansas this year, according to the latest forecasts from experts at Wichita State University. The rate has been

3+

STATES WITH POPULATIONS

SOUTH CAROLINA (pop. 4.7 million)

COMPANY

TO

5

lower than the national average

MILLION

for some time, and employers are expected to add some 24,000

SILVER

jobs this year, increasing total

Shovel Winner

employment by 1.8 percent.

N/E # JOBS

INV. AMT.

E 1,000

$900 million

Automotive

announcements of a wide range

E

600

$700 million

Tires & Rubber

of projects. One of the biggest is

E

275

$250 million

Automotive

4. Nucor Corp.

5. Shutterfly Inc.

Spartanburg Cnty.

Anderson Cnty.

Richland & Greenville Cntys.

Darlington City York Cnty.

E N

25 380

$120 million $60.1 million

6. Red Ventures

York Cnty.

E 1,000

$33.5 million

7. Physicians Choice Laboratory Services, LLC 8. Time Warner Cable

York Cnty.

N

$24.1 million

Bar Steel Products Photo/Stationary Customer Services Hdqtrs./Mktg./ Customer Service Laboratory Testing Services

1. BMW 2. Michelin North America 3. JTEKT Automotive.

South Carolina, Inc

9. SPARC 10. Albemarle Corp.

Lexington Cnty.

Berkeley Cnty.

Orangeburg Cnty.

INDUSTRY

The state’s Gold Shovel per-

CITY/COUNTY

formance comes through the

in software development and is worth more than 700 jobs. That would be a development in

364

E

644

$24 million

E

310

$11.1 million

E

20

$65 million

Telesales/ Payment Services Software Development Flame Retardant Chemicals

Lenexa from Perceptive Software, maker of process and content management software. “The Perceptive Software campus at Lenexa City Center will be an ideal place for our team to continue to develop the innovative products and solutions that make a difference for our global customers,” Perceptive Software’s President and CEO Scott Coons observed at

Represents a state/local sponsor

44

AREA DEVELOPMENT

last year’s groundbreaking.

FOR FREE SITE INFORMATION, CALL

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Kentucky Governor Steven L. Beshear

THERE’S A REASON THEY’RE ALL CHOOSING KENTUCKY When it comes time to invest, the automotive industry continually says yes to Kentucky. Since 2010, the industry – including our four major auto assembly plants and 450 suppliers – has announced $3.3 billion in investments and 14,000 new jobs in the Commonwealth.

We’ve also opened a new user-facility laboratory as part of an innovative partnership with Argonne National Laboratory and our universities to improve plug-in and hybrid automotive batteries.

If you’re looking for room to grow, Kentucky offers three certified megasites, all prime development opportunities for large-scale manufacturing facilities, as well as hundreds of additional shovelready sites and available buildings to fit your specific needs.

Coupled with our already low business costs, Kentucky’s incentive programs – which are among America’s most aggressive and effective – can also lower your company’s bottom line.

Get in touch and find out for yourself how easy it is to say yes to Kentucky.

Call (800) 626-2930 or visit www.ThinkKentucky.com

Facebook.com/ThinkKentucky Twitter.com/ThinkKentucky

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But in Kansas, there is no single sector that dominates the top-10 list, which of course is every governmental official’s dream. For example, a sports apparel expansion adds more than 600 jobs, as does a new pharmaceutical operation. More jobs come in the brokerage services business, even more in mortgage banking, and still more in insurance. Customer service for those using cloud computing services means jobs for

Xactware Solutions Inc. Orem, Utah

Kansans, as do apparel manufacturing and distribution operations.

STATES WITH POPULATIONS UNDER

KANSAS (pop. 2.9 million)

COMPANY

CITY/COUNTY

1. GTM Sportswear 2. Teva

Manhattan Overland Park 3. RTS Administrative Overland Services Park 4. Perceptive Software Lenexa 5. The Federal Savings Overland Bank Park 6. Coventry Health Overland Insurance Park 7. NetApp Wichita 8. Bombardier Wichita 9. Ventra Kansas, LLC 10. Quidsi Logistics

Kansas City Lenexa

3

MILLION

GOLD Shovel Winner N/E # JOBS

INV. AMT.

INDUSTRY

E N

638 602

$17 million $71 million

Sports Apparel Pharmaceuticals

N

400

$22 million

N N

746 450

$34 million $11 million

Brokerage Service/ Financing Software Development Mortgage Banking

N

333

$17 million

Insurance

E E

418 450

$86 million $53 million

N N

250 362

$39 million $12 million

Customer Service Flight Test & Development Center Auto Parts/Plastics Fulfillment/Distribution

Represents a state/local sponsor

STATES WITH POPULATIONS UNDER

MISSISSIPPI (pop. 2.9 million)

COMPANY

1. Nissan North America 2. VT Halter Marine 3. Teleflex 4. Comfort Revolution 5. Roxul 6. Drax Biomass 7. Kimberly-Clark 8. Rolls-Royce North America 9. General Atomics 10. Milwaukee Electric Tool

CITY/COUNTY

3

MILLION

Mississippi — Silver Shovel

SILVER

Shovel Winner N/E # JOBS

INV. AMT.

N/A*

One of the biggest growth areas INDUSTRY

Automotive

was durables manufacturing,

E 1,000

Pascagoula Olive Branch Belmont Byhalia Gloster Southaven Hancock Cnty.

E E N N N E E

400 225 200 150 45 100 35

N/A* N/A* $5 million $130 million $80 million $2 million $50 million

Shipbuilding Distribution Center Sleep Products Insulation Products Wood Pellets Distribution Jet Engine Testing

Economic Outlook” from

Shannon

E

25

$12 million

to be at the heart of job creation

Olive Branch

E

25

$8 million

Aircraft Launch Systems Distribution Center

according to the “Mississippi Mississippi Public Universities. That sector, healthcare, and transportation/utilities each enjoyed employment growth of about 2 percent in 2012. And those sectors are likely this year, too, the report predicts.

“Job creation in the future will depend more than ever on the ability of Mississippi-owned firms

Represents a state/local sponsor

AREA DEVELOPMENT

in the Mississippi economy last year

Canton

* CONFIDENTIAL

46

On the south face of Traverse Mountain in Orem, Utah, near Provo, Xactware Solutions is building a $130 million headquarters facility for development of its software aimed at those involved in estimating construction and repair projects. The company expects to create 859 new full-time jobs as the facility ramps up starting in 2014.

The business is a family affair for the company President and CEO Jim Loveland, who spoke at the groundbreaking for the facility last August. “This is a definite wow moment. When I think of my dad starting this business out of the basement of his home in 1986 with just one salesperson, with all the growth and all of the challenges that we have had over the years, and how we sit here today with 460 employees and a goal to be over 500 employees by the end of the year.”

Local officials are pleased by the Xactware commitment, but just as excited about what may follow. They believe this deal will be the catalyst for development of hundreds of thousands of additional square feet of space nearby.

to market their goods and services

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Page 47

outside the state,” senior economist Marianne Hill noted in the report.

The list of the biggest recent project announcements reflects the importance of durables manufacturing — a thousand jobs at the Nissan plant in Canton, for example, 400 shipbuilding jobs in Pascagoula, and several hundred all told in sleep products, insulation products, and aircraft launch systems. Mississippi also happens to be an excellent gateway to broader destinations, which makes it a prime spot for distribution, with the three cited distribution projects together adding 350 jobs.

North Dakota — Silver Shovel

STATES WITH POPULATIONS UNDER

NORTH DAKOTA (pop.699,628)

COMPANY

CITY/COUNTY

3

MILLION

SILVER Shovel Winner N/E # JOBS

INV. AMT.

INDUSTRY

1. Ultra Green Packaging Inc. 2. Horsch Anderson LLC 3. Bobcat Co.

Devils Lake

N

400

$2.3 million

Packaging Materials

Mapleton

N

300

$12 million

Bismarck

E

210

$10 million

4. John Deere Seeding Group 5. Phoenix International Corp.

6. CNH America LLC

Valley City

E

100

$20 million

Fargo

N

60

$22 million

Fargo

E

48

$3 million

7. Eid Passport Inc.

Minot

E

33

$16.8 million

8. ONEOK Partners LP Northwestern N N.D. 9. Minn-Dak Farmers Wahpeton E Cooperative 10. Garden Creek Watford City N II Plant

25

$160 million

Industrial & Commercial Machinery Construction Machinery Farm Machinery & Eqpt.

Electronic Components Farm Machinery & Eqpt.

Security Systems Services Natural Gas

20

$70 million

Beet Sugar

N/A

$345 million

Natural Gas

Many of the hottest economies have shale gas explo-

Represents a state/local sponsor

AREA DEVELOPMENT | Q2/Spring 2013

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ration to thank for much of their success, and North Dakota is no

STATES WITH POPULATIONS UNDER

UTAH

(pop. 2.8 million) COMPANY

CITY/COUNTY

ment of its new gas shale discov-

INV. AMT.

INDUSTRY

eries.” And, indeed, two of the

Warehouse/ Distribution Software/IT*

top 10 projects on the state’s list

Engineering/ Mineral Processing Computer Hardware Aerospace Medical Devices

ects that together represent an

$20 million

Composites

plishments that puts North

50

$40 million

500

$20 million

60

$36.9 million

Construction Materials Software Implementation Irrigation Eqpt.

N

450

$90 million

2. Xactware Solutions Inc. 3. FLSmidth

Orem

E

859

$130 million

Midvale

E

124

$16 million

4. Xi3

Salt Lake Ctiy E

250

$32.2 million

5. Boeing 6. BioFire Diagnostics, Inc. 7. ENVE Composites, Inc. 8. GAF

Salt Lake City E Salt Lake City E

104 657

$219 million $50 million

Ogden

E

342

Cedar City

N

9. Workday

Salt Lake City E E

J.P. Morgan Chase observed earbooming, thanks to the develop-

Shovel Winner N/E # JOBS

exception. As economists with lier this year, “North Dakota is

St. George

N. Salt Lake

MILLION

SILVER

1. Family Dollar

10. Orbit Irrigation Products, Inc.

3

are tied to energy — the ONEOK Partners and Garden Creek projinvestment of half a billion dollars. Other noted projects are connected to a healthy industrial variation and a series of accomDakota on the Silver Shovels list.

For example, the desire for more environmentally friendly packaging materials translates into 400 jobs at Ultra Green Packaging in Devils Lake. About

*PROJECT OF THE YEAR

150 new jobs are in the manufac-

Represents a state/local sponsor

ture of farm equipment and machinery in two separate proj-

STATES WITH POPULATIONS UNDER

WEST VIRGINIA (pop. 1.8 million)

COMPANY

1. American Woodmark 2. Constellium Rolled Products 3. Ergon West Virginia 4. Gestamp West Virginia, LLC 5. Protea Biosciences, Inc. 6. TRG Customer Solutions 7. The Williams Partners L.P. 8. Dupont 9. Gastar 10. Toyota

CITY/COUNTY

3

MILLION

ects, a couple hundred more in the creation of construction machinery, and about 300 more

SILVER

in industrial and commercial

Shovel Winner

machinery manufacturing.

N/E # JOBS

INV. AMT.

$15.2 million $42 million

INDUSTRY

Wood Products Metals

Agriculture drives investment here, too, including a $70 million

Hardy Cnty.

E Jackson Cnty. E

187 N/A

Hancock Cnty. E Kanawha Cnty. N

N/A $78 million 400 $113.5 million

Chemicals Automotive

facility in Wahpeton. “At the end

Monongalia Cnty.

Raleigh, Randolph & Kanawha Cntys.

Marshall Cnty.

Kanawha Cnty.

Marshall Cnty.

Putnam Cnty.

E

N/A

$484,000

Biotechnology

central pillar of the economy,

E

525

$200,000

Business Services

expansion at the Minn-Dak Farmers Cooperative beet sugar of the day, agriculture is still the and that’s a pretty good thing,” Delore Zimmerman, president of the Praxis Strategy Group, told

N

100

$1.3 billion

Natural Gas

Dakota Business in January.

E

N/A

$30 million

Chemicals

Utah — Silver Shovel

N

N/A

$200 million

E

80

$45 million

Natural Gas Automotive

“Utah is coming out of the recession more rapidly than the U.S., as has been the case with every downturn since World War II.” So says the “Economic

Represents a state/local sponsor

Outlook 2013” report from the

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METHODOLOGY Area Development’s annual Gold and Silver Shovel Awards recognize states for their achievements in attracting high-value investment projects that will create a significant number of new jobs in their communities. We collected information from all 50 states about their top-10 job-creation and investment projects initiated in 2012 (only those projects that actually had monies invested, “broke ground,”

began

an

expansion,

started new hiring, etc. were considered). Based on a combination of weighted factors — including the number of new jobs to be created in relation to the state’s population,

the

combined

dollar

amount of the investments, the number of new facilities, the diversity of industry represented — four states

achieving

the

highest

weighted overall scores are awarded Area Development’s 2013 Gold Shovels in four population categories: 10+ million, 5+ to 10 million, 3+ to 5 million, and fewer than 3 million. Runners up in each of these population categories are awarded 2013 Silver Shovels.

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Utah Governor’s Office of Management and Budget. For

West Virginia — Silver Shovel

example, employment in Utah grew by 3.2 percent last year,

Natural gas also is driving massive investments in West

more than double the national rate. The jobless rate, mean-

Virginia. Two projects in Marshall County together add a bil-

while, dropped to 5.7 percent, also quite a bit better than the

lion and a half dollars to the investment tally. But as in North

national average for 2012. As for 2013, the state’s economists

Dakota, it’s just a piece of a much more diverse puzzle. The

are expecting growth of 3.5 percent, which is a few tenths

booming auto industry is rippling its effects into West Virginia,

ahead of the average for Utah and far above the 1.4 percent

creating jobs. And there’s been more investment in wood

they expect to see nationally. And they’re figuring on a fur-

products and metals and chemical manufacturing. Away from

ther drop in the unemployment rate, in part because they

the manufacturing floor, there are hundreds of jobs opening

expect housing construction to finally play a bigger role in the

up business services operations.

recovery.

It’s all part of an ongoing trend, according to the West

Considering that construction was only just getting back up

Virginia University economists behind the “West Virginia

to speed in 2012, Utah’s accomplishments are all the more

Economic Outlook 2013” report. There was strong economic

impressive, and certainly worthy of a Silver Shovel. One of the

growth in 2011, and the researchers expect it’ll continue for

Projects of the Year can be found here — the $130 million

at least five years. “Employment is forecast to reach pre-

expansion at Xactware Solutions Inc., an insurance software

recession levels by 2013, and the state’s gross state product is

company in Orem that is creating nearly 900 jobs. Another 500

forecast to continue to rise at a pace higher than the previ-

software-related jobs were announced by Workday and 250

ous five years,” according to the report. As a result, the

more in computer hardware at Xi3, both in Salt Lake City, but

economists predict, the jobless rate will tick downward with

the list of top projects also includes hundreds of distribution

each passing year, dropping well below 6 percent by 2017.

jobs, hundreds more in the manufacture of medical devices, and still more in composites, aerospace, and other industries.

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Information for this report was compiled by Geraldine Gambale, Editor.

Article was written by Steve Stackhouse, Staff Editor.

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SHOVEL AWARDS REPORT SPONSORS ALABAMA

FLORIDA

••

ALABAMA DEPARTMENT OF COMMERCE The Alabama Department of Commerce helps bring jobs and investment to the state by recruiting some of the finest companies in the world to locate within the state’s borders and by helping companies located here expand. Call us to find out how we can help your company grow.

Greg Canfield, Secretary of Commerce Alabama Department of Commerce 401 Adams Avenue Montgomery, AL 36130 800-248-0033 or 334-242-0400 Gerri.Miller@commerce.alabama.gov www.madeinalabama.com Social Media: https://www.facebook.com/AlabamaDepartmentofCommerce https://twitter.com/MadeinAL

••

CULLMAN ECONOMIC DEVELOPMENT AGENCY Cullman, Alabama, is located on Interstate 65 — 45 minutes north of Birmingham and 45 minutes south of Huntsville. Industries have chosen choose Cullman because of the city’s central location, easy access to major routes in the Southeast, and highly trained available work force. Cullman enjoys a low cost of living and above average education opportunities.

Peggy Smith, Director Cullman Economic Development Agency 200 1st Avenue NE; P.O. Box 1009 Cullman, AL 35055 256-739-189; Fax: (256) 739-6721 cullmaneda@cullmaneda.org www.cullmaneda.org Social Media: https://www.facebook.com/pages/Cullman-Economic-DevelopmentAgency/149279498866

••

ECONOMIC DEVELOPMENT COMMISSION OF FLORIDA’S SPACE COAST From the dawn of NASA to the future of commercial space, Florida’s Space Coast is America’s high-tech titan. But our vibrant economy goes well beyond space, to aviation, communications, electronics, manufacturing, emerging technologies, and more — all enhanced by our skilled work force, attractive tax code, competitive wages, and unbeatable quality of life.

Gregory J. Weiner, CEcD, Sr. Dir., Bus. Dev. EDC of Florida’s Space Coast 597 Haverty Court, Suite 40 Rockledge, FL 32955 800-535-0203; 321-638-2000; Fax: 321-633-4200 gweiner@spacecoastedc.org info@spacecoastedc.org www.SpaceCoastEDC.org

GEORGIA

••

GEORGIA DEPARTMENT OF ECONOMIC DEVELOPMENT The GDEcD is the state’s sales and marketing arm and lead agency for attracting new business investment, encouraging the expansion of existing industry and small businesses, developing new domestic and international markets, attracting tourists, and promoting the state as a location for film, video, music, and digital entertainment projects, as well as planning/mobilizing state resources for economic development.

Robert Payne, Director of Account Management Georgia Department of Economic Development 75 5th Street NW, Suite 1200 Atlanta, Georgia 30309 404-962-4000 communications@georgia.org www.Georgia.org Social Media: http://twitter.com/gdecd http://facebook.com/gdecd http://www.youtube.com/user/GeorgiaBusinessUSA http://www.linkedin.com/company/georgia-department-of-economic-development

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SHOVEL AWARDS REPORT SPONSORS INDIANA

MICHIGAN

••

••

HOOSIER ENERGY Hoosier Energy is a cooperative wholesale power generator whose diverse, reliable wholesale electric system generates and transmits electric power to 18 electric cooperatives serving 700,000 customer meters. From auto assembly plants to foundries to casinos, Hoosier Energy serves a variety of power needs and supports the growth of its members with numerous services.

MICHIGAN ECONOMIC DEVELOPMENT CORPORATION Looking to grow your business? Consider a flat 6 percent corporate income tax. The nation’s fourthlargest high-tech work force and one of the world’s largest concentrations of R&D. Millions in available capital and assistance. Leading to economic activity that’s at a 10-year high. Creating a business-friendly climate that’s Pure Michigan.

Harold Gutzwiller Hoosier Energy P.O. Box 908 Bloomington, IN 47402 812-876-0294; Cell: 812-360-4796 Fax: 812-876-5030 hgutzwiller@HEPN.com www.HEPN.com www.tdl.HoosierSites.com

Dusty Duistermars, Manager, Site Location Services Michigan Economic Development Corporation 300 N. Washington Square Lansing, Michigan 48913 517-763-4156 duistermarsd@michigan.org www.michiganadvantage.org

MISSISSIPPI

KANSAS

••

KANSAS DEPARTMENT OF COMMERCE Already a terrific place for business, Kansas keeps getting better. Recent tax reform has eliminated income taxes for many types of companies, ensuring that businesses have more money to invest in our economy. With pro-growth, business-friendly policies and numerous other advantages, Kansas is the perfect state for your business.

MISSISSIPPI DEVELOPMENT AUTHORITY Consider Mississippi: everything we do is original. International industry leaders choose Mississippi for our dedicated work force, prime geographic location, and supportive business climate. But they also look to us for our innovative solutions to businesses’ needs and our passion for surpassing expectations. To learn more about the benefits of a Mississippi location, visit our website.

Barbara Hake, CEcD Business Recruitment Manager Kansas Department of Commerce 1000 SW Jackson Street, Suite 100 Topeka, KS 66612 913-345-8347 Fax: 913-345-8548 bhake@kansascommerce.com KansasCommerce.com/KBIZ

David Ramsey, Global Director Mississippi Development Authority P.O. Box 849 Jackson, MS 39205 800-360-3323 601-359-3449 Fax: 601-359-2832 dramsey@mississippi.org www.mississippi.org

Social Media: https://www.facebook.com/KansasCommerce http://www.linkedin.com/groups?gid=3705886&amp;trk=hb_side_g https://twitter.com/KansasBiz

NORTH CAROLINA

••

KENTUCKY

••

KENTUCKY CABINET FOR ECONOMIC DEVELOPMENT Many of the world’s most successful companies have discovered that Kentucky — land of the thoroughbred — is a great place to build their businesses. We invite you to write your own success story in Kentucky. We’re confident you’ll find the Bluegrass State has the winning tradition you’ve been seeking.

Erik Dunnigan, Commissioner Department for Business Development Kentucky Cabinet for Economic Development Old Capitol Annex 300 W. Broadway Frankfort, KY 40601 502-564-7140 Fax: 502-564-3256 Erik.Dunnigan@ky.gov www.ThinkKentucky.com

••

COMMERCE LEXINGTON INC. Commerce Lexington Inc. focuses its energies and resources on the core components of its approach to regional economic development including assisting local business retention and expansion; encouraging entrepreneurial activity; and recruiting new business investment. We are proud of the Bingham McCutchen, Amazon, and Florida Tile announcements in Central Kentucky.

Gina Greathouse, Senior Vice President, Economic Development Commerce Lexington Inc. 330 East Main Street, Suite 205 Lexington, KY 40507 859-225-5005 ggreathouse@commercelexington.com www.locateinlexington.com

Brenda Daniels Manager, Economic Development ElectriCities of North Carolina, Inc. 1427 Meadow Wood Blvd.

Raleigh, NC 27604 1-800-768-7697 ext. 6363 Mobile: 919-218-7027 bdaniels@electricities.org www.electricities.com WINSTON-SALEM BUSINESS INC. Winston-Salem is a diverse, progressive community with a multitude of resources for helping companies succeed. With an ample, skilled work force and collaborative spirit, the area has successfully transitioned from a manufacturing focus to a center for advances in healthcare, life sciences, financial services, technology research and development, and other expanding sectors of the economy.

Social Media: www.Facebook.com/ThinkKentucky www.Twitter.com/ThinkKentucky

••

••

ELECTRICITIES OF NORTH CAROLINA, INC. ElectriCities is a not-for-profit government service organization representing 70+ N.C. cities and universities that own electric distribution systems. A site selection professional can receive detailed reports from our extensive databases on dozens of N.C. sites, from mountains to coast, within 48 hours of a request. We’re your turnkey services partner.

Bob Leak, CEcD, President Winston-Salem Business Inc. 1080 W. Fourth Street Winston-Salem, NC 27101 336-723-8955 Fax: 336-761-1069 rleak@wsbusinessinc.com www.wsbusinessinc.com Social Media: https://www.facebook.com/WinstonSalemBusiness https://twitter.com/wsbusinessinc http://www.youtube.com/user/wsbusinessinc

Social Media: www.facebook.com/locateinlex www.twitter.com/LocateInLex http://www.linkedin.com/company/commerce-lexingtoneconomic-development

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NORTH DAKOTA

••

••

BISMARCK-MANDAN DEVELOPMENT ASSOCIATION The Bismarck-Mandan Development Association provides businesses and site consultants with assistance in relocation and expansion opportunities throughout the MSA that includes all of Burleigh and Morton counties in North Dakota. Home to a robust diversified economy, Bismarck-Mandan offers a business-friendly environment, reliable work force, and well-rounded community.

Brian Ritter, Director of Business Development Bismarck-Mandan Development Association 400 East Broadway Ave., Suite 417 Bismarck ND 58502 701-222-5530 britter@bmda.org www.bisman.org

PENNSYLVANIA PENNSYLVANIA DEPARTMENT OF COMMUNITY AND ECONOMIC Governor Tom Corbett has made it his priority to create an DEVELOPMENT environment in which companies can grow, enacting historic business tax and regulatory reforms projected to save businesses $1 billion annually. Combine this with the state’s world-class higher education institutions, skilled work force of more than 6.5 million, comprehensive transportation network, low-cost energy, and proximity to 40 percent of our nation’s population and the possibilities are limitless. Our economic development, education, and work force organizations are working together like never before to help your company become the next Pennsylvania success.

••

LEHIGH VALLEY ECONOMIC DEVELOPMENT CORPORATION The Breinigsville area of Lehigh Valley, Pa., was a hotbed of job-creation activity in 2012 as a pair of nationally known food and beverage brands came calling, as did a maker of big-truck axles. Ocean Spray, Bimbo Bakery USA, and Westport Axle all set up shop within a stone’s throw of each other.

Pete Reinke, Vice President of Regional Development Lehigh Valley Economic Development Corporation 2158 Avenue C, Suite 200 Bethlehem PA 18017 610-266-6775 Fax: 610-266-7623 preinke@lehighvalley.org www.lehighvalley.org Social Media: http://www.facebook.com/lvedc http://www.linkedin.com/groups?gid=1614017

SOUTH CAROLINA

••

SOUTH CAROLINA DEPARTMENT OF COMMERCE As South Carolina’s leading economic development agency, the Department of Commerce works to recruit new businesses and help existing businesses grow. Commerce has been part of recruiting world-class companies to South Carolina such as Boeing, Bridgestone, Continental, Heinz, Michelin, BMW, and Google Inc. Commerce also supports small and existing business, rural development initiatives, and offers grants for community development.

Steven Kratz, Director of Communications Pennsylvania Department of Community and Economic Development 400 North Street, 4th Floor Harrisburg, PA 17120-0225 866-466-3972 www.newPA.com/business

South Carolina Department of Commerce 1201 Main Street, Suite 1600 Columbia, SC 29201 803-737-0400 info@SCcommerce.com www.SCcommerce.com

Social Media: https://twitter.com/newPAnews http://www.linkedin.com/company/pennsylvania-department-of-community-&-economic-development?trk=hb_tab_compy_id_280778

Social Media: https://www.facebook.com/sccommerce https://twitter.com/SCCommerce http://www.youtube.com/SCDofC

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SHOVEL AWARDS REPORT SPONSORS ••

SOUTH CAROLINA POWER TEAM The South Carolina Power Team represents Santee Cooper and the state’s 20 electric cooperatives in their industry recruitment efforts. We provide data on certified sites and available buildings throughout the state and now offer an electric incentive rate to companies locating or expanding in co-op or Santee Cooper service areas.

Fred Gassaway, Executive VP, Marketing South Carolina Power Team 1201 Main St., Suite 1710 Columbia, SC 29201-3212 803-254-9211 Fax: 803-771-0233 Fgassaway@SCpowerteam.com www.SCpowerteam.com

••

TENNESSEE DEPARTMENT OF ECONOMIC & COMMUNITY When you select Tennessee for your expansion or location, DEVELOPMENT you’ll find a strong transportation network connecting to markets around the world, low business costs, flexible incentives, and a high quality work force.

Visit our website to learn more about how we can help your company succeed and grow in Tennessee.

Allen Borden Assistant Commissioner, Business Development Tennessee Department of Economic & Community Development 312 Rosa L. Parks Avenue, 11th Fl. Nashville, Tennessee 37243 615-741-1888 Allen.Borden@tn.gov http://tn.gov/ecd

••

TEXAS OFFICE OF THE GOVERNOR Economic Development & Tourism. The Texas economy continues to thrive across a wide range of industries. While Texas leads the nation with a diverse and robust energy sector, the state’s large work force and nation-leading infrastructure create a thriving network that supports IT operations, plastics manufacturing, call centers, and chemical projects — making Texas truly Wide Open for Business.

Aaron Demerson, Director Office of the Governor Economic Development & Tourism biztex@gov.texas.gov www.texaswideopenforbusiness.com

TENNESSEE

••

TEXAS

CITY OF AUSTIN In a slow economy, Austin, Texas, is growing rapidly — fueled by our talented work force, low cost of doing business, exceptional quality of life, and fast-growing job market. The city is recognized across the globe for its great quality of life and dynamic, high-tech economy.

Ben Ramirez, Interim Economic Development Program Manager City of Austin Economic Growth and Redevelopment Services Office 301 W. 2nd Street Austin, Texas 78704 512-974-7819; Fax: 512-974-7825 ben.ramirez@austintexas.gov www.austintexas.gov/economicgrowth Social Media: Twitter: @econvitalityATX

••

GREATER AUSTIN CHAMBER OF CHAMBER Austin hosts an educated, bilingual, multi-tiered work force and a passion for success. Our population offers skill sets that range from high-end technology design, development, and marketing to back-office operations. Our dynamic business ecosystem provides consistent job growth for some of the most successful companies.

Dave Porter Austin Chamber of Commerce 535 East 5th Street Austin, TX 78701 512-322-5650 dporter@austinchamber.com www.austinchamber.com SAN ANTONIO ECONOMIC DEVELOPMENT San Antonio has a “culture of busiFOUNDATION ness” that includes pro-business leadership, solid growth, abundant work force, land, and affordable energy that attracts diverse industries and job-producing investments to the city. Learn why 100 companies in six years have chosen to partner with SAEDF and San Antonio’s collaborative business community.

••

Tom Long, Executive Vice President of Business Recruitment San Antonio Economic Development Foundation 602 E. Commerce St. San Antonio, Texas 78205 210-226-1394 tlong@sanantonioedf.com www.sanantonioedf.com.

Social Media: https://www.facebook.com/SanAntonioEDF https://twitter.com/sanantonioedf http://www.linkedin.com/company/121085?trk=tyah

UTAH UTAH GOVERNOR’S OFFICE OF ECONOMIC DEVELOPMENT The Utah Governor’s Office of Economic Development (GOED) provides resources for the creation, growth, and recruitment of companies to Utah. GOED is your front door to the #1 state for business and careers (Forbes 2010, 2011, 2012). This and past years’ winning projects demonstrate the diversity of our economy.

Michael O’Malley, Business Marketing Director

••

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Utah Governor’s Office of Economic Development 60 E. South Temple – Third Floor Salt Lake City UT 84111 801-538-8879; Fax: 801-538-8881 businessutah@utah.gov http://business.utah.gov Social Media: https://www.facebook.com/businessutah https://twitter.com/businessutah http://www.linkedin.com/groups?gid=3688519&trk=hb_side_g

Still think Cullman’s just another small town?

VIRGINIA

••

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP Virginia’s unique combination of assets has encouraged businesses to prosper here for over 400 years. The Virginia Economic Development Partnership provides confidential site selection services. Visit our website to learn why Virginia has been named a Top State for Business by CNBC, Forbes.com, and Pollina Corporate Real Estate.

Mike Lehmkuhler, Vice President – Business Attraction Virginia Economic Development Partnership 901 East Byrd Street, Richmond VA 23219 804-545-5600 Fax: 804-545-5801 info@Yesvirginia.org www.YesVirginia.org Social Media: https://www.facebook.com/pages/Virginia-Economic-Development-Partnership/106654229545 https://twitter.com/YesVirginia_org

••

ISLE OF WIGHT COUNTY ECONOMIC DEVELOPMENT Green Mountain Coffee Roasters, Inc. (GMCR), a leader in specialty coffee and coffeemakers established a production and distribution facility in Isle of Wight County in 2012 to roast coffee for its Keurig® Single-Cup Brewing Systems. The company will invest $180 million and hire 800 employees, making it the largest project of the year in Virginia. GMCR purchased a 330,000 square-foot spec building in Shirley T. Holland Intermodal Park.

Lisa T. Perry, Director of Economic Development Isle of Wight County Economic Development 17130 Monument Circle, Suite A Isle of Wight, VA 23397 757-356-1962 Fax: 757-365-6271 lperry@isleofwightus.net www.insidetheisle.com Social Media: www.facebook.com/IsleofWightCountyVAEconDev Twitter: @IOWEconDev

••

SOUTHERN VIRGINIA REGIONAL ALLIANCE Southern Virginia — a region built on manufacturing — has access to over 60 percent of the U.S. population and over two-thirds of the U.S. industrial base within a day’s drive. Our region has 17 shovel-ready sites ranging in size from 8 to 36 pad acres and a multitude of existing buildings. It is also home to a variety of work force training facilities dedicated to helping our new and existing industries train the employees needed in order to be successful.

Leigh Cockram, Executive Director Southern Virginia Regional Alliance 300 Ringgold Industrial Parkway Danville, VA 24540 434-710-2868 lcockram@gosouthernvirginia.com www.GoSouthernVirginia.com Social Media: Linked In: Leigh Cockram Twitter: @LeighCockram

Switch gears.

We didn’t invent the strategy of recruiting national and international business to rural America, but after years of cultivating relationships with businesses from all corners of the globe, we think we’ve perfected it. Cullman is home to numerous automotive-related industries, has one of the top-10 ranked school districts in the state, successful workforce training programs and state-of-the-art healthcare facilities.

That’s why Cullman continues to rank near the top nationally for industrial recruitment and existing industry growth.

WEST VIRGINIA

••

THE POLYMER ALLIANCE ZONE (PAZ) The Polymer Alliance Zone (PAZ) is an economic development organization that works to market the plastics industry in West Virginia, specifically the Mid-Ohio Valley region of the state. PAZ helps recruit polymer businesses and related service companies to locate in the state, furthering economic development and facilitating growth of this vibrant industry.

Karen Facemyer, President Polymer Alliance Zone 1 Polymer Way Davisville, WV 26142 304-428-1622 Fax: 304-428-1667 kfacemyer@pazwv.org www.pazwv.org

Find out more about us at

www.cullmaneda.org Thank you Rehau Automotive LLC for helping Alabama win the Gold Shovel Award!

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ASSET MANAGEMENT

Thwarting the Power Threat: Smart Buildings and Grids Smart-grid technologies could not only prevent or alleviate outages, but also save companies money while capturing and marketing wasted energy.

By Dan Probst, Chairman of Energy and Sustainability Services, Jones Lang LaSalle

A

s power outages become more frequent, affect larger populations, and cost businesses ever-increasing sums, both governments and large companies are looking for cost-effective ways to mitigate the risks. What they’re finding is that smart technology — in electrical grids and in building automation — can not only help reduce the frequency and damage of power failures, but also pay for itself quickly through reduced energy usage and cost.

Big power failures are on the rise. According to an article from the University of Minnesota College of Engineering and Science, the pace of U.S. blackouts affecting 50,000 or more electrical customers more than doubled over the past decade, from 140 during 2000–2004 to 303 during 2005–2009. The trend has continued in recent years, with 52 large blackouts in 2010 and 109 in 2011.

Rising Costs The rise in the number of power outages is due in part to an increase in severe weather events in recent years. The additional wear and tear on equipment, plus the outdated and aging infrastructure in place in most of the country, has led to increasing power outages for most people and businesses — as well as increasing power costs.

A recent study co-conducted and reported by The Associated Press found that the average U.S. electrical customer spent 112 minutes without power in 2011, despite spending 43 percent more to maintain and repair existing infrastructure than a decade earlier. But the direct cost to address grid problems is tiny compared

to the financial cost of frequent failures. The Department of Energy calculates that outages cost Americans $150 billion annually — about $500 per person every year — and some estimates are as high as $180 billion.

One of most damaging outages of 2011 affected nearly seven million people in Southern California, Arizona, and Sonora, Mexico. Originating from a field engineer’s attempt to repair a capacitor bank, the failure swept across the region, knocking out switching stations across five utilities.

Many areas were without power for 12 hours, and it took 24 hours to return service to all customers.

During the power outage, the San Diego skyline went dark, cars were gridlocked for more than four hours, and several car collisions were blamed on failed traffic signals. San Diego’s trolley system and trains in Los Angeles stopped running, and one hospital lacked power for hours when its backup generator failed. A sewage treatment plant lost power and released sewage, contaminating beaches and damaging the water supply.

Add to that the lost productivity of millions of workers, and the perishable inventory of thousands of restaurants and stores, and the case for smart technology makes financial sense.

Alleviating the Problem With Technology Could smart-grid technology have prevented the 2011 outage from spreading? Could it have shortened

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the recovery period?

Chattanooga’s Electric Power Board had just started installing 1,500 automated circuit switches and sensors on 164 circuits when nine tornados struck the area in April of 2011, knocking out power. The power authority used the 123 smart switches in service to reroute power, saving customers thousands of hours of outage time and avoiding the cost of 250 “truck rolls” for maintenance and repairs.

Smart grids have cost benefits beyond preventing blackouts.

Oklahoma Gas and Electric (OGE) expects implementation of smart technology to allow it to save the capital expenditure of a new power plant.

The utility started time-based rates with 6,000 customers in a program that included in-home displays, web portals, and programmable communicating thermostats to reduce peak demand. The initial results led OGE to expand the program to 150,000 customers over the next several years, resulting in a 210-megawatt increase in power capacity.

Funding Matters These and other success stories come from a Department of Energy report on its Smart Grid Investment Grant Program, which matches $3.4 billion in federal funds with an equal amount from private-sector sources to deploy 99 smart-grid projects. Among other things, the program will result in more than 15 million smart meters across the country — double the number that existed before the program, but still just a fraction of the 65 million meters estimated by industry analysts to be in place by 2015.

Smart meters are just one part of smart grid technology. A complete modernization of the national grid is expected to cost $340 billion to $480 billion, according to the DoE report.

But that much and more is being lost through power outages and inefficient energy management. At a time when energy cost and carbon emissions are increasingly important considerations, companies are considering the longterm cost and reliability of energy in making their location decisions, and in smart-building automation that spans their global portfolios.

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Making It Work: System Compatibility & Other Factors The past few years have seen tremendous gains in smart-building technology. In the past, buildings with control systems by different manufacturers could not “speak” a common language, but recent breakthroughs now make it possible for entire portfolios to be monitored from a single remote location, with smart technology performing continual commissioning on buildings, making adjustments to keep buildings running at peak efficiency, and alerting the command center staffed by “smart” people when a maintenance or repair call is needed.

Retrofitting an automated system with this analytical capability has been shown to save 18 to 24 percent on energy cost alone in buildings where it has

We have only started to

imagine the opportunities that an

integrated smart grid/ smart building platform will bring in the coming years.

been implemented. That’s not including the savings from longer equipment life, or the much larger potential benefit of enhanced system reliability. As companies rely more on data centers and other mission-critical facilities — and as these facilities use an increasing share of electricity — the cost of power failure and the value of reliability and resiliency are increasing geometrically.

The cost of wasted energy is significant as well. The EPA’s ENERGY STAR program estimates that the country’s 4.8 million commercial buildings spend about $108 billion on energy, and 350,000 industrial plants use another $85 billion. ENERGY STAR also notes that about 30 percent of that energy is wasted. That’s potentially $65 billion a year that could be gained from better monitoring and management of energy in commercial buildings.

Portfolio monitoring systems enhance efficiency in ways that are sim-

ilar to smart grids. Part of the cost reduction comes from the system’s ability to conduct continual commissioning and to shift energy usage to nonpeak periods. Identifying equipment in need of maintenance or repair extends its useful life, reducing the owner’s capital cost and helping to guide capital planning. And just as regions with smart grids can reduce truck rolls, smart building systems make facility management staff more productive, by conducting menial tasks automatically, and by pointing professionals to likely causes of energy waste.

Smart grid infrastructure can supercharge the benefits of site-level energy strategies. The two-way communication and energy transmission of smart grids means that surplus power from on-site solar installations and co-generation plants could be sold to utilities rather than wasted. And an integrated smart grid/building system would facilitate demand response, the mechanism by which a building gets cheaper energy by agreeing to reduce or shut off grid power during peak times at the utility’s request.

Lost in Transmission Creating a market for excess energy generated at the site level would also reduce the amount of energy lost in transmission. It is estimated that about 10 percent of energy from power plants is lost on the way to its destination, but the loss factor rises as the distance between the source and the enduser increases.

For cities and states, smart infrastructure attracts businesses that want more affordable and more reliable energy. A big bonus for state and municipal governments is the reduction in greenhouse gas emissions, an issue that continues to move to the forefront of public agendas.

It’s almost hard to imagine that the electrical grid holding together our digital world is not itself digital. The risk to business and economic development is huge and getting bigger. Meanwhile, companies are recognizing that similar technology pays for itself within a year or two through energy savings in buildings. Although the simple payback is longer for infrastructure grids, it’s still a compelling case.

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INCENTIVES

Forging a Winning BusinessCommunity Partnership Through Incentives Although a company should never select a location solely based upon incentives, financial assistance to offset project and/or operating costs is important when the final decision is made.

By Larry Gigerich, Managing Director, Ginovus

I

t is vital for companies evaluating expansion or new facility projects to create collaborative relationships with communities and states to ensure a long-term partnership. Economic development incentive programs are utilized in support of projects to ensure that both parties achieve their respective objectives. While some people claim that this is not possible, it happens every day in the world. They are not mutually exclusive outcomes.

In the current challenging economic environment, incentives are being provided to assist in the expansion or location of businesses in communities across the continent. Over the years, there has been a focus on the use of economic development incentives and — with the recent New York Times article — the issue is drawing more attention. The age-old question has been whether incentives are needed to entice companies to decide to invest capital and hire team members in a specific location. Companies should never make a location decision solely based upon incentives, though the financial assistance that offsets project and/or operating costs is important when the final decision is being made by any firm.

In certain situations, the chatter surrounding the use of economic development incentives can become divisive. The bottom line is that both governmental entities and companies have responsibilities to one another

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$ $ $ $ $$ $ $ $ $ $$ $ $ $ $ $ $$ $ $ $$ $ $ $ $ $ when they enter into a financial relationship. This is the same as when government and private businesses enter into agreements with vendors to provide products or services. Parties have contractual responsibilities to one another, and if one party fails to do what they are supposed to for the other party, there are penalties put in place. In today’s world of economic development incentives, it works the same way.

Communities fit into regional and FOR FREE SITE INFORMATION, CALL

state economies. Each community plays an important role in contributing to that regional and state economy’s longterm success. When communities understand their role, they will be prepared for and successful at attracting the types of industries and economic growth that best supports the objectives of their area. By aligning companies and industry sectors with the right location, communities and states can create an enduring partnership that can lead to future growth and involvement

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in other community initiatives.

Communities and states must be prepared with the right tax structure, work force, real estate, public infrastructure, and economic development incentive programs to ensure successful economic outcomes. Communities that are keenly aware of their strategic economic development goals are well prepared to secure new capital investment and job creation opportunities.

The ability to offer and deliver meaningful economic development incentives in support of an opportunity to lower project and/or operating costs can result in great outcomes. This form of partnering will result in a winwin outcome for communities/states and businesses.

Why Communities Offer Incentives • Retaining and creating good paying jobs — this is important to any community and affects everything from the tax base to the quality of life, i.e., the happiness and health of its citizens.

• Expanding the tax base through cor-

porate taxes ranging from property taxes to sales taxes • Diversifying the economic base through the creation of jobs for a diversely educated population • Beautifying the community through the improvement of decaying buildings and neighborhoods or the availability of new tax sources to improve existing quality-of-life amenities When companies begin their search for a new location or expansion of an existing one, there are key driving factors involved in the consideration of each community being evaluated (as outlined in the accompanying chart).

Communities will need to meet most, if not all, of the high-ranking factors involved in the decision. Companies that have made diligent efforts in identifying those factors will be seeking the partnership opportunities with communities that can best fulfill those needs. Typical key factors include offsetting capital investment costs and operating expenses.

Understanding one another’s key driving factors can go a long way

toward creating a partnership that benefits both the companies and the communities involved. A clear communicative relationship with complementary or mutual objectives can help develop long-term positive results for the prosperity of the company and the community. This communication needs to include evaluations by both the company and industry, oftentimes with the aid of outside experts who have a depth of understanding and experience with the issues involved on both sides of the aisle.

Mutual perspectives can easily be identified and applicable incentives developed to address the needs of both the company and the community.

Businesses contribute to the overall prosperity of a community. With the realization that 80–85 percent of all new jobs in a community come from existing businesses, it becomes easy for communities to understand that the investment they make in the existing industries in their community is essential to promoting the growth of those industries. Growth equals new

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nomically sound and will benefit their communities. Receipt of the incentives is, typically, based upon performance and compliance with any regulations put into place. The benefit to the company is a trained work force to meet their needs for growth and sustainability. The benefit to the community is a working and tax-paying population.

The trickle down is obvious.

viding companies with credits to invest in significant remodeling or rehabilitation of existing buildings can make the difference between new jobs and growth or not.

National statistics on economic development incentives indicate that for every dollar spent by a community on economic development incentives, Work Force Initiatives $2 is re-invested by the company Several incentives can come into receiving the incentive. play to aid in the retention Now this is not to say that and growth of the necessary those responsible for work force. Existing and awarding these incentives continuing education levels should not be prudent with for the jobs will need to be the distribution of the beneaddressed by both the comfits, but those communities pany and the community. that have a solid strategy Clear communication can LABOR: The quality, availability, and cost with regard to economic help both parties ensure that are top factors in selecting a site for relocation or expansion. development — and are needs are met. Some evaluable to partner with the ating questions might INFRASTRUCTURE AND UTILITIES: companies that align best include: Capacity, cost, and redundancy are all with that strategy — have • What is the education or factors involved in the decision of selecting an excellent opportunity to training level of the existing a community. create a positive outcome work force base? for the community and the • Are there prospective REAL ESTATE: The cost, availability, and industries that it values. employees available to be location impact site selection decisions. trained or educated in order to fill additional jobs Bottom Line TAXES: Property, income, and sales taxes for present and future Growing companies will can significantly impact operating costs. needs? evaluate decisions revolving • If re-education or continaround rehabilitating outREGULATIONS: Permit and code regulauing education is necessary, dated facilities, building a tions, processes, and timelines can impact are there job-training pronew facility, or relocating to operating costs as well as project timelines. grams already in place by a new facility on many facthe community or the tors including capital investindustries that exist in the ment and the existing and community? potential work force. If the current Community Revitalization Efforts • Are any community incentives availcommunity they reside in cannot partAnother useful incentive for comable to offset the cost of training or ner to come up with a mutually benefimunities to beautify their environretraining any existing or new cial solution to stay, the company must ments is the use of industrial developemployees? evaluate the option of relocation. This ment or rehabilitation and revitalizaThe answers to the first two quesis where communities can take action tion type incentives. Outdated and tions can be answer fairly quickly. If to offset the capital investment and jobdecaying buildings, whether in use or re-education is necessary and there are training expenses for those businesses. not, can be an eyesore to any communo programs in place, the follow-up We would all love to believe that a nity. State-of-the-art facilities will help question must be who will provide company puts down roots, provides businesses keep up with the competithese necessary programs and how jobs and income for the citizens of the tion, grow, and flourish. And, as stated will they be funded? By answering the community, and stays forever. But the above, a growing business provides last question, communities have the reality is that as much as industry jobs and a tax base that trickles down opportunity to decide whether incencompetes for opportunities to mainto create all of the other positive tives for training will be available and tain and grow its business, communiimprovements that make a community offered to help companies offset their ties must also compete for their attractive. Incentives that provide necessary training costs. Most commugrowth opportunities — and incenfinancial support for infrastructure nities have access to state-level training tives can allow both parties to achieve improvements in conjunction with incentives or grants for projects that a positive outcome by forging a partcapital investment can provide an offresult in a specified number of net new nership between companies and the set and enticement for a company to jobs and have guidelines in place to communities where they choose to choose to stay in a particular area; and ensure that company projects are ecolocate or remain. those incentives that are aimed at projobs and a higher tax base, which in turn result in better schools and community amenities and a more attractive quality of life. Quality of life and good schools, in turn, continue to attract prospective employers and employees.

Key Factors for Industry When Seeking a New Location

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Special Investment Report TEXAS

TEXAS TODAY

By Mark Crawford

Texas’ stable business climate, low taxes, outstanding transportation infrastructure, skilled work force, and pro-business environment are helping companies to succeed and create jobs.

T

exas just keeps rolling along — since 2010 no state has added more jobs (in 2012 alone Texas outpaced California in job growth by over 150,000 jobs). Not only is the state’s energy sector booming, but Texas continues to attract multi-billion dollar investments across a range of industry sectors as more companies, eager to shed governmental red tape, come to Texas to bask in its low-cost business climate and get their products to market more quickly.

In 2012, for the eleventh year in a row, Texas was the number-one exporting state in the nation, according to annual trade data compiled by the U.S. Department of Commerce. Texas exports for last year totaled $265 billion, a 5.5 percent increase from $251 billion in 2011, outperforming overall U.S. exports, which only grew by 4.3 percent. Top exports were petroleum and coal products, chemicals, computer and electronic products, nonelectrical machinery, and transportation equipment.

“The fact that Texas was ranked the nation’s top exporter demonstrates that our strong economic climate provides a broad range of opportunities for businesses to succeed,” says Governor Rick Perry. “Our longstanding commitment to holding the line on taxes, keeping our work force strong, and maintaining reasonable regulations and fair courts have led to more than a decade of leading the nation in exports.”

TOP INFRASTRUCTURE Strong trade depends on having modern, efficient infrastructure in place with adequate capacity — highways, railroads, airports, and ports — plus the logistical systems and know-how to keep everything moving smoothly. No state is better positioned with its infrastructure than Texas is to maximize trade — especially along north-south routes to NAFTA partners Mexico and Canada, Texas’s two top trading partners. In 2011 Texas exported more goods to Mexico ($87.4 million) and Canada ($22 million) than to any other countries.

Texas is traversed by more than 300,000 miles of public roads, more than any other state, including nine interstate highways. I-35 and I-29 are busy trucking routes with direct access to Mexican and Canadian trading centers. With 380 airports, including Dallas-Fort Worth International and George Bush Intercontinental in Houston, Texas has the second-largest airport system in the country.

Then there are the 624 miles of Texas coastline, with 16 bustling seaports, including 12 deepwater

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Greetings: Texas Wide Open for Business is more than just a promise — it’s an environment we’ve created in the Lone Star State to stimulate business growth, train the future work force, and make Texas the greatest place to live and raise a family. For many years now,Texas has been providing businesses the opportunity to grow and prosper in a state with unparalleled infrastructure, a premier geographic location, a predictable regulatory environment, and a well-educated work force of 12.6 million Texans.The fact that Texas has led the nation in job creation for more than a decade is proof of our success.

TEXAS OFFICE OF THE GOVERNOR – ECONOMIC DEVELOPMENT & TOURISM

The Texas economy continues to thrive across a wide range of industries. While Texas leads the nation with a diverse and robust energy sector, the state’s large work force and nation-leading infrastructure create a thriving network that supports IT operations, plastics manufacturing, call centers, and chemical projects — making Texas truly Wide Open for Business.

As a global leader in economic development,Texas is committed to working alongside employers worldwide to ensure ideal conditions for job creation and economic prosperity.This is why Texas has tools like the Texas Enterprise Fund — a “deal-closing” fund for projects that offer significant projected job creation and capital investment — to ensure the growth of Texas businesses and create more jobs in Texas.

AARON DEMERSON, DIRECTOR Office of the Governor Economic Development & Tourism biztex@gov.texas.gov www.texaswideopenforbusiness.com

In addition to our exceptional quality of life and robust economic climate,Texas has one of the lowest business tax burdens in the United States.Texas also levies no personal income tax, allowing businesses to pass on more value to their employees.

Texas continues to be in the spotlight for attracting companies and jobs from around the globe. Month after month, the Lone Star State tops business rankings for business climate, job growth, and its growing communities.Texas is a leading state for Fortune 500 and 1000 companies and is the No. 1 exporting state in America for the 11th year in a row. It’s no wonder that in two recent surveys, CEOs and site consultants ranked Texas as the “Best Business Climate” in all 50 states.

Texas is doing what it takes to help businesses succeed and create jobs.That’s why as Governor of this great state, I invite you to come and see why Texas Wide Open for Business is more than a promise — it’s a reality. For more information, please visit

www.texaswideopenforbusiness.com.

Sincerely,

Rick Perry Governor

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ports. Ten of these ports are foreign-trade zones, which are excluded from a number of formal Customs entry procedures, quotas, and other restrictions. In 2011 the HoustonGalveston U.S. Customs District ranked first in the country for waterborne foreign trade, with a total volume of about 262 million metric tons.

Connected to this network of high-capacity shipping routes are two master-planned logistical complexes — Alliance Global Logistics Hub in Fort Worth and Port San Antonio in San Antonio.

Both provide easy access to interstate highways, Class-I rail systems, and airports. The airport at the Alliance Global Logistics Hub is the world’s first industrial-only airport. The hub is also a foreign-trade zone and includes BNSF Railway’s large intermodal facility, with direct access to multiple rail lines. Port San Antonio is a 1,900acre industrial complex and international logistics center, built on the former Kelly Air Force Base. It too is a foreign-trade zone with easy access to three interstate highways and Union Pacific and BNSF rail lines. Port San Antonio pro-

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AUSTIN TX »a business climate like no other

GREEN. If your business is looking to grow green, there’s no better place to locate your next expansion than Austin, Texas.

SUSTAINABLE. More than just money-saving rebates and incentives, Austin Energy®, the City of Austin’s publicly-owned energy provider, empowers businesses with the necessary tools to be successful.

GROWTH. Together with the State of Texas, we offer innovative solutions to encourage economic development. We’ll partner with you at any phase of your expansion or project to help create a responsible, sustainable and successful future.

ECONOMIC PROSPERITY. Austin was recently ranked #1 Top City for Business Growth by The Wall Street Journal MarketWatch.

We encourage you to find out why.

Rebates: Austin Energy austinenergy.com/go/commercialrebates • 512.482.5346 Expand and Grow: Economic Growth and Redevelopment Services Office austintexas.gov/economicgrowth • 512.974.7819

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AMARILLO ECONOMIC DEVELOPMENT CORPORATION

The Amarillo EDC’s mission is to promote business expansion in the Greater Amarillo area that builds a stronger, more diversified economy.

Companies choose Amarillo because of a motivated work force, modern infrastructure, supportive business climate, competitive tax rates, competitively priced energy, and an exceptional quality of life.

Over the past 24 years, the Amarillo EDC has engaged in more than 100 projects with more than 100 companies, building a Portfolio of Success.

vides more than logistical support — it also has an expanding aerospace presence. Fourteen aerospace-related companies with a combined 5,000 employees currently have facilities at Port San Antonio. In further support, Alamo Colleges has opened a new work force development and training center in the complex. Part of the 40,000-square-foot building will also serve as an incubator for start-up companies.

“This facility will benefit the residents and industries of the Alamo region and city of San Antonio, especially Port San Antonio tenants, by ensuring that Port San Antonio employers have access to a pool of skilled technicians to meet their expansion and retirement work force targets,” says Wayne Alexander, board chair of Port San Antonio.

RICHARD (BUZZ) DAVID, PRESIDENT & CEO Amarillo Economic Development Corporation 801 S. Fillmore, Suite 205 Amarillo,TX 806-379-6411 Fax: 806-371-0112 buzz@amarilloedc.com www.amarilloedc.com

Social Media:

KEY ECONOMIC DRIVERS Why do companies come to Texas? It’s pretty simple — a stable business climate, low taxes, outstanding transportation infrastructure, skilled work force, and one of the most pro-business state governments in the country. Consider that: • With no corporate income tax and no individual

CITY OF AUSTIN The Austin metropolitan area is home to 1.7 million residents and offers a prized quality of life, talented work force, and extraordinary business opportunities. Austin Energy’s Economic Growth and Redevelopment Office supports expansions and locations to the area through a number of economic development programs.

BEN RAMIREZ, INTERIM ECONOMIC DEVELOPMENT PROGRAM MANAGER City of Austin Economic Growth and Redevelopment Services Office 301 W. 2nd Street Austin,TX 78704 512-974-7819 Fax: 512-974-7825 ben.ramirez@austintexas.gov www.austintexas.gov/economicgrowth

Social Media: Twitter: @econvitalityATX

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https://www.facebook.com/AmarilloEDC https://twitter.com/AmarilloEDC

income tax, Texas has one of the lowest tax burdens in the country. According to www.taxfoundation.org, Texas ranks ninth for overall tax climate for the Fiscal Year 2013.

• Texas offers a highly skilled, well-educated work force of over 12 million people. The Texas Workforce Commission, through its Skills Development Fund, has awarded over $22 million in grants to improve worker skills.

• Transportation infrastructure in Texas consists of highly integrated networks of rail, highway, air, deepwater ports, and two master-planned logistics complexes that include Class-I rail terminals and direct access to interstate highways.

Ten ports are designated as foreign-trade zones.

• The Texas Enterprise Fund (TEF) — established in 2003 to ensure the growth and success of key industries in Texas — has become one of the country’s most competitive state-level tools for attracting business and new investment. To date

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LUBBOCKEDA.ORG

Workforce Data and Population Statistics Cost of Living, Tax and Utility Information Lubbock Business Park and Lubbock Rail Port Available Real Estate and Interactive Maps

800.687.5330 | Lubbock, Texas

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GREATER AUSTIN CHAMBER OF COMMERCE

Austin hosts an educated, bilingual, multi-tiered work force and a passion for success. Our population offers skill sets that range from high-end technology design, development, and marketing to backoffice operations. Our dynamic business ecosystem provides consistent job growth for some of the most successful companies.

TEF has invested about $500 million to close deals on projects that have brought more than 67,000 DAVE PORTER new jobs and $20 billion in capital Austin Chamber of Commerce investment to the state.

535 East 5th Street “Texas has many economic Austin,TX 78701 attributes that put it on just about 512-322-5650 dporter@austinchamber.com anybody’s short list,” says John www.austinchamber.com Lenio, economist and managing director for CBRE’s Economic Incentives Group in Phoenix, Arizona. “After that, TEF can be highly effective in closing the deal.

Other states would love to have an economic “A key underlying factor in our economic development tool like TEF. When conditions are success is that our communities also realize the right, TEF levels the playing field with other importance of bringing good companies with states, or tilts it in favor of Texas.” great jobs to Texas,” says Aaron Demerson, executive director of Economic Development and Tourism for the Governor’s office. “It’s acting upon that knowledge that has brought industry leaders like Apple, Ericsson, and ExxonMobil to our metropolitan areas, and influenced growth in the rural Texas manufacturing and energy industries.”

Lenio agrees: “Texas communities place a very high value on jobs. They often roll out the red carpet, which makes a difference and is something visiting company officials notice and remember.”

AMARILLO WILL BLOW YOU AWAY

Over the past 24 years, more than 100 companies have chosen Amarillo.

To see who and why, visit: amarilloedc.com/portfolioofsuccess

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INDUSTRY CLUSTERS IN TEXAS In 2003 the Texas legislature passed SB 275, calling for the development of strategies to strengthen the state’s competitiveness in key growth industries — advanced manufacturing, aerospace and defense,

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DALLAS/FORT WORTH INTERNATIONAL AIRPORT biotechnology and life sciences, information and communications technology (ICT), petroleum refining and chemical products, and energy.

For a decade, Texas has been developing innovative tools and strategies to support economic growth in these areas, including the TEF. These have been instrumental in attracting both major players and innovative startups to Texas, where they have been able to flourish, create jobs, and help establish Texas as an international leader in these key sectors.

Dallas/Fort Worth International Airport is the catalyst for turning the DFW area into one of the nationâ&#x20AC;&#x2122;s most prosperous economies, with many Fortune 500 companies.The airport is one of the busiest airports in the world, offering over 18,000 acres of land with over 5,200 acres available for commercial use.

PAUL HENDERSHOT Dallas Fort Worth International Airport Commercial Development Department P.O. Box 619428 DFW Airport,TX 75261 972-973-4645 Phendershot@dfwairport.com www.dfwairport.com/landhere

Advanced Manufacturing: Advanced manufacturing includes nanotechnology, semiconductors, advanced materials, electronics, automocompany also plans to construct a $200 million tive, and micro-electromechanical systems. sheet metal stamping facility that will employ Recent announcements include Samsung about 180 workers.

Electronicsâ&#x20AC;&#x2122; commitment to invest up to $4 billion to upgrade its chip manufacturing plant in Austin and National Instruments plan to spend $80 million to expand its operations, creating up to 1,000 new engineering and research jobs in Austin.

Automotive is another booming segment of the advanced manufacturing sector and includes automobiles and light trucks, motor vehicle bodies, and auto parts. Texasâ&#x20AC;&#x2122; motor From cement, steel, and electric power to strong families and an vehicle industry exported about educated workforce, great things are made in Midlothian, Texas. $18.5 billion in products in 2012. Toyota in San Antonio and Come visit us, just 30 minutes from both Dallas and General Motors in Arlington, Fort Worth, and discover how your next move can be two of the two largest automothe start of something great. tive manufacturers in Texas, are /PSUI UI 4USFFU 4VJUF " .JEMPUIJBO 5FYBT t supported by an extensive netwww.Midlothian-TX.org work of suppliers. GM invested about $1.5 billion in its Arlington plant from 1996 to 2012, which is the companyâ&#x20AC;&#x2122;s only remaining U.S. location building full-sized SUVs. The MidlothianTexas

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MARBLE FALLS ECONOMIC DEVELOPMENT CORPORATION

Located in one of the fastest-growing communities of the Texas Hill Country, Marble Falls is the retail and economic hub of the Highland Lakes area, and is located about an hour’s driving distance from Austin and San Antonio. With an economy dependent on tourism and natural resources, it’s a great place to grow a family — or a business.

A network of suppliers supports production at Toyota’s San Antonio plant.

Aerospace and Aviation: Texas has one of the most important, vibrant aerospace and aviation sectors in the country. It is home to two international airlines, 15 active military bases, and NASA’s world-famous Johnson Space Center. About 1,600 companies employ over 150,000 workers, making Texas one of the top three states in the country for aerospace research and development, manufacturing, as well as space exploration.

Commercial space travel R&D is rapidly evolving in Texas. In July 2012, XCOR

30.5781° N, 98.2725° W A 180 FROM OTHER BUSINESS COMMUNITIES.

Meet Marble Falls. On a chain of lakes in the beautiful Texas Hill Country is Marble Falls, a place Money Magazine named one of “Six Terrific Towns on the Water.” Perhaps they fell in love with our seven lakes, nine area vineyards or twelve world-class golf courses. For businesses, it’s even more attractive.

CHRISTIAN FLETCHER, EXECUTIVE DIRECTOR Marble Falls Economic Development Corporation 801 Fourth Street Marble Falls,TX 78654 830-798-7079 Fax: 830-798-8558 cfletcher@marblfallseonomy.com www.marblefallseconomy.com

Social Media: https://twitter.com/MarbleFallsEDC https://www.facebook.com/marblefallsedc

announced the creation of its new Commercial Space Research and Development Center headquarters at the Midland International Airport.

XCOR develops and produces reusable launch vehicles, rocket engines, and rocket propulsion systems.

Space Exploration Technologies (SpaceX) is also Texas-based — its engineers in McGregor, Texas, design and manufacture advanced rockets and space capsules, including the Dragon spacecraft, the first commercial vehicle to successfully dock with the International Space Station.

Marble Falls offers a pro-business environment with small town charm just an hour from Austin and 75 minutes from San Antonio. And we’re making room for your business with the expansion of our Business & Technology Park and a ready inventory of commercial tracts.

To find out why businesses are streaming to our lakefront town and what we can offer yours, visit marblefallseconomy.com

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The SpaceX Dragon was designed and manufactured in McGregor,Texas.

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LUBBOCK ECONOMIC DEVELOPMENT ALLIANCE (LEDA)

Opportunity awaits you in Lubbock,Texas.The Lubbock Economic Development Alliance (LEDA) provides comprehensive services including job creation grants, job training programs, property tax abatements, and enterprise zones. Recognized nationally for developing comprehensive work force programs, the team at LEDA is dedicated to finding skilled workers to fit your business needs.

MIKE HATLEY, DIRECTOR OF BUSINESS RECRUITMENT Lubbock Economic Development Alliance 1500 Broadway, 6th Floor Lubbock,TX 79401 806-749-4500 Fax: 806-749-4501 mike.hatley@lubbockeda.org

Medical device maker Greatbatch is establishing a new global headquarters in Frisco.

Biotech and Life Sciences: More than 3,500 biotechnology and life sciences firms in Texas generate an annual economic impact of $75 billion. Medical devices are one of the largest components of this sector and have grown substantially over the last five years, creating internationally recognized clusters that produce surgical, dental, orthopedic, medical, and laboratory products.

Texas is one of the top 10 states in the country for medical device companies — more than a dozen major companies operate headquarters or facilities in the state. And they keep coming!

In May 2012, Greatbatch indicated it would establish a new global headquarters in Frisco as part of its overall medical device strategy.

www.lubbockeda.org

“Frisco offers us proximity to an established medical device cluster, surrounded by a business community that includes leading medical technology firms, as well as strong access to talent and key industry opinion leaders,” says Greatbatch President and CEO Thomas J. Hook.

Information and Communications Technology: Texas ICT includes computers, software, telecommunications, and IT services. Major players in the state are Dell, Microsoft, Texas Instruments, HP Enterprise Services, VCE, Cisco, and National Instruments. Texas ranks second in the country for computer and video game employment. ICT is also the top sector in Texas

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MIDLOTHIAN ECONOMIC DEVELOPMENT

Midlothian,Texas, offers thousands of acres of developable property centrally located within the DFW Metroplex with major highways and rail in a community prepared to help retail, distribution, and industrial businesses make something great here — for their business, employees, and customers.

SAN ANTONIO ECONOMIC DEVELOPMENT FOUNDATION

San Antonio has a “culture of business” that includes pro-business leadership, solid growth, abundant work force, land, and affordable energy that attracts diverse industries and job-producing investments to the city. Learn why 100 companies in six years have chosen to partner with SAEDF and San Antonio’s collaborative business community.

LARRY BARNETT, PRESIDENT/CEO Midlothian Economic Development 310 North 9th Street, Suite A Midlothian,TX 76065 972-723-3800 Fax: 972-723-9301 LBarnett@Midlothian-TX.org

TOM LONG, EXECUTIVE VICE PRESIDENT OF BUSINESS RECRUITMENT San Antonio Economic Development Foundation

www.Midlothian-TX.org Social Media: https://www.facebook.com/MidlothianTexas https://twitter.com/MidlothianTexas

602 E. Commerce St. San Antonio,TX 78205 210-226-1394 tlong@sanantonioedf.com www.sanantonioedf.com.

Social Media: https://www.facebook.com/SanAntonioEDF https://twitter.com/sanantonioedf http://www.linkedin.com/company/ 121085?trk=tyah

ODESSA DEVELOPMENT CORPORATION

Specific strengths of Odessa include a nonunion and skilled labor force, a midcontinent location in the Central Time Zone where government works for business, and an extremely favorable climate. An Enterprise Zone leads the way toward revitalization and reinvestment.

With a fully developed industrial park and the economic development sales tax, Odessa has the competitive edge when it comes to working with new businesses that want to make West Texas their home.

GUY ANDREWS, DIRECTOR OF ECONOMIC DEVELOPMENT Odessa Development Corporation 700 N. Grant, Ste. 200 Odessa,TX 79761 432-333-7880 GuyA@odessaecodev.com http://odessatex.com/

for attracting foreign direct investment (FDI) — between 2008 and 2012, 64 foreign ICT projects were recorded, representing 14 percent of the state’s total FDI projects during this period.

Recent ICT announcements include CyrusOne opening a $45 million, 670,000-square-foot data center in Carrollton — the largest of its kind in the state. VISA USA plans to build a new global IT center in Austin, creating about 800 new jobs. TEKsystems Global Services also has plans

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for a $4.8 million, 500-job IT center in Irving (the state is providing $1.1 million through the Texas Enterprise Fund to close the deal).

“This center allows us to provide solutions and available technical talent to achieve results that are often not possible in other local markets,” says Randy Verdino, the firm’s vice president of applications. “We intend to leverage Irving’s tremendous wealth of talent at every level by working with local colleges for emerging skills and also hiring experienced people seeking new challenges.”

And, Apple plans to invest more than $300 million and create 3,600 jobs at a new IT campus in Austin. The mega-project, which is to be supported by $21 million from the TEF, doubles the size of Apple’s Texas work force.

Energy: When people think of oil and gas, they think of Texas — for good reason. New oil and gas reservoirs continue to be discovered in the Lone Star State. Texas leads the nation in crude oil and natural gas reserves, accounting

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SAN ANGELO CHAMBER OF COMMERCE for 24.2 percent of the nation’s oil reserves and 29.5 percent of the nation’s natural gas reserves.

This outstanding performance is being driven by the recovery of oil and natural gas from the Eagle Ford Shale and Barnett Shale using hydrofracturing methods — by 2020 it is expected that nearly 5,000 new oil and gas wells will have been completed in these regions.

Although Texas is better known for its oil than its sustainable energy reserves, it also leads the nation in installed wind energy capacity (10,394 MW as of January 2012) — more than double the capacity of the next largest installed wind energy capacity state, Iowa. Texas is home to six of the 10 largest wind power projects in the nation and two of the three largest wind farms

San Angelo is a metro area of 110,000 population located in West Central Texas. Major economic sectors include manufacturing, medical, military, business services, and energy. San Angelo is a regional shopping, entertainment, and medical center.The community boasts a commercial airport, university, air force base, and an incentive program for business assistance.

JOHN DUGAN, VP MARKETING & RECRUITMENT San Angelo Chamber of Commerce 418 W. Ave. B San Angelo,TX 76903 877-653-4136 john@sanangelo.org www.sanangelo.org

like this

is rare.

This is TexAmericas Center –

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TEXAMERICAS CENTER

TexAmericas Center, a land resource of nearly 12,000 acres, is located in Northeast Texas, 18 miles west of Texarkana, in New Boston,Texas.TexAmericas Center is central to the U.S. population, within 500 miles of the country’s geographic and population centers, and within 200 miles of five major cities.

SHERMAN ECONOMIC DEVELOPMENT CORPORATION (SEDCO)

The Sherman Economic Development Corporation is a resource for business considering a new location in the North Texas region. SEDCO represents the Sherman area for new investment and jobs, manages and promotes real estate in Progress Park, and provides incentive funding for qualified projects.

DERRICK MCGARY, VICE PRESIDENT OF PUBLIC AND BUSINESS ENGAGEMENT TexAmericas Center

SCOTT CONNELL, PRESIDENT Sherman Economic Development Corporation (SEDCO)

107 Chapel Lane New Boston,TX 75570 903-223-9841 Fax: 903-223-8742 derrick.mcgary@texamericascenter.com www.texamericascenter.com

307 W.Washington, Suite 102 Sherman,TX 75090 903-868-2566 or 800-981-2566 (toll-free) scottc@sedco.org

Social Media: www.facebook.com/texamericascenter

www.sedco.org

in the western hemisphere, Roscoe Wind Farm and Horse Hollow Wind Farm.

Petroleum Refining and Chemical Products: Texas also has a long history of leading the nation in petroleum refining and chemical products production. More than 400 chemical plants and refineries along the Texas Gulf Coast represent the largest petrochemical complex in the world and employ about 33,000 Texans. Twentysix petroleum refineries process about five million barrels of crude oil per day. The ExxonMobil refinery in Baytown is the numberone refinery in the nation for input capacity based on barrels per calendar day, and seven others are ranked in the top 20 — all of which contribute to Texas accounting for 26.6 percent of the nation’s oil-refining capacity.

Chemical manufacturing is closely related to petroleum refining because it frequently converts natural petroleum, petroleum byproducts, and other materials into thousands of chemical compounds for use in manufacturing or other industries — including pharmaceuticals, fertilizers, and construction materials. Texas’ chemical manufacturers account for more than 50 percent of total U.S. chemical production. Recent development news includes Ascend Performance Materials’

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plans to construct a $1.2 billion propane dehydrogenation facility in Alvin to manufacture propylene, a common chemical building block for plastic and synthetic fiber products. …AND BIG PROJECTS KEEP COMING Tenaris recently announced it would build a new, $1.3 billion steel pipe manufacturing facility in Matagorda County, creating 600 jobs. The one-million-square foot plant will include a state-of-the-art seamless pipe mill, heat treatment, and premium threading facilities. When completed, the plant will produce 600,000 tons of pipe annually for the energy industry. The state is providing $6 million through the Texas Enterprise Fund (TEF) to close the deal.

Governor Perry recruited company leadership

The one-millionsquare-foot Tenaris SA facility, which will open in 2016, is expected to produce 600,000 tons of pipe annually for the oil and natural gas industries.

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AROUND HERE, BUSINESS IS TAKING OFF.

“DFW Airport has created an excellent climate for our company’s growth; they make it easy to do business and achieve win-win outcomes.”

ProLogis

“DFW Airport’s location provides excellent visibility and easy access.

We’ve grown our business at a record pace.”

Arizona Tile

“Relocation helped grow our workforce and product advancements.

We received great support from the DFW development team.”

Sikorsky

“Our developments at DFW Airport have been very successful. We look forward to working with DFW on many future opportunities.”

Perot Development

At Dallas/Fort Worth International Airport, you’ll find some serious advantages. And with 6,000 acres ready for commercial development, you’ll also find amazing growth opportunities for cargo, distribution, office, retail, restaurants and hospitality.

Plus, it’s all right here in the heart of Dallas and Fort Worth.

CALL 972 973 4655 OR VISIT THE NEW DFWAIRPORT.COM/LANDHERE TO LEARN MORE.

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SUGAR LAND ECONOMIC DEVELOPMENT

REGINA MORALES ECONOMIC DEVELOPMENT DIRECTOR City of Sugar Land 2700 Town Center Blvd. North Sugar Land,TX 77479 Cell: 281-642-7328 Fax: 281-275-2217 rmorales@sugarlandtx.gov www.SugarLandEcoDev.com

during an economic development trip to Italy.

“We appreciate the assistance provided by the Governor, his staff, and the many local officials involved in this significant milestone for

Tenaris,” says Tenaris North America President Germán Curá. “We chose Texas and Matagorda County because of the strong business climate and its proximity to transportation hubs, a skilled work force, and Houston, which is the epicenter of the energy industry and home of our North American headquarters. We look forward to a long partnership with the community and making a lasting contribution to the state and Matagorda County.”

“The most profound statement about our favorable economic climate comes when companies like Tenaris make an investment of this size in our state. That says that not only is Texas the best place for them to grow their businesses now, but they’re confident it will remain that way moving forward,” concludes Governor Perry.

Beltway 8

Sugar Land offers a highly educated work force and 23 million square feet of prime commercial space. As a regional employment center, the city is home to numerous high-profile regional and international corporations, including Minute Maid, Schlumberger, Fluor, Bechtel EO,Texas Instruments, and Aetna. Sugar Land Regional Airport is home to Global Select FBO, which is ranked in the top 5 FBOs in the Americas for corporate aviation services.

NORTH

290

45

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Downtown Houston

99

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6

59

610 Sugar Land Regional Airport

Sugar Land

6

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Fort Bend Tollway

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5/2/13 9:43 PM FOR FREE SITE INFORMATION, CALL

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TOMBALL ECONOMIC DEVELOPMENT CRPORATION And, in early May, Emerson Process Management announced plans to expand one of its major facilities in Houston, creating 126 new jobs and representing $9.5 million in capital investment. The state is providing $1 million through the TEF to close the deal on this project.

“Our history in Texas dates back to 1929 and this area remains critical to our growth plans and service level commitments,” said company President David Plum. This facility serves as a center of excellence for valve automation engineering and manufacturing expertise, while providing a showroom where customers can work directly with Emerson employees to develop solutions and improve products.

Whether your goal is to expand, improve, or relocate your business, the Tomball Economic Development Corporation (TEDC) is committed to getting you on the fast track to success.Tomball has easy access to George Bush Intercontinental Airport, Port of Houston, BNSF Railway Service, and Future Grand Parkway.

TIFFANI WOOTEN, COORDINATOR Tomball Economic Development Corporation 29201 Quinn Rd., Suite B Tomball,TX 77375 281-401-4086 TWooten@tomballtxedc.org www.tomballtxedc.org

Social Media: https://www.facebook.com/pages/Tomball-EconomicDevelopment-Corporation/10150152607825473

NEXT STOP: TOMBALL,TEXAS expand improve relocate

Whether your goal is to , or your business, the Tomball Economic Development Corporation (TEDC) is committed to getting you on the fast track to success. Your ticket to Tomball grants you access to everything Houston has to offer Zith all the beneÀts of small town living! Conveniently located just 30 miles Northwest of Houston’s central business district, Tomball offers low property taxes, a thriving economy, exceptional educational opportunities, and attractive relocation and expansion incentives.

Scan To Begin Your Journey!

29201 Quinn Road, Suite B s-s Tomball, TX 77375 s-s 281.401.4086 s-s 888.401.7322 s-s tomballtxedc.org

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ASSET MANAGEMENT

The Power of 3D: Using BIM for Facility Management Building owners and facility managers can reap the benefits of using building information modeling (BIM) long after construction is complete.

By Jim Marchese and Chuck Rudderow, Stantec

the benefits of BIM can extend long after construction is complete. The data collected and stored in BIM is like a building’s medical record — it can tell us its measurements, how it’s used, and when it needs its next scheduled maintenance or “check up,” among other information. And since nearly 80 percent of a building’s lifecycle costs come after construction, having that data available to owners can make a big difference in the facility’s long-term health.

Going Beyond Design

BIM can be used to manage all types of buildings, including industrial facilities.

F

or several years now, building information modeling, known as BIM, has steadily become the preferred method for developing the design of a new building.

Instead of producing a series of flat and representational drawings, BIM creates a digital database that represents the building in three dimensions, allowing the design team, building owners, and contractors to virtually “walk” through the facility before it’s built.

One of the early benefits of BIM to building owners was virtual 3D coordination of the work, commonly referred to as “clash detection.” This process allows for both the design and construction teams to combine 3D models to coordinate the design and resolve conflicts prior to construction of the building. This better coordination, in turn, typically leads to fewer requests for information (RFIs) and change orders.

But what many facility owners and operators don’t know is

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For starters, BIM can simply provide a building’s as-built record, accurately portraying its true measurements, layout, etc. after any alterations to the original design were introduced during construction. And with that accurate account comes an exact understanding of how the building’s space is used. In the healthcare world, this kind of information can be critical for reimbursements from federal agencies.

Hospitals in the U.S., for example, are required to report the sizes of their departments to reflect how many people they are serving and, thus, how much Medicaid or Medicare reimbursement they receive.

The same approach can apply to industrial buildings, particularly when it comes to space allocation, asset management, and maintenance. BIM can include data on the age of equipment, its dimensions, when it is scheduled to receive maintenance, etc. With all of this information tracked for each piece of equipment in the building — down to the types of light bulbs in each light fixture — owners and operators can better anticipate issues and plan their budgets to account for equipment repairs and replacements. Similarly, should the facility need a new type of technology or system, BIM can help determine exactly where it should go and how it can be integrated into the current layout.

With this kind of equipment tracking, BIM can be especially useful for the commissioning process as well. As equipment is being procured and installed, the contractor can enrich the model with all of the pertinent information so that it’s ready when the commissioning phase begins. The information entered into the model can also be integrated

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into whatever commissioning system the agent and owner may be using.

Getting Started Another little known fact about BIM is that model development isn’t limited to new design and construction — models can be created for existing facilities as well, no matter their age. For most existing facilities, twodimensional computer-aided design (CAD) drawings and plans can serve as the basis for the model, and the geometry and additional details can be added over time as renovations or other changes are made.

For very old buildings whose only records are blueprints, the BIM team can use a 3D laser scanner to create the base for a model, to which building intelligence is added. With this technology, a scanner essentially pulses the scene repeatedly with a laser, collecting the spatial data for each of the hundreds of thousands of points it sees, and then reproduces that data to form a series of images. The resulting views look much like digital photographs but have all of the threedimensional angles and perspectives of the real thing, down to the electrical outlets. Again, the data the building owner is interested in collecting and reporting through the model can then be added to this foundation.

Defining the goals for BIM is, in fact, the most important part of the process, whether for new design or an existing building. For example, if commissioning is the goal, the model will be built to primarily focus on equipment installation, maintenance, and related information. Or, let’s say a facility is being decommissioned. The model can provide a detailed understanding of the building’s real estate, floor and/or room sizes, equipment, and other assets to better organize what is appropriate for resale, reallocation, or other distribution. And for

facilities with existing asset management systems, the model can be developed to focus on, say, the building’s mechanical systems, leaving asset tracking to the existing system.

The Future of BIM Perhaps the biggest advancement in BIM in the last few years is its nearly routine adoption into the design/build process. Contractors now often require a BIM workflow — with so many partners involved, it’s a relatively easy means to achieve certainty of geometry, leaving little room for discrepancies. Now that BIM is becoming a more routine tool in the design and construction process, building owners are looking for more ways to use it, which includes facility management.

One of the benefits of BIM for facility management is its flexibility, which allows a building owner to modify a model as needs and circumstances change. Right now an owner may want to maintain an existing facility management system, using BIM as a supplement. Data from the model can

be extracted and integrated into the existing system, creating a fuller picture of the building conditions without requiring a complete switch between systems. BIM can also be used to solve very specific building information management challenges, such as space management. In the near future, designers using BIM will be able to integrate energy measurement into BIM so that a model can also help owners track energy use and how changes in building systems, uses, equipment, etc. affect it.

While BIM is readily being used for facility management in healthcare and higher education settings, the principles and process are largely the same for industrial facilities. Whether it’s tracking the department sizes of hospital floors or managing an industrial plant’s 30-ton cranes, it’s the same modeling process, which reaps the same informational benefits. So no matter the age of an industrial facility, getting started with BIM now can help save time, money, and headaches for the rest of the building’s life.

The BIM lifecycle mirrors that of a building, making it useful through every step of the facility’s development.

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SITE SELECTION

Markets Matter in the Data Center Location Decision An understanding of the data center marketplace and its supply/demand dynamics will help both site selectors and their attractors move beyond the checklist and find the right fit.

By Thomas Traugott, Senior Vice President, Cassidy Turley

D

ata centers remain one of the brightest spots for investment as they reinforce the growth of our modern, current information-based economy. Data centers are the “bricks and mortar” underpinning abstract workings of the Internet, and rapid expansion of information and growth of data and technology for businesses and consumers.

How does this relate to site selection and business attraction? Articles about data center site selection tend to focus on one of two things, i.e., “scorecards” showing the best locations for data centers from a cost and/or risk perspective; and delving into the “scorecard” to show the laundry list of key variables associated with data center site selection. Both have value — to the end-users procuring new sites as well as to the economic development agencies and real estate developers looking to position their communities to attract data center business. Yet, in my experience, these guides often do a poor job of explaining the most important question: Why do data centers cluster in certain regions more than others?

The answer lies in a better understanding of the overall data center marketplace and its competitive supply/demand dynamics. As data centers have matured as an asset class, with six REITs (soon to be as many as 10) and multiple publicly traded

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operating companies providing data center services, a real spectrum of options has developed in the marketplace, with different data center product types meeting different needs.

A Spectrum of Options Equipped with this deeper understanding of the spectrum, site selectors and attractors can better tailor value propositions to find the right data center fits. The product spectrum ranges from unimproved land to fully built managed/cloud services offerings (with hybrid options falling inbetween) as follows: Unimproved Land: At the lowest end of the value spectrum, land is available for lease/purchase to a single tenant or buyer. Entry barriers are low (except in urban markets) and represent a small fraction of the data center budget (0.5 percent to 2 percent). Utilizing unimproved land, center development timing averages 24 to 36 months.

Existing Property for Retrofit: An existing structure (single-story, heavily built warehouse) is available for lease or purchase, typically to a single tenant or buyer. This may be an industrial property or commercial office building available for conversion. Some power may be in place with enhancement work needing to be done to the structure for data center use. This option represents a small fraction of the overall budget (less than 10 percent including land). Data center development from this type of asset may take 12 to

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24 months.

Powered Shell: This is the first type of product truly unique to data center industries, available for lease or purchase to either multiple tenants or a single buyer. A true powered shell is a hardened facility with key elements of utility power distribution and telecom access in place, as well as enhanced perimeter security features and a master plan to show future use.

This may be an existing facility that was a retrofit or a purpose-built new building designed to house data center infrastructure. It may reflect as much as 15 percent of the overall budget (including land). Data center development from this type of asset may take nine to 12 months.

Wholesale Data Center: Outside of hardware, this is where the bulk of the investment lies (over 80 percent).

Major mechanical/cooling systems (cooling towers, chiller plants), electrical systems (emergency generators and UPS battery systems), fire detection and suppression (sprinkler or gas systems), and final space construction/fit out (air-conditioning units, raised floor systems, power distribution units). The space is “move-in” ready for the installation of equipment, and the wholesale data center provider is responsible for the maintenance and operations of mechanical and electrical equipment. This tends to be a multi-tenant environment, with the key value proposition in the tenant benefiting from the economies of scale gained when a larger site is developed from both a capital and operating standpoint, as well as redundancy spread across a broader tenant base.

Tenants will likely have dedicated infrastructure components, whether a demised suite, UPS modules, or other, with certain “major” infrastructure that is likely to be shared (e.g., generators and cooling towers).

Retail Data Center: This is also referred to as “cage/cabinet collocation.” The main difference in terms of business model is that the provider typically partitions space down to a single four-post cabinet or small “cages” with wire mesh walls separating different tenants’ equipment. The provider will typically make additional investments inside the data center

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room with respect to ladder racking, cabling, and power distribution (less than 5 percent of the overall investment). The provider manages the major power and cooling infrastructure but is also likely to provide more services at the cabinet/rack level, with technicians on-site to perform physical work (installations and power reboots/pressing buttons). There are many more tenants and the value of contracts is smaller but this tends to be more lucrative from a rate standpoint for a provider.

Managed Services Provider: This model is similar to the retail data center, but providers will typically carry more professional services capabilities (technicians/engineers with higher IT and networking certifications). There is more of an IT outsourced flavor to the business model, and when labor is managed properly, margins are superior.

Cloud and/or Hosted Services Provider: The provider makes an additional investment in the hardware as well as platforms/operating systems and user interfaces — which starts to look less immediately relevant to site selection but is an important user case and driver for data center business growth.

With these product offerings in mind, often the site selector needs to make a strategic decision early on — i.e., does the firm expect to invest its own capital to build and operate its own data center, or does it want to have the option of leasing the space from a provider? The response informs whether the end-user will want to evaluate multiple land options or multiple wholesale options.

Conversely, the data center site attractors simultaneously need to make another decision — i.e., how much capital are they willing to spend to attract potential tenants and buyers and what do they expect the product offering to look like?

The majority of data centers are less than 50,000 gross square feet in size with less than 2.5 megawatts of critical IT load. At smaller sizes, building one’s own data center may cost as much as two times what it costs to lease space from a third-party provider, wholesale or retail.

Proven & Unproven Markets As a result, the majority of new development domestically has been made by the data center providers in locations across the country that have a history of data center supply and demand, e.g., NY Metro, Northern Virginia, Chicago, Dallas, Silicon Valley, which are each key metropolitan areas with large populations and business density.

“Proven” data center markets provide additional benefits including: • Capital/financing availability — the more mature the market, the more willing traditional lending sources are to provide competitive financing.

• Competition — which is good for tenants, but not always for providers.

However, providers benefit from a deeper pool of vendors and labor.

• Deal structure alternatives — a mature market has competitive options for the above listed entities.

• Business clustering — data centers are core to generating revenue for businesses. For a buy side financial services firm, the data center may be a place where they transact with a sell side firm via a market-exchange matching engine.

In stark contrast, rural/unproven markets have unimproved land or existing properties but no history of actual data center development — a vision is being sold. This makes the most sense for companies labeled as “market-makers” such as Google, Facebook, Microsoft, Yahoo, and Apple. These companies each build massive “hyperscale” data centers to the tune of hundreds of millions of dollars of capital investment per facility. A challenge for the majority of site selectors and attractors is that these massive requirements don’t necessarily align with their needs.

Knowing Your Options For a business looking to make a major data center investment, whether at the construction or hardware level, it helps to know that if economic or business conditions change, you have options. More liquid markets provide competitive options to meet different business needs, large and small, and offer downside protection if business conditions change.

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Why Columbus, Indiana is the #1 Location in the U.S. Ç Three times the national average

for engineers and more mechanical engineers per worker than any metro.

Ç Home to leading North American R&D Centers and one Fortune 200 Global Headquarters.

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Surprised that Columbus, Indiana is consistently ranked one of the top locations in the U.S.? Now is a great time to take a closer look at the unexpected opportunities this unforgettable community has to offer.

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Results matter — especially when it comes to spending huge amounts of time and money setting up a new business location. That’s why it is important to locate the operation in a city or region that knows how to grow its economy and has the track record to prove it.

For this year’s Leading Locations study, Area Development analyzed economic and work force data for 380 metropolitan statistical areas (MSAs) — both for 2011–2012 (recent performance) and 2007–2012 (duration of the Great Recession). The goal was to identify which cities across America are emerging from the recession as economic front-runners — and why.

Sometimes the reason for success is as simple as being in the right place at the right time (for example, being located in the middle of the oil shale boom). For most cities, though, sustained success depends on responding effectively to the many factors that impact economic performance, as well as proactively creating healthy business climates and investing in the future. This type of multilevel support helps local companies be more competitive with offshore locations, keeping profits and jobs at home.

Recovery is always easiest with a diversified economic base, something that most of the leading MSAs share. The top three MSAs in each size category are profiled in the pages that follow — some of the results might even surprise you.

Note: Area Development’s research desk compiled the statistics for this report. Locations were ranked according to the methodology explained herein.

Location profiles/articles were researched and written by Mark Crawford, Staff Editor.

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100 LEADING LOCATIONS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

State

Lafayette Fargo Odessa Columbus

LA ND-MN TX IN

City / MSA

Population 273,738 208,777 137,130 76,794

51 52 53 54

San Jose-Sunnyvale-Santa Clara Austin-Round Rock-San Marcos Midland Holland-Grand Haven Framingham Bismarck Boston-Cambridge-Quincy Dubuque Oklahoma City Casper Sandusky

CA TX TX MI MA ND MA IA OK WY OH

1,836,911 1,716,289 136,872 263,801 263,875 108,779 2,863,943 93,653 1,252,987 75,450 77,079

55

San Francisco-San Mateo-Redwood City Tulsa Dallas-Plano-Irving Washington-Arlington-Alexandria

CA OK TX

1,776,095 937,478 4,235,751

66

WV WV NE-IA

4,377,008 129,709 865,350

69

Morgantown Omaha-Council Bluffs

56 57 58 59 60 61 62 63 64 65 67 68 70 71

Corpus Christi Elizabethtown Houma-Bayou Cane-Thibodaux

TX KY LA

428,185 119,736 208,178

72

Victoria Cheyenne Santa Rosa-Petaluma Springfield Burlington-South Burlington Houston-Sugar Land-Baytown Longview

TX WY CA IL VT TX TX

115,384 91,738 483,878 210,170 198,627 5,946,800 214,369

75

WA CO CA KY-IN IA SD IA MI MD

201,140 294,567 423,895 1,283,566 569,633 228,261 89,542 344,791 1,205,162

TX TX

2,142,508 234,906

90

TX AR-MO GA-AL UT WA

2,136,022 463,204 294,865 1,124,197 2,644,584

92

97

Bellingham Boulder Santa Barbara-Santa Maria-Goleta Louisville-Jefferson County Des Moines-West Des Moines Sioux Falls Ames Ann Arbor Bethesda-Rockville-Frederick San Antonio-New Braunfels Waco Fort Worth-Arlington Fayetteville-Springdale-Rogers Columbus Salt Lake City Seattle-Bellevue-Everett

49

Fairbanks Amarillo

AK TX

97,581 249,881

50

St. Joseph

MO-KS

127,329

48

82

City / MSA

AREA DEVELOPMENT

73 74 76 77 78 79 80 81 82 83 84 85 86 87 88 89

91 93 94 95 96

San Angelo Durham-Chapel Hill Appleton Lake Charles

State

Population

TX NC WI LA

111,823 504,357 225,666 199,607

Jackson Boise City-Nampa Killeen-Temple-Fort Hood Charlotte-Gastonia-Rock Hill Cincinnati-Middletown Columbia Denver-Aurora-Broomfield Fort Collins-Loveland Lafayette Provo-Orem Portland-Vancouver-Hillsboro Cedar Rapids Anchorage State College Knoxville Tyler Lewiston

MI ID TX NC-SC OH-KY-IN MO CO CO IN UT OR-WA IA AK PA TN TX ID-WA

Williamsport Lincoln San Luis Obispo-Paso Robles

PA NE CA

116,111 302,157 269,637

Laredo Charleston-North CharlestonSummerville

TX SC

250,304 664,607

Texarkana Akron

AR OH

136,027 703,200

Elkhart-Goshen Mobile

IN AL

197,559 412,992

Canton-Massillon Nashville-DavidsonMurfreesboro-Franklin Chattanooga Pittsburgh Minneapolis-St. Paul-Bloomington

OH TN

404,422 1,589,934

TN-GA PA MN-WI

528,143 2,356,285 3,279,833

Beaumont-Port Arthur Monroe Baton Rouge La Crosse

TX LA LA WI-MN

388,745 176,441 802,484 133,665

WI GA SC

166,994 179,684 284,307

Oshkosh-Neenah Gainesville Spartanburg Barnstable Town Madison Naples-Marco Island Lima New York-White Plains-Wayne

San Diego-Carlsbad-San Marcos Kingsport-Bristol-Bristol 100 Rochester 98 99

FOR FREE SITE INFORMATION, CALL

160,248 616,561 405,300 1,758,038 2,130,151 172,786 2,543,482 299,630 201,789 526,810 2,226,009 257,940 380,821 153,990 698,030 209,714 60,888

MA WI FL OH NY-NJ

239,675 568,593 321,520 106,331 11,576,251

CA TN-VA MN

3,095,313 309,544 186,011

800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

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Lafayette

louisiana

A unique place to live and do business Strategic Location

Pro-business Climate

World-class Workforce Unmatched Quality of Life High-tech Infrastructure Lafayette, LA is a medical, energy, transportation, entertainment, education and retail hub in the heart of South Louisiana. The resilience of Lafayetteâ&#x20AC;&#x2122;s economy is attributed to its entrepreneurial spirit and productive workforce.

With this foundation, Lafayette is able to foster an economy that supports a growing population, a low unemployment rate and diverse industry sectors.

Hear the rest of our story Lafayette Economic Development Authority (337) 593-1400 T lafayette.org

ACADIANAâ&#x20AC;ŚLEADING THE WAY LAFAYETTE RANKS #1 IN AREA DEVELOPMENT'S TODAY'S LEADING LOCATIONS REPORT Area Development identifies the Leading 100 MSAs whose economies are trending upward as measured by 21 growth indicators pulled from leading economic data sets. The results rank those MSAs that are leading the way out from recession and appear to be in the best position to attract new and expanding business and create jobs going forward.

LAFAYETTE tops the charts by ranking #1 on 7 of 8 categories.

CITY OF THE FUTURE Lafayette was named as a top 10 Small American City of Future and topped the list for Foreign Direct Investment Strategies for small cities.

THE BEST INSTITUTIONS The Princeton Review listed the University of Louisiana at Lafayette as one of the nationâ&#x20AC;&#x2122;s best institutions for undergraduate education in the 2013 edition of The Best 377 Colleges.

FASTEST GROWING COMPANIES Five Lafayette-based firms made this yearâ&#x20AC;&#x2122;s Inc. 5000 list of fastest-growing private companies. â&#x20AC;&#x201C; Golfballs.com, Acadian Companies, Bizzuka, Townsend, Apex Freight Services.

BEST PLACES TO LIVE IN LOUISIANA Livability.com lists the Best Places to Live in Louisiana which includes Crowley and Lafayette.

LARGEST EMPLOYMENT INCREASE Lafayette MSA experienced the largest increase in employment in the nation from December 2011 to December 2012 with an 8.6% gain.

TOP 10 FOODIE CITY Lafayette has been named one of the Top 10 Foodie Cities by Livability.com, a national website that ranks quality of life and travel amenities of America's small and mid-sized cities.

5 & " . " $ " % * " / " 0 3 ( t (337) 593-1411

AREA0080.indd 1

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Page 84

BIG CITIES — (population > 600,000)

venture capital funding is invested in the region every year, driving R&D and commercialization efforts, especially in the fields of nanotechnology, communications, and information and computer technology (ICT). Major

San Jose-SunnyvaleSanta Clara, California Known as the heart of the Silicon Valley, the San

players include Cisco Systems, Samsung, eBay, Google, and Yahoo.

Top universities in the area — San Jose State

Jose MSA has a rich tradition of high-tech entrepre-

University, University of California-Berkeley, and Stanford

neurship, innovation, and discovery. About $8 billion in

University — attract some of the best student talent in the country, turning out an impressive number of highly skilled scientists and engineers. As a result of this stellar

METHODOLOGY

work force, strong economic growth, and the creation of high-paying jobs, San Jose also placed first in the 2012

Area Development ranked 380 MSAs across 21 economic and work force indicators. These 21 indicators were pulled from seven (7) data sets (sub-categories) originating from four sources: the Bureau of Labor Statistics, Bureau of Economic Analysis, U.S. Census American Community Survey, and IHS. Each MSA earned a ranking within each of the 21 indicators based on its statistical performance within that indicator.

The MSA with the best performance in a certain indicator earned a ranking score of "1" and the MSA with the worst performance earned a ranking score of "380."

To calculate "Overall Ranking," we added the total ranking across all indicators for each MSA and then divided by the total number of indicators to reach an average ranking.

The MSA with the lowest average earned the #1 overall ranking, while the MSA with the highest average ranked #380 overall.

We also calculated overall ranking across four categories: "Prime Work Force," "Economic Strength," "RecessionBusting Cities," and “Year-Over-Year Growth.”

To calculate the overall

ranking within these four categories, we produced an average ranking across only certain sub-category indicators. An indicator did not have to be exclusive to our category rankings. For instance, the "Employment Growth Net 3-Year Change as Percentage of Population" was used within both the "Economic Strength" and "Recession-Busting Cities" categories.

We have also produced a set of lists, using our overall results and category results, grouping the MSAs by region and size. We ranked the Top 5–20 MSAs in each region (defined by Area Development Online taxonomy), and we also ranked the top MSAs across three size groups: "Small" (population <160,000), "Mid-Size" (population 160,000600,000), and "Big" (population >600,000). We ranked the cities within each size group against our overall rankings and "Prime Work Force," "Economic Strength," "Recession-Busting Cities," and “Year-Over-Year Growth” categories.

For a full explanation of the methodology behind our Leading Locations report, go to www.areadevelopment.com/ LeadingLocations2013/ methodology.

Milken Institute Best-Performing Cities Index.

Recent announcements include Samsung Semiconductor's expansion of its research and development campus and FICO’s plans to relocate from Minneapolis to San Jose to be closer to Silicon Valley's

TOP 30 BIG CITIES City / MSA

AREA DEVELOPMENT

2010 Overall Population Rank

1 San Jose-Sunnyvale-Santa Clara

CA

1836911

5

2 Austin-Round Rock-San Marcos

TX

1716289

6

3 Boston-Cambridge-Quincy

MA

2863943

11

4 Oklahoma City

OK

1252987

13

5 San Francisco-San Mateo-Redwood City

CA

1776095

16

6 Tulsa

OK

937478

17

7 Dallas-Plano-Irving (Metropolitan Division) 8 Washington-Arlington-Alexandria 9 Omaha-Council Bluffs 10 Houston-Sugar Land-Baytown 11 Louisville-Jefferson County

TX

4235751

18

DC-VA-MD-WV

4377008

19

NE-IA

865350

21

TX

5946800

30

KY-IN

1283566

35

12 Bethesda-Rockville-Frederick

MD

1205162

40

13 San Antonio-New Braunfels

TX

2142508

41

14 Fort Worth-Arlington

TX

2136022

43

15 Salt Lake City

UT

1124197

46

16 Seattle-Bellevue-Everett

WA

2644584

47

17 Boise City-Nampa

ID

616561

56

18 Charlotte-Gastonia-Rock Hill

NC-SC

1758038

58

OH-KY-IN

2130151

59

CO

2543482

61

OR-WA

2226009

65

22 Knoxville

TN

698030

69

23 Charleston-North Charleston-Summerville

SC

664607

76

24 Akron

OH

703200

78

25 Nashville-Davidson--Murfreesboro--Franklin

TN

1589934

82

26 Pittsburgh

PA

2356285

84

MN-WI

3279833

85

LA

802484

88

NY-NJ

11576251

97

CA

3095313

98

19 Cincinnati-Middletown 20 Denver-Aurora-Broomfield 21 Portland-Vancouver-Hillsboro

27 Minneapolis-St. Paul-Bloomington 28 Baton Rouge 29 New York-White Plains-Wayne 30 San Diego-Carlsbad-San Marcos

84

State

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TOP 20 BIG CITIES - Economic Strength Factors City / MSA

State

Population Overall “Economic” Rank

1 Houston-Sugar Land-Baytown

TX

5946800

59

2 San Jose-Sunnyvale-Santa Clara

CA

1836911

108

3 Boston-Cambridge-Quincy 4 Austin-Round Rock-San Marcos

MA TX

2863943 1716289

290 9

5 Salt Lake City

UT

1124197

247

6 Fort Worth-Arlington

TX

2136022

62

7 Seattle-Bellevue-Everett

WA

2644584

256

8 Denver-Aurora-Broomfield

CO

2543482

157

9 Knoxville

TN

698030

38

10 San Francisco-San Mateo-Redwood City

CA

1776095

12

11 Dallas-Plano-Irving

TX

4235751

244

12 Omaha-Council Bluffs

NE-IA

865350

286

13 Oklahoma City

OK

1252987

53

14 San Antonio-New Braunfels

TX

2142508

10

15 Charleston-North Charleston-Summerville

SC

664607

67

16 Nashville-Davidson-Murfreesboro-Franklin

TN

1589934

294

17 Tulsa

OK

937478

353

18 New York-White Plains-Wayne 19 Raleigh-Cary 20 Washington-Arlington-Alexandria

NY-NJ

11576251

277

NC

1130490

64

DC-VA-MD-WV

4377008

143

TOP 20 BIG CITIES - Prime Workforce Growth City / MSA

1 Washington-Arlington-Alexandria 2 Louisville-Jefferson County 3 Providence-Fall River-Warwick

Population Overall “Workforce” Rank

DC-VA-MD-WV

4377008

2

KY-IN

1283566

9

RI-MA

1600852

10

4 San Jose-Sunnyvale-Santa Clara

CA

1836911

11

5 Poughkeepsie-Newburgh-Middletown

NY

670301

14

6 Bethesda-Rockville-Frederick

MD

1205162

19

7 Gary

IN

708070

25

8 San Diego-Carlsbad-San Marcos

CA

3095313

28

9 Oklahoma City 10 Austin-Round Rock-San Marcos 11 Toledo

OK

1252987

30

TX

1716289

31

OH

651429

38

12 Little Rock-North Little Rock-Conway

AR

699757

43

13 Tulsa

OK

937478

51

14 Boston-Cambridge-Quincy

86

State

MA

2863943

53

15 Charlotte-Gastonia-Rock Hill

NC-SC

1758038

54

16 Newark-Union

NJ-PA

2147727

59

17 Albuquerque

NM

887077

62

18 Fresno

CA

930450

67

19 Pittsburgh

PA

2356285

76

20 Indianapolis-Carmel

IN

1756241

84

AREA DEVELOPMENT

TOP 20 BIG CITIES - “Year-Over-Year Growth” City / MSA

State

2010 Overall Population “Year-Over” -Year Growth

1 Austin-Round Rock-San Marcos

TX

1716289

2

2 San Jose-Sunnyvale-Santa Clara

CA

1836911

3

3 San Francisco-San Mateo-Redwood City

CA

1776095

5

NE-IA

865350

7

5 Boston-Cambridge-Quincy

MA

2863943

8

6 Bethesda-Rockville-Frederick

MD

1205162

9

7 Boise City-Nampa

ID

616561

12

TX

4235751

15

4 Omaha-Council Bluffs

8 Dallas-Plano-Irving 9 Tulsa OK 10 Washington-Arlington-Alexandria 11 Columbia 12 Louisville-Jefferson County 13 Charlotte-Gastonia-Rock Hill

937478

22

DC-VA-MD-WV

4377008

SC

767598

25 29

KY-IN

1283566

30 31

NC-SC

1758038

14 Cincinnati-Middletown

OH-KY-IN

2130151

35

15 Phoenix-Mesa-Glendale

AZ

4192887

37

16 Orlando-Kissimmee-Sanford

FL

2134411

39

17 Oklahoma City

OK

1252987

40

18 Salt Lake City 19 Minneapolis-St. Paul-Bloomington 20 Seattle-Bellevue-Everett

UT

1124197

49

MN-WI

3279833

51

WA

2644584

54

TOP 20 BIG CITIES - “Recession-Busting” City / MSA

State

1 Oklahoma City

OK

1252987

2 Austin-Round Rock-San Marcos

TX

1716289

15

3 Boston-Cambridge-Quincy

MA

2863943

16 19

4 Washington-Arlington-Alexandria

Population Overall “RecessionBusting” Rank 10

DC-VA-MD-WV

4377008

5 Houston-Sugar Land-Baytown

TX

5946800

26

6 Pittsburgh

PA

2356285

31

7 San Jose-Sunnyvale-Santa Clara

CA

1836911

34

8 Knoxville

TN

698030

53

9 Fort Worth-Arlington

58

TX

2136022

10 Dallas-Plano-Irving (Metropolitan Division)

TX

4235751

58

11 San Antonio-New Braunfels

TX

2142508

60

12 Tulsa

OK

937478

66

13 McAllen-Edinburg-Mission

TX

774769

68

14 Charleston-North Charleston-Summerville

SC

664607

69

LA

1167764

74

NE-IA

865350

80

15 New Orleans-Metairie-Kenner 16 Omaha-Council Bluffs 17 El Paso

TX

18 New York-White Plains-Wayne

NY-NJ

800647

84

11576251

92

19 Denver-Aurora-Broomfield

CO

2543482

96

20 Bethesda-Rockville-Frederick

MD

1205162

97

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

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The Right Place to Live, Work and Play.

Now more than ever, Odessa is the right place in Texas to live, work and play.

Following the discovery of oil in the Permian Basin in 1926, Odessa became the hub for service, equipment and manufacturing. Since that time, Odessa has diversified significantly, but it is still considered one of the major oil field technology and manufacturing centers in the world.

877-363-3772 info@odessaecodev.com www.odessatex.com

Odessa’s quality of life offers a unique blend of small and large town benefits as a vibrant, energetic city in West Texas where the sky, literally, is the only limit. Odessa is a dynamic city that boasts fresh air, awe-inspiring sunsets and the friendliest people you’ll ever find.

Odessa, Texas was recently listed in Forbes magazine as the #1 small city in America for Best Job Growth CNBC Study Ranks Texas as #1 Business Climate in the Nation Odessa, Texas, has experienced the fastest growth in the country from 2010, 15.2 percent – US Department of Commerce

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Page 88

engineering talent pool. "By

unemployment, gross product, and housing prices.

operating from the Silicon

Further, Austin placed second on the 2012 Milken

Valley, we can more readily

Institute Best-Performing Cities Index.

build upon our company's

Much of this economic growth is driven by improved

deep talent pool, collaborate

performance in chip-making and systems design. Dell,

with other big thinkers in the

IBM, Apple, and Samsung are among the largest tech-

world's premier technology hub, and help our cus-

nology employers. Backed by a $21 million investment

tomers compete more effectively in the era of big

through the Texas Enterprise Fund and an $8.6 million

data," says FICO's president and CEO William Lansing.

grant from the city of Austin, Apple will undertake a $304 million expansion of its facilities, eventually creat-

Austin-Round Rock-San Marcos, Texas

ing 3,600 well-paying jobs. Samsung’s $4 billion expan-

Key industries in the Austin MSA are advanced man-

sion of its semiconductor manufacturing operations will

ufacturing, electronics, multimedia technology, clean

increase its total investment in Austin to $13 billion

energy and power technology, life science and biotech-

since 1996. GM plans to build a 500-employee innova-

nology, and data centers. According to the Brookings

tion center and eBay, another major Austin employer,

Institution, Austin ranked first overall among the 100

will hire about 1,000 software engineers over the next

largest U.S. metros based on amount recovered from

10 years.

pre-recession peak to the present, based on jobs,

With this kind of growth in high-technology fields, it is no surprise that Austin has also recently been named by the Business Journals as one of the top three cities

TOP 30 MID-SIZE CITIES City / MSA 1 Lafayette

for young adults to establish careers in post-recession2010 Overall Population Rank

ary America.

LA

273738

1

ND-MN

208777

2

3 Holland-Grand Haven

MI

263801

8

With over $4 billion in new development projects

4 Framingham

MA

263875

9

totaling more than 10 million square feet under con-

5 Corpus Christi

TX

428185

22

6 Houma-Bayou Cane-Thibodaux

LA

208178

24

7 Santa Rosa-Petaluma

CA

483878

27

8 Springfield

IL

210170

28

9 Burlington-South Burlington

VT

198627

29

10 Longview

TX

214369

31

11 Bellingham

WA

201140

32

1 Lafayette

12 Boulder

CO

294567

33

2 Fargo

13 Santa Barbara-Santa Maria-Goleta

CA

423895

34

3 Framingham

MA

263875

8

14 Des Moines-West Des Moines

IA

569633

36

4 Longview

TX

214369

15

15 Sioux Falls

SD

228261

37

5 Boulder

CO

294567

16

16 Ann Arbor

MI

344791

39

6 Bellingham

WA

201140

19

17 Waco

TX

234906

42

7 Sioux Falls

SD

228261

20

18 Fayetteville-Springdale-Rogers

AR-MO

463204

43

8 Fort Collins-Loveland

CO

299630

23

19 Columbus

GA-AL

294865

45

9 Appleton

WI

225666

24 26

2 Fargo

88

State

Boston-Cambridge-Quincy, Massachusetts

TOP 20 MID-SIZE CITIES-Economic Strength Factors City / MSA

State

Population Overall “Economic” Rank

LA

273738

1

ND-MN

208777

4

20 Amarillo

TX

249881

49

10 Durham-Chapel Hill

NC

504357

21 Durham-Chapel Hill

NC

504357

52

11 Burlington-South Burlington

VT

198627

27

22 Appleton

WI

225666

53

12 Corpus Christi

TX

428185

29

23 Lake Charles

LA

199607

54

13 Lafayette

IN

201789

32

24 Jackson

MI

160248

55

14 Beaumont-Port Arthur

TX

388745

36

25 Killeen-Temple-Fort Hood

TX

405300

57

15 Houma-Bayou Cane-Thibodaux

LA

208178

37

26 Columbia

MO

172786

60

16 Holland-Grand Haven

MI

263801

39

27 Fort Collins-Loveland

CO

299630

62

17 Amarillo

41

28 Lafayette

IN

201789

63

18 Fayetteville-Springdale-Rogers

29 Provo-Orem

UT

526810

64

30 Cedar Rapids

IA

257940

66

AREA DEVELOPMENT

TX

249881

AR-MO

463204

47

19 Pascagoula

MS

162246

50

20 Tyler

TX

209714

52

FOR FREE SITE INFORMATION, CALL

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LeadingLocations

5/14/13

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Page 89

struction, Boston is booming. The Innovation District

ranked first in current job growth and second in five-

along the South Boston waterfront has attracted over

year wage growth on Milken’s list. And, according to

200 new companies and 4,000 new jobs across a variety

the Bureau of Labor Statistics, the Lafayette MSA expe-

of industries, including technology, life sciences, design,

rienced the largest increase in employment in the

and advertising. Vertex Pharmaceuticals is currently

nation from December 2011 to December 2012 with an

building its $800 million, 1.1-million-square-foot global

8.6 percent gain.

headquarters in the heart of the district.

The Boston MSA enjoys an international reputation

“The growth in Lafayette’s economy over the past several years can be greatly attributed to steady growth

for healthcare and medicine.

According to Jones Lang LaSalle, nearly 75,000 people in the Boston MSA are employed in the pharmaceutical, biotechnology, and medical device industries — second only to San Diego.

Boston's 22 hospitals and 34 colleges and universities are important anchors in the city’s economy. The city is also the leading recipient for National Institute of Health funding in the U.S. — in fact, five of the top eight NIHfunded hospitals are within the Boston MSA. An outstanding educational system and high quality of life are just two reasons why Boston has such a diverse and youthful population — about one third of the city’s population is between the ages of 20 and 35. Many of these energetic, young professionals work in the high-tech growth sectors of advanced manufacturing, clean energy, defense, IT, and life sciences/biomedicine.

Mid-Size Cities — Population 160,000–600,000 Lafayette, Louisiana The Lafayette MSA was ranked 24th out of 200 metro areas in the Milken Institute’s Best Performing Cities Index for 2012 — a jump of 69 spots over last year’s placement. The city also

AREA DEVELOPMENT | Q2/Spring 2013

89

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Page 90

in the energy and healthcare

dent and CEO Gregg Gothreaux. “These industries

industries, which account for

remain relatively recession-proof and will continue to

40 percent of the area’s GDP,”

contribute to Lafayette’s steady economic growth, while

says Lafayette Economic

providing an impetus for our growing finance and enter-

Development Authority presi-

tainment industries.”

The vibrant energy sector is a big reason Louisiana

TOP 20 MID-SIZE CITIES - Prime Workforce Growth City / MSA 1 Fargo

State

2010 Overall Population Rank

ND-MN

208777

1

2 Cedar Rapids

IA

257940

3

3 Santa Barbara-Santa Maria-Goleta

CA

423895

4

4 Norwich-New London

CT

278598

5

5 Columbia

MO

172786

7

6 Mobile

AL

412992

12

7 Jackson

MI

160248

13

8 Lafayette

LA

273738

16

9 Augusta-Richmond County

80,000-square-foot facility in Scott, just outside Lafayette, to provide comprehensive coating and plating services for its clients, including many oilfield servicing companies. The plant will employ 120 workers with an annual local payroll estimated at $3 million.

Fargo, North Dakota/Moorhead, Minnesota The economy is on the move in Fargo, with employment in manufacturing growing by 4 percent, in back

GA-SC

556877

17

10 Ann Arbor

MI

344791

20

office by 5 percent, and in IT by an impressive 8.6 per-

11 Holland-Grand Haven

MI

263801

22

cent from 2011 to 2012. The unemployment rate for the

12 Santa Rosa-Petaluma

CA

483878

23

Fargo-Moorhead MSA is about 4.7 percent, almost half

13 Lake Charles

LA

199607

24

14 Columbus

GA-AL

294865

26

the national unemployment rate of 8.5 percent during

15 Manchester

NH

187596

27

16 Roanoke

VA

308707

32

Major employers in town are Microsoft, Hitachi, John

17 Naples-Marco Island

FL

321520

33

Deere, and Tech Mahindra, which set up operations last

18 Gulfport-Biloxi

MS

248820

34

year. John Deere continues its expansion efforts with a

19 Des Moines-West Des Moines

IA

569633

36

20 Scranton-Wilkes-Barre

PA

563631

37

TOP 20 MID-SIZE CITIES - “Year - Over - Year Growth” City / MSA

1 Lafayette 2 Fargo

State

2010 Overall Population “Year-Over” -Year Growth

the recession.

TOP 20 MID-SIZE CITIES - “Recession-Busting” City / MSA

LA

273738

1

1 Lafayette

ND-MN

208777

4

2 Fargo

State

Population Overall “Recession Busting” Rank

LA

273738

2

ND-MN

208777

5

3 Santa Rosa-Petaluma

CA

483878

6

3 Framingham

MA

263875

8

4 Boulder

CO

294567

10

4 Springfield

IL

210170

11

5 Framingham

MA

263875

13

5 Waterloo-Cedar Falls

IA

167819

12

6 Corpus Christi

TX

428185

16

6 Lubbock

TX

284890

13

7 Burlington-South Burlington

VT

198627

17

7 Corpus Christi

TX

428185

16

8 San Luis Obispo-Paso Robles

CA

269637

18

8 Waco

TX

234906

21

9 Des Moines-West Des Moines

IA

569633

20

9 Abilene

TX

165252

24

10 Bellingham

WA

201140

21

10 Houma-Bayou Cane-Thibodaux

LA

208178

27

11 Ann Arbor

MI

344791

23

11 Anchorage

AK

380821

27

12 Anchorage

AK

380821

24

12 Columbia

MO

172786

27

13 Santa Barbara-Santa Maria-Goleta

CA

423895

26

13 Sioux Falls

SD

228261

30

14 Mobile

AL

412992

27

14 Amarillo

TX

249881

32

15 Gainesville

GA

179684

28

15 Columbus

GA-AL

294865

33

16 Elkhart-Goshen

IN

197559

32

16 Killeen-Temple-Fort Hood

TX

405300

36

17 Fayetteville-Springdale-Rogers

90

Plating and Coatings decided to open a $9 million,

AR-MO

463204

33

17 Laredo

TX

250304

41

18 Naples-Marco Island

FL

321520

33

18 College Station-Bryan

TX

228660

42

19 Holland-Grand Haven

MI

263801

44

19 Burlington-South Burlington

VT

198627

43

20 Houma-Bayou Cane-Thibodaux

LA

208178

45

20 Tyler

TX

209714

43

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new, $20 million, 90,000-square-foot facility that opened in 2012. Horsch Anderson, a South Dakota company that manufactures agricultural equipment, will build an 110,000-square-foot manufacturing facility in Fargo, investing about $12.5 million and creating 80 jobs. With a combined enrollment of about 30,000 students, the three higher-education institutions in the area — North Dakota State University, Minnesota State University-Moorehead, and Concordia College — work with the private sector to create specific training programs for students who are interested in working in these industries.

The recent addition of an American Airlines flight between Fargo and Dallas/Fort Worth has created better access to both national and international destinations, which improves Fargo’s competitiveness as a place to do business. Direct flight options from Fargo include Chicago, Dallas, Denver, Las Vegas, Los Angeles, Minneapolis-St. Paul, Orlando-Sanford, Phoenix-Mesa, and Salt Lake City.

Holland-Grand Haven, Michigan Over the last two years the Lakeshore Region of Michigan has generated $41 million in industrial investment, creating 96 jobs and retaining 2,662 jobs.

This region, which is anchored by Holland and Grand Haven, continues to outpace both the Midwest and the nation in sales growth. Over 77 percent of the region reported sales gains, compared to 59 percent for the Midwest and 57 percent for the U.S. According to “Michigan’s Urban and Metropolitan Strategy” by the Brookings Institution, over 86 percent of regional companies have introduced new products in the past five years, compared to 81 percent for the Midwest and 78 percent for the nation as a whole. The Greater Holland area places second in Michigan for the number of patent applications per capita, nearly twice the national average.

Holland development projects include Energetyx ($15 million, 500 jobs), Haworth ($10 million, 450 jobs), Johnson Controls-Saft ($220 million, 450 jobs), and Lean Logistics ($3.3 million, 580 jobs). Energetyx uses composite material technology to manufacture windmill blades for wind energy installations. LG Chem, a South Korea-based advanced battery manufacturer, plans to produce its first lithium-ion cells for the automotive industry from its $300 million factory in Holland this year.

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Small Cities — Population <160,000

In 2012 Odessa placed 95th on Forbes list of the best small places for business and careers. Although the Odessa economy grew at the torrid pace of 14.4 percent in 2012, the growth rate is expected to be closer to

Odessa, Texas

6 percent this year. The improved economy has stimulat-

Located in the energy-rich Permian Basin, Odessa’s economy is fueled by oil and

TOP 20 SMALL CITIES - Economic Strength Factors

gas — especially from unconventional shale plays. Oil

City / MSA

and gas companies include Halliburton, Weatherford

State

CPS, and Holloman Construction. Recent announcements include Chevron’s plans to build a $100 million

1 Midland

TX

136872

2

campus and Pioneer Natural Resources’ plans for a $50

2 Columbus

IN

76794

3

million office building.

3 Odessa

TX

137130

5

4 Bismarck

ND

108779

7

5 Dubuque

IA

93653

11

The University of Texas of the Permian Basin, the Texas Tech University Health Sciences Center, and Odessa

6 Victoria

TX

115384

13

College all play important roles in expanding the energy

7 Fairbanks

AK

97581

18

and healthcare sectors in Odessa, including research into

8 Sandusky

OH

77079

21

wind, solar, clean coal, and nuclear energy technologies.

9 Morgantown

WV

129709

31

10 Casper

WY

75450

33

11 Cheyenne

WY

91738

42

12 Texarkana

AR

136027

43

13 San Angelo

TX

111823

44

14 Williamsport

PA

116111

46

15 Mount Vernon-Anacortes

WA

116901

48

16 Ames

IA

89542

49

17 Hinesville-Fort Stewart

GA

77917

55

18 Elizabethtown

KY

119736

60

TOP 30 SMALL CITIES City / MSA 1 Odessa

State TX

2010 Overall Population Rank 137130

3

2 Columbus

IN

76794

4

3 Midland

TX

136872

7

4 Bismarck

ND

108779

10

5 Dubuque

IA

93653

12

6 Casper

WY

75450

14

7 Sandusky

OH

77079

15

8 Morgantown

WV

129709

20

9 Elizabethtown

KY

119736

23

TX

115384

25

11 Cheyenne

WY

91738

26

12 Ames IA

89542

13 Fairbanks

AK

14 St. Joseph

MO-KS

15 San Angelo

TX

10 Victoria

16 State College

19 Lewiston 20 State College

ID-WA

60888

60

PA

153990

69

TOP 20 SMALL CITIES - Prime Workforce Growth City / MSA

State

2010 Overall Population Rank

1 Ithaca

NY

101564

2 Lebanon

PA

133568

8

48

3 Morgantown

WV

129709

14

127329

50

4 Columbus

111823

51

5 Cape Girardeau-Jackson

38 97581

6

IN

76794

17

MO-IL

96275

21

PA

153990

68

6 Bend

OR

157733

29

ID-WA

60888

71

7 Pueblo

CO

159063

35

18 Williamsport

PA

116111

72

8 Odessa

TX

137130

41

19 Texarkana

AR

136027

77

9 Mankato-North Mankato

MN

96740

42

20 La Crosse

WI-MN

133665

89

10 Elizabethtown

KY

119736

44

OH

106331

96

11 Farmington

NM

130044

46

22 Iowa City

IA

152586

105

12 State College

PA

153990

49

23 Pocatello

ID

90656

106

13 Auburn-Opelika

AL

140247

65

24 Mount Vernon-Anacortes

WA

116901

109

14 Owensboro

KY

114752

66

25 Ithaca

NY

101564

110

15 Flagstaff

AZ

134421

68

26 Corvallis

OR

85579

111

16 Steubenville-Weirton

OH-WV

124454

69

UT-ID

125442

117

17 Williamsport

PA

116111

70

28 Owensboro

KY

114752

124

18 Cleveland

TN

115788

73

29 Billings

MT

158050

126

19 Ocean City

NJ

97265

74

30 Jefferson City

MO

149807

130

20 Wheeling

WV-OH

147950

78

17 Lewiston

21 Lima

27 Logan

92

Population Overall “Economic” Rank

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Page 93

ed a number of construction projects in the city, includ-

2010, resulting in more than 1,800 direct jobs and $170

ing three new elementary schools, $68 million in capital

million in capital investments. Among the newest addi-

improvements, and new science and nursing buildings at

tions is the Phoenix Group, which has selected

the University of Texas of the Permian Basin; a new engi-

Columbus for a $150 million, 468,000-square-foot distri-

neering building is also being discussed.

bution facility.

Columbus, Indiana

Midland, Texas

Columbus is known for its manufacturing expertise

According to the United States Census Bureau, the

and engineering strengths.

Fortune 200 dieselengine–maker Cummins Inc. is headquartered here, employing more than 7,000 workers. The city is also a national leader in foreign direct investment — 21 Japanese companies, including

OKLAHOMA CITY DELIVERS

NTN, Enkei, and Toyota D OW N TOW N O K L A H O M A C I T Y

Industrial Equipment, employ nearly 5,000 workers. Toyota Material Handling USA recently announced it would relocate its headquarters from California to Columbus. Other global companies with an R&D presence in town include Faurecia (emission control systems) and child safety seat manufacturer Dorel Juvenile Group.

Local employers draw from a 35-mile commuting population of 1.7 million and an 884,000-person labor force.

With 35 percent of local employment tied directly to manufacturing, the one-county MSA is among the top 3 per-

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AREA DEVELOPMENT | Q2/Spring 2013 AREA0091.indd 1

93

5/10/13 9:28 PM

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Page 94

fastest-growing metropolitan

Roman, chairman of the Midland Development

area in the country is Midland,

Corporation.

with a 4.6 percent increase in population between July 2011 and July 2012. Located 300

Economic Growth/ Year-over-Year Growth

miles west of Dallas, Midland is in the Permian Basin, where deep horizontal drilling With a booming energy economy, plans are under

community. It’s also an incredible challenge, especially

way for the “Energy Tower” — a 53-story skyscraper

when there are so many variables and pitfalls that can

that will be the sixth-tallest building in Texas and

derail economic growth, which are often beyond the

include offices, residential space, shopping, dining, and

control of the city or region.

a five-star hotel. Midland will also be the headquarters

Cities with economic strength factors and year-over-

for XCOR Aerospace’s new commercial spaceflight and

year economic growth tap into strategic management

R&D center. XCOR manufactures reusable rocket

plans that minimize these economic risks by diversifying

engines for major aerospace prime contractors and is

their economic base, building strong public-private

the designer, manufacturer, and operator of the Lynx, a

partnerships, strengthening their education systems,

fully reusable, high-performance suborbital space vehi-

and developing multi-skilled work forces that attract

cle that is designed to safely carry two persons or scien-

high-growth industries. Strong leadership and a com-

tific experiments to the edge of space and back.

mon vision are also required at local, regional, and state

“XCOR’s Research and Development Center head-

levels to carry out economic development with the

quarters will add economic diversity to Midland, along

future in mind — especially when resistance is strong

with $12 million in new payroll and capital investment

(i.e., doing things the “old way”).

In addition to taking care of traditional industries and

over the next five years and an estimated average

major employers, forward-thinking communities must

annual wage of over $60,000 per job,” says Laura

TOP 20 SMALL CITIES - “Year - Over - Year Growth” City / MSA

94

Maintaining strong economic growth — and doing so year after year — is the mark of a well-managed

has created another oil and gas rush.

State

2010 Overall Population “Year-Over -Year” Growth

TOP 20 SMALL CITIES - “Recession-Busting” City / MSA

State

Population Overall “Recession Busting” Rank

1 Columbus

IN

76794

11

1 Odessa

TX

137130

1

2 Odessa

TX

137130

14

2 Bismarck

ND

108779

3

3 Bismarck

ND

108779

19

3 Midland

TX

136872

4

4 Morgantown

WV

129709

35

4 Dubuque

IA

93653

6

5 Victoria

TX

115384

38

5 Fairbanks

AK

97581

7

6 Dubuque

IA

93653

41

6 Casper

WY

75450

9

7 St. Joseph

MO-KS

127329

42

7 Columbus

IN

76794

14

8 Ames

IA

89542

43

8 State College

PA

153990

18

9 Sandusky

OH

77079

48

9 Cheyenne

WY

91738

20

10 San Angelo

TX

111823

52

10 Morgantown

WV

129709

22

11 Ithaca

NY

101564

55

11 Texarkana

AR

136027

23

12 Midland

TX

136872

61

12 Williamsport

PA

116111

24

13 Billings

MT

158050

72

13 Elizabethtown

KY

119736

35

14 Kokomo

IN

98688

75

14 La Crosse

WI-MN

133665

37

15 Santa Fe

NM

144170

77

15 San Angelo

TX

111823

38

16 Bend

OR

157733

80

16 Lewiston

ID-WA

60888

39

17 Lima

OH

106331

83

17 Rapid City

SD

126382

40

18 Pocatello

ID

90656

84

18 Hinesville-Fort Stewart

GA

77917

47

19 Cheyenne

WY

91738

86

19 Sandusky

OH

77079

50

20 Idaho Falls

ID

130374

88

20 Jonesboro

AR

121026

50

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Page 95

be willing to invest in programs and initiatives that

(WDI) that will target high-value projects and train

attract high-growth, knowledge-based industries and

skilled workers for a variety of industries.

expand educational opportunities. Not only will these

AEDC recently awarded $210,000 and a package of

“high-tech” companies broaden the tax base, they will

tax benefits to assist local manufacturer Amcor Rigid

be of more interest to Generation X and Generation Y

Plastics with a $24 million expansion that will add new

populations, improving the chances that these eager,

equipment, support nearly 100 jobs, and improve the

productive young adults will stay and help grow their

company’s competitiveness. “In order to remain a play-

communities.

er in the market, it is imperative that we stay on top of

Leveraging Expertise: These cities know how to

new advancements and AEDC is helping us do this,”

leverage their core strengths to build economic

says Sheridan Attig, Amcor’s director of purchasing

momentum. Ames, Iowa, for example, has a long histo-

services.

ry of agriculture and manufacturing. The city and Iowa

Technology-Driven: Cities that exhibit economic

State University have worked together to build on this

strength and deliver year-over-year improvements tend

history and develop and support prosperous sectors in

to have diversified economies that blend traditional and

animal health, food processing, plant science, and

knowledge-based industries. Not only do they support

advanced manufacturing. The Ames Economic

and update traditional industries, they nurture and

Development Commission’s (AEDC) five-year plan

development high-tech sectors like information and

focuses on building key infrastructure, supporting busi-

computer technology (ICT), nanotechnology, biotechnol-

ness growth, and collaborating with Iowa State

ogy, medical devices, and advanced manufacturing. This

University Research Park on new ventures. AEDC has

is a big reason Gainesville, Georgia, has been ranked by

also developed its Workforce Development Initiative

Forbes as one of the “Best Small Places for Business

“Louisiana’s custom-fit solutions enabled us to begin our mega-project 6 to 12 months sooner than planned.”

ANDRÉ DE RUYTER | SASOL NORTH AMERICAN PRESIDENT

LOW-TAX ADVANTAGE 2nd lowest taxes in the nation for new firms and 10th lowest for mature firms TARGETED INCENTIVES Custom-fit incentive program ranked No. 2 in the nation by Area Development UNRIVALED ACCESS Six deepwater and 33 shallow draft ports combine with six Class 1 railways to create an unrivaled logistics network #1 WORKFORCE TRAINING LED FastStart® ranked top U.S. workforce training program three years in a row

Expansion, relocation or start up? Discover the Louisiana advantage at OpportunityLouisiana.com

AREA DEVELOPMENT | Q2/Spring 2013

95

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Page 96

and Careers” over the last

Keeping Costs Down: Companies want to see seri-

three years. The city was also

ous commitment when it comes to reducing business

ranked by the Milken Institute

costs and red tape — especially during uncertain eco-

as the 39th best-performing

nomic times. Cities that do not make the effort to cre-

small city in 2012, a 62-place

ate a friendly, proactive tax and regulatory climate will

jump over its 2011 position.

be left behind. It is essential to create meaningful incen-

Gainesville is home to 47 Fortune 500 firms and more

tives that make sense to prospective companies —

than 300 manufacturing and processing companies. In

especially streamlining start-up costs, subsidizing work-

FY 2012–2013, 24 new and expanded businesses with a

er training, and providing other benefits that address

total capital investment of $203 million created 1,660

special needs and facilitate growth.

jobs and retained 1,530 existing jobs. These companies

Nashville, Tennessee, is at the forefront of cost con-

include Atlanta Biologicals, KIK Custom Products,

trol. According to a study by KPMG LLP, Nashville was

ProCare Rx, Bitzer, Yazaki, ElringKlinger, Kubota, Atex,

the second least-costly city in which to do business

IMS Gear, Zebra Technologies, and Lupold.

among 13 locations in the United States with populations

COMMENTARY Shifting Gears:

Companies Once Again Considering Out-of-Footprint Locations

By Eric Stavriotis, MANAGING DIRECTOR,

Business and Economic Incentives (BEI) Group Jones Lang LaSalle

As the U.S. economy slowly recovers from the recession, this year’s “Leading Locations” research reflects a change in site selection behavior that matches what we are seeing in the field. Companies are once again moving outside their existing footprints, following a long period of looking inward. The search for the ideal combination of work force, facilities, and cost is leading many to seek a happy medium — often between the East and West coasts.

Until recently, increased scrutiny on costs created a very high “risk premium” for out-of-footprint sites.

Given capital constraints, the short-term savings of staying within the existing footprint outweighed other long-term considerations. If a manufacturing concern planned to expand, for example, it would invest in an existing site — even if an out-of-footprint location offered a superior combination of attributes.

As evidenced by the Leading Locations research, companies are continuing to migrate from higher-cost to lower-cost locations, but are not restricting their options to existing sites. Winning locations include cities in the Heartland, as well as inland western and eastern U.S. locations where real estate and labor costs can be 10 to 30 percent lower than in the major coastal cities. Of the top 50 Leading Location markets, only 12 are coastal markets. The remainder are toward

96

AREA DEVELOPMENT

the middle, a finding that aligns with what we are seeing among our clients.

Top 50 cities such as Columbus, Ind.; Austin; Holland, Mich.; and Oklahoma City, for instance, offer less expensive land and facilities costs than the coasts, but also provide different kinds of work force capabilities.

Thirty-eight of the top 50 are in the “flyover” states, areas that many companies avoided in the past.

Midwest cities dominate the top 100 overall rankings, capturing 24.25 percent of this group.

Work force considerations are also affecting some location decisions. For instance, Omaha-Council Bluffs ranks among the top 10 leading “Big Cities,” and jumps dramatically up the overall rankings, from 133 last year to 21 this year. While Omaha may not have been traditionally viewed as a large Tier 1 market in the United States, major corporations such as PayPal, TD Ameritrade, Yahoo, and Google have been making substantial investments in Omaha for years.

The resurgence of manufacturing in the United States has made work force development a key selection factor for manufacturing concerns facing labor shortages. States and cities that have aggressively invested in work force development programs are winning the competition for these companies.

In fact, the return of manufacturing jobs has led some secondary markets out of the recession. While most of the top 20 overall markets are characterized by technology and “knowledge worker” companies or by the energy boom, Columbus, Ind.; Holland-Grand Haven, Mich.; and Dubuque, Iowa are among the cities that are thriving largely because of major manufacturing companies such as Cummins, Johnson Controls, Herman Miller Furniture, Whirlpool, and others.

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Page 97

between one million and two million. Nashville’s cost of

ing and up to $100,000 in “WorkKeys” funding, a

doing business is 88.5 percent of the national average.

national program that gives companies more control in

Forbes recently ranked Nashville as the third-best-posi-

determining the skill sets of potential new employees.

tioned city “to grow and prosper in the coming decade.”

The state of Tennessee also has no personal income tax.

Utah is another top-ranked state for economic per-

“Boeing’s reputation for innovation and leadership has in part helped Utah gain a reputation as one of the leading states for business,” says Spencer Eccles, executive director

formance. In December 2012 it was ranked as best

of the Governor’s Office of Economic Development. “We

state for business and careers by Forbes for the third

look forward to seeing what this new project will bring.”

consecutive year — noted especially for its low business costs, top-notch labor force, regulatory environment, and growth prospects. Utah’s incentive programs include a refundable tax credit for up to 30 percent of new state tax revenue over the life of a project, as well as generous grants for creating high-paying jobs.

Salt Lake City, for example, is a leader in both economic strength and year-over-year economic growth (2011–2012).

The city invests millions of dollars every year in infrastructure improvements and is increasingly known for its advanced manufacturing, aerospace, and ICT sectors.

FireEye, a provider of advanced IT security programs headquartered in California, recently announced it would build a $2 million facility in Salt Lake County, creating about 250 new jobs. Salt Lake Citybased Boeing is planning to add high-tech manufacturing jobs at its Utah operations to increase its composite manufacturing capacity. Boeing will also hire about 100 new employees to meet increased production demands. Utah’s Department of Workforce Services and the Industrial Assistance Fund will provide up to $225,000 for specialty train-

AREA DEVELOPMENT | Q2/Spring 2013

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Prime Work Force Growth

designed to attract targeted, high-growth industries that will hopefully become good, long-term partners. By supporting specific industries, and developing the high-

Labor is a top consideration for any company that

ly skilled workers these businesses require, cities

wants to move or expand its

already have, as well as bringing in other companies

operations. Because labor is typically one of the highest operating costs, companies are also eager to select a

increase their chances of keeping the employers they that will create more jobs and build the tax base.

Kokomo, Indiana, is a good example — with its long

location with a highly skilled, plentiful work force that

history of automotive manufacturing, the state knows

can easily fill the often-specialized jobs the new facility

how important this industry is to its economy and works

requires, with minimal turnover.

hard to support the automotive sector. Recently the

Although plenty of Americans are looking for work,

Indiana Economic Development Corporation announced

they often don’t have the right combination of skill sets

it would award Chrysler Group up to $11.5 million in con-

for many open positions, leaving HR managers frustrat-

ditional tax credits and up to $200,000 in training grants

ed. These days, most jobs require some level of post-

to assist with a $374 million expansion of its operations

secondary education, as well as computer skills.

in Kokomo, creating up to 1,250 new jobs by 2015.

Training Programs: Other states — such as South

In order to fulfill business’ needs and also make themselves stand out from the crowd, more communi-

Carolina, Louisiana, and Texas — have created highly-

ties are partnering with regional and state government

respected, innovative work force training programs that

agencies to provide highly trained labor pools —

can sometimes “close the deal” when it’s time to make the final decision on a location.

In South Carolina, ReadySC™ provides comprehensive and customized training solutions for qualify-

Top 5 New England Cities City / MSA

State

Population Overall Rank

1 Framingham

MA

263875

9

2 Boston-Cambridge-Quincy

MA

2863943

11

3 Burlington-South Burlington

VT

198627

29

4 Barnstable Town

MA

239675

93

5 Peabody

MA

246481

102

Top 15 Mid-Atlantic Cities City / MSA 1 Washington-Arlington-Alexandria

Population Overall Rank

DC-VA-MD-WV

4377008

19

MD

1205162

40

3 State College

PA

153990

68

4 Williamsport

PA

116111

72

2 Bethesda-Rockville-Frederick

5 Pittsburgh 6 New York-White Plains-Wayne

PA

2356285

84

NY-NJ

11576251

97

7 Ithaca

NY

101564

110

8 Erie

PA

280566

129

9 Scranton--Wilkes-Barre

PA

563631

142

PA

411442

143

11 Lebanon

PA

133568

150

12 Ocean City

NJ

97265

165

13 Albany-Schenectady-Troy

NY

870716

167

14 Trenton-Ewing

NJ

366513

167

MD-WV

103299

187

10 Reading

15 Cumberland

98

State

AREA DEVELOPMENT

ing companies that are investing in the state.

Louisiana Economic Development’s FastStart® program offers employee recruiting, screening, and

Top 20 Midwest Cities City / MSA

State

Population Overall Rank

1 Columbus

IN

76794

4

2 Holland-Grand Haven

MI

263801

8

3 Dubuque

IA

93653

12

4 Sandusky

OH

77079

15

5 Springfield

IL

210170

28

6 Des Moines-West Des Moines

IA

569633

36

7 Ames

IA

89542

38

8 Ann Arbor

MI

344791

39

9 St. Joseph

MO-KS

127329

50

10 Appleton

WI

225666

53

11 Jackson

MI

160248

85

OH-KY-IN

2130151

55

13 Columbia

MO

172786

59

14 Lafayette

IN

201789

60

15 Cedar Rapids

IA

257940

63

16 Akron

OH

703200

66

17 Elkhart-Goshen

IN

197559

78

18 Canton-Massillon

OH

404422

79

19 Minneapolis-St. Paul-Bloomington

MN-WI

3279833

81

20 La Crosse

WI-MN

133665

89

12 Cincinnati-Middletown

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Page 99

Top 15 Southern Cities City / MSA

State

Top 15 South-Atlantic Cities Population Overall Rank

City / MSA

1 Lafayette

LA

273738

1

2 Elizabethtown

KY

119736

23

2 Columbus

3 Houma-Bayou Cane-Thibodaux

LA

208178

24

3 Durham-Chapel Hill

4 Louisville-Jefferson County

State

1 Morgantown

Population Overall Rank

WV

129709

GA-AL

294865

20 45

NC

504357

52 58

KY-IN

1283566

35

4 Charlotte-Gastonia-Rock Hill

NC-SC

1758038

AR-MO

463204

43

5 Charleston-North Charleston-Summerville

SC

664607

76

6 Lake Charles

LA

199607

54

6 Gainesville

GA

179684

91

7 Knoxville

TN

698030

69

7 Spartanburg

SC

284307

92

8 Texarkana

AR

136027

77

8 Naples-Marco Island

FL

321520

95

9 Mobile

AL

412992

80

9 Columbia

SC

767598

101 113

5 Fayetteville-Springdale-Rogers

10 Nashville-Davidson-Murfreesboro-Franklin 11 Chattanooga 12 Monroe 13 Baton Rouge

TN

1589934

82

10 Blacksburg-Christiansburg-Radford

VA

162958

TN-GA

528143

83

11 Jacksonville

NC

177772

115

LA

176441

87

12 Huntington-Ashland

WV-KY-OH

287702

119

LA

802484

88

13 Hinesville-Fort Stewart

GA

77917

135

14 Kingsport-Bristol-Bristol

TN-VA

309544

99

14 Savannah

GA

347611

144

15 Clarksville

TN-KY

273949

108

15 Orlando-Kissimmee-Sanford

FL

2134411

148

Whatever your needs, consider

Bismarck-Mandan, North Dakota, and all it has to offer.

• Convenient location — Bismarck-Mandan sits at the intersection of US I-94 and US Highway 83.

• Diversified economy — From energy to healthcare, manufacturing to agriculture, technology to tourism, there’s a place for you in Bismarck-Mandan.

• Access to government — The State Capitol in Bismarck offers direct contact with regulatory agencies and elected officials.

• Well-rounded community — Whether for business or family, Bismarck-Mandan offers available work force, quality educational institutions, state-of-the-art healthcare, recreational opportunities year-round, and a safe atmosphere to live, work and raise a family.

Contact the Bismarck-Mandan Development Association (BMDA) at 701.222.5530 or info@bmda.org or visit www.bisman.org.

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training solutions for compa-

Recession-Busting Cities

nies that meet its job-crecovers a wide range of sub-

Bouncing back from the Great Recession hasn’t been easy — many cities are still struggling to regain

jects, including specific

high-quality job growth and economic prosperity. Area

processes and procedures,

Development looked at several key economic indicators

advanced technologies, computer skills, and organi-

to identify the top-10 “recession-busting” cities that are

zational management. In Texas, the Texas Workforce

having the most success in rebooting their economies

Commission’s Skills Development Fund provides

and creating good-paying jobs.

ation requirements. Training

grants to community and technical colleges to cus-

A big reason these cities are successful is that they

tomize job-training programs for qualifying appli-

focus on their core assets and work hard to create posi-

cants. In Fiscal Year 2012, 50 grants totaling more

tive business climates and recruit new companies —

than $22 million helped assist nearly 20,000 workers.

CoServ, a company that finds workers for the electrical industry, recently received a $162,000 grant from

Top 15 Pacific Cities

the Texas Workforce Commission that was used to train 143 people to work as electrical engineers, meter read-

City / MSA

State

ers, power line installers, and support staff. “These

1 San Jose-Sunnyvale-Santa Clara

CA

1836911

5

resources were critical in helping us recruit and retain a

2 San Francisco-San Mateo-Redwood City

CA

1776095

16

sustainable talent pool of employees for this industry,”

3 Santa Rosa-Petaluma

CA

483878

27

comments Dennis Engelke, director of Member and

4 Bellingham

WA

201140

32 34

Employee Relations for CoServ.

5 Santa Barbara-Santa Maria-Goleta

CA

423895

6 Seattle-Bellevue-Everett

WA

2644584

47

7 Fairbanks

AK

97581

48

OR-WA

2226009

65

AK

380821

67

10 San Luis Obispo-Paso Robles

CA

269637

74

11 San Diego-Carlsbad-San Marcos

CA

3095313

98

12 Mount Vernon-Anacortes

WA

116901

109

13 Corvallis

OR

85579

111

14 Santa Cruz-Watsonville

CA

262382

123

15 Honolulu

HI

953207

131

8 Portland-Vancouver-Hillsboro 9 Anchorage

Top 10 Mountain Cities City / MSA

State

1 Casper

WY

2 Cheyenne 3 Boulder

Population Overall Rank 75450

14

WY

91738

26

CO

294567

33

4 Salt Lake City

UT

1124197

46

5 Boise City-Nampa

ID

616561

56

6 Denver-Aurora-Broomfield

CO

2543482

61

7 Fort Collins-Loveland

CO

299630

62

8 Provo-Orem

UT

526810

64

9 Lewiston

ID-WA

60888

71

10 Pocatello

ID

90656

106

Top 5 Plains Cities City / MSA 1 Fargo

State ND-MN

Population Overall Rank 208777

2

Top 15 Southwest Cities City / MSA

State

Population Overall Rank

1 Odessa

TX

137130

2 Austin-Round Rock-San Marcos

TX

1716289

6

3 Midland

TX

136872

7

4 Oklahoma City

OK

1252987

13

5 Tulsa

OK

937478

17

6 Dallas-Plano-Irving

TX

4235751

18

7 Corpus Christi

TX

428185

22

8 Victoria

TX

115384

25

9 Houston-Sugar Land-Baytown

TX

5946800

30

10 Longview

TX

214369

31

11 San Antonio-New Braunfels

TX

2142508

41

TX

234906

42

3

ND

108779

10

12 Waco

NE-IA

865350

21

13 Fort Worth-Arlington

TX

2136022

43

4 Sioux Falls

SD

228261

37

14 Amarillo

TX

249881

49

5 Lincoln

NE

302157

73

15 San Angelo

TX

111823

51

2 Bismarck 3 Omaha-Council Bluffs

100

Population Overall Rank

AREA DEVELOPMENT

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especially keeping costs down for both established

North Charleston-based Boeing Company has commit-

companies and new startups.

ted to investing $1 billion in its operations and hiring up

For example, last year Oklahoma City was named the least-costly city to do business among 13 mid-sized U.S.

to 2,000 workers over the next eight years.

Another recession-busting city that is working hard

cities, according to KPMG. Oklahoma City’s cost index of

to build a pro-business tax climate and reduce the

95.5 was significantly lower than the average U.S. index of

cost of doing business is Dubuque, Iowa. Incentives

100.0. Cost advantages for labor, facility leases, expenses,

include effective worker training programs and proj-

and taxes contributed to the city’s favorable ranking.

ect-specific work force recruitment campaigns. The

“Oklahoma City’s cost-effectiveness makes this a

city’s innovative certificate training and scholarship

great place to do business,” says Roy H. Williams, presi-

program entitled “Opportunity Dubuque” was recent-

dent and CEO of the Greater Oklahoma City Chamber.

ly honored by the Mid-America Economic

“Across all business sectors, the low cost of living and

Development Council (MAEDC) for its success in

the availability of business incentives provides a secure

upgrading skills and creating a talented work force

environment for businesses to flourish.”

for advanced manufacturing industries.

In South Carolina, Charleston was recently ranked

“Our robust work force initiatives have allowed us to

ninth out of 100 U.S. cities for job recovery by the

minimize the risk for key decision-makers considering

Brookings Institution, as well as 23rd for recovery from

Dubuque for future business needs and potential work

the recession. This quick rebound is in large part due to

force,” says Rick Dickinson, president and CEO of the

its diversified economy, friendly business climate, work

Greater Dubuque Development Corporation.

force recruitment and training programs, favorable tax

“Opportunity Dubuque is a critical work force solution

structures, and special discretionary incentives for quali-

for existing businesses looking to expand, as well as

fying projects. The willingness of local and state govern-

prospective clients weighing Dubuque against other

ments to work pro-actively with business is a big reason

locations around the globe.”

100 Leading Locations Report Sponsors

INDIANA

FLORIDA ECONOMIC DEVELOPMENT COMMISSION OF FLORIDA’S SPACE COAST From the dawn of NASA to the future of commercial space, Florida’s Space Coast is America’s high-tech titan. But our vibrant economy goes well beyond space, to aviation, communications, electronics, manufacturing, emerging technologies, and more — all enhanced by our skilled work force, attractive tax code, competitive wages, and unbeatable quality of life.

Gregory J. Weiner, CEcD Senior Director, Business Development gweiner@spacecoastedc.org info@spacecoastedc.org www.SpaceCoastEDC.org GREATER FORT LAUDERDALE ALLIANCE Greater Fort Lauderdale offers “Life Less Taxing” to more than 150 corporate and international regional headquarters including AutoNation, Citrix, DHL, Emerson, Microsoft, and Nipro Diagnostics through a cost-competitive business climate and no state personal income tax, combined with robust domestic and international air and seaports and exceptional quality of life.

Robin Ronne Managing Director, CEO Council Greater Fort Lauderdale Alliance 110 East Broward Boulevard, Suite 1990 Fort Lauderdale, FL 33301 954-627-0126 pdoty@gflalliance.org www.lesstaxing.com

COLUMBUS ECONOMIC DEVELOPMENT BOARD Columbus, Indiana, is known for its manufacturing prowess, engineering strengths, and world-renowned architecture. Significant job growth has recently occurred at Cummins Inc., Toyota Industrial Equipment and its sister firm Toyota Material Handling USA, as well as many other companies. More information on recent corporate relocations and expansions is available on our website.

Jason Hester, CEcD – Executive Director Columbus Economic Development Board 500 Franklin Street Columbus, IN 47201 812-378-7300 Fax: 812-372-6756 jhester@columbusin.org http://www.ColumbusIN.org SOCIAL MEDIA: Twitter: @ColumbusEconDev

LOUISIANA LAFAYETTE ECONOMIC DEVELOPMENT AUTHORITY (LEDA) Lafayette is a medical, energy, transportation, entertainment, education, and retail hub in the heart of South Louisiana. Lafayette’s entrepreneurial spirit fosters a diverse and thriving economy. Through innovative collaborations with business, government, and education, LEDA strives to expand the community’s business base for future growth and development.

Gregg Gothreaux, President and CEO Lafayette Economic Development Authority (LEDA) 211 East Devalcourt Street Lafayette, LA 70506 337-593-1400 Fax: 337-234-3009 www.lafayette.org SOCIAL MEDIA: www.facebook.com/lafayettela Twitter: @LEDALafayetteLA www.linkedin.com/company/lafayette-economic-development-authority

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NORTH DAKOTA

TENNESSEE

BISMARCK-MANDAN DEVELOPMENT ASSOCIATION The Bismarck-Mandan Development Association provides businesses and site consultants with assistance in relocation and expansion opportunities throughout the MSA that includes all of Burleigh and Morton counties in North Dakota.

Home to a robust diversified economy, Bismarck-Mandan offers a businessfriendly environment, reliable work force, and well-rounded community.

KNOXVILLE-OAK RIDGE INNOVATION VALLEY Knoxville-Oak Ridge Innovation Valley in East Tennessee is home to over 75 corporate headquarters and is a major hub for manufacturing and innovation with world-class research at Oak Ridge National Laboratory and the University of Tennessee.

Brian Ritter Bismarck-Mandan Development Association P.O. Box 2615 400 E. Broadway, Ste. 417 Bismarck, ND 58501 701-222-5530 britter@bmda.org or info@bmda.org www.bisman.org

SOCIAL MEDIA: Facebook: Knoxville Oak Ridge Innovation Valley Twitter: KnoxOakRidgeIV

OKLAHOMA GREATER OKLAHOMA CITY CHAMBER The list of reasons to locate in Oklahoma City is growing — almost as quickly as the list of reasons why people love living here. In Greater OKC, we understand that partnership among business, government, EDOs, and civic leaders is integral to our success. Let us introduce you to Greater Oklahoma City — a region that has redefined itself for the future.

Kurt Foreman, Executive Vice President, Economic Development Greater Oklahoma City Chamber 123 Park Avenue Oklahoma City, OK 73102 405-297-8945 kforeman@okcchamber.com www.greaterokc.tv

TULSA REGIONAL CHAMBER The Tulsa Regional Chamber’s economic development division is the primary regional economic development organization representing the Tulsa Metro and Northeast Oklahoma area. The Tulsa Region balances convenience, affordability, a great quality of life, and a pro-business atmosphere.

PENNSYLVANIA CHAMBER OF BUSINESS & INDUSTRY CENTRE COUNTY (CBICC) Being so close to Penn State University with access to its resources, and having a flourishing high-tech business sector, Centre County is home to businesses that offer a thriving and varied job market. With beautiful mountains, friendly communities and top-notch schools, Centre County is the perfect place to live, work and raise a family. The CBICC is a valuable tool to learn about opportunities within the region.

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AMARILLO ECONOMIC DEVELOPMENT CORPORATION The Amarillo EDC’s mission is to promote business expansion in the greater Amarillo area that builds a stronger, more diversified economy. Companies choose Amarillo because of a motivated work force, modern infrastructure, supportive business climate, competitive tax rates, competitively priced energy, and an exceptional quality of life. Over the past 24 years, the Amarillo EDC has engaged in more than 100 projects with more than 100 companies, building a Portfolio of Success.

SOCIAL MEDIA: https://www.facebook.com/AmarilloEDC https://twitter.com/AmarilloEDC http://www.linkedin.com/company/2278053?goback=.fcs_GLHD_amarillo+edc_false_*2_*2_*2_*2_*2_*2_*2_*2_*2_*2_*2_*2&trk=ncsrch_hits CITY OF AUSTIN The Austin metropolitan area is home to 1.7 million residents and offers a prized quality of life, talented work force, and extraordinary business opportunities. Austin Energy’s Economic Growth and Redevelopment Office supports expansions and locations to the area through a number of economic development programs.

Justin McLaughlin, CEcD Senior Vice President, Economic Development Tulsa Regional Chamber One West Third Street, Ste. 100 Tulsa OK 74103 918-560-0240 or 800-624-6822 jmclaughlin@tulsachamber.com www.growmetrotulsa.com

SOCIAL MEDIA: https://www.facebook.com/cbicc https://twitter.com/CBICC

TEXAS

Richard (Buzz) David, President & CEO Amarillo Economic Development Corporation 801 S. Fillmore, Suite 205 Amarillo, TX 806-379-6411 Fax: 806-371-0112 buzz@amarilloedc.com www.amarilloedc.com

SOCIAL MEDIA: https://twitter.com/GreaterOKC https://www.facebook.com/GreaterOKC http://www.linkedin.com/pub/greater-oklahoma-citychamber/13/bb8/3b8?goback=.hom.ail

Vern Squier, CEO Centre County Industrial Development 200 Innovation Boulevard, Suite 150 State College, PA 16803 814-234-1829 vern@cbicc.org www.cbicc.org

Doug Lawyer, Vice President of Economic Development Knoxville Oak Ridge Innovation Valley 7 Market Square #201 Knoxville, TN 37902 865-637-4550 dlawyer@knoxvillechamber.com www.knoxvilleoakridge.com

Ben Ramirez, Interim Economic Development Program Manager City of Austin Economic Growth and Redevelopment Services Office 301 W. 2nd Street Austin, Texas 78704 512-974-7819 Fax: 512-974-7825 ben.ramirez@austintexas.gov www.austintexas.gov/economicgrowth SOCIAL MEDIA: Twitter: @ econvitalityATX GREATER AUSTIN CHAMBER OF CHAMBER Austin hosts an educated, bilingual, multi-tiered work force and a passion for success. Our population offers skill sets that range from high-end technology design, development, and marketing to back-office operations. Our dynamic business ecosystem provides consistent job growth for some of the most successful companies.

Dave Porter Greater Austin Chamber of Commerce 535 East 5th Street Austin, TX 78701 512-322-5650 dporter@austinchamber.com www.austinchamber.com

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT.COM

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ODESSA DEVELOPMENT CORPORATION Specific strengths of Odessa include a nonunion and skilled labor force, a mid-continent location in the Central Time Zone where government works for business, and an extremely favorable climate. An Enterprise Zone leads the way toward revitalization and reinvestment. With a fully developed industrial park and the economic development sales tax, Odessa has the competitive edge when it comes to working with new businesses that want to make West Texas their home.

Guy Andrews, Director of Economic Development Odessa Development Corporation 700 N. Grant, Ste. 200 Odessa, TX 79761 432-333-7880 GuyA@odessaecodev.com http://odessatex.com/ SAN ANGELO CHAMBER OF COMMERCE San Angelo is a metro area of 110,000 population located in West Central Texas. Major economic sectors include manufacturing, medical, military, business services, and energy. San Angelo is a regional shopping, entertainment, and medical center. The community boasts a commercial airport, university, air force base, and an incentive program for business assistance.

John Dugan, VP Marketing & Recruitment San Angelo Chamber of Commerce 418 W. Ave. B San Angelo, TX 76903 877-653-4136 john@sanangelo.org www.sanangelo.org

SAN ANTONIO ECONOMIC DEVELOPMENT FOUNDATION San Antonio has a “culture of business” that includes pro-business leadership, solid growth, abundant work force, land, and affordable energy that attracts diverse industries and job-producing investments to the city. Learn why 100 companies in six years have chosen to partner with SAEDF and San Antonio’s collaborative business community.

Tom Long, Executive Vice President of Business Recruitment San Antonio Economic Development Foundation 602 E. Commerce St. San Antonio, Texas 78205 210-226-1394 tlong@sanantonioedf.com www.sanantonioedf.com.

SOCIAL MEDIA: https://www.facebook.com/SanAntonioEDF https://twitter.com/sanantonioedf http://www.linkedin.com/company/121085?trk=tyah SUGAR LAND ECONOMIC DEVELOPMENT Sugar Land offers a highly educated work force and 22 million square feet of prime commercial space. Sugar Land Regional Airport was designated a “National General Aviation” airport, one of 84 in the country and one of only eight in Texas. In January, a ribbon-cutting was held at the Taxilane Juliett site, a project that accommodates aviation departments interested in relocating to Sugar Land.

Regina Morales City of Sugar Land Economic Development 2700 Town Center Blvd. North Sugar Land, TX 77479 Cell: 281-642-7328 Fax: 281.275.2217 ecodev@sugarlandtx.gov rmorales@sugarlandtx.gov www.SugarLandEcoDev.com

A LIVE

GREAT WORK

PLACE

TO

DO BUSINESS

MINNESOTA IS THE RIGHT CHOICE FOR YOUR BUSINESS International Seaport 19 Fortune 500 Companies Global Health Care Leader Shovel-ready Sites Competitive Incentives ECONOMIC.DEVELOPMENT@STATE.MN.US

AREA0087.indd 1

651-259-7432

WWW.POSITIVELYMINNESOTA.COM AREA DEVELOPMENT | Q2/Spring 103 5/10/132013 9:17 PM

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SUSTAINABILITY

Achieving Platinum-Rated Construction Volkswagen of America earned LEED® Platinum certification due in part to recycled and regional materials and construction waste management.

By Laura A. Orlich, LEED AP BD+C, NCARB SSOE Group

construction and demolition waste.

Those eight points represented more than 15 percent of the total points required to achieve Platinum certification.

The awarding of the credits depended on general contractors for documentation of material content and site accountability for construction waste management. Even though the LEED requirements in these three areas have become best practices for sustainable construction, the documentation is not a standard construction practice.

Volkswagen achieved this Platinum rating with detailed planning, research, modification of standard construction practices, and contractor oversight guided by a dedicated on-site LEED coordinator on the A/E/CM (architecture/ engineering/construction management) team.

The Role of On-Site LEED Coordinator

A factory-floor recycling center — Construction waste management practices have been carried into everyday plant facility operations at VW’s new Chattanooga facility.

T

hat Volkswagen Group of America builds fuel-efficient cars is well known in the industry. What may be less well known is that it built its new manufacturing plant in Chattanooga, Tennessee, on the principle of environmental sustainability. Last year the plant achieved LEED Platinum certification from the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) green building certification program. Platinum is the highest-possible LEED designation.

The first and only LEED Platinum automotive manufacturing plant in the world, the $1 billion, 2.7-million-squarefoot facility was awarded 52 points, which included eight points in the critical categories of recycled content, regional materials, and construction waste management. Recycled content and regional materials each comprised more than 45 percent of total building materials, and the construction team salvaged or recycled nearly 78 percent (4,602 tons) of

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Although some general contractors have experienced LEED-accredited professionals on staff, the success of a complex project may well depend upon a single point of responsibility to research the local market, provide guidance and insights in planning, oversee contractors in the documentation process, and manage the LEED submittal.

In the case of the Volkswagen project, a coordinator from SSOE Group fulfilled the single point role throughout the lifecycle of the project. Before beginning the LEED certification process, SSOE created a handbook for contractors that condensed the U.S. Green Building Council’s reference manual into the practical requirements to fulfill each checklist item. The LEED coordinator included the results of advance research to identify local companies that could supply specific materials and buy specific types of construction waste.

Since this was such a large facility, more than 40 separate contracts were issued. Each contractor had different responsibilities, based on its scope of work. SSOE’s LEED coordinator then created a spreadsheet that identified every Volkswagen contractor package, including the associated LEED requirements; specific criteria — e.g., percentages and weights of recycled and regional materials; and documentation status. This system allowed SSOE to verify that docu-

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mentation was submitted in a timely manner and that each contract package was on track to fulfill the requirements. This data was uploaded to LEED online on the contractors’ behalf, which streamlined the submittal process and ensured accuracy. Because accuracy is critically important when preparing the submittal, errors can trigger a time-consuming audit and jeopardize LEED accreditation. In the Volkswagen project, attention to document accuracy helped the team complete the LEED submittal and review process quickly and cleanly.

Documenting Recycled Content and Regional Materials The LEED categories of “recycled content” and “regional materials” recognize the significant environmental impact of using such materials, eliminating the extraction process of virgin materials and reducing transportation.

However, their documentation poses a serious challenge. These categories include calculations of materials as percentages of the total cost of building materials, along with verification that these percentages will meet LEED requirements. To capture and verify documentation requires careful planning, a well-managed process, and linkage between documentation and contractor compensation.

Contractors must obtain documentation of all recycled and regional materials directly from the manufacturers and submit documentation at specified intervals throughout the construction phase of the project. This requirement must be understood and satisfied from the outset: first in project planning, then in the RFP, and finally as condition of contract payment applications.

For materials that compose a large percentage of the total project construction cost, verification of manufacturers’ statements is particularly important. For example, steel and concrete are the big-ticket materials in an industrial manufacturing facility like the Volkswagen plant. Moreover, not only must pre- and post-consumer recycled content be separately calculated, but the documentation must also be provided by the manufacturers to the general contractors — and there

is no standard format.

In the Volkswagen project, the onsite LEED coordinator carefully interpreted the manufacturers’ statements and calculated the specific percentages of pre- and post-consumer recycled content of each type of recycled material. She then calculated the percentage that each material contributed to the total cost of building materials.

Similarly, the coordinator interpreted and verified the manufacturers’ statements about the sources and percentages of regional materials composing each regional construction material and the percentages of total construction materials.

Linking contractor compensation with submittal of the documentation was the final step. Contractors were contractually obligated to gather and submit the required documentation.

As an incentive for timely submissions, the approval of their monthly invoices was made contingent upon receipt of this documentation. For the Volkswagen project, the LEED coordinator tracked the contractors’ progress on documentation as invoices were submitted and issued reminders when necessary.

Site Accountability for Construction Waste Management According to the 2009 study from the EPA, 160 million tons of debris are generated from the construction industry each year. A recycling program included with construction waste management diverts construction materials and demolition debris from landfills.

For construction waste management, site accountability is the major challenge in meeting the LEED requirements because separation and recycling a high percentage of construction waste is not standard construction practice on conventional construction projects. Without someone effectively encouraging a construction waste management program, materials that could be recycled often end up in landfills or incinerators. A contractor may improperly utilize the dumpsters of another contractor, and this would cause cross contamination, unnecessary waste, or both.

Although it would be beneficial to

award a single contract for construction waste management, it is typically the responsibility of each contractor.

Contractors are working hard, and often overtime, to meet the schedule and fulfill their obligations, and construction waste management may not be high on their list of priorities. On a large project with a thousand workers on-site, it’s time consuming to separate and properly recycle all waste. It requires careful oversight by each contractor, and it takes the support of the construction management team and owner to follow and document waste management protocols. This is the only way to secure the maximum LEED credits.

During the Volkswagen project, individual contractors monitored and protected their containers. Their strategies included fencing their containers, moving their containers to more remote locations, posting a worker to sort materials, and even partnering with other contractors to consolidate small amounts of particular waste materials in a single container. SSOE’s on-site construction management team periodically observed the process of separating and distributing waste among the various containers. The onsite LEED coordinator monitored the monthly submittals of construction waste documentation to identify instances when corrective action was needed.

The overall success of a LEED project is based on many participants, including owners, designers, and contractors. The vision may begin with the owner and the design team, but will not be successful without the dedication and cooperation of the contractors building the project. On this project, Volkswagen, with a practical commitment to sustainability, considered sustainable design and construction a social responsibility. Teaming with hardworking and like-minded companies, they achieved the highest standard achievable. The result was Platinum!

Laura Orlich, LEED AP BD+C, NCARB, is an architect and an associate with SSOE Group (www.ssoe.com), a global engineering, procurement, and construction management firm.

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Special Investment Report CALIFORNIA

LOCATION CALIFORNIA

By Beth Mattson-Teig

California’s status as a powerful economic engine is unquestionable. Sheer size alone — whether measuring the population, work force, or diverse business base — is enough to land California on the short list for relocation and expansion options.

C

alifornia is the ninth largest economy in the world. “We’re more than just an amazing place to live with a world-class quality of life — though we have that too,” notes Leslie McBride, deputy director of Business Investment Services for the California Governor’s Office of Business and Economic Development (GO-Biz). “We’re the number-one market in the country and we’re number one in foreign direct investment and venture capital where we get more VC than the next 10 states combined,” adds McBride.

Given the size and diversity of the state, it is no surprise that California has a number of top rankings to its credit. The state also is a recognized leader in a variety of industries from cutting-edge technologies, such as computer software and unmanned vehicles, to more traditional industries including manufacturing and food processing. Businesses are drawn to the state’s large consumer marketplace. California is the largest state in terms of population with some 37.2 million people as of the 2010 Census. “You have to service the population, which is why a lot of businesses locate in California,” says Eric C. Dienstbach, a senior vice president at Binswanger Company in Greenwood Village, Colo.

The existing population, as well as the state’s position as a key gateway for importing and exporting goods to the Asia-Pacific region, continues to attract expansion of distribution and third-party logistics firms. For example, Amazon announced in January that it would open a new one-millionsquare-foot fulfillment center in Tracy. This marks the company’s third California facility in the last year. The company opened its first fulfillment center in San Bernardino in October, and currently has its second facility under construction in Patterson, which is slated to open later this summer.

Combined, those projects are expected to create 1,000 new jobs.

LABOR IS A KEY ADVANTAGE Among the state’s many assets, one of the most notable is its skilled labor force, which has been a boon for segments of the market such as technology, engineering, healthcare, and life sciences.

Private and public universities such as Stanford University, UCLA, and the University of California-

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Berkeley rank at the very top among world-renowned universities across a variety of fields, ranging from arts and humanities to business. “Our top universities and private research institutions have created one of the world’s leading innovation and R&D cultures,” says McBride.

The strong education system fosters innovation and growth across an array of industries. Certainly, Silicon Valley and the Bay Area are at the heart of that knowledge base, but it has a broader reach throughout the state in markets such as San Diego, which is home to one of the strongest life sciences clusters in the country. “[California has] some of the most educated and the most skilled work force segments in the world,” agrees Jubal Smith, an executive vice president in the Business and Economic Incentives Practice at Chicago-based Jones Lang LaSalle.

“Many of the skilled workers located in California migrated there from around the world to be a part of the technology revolution.” Those skilled workers are employed at some of the most well-known, wellestablished global tech companies such as Apple, Cisco, Google, Intel, Oracle, and Yahoo. As those companies grow and mature, many of those workers leave to create new spin-off companies. “So California continues to be a birthplace for high-tech companies,” he adds.

California’s reputation as a leader in innovation has helped to attract workers, companies, and capital to the state. California is second only to Texas in job creation. In January, the state posted a year-over-year increase of 286,100 non-farm jobs.

Another notable accomplishment, businesses in California received a staggering half of all venture capital

California — At the Epicenter of Innovation CALIFORNIA IS RECOGNIZED BOTH NATIONALLY AND INTERNATIONALLY FOR ITS TECH DEVELOPMENT IN AREAS SUCH AS CLOUD TECHNOLOGY, OPERATING SYSTEMS, AND APP DEVELOPMENT. The entire tech sector has returned to the “boom levels” that existed prior to the recession. For example, Samsung, Dell, Ford, GE, and Volkswagen are among those firms that have opened R&D or innovation centers in California in the past year. In January, FICO, a leading provider of predictive analytics and decision-management technology, announced that it would relocate its headquarters from Minneapolis to San Jose in order to be closer to Silicon Valley’s engineering talent pool. The company, which already employs 90 people in San Jose, will occupy about 40,000 square feet near the Mineta San Jose International Airport.

High tech has been big and a driver for Silicon Valley and the Bay Area. However, those industries are continuing to expand throughout the state. California is one of the top hubs for gaming in the country with an established market in the Bay Area that is extending further south into Santa Monica and Venice — an area that is emerging as the “Silicon Beach” due to its growing base of companies and tech workers. California also has a strong healthcare industry, as well as a growing green energy sector.

The state also is home to key life sciences clusters in both San Diego and the Bay Area. In fact, Jones Lang LaSalle ranks San Diego and the Bay Area as second and third, respectively, among the top life sciences clusters in the nation. California’s 2,324 biomedical companies employ an estimated 267,000 people and account for $115 billion in annual revenues, according to the California Healthcare Institute.

A notable trend in San Diego in the past year has been a flurry of M&A activity. The local market recorded $13.8 billion in eight M&A deals, according to Jones Lang LaSalle. It remains to be seen how those acquisitions will impact plans to expand — or contract — existing operations. One sizable announcement is Shire Pharmaceuticals’ plan to build a new 170,000-square-foot facility in Sorrento Mesa to house manufacturing and warehouse functions.

The site also will be able to accommodate future growth up to 800,000 square feet.

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financing in the U.S in 2011, according to an Ernst & Young venture capital report. “California has a lot going for it. It is highly diverse, and that diversity will continue,” says Smith.

TRADITIONAL INDUSTRIES PROVIDE A SOLID BASE Although Silicon Valley and the glamour of the state’s thriving movie and television industry are more apt to grab the spotlight, the state is home to steady workhorse sectors such as manufacturing, shipping, and energy.

California is by far the numberone state for manufacturing — both in terms of jobs and output.

Manufacturers in California account for 11.7 percent of the state’s total output and employ almost 9 percent of the work force. Total output from manufacturing was $229.9 billion in 2011, significantly more than for any other state, according to the National Association of Manufacturers. “Manufacturing will continue to be an enormously strong segment in California for many years to come,” says Smith.

Another traditional sector where California continues to reap the benefits is agriculture; the state produces everything from almonds to wine. California is also the number-one state for agriculture revenues. The state’s 81,500 farms and ranches posted record sales revenues of $43.5 billion in 2011, which represents 11.6 percent of the U.S. total, according to the California Department of Food and Agriculture. “As the country continues to demand fresh food, healthy food, and organic food, California will continue to be an

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enormous [agricultural] leader,” says Smith.

Another traditional source of revenue is the state’s busy ports. The San Pedro Bay ports of Los Angeles and Long Beach are the two largest container ports in the nation. Imports from the Pacific Rim countries are responsible for a lot of activity of multinational 3PL providers as well as distributors coming into the San Pedro area. The Inland Empire is one region that has benefited from that business with considerable expansion in the last 10 years as trade from the Pacific Rim into the United States has increased. However, there are some predictions that the Panama Canal expansion could grab 20 to 30 percent of the shipping volume that is now coming into the California ports of Long Beach and Los Angeles.

BATTLING COMPETITIVE PRESSURE Despite California’s many strengths, the state does face increased competition from other states such as Texas, Arizona, and Nevada. Yet, according to McBride, those businesses that do choose to move out-of-state are only a very small fraction of the broader business base. “For us, retaining businesses is maintaining businesses. We work with them to deal with their issues — from permitting to capacity to capital — wherever possible, and as early as we can to identify issues in which we might assist,” she says.

Another area where California is gaining ground is getting businesses to consider regions within California that they might not know about. For example, the state has a variety of communities with strong research university partners, able work

forces, and great infrastructure — cities outside of the San Francisco Bay Area or Southland (i.e., Los Angeles, Orange, San Bernardino, Riverside, and Ventura counties).

Certainly, businesses are attracted to the state’s work force, support for emerging technologies, and a strong academic base that

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CITY OF STOCKTON

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Your business can thrive with the Sacramento Municipal Utility District (SMUD) as your electric service.

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

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encourages R&D and innovation. Those are just a few of the attributes that have helped to establish California as the number-one destination for foreign direct investment in the country and a prime target for venture capital investment. “People don’t come to California to do small things,” McBride concludes.

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