Area Development Q2 Issue 2020

2020

FINDING TALENT IN A TIME OF ECONOMIC CHANGE

SHOVEL AWARDS PAGE 30

INNOVATION IN AMERICA REACHES NEW HEIGHTS

AREADEVELOPMENT NOW NEXT LATER PAGE 26

SITE

AND

FACILITY

PLANNING

PAGE 22

Q2/2020

The coronavirus pandemic is driving companies to focus on near-term survival and long-term supply chain challenges.

W W W. A R E A D E V E L O P M E N T. C O M

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America’s top state for talent

Ranked No. 1 in America for both talent and education by CNBC, Virginia continues to raise the bar when it comes to talent development.

Virginia Talent Accelerator Program: offers world-class, fully-customized workforce recruitment and training solutions — at no cost to eligible companies Tech Talent Investment Program: commits more than $1 billion to produce 31,000 new graduates in computer science and related fields in the next 20 years (in excess of current levels) Computer Science in K-12: Virginia is the first state to incorporate computer science, including coding, as a mandatory part of the curriculum for all public school students, from kindergarten through graduation

CONTENTS

18

Cover Story

A

Now, Next, Later

Approach for Dealing with Pandemic Challenges The coronavirus pandemic is driving companies to focus on nearterm survival and long-term supply chain changes.

Typical Market Longevity Modeling Inputs 26 Finding Talent in

SCALABILITY

As millions of idled workers start to return to the workforce, the need for workforce development programs will be greater than ever before.

•

features

• Highlight Importance of Skills

Businesses and communities will find that the solution to their post-COVID workforce problems is the same: skills.

SENSITIVITY ANALYSIS

14 Accelerated Trends

22 Innovation in SUPPLY •SKILL SPECIFIC

16 •“Future-Proofing” WAGE DEPENDENT Corporate Location Decisions in Uncertain Times

Despite today’s unprecedented labor market uncertainty, predictive people Figure 1:can still be used analytics to understand exposure to the economic ramifications of the current crisis.

a Time of Economic Change

America Reaches New Heights

DEMAND •CLIENT GROWTH & TURNOVER

•COMPETITION If necessity is the mother of invention, the COVID-19 •Wage arbitrage crisis is driving cooperative innovation by companies, •Competitive risk government entities, and healthcare organizations.

•Demand changes

56 A Disciplined Road •Future growth Map for Industrial Site Selection

By gaining real data in the pre-capital planning stage, a business can achieve a solid basis for making critical operational and locational decisions.

Area Development® Site & Facility Planning (USPS 345-510) is published four times per year (Q1, Q2, Q3, and Q4) 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, $20. Yearly subscription U.S. & Canada, $75; foreign, $95.

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Volume 55 | Number 2 Q2/2020

Healthcare “America’s healthcare system is neither healthy, caring, nor a system.”

Walter Cronkite, Jr. (1916–2009), American broadcast journalist who served as anchor for the CBS Evening News from 1962 to 1981.

departments

4 Editor’s Note

Guidance for the “New Normal”

6 In Focus

When — and How — to Ramp Up the Workforce

59 Redevelopment of

Former Coal Plant Sites

8 In Focus

Industrial real estate firms are joining environmental investors to redevelop former coal plant sites in an effort to breathe new life into the communities where they are located.

FDI Will Signal Better Days

10 Front Line

Inland Ports Spur Distribution Growth

62 The Nature of

Incentives Compliance in the Age of the Coronavirus

12 First Person

Although compliance may not be top of mind for business during the pandemic, renegotiation may be possible, and incentives could be more important now than ever before.

64 Ad Index/Web Directory

Michael Vetter, Senior Project Manager and Senior Associate, SSOE Group

exclusive online content • Assembling the Right Site Selection Team • Smart Facilities and Industrial IOT in the Era of 5G

Also RESPONSES TO THE COVID-19 CRISIS from experts at:

special report

30

While the current COVID-19 crisis may put some development on “pause,” our annual Shovel Awards recognize states that garnered large job-creating and investment projects over the course of the previous year.

2020 2020

GOLD & SILVER

SHOVEL AWARDS

• Jones Walker Consulting • McGuire Sponsel • Parker Poe Consulting • Cresa

• Compass Key Site Solutions • Terrafinder Consulting

• Kupperman Location Solutions • ESRP • Boyette Strategic Advisors • JLL • Savills • McGuireWoods Consulting

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 2020 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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EDITORS NOTE

Q2/2020

Guidance for the “New Normal”

I

n early March, we were worried about supply chain disruptions because of the novel coronavirus spreading in Asia. Just two weeks later, our country — and economy — basically shut down as COVID-19 spread throughout the United States, ending the country’s longest economic expansion on record.

At the end of the first quarter, the U.S. economy contracted by 4.8 percent — the steepest contraction since Q4/2008 during the Great Recession, according to the Bureau of Economic Analysis.1 How should businesses respond to this crisis? In this issue, several consultants to industry have provided our readers with some advice. Specifically, Kate Crowley and Jeff Jorge from Baker Tilly provide an approach for “now, next, later.”

The “now” strategy focuses on financial considerations, i.e., getting the capital your business needs; reexamining supply chains and inventory; and strategic planning.

“Next” come plans for sustaining business for the medium term. And strategies for “later” include preparing your company for the economic recovery, including considering strategies for perhaps reshoring or near-shoring some of your supply chain.

As the economy begins to re-open, there is also the question of putting the millions who have been laid off or furloughed back to work. Managers should rank workforce openings based on their potential economic and strategic impact, according to Kent Cornell of UHY Advisors. SSOE Senior Project Manager Michael Vetter says it’s also important for companies to make sure their employees are — and feel — safe on the factory floor.

Ways of operating may never go back to the way they were, according to economic modeling firm Emsi, so businesses need to prepare for a reshuffling of the workforce, with some employees moving into newly created or significantly altered roles. Importantly, those companies that have received incentives based on job-creation and investment numbers, may now need to go back to incentive-granting authorities to renegotiate terms.

Go to https://www.areadevelopment.com/covid-19-response/ to read more about incentives renegotiation and other ways the COVID-19 crisis will affect business operations. Highly regarded consultants to industry present their views on how companies — and taxing authorities — should prepare for the “new normal.”

As we continue to navigate these uncertain times, Area Development will continue to provide our readers with information to help guide their site and facility planning needs.

www.areadevelopment.com EDITORIAL Editor Geraldine Gambale editor@areadevelopment.com Staff and Contributing Editors Lisa Bastian Tom Gresham Dave Claborn Mark Schantz Mark Crawford Steve Kaelble Dan Emerson Karen Thuermer Tom Ewing

DESIGN/PRODUCTION Art & Design Patricia Zedalis Production Manager Jessica Whitebook jessica@areadevelopment.com

EXECUTIVE Publisher Dennis J. Shea dshea@areadevelopment.com Sydney Russell, Publisher 1965-1986

ADVERTISING SALES William Bakewicz (ext. 202) billbake@areadevelopment.com

ONLINE SERVICES Digital Media Manager Justin Shea (ext. 220) jshea@areadevelopment.com Web Designer Carmela Emerson

CONFERENCES/EVENTS Business Development Manager Matthew Shea (ext. 231) mshea@areadevelopment.com

CIRCULATION

Editor

circ@areadevelopment.com

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https://www.reuters.com/article/us-usa-economy/coronavirus-savages-u-s-economy-in-first-quarterbigger-hit-still-to-come-idUSKCN22B0A1

EXECUTIVE OFFICES Halcyon Business Publications, Inc. President Dennis J. Shea

2020 Editorial Advisory Board Josh Bays, Principal, Site Selection Group, LLC Marc Beauchamp, President and CEO, The CAI Global Group H. Robert Boehringer, III, Managing Director, Global Location and Expansion Services, KPMG Brian Corde, Managing Partner, Atlas Insight, LLC Les Cranmer, Senior Managing Director, Savills Kate Crowley, Principal, Baker Tilly Capital, LLC Dennis Cuneo, Partner, Fisher & Phillips LLP

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Amy Gerber, Executive Managing Director, Business Incentives Practice, Cushman & Wakefield

Bradley Migdal, Senior Managing Director, Business Incentives Practice, Cushman & Wakefield, Inc.

Stephen Gray, CEO, Gray

Paul Naumoff, Principal, National Director of Tax Credits and Investment Advisory Services, EY

Michael Kruklinski, Head of Real Estate, Siemens Energy and Siemens USA Scott Kupperman, Founder, Kupperman Location Solutions, LLC Dan Levine, Practice Leader, Location Strategies and Economic Development, Oxford Economics, Inc. Bill Luttrell, Director of Corporate Real Estate, Werner Enterprises, Inc.

Eric Stavriotis, Senior Vice President, Advisory & Transaction Services, CBRE Margy Sweeney, Founder & CEO, Akrete, Inc. Dan White, Director, Government Consulting and Fiscal Policy Research, Moody’s Analytics Joshua Wright, Vice President, Economic & Workforce Development, Emsi

Finance Mary Paulsen finance@areadevelopment.com Business/Finance Assistant Barbara Olsen (ext. 225) olsen@areadevelopment.com All correspondence to: Area Development Magazine 400 Post Avenue, Westbury, NY 11590 Phone: 516.338.0900 Toll Free: 800.735.2732 Fax: 516.338.0100

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INFRASTRUCTURE

GEORGIA MOVES AT THE SPEED OF BUSINESS Georgia is No. 1 for U.S. distribution and supply chain hubs, offering unparalleled access to domestic and global markets, thanks to the state’s robust rail and highway infrastructure, the busiest and most efficient airport in the world and the fastest-growing container port in the U.S. Add to that the intersection of two of the nation’s largest fiber-optic trunk routes, plus the world’s largest cold storage network, and it’s no wonder why so many businesses are proud to call Georgia home.

Visit us at Georgia.org/Infrastructure when you’re ready to begin the conversation.

IN FOCUS When — and How — to Ramp Up the Workforce

those roles at the top of the list.

Although the COVID crisis has forced companies to lay off or furlough employees, they need to consider talent acquisition strategies now.

Don’t quit the hiring process.

•

BY KENT CORNELL, Managing Director, UHY Advisors

Kent Cornell is a managing director with UHY Advisors and serves as the St. Louis office’s director of Consulting Services.

Kent has more than 35 years of public accounting and consulting experience with public and privately held companies on a variety of accounting, financing, tax, and business planning issues.

With the uncertainty in the future of businesses and the length of the coronavirus pandemic, many companies have responded to the crisis by moving to conserve money as quickly as possible. Steps taken to do this have included laying off or furloughing staff, reducing contractors and consultants, placing a freeze on new hires, and reducing compensation.

Many of these steps were necessary for companies to take due to the unforeseen collapse in the economy and a lack of demand for their services. However, companies now need to consider when is the right time to re-engage with talent acquisition and

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what are the right processes to follow.

With millions of people out of work due to the pandemic, now more than ever, companies are challenged to successfully execute the day-to-day project demands while quickly ramping up their workforces. With a previously tight labor market in the manufacturing sector, how should companies proceed in the talent acquisition process?

Prioritize investments.

Initially, during a crisis that is affecting a company’s bottom line, a broad policy to conserve cash is a smart way to

The hiring process can be difficult to re-start, which can cost valuable time and money. It is important that companies continue to interview candidates, with most interviews taking place virtually until people are more comfortable being face-to-face. The interviewers should always explain the company’s situation and anticipated timeframe and continue to stay in touch with candidates, as they always appreciate ongoing communication.

Utilize technology.

As previously mentioned, the traditional in-person interview approach is going to be

MANAGERS SHOULD RANK OPENINGS BASED ON POTENTIAL ECONOMIC AND STRATEGIC IMPACT. go. However, eventually some investments will need to be made to move the business forward. Mission-critical hires should be considered as part of that process. Accordingly, management needs to systematically consider each open role.

As part of that process, managers should rank openings based on potential economic and strategic impact. Careful consideration should be given to starting (or restarting) the search for

very difficult to perform for the foreseeable future. While not a perfect substitute, utilizing technology does allow the process to move forward.

For companies with IT and human resources departments, consider implementing solutions to support the hiring and onboarding of remote or dispersed hires. With support from multiple departments, managers can continue to rank candidates and eliminate those who do not fit

the position.

From a business development standpoint, keep in mind that many companies are already using technology to ask candidates to respond to a standard set of questions through either video or audio technology. This initial impression forms the basis for the next steps in the selection process. Companies should now apply a similar approach to their own hiring process.

Be ready for action.

The current situation will require companies to act quickly in order to fill key positions and maintain existing talent. Managers should be ready to engage with candidates and move to hire when they feel the time is right. In this environment, candidates, who were thought to be unavailable a few months ago, may be willing to consider new opportunities.

Furthermore, with an increased reliance on technology to operate, will the company’s less technically skilled employees require training to stay relevant to the new normal? Is the company modifying training programs to reach remote employees? Be prepared to balance out the addition of highquality employees to the existing company workforce.

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IN FOCUS FDI Will Signal Better Days The value and impact of FDI will remain an important part of the economic recovery from the coronavirus pandemic.

•

BY KENNY MCDONALD, President and CEO of One Columbus; and Chairman, International Economic Development Council

As president and chief economic officer, Kenny McDonald serves as the primary leader of all economic development and business attraction efforts for the 11-county Columbus, Ohio, region. He has an extensive background in site selection, regional economic development, community marketing, business recruitment, and international business development.

For decades, the pursuit of foreign direct investment (FDI) has become a component of nearly every state and metro’s economic development strategy, and for good reason.

FDI creates high-paying jobs in nearly every sector of the economy; it provides investment in communities both rural and urban; and it builds ties between places and people that forge incredibly important cultural ties. It could be said that foreign investment makes the world a better and safer place.

This is true in Ohio.

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Honda’s investment in the early 1980s changed the U.S. automotive industry and has become one of the most important economic drivers in the Columbus region four decades later. That investment — along with hundreds of others from around the world that have since joined Honda — has generated

also going to help ensure that our core supply chains are resilient and secure. Technology and know-how from around the world will help achieve this goal in the United States and in other markets around the world.

The U.S. will also benefit greatly from its own companies’ ability to create investment and

STUDIES SUGGEST THAT INNOVATION IS ALSO ENHANCED THROUGH ENTERING NEW MARKETS billions of dollars and stimulated thousands of jobs in Central Ohio and, in fact, throughout the country.

FDI as a Signal of Economic Health While it is still too early to determine the full impact that COVID-19 will have on globalization, it will likely remain true that the value and impact of FDI will remain an important component of any recovery strategy. In fact, the return of foreign investments into the U.S. will signal that our economy is stable and growing.

Investment into the United States is critical to create jobs and tax revenue locally, but it is

jobs across the globe.

Each time a company invests abroad, jobs are also created in their own country. Studies suggest that innovation is also enhanced through entering new markets.

FDI as a Signal of Economic Competitiveness For communities, there is a correlation between FDI in a region and overall competitiveness of the location.

Foreign investments typically demand additional scrutiny by company management and by their boards because they are going into unknown territory. The ability of a

location to secure such investments shows a location’s ability to control costs, reduce risk, and supply a talented, adaptable workforce.

FDI also functions as a multiplier: if foreign investment is thriving in a location, other investments — both foreign and domestic — will soon follow to help support and enhance the foreign investment.

An initial investment like Honda’s also has the power to change perceptions of a location as an open and progressive place. From BrewDog beer to Magnanni shoes, many Columbus region residents not only make products made by foreign companies, but also consume and enjoy those products on a daily basis.

As we seek to recover and rebuild, foreign investment will be a highly sought-after prize — a sign that we’ve reached stable ground again and a necessary component for any regional economic strategy.

(See also Post-Pandemic Opportunities for FDI – https:// www.areadevelopment.com/ covid-19-response/Q2-2020/ resiliency-of-supply-chains-postpandemic-opportunities-FDI. shtml)

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5/26/20 11:18 AM

READY TO SUCCEED

MISSISSIPPI IS READY. Mississippi won a second consecutive Gold Shovel Award in 2020, and ninth consecutive shovel award overall. Our skilled workforce and innovative public policy have forged partnerships with companies like Amazon, Fresenius, VT Halter Marine and Relativity Space.

Don’t miss out on striking gold in Misissippi.

VISIT MISSISSIPPI.ORG TO FIND OUT MORE. SA F - T - CA R T - C L A R KS D A L E , M I S S I S S I P P I

FRONT LINE Inland Ports Spur Distribution Growth Locations in the middle part of the country provide an alternative to coastal seaports while providing quick intermodal connections to the nation’s interior.

Woodfield Distribution Services (WDSrx) is a medical distribution company that has located to the Columbus/Rickenbacker area.

•

BY KAREN E. THUERMER

Inland ports serve an important role in attracting businesses. They offer companies an opportunity to bypass congested coastal deepwater seaports and move goods inland — usually by rail.

While inland ports are found around the country, several middle America locations that have benefited include Kansas City (KS/MO); St. Louis, MO; and Columbus, Ohio.

Distributing to the Medical Community In Columbus, Rickenbacker Inland Port — with its Rickenbacker Global Logistics Park — is particularly providing value during the COVID-19 pandemic by offering a platform that connects the area’s logistics/distribution community with the healthcare industry, to which it supplies critically needed medical equipment. Assets at the inland port include an international cargo airport, rail intermodal facility, CSX

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and Norfolk Southern (NS) railroad service, and a U.S. foreign-trade zone.

“Twin-Med and Woodfield Distribution Services (WDSrx) are two of several medical distribution companies that have located to the Columbus/Rickenbacker area over the last few years to take advantage of the region’s logistics benefits,” revealed Sarah McQuaide, spokesperson for the Columbus Regional Airport Authority.

WDSrx President Adam Runsdorf explains that the company decided to open a distribution center (DC) in Columbus in 2018 because from that location WDSrx can reach a greater population within a 10-hour drive than from any other location in a major metropolitan area. The expansion, he says, also supports the company’s strategic plan to develop key locations in pharmaceutical hubs around the U.S.1

A Bi-State Inland Port The array of logistics resources catalyzed by KC Smartport in Kansas City illustrates the potential for regional development of integrated intermodal systems, inland ports, and logistics parks. The area currently has four intermodal parks, with another intermodal distribution project being developed.

“The rapid growth of ecommerce has fueled development of warehouses and distribution centers, specifically with U.S. inland-port markets such as Kansas City,” reports Chris Gutierrez, president, KC Smartport. He stresses how inland ports like KC Smartport give companies access to land and buildings at lower prices and operating costs than most crowded coastal port cities. “Many manufacturers and distributors bring product via rail inbound to the inland port, thereby saving on transportation costs and potentially traffic delays,” he adds.

Making Regional Rail Connections Rail lines are interested in investing in inland terminals where they can extend their services deeper into customer supply chains. A good example is BNSF Railway’s most modern logistics park, the Logistics Park Kansas City (LPKC). With 1,700 acres, LPKC is the largest intermodal facility in the Kansas City market.

The St. Louis Regional Freightway emphasizes that region’s assets, includ-

ing being home to one of America’s largest inland ports; four interstates; five airports; and six Class I railroads. Last year, St. Louis Regional Freightway and Georgia’s Port of Savannah, unveiled a partnership to create stronger rail connections between the two locations, effectively creating an inland port that will enable shippers using the fast-growing container port to distribute products more easily to interior markets. The Freightway bills it as “a new connection between the St. Louis region and the largest single-terminal container facility in the Western Hemisphere.”

“I cannot overstate the potential of this new partnership and the opportunities it can create to develop stronger links between our region’s worldclass freight capabilities and national and global supply chains,” says Mary Lamie, Freightway’s executive director.

As part of a $3 billion program to increase containerized cargo capacity, Georgia Port Authority officials are looking to develop a $220 million onterminal rail facility, which can increase annual capacity to one million containers a year. They refer to the project as the Mid-American Arc. With such expanded capacity, planners hope for faster and more frequent CSX and NS rail service between the two locations.

1

https://www.wdsrx.com/woodfielddistribution-llc-continues-expansion-with columbus-oh-area-distribution-center

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5/26/20 11:21 AM

FIRST PERSON MICHAEL VETTER | SENIOR PROJECT MANAGER AND SENIOR ASSOCIATE | SSOE GROUP |

The global COVID-19 pandemic has caused some manufacturing plants to temporarily suspend — wholly or in part — their operations because of employees suffering illness.

What — and who — is involved in coordinating the suspension of operations?

Vetter: To my knowledge, I don’t believe that we have seen this type of activity happening within our food and consumer products clients’ operations. In fact, what we are experiencing is a ramp up in production on their existing lines. Lines that had some, or even significant amounts of idle time in their production schedule prior to COVID-19, have now been replaced with increased production time in order to meet the higher demand of keeping food on the grocery store shelves, especially ready-to-eat (RTE) foods as well as household cleaning products, disinfectants, hand sanitizer, and toiletries.

One drawback we have seen as a result of this increase in production is that some of the new product projects that our clients were currently undertaking had to be put on the back-burner to meet the higher demands for their existing products. The idle time required for the construction and modification of the lines for those new products and projects is now a very low priority. Currently, there is no appetite from the general population for the next “new” or “improved” product. The old tried-and-true staples are in great demand right now.

What is being done at these plants during this time as far as cleaning and maintenance, etc.?

Vetter: In the food manufacturing world, cleaning and maintenance are second nature. Having appropriate cleaning plans for product switches and end-of-run productions is standard and something these manufacturers are accustomed to performing. Meeting the FDA guidelines for that is adequate during the current pandemic. However, general cleaning of frequent touch points such as door handles and handrails has increased significantly.

How are outside contractors and/or vendors dealt with at those plants that do suspend operations?

Vetter: As mentioned previously, we haven’t experienced any suspended operations with our clients, but

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we have heard, in cases such as these, most vary by client. Some clients shut their doors to outside vendors completely, while most have followed state and local guidelines that have labeled construction as an “essential” business, so engineers and contractors are allowed in the facility. Overall, in these facilities, there are health assessments/checks with a questionnaire and temperature checks performed prior to any persons entering the facility.

How do companies handle “social distancing” of employees while they are working?

Vetter: Companies are utilizing social distancing as much as possible. They are removing tables/chairs in the lunchroom, decreasing occupancy counts in both conference and meeting rooms, having individuals wear masks — all are standard practice right now. It is also known within this industry that some jobs and tasks must be performed with another employee and social distancing cannot be adhered to. Those types of tasks and contact are being minimized, if possible, and performed only if they can be done safely.

What about retooling plants, e.g., GM now making ventilators? Other examples?

Vetter: One of SSOE’s consumer products manufacturing clients approached us to assist them with the conversion of a portion of their batch tanks to make hand sanitizer solution. It was adapted extremely quickly to help meet the immediate increase in demand. The client produces this sanitizer for donations to local hospitals, nonprofit

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agencies, and first responders. However, this may become a long-term line as market demand has increased and is expected to remain high.

Many other clients have done what they can, either on an individual level or as an industry group. Utilizing 3D printers, both the companies themselves — and their employees personally — are making face shields and face masks. Additionally, many are making donations of N95 masks to front-line personnel in hospitals and EMT staff. There are a lot of kind actions being performed by many.

Once a business decides it is safe to re-open, what stages must it go through to get up to capacity again?

Vetter: Ensuring their employees can be safe and feel safe is of upmost importance. There are several measures that must be taken to ensure this prior to returning. Some of those tasks include reconfiguring workspaces, offices, and furniture/equipment to help ensure social distancing, making individual face coverings available for each and every employee, creating traffic patterns with designated stopping points and physical barriers for employees if necessary, etc.

Internally, SSOE has created a Return to Office Playbook developed by our COVID-19 Core Team, which details plans for the short-term that need to be executed, as well as policies and procedures associated with moving forward into our new normal.

It will be some time until things get up to full capacity again though. We believe the best approach is a staged process, where only a portion of the employees come back at a time, using alternative work schedules allowing for social distancing. This can occur especially if others can work remotely to help support this effort.

Having the proper inventory of PPE, including face masks and hand sanitizer, is a must. All of these things need to be looked at to ensure a smooth and safe transition back.

How does the company maintain the trust of its employees that the workplace is now safe?

Vetter: Employers should be completely transparent with their employees on exactly what they can do and what they can’t. All must follow CDC guidelines to help ensure safety, whether that is adhering to the number of personnel allowed, to taking temperatures of personnel, and providing appropriate PPE to all.

THE ASSIGNMENT In light of the COVID-19 crisis, Area Development asked SSOE Group’s Michael Vetter about what companies are doing to keep their operations up and running and their employees safe.

The world has changed.

The importance of data hasn’t.

W H AT E V E R Y O U R S I T U AT I O N , E M S I D ATA I S H E R E T O H E L P.

FOR SALE

COMMUNITY

BROKER

EXECUTIVE

helping businesses recover

adapting to a new market

assessing location needs and options

Economicmodeling.com AREA DEVELOPMENT | Q2 2020

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LABOR

Accelerated Trends Highlight Importance of Skills Businesses and communities will find that the solution to their post-COVID workforce problems is the same: skills.

By Drew Repp, Content Manager, Emsi

A

recent Brookings article1 touched on trends that the COVID-19 pandemic will likely accelerate. Many of them were already familiar to communities and economic developers: automation, the housing crisis, the necessity of ubiquitous broadband, and the struggles of microbusinesses. And businesses are also keenly aware of shifts in the economy that were already in motion: (again) increasing automation, rise of remote work, difficulty in finding talent, and oftentimes retaining that talent.

The key for communities and businesses in traversing the labor market shifts was identifying in-demand skills, connecting individuals with those

Most Important Skill Levels

The Reshuffle

Operation & Control Judgment & Decision-Making

100

Active Listening

75 Social Perceptiveness

Time Management

50 25

Critical Thinking

0

Service Orientation

Operation Monitoring

Speaking

Reading Comprehension

Writing Monitoring

Level Overlap

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Skill Gap

skills to jobs and, when necessary, connecting them to training for upor re-skilling. This is still true, and now perhaps more urgent. Skills are what people have and employers need. And as the economy begins to re-open, there will be millions of people ready to put their skills to work. And as businesses begin either backfilling or making strategic investments in their workforce, finding the right talent with the right skills will be their biggest need.

While the economy will start up again, it’s difficult to predict exactly what that recovery will look like. There are too many unknowns, variables, and regional differences to predict with much certainty. But with such a major disruption, it’s inevitable that a reshuffle will take place. Things simply can’t go back to the way they were. Consider these possible scenarios and combinations of each: •W orkers are able to return to their old job.

•E ither because their UI (unemployment insurance) payments exceed what they would make in their old job or available new one, workers don’t immediately return to the labor force.

•R ather than return to their old job, workers enroll in school or invest in training.

• Employers rehire laid off employees.

•E mployers, out of necessity or be-

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5/26/20 11:31 AM

cause of innovative solutions, conclude they can operate with a slimmer workforce and don’t rehire laid off employees.

•E mployers rehire laid off employees, but with changes in duties, hours, required skills, or a combination of all three.

These are a few of many scenarios, all of which will occur to varying degrees. But a thread through all of these scenarios, and the labor market trends which were already in motion, is the need to better connect job-seekers and employers. Skills have been emerging as that connection and the COVID-19 pandemic and economic fallout will accelerate the need for utilizing a skills-based approach both in job-seeking and in hiring.

In the near-term, businesses, communities, and individuals will need to leverage skills in order to temper the economic fallout of COVID-19.

BUSINESSES: Multiple Options to Help Workers In an April analysis, McKinsey noted that “0ne of the lessons of the last downturn is that completely severing the relationship between employers and employees tends to lengthen unemployment. To the extent that companies can implement reduced hours, temporary furloughs, or creative job-sharing and redeployment programs instead of outright layoffs, the entire economy will be better positioned for a faster and stronger recovery.”2 Skills can be the Rosetta Stone for such redeployment programs and provide ways to limit outright layoffs.

By analyzing the skills of their existing employees, businesses needing to pivot can determine which employees can move into newly created or significantly altered roles. Such an analysis will also reveal what training, either internally or through a learning provider, could be delivered to upskill an employee into a role.

Perhaps creating a new role that utilizes the skills of two employees, each on a part-time basis, is a solution to prevent outright layoffs.

In the event an employee can’t be retained, helping them understand their skills as they seek another opportunity can reduce the length of unemployment. Employers who work with their employees on finding a landing spot not only support a quicker economic recovery, but also maintain a positive relationship through a difficult time.

COMMUNITIES: Skill Transferability Triage Transferring of skills is an area where businesses and communities can and should work together closely.

McKinsey went on to say, “When furloughs and layoffs are unavoidable, employers can take steps to help the newly unemployed land on their feet. Participating in digital platforms can help furloughed and laid-off workers connect with organizations that need temporary help to meet surging demand. Some companies that are downsizing are already forming direct partnerships with organizations that are hiring to help make these work-

force transitions faster and more seamless. Furloughs can also provide a window, through online training, for employees to develop the skills that employers envision needing in the future.”

Economic and workforce development organizations can showcase these connections, particularly in the realm of skill transferability, thereby helping both businesses in need of talent and job-seekers in need of work.

Take for example the immediate slowing and, in some cases, ceasing of construction activity. The near-term impact is substantial, but with a slow economic recovery, construction won’t just resume once social distancing measures are relaxed.

At the same time, with the increase in home delivery, there is a need for light-truck drivers. Emsi’s Skills Transferability report uses O*Net Occupations to find links between occupations. A Compatibility Index of 93 (out of 100) exists between construction laborers and light truck or delivery services drivers. The accompanying radar chart depicts those minimal skill gaps, meaning a quick transition can occur for these workers.

Finding these sorts of skills connections are needed to support job-loss mitigation efforts.

INDIVIDUALS: Making the Most of a Bad Situation While not a desired or ideal situation, individuals furloughed, laid off, or waiting to return to work can make the most of a bad situation. Massive open online courses (MOOCs) afford these workers the opportunity to up- or re-skill. While the pandemic has forced a digital disruption of higher education that was needed, MOOCs are one of those trends that already existed but now will accelerate.

In addition to examining their resume based on skills, individuals can audit their existing skills to determine necessary training to make career advances. To help them make the right training decisions, businesses along with economic and workforce developers can provide industry and regional insights about the nuance of in-demand skills in their area.

The Bigger Picture of Skills Economic and workforce developers have been keenly aware of the importance of skills in developing talent supply. The COVID-19 economic fallout is accelerating and shining a light on this already existing trend. While skills are valuable for immediate economic recovery efforts, they just as importantly provide the framework for data-driven workforce strategies in the mid- and long-term. This was true before COVID and is truer postCOVID. As regions and states develop re-employment strategies, skills provide the right data for policy and decision-making, alignment of learning providers and stakeholders, and connecting job-seekers with businesses in the skills-based marketplace. n 1

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https://www.brookings.edu/research/how-covid-19-will-change-the-nations-long-termeconomic-trends-brookings-metro/ https://www.mckinsey.com/industries/public-sector/our-insights/covid-19-and-jobsmonitoring-the-us-impact-on-people-and-places

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PEOPLE ANALYTICS

“Future-Proofing” Corporate Location Decisions in Uncertain Times Despite today’s unprecedented labor market uncertainty, predictive people analytics can still be used to understand exposure to the economic ramifications of the current crisis.

By Chris Volney, Senior Director, CBRE Labor Analytics

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Typical Market Longevity Modeling Inputs

SCALABILITY

• • SENSITIVITY ANALYSIS

ite selection has traditionally focused on analyzing and comparing markets based on their current — and sometimes historical — capacity to support a corporate ender user’s organizational objectives. More recently, a fundamental shift is under way where clients are challenging their consultants and candidate communities to also provide assessments of future market conditions, particularly surrounding talent. This forward-looking approach mitigates risk around the final location decision and aims to ensure that the selected market will align with the company’s long-term location and people strategy. Clients are increasingly requiring a site selection analysis that solves for their future workforce needs and doesn’t only consider today’s economic and talent landscape.

In other words, the process for determining optimal locations for new business operations is becoming a “both…and” proposition, where clients want to know that their chosen market affords optimal conditions for supporting successful talent attraction and retention on day one, as well as “future-proofing” their decision to ensure that conditions remain favorable over the longer term.

The CBRE Labor Analytics team’s approach to predicting the shifting

SUPPLY •SKILL SPECIFIC •WAGE DEPENDENT

DEMAND •CLIENT GROWTH & TURNOVER

•COMPETITION •Wage arbitrage •Competitive risk •Demand changes •Future growth

Figure 1:

fundamentals of a labor market is mostly science…with some art.

While market forecasting is based on regression modeling and other predictive analytic techniques, it also benefits from combining these forecasts with an historical knowledge of the nuances and unique traits of each labor market to bet-

ter understand how they may be uniquely impacted by future trends.

Longevity and Scalability Clients generally frame their concerns about a market’s long-term sustainability in a series of questions related to a market’s longevity and scalability. The themes we

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commonly hear from our clients boil down to these four questions: 1. H ow much will I be able to scale my headcount in this location?

2. How many years can I be successful in this market?

3. W hat wage levels will I need to pay to remain competitive?

4. Should I renew my lease in this market?

A typical site selection exercise identifies the most viable markets by optimizing factors surrounding talent availability and quality, cost, and the presence of direct competition for talent. The previously mentioned questions are driving at the clients’ desire for risk avoidance around these factors. They prefer to bypass markets that may be especially susceptible to future saturation levels that would hinder the company’s ability to add and retain future headcount while exposing them to upward wage pressures and the erosion of potential cost savings.

Developing an informed perspective on these questions benefits from a dynamic risk approach to market forecasting. The first step in this process is creating projections of key high-level supply and demand factors that will have a material impact on a market’s future talent availability and cost structure. For example, a favorable future market would provide a sizable and growing pool of desired skills, limited growth in hiring demand from competitors, and sustainable levels of wage growth.

Some of the specific forecasted factors that can be used as inputs to estimate a market’s potential longevity and scalability (i.e., future risk) include: •S upply side: employed candidate pool/skill set, annual labor force growth, turnover/attrition rates, unemployment rate, etc.

• Demand side: headcount growth of the competitive set vs. client’s expected hiring demand The resulting market longevity/risk assessment provides the client with an informed outlook regarding its ability to satisfy its specified hiring needs without being exposed to a tipping point that threatens to offset the market’s current equilibrium. The output of the risk assessment can be expressed in years to provide an estimate of how long the client can operate in the market before running into a higher risk of saturation. This is where two markets that appear to exhibit similar characteristics today may perform very differently in the future according to the results of the risk modeling.

Scenario Planning This approach also lends itself to scenario planning, wherein the client can visualize how market risk is impacted by potential changes to internal and external factors, including changes to client’s expected pay scale, its ability to increase its own hiring (i.e., scalability), assumptions regarding the hiring needs of competitors,

and changes to other macroeconomic indicators such as the unemployment rate and overall turnover rates.

While economic forecasting is never 100 percent accurate, this approach does empower clients to make informed decisions regarding a market’s potential risk based on the continuation of current trends and the likely impacts of other exogenous factors such as a spike in hiring by a direct competitor or a major upswing in unemployment due to an economic recession. The client can enter a new market with greater confidence regarding the range of potential outcomes in the local market and how its hiring plans and compensation approach fit into this bigger picture.

This type of modeling could never have predicted cataclysmic societal and economic events such as the COVID-19 pandemic and resulting economic downturn, but it does allow the client and consultant team the flexibility to model likely market conditions under a range of possible outcomes, including rapid broad-based macroeconomic shifts.

Current Unprecedented Labor Market Uncertainty Given the unprecedented labor market uncertainty resulting from COVID-19, CBRE’s predictive analytics is using our historical knowledge of the industry composition of U.S. markets as an input to risk modeling to understand each market’s degree of exposure to the economic ramifications of the current crisis. The impacts will not be felt uniformly across all geographies at the same time.

Specifically, we’ve divided industry sectors into three buckets: “first wave,” “second wave,” and “resilient” industries based on the likely timing and degree of impact. Markets that are heavily comprised of first wave industries (e.g., hospitality/tourism, retail trade, passenger transportation, etc.) are likely to see the earliest spikes in talent availability and possibly the first to see downward wage pressure. Markets with a higher percentage of existing employment in second wave industries may remain more stable initially, but as negative impacts ripple through the economy more broadly, these industries are also likely to be significantly impacted by employer downsizing. Some markets may be overly exposed to both first and second wave sectors. Finally, markets with a higher representation of resilient industries (e.g., B2B technology, government, and some areas of healthcare) may in the near to mid-term see comparatively less of a rise in unemployment than other markets.

The likely differences in timing and severity of impacts will vary across industry sectors, and the effects on specific markets will depend largely on each region’s industry composition. This becomes another input into the modeling

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NOW NEXT LATER

Approach for Dealing with Pandemic Challenges The coronavirus pandemic is driving companies to focus on near-term survival and long-term supply chain changes.

By Kate Crowley, Principal, and Jeff Jorge, International Growth Services Practice Leader, Baker Tilly Virchow Krause, LLP

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s the coronavirus (COVID-19) pandemic in the U.S. spread in March, leading to shelter-in-place orders in most states and a rapid slowdown of the national economy, businesses have started adopting Baker Tilly’s “now, next, later” framework in dealing with the pandemic challenges: “Now” is focused on the first 30 days; “next” is focused on the following 60 days; and “later” focusing on 90 days and beyond.

The “now” response reflects the immediate reality for businesses – survival. An early March 2020 poll by the National Association of Manufacturers1 showed 35 percent of manufacturers are facing significant interruptions in supply chain operations, though only 51 percent had an emergency response plan in place. Filings for unemployment claims by mid-April soared to levels not seen since the Great Depression. Yet, even as companies respond to short-term disruption in operations and in the lives of their employees and communities, business leaders are looking ahead to implement effective changes they can make to their businesses when the economy begins to recover.

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COVID-19 — Impact on manufacturing sector

Anticipate a change in operations due to COVID-19

Face significant supply chain disruptions

Anticipate a financial impact as a result of the crisis

Strategies for “Now�

In the near-term, the survival filter applied to operational focus draws attention to three key areas: 1. Finances

2. Inventory and logistics

3. Strategic planning and operations (including people)

tial, especially in a time of supply chain disruptions as experienced in the last two years: first with trade tensions and now with COVID-19.

In practical terms, a company may have a Tier 4 component manufacturer as part of its bill of materials and — should that Tier Have an 4 fail to deliver on its commitemergency response at ment to the Tier 3, who fails the their company Tier 2, who compromises the Tier 1 — that company is now exposed.

Companies need to be aware of the entire flow of materials, their suppliers, and countries of origin to be able to respond effectively to supply chain interruptions, whether they are pandemic-related or otherwise.

Strategy planning and operations is a focus on the current state of operations and scenario planning — including staffing scenarios. Companies need to make data-driven decisions that inform how the business is operating. Companies are also adjusting to increased remote work; do they have the right workforce technology in place? How does working from home affect human resources, morale, and team unity? How do employees stay connected and engaged, even though they are not working side by side? This all takes effort and deliberate leadership to maintain, if not strengthen, a corporate culture in a time of such massive scale disruption.

Even as companies quickly shift how they did business, making sure they support both their employees and their customers, they have had to focus on cybersecurity hygiene. Companies and individuals must be vigilant in the face of criminals and bad actors who are always looking to steal data, disrupt systems, or undermine an organization’s reputation and credibility. Bogus vendors will take advantage of the unsettled environment as companies look to fill supply and resource gaps.

From the financial side, the first 30 days focus on cash management and operational continuity: how to retain cash, how to ensure operations do not stop, and how to apply for capital assistance. However, this is not a time to be proud; companies that need access to capital, particularly under favorable government terms, should initiate the application process.

The Coronavirus Aid, Relief and Economic Security (CARES) Act provided substantial support to individuals, small businesses, and the healthcare sector, and Congress is likely to consider further stimulus legislation. Businesses need to stay in close contact with their legal, banking, and professional advisors since new COVID-19 response programs will be added and existing programs will evolve to meet local needs.

Even if businesses think their cash flow is adequate at present, they should seek out their banker and look into expanding credit lines to be better prepared for any interruptions or declines in cash flow should government assistance be insufficient for their organization’s cash coverage needs.

Strategies for “Next�

Shifting to inventory and logistics, companies need to examine their supply chains and identify where they might be short on key items. Most middle market companies, and often their larger global counterparts, have limited visibility into their extended supply chain — i.e., Tier 2, 3, and even Tier 4 suppliers. This visibility and knowledge is essen-

As companies deploy “now� solutions, their attention quickly begins transitioning onto sustaining the business in the mid-term. If key supplies are lacking inventory or consumers, companies may not be able to fulfill certain contracts. Taking care of customers is an essential consideration for businesses at a time when so much energy is being applied to survival.

Communicate with customers; be proactive and let

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them know of any negative ramifications to supplies or commitments previously made. Perhaps utilize the opportunity to discuss how to protect them, securing different payment terms that help increase control over the company’s supply chain and secure necessary items to fulfill client obligations.

In the short- and medium-term, many businesses will need to evaluate their workforce needs. Should there be a need to decrease workforce, what are the impacts to production and does this affect the company’s eligibility for the PPP (Paycheck Protection Program) from the CARES Act? If the company had previously received an economic development incentive for job creation and capital investment, review what was received, and, if needed, amend it to reflect the current conditions.

Strategies for “Later” Shoring up the business and people in the short term and making adjustments for the medium term will better prepare a company for the recovering economy. This is when companies will focus in part on which types of suppliers are best suited to shift manufacturing back to “the Americas,” including the U.S., Mexico, and Central and South America. The sector does not matter — what matters is the type of business.

Let’s focus on three types of products and explain which are best suited for a reshoring or near-shoring shift: • Freight-intensive • Capital-intensive • Labor-intensive Freight-intensive products are usually heavy and expensive, difficult and expensive to export, and usually produced close to where they are consumed. For example, the costs of moving a car frame that could be “cheaply” built in China and shipped to the U.S. would be prohibitive, just looking at the cost of freight alone.

These types of products are generally already made in the Americas, so there is no business to “shift.”

Capital-intensive products use high-precision machine operations and automation, with a small amount of manual labor. Examples would be manufacturing a car’s drive train and steering system. Many of these types of products have been made in low-wage countries for many years, but interest is skyrocketing in reshoring or near-shoring these operations. Why? Because serious supply chain disruption — whether due to a natural disaster or a pandemic — makes the decision to depend on a supplier in a low-wage country begin to look like an expensive decision. It makes sense then to consider reshoring or near-shoring manufacturing of these types of products, even when moving this manufacturing may be difficult and expensive in the short term from an operations perspective.

Labor-intensive industries include agriculture, mining, hospitality, and food service production. Automation investments to replace human labor in these industries often do not make business sense. Many of these types of products are still made in China or other Asian countries, but as the price of labor increases in these countries, the appeal of moving production closer to the U.S. increases — assuming a business can find a capable operator for a site, the right equipment, and find, hire, and train the right people from local populations.

For U.S. companies, shifting production to Mexico has become an attractive proposition because of (1) the increasing cost of labor in China; (2) increasing freight costs; and (3) disruptions due to trade disputes, natural disasters, and now the pandemic.

Incentive Programs Target Existing Businesses Companies are going to have to be far more strategic about their supply chain in the economy that emerges from the pandemic crisis. In recent years, labor drove a company’s site selection decision, since the talent shortage affected most sectors and most regions of the country. As the economy reopens, having reliable local or near-shore suppliers, as well as supply chain redundancy, will drive site selection decisions more than it has in recent years.

Local economic development organizations will respond to that new reality and will focus their limited funds on the core industry clusters in their regions and what they can do to support Tier 2, Tier 3, and Tier 4 suppliers to those clusters.

As states extend their shelter-in-place orders and health officials look for a plateau and decline in the spread of COVID-19, it is impossible to predict how the economy will re-open. One scenario is a delayed recovery that accelerates toward the end of 2020 and into 2021.

Equally possible is a prolonged recession that affects financial markets and supply chains well into next year.

In the coming months, successful companies will be the ones that manage their cash flows well, support and protect their employees as they shift to new working environments, demonstrate their continued value to customers, and stabilize their supply chains. As companies look at their business, how will they leverage this crisis to upgrade their approach in the market after the pandemic subsides? We welcome your insights; please share your stories with Kate Crowley and Jeff Jorge. n NOTE: Baker Tilly regularly updates its list2 of federal, state and local government financial assistance available to businesses impacted by COVID-19.

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https://www.nam.org/manufacturers-survey-reveals-current-industry-impact-ofcovid-19-7411/ https://www.bakertilly.com/insights/covid-19-stimulus-guide-federal-state-and-localfinancial

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GOVERNMENT POLICY/EDUCATION

Innovation in America Reaches New Heights If necessity is the mother of invention, the COVID-19 crisis is driving cooperative innovation by companies, government entities, and healthcare organizations.

By Lisa Bastian

T

he concept of an “innovation center” is certainly not new. However, without much fanfare, over time, some operations have reinvented the traditional center model, changing how and where they operate, leaning upon new partners and resources, and switching out the types of clients or markets served.

Unfortunately, due to the COVID-19 global pandemic, these centers now have additional herculean challenges sprung upon them in a world facing unprecedented levels of economic and social upheaval. How can innovation be supported in this “new normal” era so organizations cannot just survive, but thrive?

LET’S LOOK AT A FEW EXAMPLES: On the Cutting Edge of Innovation

Courtesy of Arizona State University

Arizona’s vast tech and innovation resources create, test, and scale new technologies on a regular basis.

ASU’s Biodesign Institute, where work is under way to scale up testing for COVID, among other initiatives.

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From 2014 to 2018, employment in innovation and technology services increased 27 percent — a rate much higher than the national average. Over 82,680 sector workers are employed in more than 7,778 establishments, according to the Arizona Commerce Authority.1 While incubators, accelerators, co-working spaces, angel investors, business plan competitions, and VCpitching training all support a growing entrepreneurial community, so too do a legion of private and public organizations and educational entities; e.g., the 800-member Arizona Technology Council, the premier trade association for technology- and science-driven companies, and ASU (Arizona State University). ASU helps its students find methods to use technology creatively and offers them many unique research and funding opportunities.

For the fifth year in a row, last September, ASU was named the most innovative school in America by U.S. News and World Report.2 The magazine’s ranking, based on a peer survey, compared over 1,500 institutions. ASU President Michael Crow says the school received this honor due to the work of thousands of people tackling challenges in new ways positively impacting not just ASU, “but the state of Arizona and far beyond.”

With such accolades, it’s not surprising that in 2020 ASU researchers were tasked to find innovative solutions to the COVID-19 pandemic. For example, this March, ASU received a $2 million grant donation to fund its work in three areas: virus testing of “front-line” workers, assembling of virus test kits for healthcare providers, and 3D manufacturing of PPE. “ASU is in a unique position to scale up…to support round-the-clock testing and analyze hundreds of samples daily,” notes Joshua LaBaer, director of ASU’s Biodesign Institute.3 This rapid shift was made possible by a $40 million investment in ASU made by the Department of Defense in 2009, when the school was lead contractor on a project developing a tool to help people in the event of a nuclear emergency. “We just swapped out the genes for radiation detection [in the tool] for the coronavirus ones for free site information, visit us online at www.areadevelopment.com

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to do the test,” adds LaBaer. “We have all the automation and robots in place…now.” Eventually the system will be able to run 1,000 samples a day, a feat greatly increasing Arizona’s local COVID-19 testing capabilities.

Other ASU pandemic-focused research efforts under way include development of a coronavirus vaccine, a simple blood test for seven strains of the virus, AI models to predict COVID-19’s impact on residents, heat treatment/UV light tools to rapidly sterilize PPE for reuse, and more.

yet-to-be-developed products and processes for clients.

The ‘Next Impossible’ Is Now Possible, Locally

A few years after its founding, COI focused more on companies operating in the “middle” spectrum, between entrepreneurial entities growing in incubators on one end, and big corporations with big dollars on the other.

The majority of these firms were 5 to 10 years old, with 50 to 100 employees. They were too large for incubator space, yet not big enough to operate their own innovation centers.

Recently COI morphed again, with its customer A New Innovation Model service reflecting newer national and global business for Middle-Sized Firms trends. What prompted the change? “The realization that The Georgia Centers of Innovation (COI) — a division innovation can’t and doesn’t always exist in big cities,” of the Georgia Department of Economic Development David Nuckolls, COI’s associate director told Area Devel— is the state’s leading resource for facilitating business opment. COI’s “Mothership” was innovation. COI advises Georgia (and still is) active in Atlanta’s companies on how to translate Tech Square, home to 25 innovanew ideas and technologies into HOW CAN INNOVATION tion centers plus a high density commercially viable products of startups, corporate innovaand services via technical inBE SUPPORTED tors, and academic researchers. dustry expertise, research col“But across the state, we were laborations, and business partIN THIS “NEW seeing so many different flavors nerships. Its staff of 15 works of innovation, from fashion to with all kinds of businesses NORMAL” ERA SO film to healthcare,” Nuckolls rerepresenting diverse fields, and calls. “And from that, questions all services are free.

ORGANIZATIONS then arose of how we should When asked what “innovation” address companies needing or looks like, Steve Justice, COI’s CANNOT JUST wanting to drive innovation more executive director, told Area DeSURVIVE, BUT THRIVE? locally.” That’s when COI realvelopment that COI is very narized it had to “create new envirow in its focus of that definition. ronments,” explains Nuckolls, “Since we are economic developand no longer would it solely be ers, innovation is how we help a a “big building” for clients to business develop new products, visit. Instead, adds Justice, “We services and/or processes to focus on taking our resources to them.” help them better serve customers and allow them to grow There are two reasons to innovate, says Nuckolls. their company. When you use that definition, a lot of folks “You want to, or you’re forced to do it. Lots of compathink of innovation being like the iPhone. But innovation nies now are in the ‘forced to’ box after COVID-19 hit is all about the ways people use it. Tech is just a tool.” the country. The good news is, by embracing innovation In fact, innovation doesn’t have to be new — maybe head-on, what some people thought was impossible just new to that company. And strange to many ears, to improbable to accomplish, they’re now doing. That not all solutions must be high tech either, as sometimes opens eyes, to think now that the ‘next impossible’ is “low tech” is the best answer for a client’s issue. now possible,” he says.

Each year COI assists about 700 companies, with America’s new COVID-19 environment (with social disclient “engagements” lasting a few minutes to up to 12 tancing and the like) “may push us to bring even more months. While each of COI’s five facilities focuses on one innovation to where people live,” says Justice. “Maybe a of five key industries — aerospace, energy technology, company doesn’t have to be in an innovation district to information technology, logistics, and manufacturing — do innovation or be an innovator. Maybe you can do it it’s not unheard of to do projects for the same client as where you live. We’ve learned how we can be connected, the organization’s needs and life cycle evolve over time. but not in the same physical location, and still get work COI’s efforts are facilitated through the state universidone,” he says. This certainly doesn’t decrease the imty system, which includes the Georgia Institute of Techportance for major innovation centers to be housed in nology, the University of Georgia, and other prominent tech communities. Justice notes, “But vertical connecresearch partners. “We excel at connecting companies tions now allow us to ‘spread the wealth’ a bit and be with those researchers,” says Justice. In turn, the ability more geographically diverse.” Both models can and do to provide easy access to such a wide range of gamework together synergistically. changing services has a huge impact on new, existing, or

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Pandemic Births New Innovation Center for Global Solutions Almost all innovation centers today exist to improve operations for public/private entities and improve operations. That’s why one new entity — Mass General Brigham Center for COVID Innovation in Massachusetts (MGBCCI) — is so unique. It exists to scale products that can save the lives of millions of Americans and global citizens, who are impacted by COVID-19.

MGBCCI is a joint research, engineering, and development effort between Mass General Hospital (MGH) and Brigham and Women’s Hospital (BWH). It was established in March to help coordinate, facilitate, and rapidly develop innovations for the most pressing COVID-19 issues affecting patients, frontline healthcare workers, and the wider community. They came together to promote collaboration after recognizing a coordinated effort was needed to manage all the different solutions being investigated, explains center co-leader Dr. David Walt, medical diagnostics researcher at Brigham and the Wyss Institute.

MGBCCI has four research areas. The first two launched were the devices and diagnostics units; the data and therapeutics units soon will begin operations.

Within each center program area, hospital leaders oversee hundreds of scientists, engineers, and clinicians from BWH, MGH, the Brigham Research Institute, the Wyss Institute, plus other academic institutions and life sciences and biotech companies.

Due to focused help and support from so many leading healthcare partners, working groups are expected to have products ready for mass production/deployment “in the upcoming weeks,” predicts co-leader Dr. Guillermo Tearney, M.D., Ph.D, an investigator in Mass General’s Wellman Center for Photomedicine.4 Already one group discovered a hydrogen peroxide vapor method to decontaminate N95 masks for reuse. Ultraviolet light is being researched for mask sterilization, too. Another group identified new promising designs for N95 respirator masks and face shields, while a ventilator group came up with 3D-printed prototypes for those respiratory machines. Other investigators are designing a new protective plexiglass booth for patient screenings, a new patient isolation hood to cut down virus exposure to healthcare providers, promising COVID-19 therapeutic agents or vaccines, a diagnostic test for home use, and tests that can rule out COVID-19 more quickly than most now used.

COIVD-19 may be around for a few years, or forever; we just don’t know. No matter the timeline, it’s apparent our brightest minds can be counted upon to find innovative solutions to problems affecting health, economies, business continuity, logistics, education, and more. n 1

https://www.azcommerce.com/industries/technology-innovation/ https://asunow.asu.edu/20190908-asu-news-number-one-innovation-us-news-fifthconsecutive-year 3 https://publicservice.asu.edu/content/asu-receives-2m-boost-coronavirus-rapidresearch-response 4 https://www.massgeneral.org/news/coronavirus/research/covid-innovation-centersolutions-reduce-ppe-ventilator-shortage 2

Dynamic Risk Modeling and Scenario Planning

Future-Proofing

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of future market conditions as we attempt to highlight potential changes to talent availability and cost.

Avoiding Undesirable Outcomes Companies invest a significant amount of time, money, and other resources when selecting and eventually opening a new location. Through these efforts, they’re seeking long-term returns on their investments and a degree of confidence that they’ve put down roots in a location that will sustainably support long-term growth and success. The worst-case scenario would be to enter a new market only to run up against talent scarcity, high turnover, and rising wages shortly after they arrive. Predictive modeling that supports workforce future-proofing can be utilized to avoid these undesirable outcomes.

As more data becomes ubiquitous and easily accessible, clients will look to their site selection consultant partners for their unique assessments of future market conditions. While no one has the proverbial “crystal ball” to predict the future, the modeling of key supply

LONGEVITY (YEARS)

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0

500

1,000

1,500

2,000

2,500

3,000

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EMPLOYEE SIZE TURNOVER: 5% $29.00/HR $31.50/HR $34.00/HR $27.00/HR WAGE

$36.50/HR

Figure 2:

and demand factors, combined with an historical understanding of each market’s unique economic and talent composition, will go a long way in providing clients with a greater degree of confidence when making their longterm talent-driven site selection decisions. n AREA DEVELOPMENT | Q2 2020

InnovationInAmerica.indd 25

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>

WORKFORCE

Finding Talent in a Time of Economic Change As millions of idled workers start to return to the workforce, the need for workforce development programs will be greater than ever before.

By Steve Kaelble

T

he coronavirus pandemic has caused more economic disruption than the U.S. has seen since the Great Depression. No one can say for sure what the landscape will look like as the economy recovers, but it’s clear that a lot of puzzle pieces won’t snap back into the same places as before.

In a post-pandemic reality, business operations may look dramatically different. Many people will be forced to transition from one job or career to another. Put another way, there will be an incredible need for workforce development as millions of idled workers return to the workforce. The country’s many workforce programs are ready to get everyone back in the game and have already been adapting their work to the new reality.

To begin with, as much as the pandemic stunned the economy in the first quarter of 2020, “a lot of projects are still proceeding,” says Stephen Moret, president and CEO of the Virginia Economic Development Partnership. And not just projects that were already moving forward as the pandemic first unfolded, he adds. “Companies are making new decisions to expand.”

Moret notes that some industry sectors were hit harder than others by the

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pandemic, and for some industries, the changing economy has brought opportunities. Cloud computing, for example, which has a growing presence in Virginia, is serving a vastly expanded army of remote workers.

“In general, data centers are running full-tilt,” he says. Food-and-beverage manufacturers and logistics companies are also responding to added demand, as more people stay home and cook for themselves.

“A lot of companies are looking to retool their operations to produce personal protective equipment,” Moret adds. That often has a workforce-development component, too.

Brad Neese, vice president of Economic Development at readySC, a division of the South Carolina Technical College System, says the coronavirus pandemic had an impact on his group’s operations almost from the start. “During the COVID-19 crisis, readySC has worked with its partner companies to continue moving forward with training,” he says. “We have helped companies adapt to the requirements of CDC regulations and the unique opportunities offered through online training.”

Though the post-pandemic challenge will be a big one, Neese observes that it’s in keeping with the mission of programs such as his.

“Coming out of the crisis, readySC looks forward to helping South Carolinians connect to employment opportunities with expanding and

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

5/21/20 3:56 PM

newly located companies,” he says. “We will continue to connect companies with our colleges across the state to help train incumbent workers, build back capacity for existing businesses, and ensure a continuous pipeline of skilled workers for the future. At the end of the day, we are a system dedicated to enhancing workforce and economic development in the state. It’s a comprehensive, holistic solution that works.”

“The situation Alabama and the entire country are facing is truly unlike anything we’ve ever seen,” says Ed Castile, Alabama’s deputy secretary of Commerce for the Workforce Development Division and executive director of Alabama Industrial Development Training, about the pandemic’s impact. He says a typical economic downturn causes much more gradual changes to the employment picture, while the pandemic collapse has required a more day-by-day response. “The one thing we’re certain of is that when this is under control, we will be ready to help our citizens and our companies return to full employment and full production capacity very quickly.”

development through readySC made a significant difference, helping companies meet or exceed recruitment goals even in a low-unemployment-rate environment.

And even without the current economic challenges, the labor market has been in a period of evolution that has necessitated an increased focus on workforce development efforts, Neese says. “While the landscape is somewhat unknown based on the impact of the pandemic, we have the tools to continue ensuring our existing and future industries have the workforce necessary to find success within our borders.”

Workforce Is Not a New Concern

V I R G I N I A : The Virginia Talent Accelerator is a turnkey solution for customized recruitment, screening, and training, according to Mike Grundmann, senior vice president of Talent Solutions at the Virginia Economic Development Partnership. Services are provided at no cost to qualifying new or expanding employers. Meanwhile, the Virginia Jobs Investment Program offers consultative services and funding to companies that are creating new jobs or experiencing technological change. Through Virginia’s workforce initiatives, Grundmann says, “our goal is to shorten the new-hire learning curve.”

Of course, it didn’t take a pandemic to put workforce development high on the list of concerns facing businesses. The ability to locate and hire the right workers — and train them as necessary — has been a major business concern for a long time. “Companies want to know they will be able to find the right number of employees with the right skills and/or the ability to obtain those skills,” Neese says.

“The availability, quality, and cost of talent has become the dominant driver in location decisions,” says Moret. It always was important, he says, but in recent years became even more pronounced, as jobs have become more dependent upon education and the development of specialized skills.

Castile says the biggest concerns companies have been bringing to his organization — at least before the pandemic stunned the economy — have included labor availability, workforce sustainability, and technical skills.

“We were approaching workforce shortages prior to the recession in 2009–2010,” he recalls. “The Great Recession changed the dynamic. It took several years to get the people back to work because of a complete contraction of the economy. We were facing some of the same workforce availability issues right before the COVID-19 pandemic.”

Neese says the same thing about South Carolina.

“Like much of the U.S., South Carolina saw record low unemployment, which some companies perceived as a potential barrier to finding talent,” he says. Workforce

Connecting Employers with Qualified Workers How does workforce development work most effectively? There are a lot of examples from the Southeast, where just about all of the country’s most highly ranked workforce development programs can be found.

As Moret points out, “Southeast States have tended to promote economic development as an activity more than some other parts of the country.” Here are some examples:

G E O R G I A : The Georgia Quick Start program has been around for more than four decades and was the first of its kind in the country. Connected with the Technical College System of Georgia, it has trained more than a million workers, through programs tailored to the needs of the employer.

L O U I S I A N A : LED FastStart is also a highly rated workforce training program. It offers no-cost, customized employee recruitment, screening, training development, and training delivery. The program employs expertise from a wide range of businesses to offer an edge to qualified new and expanding companies.

A L A B A M A : AIDT is Alabama’s workforce training agency, offering a range of job-specific services for pre-employment and on-the-job training. It provides recruitment, assessment and training services, develops AREA DEVELOPMENT | Q2 2020

FindingTalent.indd 27

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5/21/20 3:57 PM

E

courtesy of Morgan Olson

WORKFORCE DEVELOPMENT TOOLS IN ACTION

ven before the pandemic hit, Americans were buying more and more things online for home delivery. Michigan-based Morgan Olson makes walk-in delivery vehicles that help enable those online purchases, and the company has been needing to expand its manufacturing capacity to keep up with demand.

Meanwhile last summer, Ikea announced plans to shutter its 925,000-square-foot manufacturing plant in Danville-Pittsylvania County, Virginia. The move would cost 300 jobs in an area already hardhit by the loss of textile manufacturing. State officials quickly made the connection between Morgan Olson’s need for manufacturing space and Danville’s need for replacement jobs. Stephen Moret, president and CEO of the Virginia Economic Development Partnership, referred to it as “a real Hail Mary pass,” and in October the state caught the pass for a touchdown — a $57.8 million investment by Morgan Olson worth hundreds more jobs than what Ikea left behind.

Mike Grundmann, senior vice president, Talent Solutions at the Virginia Economic Development Partnership, says a key to making it work is the Virginia Talent Accelerator Program, a workforce initiative created by VEDP in collaboration with the Virginia Community College System. The program provides company-specific recruitment and training services at no cost to qualified new and expanding employers, and that helped seal the deal for Virginia.

Indeed, the company said as much in making its plans public. “One of the most attractive aspects of locating in Danville-Pittsylvania County is that we will be able to take advantage of the new Virginia Talent Accelerator Program, which will help us quickly attract and train the high-quality workforce we need to deliver for our customers,” said Mike Ownbey, president and CEO of Morgan Olson.

Within a month of the announcement, Grundmann reports, Morgan Olson was interviewing former Ikea employees to fill professional staff positions. At about the same time, expert instructional designers from the Virginia Talent Accelerator Program and Danville Community College traveled to a Morgan Olson plant in Tennessee to study processes, best practices, and training needs to apply in Virginia. They returned to Tennessee later to get video of assembly workers in action, to help create training programs.

Following a series of job fairs, the program conducted two weeks of pre-hire training that included an introduction to riveting, measuring, and other assembly procedures. It was a preview for future workers and an opportunity for the company to get a first look at candidates’ potential performance before making final commitments. Supplementing the manufacturing training was a Leadership Academy for supervisors and team leaders.

Post-hire training classes began in mid-March 2020, as the company moved toward the launch of production this summer, less than a year after Ikea announced its plans to depart. Workforce development efforts helped that Hail Mary pass turn into a championship win for the company and community alike.

training materials, and offers training facilities. “AIDT is in the company-specific recruitment and training business,” Castile says, and “we have ramped up everything to reflect the growing needs.”

S O U T H C A R O L I N A : The readySC program offers recruiting, assessment, training development, management, and implementation services, Neese says. On a typical day, the program is working on more than a hun-

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AREA DEVELOPMENT

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dred projects across the state. Other programs include ManuFirstSC, which provides certification that entrylevel talent meets minimal manufacturing experience requirements. Neese also points to South Carolina apprenticeship programs and a statewide technical college scholarship program.

T E N N E S S E E : Several programs and initiatives have earned this state accolades for workforce development. for free site information, visit us online at www.areadevelopment.com

5/21/20 3:58 PM

Workforce360° is a systematic partnership among state agencies and the higher education system, a projectbased system targeting workforce gaps. The Labor Education Alignment Program follows a data-driven approach to be sure postsecondary institutions are delivering what businesses need from a skills perspective.

And a series of programs aims to make postsecondary education affordable to all residents.

N O R T H C A R O L I N A : The statewide workforce system here is known as NCWorks, and like other highly rated programs, it has a range of free services and programs for expanding businesses. NCWorks includes recruiting services, job training assistance, apprenticeship programs, and special services related to the agricultural workforce.

Getting Workforce Results AIDT has helped enable a wealth of economic investment in Alabama, Castile says. Just one example is assistance it has provided for Mercedes-Benz U.S. International. “We’ve worked closely with MBUSI, one of our long-term partners, to help establish a new supply chain for electric vehicles. We’re working through new skills and needs for suppliers for this new vehicle,” he says.

“In addition, we’re working to get Mazda Toyota Manu-

“

In a post-pandemic reality, business operations may look dramatically different.

facturing and their new joint venture moving forward.”

Neese cites work with Quality Electronic Manufacturing Services (QEMS), which moved to South Carolina in 2018. “A big reason for the decision to move was support from readySC for our future business growth,” according to the company’s CEO, Phuong Nguyen.

One hallmark of the country’s leading workforce programs is an openness to tackle new issues as they are identified. “We’re working specifically with one of our workforce regional partners to remove all roadblocks to getting people to work, including transportation issues and childcare issues,” Castile says. “There are multiple opportunities to remove roadblocks to employment. We just have to identify the best solutions to these issues and make sure they actually help our citizens.” n

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AREA DEVELOPMENT | Q2 2020

FindingTalent.indd 29

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2020

2020

ARTICLE BY STEVE KAELBLE

GOLD & SILVER

SHOVEL AWARDS While the current COVID-19 crisis may put some development on “pause,” our annual Shovel Awards recognize states that garnered large job-creating and investment projects over the course of the previous year.

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

5/27/20 1:38 PM

Clearly, 2020 is not taking shape the way that anyone expected it would as America watched the ball drop and rang in the new year. The coronavirus pandemic has impacted just about everything, from health to lifestyles to

METHODOLOGY

the state of the economy.

Amid today’s gloomy headlines, it’s worth taking a look back at the economic development headlines of 2019 — the expansions and new developments that inspired our annual Shovel Awards. These honors are based on information provided by state economic development officials and the information was current at the time it was provided. It goes without saying that some companies may have paused or altered some of these plans as the pandemic unfolded.

Looking back at the wins of 2019 is not simply a matter of turning on old favorite tunes to relive memories of better times. Paused economies always fire back up, and the Shovel Awards spotlight strong economic foundations upon which to build bright futures.

BIG JOB CREATORS The Gold Shovel honoring Texas was powered by several projects with four-digit job promises. The biggest was the plan from Apple to greatly boost its already impressive presence in Austin with at least 5,000 more jobs (see Project of the Year sidebar for more information). More big wins came in both the financial sector and information technology.

Plano, for example, is benefiting from JP Morgan Chase & Co.’s evolution that has been shrinking its New York workforce. Last year construction began on a 12-story office that’ll be the tallest in the company’s Plano campus. It’s a $106 million project promising 4,000 jobs. Allstate, meanwhile, is creating 1,300 jobs at a major, $11 million expansion in the Texas community of Irving. As for the IT sector, Uber last year opened a new Dallas site that eventually could provide work for 3,000 people, although construction has been paused due to the pandemic.1 And job-search service Indeed promised 3,000 new jobs of its own in Austin, including in a high-rise slated to be named Indeed Tower.

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 asked for information from all 50 states about their top-10 job-creation and investment projects initiated in 2019.

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, and the diversity of industry represented — five states achieving the highest weighted overall scores were awarded Area Development’s Gold Shovels in five population categories: 12+ million, 8+ to 12 million, 5+ to 8 million, 3+ to 5 million, and fewer than 3 million. Runnersup in each of these population categories were awarded Silver Shovels.

Auto manufacturing paused during the early stages of the pandemic but by late spring was making plans for a

AREA DEVELOPMENT | Q2/2020

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5/27/20 1:39 PM

PROJECT of the YEAR Apple Breaks Ground in Austin, Texas

I

IT’S A BILLION-DOLLAR INVESTMENT that could ultimately make Apple the largest private employer in the Texas capital of Austin.1 The company broke ground in November on its 133-acre, three-million-square-foot campus that’ll be home to 5,000 employees at the outset, with enough room to triple that tally down the road.

The new campus — a Shovel Awards Project of the Year — will include such functions as engineering, research and development, operations, customer support, sales, and finance. Powering the campus will be 100 percent renewable energy, with lots of solar generation on-site.

Even before embarking on the new campus, Apple employed more than 6,000 people in Austin, its biggest employment cluster outside its California headquarters in Cupertino. Among other operations, Apple has an Austin production facility where an all-new Mac Pro started rolling off the line last December.

1

https://www.apple.com/newsroom/2019/11/ apple-expands-in-austin/

TEXAS

GOLD SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Austin

N

5,000

$1 billion

Tech Products

JPMorgan Chase Bank Plano N 4,000 $106 million

Financial Services

Uber Technologies Dallas N 3,000 $75.1 million

Software Dev.

Indeed Austin E 3,000 $29.8 million

Internet Technology

Apple, Inc.

Industry

Allstate Insurance Co.

Irving

E

1,300

$11 million

Insurance

Steel Dynamics Southwest, LLC

Sinton

N

592

$1.9 billion

Steel

Bayport Polymers LLC (Baystar)

Pasadena

N

25

$810 million Petrochemicals

Google

Midlothian

N

40

$600 million

Data Center

Sweeny

E

10

$500 million

Natural Gas

AW Texas Cibolo N 900 $400 million

Auto Parts Technology

Phillips 66

(pop. 28.70 million) States with populations of 12+ million Sponsor: Lubbock Economic Development Alliance Project of the Year

FLORIDA

SILVER SHOVEL WINNER Company Tellus

NBC Universal

UPS

City/County

N/E

Broward County

E

30

Inv. Amt. $109.3 million

Industry IT

Orange E 150 $348 million Corporate County HQ Jacksonville

Minimise USA

# Jobs

E

270

$76.7 million

Distribution

Hillsborough N 115 $81.1 million Corporate County HQ

Pensacola E 1,325 $210.1 million Aviation/ VTMAE Aerospace Lockheed Martin Orlando E 1,314 $300 million Defense/ Corp. Homeland

Security) Alta Resources Fort Myers E 577 $21.3 million Corporate

HQ Kroger Lake County N 350 $83.1 million Logistics/ Distribution Royal Caribbean

Miami E 100 $300 million Corporate

HQ

Starwood Capital Miami E 293 $110 million Corporate Group Holdings HQ

resumption of assembly operations. Some of the biggest proj-

(pop. 21.48 million) States with populations of 12 + million

ects of 2019 from a job-promise perspective involved this sector,

Sponsor: Enterprise Florida, Inc. Sponsor: FloridaWest EDA & Florida’s Great Northwest

particularly in the traditional automotive capital of Michigan —

Chrysler Automobiles operation that will

which helped fuel that state’s Silver Shovel

build Jeep models. It’s the biggest piece of

honors.

FCA growth totaling more than $4 billion

In fact, Detroit’s first new assembly plant in decades is taking shape, a Fiat

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and more than 6,400 jobs. Ford Motor Co. added the promise of another 3,000 jobs

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

6/3/20 3:21 PM

VIRGINIA

one where autonomous vehicles

GOLD SHOVEL WINNER

will be completed.

Company

City/County

N/E

# Jobs

Inv. Amt.

Amazon

Arlington County

N

25,000

$2.5 billion

Headquarters

Incentive Technology Group (ITG)

Arlington County

E

1,000

$5.1 million

IT

Pulaski County

E

777

$400 million

Heavy Trucks

Pittsylvania County

N

703

$57.8 million

Walk-in Step Vans

Wegmans

Hanover County

N

700

$206 million

Distribution

PPD, Inc.

Henrico County

E

200

$63.7 million

Contract Research

Rockingham County

E

152

$1 billion

PointOne. Developments Ltd

Fauquier County

N

72

$265 million

Hershey Chocolate of Virginia, Inc.

Augusta County

E

65

$104.4 million

Food Products

Covington

E

N/A

$248.4 million

Corrugated Containers

Volvo Trucks North America Morgan Olsen, LLC

Merck & Co., Inc.

WestRock

Industry

Bio pharmaceuticals Data Center

Missouri’s Silver Shovel honors fly in with a big lift from Boeing, which in turn had a big lift from the U.S. Air Force and its $9 billion contract to develop and produce what are now known as the T-7 pilot trainer aircraft. It’s an enormous win for Boeing, which has defense production near St. Louis Lambert International Airport, and it’s worth some 2,000 jobs. The company is also pumping $70 million into an expansion at its St. Charles missile and munitions

(pop. 8.63 million) States with populations of 8+ to 12 million

plant across the Missouri River.

Sponsor: Virginia Economic Development Partnership

Home improvement is lead-

Project of the Year

ing to job-picture improvement in a number of places. Silver

GEORGIA

Shovel winner North Carolina

SILVER SHOVEL WINNER

welcomed Lowe’s Companies’

City/County

N/E

# Jobs

Inv. Amt.

Amazon

Stone Mountain

N

1,000

$237.1 million

Cobb County

E

919

$42 million

Lithia Springs

N

981

$15.5 million

Distribution

jobs. Meanwhile, competitor

Palmetto

N

575

$77.6 million

Distribution

Home Depot disclosed nearly

Home Depot Stitch Fix Phillips-Van Heusen Corp.

Industry

plan to invest $153 million in

Company

Distribution Tech/Software Development

a global technology center in Charlotte. It’s an IT-modernization effort worth more than 1,600

Wayfair, Inc.

Athens

N

503

$7.7 million

Call Center

1,000 new jobs in Cobb County,

Invesco

Atlanta

E

500

$70 million

Financial Services

Georgia, largely involving digital

Guidoni

McRae- Helena

N

455

$96.6 million

Quartz Mfg.

Forest Park

N

410

$121 million

Food Distribution

Macon

E

159

$400 million

Paper Products Mfg.

Rome

E

187

$283.5 million

Kroger/Ocado Irving Consumer Products Ball Corp.

Beverage Packaging

and other high-tech pursuits.

Economic development leaders were all grins in sharing that Smile Direct Club is expanding in the Nashville area of Gold Shovel winner Tennessee. It’s a

(pop. 10.62 million) States with populations of 8 + to 12 million Sponsors: Georgia Department of Economic Development and Georgia Ports Authority

2,000-job plan for new hires over the next few years, with opportunities in R&D, manufacturing, and distribution. According to Smile

through expansions of two Michigan facili-

Direct Club’s Chief People Officer Cheryl

ties, including a plant that produces Bron-

DeSantis, the company is tapping into Nash-

cos and Rangers, one that’s working on

ville’s rich recent college graduate popula-

hybrid and fully electric pickup trucks, and

tion to fill these roles.2 Smile Direct Club is a

AREA DEVELOPMENT | Q2/2020

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5/27/20 1:41 PM

PROJECT of the YEAR Amazon Starts Hiring for Virginia HQ2

A

AMAZON HAS BEEN A HUGE job-creator and headline-generator year-in and year-out, and 2019 was no exception. The company already had more than 10,000 on its payroll in Virginia even before it named Arlington County winner of the coveted HQ2 prize, and that announcement promised another 25,000 jobs.1 As 2019 progressed, so did that landmark project, a Shovel Awards Project of the Year.

MICHIGAN

SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Fiat Chrysler Automobiles US LLC

Wayne County

E

6,433

$4.4 billion

Automotive

Ford Motor Co.

Wayne County

E

3,000

$1.5 billion

Automotive

N

2,183

$63 million

Real Estate Brokerage

Ari-El Enterprises Amazon

Kent County

N

1,000

$150 million

Distribution

KLA Corp.

Washington County

N

600

$217.8 million

Electronic Equipment

My Locker

Wayne County

E

452

$20.4 million

Custom Apparel

Webasto Roof Systems, Inc.

Wayne County

E

441

$47.9 million

Automotive Parts

Acrisure

Kent County

E

400

$33.2 million

Financial Services

Roskam Baking Co.

Kent County

E

238

$85.2 million

Food Processing

N

110

$119.3 million

Steel Products

Shunli Steel Group

By year-end, the first few hundred of the 25,000 had been hired, and local officials approved millions of dollars in growth incentives. Metropolitan Park is where the growth is to be based, on a campus set to include a couple of highrise office buildings, neighborhood retail options, a daycare center, and a meeting facility. Amazon is designing its primary buildings with sustainability in mind, with goals going well beyond what’s required for LEED Platinum certification. The company also spent the year connecting with local nonprofit and community groups and laying the groundwork for workforce development efforts.

It’ll take some time for the big picture to really take shape. The hiring goal of 25,000 is a long-term projection, over perhaps a decade. In the meantime, Amazon also made headlines elsewhere in the country in 2019 as it continued to build out its distribution network.

Oakland County

Industry

Monroe County

(pop. 9.99 million) States with populations of 8 + to 12 million Sponsor: Michigan Economic Development Corporation

NORTH CAROLINA SILVER SHOVEL WINNER

Company

City/County

N/E

# Jobs

Inv. Amt.

Lowe’s Companies, Inc.

Mecklenburg County

N

1,612

$153.9 million

Rowan County

N

1,200

$55 million

Distribution/ Logistics

Chime Solutions

Mecklenburg County

N

1,000

$7 million

Business & Financial Services

Microsoft

Wake & Mecklenburg Cos.

N

930

$71.4 million

Q2 Solutions

Durham County

N

749

$84 million

Pendo.io, Inc.

Wake County

E

590

$34.6 million

IT

Bharat Forge

Lee County

N

460

$170.9 million

Metal Forging

Cree Inc.

Durham County

E

420

$500 million

IT

Merck & Co., Inc.

Durham County

E

391

$650 million

Biopharmaceuticals

E

300

$500 million Pharmaceuticals

Chewy.com

Pfizer

Lee County

Industry IT

IT Biotechnology

(pop. 10.38 million) States with populations of 8 + to 12 million

1

https://blog.aboutamazon.com/job-creation-andinvestment/update-on-amazon-hq-in-arlington-va

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

6/3/20 3:22 PM

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GOLD & SILVER

SHOVEL AWARDS

pioneer in teledentistry, offering

OHIO

SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Industry

AMG Vanadium LLC

Washington

N

102

$200.7 million

Energy/ Chemicals

Ensemble RCM, LLC

Springdale

E

1,600

$14.5 million

Healthcare Corporate Offices

lower-cost and easy-to-access

Total Quality Logistics, LLC

Union

E

594

$13 million

Logistics/ Distribution

orthodontic solutions, and the

Apex Power Group LLC

Valley

N

25

$1.6 billion

Energy/ Chemicals

company is straightening teeth in

Fortress Transportation & Southeast Infrastructure Investors LLC

Southeast Ohio

N

30

$500 million

Energy/ Chemicals

Troy

E

400

$183.2 million

Heath

N

400

$22.7 million e-Commerce/ Distribution

an increasing number of markets worldwide.

More big-job-creating projects came from Amazon,

Great Lakes Cheese Co., Inc. Carvana, LLC

Food Sciences

including ongoing planning and

Walmart Associates, Inc.

Groveport

N

525

$14.7 million

Logistics/ Distribution

development work for its 25,000-

North Star Bluescope Steel LLC

York

E

90

$459 million

Steel

Columbus

N

500

$4 million

job HQ2 project in Gold Shovel

Willams Lea Inc.

Business Services

winner Virginia. And in Gold Shovel winner Utah, Qualtrics will add more than 2,200 jobs to

(pop. 11.69 million) States with populations of 8 + to 12 million

its Provo co-headquarters op-

TENNESSEE

eration over the next 10 years.

GOLD SHOVEL WINNER

(Check the Project of the Year sidebars for more on Amazon and Qualtrics).

FINANCIAL SERVICES HEADLINES The Silicon Slopes region of Utah got the promise of 1,449 new financial-tech jobs from an expansion of operations by BlueVine Capital that’s worth about $20 million in investment.

Another $23 million in financialtech investment and another thousand jobs will be part of

Company

City/County

N/E

# Jobs

Inv. Amt.

Nashville

E

2,010

$217 million

Corporate Offices

Chattanooga

E

1,000

$800 million

Automotive

Fedex Logistics

Memphis

E

689

$494.1 million

Logistics

JNJ Express

Memphis

E

610

$83.6 million

Corporate Offices

Smile Direct Club, LLC Volkswagen Group of Americas

Arrive Logistics

Chattanooga

E

500

$3.6 million

Logistics

Western Express, Inc.

Nashville

E

225

$88 million

Freight Trucking

Hyosung Heavy Industries

Memphis

E

410

$87 million

Motors/ Generators

Mueller Water Products

Kimball

E

325

$41 million

Industrial Valves

Pilot.com, Inc.

Nashville

N

455

$6.3 million

Computer Services

Dayton

E

250

$2 million

STULZ Air Technology Systems, Inc.

Brex Inc.’s new location in the Salt Lake Valley. The two fintech

Industry

A/C/Heating, Industrial Refrigeration Eqpt.

(pop. 6.77 million) States with populations of 5+ to 8 million

announcements within months illustrate the area’s growing

Sponsor: Tennessee Department of Economic & Community Development

prominence in that sector.

On the real estate side of this sector,

36

Michigan, where it proposed the Oakland

Ari-El Enterprises Inc. plans to take on a

County Business Center. It’s a $63 million

blighted mall location in Oakland County,

deal that will make way for a million square

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 36

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

5/27/20 1:42 PM

MANY STATES STRUGGLE TO REDUCE THE BARRIERS TO DOING BUSINESS. WE JUST ELIMINATED THEM ALTOGETHER. Consistently ranked one of the best states for business, Florida is committed to keeping regulatory requirements and business taxes low. That, along with a strong economy and zero personal state income tax, makes it a great place to do business. We won’t stand in the way of your success.

We’ll pave the way for it. Discover what a future in Florida means for your business at floridathefutureishere.com/freedom, or call 877-YES-FLORIDA.

Miami, Florida

PROJECT of the YEAR Raytheon Keeps Growing in Tucson

R

RAYTHEON ALREADY IS THE biggest employer in the Tucson region of Arizona, providing work for some 13,000 people. The company’s a major player in defense, with products including the Tomahawk cruise missile and other systems ranging from missile interceptors to laser weapons to hypersonic missiles. Earning it Shovel Awards Project of the Year status for 2019 were plans to expand in Tucson1 and add a thousand jobs to the payroll, after opening six new buildings in Arizona the year before.

The positive headlines continued following its expansion announcement.

Raytheon Missile Systems landed a billion-dollar Pentagon deal in December for work on the Standard Missile-6 system at locations worldwide, including Tucson.2 And in the first quarter of 2020, it was announced that Tucson would be the headquarters of a business unit combining the already Tucson-based Raytheon Missile Systems and the Massachusetts-based Raytheon Integrated Defense business.3 The new unit is called Raytheon Missiles & Defense, and the consolidation is a byproduct of the merger of parent Raytheon Co. and United Technologies Corp.

1

https://www.bizjournals.com/phoenix/news/2019/10/02/ raytheon-plans-huge-hiring-surge-for-expanded.html https://www.bizjournals.com/phoenix/news/2019/12/30/ raytheon-in-tucson-awarded-1-billion-navy-missile.html 3 https://tucson.com/news/local/raytheon-chooses-tucsonfor-headquarters-of-combined-missiles-defense-unit/article_ee884dfe-4489-11ea-8617-6b5185c6107b.html 2

ARIZONA

SILVER SHOVEL WINNER Company

City/County

Raytheon Missile Systems

Tucson

Microsoft

Goodyear & El Mirage

Fox Corp.

Tempe

N/E

# Jobs

Inv. Amt.

Industry

E 1,000

N/A*

Aerospace & Defense

N

N/A*

IT

110

E N/A*

$150 million

IT

Fairlife

Goodyear

N

186

$200 million

Consumer Products

Red Bull

Glendale

N

144

$149 million

Consumer Producs

State Farm

Tempe

E 1,100

Farmer’s Insurance

Phoenix

E

943

Shellpoint Mortgage

Tempe

E

USAA

Phoenix

Opendoor Labs

Tempe

N/A

Banking/ Finance/Ins.

$32 million

Banking/ Finance/Ins.

1,350

$13.8 million

Banking/ Finance/Ins.

N

1,000

$20 million

Banking/ Finance/Ins.

E

804

$21.2 million

IT

(pop. 7.17 million) States with populations of 5+ to 8 million *Confidential

Sponsor: Arizona Commerce Authority Project of the Year

MISSOURI

SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Boeing

St. Charles/ St. Louis

E

2,000

$70 million

USDA

Industry Aerospace

Kansas City

N

525

N/A

AgTech

Bayer AG

St. Louis

E

500

$164 million

AgTech

Benson Hill Biosystems

St. Louis

E

300

$52 million

AgTech

Maryland Heights

E

300

$32 million

Financial Services

1st Phorm

St. Louis

E

250

$20 million

Nutritional Products

ChowNow

Kansas City

N

173

$2 million

Financial Services

Niagara Bottling

Kansas City

N

49

$68 million

Bottled Water

St. Peters

N

150

$47.5 million

Kansas City

E

1,039

$89.8 million

Safety National Casualty Corp.

Medline Industries Waddell & Reed, Inc.

Logistics/ Distribution Financial/ Professional Services

(pop. 6.14 million) States with populations of 5+ to 8 million Sponsor: Missouri One Start

feet of new development that promises to create more than 2,100 jobs.

Silver Shovel winner Arizona landed a couple of major financial industry projects last year. State Farm, for example, plans

38

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

6/3/20 3:23 PM

PROJECT of the YEAR Qualtrics Doubling the Size of Utah Headquarters

Q

QUALTRICS, A CUSTOMER-experience management company with co-headquarters in both Seattle and Provo, Utah, earned a Shovel Awards Project of the Year nod with its 2019 plan to double the size of its Provo HQ. The company originally announced 1,000 new jobs there1 but increased that to 2,245 new jobs over 10 years.2 The plan includes more than 150,000 square feet of office space plus 40,000 square feet for an on-site STEMfocused daycare. There will also be a three-story outdoor terrace with meeting spaces and garden views. When all is complete, the campus will total 355,000 square feet, a good bit bigger than the Provo basement where the company launched in 2002.

UTAH

GOLD SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Qualtrics LLC

Utah County

E

2,245

$45 million

Industry IT

BlueVine Capital Inc.

Salt Lake N 1,449 $20 million County

Financial Services

Brex, Inc.

Salt Lake N 1,000 $23.4 million County

Financial Services

Weave Communications, Inc.

Utah County

E

997

$65 million

IT

Ancestry US

Utah County

E

506

$10.5 million

IT

Tyson Fresh Meats, Inc.

Utah N 500 $286 million County

Food Mfg./ Distribution

Oatly Inc.

Weber N 50 $40 million County

Food Mfg./ Distribution

GE Healthcare

Cache County

E

68

$31 million

Amazon Web Services

Salt Lake County

N

300

$25.4 million

IT

Quick Base Inc.

Salt Lake County

N

485

$713,500

IT

Life Sciences

(pop. 3.21 million) States with populations of 3+ to 5 million Project of the Year

It was a big year for expansion announcements for Qualtrics. The company also announced a new Qualtrics Tower in Seattle, a new office building in Dublin, and an office along the riverfront in Chicago.

1

https://www.qualtrics.com/news/utah-expansion-cloudvillage/ 2 https://business.utah.gov/news/goed-board-approvesedtif-for-qualtrics-nov2019/

point Mortgage expansion plan in Tempe includes 1,350 jobs.

Adding to North Carolina’s Silver Shovel bounty in the financial services sector, Chime Solutions plans to create 1,000 call center jobs in Charlotte. Atlanta-based Invesco unveiled a $70 million expansion plan that would add 500 jobs in Silver Shovel-winning Georgia. Silver Shovel winner Kansas celebrated SelectQuote Insurance Services Inc. plans in Overland Park that could double the company’s presence in the Kansas City metro. Meanwhile, Waddell & Reed Financial Inc. is moving from Overland Park, Kansas, across the

to hire 1,100 new employees in a Tempe

state line into Silver Shovel winner Mis-

expansion — everything from sales to un-

souri, bringing about 1,000 new jobs to a

derwriting to technology development.

new downtown Kansas City high-rise that

USAA’s Phoenix operations are slated to

was designed by Kansas City-based archi-

grow by a thousand in the next several

tecture, construction, and engineering firm

years, with IT and software development

Burns & McDonnell.3

opportunities leading the way. In another Phoenix expansion, Farmers Insurance will add more than 900 new jobs. And a Shell-

40

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ShovelArticle2020SpreadStart.indd 40

INFORMATION TECHNOLOGY WINS Virginia’s Gold Shovel win was boost-

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

6/3/20 3:23 PM

1,000+ JOBS CREATED State ARIZONA

FLORIDA

Company Raytheon Missile Systems

KANSAS KENTUCKY MICHIGAN

MISSOURI

NORTH AROLINA C

OHIO OKLAHOMA TENNESSEE

TEXAS

UTAH

VIRGINIA

N/E

# Jobs

Inv. Amt.

Industry

N/A*

Aerospace & Defense

Tucson

E

1,000

Shellpoint Mortgage

Tempe

E

1,350

$13.8 million

Banking/Finance/ Insurance

State Farm

Tempe

E

1,100

N/A

Banking/Finance/ Insurance

USAA

Phoenix

N

1,000

$20 million

Banking/Finance/ Insurance

Lockheed Martin Corp.

Orlando

E

1,314

$300 million

Defense/ Homeland Security

Pensacola

E

1,325

$210.1 million

Aviation/ Aerospace

Amazon

Stone Mountain

N

1,000

237.1 Million

Distribution

King of Freight

Wichita

E

1,060

$1.1 million

Freight Brokerage

UPS Worldport II

Louisville

E

1,000

$750 million

Distribution/Logistics

VTMAE Pensacola

GEORGIA

City/County

Amazon

Kent County

N

1,000

$150 million

Distribution

Ari-El Enterprises

Oakland County

N

2,183

$63 million

Real Estate Brokerage

Fiat Chrysler Automobiles

Wayne County

E

6,433

$4.4 billion

Automotive

Ford Motor Co.

Wayne County

E

3,000

$1.5 billion

Automotive

Boeing

St. Charles/St. Louis

E

2,000

$70 million

Aerospace

Waddell & Reed, Inc.

Kansas City

E

1,039

$89.8 million

Financial/ Professional Services

Chewy.com

Rowan County

N

1,200

$55 million

Distribution/Logistics

Chime Solutions

Mecklenburg County

N

1,000

$7 million

Business & Financial Services

Lowe’s Companies, Inc.

Mecklenburg County

N

1,612

$153.9 million

IT

Ensemble RCM, LLC

Springdale

E

1,600

$14.5 million

Healthcare Corporate Offices

Tinker Air Force Sustainment Center

Oklahoma City

E

1,300

$120.5 million

Aerospace/Defense

Smile Direct Club, LLC

Nashville

E

2,010

$217 million

Corporate Offices

Volkswagen Group of Americas

Chattanooga

E

1,000

$800 million

Automotive

Allstate Insurance Co.

Irving

E

1,300

$11 million

Apple, Inc.

Austin

N

5,000

$1 billion

Insurance Tech Products

Indeed

Austin

E

3,000

$29.8 million

Internet Technology

JPMorgan Chase Bank

Plano

N

4,000

$106 million

Financial Services

Uber Technologies

Dallas

N

3,000

$75.1 million

Software Development

BlueVine Capital Inc.

Salt Lake County

N

1,449

$20 million

Financial Services

Brex, Inc.

Salt Lake County

N

1,000

$23.4 million

Financial Services

Qualtrics LLC

Utah County

E

2,245

$45 million

IT

Amazon

Arlington County

N

25,000

$2.5 billion

Headquarters

Incentive Technology Group (ITG)

Arlington County

E

1,000

$5.1 million

IT

* Confidential

AREA DEVELOPMENT | Q2/2020

ShovelArticle2020SpreadStart.indd 41

41

5/27/20 1:44 PM

2020

GOLD & SILVER

SHOVEL AWARDS

KENTUCKY

SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Industry

UPS Worldport II Louisville E 1,000 $750 million

Ford Motor Co. LAP

ed by plans by Incentive Technology Group to move its headquarters into a larger location and create a thousand jobs. The IT consulting company had offers from elsewhere but chose to keep growing at home in the Arlington area.

North Carolina, meanwhile, already counted the 1,600 new Lowe’s jobs mentioned above as

CMWA Pinkerton Tobacco Co. LP Georgia Pacific Consumer Operations LLC

Distribution/ Logistics

Louisville

E

185

$550 million

Automotive

Paris

E

145

$111.9 million

Automotive

Owensboro

E

120

$100 million

Tobacco

Bowling E 50 $100 million Green

AppHarvest, Inc.

Morehead

Paper Products

N

285

$85 million

Meggitt Aircraft Braking Danville Systems Kentucky

E

83

$82.7 million

Aerospace

Bendix Spicer Foundation Brake LLC

E

94

$65.1 million

Automotive

Bowling Green

Agritech

Atlas Air Erlanger N 593 $34.1 million Air Worldwide Holdings Transportation

Services Lakeshore Learning Midway E 100 $27.6 million Distribution/ Materials Logistics

(pop. 4.47 million) States with populations of 3+ to 5 million

IT work and added three more

Sponsor: Kentucky Cabinet for Economic Development

major IT projects to that. Microsoft shared plans for Wake and

LOUISIANA

Mecklenburg counties that will

SILVER SHOVEL WINNER

total 930 jobs and a $70 million investment. Pendo.io’s addition

Company

City/County

N/E

# Jobs

Inv. Amt.

of nearly 600 jobs in Raleigh en-

LHC Group

Lafayette

E

500

$45 million

Healthcare HQ

Medline Covington N 464 $53 million

Distribution/ Logistics

sures that it remains listed as the world headquarters for the tech firm. And Durham-based Cree Inc. is expanding near Research Triangle Park, with more than 400 jobs to be added.

Utah added to its credentials in IT with multiple projects.

The Qualtrics expansion (spotlighted in the sidebar) led the way. Other big deals included Weave Communications, which will create nearly 1,000 jobs over

South Louisiana Methanol

Industry

St. James N 75 $2.2 billion Parish

Chemical Processing

Methanex Geismar E 62 $1.4 billion

Chemical Processing

SNF

$375 million

Polymers

Shell Chemical Geismar E 23 $1.2 billion

Plaquemine

Chemical Processing

Exxon Mobil Baton Rouge E 65 $469 million

Chemical Processing

Valero/Diamond Green Diesel

Norco

E

150

E

54

$1.5 billion

Fuel Refining

Bagwell Energy Delcambre E 240 $2.5 million

Energy Services

EY New Orleans E 200 $2 million

HQ/Financial Services

(pop. 4.7 million) States with populations of 3+ to 5 million

the next decade at its Lehi opera-

Sponsor: Louisiana Economic Development

tions focusing on voice over Internet and other customer communications technology. Ancestry continues to

plication building business in Salt Lake City.

grow through its focus on family history and

And Amazon Web Services will add 300 new

consumer genetics, and it anticipates 500

jobs in the Salt Lake area.

new jobs in Utah. Quick Base plans a similar level of hiring, growing its customized ap-

42

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 42

Arizona enjoyed a fair amount of IT activity in 2019, too. Projects included a $150

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

5/27/20 1:45 PM

(800) 626-2930 • CED.ky.gov

More than just shovel-ready.

Kentucky has

Build-Ready.

Kentucky has set a new, higher standard. With our certified Build-Ready sites, we have drastically shortened the time needed to plan and begin construction. With a Build-Ready site, a company is guaranteed that: •

A building pad is ready

•

Zoning is in place

•

Environmental issues have been resolved

•

Infrastructure plans are set

•

Construction costs and timetables have been estimated

•

Funding plans have been developed, with sale and lease options

•

Building renderings are available

That means much of the red tape has been eliminated, allowing a company to be operational much more quickly.

Kentucky communities are offering a growing list of certified Build-Ready sites. To learn more, call (800) 626-2930 or visit

BuildReadyKY.com

2020

GOLD & SILVER

SHOVEL AWARDS

million investment by Opendoor Labs, a Fox Corp. media center within the Arizona State University Research Park in Tempe, and Microsoft data center plans.

Silver Shovel winner

OKLAHOMA

SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Tinker Air Force Sustainment Center

Oklahoma City

E

1,300

$120.5 million

Enable Midstream Services LLC

Oklahoma City

E

75

$1 billion

TTEC Digital Inc.

Oklahoma City

N

450

$2.5 million

Information Services

Google North America

Pryor

E

100

$600 million

Data Center

Kimberly-Clark Corp.

Jenks

E

65

$132.7 million

Oakwood

N

150

$112 million

Mining

Durant

N

126

$44 million

Tubing Products

Oklahoma City

E

355

$77 million

Control Equipment

Tulsa

N

150

$55.5 million

Beverages

Preferred Sands of Oklahoma LLC Tubacex Durant, LLC

Nebraska celebrated LinkedIn

Kimray Inc.

Corp.’s proposed $70 million

Milo’s Tea Company Inc.

investment in Omaha, with 540 jobs and a $600 million

Industry Aerospace/ Defense Energy Services

Paper Mfg.

(pop. 3.94 million) States with populations of 3 + to 5 million

Google data center in Omaha.

LOGISTICS, MANUFACTURING AND OTHER SECTORS Pandemic or not, there’s plenty of need to move things around the country, and 2019

MISSISSIPPI

GOLD SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Industry

Entergy Nuclear

Hinds & Clairborne Counties

E

320

$127.1 million

Energy

projects established a solid foun-

Baxter International

Bolivar County

E

70

$72.7 million

Medical Eqpt.

dation for logistics growth all

Kohler Engines

Forrest County

E

250

$13.6 million

Engines

ESCO (The Weir Group)

Newton County

E

150

$50 million

at the expanding UPS Worldport

VT Halter Marine

E

900

$37.5 million

sorting and distribution facility

Jackson County

Relativity Space

Hancock County

E

190

$59 million

Correlle Brands

Marshall N/E County

450

$30.1 million

Plastics Mfg./ Distribution

Amazon

Desoto County

E

500

$100 million

Distribution

Kentucky, an Atlas Air Worldwide

Medline Industries

Desoto County

N

450

$46 million

Distribution

Holdings air cargo operations

Spectra Laboratories

Desoto County

N

300

$88 million

Life Sciences

over. In Silver Shovel winner Kentucky, the biggest job growth was

in Louisville, representing 1,000 new jobs. And across the Ohio River from Cincinnati, in Erlanger,

center will create nearly 600 jobs.

Tennessee earned its Gold

Mining Machinery/ Eqpt.

Shipbuilding/ Repair Aerospace

(pop. 2.9 million) States with populations under 3 million

Shovel with a wide range of projects, but it has always been a big

Sponsor: Mississippi Development Authority

player in logistics. FedEx in Memphis is one big reason, and it announced

44

ongoing expansion plans in 2019 creating

Memphis, Arrive Logistics’ expansion in Chat-

nearly 700 jobs. But there were plenty of

tanooga, and Western Express’ expansion

other jobs related to moving stuff around,

in Nashville, accounting for more than 1,300

including JNJ Express’ new headquarters in

new jobs all told.

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 44

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

5/27/20 1:46 PM

KANSAS There’s nothing more inspiring than a comeback story.

Central location. High-quality workforce. Outstanding infrastructure. Aggressively pro-business climate. These are just some of the things that led to Kansas being named CNBC’s Comeback State of 2019. And, if you’re considering reshoring, these are just some of the reasons it makes sense for Kansas to be the home of your comeback.

In a post-COVID world, location matters more than ever.

Department of Commerce

kansascommerce.gov/reshore

North Carolina hailed the

KANSAS

1,200 jobs being created by

SILVER SHOVEL WINNER

pet product distributor Chewy, planning a fulfillment center in Rowan County. Virginia celebrated plans by Wegmans Food Markets to build a new regional distribution center in Ashland.

Company

City/County

King of Freight SelectQuote Insurance Services

N/E

# Jobs

Inv. Amt.

Industry

Wichita

E

1,060

$1.1 million

Freight Brokerage

Overland Park

E

968

$10.1 million

Insurance Brokerage

Georgia welcomed distribution

1 Vision Aviation, PLLC

Salina

N

900

$5.2 million

Aerospace

centers from Stitch Fix in Lithia

Faith Technologies

Olathe

E

780

$38.5 million

Pre-fab Electrical Products

Overland Park

N

622

$5 million

Back Office Operations

CarMax Auto Superstores, Inc.

Olathe

N

315

$5 million

Back Office Operations

Resers Fine Foods

Topeka

E

301

$54 million

Food Processing

Walmart

Topeka

N

300

$235 million

Logistics/ Distribution

ated significant headlines and

Advisors Excel Holdings, LLC

Topeka

E

275

$14.4 million

Insurance & Brokerage

job creation. A big driver was the

Empirical Foods, Inc.

Garden City

N

300

$252 million

Food Processing

Springs and Phillips-Van Heusen in Palmetto. And the biggest

A Place for Mom

job-creating project in Kansas was the King of Freight brokerage expansion in Wichita, worth more than 1,000 jobs.

Across the country, manufacturing-related projects gener-

automotive sector, as it often is, as illustrated by the thousands of jobs previously detailed involving Ford and Jeep plants in Michigan.

(pop. 2.91 million) States with populations under 3 million Sponsor: Kansas Department of Commerce

Additional Michigan projects

NEBRASKA

were planned by Webasto Roof

SILVER SHOVEL WINNER

Systems, an automotive OEM supplier, with job totals approaching 450.

Company

City/County

N/E # Jobs

Inv. Amt.

Industry

LinkedIn Corp.

Omaha

E

540

$70 million

IT

manufacturing are such projects

Monolith Materials, Inc.

Hallam

N

100

$100 million

Natural Gas Products

as the 900-job transmission plant

The Scoular Co.

Seward

N

100

$51.2 million

Pet Foods

Merck Animal Health

Lincoln

E

50

$103 million

Pharmaceuticals

Great Plains Beef, LLC

Lincoln

E

40

$360 million

Meat Processing

pansion projects are slated to

Google

Omaha

N

30

$600 million

Data Center

combine for more than 400 jobs

Thunderhead Wind Energy, LLC

Neligh

N

15

$309.1 million

Wind Energy

Motor Wheel of America (CMWA)

Plum Creek Wind, LLC

Wayne

N

10

$209.1 million

Wind Energy

in Paris, and Bendix Spicer Foun-

Kawaski Motors Mfg. Corp., USA

Lincoln

E

50

$12.6 milion

Aerospace

Blair

E

N/A

$50 million

Sweetners

Also supporting automotive

in Cibolo, Texas, by AW Texas, a subsidiary of Aisin AW Co. In Kentucky, three auto-sector ex-

total: Ford in Louisville, Central

dation Brake in Bowling Green.

In Tennessee, Volkswagen’s Chattanooga project that

Avansya

(pop. 1.92 million) States with populations under 3 million

broke ground last November promises 1,000 new jobs. It’s an $800 million project that will

46

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 46

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

5/27/20 1:46 PM

C

M

Y

CM

MY

CY

CMY

K

We understand the impact that COVID-19 has had on society and the economy. That’s why, when it comes to finding talent, LED FastStart® tailors every training program. It's why we're successful in launching projects faster for our clients – because their future can't wait.

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OTHER SIGNIFICANT PROJECTS — ­ MANUFACTURING State & Company

Location

Jobs Investment

ALABAMA

State & Company

Location

Jobs Investment

ILLINOIS

DaikyoNishikawa

Huntsville

380

$110 million

Ford Motor Company

Chicago

500

$1 billion

Gerhardi

Montgomery

235

$41.6 million

Medline Industries, Inc.

Libertyville

290

$110 million

Navistar

Huntsville

145

$125 million

Broetje Automation

Elk Grove

100

N/A

Toyota

Huntsville

450

$288 million

Toyota Boshoku America

Athens

400

$50 million

U.S. Steel Corp.

Fairfield

150

$215 million

$37.6 million

Vuteq

Huntsville

200

$60 million

Y-tec Keylex Toyotetsu

Huntsville

650

$220 million

Andersen Corporation

Goodyear

415

$105 million

Hyundai Motor Mfg. Alabama, LLC

Montgomery

200

$410 million

Yongsan Automotive

Opelika

150

$5 million

ARIZONA Nike

Goodyear

500

$184 million

ARKANSAS USA

Little Rock

565

$90 million

Flack Global Metals

Osceola

150

$150 million

Lockheed Martin

Camden

326

$142 million

Nucor Steel

Hickman

100

$230 million

INDIANA Abbott

Westfield

450

Eli Lilly

Indianapolis

100

$400 million

Greenleaf Foods

Shelbyville

460

$310 million

Saab

West Lafayette

300

$37 million

Lopez Foods

Cherokee

386

$29.5 million

Allison Transmission, Inc.

Indianapolis

357

$425 million

FCA US LLC

Kokomo

204

$394.8 million

BeijingWest Industries

Greenfield

441

$80 million

Cormo USA

Rushville

250

$29.5 million

Waelz Sustainable Products

Muncie

210

$75 million

Central Motor Wheel of America

Paris

145

$111.9 million

Kentuckiana Curb

Louisville

400

$50 million

Fibrotex USA

Sterns

350

$12.1 million

KENTUCKY

Structurlam Mass Timber Corporation

Conway

130

$90 million

Dajcor Aluminum

Hazard

265

$19.6 million

CZ-USA

Little Rock

565

$90 million

Kobelco Aluminum Products & Extrusion

Bowling Green

90

$42 million

Moreno Valley

200

$100 million

Henkel And ALPLA

Bowling Green

60

$130 milion

Arglass Yamamura

Valdosta

150

$123 million

Bardstown

180

$46 million

Boehringer Ingelheim Animal Health

Athens-Gainesville

225

$120 million

Hitachi Automotive Systems Americas

Monroe

100

$100 million

CALIFORNIA Karma Automotive

GEORGIA

Takigawa Japan

MARYLAND Kite Pharma

Hagerstown

810

$85 million

Autolus

Rockville

170

N/A

MASSACHUSETTS

Projects curated from 2,000+ press releases received by Area Development during 2019, representing projects of 100 or more jobs and/or $50 million or more capex

Amazon

Westborough

200

$40 million

Cedar’s Foods

Ward Hill

125

$100 million

Thermo Fisher Scientific

Lexington

200

$90 million

make a big splash in electric vehicle pro-

gram, which will help us quickly attract and

duction. Virginia was a big winner in 2019,

train the high-quality workforce we need

too, with 777 jobs being created by Volvo

to deliver for our customers,” said Mike

Trucks North America in Pulaski County.

Ownbey, president and CEO of Morgan

State leaders called the $400 million invest-

Olson.5 And, just recently, the company

ment one of the largest ever in the south-

said it would up the Danville workforce to

west part of the state. Another 703 jobs

1,000. Morgan Olson, which makes vans

are part of a plan by Morgan Olson to build

for companies such as UPS, FedEx, and The

a new walk-in step van production facility in

New York Times, also will sign a contract

the Virginia community of Danville.

with the Canada Post to produce new mail

4

“One of the most attractive aspects of locating in Danville-Pittsylvania County is that we will be able to take advantage of the new Virginia Talent Accelerator Pro-

48

LOUISIANA

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 48

trucks, which likely will be produced at the Danville plant, Ownbey said.6 Aerospace and defense-related projects promised jobs across the country in

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

5/27/20 1:47 PM

OTHER SIGNIFICANT PROJECTS — ­ MANUFACTURING

State & Location Jobs Investment Company MICHIGAN

State & Location Jobs Investment Company PENNSYLVANIA

GM

Orion Township

400

$300 million

Keurig Dr Pepper

RPM Freight Systems

Royal Oak

500

$4.9 million

AKASOL

Detroit

224

$40 million

RHODE ISLAND

Amgen

MINNESOTA

Phoenix Paper

Wickliffe

500

$200 million

Up North Plastics

Cottage Grove

200

$101.5 million

Pascagoula

900

$37.5 million

MISSISSIPPI

Shipbuilder VT Halter Marine

Haas Automation, Inc.

Clark County

500

$100 million

NEW MEXICO

Intel

NEW YORK

Amy’s Kitchen

Goshen

680

N/A

I EC Electronics Corporation

ON Semiconductor

Newark East Fishkill

362 100

$22 million $720 million

Rio Rancho

300

N/A

ABB

Mebane

400

$39.9 million

Aircraft Solutions USA Greenheck Group

Lenoir County Shelby

475 400

$100 million $58.8 million

Navassa

299

$37.6 million

Cary

600

$18.4 million

Hickory

151

$42 million

Toledo/Parma/ Moraine

450

$700 million

Lordstown

1,100

$2.3 billion

Mason

190

$128 million

Pacon Manufacturing Corporation

Xerox

Cataler North America

OHIO

General Motors

General Motors & LG Chem

Precision Castparts

2019, including Raytheon’s growth of 1,000

$219.7 million

West Greenwich

146

$165.1 million

Flex, Ltd. Spectrum Quartz

Lexington County Dillon County

500 150

$25 million $22.5 million

TENNESSEE

Spring Hill

100

$300 million

Memphis

410

$86.9 million

Global Track Manufacturing USA

Milan

250

Ebm-papst

Washington County

200

$37 million

General Motors

Mitsubishi Motors

Franklin

200

$18.5 million

Nippon Paint

Chattanooga

150

$60 million

HIROTEC Group

Fayetteville

100

$48 million

Mersen

Columbia

100 $65 million

TEXAS

NORTH CAROLINA

378

SOUTH CAROLINA

Hyosung Heavy Industries

NEVADA

Lehigh Valley

Access Dental Lab

Kyle

440

$36 million

Continental Structural Plastics

Seguin

200

$65 million

McKinney

500

N/A

Fort Worth Richardson

500 488

N/A $3.1 billion

Carvana Pharmaceutical Product Development

Chesterfield County Henrico County

400 200

$25 million $63.7 million

Cartograf

Chesterfield County

63

$65.3 million

WEST VIRGINIA

Toyota

Buffalo

123

$111 million

WISCONSIN

Milwaukee Tool

Sun Prairie

870

$100 million

Promega

Fitchburg

100

$190 million

Raytheon

Stanley Black & Decker

Texas Instruments

VIRGINIA

Alto-Shaam, Inc.

Monomonee Falls

150

$18.8 million

Sub-Zero Group, Inc.

Fitchburg

100

$57.6 million

American Builders & Contractors

Beloit

195

$25.9 million

jobs in Arizona (see Project of the Year sidebar for Raytheon details). Silver Shovel winner Florida celebrated expansion at VT Mobile Aerospace Engineering (VTMAE) at the

VT Halter Marine to expand its shipyard and

Pensacola International Airport, along with

add 900 jobs.

Lockheed Martin in Orlando — each project

A wide range of manufacturing wins

tallied more than 1,300 new jobs. In Kansas,

also included medical/pharmaceutical proj-

1 Vision Aviation opened a headquarters in

ects, including a Spectra Laboratories project

Salina after moving from Iowa, representing

in Southaven, Mississippi, where 300 new

900 jobs in aircraft maintenance and repair.

jobs will focus on dialysis products and ser-

Gold Shovel honoree Mississippi hailed

vices. Down the Mississippi River in Bolivar

expansion at Relativity Space, where a 3D

County, Baxter International is expanding

printing process will build rockets. Back on

its plant that makes wound irrigation solu-

earth in the Mississippi community of Pasca-

tion and other products. And a non-manu-

goula, a U.S. Coast Guard contract will allow

facturing announcement tied to healthcare

AREA DEVELOPMENT | Q2/2020

ShovelArticle2020SpreadStart.indd 49

49

5/27/20 1:48 PM

2020

GOLD & SILVER

SHOVEL AWARDS

OTHER SIGNIFICANT PROJECTS — ­ TECHNOLOGIES

State & Location Jobs Investment Company ARIZONA

involved Ensemble Health Partners, a revenue cycle management provider serving the healthcare industry, growing in the

Sendoso

Scottsdale

260

N/A

FujiFilm Electronic Materials

Mesa

N/A

$91 million

Conway

1200

N/A

Brookfield

220

$49 million

Jacksonville

500

N/A

Cobb County

500

$5 million

ARKANSAS

DXC Technology

Cincinnati area of Silver Shovel-winning

CONNECTICUT

Ohio. The company hopes to fill well over

1,000 jobs this year.

FLORIDA

Emerson

INDUSTRY CLUSTERS

FIS

GEORGIA

BioIQ

Collibra

The strength of localized industry clusters is very apparent in some jurisdictions. Silver Shovel winner Louisiana, for example, boasts an impressive list of massive investments in chemical processing and energy, including South Louisiana Methanol in St. James Parish, Methanex and Shell in Geismar, Exxon Mobil in Baton Rouge, Valero/Diamond Green

Atlanta 200 N/A

INDIANA

Sitel Group

Fishers

350

N/A

ActiveCampaign

Indianapolis

200

$10 million

LHP Engineering Solutions

Columbus

135

$1 million

Lafayette

200

N/A

Baltimore City

200

N/A

LOUISIANA

Waitr Holdings

MARYLAND

Stripe

NEW YORK

Yext

New York City

500

N/A

IEC Electronics Corporation

Newark

362

N/A

bre. The energy and chemicals sector

IBM

Albany

N/A

$2 billion

also was active in Ohio, with three signifi-

OHIO

cant projects: AMG Vanadium in Wash-

in Norco, and Bagwell Energy in Delcam-

ington, Apex Power Group in Valley, and Fortress Transportation and Infrastructure

Tyler Nexient

Amazon

SOUTH CAROLINA

more than $2 billion in investment.

AIRSYS Cooling Technologies

tor was a significant job creator in Mis-

200

N/A

Portland

400

N/A

Greer

116

$5 million

Austin

800 N/A

OREGON

Investors in Southeast Ohio, representing The agriculture and agtech sec-

Moraine 200 N/A Columbus

TEXAS Amazon

souri last year. The biggest headlines

H-E-B

San Antonio

revolved around the U.S. Department of

VIRGINIA

500

Agriculture’s (USDA) plans to relocate

N/A

Future Foundation

Henrico County

500

N/A

CameraMatics

Richmond

100

$25 million

its Economic Research Service and National Institute for Food and Agriculture to the Kansas City region. Overland Park on the Kansas side of the state line was

Projects curated from 2,000+ press releases received by Area Development during 2019, representing projects of 100 or more jobs and/or $50 million or more capex

one option considered, but the agencies landed on a building in downtown Kansas

its crop sciences division, while Benson Hill

City, Missouri. Across the state in the St.

Biosystems will build a new headquarters

Louis metro area, two agtech projects to-

operation in the Donald Danforth Plant Sci-

gether promise a total of 800 jobs. Bayer

ence Center with plans to grow 300 jobs.

is moving in some 500 high-paying jobs in

50

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 50

While it’s not an industry cluster,

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

5/27/20 1:49 PM

Congratulations FloridaWest EDA on your 2020 Silver Shovel Award for landing ST Engineering in Pensacola.

Northwest Florida — where deals get done Silver Shovel Awards are not won easily. Hard work, tenacity and shared vision – combined with the unique Triumph Gulf Coast incentive fund – powered ST Engineering Aerospace’s expansion in Pensacola. This transformational project would not have been possible without the commitment from ST Engineering and the many partners who saw it through.

Talk with us today about landing your spot in our corner of Florida.

floridasgreatnorthwest.com

floridawesteda.com

OTHER SIGNIFICANT PROJECTS — ­ WAREHOUSE/DISTRIBUTION State & Company

Location

Jobs Investment

supporting corporate offices as fully half of its 10 most significant 2019 projects.

They included Alta Resources growth

ALABAMA Ben E. Keith

New Brockton

80

$100 million

in Fort Myers, Starwood Capital Group

Carvana

Bessemer

450

$40 million

Holdings and Royal Caribbean head-

RRB Beverage

Glendale

140

N/A

Quetico

Goodyear

300

$45 million

Amazon

Auburndale

500

N/A

and growth announced by NBC Universal,

Amazon

Deltona

500

N/A

which owns the Universal Orlando Resort.

Chick-fil-A

Cartersville

300

N/A

GE Appliances

Murray & Jackson Counties

200

$87 million

Nampa

1,000

N/A

Channahon

500

N/A

Westfield

400

N/A

Floor & Décor

Baltimore County

150

N/A

Smithfield Foods

Cecil County

240

N/A

ARIZONA

quarters offices in the Miami area (which broke ground in September), Minimise USA operations in Hillsborough County,

FLORIDA

GEORGIA

Amazon

ILLINOIS Amazon

Other places, such as Silver Shovel winner Oklahoma, thrive on diversity. Its biggest job-creator is a new 158-acre cam-

IDAHO

pus at Tinker Air Force Base where 1,300 jobs are expected. Nearly 500 jobs are in the works in digital customer experience technology and services at TTEC in Oklaho-

INDIANA Gordon Food Service

MARYLAND

ma City, more than 350 new jobs at a Kimray Inc. control equipment manufacturing expansion in Oklahoma City, and 150 jobs at a Milo’s Tea Co. plant in the Tulsa area.

MICHIGAN Production Tool Supply Company

Novi

85

Nebraska welcomed a diversity

$75 million

of projects as well, beyond its LinkedIn

MISSOURI O’Reilly Auto Parts

Horn Lake

380

N/A

headline mentioned earlier. It’s a great place for wind energy, which resulted

NEW YORK Orgill

Rome

225

$70 million

Gap

Groveport

600

$100 million

Amazon

Akron & Rossford

2500

N/A

OHIO

in big projects from Thunderhead Wind Energy and Plum Creek Wind. Google

PENNSYLVANIA

picked Papillion for a data center, Kawasaki Motors is expanding its aerospace

Lulus

Palmer Township

450

$6 million

manufacturing in Lincoln, and Merck is

WebstaurantStore

Columbia County

400

$33 million

Amazon

Findlay Township

800

$30 million

expanding animal health operations also

Dorchester County

450

$100 million

SOUTH CAROLINA DHL Supply Chain

Rooms To Go

Wilson County

200

$69 million

Stanley Black & Decker

Denton

300

N/A

Dollar Tree

Rosenberg

300

$130 million

Kroger & Ocado

Dallas

400

N/A

West Jordan

800

N/A

VIRGINIA Preferred Freezer Services

Portsmouth

60

$60 million

Wegmans Food Markets

Ashland

700

$175 million

Beaver Dam

140

N/A

WISCONSIN

Projects curated from 2,000+ press releases received by Area Development during 2019, representing projects of 100 or more jobs and/or $50 million or more capex AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 52

some companies to put their plans for this article on “pause,” but the states recognized with Shovel Awards are still to be congratulated.

UTAH

Conagra BrandsBirds Eye

As previously stated, the corona-

new facilities or expansions outlined in

TEXAS

Amazon

in Lincoln, among other headlines. virus global pandemic may have caused

TENNESSEE

52

per se, Florida counted high-level and

1

https://www.bisnow.com/dallas-ft-worth/news/constructiondevelopment/uber-is-still-coming-to-dallas-but-covid-19-stalled-itsconstruction-plans-103686 2 https://fox17.com/news/local/smile-direct-club-excited-aboutnashville-expansion 3 https://www.bizjournals.com/kansascity/news/2020/01/10/waddellreed-downtown-kc-headquarters-lease.html 4 https://wset.com/news/local/777-new-jobs-being-created-in-ourarea-thanks-to-400-million-volvo-expansion 5 https://www.vedp.org/press-release/2019-10/morganolson 6 https://www.godanriver.com/business/upping-original-estimatedelivery-van-company-may-provide-as-many-as-1-000-jobs-in/ article_9b92197c-edcc-5bd1-ba23-afadb0dc2bde.html

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

5/27/20 1:49 PM

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SPONSORS ARIZONA

Arizona Commerce Authority The Arizona Commerce Authority (ACA) is the state’s leading economic development organization with a streamlined mission to grow and strengthen Arizona’s economy. The ACA uses a three-pronged approach to advance the overall economy: attract, expand, create – attract out-of-state companies to establish operations in Arizona; work with existing companies to expand their business in Arizona and beyond; and help entrepreneurs create new Arizona businesses in targeted industries.

Sandra Watson, President & CEO Arizona Commerce Authority 100 N. 7th Ave., Suite 400 Phoenix, AZ 85007 602-845-1200 sandraw@azcommerce.com Azcommerce.com

FLORIDA

Enterprise Florida, Inc. From a talented workforce to a strategic geographic location, Florida has the boundless resources businesses need to grow. Freedom from high taxes and prohibitive regulations make Florida the Tax Foundation’s #1 tax climate in the Southeast and a top state for business.

Learn how Florida can help your business thrive.

Tim Vanderhoof, Senior Vice President, Business Development Enterprise Florida, Inc. 800 N. Magnolia Ave., Suite 1100 Orlando, FL 32803 407-956-5600 tvanderhoof@EnterpriseFlorida.com www.enterpriseflorida.com FloridaWest Economic Development Alliance FloridaWest Economic Development Alliance is the designated economic development organization for Pensacola and Escambia County. We are an alliance of public and private community leaders dedicated to collectively building, growing, and sustaining the economic potential and prosperity of individuals, businesses, and our Northwest Florida communities.

Scott Luth, CEO FloridaWest EDA 3 West Garden Street, Suite 618 Pensacola, FL 850-898-2201 sluth@floridawesteda.com floridawesteda.com Florida’s Great Northwest Florida’s Great Northwest (FGNW) is the regional economic development organization for the Florida Panhandle. FGNW promotes Northwest Florida for economic growth and diversification, advocates for economic development issues that affect the region, and collaborates to improve regional competitiveness.

Jennifer Conoley, President & CEO Florida’s Great Northwest P.O. Box 370 Niceville, FL 32588 850-527-0999 jconoley@fgnw.org www.floridasgreatnorthwest.com

54

AREA DEVELOPMENT

ShovelArticle2020SpreadStart.indd 54

GEORGIA

Georgia Department of Economic Development Georgia has long received recognition for its attractive business climate. Georgia Quick Start is the top-ranked workforce training program in the United States; the Port of Savannah and Hartsfield-Jackson Atlanta International Airport connect businesses to their consumers; and the state’s pro-business policies make Georgia a competitive option for companies.

Georgia Department of Economic Development 75 Fifth St NW, Suite 1200 Atlanta, GA 30308 404-962-4000 www.Georgia.org Georgia Ports Authority Georgia’s ports provide greater scheduling flexibility and market reach with direct links to I-95 and I-16, on-terminal rail, and 36 weekly container ship calls. The Savannah market features a deep inventory of industrial sites and parks, while the state of Georgia offers a business-friendly tax structure and targeted workforce training.

Stacy Watson, Director of Economic & Industrial Development Georgia Ports Authority P.O. Box 2406 Savanah, GA 31402 912-964-3879 • Fax: 912-964-3869 swatson@gaports.com www.gaports.com

KANSAS

Kansas Department of Commerce Vibrant urban and rural communities, a highly skilled workforce, and a business-friendly climate are just a few of the advantages companies gain by doing business in Kansas. Contact the Kansas Department of Commerce today to capture all the opportunity Kansas has to offer.

Kansas Department of Commerce 1000 SW Jackson, Suite 100 Topeka, KS 66612 Commercenews@ks.gov www.kansascommerce.gov

KENTUCKY

Kentucky Cabinet for Economic Development From single-employee startups to century-old brands, Team Kentucky helps businesses of all sizes select, grow, and succeed in Kentucky. With experts in Europe, Asia, and throughout the Bluegrass, Team Kentucky responds quickly, builds long-term relationships, assists with workforce training, and assures companies get the resources they need for success.

Jeff Taylor, Commissioner, Business Development Kentucky Cabinet for Economic Development Old Capitol Annex 300 West Broadway Frankfort, Kentucky 40601 502-564-7670 1-800-626-2930 CED.ky.gov www.ThinkKentucky.com

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

5/29/20 11:44 AM

SPONSORS LOUISIANA

Louisiana Economic Development LED is responsible for strengthening Louisiana’s business environment and creating a more vibrant economy. In 2019, LED attracted 80+ new economic development projects representing 12,300 new jobs, 15,500 retained jobs, and over $8.4 billion in new capital investment. LED assisted more than 9,500 Louisiana small businesses and entrepreneurs in 2019.

Louisiana Economic Development 617 North 3rd Street Baton Rouge, LA 70802 225-342-3000 Toll Free: 800-450-8115 OpportunityLouisiana.com

MICHIGAN

Michigan Economic Development Corporation The Michigan Economic Development Corporation markets Michigan as the place to do business. The MEDC assists businesses in their growth strategies, fosters the development of vibrant communities, and enhances Michigan’s image as a business and travel destination.

MEDC business assistance programs connect companies with resources, partners, and access to capital.

Susan Proctor Michigan Economic Development Corporation 517-719-0393 proctors1@michigan.org michiganbusiness.org

MISSISSIPPI

Mississippi Development Authority The Mississippi Development Authority is the state’s lead economic and community development agency, with approximately 300 employees providing services to businesses and communities throughout the state. MDA works to recruit new business to Mississippi and retain and expand existing industry and business. The agency also promotes tourism throughout the state.

Michael J. McGrevey, Deputy Director Mississippi Development Authority 501 N. West Street, Jackson, MS, 39201 601-359-3449 1-800-360-3323 mmcgrevey@mississippi.org Mississippi.org

TENNESSEE

Tennessee Department of Economic and Community Development It’s no accident that some of the biggest and most respected brands in the world have chosen to call Tennessee home. We provide companies a central location with unparalleled infrastructure, a highly qualified workforce backed by game-changing education reform, a low tax burden, and a collaborative environment with a business-friendly administration.

Allen Borden, Deputy Commissioner, Business, Community and Rural Development Tennessee Department of Economic and Community Development Tennessee Tower, 27th Floor 312 Rosa L. Parks Ave. Nashville, TN 37243 615-741-1888 allen.borden@tn.gov https://TNECD.com

TEXAS

Lubbock Economic Development Alliance Located in the middle of everywhere, Lubbock, Texas, is home to a thriving and diverse economy, alongside a skilled workforce with grit. Ranked in the Top 25 Best Cities to Start a Business, Lubbock is ideal for optimal work-life balance, short commute times, and a collaborative business climate.

Lubbock Economic Development Alliance 1500 Broadway Ave. 6th floor Lubbock, TX 79401 806-749-4500 800-687-5330 Lubbockeda.org

VIRGINIA

Virginia Economic Development Partnership For decades,Virginia has been a top choice for business.

Consistently rated among the best states for business, Virginia’s leaders have long made policy choices that demonstrate strong bipartisan support for business.

In fact, Virginia was ranked as America’s Top State for Business in 2019 by CNBC. Virginia Economic Development Partnership 901 East Cary Street Richmond, VA 23219 804-545-5600 info@vedp.org www.vedp.org

MISSOURI

Missouri One Start Missouri One Start provides a tailored workforce strategy to address your unique business needs. At no cost to eligible businesses, the team at Missouri One Start will customize services ranging from pre-employment screening and recruitment to designing job-specific training both during and after the onboarding process.

Kristie Davis, Director Missouri One Start P.O. Box 478 301 W. High Street Jefferson City, MO 65102 573-526-9239 MissouriOneStart.com AREA DEVELOPMENT | Q2/2020

ShovelArticle2020SpreadStart.indd 55

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>

ASSET/FACILITY MANAGEMENT

A Disciplined Road Map for Industrial Site Selection By gaining real data in the pre-capital planning stage, a business can achieve a solid basis for making critical operational and locational decisions.

By Courtney Dunbar, Site Selection and Economic Development Leader, Burns & McDonnell

I

t’s almost always good news when an industrial manufacturer needs to find a new plant site. It means business is growing, new markets are emerging, and financials are healthy. However, this is the point of time in the business cycle when decisions about next steps need to be made carefully. Unfortunately, this is when many businesses get tripped up.

Plant owners and managers may agree on the need for new production lines, more distribution capacity, new automation processes, and more staff.

But this is also when additional rigor is most urgently needed to analyze the best-case business scenarios for that next step. It’s when a pre-capital plan with disciplined site selection criteria is most needed.

All this delivers cost and time savings.

It takes time and effort to begin drilling into the details of industrial or manufacturing operations and even material-handling and supply-chain processes. It becomes quickly apparent that a whole network of processes must be reviewed. Marshaling the resources needed to help a manufacturer

56

AREA DEVELOPMENT

DisciplinedRoadmap.indd 56

identify and analyze the full scope of potential process efficiencies can involve a number of disciplines, ranging from engineering and technology specialists to finance, legal, environmental, and government relations.

These initial steps of pre-capital planning aim to assess a business’ objectives and existing capabilities mapped against broader macro trends within a given industry and the economy. The focus is on gaining real data that can provide a solid basis for critical decisions on the best course forward.

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

5/27/20 12:04 PM

Time is of the essence. Industries like food and consumer products, among many others, are driven by rapid changes in consumer tastes and expectations, not to mention interruptions to supply chains brought on by unexpected events such as the recent coronavirus pandemic. That means pre-capital planning needs to occur on a very accelerated cycle, which presents another strong argument for engaging an outside team of experts with the resources and base of knowledge who can quickly gather relevant data and present options within a matter of weeks.

Improve processes first.

Before any business makes a seven- or eight-figure capital investment, it is simply prudent to first look at the full range of potential process improvements that may be made, either at an existing facility or new facility. If some of the manufacturer’s goals can be met via simpler and less costly process improvements, the pre-capital exercise is often the right time to identify them. Perhaps reductions in “minor stops” and “breakdowns” on production lines can be achieved with better maintenance and focused improvement events.

Nearly every manufacturing or industrial facility has mountains of data. However, managers often have neither the time nor resources necessary to analyze it to reveal sources of problems and opportunities for improvement. The focused efforts of an outside multi-discipline team can identify the reasons processes are being interrupted and recommend solutions ranging from new technology, automation, robotics or simply improved maintenance and processes among front-line production personnel. Processes optimized at existing facilities can easily be captured and transferred to new facilities.

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AREA DEVELOPMENT | Q2 2020

DisciplinedRoadmap.indd 57

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Make smart decisions on site selection.

need to construct backup generation on site.

Projecting operations and maintenance expenses, Pre-capital planning is an essential discipline that long-term depreciation rates, and expected energy cost dovetails with site selection. It is imperative that the fluctuations can be helpful exercises because they force critical step of investing in a new facility be guided by a longer-term view. The amount of detail provided in the facts and data and not be just a guess. site assessment is a marker for how successful a costIn starting the site evaluation process, the first quessavings assessment will be. tion always should be: “What are the infrastructure High financial hurdle rates are the best argument needs?” Next question: “What are the business drivers?” possible to engage a broad team with expertise in disAnd, the following questions: “Does the new facility need ciplines ranging from master planning; environmental to be close to existing or new markets, or will it gain assessments; permitting; and land acquisition to civil, cost advantages by moving closer to supply sources? Will structural, electrical, and mechanical engineering; archimore immediate access to certain labor pools create adtecture; and construction. ditional advantages?”

Plant owners and operators who try and tackle these questions independently without Navigate the web of regulations access to all available data and expertise of and incentives. a range of experts face a heightened risk of Tax incentives or other inducements such making crucial mistakes. Proper due dilias promised infrastructure improvements gence requires rigorous analysis and shortcan come into play in many site selection It is simply cutting this step can result in erroneous conexercises. These can be important, but ownprudent to clusions and costly mistakes that may only ers and developers must not be enticed into first look at show up much later in the business cycle. weighting them more highly than they should the full range be. Regulatory and permitting requirements should also be weighed in the balance before Identify required rates of return. of potential determining if incentives are enough to offset Though site selection can be complex, it process any of these potential hurdles. becomes a more straightforward process if improvements Major constraints are always a first conit is preceded by pre-capital planning that that may be sideration for any given site. For example, are establishes a list of factors that can be evaluthere wetlands and mitigation requirements ated on both a quantitative basis and a qualimade, either that might come into play? If the site is in a tative basis. at an existing floodplain, are there constructability issues Though each owner/operator will have facility or new or adequate protection from levees and other their own proprietary criteria for site selecf a c i l i t y. nearby infrastructure? Are there constraints on tion, based on business needs and objeczoning, land use, stormwater management, tives, cost is almost always near the top of building heights, setbacks, and parking? Will the list. Industries such as food processing, the business encounter environmental confor example, have high financial hurdles for cerns such as endangered species, historic or any capital investment, usually in the neighcultural preservation, air quality or noise constraints? borhood of a 20 percent internal rate of return (IRR) on And, through it all, working to alleviate any concerns a payback timeline that can be as short as three years of local, state, and federal government agencies, as well or even sooner. as concerned public stakeholder groups, is a necessary Location and proximity to markets and supply chains step. The list can be immense before a project is ready can directly impact IRR. Energy costs can also be imto be “greenlighted.” portant in certain regions as well as power interconnections. Condition of roads, sewers, and high-quality water supplies also must be assessed, along with available Model constructability with capital projections. pools of skilled labor. Projected taxes and availability of It’s no secret that selecting the right site for your tax incentives also must be considered. manufacturing or distribution facility is part of a broadDespite these factors, it is still strongly recommended er puzzle. Understanding how all the pieces fit together that owners and developers consider total lifecycle costs will help you efficiently maximize production resources, in evaluating potential plant sites. Low upfront developlabor resources, and land requirements. ment costs often are offset by high long-term expenses.

By making a careful analysis of internal and external For example, water quality will be a major considerfactors through a deliberate capital planning process, ation for many process manufacturing facilities. Selectyou can often identify meaningful process improvements ing a site with marginal water quality simply because it that will save money over the long term. Then, utilizing is low-cost may require construction of advanced water this framework in a disciplined site selection process, treatment facilities that offset any upfront cost savings. while also utilizing a team with broad-based expertise, Similarly, locations with low utility rates may also present can give you peace of mind that you have made a wise issues with power quality and reliability, resulting in the investment of hard-earned capital. n

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ENERGY/INFRASTRUCTURE

Redevelopment of Former Coal Plant Sites Industrial real estate firms are joining environmental investors to redevelop former coal plant sites in an effort to breathe new life into the communities where they are located.

By Kerry Smith, Informationworks

alternate energy sources such as natural gas, subsidized solar and wind energy, continued compliance with federal energy regulations, and public concern over coal’s effect on climate change.

The decommissioning of U.S. coal-fired power plants, according to the U.S. EIA, is not limited to any one state nor to any one type of coal. The three largest coal plants to cease operation in 2019 were in Pennsylvania (FirstEnergy Bruce Mansfield), Arizona (Navajo), and Alabama (Gorgas).

Environmental Liability Transfer (ELT), which acquired the Meredosia Power Station in November 2019, anticipates a two-year time frame to remediate and repurpose the 75-acre site.

C

oal-fired power plants across the United States shut down in 2019 at the second-fastest pace on record. According to the U.S. Energy Information Administration (EIA), plants with a combined total of more than 15,100 megawatts ceased operating nationwide last year — enough to power 15 million homes, and second only to the number of megawatts retired during 2015. The reasons behind these closures are many: decreasing wholesale prices, competition from comparatively cheap and plentiful

Energy Companies Seek Out Industry Experts With even more coal-fired plants projected to come offline in 2020 and beyond, energy companies are seeking industry experts in the decommissioning, site remediation, sales, and redevelopment of these sites. For example, Southern Illinois-based industrial real estate brokerage firm BARBERMURPHY is actively working with coal-fired power plant owners, environmental remediation companies, and others to assist in the decommissioning, sale, and redevelopment of these sites.

BARBERMURPHY principal and broker Steve Zuber, SIOR, has been working with St. Louisbased Commercial Development

Company (CDC) in the disposition and repurposing of these plants, most recently the Meredosia Power Station (formerly owned and operated by Ameren Energy Medina Valley Cogen LLC) located 100 miles west of Springfield, Ill. Commercial Development Company’s affiliate, Environmental Liability Transfer (ELT), acquired the plant in November 2019 and anticipates a two-year time frame to remediate and repurpose the 75acre site, which operated as a power plant from 1948 through mid-2011.

Permitting, asbestos abatement, waste removal, environmental remediation and restoration, liquidation of surplus machinery and equipment, and demolition of most of the Meredosia plant’s infrastructure is included in ELT’s scope of work. Since 2014, the firm has assumed and abated nearly $2 billion in corporate environmental liability.

“BARBERMURPHY is intently involved in the disposition and repurposing of this site,” Zuber says.

“The existing substation and power grid will remain intact, which is a plus for users with high energy requirements. We’re looking at a wide array of different industrial users that can utilize this site, from solar energy producers that want to tie into the power grid to heavy manuAREA DEVELOPMENT | Q2 2020

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The tion in 2012) is enrolled in facturing companies that decommissioning of this program,” she says. need power from the grid.

Another attraction is the IlliU.S. coal-fired nois River for access to bargAttributes of Power ing services.”

Plant Reclamation The Meredosia site is but Commercial Development one example of plant site reCompany is actively targetdevelopment. Illinois’ identity ing industrial real estate, as one of 16 states with deincluding power plants, for according regulated electricity markets redevelopment. Marketing also positions it well in terms Director John Kowalik says to the U.S. EIA, is of remarketing its decomCDC has purchased seven remissioned coal-fired power tired coal-fired power plants plant sites to green-energy since 2014, representing prospects, says Zuber. “The more than 3,700 megawatts cost of power here in Illinois of retired generation capacis certainly more competitive ity. “And as energy markets to any one state than in many other states,” continue to embrace more he notes. efficient and renewable techAccording to Illinois Envinologies, we expect signifinor to any one ronmental Protection Agency cantly more acquisitions over (IEPA) Bureau of Air spokesthe next few years,” Kowalik woman Kim Biggs, Meredosays. type of sia is in good company with Once a power plant a host of other coal-fired closes, beyond the job losses power plants to have ceased and tax revenue losses, the operations in Illinois over the environmental impact from past nine years. Biggs cited historic plant operations still the 2016 closure of Dynegy needs to be resolved. That’s Midwest Generation LLC’s where CDC steps in. “WithWood River Power Station on out a buyer willing to take the Illinois side of the St. Louis MSA and 10 other plants the risk, old shuttered power plants could remain in a in northern and central Illinois. perpetual state of decay and deterioration,” he explains.

“There are currently 11 coal-fired power plants that “That’s not a good scenario for the utility or the surremain in operation in Illinois,” says Biggs. “Illinois EPA rounding community.” cannot speculate on the future status of the remaining Kowalik agrees with Zuber that the range of potencoal-fired power plants. The agency does not expect to tial end-users of these sites is very broad. “One of the see any new coal-fired power plant developments in Ilincredible attributes of power plant reclamation is that linois’ future.” the real estate typically has built-in infrastructure comThe 11 operational coal-fired power plants in Illinois, ponents that can be easily reused for new industries… according to the IEPA, include three plants in Baldwin, access to rail, access to waterways and ports, access to Newton, and Peoria owned by Vistra Energy (which achighway transportation, access to utility grids, and so quired Dynegy in 2018); NRG’s plants in Pekin, Waukegon,” he says. “Additionally, retired power plants are typian and Will County; Electric Energy Inc.’s plant in Joppa; cally located in areas where there is a strong talent base Dominion Energy’s plant in Kincaid; CWLP’s Interstate and the need for good-paying jobs.” plant in Springfield; Southern Illinois Electric CooperaIn addition to the Meredosia, Ill., site, CDC’s plant tive’s plant near Marissa; and Prairie State Generatredevelopment projects include Brayton Point Power Staing Co., LLC’s plant, also near Marissa in Washington tion (Dynegy) in Somerset, Mass.; Tanners Creek Power County.

Plant (Indiana Michigan Power) in Lawrenceburg, Ind.; As each site is ready for redevelopment, Biggs says Mighty Marysville Power Plant (DTE) in Marysville, Mich.; property owners can enroll in the IEPA’s Voluntary Site Chamois Power Plant (AECI) in Chamois, Mo.; Fox Lake Remediation Program. The program provides IEPA reGenerating Station (Alliant) in Sherburn, Minn.; and Picview, technical assistance, and no further remediation way Power Plant (AEP) in Pickaway County, Ohio. determinations from the agency. “Currently the former Massachusetts is among the states that are doing Crawford Power Station in Chicago (which ceased operatheir part to promote redevelopment of former coal-fired

power plants,

not limited

coal.

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power plant sites. According to the U.S. EPA, the Massachusetts legislature launched the Plant Revitalization Task Force several years ago and created a plan for redeveloping the Salem Harbor Power Station. The state’s strategy also includes a plan for decommissioning other coal-fired power plants that were facing imminent closure throughout the state. Massachusetts provided $100,000 for each of three reuse studies.

And in Illinois, several years back, former Chicago Mayor Rahm Emanuel appointed a nonprofit environmental policy organization to engage the public and business leaders to forge a plan for redeveloping the previously mentioned decommissioned Fisk and Crawford coal-fired plant in Chicago.

State and federal government brownfields initiatives are another framework within which former power plant sites are being cleaned up and repurposed. At the state level, tax increment financing (TIF) is also a means through which municipalities can cover upfront cleanup and infrastructure costs.

In the private sector, commercial and investment funding mechanisms are often used to finance these redevelopment projects, as is the scenario with CDC and Meredosia, among others. Program-related investments (PRIs) may also fund the redevelopment of power plants, according to the U.S. EPA. PRIs are loans, loan guarantees, or equity investments made by a foundation to support charitable activities. Educational and research institutions may also contribute to redevelopment by conducting initial feasibility analyses and renewing remediation options.

Regardless of the source of funding to make these deals happen, preparing a site for reuse is often a complex, multi-year process that includes not only decommissioning and demolition but also cleaning up contamination existing in materials, soil and/or groundwater. But a tiny town in central Pennsylvania is making it happen. Within the next 60 days, a 38,400-square-foot medical marijuana growing facility is expected to open in Shamokin Dam, Pa., employing 60 people on a 219-acre site upon which stood a coalfired power plant that operated for more than 60 years before closing in 2014.

Pennsylvania publishes detailed “playbooks” for each coal-fired power plant that retires, outlining specific property characteristics for potential investors.

Denise Brinley, executive director at the Pennsylvania’s Office of Energy, says these playbooks are proving to be an effective means of marketing the redevelopment of sites like this one. “We don’t want sites with infrastructure like these to be underutilized, eyesores on the community, and offer no real tax revenue or employment opportunities going forward,” Brinley says.

“They have great potential for future redevelopment that can breathe new life into communities.” n

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GOVERNMENT POLICY/INCENTIVES

The Nature of Incentives Compliance in the Age of the Coronavirus Although compliance may not be top of mind for business during the pandemic, renegotiation may be possible, and incentives could be more important now than ever before.

By Larry Gigerich, Executive Managing Director; Susan Jarvis, Senior Client Advisor; and Gerald Frazier, Principal; Ginovus

E

conomic development compliance is historically a long process, one that is typically managed over a multi-year time frame. Companies have negotiated incentives to help offset costs associated with growth and expansion and count on the economic benefits as part of their strategic growth plan — specifically, their plan for building the future of their business and their teams.

What no one counted on was a global pandemic bringing life as we know it to a standstill. The dramatic slowdown of the economy has caused business leaders to take a close look at all aspects of their business, which should absolutely include compliance reporting associated with economic incentive agreements.

What does compliance look like in the middle of a pandemic?

Despite these unprecedented times, not everything has — or should — come to a screeching halt. Business must continue processing payroll, maintaining employee health benefits, and fulfilling production orders. For those businesses that have recently experienced growth and expansion and have been awarded economic development incentives, quarterly or annual compli-

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ance reporting must be maintained.

Most state and local compliance reports are due within the first quarter of each year, and in 2020, this was also the time that COVID-19 reared its ugly head in the United States.

Companies had to immediately shift focus to having their employees work remotely, ensuring that networking and computer systems were safe and secure, and maintaining business continuity to the greatest extent possible. With this shift in attention, maintaining compliance with incentives has likely not been the priority.

Keeping up with compliance will be crucial in a recession.

Economic development incentives continue to be an important

component of the strategic plan for companies experiencing growth.

Past data has shown that many companies awarded incentives fail to realize the benefits because of the compliance requirements. This could be for a variety of reasons, including burdensome paperwork and/or the fact that responsibility for compliance failed to reach the appropriate company contact.

In 2020, maintaining compliance may be even more complicated as workers adjust to remote work environments, and teams are operating in fluctuating circumstances.

However, as companies experience an economic downturn as a result of the pandemic crisis, the value of receiving the financial benefit from

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economic incentives becomes even more crucial to a company’s bottom line. It could make the difference in sustaining operations. Many incentives realized will be in the form of much-needed cash, especially important during uncertain times.

What’s happening around the country with compliance?

Nationally, Congress moved to enact the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as additional legislation in progress, which intends to assist businesses with a variety of needs during this crisis. While these assistance packages do not necessarily lighten or change the burden of direct compliance, the program will assist with the day-to-day stress of guiding a company through the fallout from COVID-19.

In New York, one of the areas most impacted by COVID-19, the New York City Department of Finance has offered relief in the form of deferment or suspension of property tax payments and extending abatement deadlines.

In Indiana, the Indiana Economic Development Corporation (IEDC) has extended the filing deadline for compliance reports required to receive payroll tax credits.

Eric Holcomb, Governor of Indiana, also issued several Executive Orders, a few of which allow for the extension of property tax reporting and tax payments.

In Nevada, the Governor’s Office of Economic Development (GOED) issued a memorandum to the business community to take whatever measures necessary to keep its business and employees safe during the COVID-19 outbreak, including working with the GOED office to discuss specific situations and to work on compliance extensions as needed.

And a response by JobsOhio has been to immediately put into place an automatic, limited waiver of compliance for companies with active economic development projects. This policy will continue through the calendar year 2020 and 2021 reporting periods.

As other states continue to adapt to the ever-changing business landscape, we will continue to see more states roll out their contingency compliance guidelines.

National emergencies have impacted incentive compliance in the past.

How do we compare how the compliance process has been affected by the COVID-19 crisis to other national crises such as 9/11 and Hurricane Katrina? The short answer is that this crisis is unique with its challenges, and the need for flexibility is constantly evolving.

During 9/11, the aforementioned New York City Department of Finance enacted several tax incentives in an effort to encourage rebuilding in the city’s most traumatized areas. During Hurricane Katrina, the Gulf Opportunity Zone (GO Zone) Tax Incentives and Relief Act made available almost $14 billion in federal tax incentives to encourage businesses to invest in the regions devastated by the hurricane. Also, because there was such a need

for housing to be rebuilt, tax incentives were offered to the New Orleans construction industry, an industry that would not normally qualify for economic incentives.

Re-negotiation may be a necessary reality.

The current pandemic crisis is unlike 9/11 or Hurricane Katrina; it is not human-made or a force of nature.

The staggering number of $2 trillion is, as of this writing, the estimated financial loss to the global economy due to the COVID-19 pandemic, according to the United Nations Conference on Trade and Development.1 Following a long period of economic growth, companies that a year ago were growing and hiring are now worried about keeping their doors open. For those companies that were awarded economic incentives as a result of their growth plans, adding to their worry is the possibility of not being able to meet their job and investment commitments and thus losing the economic benefit from those incentives. In the worst case, repayment of funds already awarded may be a reality; however, given the unforeseen circumstances, this situation likely can be mitigated. During these times, existing incentive contracts may need to be renegotiated based upon post-pandemic economic realities. Having strong relationships with state and local economic development officials can be an important strategic advantage.

Prepare for what comes next.

Our country has never faced a national or global emergency of this magnitude. Federal stimulus dollars will be an effective bridge, but the reparations needed to get our nation back to a pre-pandemic level will likely not be swift or linear. Unemployment is expected to remain at around 6 percent for the foreseeable future,2 leaving roughly four million people looking for work in a difficult economy. We had already seen manufacturing on a downward trajectory3 and can expect this trend to continue.

At the same time, positive signs are starting to surface. Local and state governments are now considering how to emerge from this pandemic safely and move forward. As businesses look to regain their footing and open again, it will remain imperative for companies to stay connected with economic developers to consider the latest factors and how they apply to any existing or future incentive agreements and opportunities.

Our country has risen to whatever challenges have been placed before us time and time again. This pandemic has been a bold reminder of our resiliency, our creativity, and our ability to come together for the greater good.

We will again see a time when companies commence making new investments, and broad-based hiring will resume. Businesses should continue to expect economic development incentives to be an important collaboration tool in our nation’s economic recovery and rebirth. n 1

https://www.cnn.com/2020/04/20/health/coronavirus-impact-by-the-numbers-trnd/ index.html https://www.reuters.com/article/us-health-coronavirus-usa-forecast/economistssee-uneven-jobs-recovery-high-u-s-unemployment-through-2021-idUSKCN21S0BL 3 https://www2.deloitte.com/us/en/insights/economy/us-economic-forecast/ united-states-outlook-analysis.html 2

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ADINDEXWEBDIRECTORY Advertiser

Page Advertiser

ARIZONA

Page

LOUISIANA

Arizona Commerce Authority www.AZCommerce.com

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Arizona State University www.ASU.edu innovationzones.asu.edu

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Louisiana Economic Development www.OpportunityLouisiana.com

MARYLAND Maryland Department of Commerce www.Commerce.Maryland.Gov

FLORIDA Enterprise Florida, Inc. tvanderhoof@EnterpriseFlorida.com www.EnterpriseFlorida.com

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Florida West Economic Development Alliance sluth@floridawesteda.com www.FloridaWestEDA.com

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Florida’s Great Northwest Economic Development jconoley@fgnw.org www.floridasgreatnorthwest.com www.FGNW.org

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MICHIGAN Michigan Economic Development Corporation proctors1@michigan.org www.MichiganBusiness.org

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MISSISSIPPI Mississippi Development Authority mmcgrevey@mississippi.org www.Mississippi.org

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MISSOURI

GEORGIA Georgia Department of Economic Development www.Georgia.org

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Georgia Ports Authority swatson@gaports.com www.GAPorts.com

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Missouri One Start Department of Economic Development www.MissouriOneStart.com

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NEW YORK New York City Economic Development Corporation www.edc.nyc

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TENNESSEE

IDAHO

Tennessee Department of Economic Emsi 13 & Community Development www.EconomicModeling.com allen.borden@tn.gov www.TNECD.com

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INDIANA

River Ridge Development Authority info@RiverRidgeCC.com www.RiverRidgeCC.com

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Lubbock Economic Development Alliance www.Lubbockeda.org

KANSAS Kansas Department of Commerce Commercenews@ks.gov www.KansasCommerce.gov

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VIRGINIA Virginia Economic Development Partnership info@vedp.org www.VEDP.org

KENTUCKY Kentucky Cabinet for Economic Development CED.ky.gov www.ThinkKentucky.com

TEXAS

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Big moves should generate big returns. A Maryland move does.

We’re talking a tech-savvy talent pool and infrastructure that make crucial markets more accessible than ever. And companies here don’t pay the price of other tech hubs. Point your clients to markets that generate ROI, like D.C. suburb Silver Spring (66% more affordable than San Francisco), or Baltimore (43% more affordable than New York).

Open.Maryland.gov

Innovation Technology Top Talent “ Our mission is to create innovative solutions to make the world a safer place, and Arizona provides both the talent and the environment that enables us to continue to grow and achieve that mission.”

Wes Kremer President, Raytheon Missiles & Defense

2020

PROJECT OF THE YEAR AWARD WINNER

Arizona is proud to provide a platform for pioneers like Raytheon Missiles & Defense to grow and thrive. With nearly 13,000 employees and a statewide network of more than 500 suppliers, the high-tech powerhouse contributes $2.6 billion annually to the state’s economy, an impact that has grown by more

than $500 million in the last three years. Arizona’s top talent, commitment to keeping taxes low and regulation light, and strategic geographic location have earned the state a reputation as a leading hub for advanced manufacturing. Plus, Arizona offers a lifestyle that allows employees to achieve their personal goals with endless outdoor activities, vibrant arts and culture, easy commutes, and affordable housing.

It’s this perfect balance that makes life better here — and provides the winning combination for global innovators like Raytheon.

Learn more at azcommerce.com

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