Area Development Q2 Issue 2019

2019

FEELING THE EFFECTS OF NEW METALS TARIFFS

SHOVEL AWARDS PAGE 21

PAGE 9

WORKING WITH COMMUNITIES PAGE 70

AREADEVELOPMENT SITE

AND

FACILITY

PLANNING

Q2/2019

PEOPLE ANALYTICS

HELPS DEFINE THE SEARCH FOR

SKILLED LABOR

PAGE 16

WHAT MAKES A SUCCESSFUL

INNOVATION DISTRICT? PAGE 47

GROWING MARKETS POSITIONED FOR CORPORATE LOCATION SUCCESS PAGE 57

NIKOLA MOTOR COMPANY SETS UP PRODUCTION LINE IN GREATER PHOENIX, AZ. PAGE 28

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“After 12 months, nine states and 30 locations, we decided on Arizona.

With a workforce to support our growth and a pro-business Governor, Arizona understood what 2,000 jobs would mean to their state.”

–Trevor Milton, CEO, Nikola Motor Company

2019

GOLD SHOVEL

AWARD WINNER

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2019

PROJECT OF THE YEAR AWARD WINNER

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Arizona has established a global reputation as one of the best states for business and innovation — attracting pioneering leaders like Nikola Motor Company. On its mission to revolutionize the transportation industry, Nikola Motor Company discovered that Arizona provides the perfect platform to scale their success. With a skilled, available talent pool, a commitment to keeping taxes low and regulation light, and a strategic geographic position, Arizona has the winning combination for companies seeking their next location for growth. Arizona also provides 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.

Learn more at azcommerce.com

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CONTENTS

28

Cover Story

Nikola Motor Co. to build hydrogenelectric trucks in Arizona

57 Growing Markets Positioned for Corporate Location Success Corporate site location projects begin with understanding which regional markets are growing and will provide a long-term pool of skilled workers.

64 Corporate Talent Strategy

features

14 Utilities’ Role in the

16 People Analytics

Conveying a company’s utility needs to service providers and choosing a location that can properly meet those needs will help to ensure a project’s success.

The analysis of human capital flows across markets and regions measures how, why, and where talent and skill clusters are creating and supporting sustainable market strength.

Corporate Location Decision

Carefully aligning your company’s talent sourcing strategy with its choice for a new facility location will result in a successful investment decision.

Helps Define the Search for Skilled Labor

70 Working with

Communities to Earn a Welcoming Reception

47 What Makes a

Successful Innovation District?

Understanding a community’s dynamics will lead to a successful project and long-term benefits for all.

Prosperous innovation districts have diversified economies and are integrated into the fabric of a community.

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, $10. Yearly subscription U.S. & Canada, $75; foreign, $95.

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

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Volume 54 | Number 2 Q2/2019

departments

Economics “In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up or else all go down as one people.”

Franklin D. Roosevelt (1882 – 1945), American statesman who served as the 32nd president of the United States from 1933 until his death in 1945.

4 Editor’s Note

Can the U.S. Win the Trade War With China — and at What Cost?

8 In Focus

Uncertainty Driving Location Strategy Amid USMCA Debate

9 Front Line

special report

21

GOLD & SILVER

SHOVEL AWARDS

The 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.

Feeling the Effects of New Tariffs on Steel and Aluminum

10 Front Line

Implications for Industry of Raising the Minimum Wage

12 First Person

Amanda Hutchings, President, Peak Manufacturing

72 Ad Index/Web Directory special location report

50 Texas Builds on Its Strengths and Confronts Its Challenges

Population growth, a favorable tax climate, and a business-friendly environment are among the factors fueling economic gains.

61 Diversification Bolstering

Economic Growth in Ohio

While building on its existing strengths, Ohio is seeking to diversify the state’s economy.

66 Indiana Is Making Global

Connections

Both domestic and foreign advanced technology and other firms are investing in Indiana.

online • Opportunity Zones Can Uplift Communities and Investors Alike • Ingredients for a Healthy Site Selection Process in the Food Industry • Who is Generation Z? • Building Smarter: How to Ensure Optimization from Start to Finish and Beyond • Understanding the Evolving Incentives Landscape • Defining Key Siting Criteria Will Lead to a Perfect Location Match • Ensuring a “Pipeline” of Qualified Workers • New Construction Technologies and Techniques in a Time of Shortages Find these articles and more @ www.areadevelopment.com

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 2019 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

Q2/2019

Can the U.S. Win the Trade War With China — and at What Cost?

E

very day news of the U.S. trade war with China takes a new turn. On May 10, the Trump administration raised tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, after trade talks between the two countries broke down. Then, in mid-May, the Trump administration signed an order that may ban major Chinese companies from buying computer chips from the U.S. China has referred to the administration’s moves as “economic terrorism.”

Meanwhile China is raising tariffs on $60 billion of U.S. goods, has halted its purchase of American soybeans, and has also suggested it may curb exports of rare earth minerals, which are crucial to high-tech manufacturing.1 What does this mean to U.S. businesses and consumers? An analysis from the Tax Foundation finds that the administration’s 25 percent tariff on $200 billion worth of Chinese goods amounts to a $50 billion tax increase and would reduce GDP by 0.21 percent and eliminate more than 161,751 jobs.2 This is because the cost of new tariffs is being passed on to U.S. companies, affecting their decisions and ability to grow and increase hiring. And many companies say they’ll have to pass on the extra costs of tariffs to consumers of their products.

Columbia Sportswear CEO Tim Boyle calls the tariffs “very disruptive” to his company’s supply chain and said in a Bloomberg TV interview Columbia will pass on the costs to consumers if it has to. According to Boyle, “The big issue is really the uncertainty we face in trying to grow our business; we’re spending way too much time worrying about Mr. Trump’s trade war as opposed to selling our products.”3 Yet, there are those who would say these tariffs are necessary because China has taken advantage of its global competitors by ignoring trade agreements and illegally appropriating foreign technology. Getting China to change will require severe financial penalties, according to Michael Collins, president of MPC Consulting, which focuses on the challenges faced by small and mid-size manufacturers. He believes we need a “short-term sacrifice to avoid long-term collapse” of our economy.4 The question remains — can we win this trade war and at what cost?

1

https://www.cnn.com/2019/05/30/asia/china-us-peoples-daily-trade-war-intl/index.html 2 https://taxfoundation.org/trade-china-tariffs-economic-impact 3 https://www.industryweek.com/leadership/columbia-sportswear-ready-pass-trump-tariffs-consumers 4 https://www.industryweek.com/economy/why-we-need-tariffs

www.areadevelopment.com EDITORIAL Editor Geraldine Gambale editor@areadevelopment.com Staff and Contributing Editors Dave Claborn Mark Crawford Dan Emerson Tom Ewing

Tom Gresham Mark Schantz Steve Kaelble Karen Thuermer

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

circ@areadevelopment.com

Editor

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

2019 Editorial Advisory Board Aaron Ahlburn, Managing Director and Senior Director, Research, JLL 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 Studley Kate Crowley, Principal, Baker Tilly 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.

Finance Mary Paulsen finance@areadevelopment.com

Stephen Gray, CEO, Gray Construction

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

Business/Finance Assistant Barbara Olsen (ext. 225) olsen@areadevelopment.com

Minah C. Hall, Managing Director, True Partners Consulting LLC Scott Kupperman, Founder, Kupperman Location Solutions, LLC Dan Levine, Practice Leader, Location Strategies and Economic Development, Oxford Economics, Inc. Bill Luttrell, Senior Locations Strategist, Werner Global Logistics, Werner Enterprises, Inc.

Eric Stavriotis, Senior Vice President, Advisory & Transaction Services, CBRE Margy Sweeney, Founder & CEO, Akrete, Inc.

All correspondence to: Area Development Magazine

Dan White, Senior Economist, Moody’s Analytics

400 Post Avenue, Westbury, NY 11590

Joshua Wright, Vice President, Economic & Workforce Development, Emsi

Phone: 516.338.0900 Toll Free: 800.735.2732 Fax: 516.338.0100

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Build a better company, from the state up.

Walk the line between booming business growth and reasonable living costs and you’ll find yourself in Maryland.

With a constant supply of well-qualified candidates from an award-winning education system and a diverse, talented workforce, Maryland is the perfect place for your business to set up camp.

Plan your move.

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IN FOCUS Uncertainty Driving Location Strategy Amid USMCA Debate

By Brett Doney, President & CEO, Great Falls Montana Development Authority

Companies must manage trade policy risks and opportunities in today’s uncertain global trade environment.

BRETT DONEY, president and CEO of the Great Falls Montana Development Authority, is a Certified Economic Developer (International Economic Development Council) who also holds the Master of Corporate Real Estate and Senior Leader of Corporate Real Estate professional designations from CoreNet Global.

The United States-Mexico-Canada trade agreement (USMCA), which has been signed but not yet ratified, complicates the calculus for company location strategies.

How do corporate leaders make long-term capital investment siting decisions during a period of such uncertainty? Careers are advanced/destroyed and companies grow or fall based on site location decisions. Managing risk, while positioning your company to take advantage of emerging opportunities, has become increasingly difficult.

NAFTA’s replacement, assuming it is ratified in its current form, will affect company supply chains, workforce, tax, regulatory, market, and other considerations. The agreement increases environmental regulations, incentivizes domestic production, and opens Canada’s dairy market to the U.S., among other features.

Policy changes like this always create new threats and opportunities. Larger uncertainty with

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American trade policies and the rapid progress of other global trade agreements are sure to create even greater threats and opportunities for most companies, many of which will only become apparent as global systems realign.

In today’s turbulent world, companies can delay major siting decisions, though doing so risks losing out on new market opportunities and hinges on the assumption that “sometime soon” the trade policy landscape will become more settled. Even if that is likely, which remains to be seen, rapid changes in markets and technology will ensure that corporate siting decisions continue to be made in an era of uncertainty.

FOUR SITING STRATEGIES —

How, then, can companies make smart location decisions? Four siting strategies have emerged: 1. I ntegrating real estate location decisions within the C-Suite strategic level of company decisionmaking;

tants that have developed extensive databases and analytical algorithms. For example, workforce analysis has moved beyond occupational data — which can only provide “yesterday’s” figures — to task classification analysis, which enables innovative companies to assess workforce capabilities for occupations that do not yet exist.

Site and market “flexibility” — Uncertainty in trade policy has led companies to focus on the flexibility of sites, in terms of their position to serve multiple markets and in the array of shipping options to adapt to supply chain and market access changes. The Great Falls Montana Development Authority (GFDA) has a client that recently shifted focus from growing overseas markets to domestic opportunities. Luckily, the company’s plant location allows it to quickly shift directions and modes of shipping. Today’s market tends to warrant a similar approach.

Site selection reaches C-suite — Companies must be able to evolve, adapt, and adjust to manage trade policy and other uncertainties. Strategic site location decisions have become critical in securing competitive advantages.

As such, corporate real estate has been elevated to the C-suite. This means site decision-making often emanates from the top — by way of an informed, carefully vetted approach.

Exploring “ready-to-build” sites — Companies seeking to manage location-decision risks while also speeding up the selection and tomarket process are now prioritizing ready-to-build sites. These locations have been pre-certified and have infrastructure and much of the land-use permitting already in place.

Logistics companies such as BNSF have certified premier industrial parks that can save businesses six to nine months of construction time. BNSF’s program provides an inventory of sites available for immediate development. In Montana, a super wide/high corridor — from Great Falls to the Canadian border — has been pre-permitted and developed to eliminate the delay and permitting risk for shipping large loads such as fabricated modules.

Moving past “yesterday’s” data analysis — Companies are investing in more in-depth and customized site research, often leveraging specialized site selection consul-

To excel in today’s often-turbulent marketplace, innovative companies must evolve, adapt, and adjust to ever-changing environments. Managing trade policy

2. U sing new, more complex site analysis research tools in the decision-making process; 3. P rioritizing flexibility in site selection criteria; and, 4. R educing time to market by focusing on pre-developed sites.

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

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risks and opportunities are just part of the site decision process. Yesterday’s location process and criteria are being surpassed by quicker, more strategic, and more customized site analysis.

FRONT LINE

Feeling the Effects of New Tariffs on Steel and Aluminum

By Dan Emerson

Both manufacturers and consumers are paying the price for these new tariffs, with many in the former group asking for exclusions.

As part of a campaign promise to take action against unfavorable trade practices by foreign governments, on March 8, 2018, President Donald Trump and the U.S. Commerce Department imposed a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.

According to the website Quantgov.org, “Consumers generally bear the burden of the tax when the import is a final consumer good, and manufacturers generally bear the burden when the import is an intermediate good such as steel or aluminum.”1 The latter seems to be the case for some American manufacturers who say they are being hurt by the tariffs.

Testifying before Congress last May, Alan Shaw, president and

CEO of Electrolux North America Major Appliances, said, “Portions of Section 301 put our U.S. manufacturing in harm’s way because the main beneficiaries of the tariffs will be foreign manufacturers, who are not impacted by Section 301… they are and will continue building appliances outside of the U.S. and importing them into our country.”2 Shaw said the proposed tariffs cover key components in the company’s appliances that, in the near term, it is unable to source outside of China, which means the components will cost more, along with the end products. “This increased cost creates what I would call an unintended bias against U.S. manufacturers like Electrolux,” he said.

Shaw added that because there is no viable American supplier for the compressors the company needs, the tariff will not protect any U.S. industry. “All it will do is drastically increase the cost of the single most expensive part of every U.S.-manufactured refrigerator and freezer. Foreign manufacturers, because they are not impacted by the tariff, will not have this same increased cost and will therefore not have to raise their consumer price.”

Even manufacturers who get most of their steel and aluminum from American suppliers have been hurt, according to a New York Times article,3 which cited the example of Iowa-based Winnebago Industries, which makes motor homes. The tariffs have driven up prices for both domestic and imported metals. Tariffs on Chinese goods have led to higher prices for electrical components, lighting fixtures, tires, and other parts the company imports. Winnebago CEO Michael Happe told The Times his company has been able to pass those costs on to consumers — but isn’t sure for how long.

Andrew Stettner, a senior fellow with the Century Foundation, says the impact of the new tariffs has been delayed somewhat because a number of metal fabricators “had already ordered a lot of their primary metals” for 2019. “On a micro level, some people are very worried

about the price of a very important input going up,” Stettner told Area Development. “On the other hand, the data would indicate that there has been robust enough demand that (some manufacturers) have been able to withstand that.” U.S. manufacturing companies added more jobs in 2018 than they had in any year since the early ’90s, Stettner pointed out.

New tariffs on aluminum “have saved that industry,” Stettner said.

“Production of U.S. aluminum is up 53 percent; there are a number of new smelters coming online; and 2,000 new jobs have been added.”

REQUESTS FOR EXCLUSION Under Commerce Department regulations, U.S. firms and individuals that use steel and aluminum may file a request to be excluded from the tariffs. Again, according to the website Quantgov.org, as of March 18, there had been a total of 51,345 steel and aluminum tariff exclusion requests filed by 905 firms in 303 congressional districts across 46 states plus Puerto Rico. Of these filings, 45,328 exclusion requests ask for an exemption from the steel tariffs, and steel manufacturers have filed 19,543 objections.

The Bureau of Industry and Security (BIS) had reached a decision on 61.9 percent of the steel exclusion requests: 21,464 have been approved and 6,588 have been denied. Additionally, 6,017 exclusion requests asked for an exemption from the aluminum tariffs, and aluminum manufacturers have filed 935 objections. The BIS has reached a decision on 78.2 percent of the aluminum exclusion requests: 4,069 have been approved and 637 have been denied, according to Quantgov.org.

Finally, there was some good news in mid-May when it was announced the U.S. would lift steel and aluminum tariffs on Canada and Mexico in favor of stronger enforcement actions.

1

https://quantgov.org/tariff-exclusion/ https://ustr.gov/sites/default/files/ enforcement/301Investigations/Hearing%20Transcript%20 Proposed%20Tariffs%2C%20Day%202.pdf 3 https://www.nytimes.com/2019/04/04/business/economymanufacturing-jobs-trump.html 2

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FRONT LINE

Implications for Industry of Raising the Minimum Wage

By Dan Emerson

With manufacturers today employing fewer minimum wage-workers, the industrial sector may be only minimally affected by an increase.

Shortly after winning control of the House of Representatives last November, Congressional Democrats indicated that, as part of their economic platform, they plan to work for a higher federal minimum wage.

The campaign for a $15 per hour minimum wage has been gaining momentum across the U.S. Workers in as many as 22 states and the District of Columbia may receive higher minimum wages this year, according to a National Employment Law Project (NELP) report.

About 17 million workers will benefit from the 2019 wage increases, the nonprofit estimates. “(Cost-of-living adjustments) are small increases, but at least workers won’t be falling behind inflation in the coming years,” Yannet Lathrop, researcher and policy analyst at NELP, told USA Today.1 Thirty-eight cities and counties also are scheduled to raise their minimum wages, according to the NELP report. In more expensive states and cities — such as Hawaii — the next an-

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ticipated change will be an hourly minimum wage higher than $15.

In making their case, Democrats point out that, adjusted for inflation, the spending power of the lowest paid worker has fallen nearly 40 percent in the past five decades.

The federal minimum wage rose to its current level of $7.25 in 2009.

Rep. Bobby Scott (D-VA), chairman of the House Committee on Education and the Workforce, has sponsored legislation to gradually increase the minimum wage to $15 per hour, a bill supported by House Speaker Nancy Pelosi.

Rather than waiting for federal action, several Democrat-led states have acted to raise their hourly minimum wage to $15, and others are preparing to act, according to Politico.com. New York, California, Illinois, Massachusetts and, most recently, New Jersey have each enacted a $15 minimum wage.2 Maryland, Connecticut, Vermont, and Hawaii are reported to be close to following suit. A number of other states will raise their minimum wages “at least somewhat” this year, Politico reported. And several large cities, including San Francisco and Seattle, have also boosted base pay to $15 per hour.

HOW WILL HIGHER MINIMUM WAGES IMPACT U.S. MANUFACTURERS? Because manufacturing has been transformed by automation and other technology advances, minimum wage workers represent a much smaller percentage of the manufacturing workforce than they used to — less than 1 percent earn less than the minimum wage, according to Alivia Metts, an economist and director of consulting for Emsi. Overall, manufacturing requires a much higher skill level than it used to.

Factory mechanics, for example, “used to be grit laborers,” Metts told Area Development. Now they have to run and maintain the programmable logic controllers that run whole factories. “If a PLC goes down and a manufacturer

doesn’t have somebody to fix it, they are losing millions a day,” Metts explained.

However, competition for skilled labor has also been a factor in increasing wages, Metts noted. “The cost per hour worked — total compensation — has increased pretty dramatically over the last 10 years.”

Kelsey Carvell, a senior manager with Deloitte Consulting LLP’s Digital Supply Networks, cited one beneficial, long-term effect of a uniform minimum wage across the U.S. Carvell explained that tariffs and minimum wage information are two factors manufacturers with large networks — both overseas and stateside — use to build their long-term planning models. Differences in minimum wage requirements create “place congestion” for manufacturers and distribution networks. Locales where the minimum wages are relatively low tend to draw companies for that reason, noted Carvell, citing the state of Georgia as one example.

When manufacturers cluster, that can also create more competition for workers, which can also raise costs. Congestion also heightens the need for roads and other infrastructure and wear and tear on that infrastructure. A secondary impact of this congestion is the current labor shortage of truck drivers. According to Carvell, “A lot of this is due to large manufacturers having similar points of supply and demand.”

A uniform minimum wage “could be an advantage for a lot of companies because they wouldn’t have as much labor force competition in some places, and they would be making network decisions that could be more sustainable, long-term,” Carvell said.

“A more even playing field could alleviate some of the competition and help drive costs down in the long run.”

1

2

https://www.usatoday.com/story/money/2018/12/27/ minimum-wage-2019-which-states-increasing-nextyear/2377035002/ https://www.politico.com/story/2019/02/16/new-jerseyminimum-wage-1173156

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FIRST PERSON AMANDA HUTCHINGS

PRESIDENT

PEAK MANUFACTURING

Briefly describe your career with Peak Manufacturing.

Hutchings: Peak Manufacturing is the world’s largest bearing spacer supplier for the heavy truck industry.

We shear, press, and machine a line of spacers that go into the hub assemblies of most heavy trucks you see on the road today.

I wish I could say I was a confident superwoman and pushed for growth and promotion when I started with Peak 10 years ago in an entry-level position. In reality, I was in my early 20s and fearful of change. However, the owner had an unusual amount of faith in me and moved me into open positions as key people left the company. In a small business you learn quickly to wear many hats.

Workforce is a huge issue in manufacturing today, especially the skills gap.

How do you maintain a highly skilled workforce?

Hutchings: The type of manufacturing we do here at Peak Manufacturing requires training; we use custom equipment and a variety of machining methods. We grow from within and train.

When we hire, we find people with integrity who have desire to learn, and we teach them what they need to know. Almost the entire management team started their careers with entry-level jobs at Peak. We have an excellent employee retention rate, in part due to our positive culture. Our employee appreciation and community giving programs help attract the type of people we are looking for, and our culture and opportunities for advancement keep them here.

Do you require employees to have a postsecondary degree or specialized training?

Hutchings: No one was ever hired at Peak because they had a degree, and we never have required a degree for any position. I am a firm believer in postsecondary education for those who want it, and in many industries, it may be vital to obtain a job, but at Peak it is not a requirement. We offer hands-on training for every employee. For administrative, quality, or

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PLEASANT LAKE, MICHIGAN

management-type positions, we offer many skills seminars or training sessions to help solidify the skills that are needed for their roles. I require seminars for my entire management staff. Continuous improvement is a large part of our quality management system, and the same can be said about our human resources — we are constantly looking for ways to improve employee competency and personal growth.

What are the greatest challenges for women in manufacturing?

Hutchings: Manufacturing is a male-dominated industry.

I did not grow up imagining that I would be in manufacturing; it simply just happened. I went to college for marketing and was working with a nonprofit whose office happened to be located in a manufacturing plant. My eyes were opened to the different types of roles within a manufacturing organization, especially financial and quality positions.

Manufacturing does not only mean assembly line work or running a machine. There are many supporting jobs that people just do not know about. For example, we have many women at Peak in positions that include top management, administration, purchasing, quality control, and inspectors and machine operators on the shop floor. It is our job as women in manufacturing to celebrate our contributions and share these opportunities with other young women. Inspiring the next generation and showing them that there are rewarding careers, from entry level to top management, is an ongoing mission — it takes time and I think we will get there.

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Tell us about your efforts in getting the youngest generation interested in science and manufacturing.

Hutchings: For over 10 years I have been very involved with the Shop Rat Foundation and have watched the organization grow from a simple after-school program building chopper motorcycles with local kids to becoming mid-Michigan’s premier STEM and skilled trades educational curriculum provider.

Staff work hand-in-hand with the educational pipelines and industry to prepare students for their next step, whether it is a continuing program or moving directly into a position in the skilled trades. The curriculum is carefully developed to meet both the needs and interests of the students, as well as the community. Many of our Shop Rat alumni are enjoying their careers with local manufacturers.

Peak also supports skilled workforce youth organizations such as the Stockbridge High School robotics team, Jackson Area Career Center, JAC3 Program, JAMA Camp, Junior Achievement of the Michigan Edge, and other youth programs. One of our past Shop Rat students is completing her internship though Peak by working as a mechanical engineer.

Please share any final thoughts about what it takes to be a successful and competitive manufacturer today.

Hutchings: We are shifting our focus from profitability and customer satisfaction to employee satisfaction and community involvement. Customer satisfaction and profitability will always be important, but these come much more naturally and are more sus-

tainable with happy, satisfied employees who are proud of working with a company that cares about the community.

As part of Peak’s mission statement, supporting our community is just as important as supporting our customers. We believe that giving should be the foundation of any business. Peak sponsors and donates hundreds of thousands of dollars to local organizations, including missionary work, youth programs, and animal rescue organizations. Employees can earn up to two full days of vacation time for volunteering throughout the year. We also do group volunteering where the entire company is invited to participate in a volunteering event. Last fall we packed food for an amazing non-profit called Generosity Feeds to help combat child hunger. Giving back is embedded in our culture — it is who we are.

THE ASSIGNMENT Area Development’s staff writer, Mark Crawford, recently spoke to Amanda Hutchings, president of Peak Manufacturing in Pleasant Lake, Mich., about addressing the looming shortage of workers in manufacturing by hiring women, who are underrepresented in this field, and educating the youngest generation about the rewarding careers that await them in manufacturing.

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SITE SELECTION

Utilities’ Role in the Corporate Location Decision Conveying a company’s utility needs to service providers and choosing a location that can properly meet those needs — now and into the future — will help to ensure a project’s success.

By Grant M. Miller and Don Moss, Partners, Colliers International

I

n today’s competitive landscape, the corporate site selection timeframe from project onset to when the facility is put into use continues to tighten. Decisionmakers expect sites selected for new construction or a building chosen for a new operation to have the necessary utility capacity in place from the beginning. Therefore, utility providers can add tremendous value to the site selection process by working with communities, site selectors, and their clients to have plans and approvals in place for system or capacity expansions.

While utility cost and capacity are not ranked as high as workforce, transportation, and labor costs, one could argue that utilities and their associated costs are just as important when deciding to locate a new and/or expand a manufacturing or distribution facility. Utility providers need to be fully aware of this fact and can be an asset

in how they assist in the overall site selection process.

Outlined below are several ways in which utility providers can be of benefit in the location decision:

Availability and Cost By far the most important way the utility company can assist with site selection is fully understanding the service availability and excess capacity to all sites and available buildings in the community and/or communities served. If there is no current excess capacity, the utility company needs to have a plan in place to expand that capacity in a given area, depending on growth patterns.

Installing new service or adding capacity is not an overnight process. It requires weeks — and, in most instances, months — to complete the entire process, which includes several layers of approvals, cost/benefit analyses, and easement procurements. Specifically, it is easy to fall into a trap: just because a site has “access” to a certain utility doesn’t mean that the utility can serve the site.

Knowing up front what the project will demand or consume in terms of electrical, water, sewer, natural gas, and telecommunication services will easily vet the site to determine if that location should be considered for the project. All potential sites should be thoroughly vetted before a tour is put together. Keep in mind that any costs for extending utility service or adding capacity are typically passed along to the client, and these costs need to be calculated up front to determine the feasibility of the project. The last thing you want to do is visit the site and then realize that the water pressure is inadequate and there needs to be a water tank installed on the site to accommodate the sprinkler system in the building.

Incentives and/or Grants Should the proposed project require adding new or expanded service to meet a minimum demand, many

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states and communities offer incentives to eliminate or defray costs to the company or developer preparing the building or site for the occupant. The grants can be paid up front or over a certain period and are paid directly to the company. Types of eligible expenditures for the grant can be anything from the extension of water, sewer, natural gas, or rail service to obtaining and installing a transformer for electrical service.

Typically, these incentives are performance-based, and the company taking advantage of these grants will be required to create and maintain new jobs and investment for a specified time period. Other incentives from utility companies could include rebates (often on a sliding scale over a certain time period) based upon the company’s utility usage, which certainly can be advantageous for a company during the beginning stages of a project.

Again, knowing the project requirements up front is paramount to maximizing any incentives and/or grants that could be made available for the project.

DRIVEN TO SUCCEED

Site Evaluation Assistance One of the more common value adds that a utility company provides to a state or community, which in turn assists the company considering a site, is help in evaluating a potential site and determining if it is suitable for development. As development of a site is a timely process, most corporate site selection projects will quickly eliminate sites that do not have even the basic information readily available.

This is where the utility companies are helpful in bridging the gap.

Many utility companies provide funding to communities and or local economic development organizations to assist with having the basic due diligence activities performed on the sites within a county or city in which they provide service. Typically, the due diligence will include verification of zoning and location of electricity, water, sewer, and natural gas along with their corresponding capacities. Additionally, high-level mapping will be provided that outlines any possible wetland, easements, and topographical challenges. Taking the process one step further would be a Phase 1 environmental site assessment and some limited geotechnical testing to determine the suitability of the underlying soil on the site.

Having these deliverables readily available at the initial request for information phase and initial site visit will certainly help in understanding the site much quicker and perhaps keep it from a quick elimination.

Automotive manufacturers know Mississippians can efficiently make automotive products. Educational institutions work hand-in-hand with companies like Toyota and Nissan to ensure the best workforce available to make quality automobiles.

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In Sum A community might have all the attributes for a new plant or distribution center (labor availability and favorable labor cost, transportation, etc.) but could fall short on a property with the required utility service for the new location. Being prepared with specific knowledge of utility extension, capacities, and approvals in place can help a community in winning the project.

Conversely, companies working with site selection professionals need to fully understand their own utility needs not only for the project at hand but also for some level of growth at the new facility. If a community can handle the utility needs of today but not allow for growth, then the project needs to consider alternative locations. n

MISSISSIPPI

AUTOMOTIVE

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LABOR

People Analytics Helps Define the Search for Skilled Labor The analysis of human capital flows across markets and regions measures how, why, and where talent and skill clusters are creating and supporting sustainable market strength.

By Dr. Wayne Gearey, Chief Data Scientist, and Amy Fobes, Vice President of Business Development, Emsi

G

ross domestic product (GDP) measures raw economic activity and has been used as a leading indicator of the growth and performance of an economy for the last 70 years. In a digital and globally interconnected world, GDP is not a complete picture of economic indicators of progress or predictive growth from market to market. The architect of GDP, Simon Kuznets, recognized the limitations of GDP. The Economist (2016)1 reported that GDP uses a statistical framework that is no longer an adequate measure of a performing market, especially when it comes to people analytics.

Whereas GDP tracks and measures markets based on manufacturing activities revolving around the import/export and consumption of products, it is critical to recognize that technology innovation is driving and creating new economies through the digitization, distribution, and consumption of explosive volumes of data. Understanding the interrelationships and inter-

dependencies of new service-based economies requires geographicallydriven analysis of human capital based on the availability, cost, and sustainability of labor, especially technology talent and skill clusters.

Not a New Concept People analytics or human resources analytics, a phrase first coined by Google in 2007, has evolved from a buzzword to recognizing the need for analysis of human capital flows across markets

People analytics is defined by understanding a market through the dynamic interaction of a variety of economic indicators.

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and regions to measure how, why, and where talent and skill clusters create and support sustainable market strength. In fact, these types of analytics and the results have rapidly become critical to understand the future economic performance of most markets.

People analytics is not a new concept. Gary Becker, the pioneer of human capital and Nobel Laureate for Economics in 1992, referred to human capital as the abilities and qualities of people that make them productive through levels of academic achievements or trade skills. Today, understanding and analyzing human capital is dynamic and career paths are often not as linear as in previous decades. The demand for more labor data and analytics has grown — from statistical data at a market level that reflects hiring trends to tracking job postings and social profiles and much more.

Area Development’s 32nd annual Corporate Survey and 14th People analytics annual Consultants Survey,2 released in 2018, showed that leverages statistics, CEOs from consulting compatechnology, and nies are concerned that the expertise to tackle availability of skilled labor is affecting their clients’ facility planlarge sets of ning and/or current operations. labor data across As a result, a new methoda complex business ological approach to making important decisions across ecosystem, all with an organization on workforce the goal of helping requirements and employment companies achieve has emerged. This type of analysis requires robust labor market sustainable growth. information combined with the ability to search for and find the right labor at the right time and in the right location. People analytics is not just an HR function to determine labor availability. People analytics is defined by understanding a market through the dynamic interaction of a variety of economic indicators.

Evidence-Based Location Decisions The fallout from the 2008 recession put immense pressure on boards and C-level executives to improve upon evidenced-based location decisions, especially where to place facilities and operations that would maintain, attract, and grow through a sustainable workforce. For any firm, labor is one of the costliest expenditures, followed by real estate assets.

People analytics leverages statistics, technology, and expertise to tackle large sets of labor data across a complex business ecosystem, all with the goal of helping companies achieve sustainable growth in today’s rapidly changing and interconnected economy. Decision support and labor analysis is unique for every company, even companies within the same industry.

Labor analysis is further complicated by a global challenge that there will be a 7.4 million projected job shortage in the U.S. by 2030 across all industries. As a result, the competition has intensified for specialized

FORMULA FOR SUCCESS

From sleek automobiles to molecular polymers, Mississippians have the ability to manufacture products large and small. The state has a dedicated and skilled workforce ready and available.

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Providing the Necessary Tools NV Energy’s Economic Development Team is your resource for relocation and business expansion information. We can assist you with site selection, labor force resources, training programs, information on Nevada’s tax advantages and any other intelligence you may need to make an informed decision about living and working in Nevada.

With extensive economic development experience and strong relationships with state and local development officials, we can help you manage every step of the site location decision process.

Our services are complimentary and confidential.

www.nvenergy.com/econdev Our team is here to help current and future customers, site consultants and real estate firms identify the perfect location for your business. Nevada offers affordable, large-scale commercial real estate with advantageous access to the West Coast market.

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skills and labor clusters that crosscut local, regional, and global markets. Through people analytics, we can make sense of and uncover specific occupations and skills located in often hidden geographies of opportunity. For example, in India, there is a booming resource of qualified tech labor that global corporations are tapping into. The analytical process for understanding labor opportunity in other countries requires understanding labor availability with an objective to see how it compares to the U.S. market and then determining the skills that allow a firm to get to the right opportunity.

Econometric firms like Emsi are developing ways to predict tech labor patterns globally and then contextualize this information and understand local market opportunities. The application below is a visual snapshot of modeling complex labor, demographic, and economic drivers that contextualizes markets and reveals specialized labor hotspots. In simpler terms, this data-driven approach reveals where programmers can be found and uncovers a high concentration of specialized skills such as Python programmers.

Disrupting the Site Selection Process People analytics is disrupting the way we look at site selection and should be of interest to a variety of stake-

holders, including: •P rospective employers (particularly businesses seeking to relocate or expand) — providing crucial information to such employers, helping them to locate in cities or regions which enable them to attract and retain “the best and the brightest” for their workforce •M unicipal and regional governments, economic development practitioners, the business community — assisting cities and regions in attracting companies and investment •H R practitioners — assisting households who are planning a move with relevant information about the strengths that could be anticipated in a new location •R esearchers and academic institutions — fostering research and improving understanding of what make cities attractive and viable In analyzing markets, people analytics has advanced beyond the limitations of GDP. Today, in order to understand emerging economies, the ability to measure the availability and sustainability of labor allows firms to prescribe and predict economic opportunity for human capital and financial success across global markets. n 1

https://www.economist.com/leaders/2016/04/30/how-to-measure-prosperity https://www.areadevelopment.com/Corporate-Consultants-Survey-Results/ Q1-2018/32nd-annual-corporate-survey-14th-annual-consultants-survey.shtml

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Visual snapshot of modeling complex labor, demographic, and economic drivers that reveals specialized labor hotspots

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Vital. Useful. Updated Daily.

The best information on site selection and facility planning available online •C urrent News: Real estate & industry news, and economic indicator reports updated throughout the day

•V aluable Resources: Tax and incentive information, development contacts, and insightful surveys

•R eviewable Archives: Search the Area Development archives for content, opinion, and reports spanning the last five years from the top industry minds

• T hought Leadership: Knowledge derived from the experience of leaders in the economic development field

Visit – www.areadevelopment.com

AREADEVELOPMENT S I T E

A N D

F A C I L I T Y

P L A N N I N G

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2019

GOLD & SILVER

SHOVEL AWARDS While e-commerce was creating thousands of jobs across the nation last year, high-profile, diverse projects in the manufacturing, information technology, financial services, energy, and other sectors were also making news.

ARTICLE BY STEVE KAELBLE

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TEAMWORK

Dear Friends: Winning a Gold Shovel from Area Development is an honor and a testament to the pro-business environment that we continue to cultivate here in Georgia. Job growth in our state is beating national trends, and companies around the world have Georgia on their mind.

1. BLACKROCK 1,000 jobs Financial Technology

We have long been known as the Peach State, and agribusiness continues to be our largest industry sector with a $60 billion annual economic impact. Aerospace follows closely behind at $57 billion. But it is telling when you look at the top projects that produced this Gold Shovel award. Half of the companies on the list are – at their core – focused on technology and innovation.

2. FACEBOOK 100 jobs $750 million investment Data Center

You know well that talent is the number one ingredient to ensure that these companies are successful, and one of the primary building blocks of Georgia’s business climate is our highly skilled workforce. Georgia’s academic institutions are world-renowned – like our Southern hospitality – and cities like Atlanta, Augusta, Columbus, and Savannah have turned into hubs of innovation and investment.

3. FOX FACTORY HOLDING 800 jobs $50 million investment Bicycle/Vehicle Parts

We are at the epicenter of FinTech, with 70% of all U.S. transactions handled by payment processing firms located in Georgia. The state’s “Transaction Alley” is comprised of 50+ FinTech companies, which generate an annual revenue of over $72 billion.

Effective in 2020, Fort Gordon in Augusta will become home to the U.S. Army Cyber Command, the central post for all of the U.S. Army’s cybersecurity operations. More than 4,700 high-tech military personnel will be relocated to Fort Gordon as part of this growth within military intelligence, cyber, and the NSA. These elite service men and women are already tapping into our new $100 million Cyber Center.

Along with tech talent, we continue to invest in our global supply chain. Home to the world’s busiest and most efficient airport, and the fastest growing port in the nation, we are helping companies move their people and products around the world.

In 2018, Georgia’s international trade numbers set a new record with exports surpassing $40.5 billion – a 9% increase over 2017. These numbers are supported by our representation in twelve strategic markets, including Brazil, Canada, Chile, China, Colombia, Europe, Israel, Japan, Korea, Mexico, Peru, and the United Kingdom and Ireland. In fact, 60% of Georgia exports are sold to markets where the state has a presence.

From our big cities to our vibrant small towns, Georgia has the resources for all businesses – big and small – to be successful. Most importantly, I can confidently say that you will find hardworking Georgians in every corner of our state.

Bottom line, it is because of our readily available workforce, infrastructure, culture of collaboration, and ability to move at the speed of business that we have been named the “top state for doing business” for five years in a row by Area Development.

We look forward to helping you prosper.

Sincerely,

Brian P. Kemp Governor of Georgia

4. HANWHA Q CELLS KOREA 150 jobs $500 million investment Solar Cells 5. INSPIRE BRANDS 1,100 jobs $32 million investment Headquarters 6. NORFOLK SOUTHERN 850 jobs $575 million investment Headquarters 7. SALESFORCE 600 jobs $12.3 million investment CRM-Regional Headquarters 8. STARBUCKS 500 jobs Financial Technology 9. THYSSENKRUPP AG 650 jobs $200 million investment Headquarters/Innovation Center 10. WAYFAIR, INC. 1,000 jobs $45 million investment Distribution

Methodology Area

Development’s

annual Gold and Silver Shovel Awards recognize states for their achievements in attracting high-value investment projects that will create a significant number of new jobs in their communities. We asked for information from all 50 states about their top10 job-creation and investment projects initiated in 2018. 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 — six 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. Runners-up in each of these population categories were awarded Silver Shovels.

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T

echnology and retailing giant Amazon certainly was the talk of the economic development world throughout 2018.

Cities all over were holding their breath, awaiting the word regarding which of the 20 finalists would be chosen for

the company’s HQ2 project. However, the winners weren’t always who

TEXAS

GOLD SHOVEL WINNER

Company

City/County

N/E

# Jobs

Inv. Amt.

Amazon

Dallas

N

1,500

$90 million

Okin Business San Antonio N 1,400 $23 million Process Services Cognizant Technology Irving N 1,090 $2.7 million

Paycom

Grapevine N 1,000

Gartner, Inc.

N/A

Industry Distribution IT Headquarters Regional Tech & Service Delivery Center IT

Irving

E

800

$12 million

Point Comfort

E

340

$5 billion

Plastics

Cheniere Energy Corpus Christi N 430 $3 billion

Energy - LNG

Formosa Plastics

LyondellBasell

Software

Channelview

E

160

$2.4 billion

Chemicals

Covestro

Baytown

E

75

$1.72 billion

Chemicals

Braskem

La Porte

E

50

$675 million

Polymers

(pop. 28.70 million) States with populations 12+ million

Sponsor: Texas Department of Economic Development

FLORIDA Company PGA Tour

City/County

SILVER SHOVEL WINNER N/E

# Jobs

Inv. Amt.

St. Johns E 307 $86 million County

Webstaurant, Inc.

Hillsborough County

Baker McKenzie

Hillsborough N 300 $3.3 million County

N

305

$1 million

Industry Headquarters IT Headquarters

Nucor Corp.

Polk County

Pratt & Whitney

Palm Beach E 215 $100.4 million County

Aircraft Parts

Jinko Solar Duval County N 200 $50.5 million

Solar Panels

Wyndham Destinations, Inc. Steelco Florida, Inc.

N

250

$238 million

Steel

Orange E 200 $7.5 million Headquarters County Hillsborough County

McLane Company, Marion Inc. County

E

195

$130 million

Steel Mill

N

125

$59 million

Distribution

CAE USA Hillsborough E 100 $48 million

County

Simulation/ Training

(pop. 21.29 million) States with populations 12+ million

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6/4/19 1:06 PM

GOLD & SILVER SHOVEL AWARDS

they seemed to be initially. The promised 50,000-job HQ2 project turned into a pair of 25,000-job announcements — in the Washington, D.C., suburb of Crystal City, Virginia, and in Long Island City in Queens, New York — until local opposition helped torpedo the latter deal. (Note: Virginia did not report the Amazon project for the 2018 Shovel awards as it was not yet under way last year.)

Meanwhile, one of the other HQ2 finalists, Nashville, has collected an in-

ILLINOIS

SILVER SHOVEL WINNER

credibly valuable “consolation prize,”

Company

a 5,000-job “Operations Center of

World Wide Belleville N 500 $115 million Technology Technology Services

Excellence” at the Nashville Yards.

Ikea

City/County

N/E

# Jobs

Inv. Amt.

Industry

Joliet

N

200

$80 million

Distribution

That turned out to be the biggest job

Pinnacle Foods

St. Elmo

N

110

$54 million

Food Mfg.

total on the 2018 Shovel project list

Salesforce

Chicago

N

1,000

$475 million

Software

Carbondale

N

400

$5.7 million

Insurance

for Tennessee.

Illinicare Health S&S Activewear

Lockport

N

360

$37 million

Distribution

Carl Buddig & Co.

Montgomery

N

350

$30 million

Food Mfg.

talent, great educational skill sets —

Berner Food & Beverage

Cherry Valley

N

200

$25 million

Food Mfg.

huge higher education opportunities

Bystronic

Hoffman Estates

N

140

$30 million

Machinery

Bolingbrook

E

130

$11 million

HVAC Parts

“Nashville is a place that has great

with Vanderbilt, MTSU, Tennessee

Neuco, Inc.

Tech and…the University of Tennes(pop. 12.80 million) States with populations 12+ million

see. We think it’s a great location to grow this new Center of Excellence,” said Holly Sullivan, one of the leaders on Amazon’s location team.1

E-Commerce Creating Jobs Across the Country While the HQ2 saga was the big

NEW YORK Company

City/County

SILVER SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Industry

Applied Materials Albany N 300 $600 million

Semiconductors

making comparatively smaller invest-

Away New York City E 249 $3 million

Headquarters

ments all over the country — but

Blink Health Group LLC New York City E 323 $3 million

Healthcare Technology

really big deals in the places where

Broadway National Hauppauge E 150 $10 million Headquarters Group

national focus, Amazon was busy

they landed. Indeed, the 2019 Shovel

Green Empire Farms LLC

Oneida

N

118

$70 million

Food Mfg.

Awards highlight numerous Amazon-

NextGen Power

Syracuse

N

292

$150 million

Electronics

related major projects, in addition to

Norsk Titanium

Plattsburgh

N

383

$50 million

Aerospace

SungEel MCC

Endicott

N

86

$23.3 million

Batteries

Topiderm Inc. Amityville E 110 $122 million

Skincare Products

HQ2 and Nashville.

AMONG THEM: • A 1,500-job fulfillment center in Bessemer, Alabama, set to open next year;

Regeneron Rensselaer E 1,500 $837 million Biopharmaceuticals

Project of the Year

(pop. 19.54 million) States with populations 12+ million

AREA DEVELOPMENT | Q2/2019

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GEORGIA Company Inspire Brands

BlackRock Wayfair, Inc.

City/County

GOLD SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Sandy N 1,100 $32 million Springs Atlanta

N

1,000

$42.2 million

Savannah

E

1,000

Industry Headquarters FinTech

$45 million

Distribution

Norfolk Southern Atlanta N 850 $575 million

Headquarters

Fox Factory Gainesville N 800 $50 million Holding Corp.

Bicycle/ Vehicle Parts

thyssenkrupp AG Atlanta N 650 $200 million Hdqtrs./

Innovation Ctr.

Salesforce Atlanta N 600 $12.3 million

Hanwha Q Cells Korea

$150 million

Solar Cells

Facebook Social Circle N 100 $750 million

Data Center

Starbucks

Dalton

Atlanta

S ponsors: Georgia Department of Economic Development, Georgia Ports Authority

N

N

500

CRM Regional Hdqtrs.

500

$16 million

FinTech

(pop. 10.52 million) States with populations 8+ to 12 million

•A 1,500-job facility in Tucson, Arizona, that will handle a variety of functions, from customer returns to light assembly to 3D printing to customer pickup; • A distribution facility in the Indianapolis suburb of Greenwood, Indiana, adding 1,250 jobs to its 8,500 existing Indiana jobs at more than half a dozen facilities; • Two new facilities in North Carolina, near the Charlotte airport and in Garner, both worth about 1,500 jobs; • A fourth distribution facility in Michigan expected to ultimately employ 2,025 in Kent County; • A new distribution center in Dallas, which is slated to employ 1,500;

MICHIGAN Company

City/County

• And Amazon’s first Mississippi fulfill-

SILVER SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Ford Motor Company Wayne E 2,500 $738 million

County

Amazon

Stryker Corporation

Ashley Capital

Loc Performance Products, Inc. KLA Corporation

Kent N 2,025 $190 million County Kalamazoo E 260 $109.8 million County Oakland N 613 $85 million County Wayne E 700 $71.5 million County

Industry Automotive/ Engineering Distribution Medical Devices Distribution Defense/ Military

Washtenaw N 500 $71.1 million Semiconductor County Eqpt.

United Shore Financial Services, LLC

Oakland E 600 $69 million County

Financial Services

The Kroger Co.

Macomb N 377 $24.9 million County

Distribution

Morley Companies, Inc.

Saginaw N 525 $5.2 million County

Professional Services

Nexient Washtenaw E 300 $4.2 million

County

S ponsor: Michigan Economic Development Corp.

Information Technology

ment center in Marshall County that will employ 850 people.

All in all, though Amazon left many HQ2 finalists disappointed when it announced its biggest decision, there are lots of communities across the country cheering on the company’s 2018 development activities. And while Amazon is the clear leader in direct online retailing, the evergrowing preference of shopping via computer and smartphone is creating thousands of additional jobs across the country involving other companies. Birmingham-based Shipt, for example, has been a pioneer in sameday delivery of groceries and other

(pop. 9.99 million) States with populations 8+ to 12 million

essentials, successful enough that Target acquired the company in 2017.

Shipt is expanding its operations in Alabama and expects to hire nearly 900 more people.

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ShovelArticle2019.indd 26

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

6/4/19 1:08 PM

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together just the right mix of

pick a place where others in

workforce-development programs,

the business are already operating.

scientific expertise, and other factors

Industry clusters afford access to

vital for taking a high-tech concept

experienced labor, existing suppliers,

into mass production. Nikola’s head-

and other support systems. But what

quarters facility opens in Phoenix

if you’re in an industry so new and dif-

this year, and it will break ground

ferent a critical mass of activity hasn’t

on its manufacturing facility later

really emerged just yet? You begin

this year in Coolidge, on a 430-acre

with a clean slate and blaze a trail.

site where infrastructure is already in place, according to Stringer.1 Trucks

Such was the case with Nikola Motor

are to start rolling out the door in

Company. Yes, its product is big

2022, and fleet testing is planned

trucks, and there certainly are places

later this year by such companies

where lots of big trucks are already

as Anheuser-Busch and US Xpress.

being built. But these are trucks of the future, propelled by cutting-

Nikola is not the only transportation-

edge hydrogen-electric technology.

related company with futuristic

The company last year picked Ari-

plans in Arizona. A startup called

zona — a state without a long history

Lucid Motors is planning to build

of motor-vehicle assembly — for a

electric cars in Casa Grande within

billion-dollar assembly plant that’ll

the next year or so, a project first

create 2,000 or more jobs. Arizona

announced back in 2016. And a

may not have a significant past in

Chinese company called TuSimple

traditional auto assembly, but it is

is developing a line of self-driving

quickly building a future in creating

commercial trucks in Tucson. It has

new-technology vehicles.

been testing the concept for well over a year now, and in late 2018

“If you look at what’s happening

announced expansion plans that

in Arizona in this space, it’s starting

would bring in another 500 new jobs.

to become ground zero,” says Tom

At that expansion announcement,

Stringer, who leads the national Site

Gov. Doug Ducey underscored how

Selection and Business Incentives

Arizona is creating its place on the

practice with BDO, and who repre-

map when it comes to cutting-edge

sented Nikola as a consultant. “This

vehicles and other advancements:

was an over year-and-a-half national

“In Arizona, we’re committed to

selection process. We had very spe-

encouraging new technologies.”2

cific requirements, in an industry in its early stages of development.”

Because there aren’t a bunch of major players in this sector, Nikola

ShovelArticle2019.indd 28

1

https://www.pinalcentral.com/coolidge_examiner/ news/semi-truck-plant-announced-in-coolidgewould-employ-up-to/article_ecc7ccbd-5d23-5103ae76-b69205f39557.html 2 https://azgovernor.gov/governor/news/2018/09/ self-driving-truck-company-tusimple-announcesexpansion-tucson-arizona

The top online retailer of musical instruments and audio gear — Sweetwater Sound in Fort Wayne, Indiana — is building two new facilities and adding a thousand jobs. Meanwhile, Wayfair has made it convenient to order furniture and home goods online.

The company promised as many as a thousand jobs in Chatham County, Georgia, with a brand-new warehouse. And speaking of furniture, Ikea opened a high-tech Joliet distribution center in Illinois, and Overstock.com’s new Kansas City fulfillment center will allow it to reach 99 percent of U.S. customers within two-day shipping.

Financial Services & Info Tech Job-Creators While Amazon was clearly the biggest cumulative job creator of 2018, there were plenty of other headlines that included noteworthy employment counts.

Numerous projects were announced last year with promises of at least a thousand new jobs, many in the financial services or IT sectors.

The state of Arizona, in particular, basked in a wealth of location an-

6/4/19 1:08 PM

nouncements with job totals of a thousand or more apiece. Financial services and IT were particularly strong winners in the Grand Canyon State.

Allstate, for example, pledged more than 2,500 jobs and a planned corporate campus in Chandler, while Voya Financial will add a thousand there.

Freedom Financial is expanding with 1,000+ jobs in Tempe, and The Money Source is growing with 500 new jobs in Phoenix.

Big Arizona news in IT also included Deloitte with 2,500 new jobs in Gilbert and Infosys with 1,000 in Phoenix.

Infosys is also adding thousands of jobs in Indiana, another big example of IT growth. The company opened a Technology and Innovation Hub last year and broke ground on its U.S. Education Center.

Salesforce, meanwhile, is adding a thousand jobs in Chicago. And Texas landed at least three big-jobcount deals in the world of IT: Okin Business Process Services’ U.S. headquarters in San Antonio, Cognizant Technology Solutions’ tech and service delivery center in Irving, and Paycom

AREA DEVELOPMENT | Q2/2019

ShovelArticle2019.indd 29

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6/4/19 1:09 PM

GOLD & SILVER SHOVEL AWARDS

NORTH CAROLINA SILVER SHOVEL WINNER Company

City/County

N/E

# Jobs

Inv. Amt.

Amazon

Mecklenburg County

N

1,500

$200 million

Distribution

Amazon

Wake County

N

1,500

$200 million

Distribution

AvidXchange

Mecklenburg County

E

1,229

$41 million

FinTech

Chatham E 580 $86 million County

Food Processing

Mountaire Farms

House of Duplin County E 488 $75 million Raeford Farms Polywood Honeywell

Sonic Automotive

Person County N

384

Industry

Food Processing

$35.3 million

Furniture

Mecklenburg N 750 $248 million County

Headquarters

Gaston N 500 $11.2 million Automotive County

National General Forsyth County E 626 $12.2 million Insurance Albaad USA Rockingham E 302 $45 million

County

Financial Services Personal Care Products

Software’s location in Grapevine, for a combined total of nearly 3,500 jobs.

The insurance and financial services sectors were good to Indiana, with a massive Geico project in the works in Indianapolis. More big financial services projects around the country

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

include four-figure employment totals at RoundPoint Mortgage and ServiceMac in South Carolina. And in the financial technology sector, BlackRock

VIRGINIA Company

City/County

Inc. is expanding in a big way in At-

GOLD SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Micron Technology Manassas E 1,100 $3 billion

1901 Group

Fairfax & Montgomery Counties

E

805

$4 million

Industry Semiconductors

IT

KPMG

Fairfax E 521 $31.4 million County

Business Services

Monogram Foods

Henry E 300 $30 million County

Food Products

Discovery, Inc. Loudoun E 240 $16 million

County

Media Technology

WillowTree, Inc. Albemarle E 200 $12.3 million

County

Software Development

Speyside Bourbon Cooperage

Stave Mill & Cooperage

TemperPack

England Furniture Service Center Metals

Smyth & N 160 $35 million Washington Counties Henrico N 141 $10.4 million County Lee County

N

79

Thermal Insulation

$1.3 million

Furniture

Prince E 58 $45.2 million George County

Aluminum Extrusions

lanta, while Charlotte is welcoming a major expansion at the AvidXchange corporate headquarters.

In the corporate sector, Inspire Brands picked the community of Sandy Springs, Georgia, for its new headquarters. It’s a big, multi-brand player in the restaurant business, with such names as Arby’s, Sonic, and Buffalo Wild Wings, and its project is worth some 1,100 jobs. AllianceBernstein, a global investment management firm, picked Nashville for its new headquarters. That’s a $70 million+ investment yielding 1,050 jobs. The company plans to build a private wealth group there, and potentially a local investment team. And Honeywell will locate

Project of the Year

(pop. 8.40 million) States with populations 8+ to 12 million

a headquarters facility in Mecklenburg County, North Carolina, a 750-job deal.

30

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6/4/19 1:10 PM

GOVERNOR’S CUP WINNER 7TH Straight Year

BEST STATE FOR BUSINESS CNBC 2018

SITE SELECTION MAGAZINE 2018

BEST STATE FOR BUSINESS 15th YEAR IN A ROW CHIEF EXECUTIVE MAGAZINE 2019

14 Million

Golden SHOVEL AWARD WINNER

PEOPLE IN TEXAS’ CIVILIAN LABOR FORCE

#1 FOR FOREIGN DIRECT INVESTMENT

14 YEARS OF SHOVEL AWARDS AREA DEVELOPMENT 2019

ANNUAL STATE RANKINGS REPORT BUSINESS FACILITIES 2018

GET IN TOUCH

TOP EXPORTING STATE

FOR 17 CONSECUTIVE YEARS

IF TEXAS WERE A NATION, IT WOULD BE

10th Largest Economy

IN THE WORLD BASED ON GDP

The Office of the Governor | Economic Development & Tourism Division 512.936.0100 | business@gov.texas.gov

@GoBigInTexas

/GoBigInTexas

ARIZONA Company

GOLD SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Industry

Allstate Chandler N 2,530 $38.9 million

Deloitte Tax LLP

Gilbert

N

2,500

Banking/ Finance/ Insurance

$37.5 million

IT

The Money Source Phoenix N 500 $7.5 million

Banking/ Finance/ Insurance

Nikola Motor Co. Coolidge N 2,062 $1 billion

Commercial Trucks

Amazon Tucson N 1,500 $145 million

Dealing with Data Though not on the same

Logistics/ Distribution

colossal scale as Amazon’s

Freedom Financial Tempe N 1,100 $20 million Network

Banking/ Finance/ Insurance

flurry of fulfillment centers,

Voya Financial, Inc. Chandler N 1,060 $60.6 million

Banking & Finance

Infosys

Phoenix

N

1,000

$18.3 million

IT

Cognizant Technology Solutions

Phoenix

E

921

$4.6 million

IT

Nationwide Realty Scottsdale N 514 $139 million Investors

Sponsor: Arizona Commerce

Authority Project of the Year

Banking & Finance

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

fellow market-capitalization giant Facebook is doing its economic investment part by building more and more data centers. One is a $750 million, 100job facility slated for the Rocket City of Huntsville, Alabama. Another is an expansion in Papillion,

Project

of the Year

Nebraska, where six data hall buildings will total 2.6

Micron Technology Expanding Chip-Making in Virginia

T

million square feet and a hundred more people will go to work. And the social media company appropri-

he more advanced that cars

employment count by about 1,100

ately chose the Georgia

become with regard to com-

engineers and technicians.

city of Social Circle for another 100-job, $750 million

puter power, the more need

there is for specialized semicon-

Though many chipmakers con-

data center. It’s one of a

ductors that handle such things as

tract out their manufacturing,

number of recent data cen-

lane-departure warning and collision

Idaho-based Micron still handles its

ter developments in and

avoidance systems. Micron Technol-

own manufacturing, much of it in

around Atlanta.

ogy Inc. supplies those chips, and it is

the United States. Gartner lists the

Google has lots of data

keeping up with the demand with a

company as the world’s fourth-

center capacity, too, but

$3 billion plant expansion in Virginia.

largest semiconductor maker, and

is adding to it by expand-

the ever-expanding technology in

ing its South Carolina data

The company’s Manassas facility,

automobiles would seem to sug-

center outside Charleston.

not far from Washington, D.C., has

gest a bright future. As the com-

It’s a $600 million invest-

about 1,500 people on the payroll.

pany’s president and CEO, Sanjay

ment. The Design LLC

The expansion announced in 2018

Mehrotra, told Reuters, “Think of

data center to be located

will add about 100,000 square

the automobiles of the future as

in Henderson, Nevada,

feet of clean room space for chip

data centers on wheels.”1

is a Google-subsidiary

manufacturing and will boost the

1

ttps://www.reuters.com/article/us-micron-techh virgina/micron-technology-plans-3-billion-expansionof-virginia-plant-idUSKCN1LE27E

development. Other data center projects beyond Facebook and Google include one in Indiana, the

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6/4/19 1:10 PM

GOLD & INDIANA Company

SILVER SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Industry

GEICO

Indianapolis

E

1,474

$16.5 million

Insurance

Amazon

Greenwood

N

1,250

$80 million

Distribution

Sweetwater Sound, Inc. Fort Wayne

E

1,009

SILVER SHOVEL AWARDS

$76.4 million Warehousing

Infosys Ltd. Indianapolis N 1,000 $224.1 million Professional &

Technical

Services U.S. Steel Corp.

Lehigh Cement Co. LLC

Gary

E

0

$750 million

Steel

Mitchell

E

52

$548 million

Cement

Digital Crossroads of America Data

Business Support Services

Center planned by Indiana NAP in

United Collection.

Jeffersonville N 621 $2.5 million Bureau, Inc.

Fulcrum Centerpoint, Gary N 163 $567 million Petrochemicals LLC SF Motors, Inc.

Mishawaka

N

467

$159.1 million

Indiana NAP LLC Hammond N 45 $201 million

Hammond. And Nevada is welcoming MECP1 in Reno.

Automotive Data Processing/ Hosting

(pop. 6.69 million) States with populations of 5+ to 8 million

Diverse Manufacturing Jobs Needless to say, manufacturing projects have always been a feather-inthe-cap for states lucky enough to land them, given that they tend to produce relatively stable, decent-

SOUTH CAROLINA Company Google

Keurig Dr. Pepper

City/County

SILVER SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Berkeley E 0 $600 million County Spartanburg County

N

500

Industry Data Center

$350 million

Packaging

Roundpoint Mortgage York County E 1,100 $34 million

Financial Services

paying jobs. The Shovel Award top project lists include a fair number of 2018 manufacturing wins, including a number of massive projects in terms of four-figure job totals.

In Kansas, for example, Spirit AeroSystems in Wichita is planning

JW Aluminum

Berkeley County

$255 million

Aluminum

to hire 1,400 more employees over

Becton, Dickinson and Co.

Sumter E 125 $150 million County

Medical Equipment

the next few years to support com-

$76 million

Polymers

company already had announced a

Lancaster N 1,000 $24 million County

Financial Services

thousand new jobs the year before,

Z eus Industrial Products ServiceMac, LLC

W International

Draexlmaier Automotive of America

Calhoun County

E

E

50

350

Berkeley N 600 $35.2 million County

Welded Metal Products

Spartanburg E 460 $42.7 million Automotive County

Samsung Electronics Greenville N 400 N/A

County

Sponsor: Santee Cooper

Customer Service

(pop. 5.08 million) States with populations of 5+ to 8 million

mercial and defense programs. The

but the business keeps building, according to the announcement from the company’s president and CEO, Tom Gentile: “The aerospace market is growing as never before, and for us that means we continue to need even more highly skilled people.” 2 The aerospace business is good for Wichita and for Kansas as a whole — another of its headlines was a 400-job expansion at

34

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6/4/19 1:11 PM

$1 BILLION+ PROJECTS Company

City/County

N/E

# Jobs

Inv. Amt.

Industry

ALABAMA

Mazda/ Toyota

Huntsville

N

4,000

$1.6 billion

Automotive

ARIZONA

Nikola Coolidge N 2,062 $1 billion Motor Co.

Commercial Trucks

NEVADA

Bigelow North E 30 $6.6 billion Aerospace Las Vegas

Aerospace/ Defense

TENNESSEE

FedEx Memphis E 0 $1 billion

TEXAS

Formosa Point Plastics Comfort

VIRGINIA

E

340

Freight/ Trucking

$5 billion

Plastics

Cheniere Corpus N 430 $3 billion Energy Christi

Energy LNG

Lyondell- Basell

Channelview

E

160

$2.4 billion

Chemicals

Covestro

Baytown

E

75

$1.72 billion

Chemicals

E

1,100

Micron Manassas Technology

$3 billion

Semiconductors

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AREA DEVELOPMENT | Q2/2019

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6/4/19 1:12 PM

TENNESSEE Company

SILVER SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Industry

Amazon Nashville N 5,000 $230 million

Corporate Offices

AllianceBernstein L.P. Nashville N 1,050 $71.5 million

Corporate Offices

FedEx Memphis E 0 $1 billion

Freight/ Trucking

DENSO Athens E 320 $190 million

Motor Vehicle Parts

Van Hool Morristown N 640 $47 million

Heavy Duty Trucks

Indigo Ag, Inc.

Memphis

E

700

$6.6 million

R&D

Asurion, Inc. Nashville E 400 $288 million

Insurance & Pension Administration

Oshkosh Corp.

Jefferson City N 359 $30.6 million

Automotive

Keep Truckin, Inc. Nashville E 386 $3.5 million

Software Publishing

Ernst & Young LLP Nashville E 600 $22.7 million

Business Services

aviation parts supplier Orizon Aerostructures in Olathe.

To the west, the expansion of Merit Medical in Salt Lake County is a half-billion-dollar deal that promises 1,010 jobs in the state of Utah. Merit makes

Sponsor Tennessee Department of Economic and Community Development

(pop. 6.85 million) States with populations of 5+ to 8 million

disposable medical devices that are used in intervention, diagnostic, and therapeutic medical pro-

Project

of the Year

Life Sciences Company Regeneron Expanding in New York State

R

cedures. Other medicaldevice-makers expanding include Becton Dickinson in Columbus, Nebraska, which will add 200 jobs, and Stryker in Portage,

egeneron Pharmaceuticals

sion will further drive economic

Michigan, with plans to

Inc. already was the largest

growth in the Capital Regions

add 260 jobs. And bio-

biotech company in the state

and fuel lifesaving innovation

pharma company Regen-

of New York. With more than 5,000

and development that benefits

eron is investing more than

employees statewide and multiple

the entire world.”

$800 million in Renssalear,

operations near the University at Albany’s Health Sciences campus, the Tarrytown-based company took another leap forward in 2018 with a pledge to create 1,500 new jobs in East Greenbush.

1

The company’s CEO, Leonard Schleifer, said the move reflects ongoing growth in Regeneron’s product pipeline: “As our number of approved and investigational medicines continues to

It’s a roughly $800 million invest-

grow, our need for world-class

ment, planned over a seven-

manufacturing teams and fa-

year period, expanding existing

cilities also increases.” The com-

laboratory, manufacturing, and

pany’s products treat a wide

warehouse space. Helping seal

range of ailments, including

the deal were state incentives of

auto-inflammatory conditions,

up to $140 million. In a statement

colorectal cancer, adult atopic

announcing the expansion, Gov.

dermatitis, rheumatoid arthritis,

Andrew Cuomo called it a sign

and blindness in the elderly.

of New York’s prominence in life

1

sciences: “Regeneron’s expan-

ShovelArticle2019.indd 36

https://www.biospace.com/article/jc1n-with140-million-state-incentives-regeneron-expandingin-new-york-and-adding-1-500-jobs/

New York, where it will employ 1,500 (see sidebar).

Meanwhile, Ford made big headlines with an interesting site choice for 2,500 of its employees involved in electric and autonomous vehicles: the Michigan Central train station in the Corktown area of Detroit.

“It will be the proving ground where Ford and our partners design and test the services and solutions for the way people are going to live and get around tomorrow,” said

6/4/19 1:13 PM

MISSISSIPPI IS WINNING Mississippi nabbed its second consecutive Gold Shovel Award in 2019, the 8th consecutive shovel award overall for the state. Governor Phil Bryant has successfully led the state in the recruitment and expansion of businesses, exceeding expectations and drawing in major corporate partners such as Amazon, Milwaukee Tool and Continental Tire.

Discover how you can win with Mississippi. Visit Mississippi.org to learn more.

ALABAMA Company

GOLD SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Industry

Mazda/Toyota

Huntsville

N

4,000

$1.6 billion

Automotive

Amazon

Bessemer

N

1,500

$325 million

Distribution

Mercedes-Benz Bibb County N 325 $268 million U.S. Int’l.

Automotive

Haier U.S. Appliance Decatur E 255 $115 million Appliance Solutions, Inc. Manufacturing

& Distribution Airbus Mobile

Mobile

E

432

$264 million

Aerospace

Facebook Huntsville N 100 $750 million

Data Center

Shipt Birmingham E 881 $10 million

e-Commerce/ Distribution

Ford President and CEO Jim Hackett.3 Tennessee’s strong automotive sector also drove a few significant manufacturing projects last year.

Kimber Manufacturing Inc.

Troy

N

366

$38 million

Firearms

Lockheed Martin Corp.

Troy

E

60

$130 million

Aerospace

Hool announced a plant in

Automotive

Morristown, with at least

Hyundai Motor Montgomery E 75 $388 million Manufacturing Alabama LLC

Belgian bus-maker Van

600 on the payroll to begin with and as many as twice

S ponsor: Alabama Department of Commerce Project of the Year

(pop. 4.90 million) States with populations of 3+ to 5 million

that in the next several years. Japanese supplier Denso, in the community of Athens, is expanding with more than 300 new

Project

of the Year

jobs. And truck-maker Oshkosh Corp. is taking over a John Deere facility in Jeffer-

Alabama Adds Mazda/Toyota Manufacturing USA to Its Auto Roster

A

son City, with plans to add more than 300 jobs.

South Carolina also has

robot turned the sym-

over model not yet unveiled.

a strong automotive sec-

bolic first shovel of dirt last

It’ll be the fourth auto assembly

tor, and that’s reflected

November at the site of

plant to open in Alabama in the

in its 460-job expansion

Alabama’s next big auto assembly

past couple of decades. Ala-

project from supplier

plant in Huntsville. In 2021, manu-

bama is now the country’s fifth-

Draexlmaier Automotive

facturing robots and some 4,000

biggest auto-producing state,

of America, near the BMW

humans will begin turning out some

building about a million vehicles

assembly plant.

300,000 Mazda and Toyota vehicles

every year. At the groundbreak-

a year at the $1.6 billion facility.

ing, Mazda’s senior manag-

expansion at Electric Boat

ing executive officer, Kiyotaka

Corp. in North Kingstown,

Mazda/Toyota Manufacturing

Shobuda, called Huntsville “a

Rhode Island, helped make

USA is building the facility not far

city that believes in the possibili-

the state a recipient of its

from a Toyota engine plant that

ties of technology and manufac-

premiere Shovel award.

provides work for 1,400 people.

turing, and has striven to realize

The 1,300-job project

The jointly owned and operated

mankind’s greatest dream.”1

will allow the company to

assembly plant will make a new generation of Toyota Corolla vehicles, as well as a Mazda cross-

38

A nearly $800 million

AREA DEVELOPMENT

ShovelArticle2019.indd 38

annually produce three 1

https://insidemazda.mazdausa.com/press-release/ mazda-toyota-plant-paving-the-way-for-groundbreaking-future/

Virginia-class submarines (see sidebar).

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

6/4/19 1:14 PM

2019 Silver Shovel Award Winner

ONE TEAM

ONE WIN

THE POWER OF ‘WE’ In Nebraska we listen. We work. We cheer.

That’s why we grow.

Moving our state and local economies forward. Making Nebraska your top location for business. Establishing our state as the top location to live, work and play.

This is what collaboration looks like.

We are your choice. Come grow with us.

oppd.com

Sites.nppd.com

Opportunity.Nebraska.gov

SelectLincoln.org

Advance Southwest Iowa Corporation | Cass County Nebraska Economic Development Council Gateway Development Corporation | Greater Fremont Development Council Sarpy County Economic Development Corporation

SelectGreaterOmaha.com

GOLD & KENTUCKY Company Beam Distillery

SILVER SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Bullitt County

E

5

$585 million

Nucor Steel Gallatin

Gallatin County

E

70

$650 million

Maker’s Mark Distillery, Inc.

Marion County

E

24

$463.8 million

Novelis Corp.

Todd County

N

125

$304.9 million

Industry

SILVER SHOVEL AWARDS

Distillery Steel Distillery Aluminum

GE Appliance Park Jefferson E 400 $200 million

County

Household Appliances

Global Win Ballard N 500 $150 million Wickliffe, LLC County

Paper Packaging

Century Aluminum Hancock E 250 $116.5 million

Aluminum

from a pair of food-processing opera-

Sister Schubert’s Hart County E 134 $74 million Homemade Rolls, Inc.

Food Processing

tions: Mountaire Farms and House of of poultry. And several food process-

Independent Stave Co.

Rowan N 220 $66.5 million County

Wood Barrels

Kobelco Aluminum

Warren E 115 $48.5 million County

Aluminum

Raeford Farms, both in the business ing expansions are also on Nebraska’s top projects list: Wholestone Foods,

(pop. 4.40 million) States with populations of 3+ to 5 million

Sponsor: Kentucky Cabinet For Economic Development

In North Carolina, a total of more than a thousand new jobs will result

Michael Foods, and Ingredion are all expanding in the state.

Kentucky manufactures many things, perhaps none more beloved

NEVADA Company

SILVER SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Axion Corp.

Reno N 511 $27.6 million

Sephora USA, Inc.

North Las Vegas

N

460

$36 million

MECP1 Reno 1, LLC Reno N 50 $106.8 million

Industry Engineering/ Manufacturing/ Distribution Logistics Data Center

KRS Global Henderson N 160 $34.6 million Pharmaceuticals Biotechnology, Inc. AeroSpec Lyon County N 85 $124.6 million NDT Services, Inc.

Aerospace/ Defense Services

Bigelow Aerospace

Aerospace/ Defense

North E 30 $6.6 billion Las Vegas

VM Innovations Henderson E 56 $60.8 mllion

Scientific Games Corp.

Las Vegas

E

300

$2 million

Design, LLC Henderson N 50 $300 million

C4 Mining Co. Inc.

Clark County Ctiy

N

30

$25.4 million

Aviation Services Business/IT Data Center Business/IT

than bourbon. Two distilleries made the state’s top projects list for expansion plans. Jim Beam announced an infrastructure investment of $585 million, while Maker’s Mark pledged to invest more than $460 million, and Independent Stave Co. is adding jobs and pumping investment into the business of making wood barrels to age the bourbon. Virtually all of Kentucky’s big 2018 projects were in manufacturing, and they provided a showcase of the state’s diversity.

Three different companies are investing and creating new jobs in aluminum manufacturing, and steelmaker Nucor is making a $650 million invest-

(pop. 3.03 million) States with populations of 3+ to 5 million

ment as well.

Mississippi also displayed its diversity in manufacturing and related sectors. Two big projects involve poultry processing: Pearl

40

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6/4/19 1:14 PM

GOLD & UTAH Company

SILVER SHOVEL WINNER City/County

N/E

# Jobs

Inv. Amt.

Clarus Corp.

Holladay E 147 $40 million

GoHealth

SILVER SHOVEL AWARDS

Lindon N 363 $900,000

Industry Headquarters Insurance

Canopy Tax Lehi E 538 $7.5 million

IT/Technology

Amer Sports Ogden E 155 $32 million

Headquarters

HealthEquity

Salt Lake Cty.

E

500

$29.8 million

FinTech

Lending Club

Salt Lake Cty.

N

860

$17.9 million

FinTech

Bullfrog Spas

Herriman

E

150

$20 million

Hot Tubs

Merit Medical Salt Lake Cty. E 1,010 $505 million

Medical Devices

Sarcos Corp.

Salt Lake City E 292 $2.4 million

Tech/ Robotics

Moog Inc. Salt Lake Cty. E 120 $2.2 million

Defense/ Aerospace

(pop. 3.16 million) States with populations of 3+ to 5 million

River Foods is adding 450 workers in Carthage, and Peco Foods will hire 300 at a facility where frozen chicken products will be handled. Two announcements were in the automotive sector, including a $170 million retooling at the Toyota assembly plant in Jackson, where an additional 400 workers will be needed to roll more next-generation Corollas off the line.

MISSISSIPPI Company Amazon

GOLD SHOVEL WINNER

City/County

N/E

# Jobs

Inv. Amt.

Industry

Marshall N 850 $45 million County

Distribution

SYNNEX Corp.

Desoto E 600 $20 million

County

Electrical Components

Pearl River Foods Leake E 450 $1 million

County

Poultry Processing

Toyota Lee County E 400 $170 million

Automotive

Williams-Sonoma Raytheon DMC Power

Lee County

E

350

$18.5 million

Furniture

Scott County

E

45

$100 million

Radar

Desoto N 125 $8 million County

Big-Dollar Deals Only a handful of 2018 projects entered 10-figure dollar territory. Not surprisingly, a lot of them involved petrochemicals, a sector where it’s tough to do much that’s substantial for less than a billion dollars. Also not surprisingly, the billion-dollar petrochemical activity was centered in Texas.

In the Lone Star State, Formosa

Connection Systems

Plastics pledged $5 billion on an

Auto Parts Lee County E 50 $100 million Manufacturing Mississippi

Automotive Parts

expansion intended to broaden the

Peco Foods Clay County E 300 $40 million

Poultry Processing

Unified Brands

Food Equipment

Warren E 250 $9.5 million County

company’s line of plastic resins and get into low-density polyethylene resins. It’s a pricey project with a good-sized employee count, adding

S ponsor: Mississippi Development Authority

(pop. 2.98 million) States with populations under 3 million

about 340 to the payroll. Another 430 jobs are part of a $3 billion Cheniere Energy project in Corpus Christi involving liquefied natural gas production. In Channelview, LyondellBasell broke ground on

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

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KANSAS Company

SILVER SHOVEL WINNER

City/County

N/E

Colwich

N

Element, LLC

# Jobs 60

Inv. Amt.

Industry

$180 million

Ethanol

Viega, LLC McPherson E 40 $210 million

Valves/Pipe Fittings

Spirit AeroSystems, Inc. Wichita E 1,400 N/A

Aircraft Parts

Resers Fine Foods Topeka E 60 $74 million

Food Processing

Scavuzzo’s Inc. Kansas N 70 $100 million

City

Logistics/ Distribution

Palmer Manufacturing Garden E 201 $16.6 million & Tank Inc. Ctiy

Metal Fabrication

Orizon Aerostructures, Olathe E 400 $127.3 million LLC

Aviation Parts

GEICO Lenexa N 500 $9.8 million

what will become the largest propylene oxide and tertiary butyl alcohol plant ever built. It’s a $2.4 billion

Camso Manufacturing USA, Ltd.

Junction E 41 $44 million City

Overstock.com

Kansas N 200 $14.2 million City

Sponsor: Kansas Department of Commerce

project, and by the time it’s done, 160 jobs will be

Insurance Rubber Products Logistics/ Distribution

(pop. 2.92 million) States with populations under 3 million

added. Another chemicalrelated expansion was

Project

announced in Baytown,

of the Year

where German manufacturer Covestro is pumping $1.7 billion into its operation to boost production of a key chemical found in polyurethane foam.

Automotive and semiconductor operations also often top the billion-dollar mark. That’s the case with the $1.6 billion being spent by the Mazda/ Toyota joint venture in Alabama. Mazda/Toyota’s Huntsville plant will create some 4,000 jobs (see

Project of the Year, Electric Boat Corp. to Expand Submarine Production in Rhode Island

I

n 2018, Electric Boat Corp., a

was enabled by a spending bill

division of General Dynamics

passed by Congress earlier in

pledged to invest $792 million in its

2018, and the state’s two U.S.

manufacturing facility at the Quonset

senators were on hand for the big

Business Park in North Kingstown,

announcement. “These subma-

Rhode Island. The project involves an

rines are critical to the defense of

expansion of about 1.3 million square

our nation,” said Sen. Jack Reed,

feet of manufacturing space and

who serves on the Senate Armed

some 1,300 new jobs, and it will allow

Services Committee.1

Electric Boat to start making a new

A state investment of $14 million

sidebar). But Alabama’s

generation of nuclear submarines.

automotive news goes

The company presently builds

by supporting improvements

two Virginia-class submarines a

and modernization at Quonset

year for the U.S. Navy, and after

Point. The state also offered tax

its expansion it hopes to be able

credits of $2 million and sales tax

to produce three a year. Electric

exemptions of $18 million.

beyond the Mazda/Toyota joint venture. MercedesBenz new Bibb County facility is part of its overall Alabama operation, and Hyundai is investing nearly $400 million in an

ShovelArticle2019.indd 43

Boat is also now the prime contractor for making the Columbia class of submarines. The project

helped facilitate the project

1 https://www.hstoday.us/channels/dod-nationaldefense/general-dynamic-electric-boat-expansion-will-create-1300-jobs-at-navy-submarineplant/

6/4/19 1:16 PM

GOLD & NEBRASKA Company

City/County

SILVER SHOVEL AWARDS

SILVER SHOVEL WINNER N/E

# Jobs

Inv. Amt.

Industry

Michael Foods Bloomfield E 100 $150 million

Food Processing

Facebook Papillion E 100 $500 million

Data Center

Becton Dickinson

$125 million

Medical Devices

i2c Omaha N 300 $30 million

Financial Services

Ingredion

Columbus

E

200

$84.2 million

Food Processing

BuilderTrend Omaha E 300 $8.6 million

Construction Software

South Sioux City

E

40

Rattlesnake Allen N 12 $470 million Wind Energy Creek Wind Farm LDI Omaha Papillion E 20 $45 million Box Co.

Box Manufacturing

Sholes Wind Wayne N 10 $250 million Energy Center (Nextra)

Wind Energy

Wholestone Fremont E 500 $180 million Foods

Food Processing

expansion in Montgomery.

The decision by Nikola Motor Co. to build hydrogen-electric trucks in Coolidge, Arizona, also represents a $1 billion investment and the creation of 2,100 jobs (see sidebar). Additionally, having a shovel-ready site helped seal the deal according to a statement from Nikola Motor Co. CEO Trevor Milton: “Coolidge had a shovel-ready 430-acre piece of property

S ponsor: Nebraska Department of Economic Development

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

with the infrastructure already in place that will shave years off our construction time…We have customers like

RHODE ISLAND Company Electric Boat Corp.

City/County

Anheuser-Busch and US Xpress who

SILVER SHOVEL WINNER N/E

# Jobs

North E 1,309 Kingstown

Inv. Amt.

Industry

$792.1 million

North N 702 110.2 Kingstown million

Food Packaging

iXblue Defense Lincoln N 22 Systems, Inc.

$2.9 million

Defense

Rubius Smithfield N 154 Therapeutics, Inc.

$188 million

Biopharmaceuticals

S ponsor: Rhode Island Commerce Corp.

Project of the Year

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this move, we’ll be able to deliver much faster.”4 Finally, with all of the automotive-

Shipbuilding

Pharmaceuticals Immunex Rhode Kent E 146 $164.1 Island Corp. million

Infinity Meat Solutions, LLC

are ready for their trucks, and with

related projects, Micron Technology is facing increased demand for its computer chips which are used in the advanced technology found in today’s vehicles. In response to this, it is expanding in Manassas, Virginia, at a

(pop. 1.06 million) States with populations under 3 million

cost of $3 billion and will create 1,100 jobs (see sidebar).

1

https://www.tennessean.com/story/ news/2018/11/16/amazon-nashville-yards-gov-billhaslam-mayor-david-briley/2006460002/ 2 https://www.spiritaero.com/release/137018/ spirit-aerosystems-plans-more-major-expansion-inwichita-kan 3 https://www.mlive.com/auto/2018/06/ford_outlines_plan_for_michiga.html 4 https://www.azcentral.com/story/news/local/ arizona/2018/09/11/nikola-lands-coolidge-truckmanufacturer-jobs/1260281002/

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

6/4/19 1:16 PM

SPONSORS

ALABAMA

Alabama Department of Commerce The Alabama Department of Commerce is the state’s lead economic development agency. In addition to business development activities, Commerce promotes exporting and international opportunities for Alabama companies, assists small businesses, and positions the state for film productions. Commerce is home to the state’s primary workforce development program, AIDT. Greg Canfield, Secretary Alabama Department of Commerce 401 Adams Avenue P.O. Box 304106 Montgomery, Alabama 36130-4106 www.madeinalabama.com

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 threepronged 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.

Connie Weber, Public Relations Director Arizona Commerce Authority 100 N. 7th Ave., Suite 400 Phoenix, AZ 85007 602-845-1200 conniew@azcommerce.com AZcommerce.com

GEORGIA

Georgia Department of Economic Development The Georgia Department of Economic Development is responsible for attracting new business investment and encouraging the expansion of existing industry. Consistently ranked as the “top state for doing business,” Georgia provides the world’s leading brands with a skilled workforce, an unparalleled logistics ecosystem, and a highly competitive tax climate.

Scott McMurray, Deputy Commissioner of Global Commerce Georgia Department of Economic Development 75 5th Street NW, Suite 1200 Atlanta, Georgia 30308 404-962-4000 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 37 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 Kansas is the perfect place to do business, with an abundance of business advantages, including a highly-skilled workforce, vibrant rural and urban communities, and a business-friendly climate.

Susan Neupoth Cadoret, Director of Business & Community Development Kansas Department of Commerce 1000 S.W. Jackson St. Suite 100 Topeka, KS 66612 785-296-5298 Susan.NeupothCadoret@ks.gov www.kansascommerce.gov

KENTUCKY

Kentucky Cabinet for Economic Development Kentucky helps new and existing companies of all sizes meet their workforce needs. Kentucky fosters growth through a variety of services designed to raise capital, increase business, and encourage investment within the food processing and other industries.

Explore the many advantages of the Commonwealth and you’ll find Kentucky will go the extra mile to exceed your needs.

Erran Persley, Commissioner of Business Development Kentucky Cabinet for Economic Development Old Capitol Annex 300 W. Broadway Frankfort, KY 40601 502-564-7670 or 1-800-626-2930 www.ThinkKentucky.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.

Nicole Whitehead Michigan Economic Development Corporation 517-719-3157 whiteheadn@michigan.org www.michiganbusiness.org

MISSISSIPPI

Mississippi Development Authority The Mississippi Development Authority (MDA) is the state of Mississippi’s lead economic and community development agency.

The agency works to recruit new business to the state and retain and expand existing Mississippi industry and business.

Glenn McCullough, Executive Director Mississippi Development Authority 501 North West St Jackson, MS 39201 601-359-2832 www.mississippi.org

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SPONSORS

NEBRASKA

Nebraska Department of Economic Development Nebraska isn’t what outsiders think. Our state is the perfect mix of good people, interesting places, and a diverse range of things to do. We’re in-the-middle-of-it-all, offering a limitless array of advantages that make living, working, and doing business here a wonderful and rewarding experience.

Jason Guernsey, Director of Business Attraction Nebraska Department of Economic Development 301 Centennial Mall South Lincoln, NE 68509-4666 jason.guernsey@nebraska.gov opportunity.nebraska.gov

RHODE ISLAND

Rhode Island Commerce Corporation The Rhode Island Commerce Corporation is the full-service, official economic development organization for the state of Rhode Island.

It serves as a government and community resource to streamline business expansion in, and relocation to, Rhode Island. The agency assists companies with commercial real estate, business financing, workforce training, and more.

Matt Sheaff, Director of Communications and Stakeholder Outreach Rhode Island Commerce Corporation 315 Iron Horse Way Providence, RI 02908 401-278-9100 info@commerceri.com https://commerceri.com/

SOUTH CAROLINA

TENNESSEE

Tennessee Department of Economic & 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 & 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

Texas Department of Economic Development Low taxes, global access, and competitive incentives — these are just a few reasons companies like Toyota, Boeing, Charles Schwab, and Stanley Black & Decker choose to Go Big in Texas. Add to that world-class infrastructure and the second-largest workforce, and it’s no wonder Texas continues to lead the nation in job creation.

Robert Allen, President and CEO Texas Economic Development Corporation (TxEDC) 1005 Congress Ave., Suite 910 Austin, TX 78701 512-981-6736 robert@businessintexas.com www.GoBigInTexas.com

Santee Cooper For over 80 years, Santee Cooper has supported South Carolina’s business community by providing safe, reliable power that helps your bottom line and ultimately improves the quality of life for South Carolinians. In addition to delivering electricity directly to 27 large industrial customers, Santee Cooper directly and indirectly powers 13 municipalities, Charleston Air Force Base, and electric cooperatives in all 46 counties of the state.

Bill McCall, Economic Development Specialist Santee Cooper One Riverwood Drive Moncks Corner, SC 29461 843-761-8000 ext. 5381 wmccall@santeecooper.com www.PoweringSC.com

Find the Right Location for Your Next Project.

FacilityLocations is a GIS map-driven, online economic development directory used to research potential locations during the business re-location or expansion process.

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>

MARKET ANALYSIS

What Makes a Successful Innovation District?

Prosperous innovation districts have diversified economies and are integrated into the fabric of a community, drawing workers who seek out such environments and the companies that are trying to attract them.

By Stephen Coulston, Principal & Practice Leader, Urban Design, Perkins+Will

T

Courtesy of UC Davis and Perkins+Will

he definition of the workplace as we know it has been undergoing rapid changes. What it once meant to baby-boomers is completely different than what it now means to millennials and Gen-Z. Instead of having students graduate and move for jobs, companies are now choosing to set up shop where young talent wants to live — in up-and-coming destinations that embody a “cool factor” like Denver, Austin, and Seattle. This shift in perspective has led to the rise of innovation districts — an emerging trend that is changing the way industries, economies, and communities are growing in the areas where they are located.

These targeted urban areas have the potential for entrepreneurship and, of course, innovation, given the right catalysts. In these districts, spaces and ideas develop organically to foster connections between people

Concept design of UC Davis Aggie Square, a planned 25-acre innovation district on UC Davis’ Sacramento campus.

and industries. When executed successfully, innovation districts can diversify and encourage significant economic development in a community, as well as serve as a compelling tool for both talent recruitment and retention. But what makes an innovation district flourish?

How do we turn a trend into a lasting vehicle for economic growth and prosperity?

What Is an Innovation District?

The concept of the modern innovation district has long been in the making, with the first industrial and corporate business campuses evolving into university research parks. There was a surge in the development of many of these areas in the 1970s and 1980s, which were anchored by — if not led by — universities with notable research-based institutions and academic medical centers that resulted in partnerships with business and industry. Most parks were based on the traditional corporate park model — a building in isolation, surrounded by surface parking, maybe a pond with a fountain, and a ring road that would quickly help people leave at the end of the business day. These design and planning elements were not the model of a vibrant, active space.

As universities have continued to face research funding challenges, industry partnerships have since become an even more important part of the equation. Due to the fact that institutions have cautiously become more outwardly focused, their respective communities have simultaneously learned to leverage the economic potential of their institutions. Surrounding communities and investors from both the public and private sector have instinctively realized that they are able to utilize local assets in an economically favorable way. This has led to more advantageous partnerships, because both parties have a strong understanding of the mutual economic gains of working together, ultimately resulting in development and growth.

These partnerships are a fundamental aspect of the evoAREA DEVELOPMENT | Q2 2019

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Location.

Location.

Innovation.

Welcome to Innovation Zones at ASU, a portfolio of co-location offerings at Arizona State University — named the country’s most innovative university by U.S. News & World Report. Companies benefit from direct connections with ASU students, world-renowned research and nationally leading programs in engineering, bioscience, business, cybersecurity, health care and more. You’ll be surrounded

by Fortune 500 companies as well as dozens of innovative startups.

ASU offers you both location and innovation.

View locations at innovationzones.asu.edu.

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lution of the modern innovation district.

Coupling the demand of next-generation service and creative workers who are seeking interesting places to live, employers have begun to follow the talent. A robust and available pipeline of knowledgeable workers is key, as recently evidenced by major expansions of Amazon in both Crystal City, Virginia, and Nashville, Tennessee, as well as Apple in Austin, outside of their bases in Seattle and Cupertino, respectively. As such, placemaking and economic development have become inextricably woven.

Traditional office parks are attempting to reinvent themselves as places full of activity offering employees a variety of uses, and university research parks are rethinking their traditional models as well. For example, today’s mechanical engineering graduate who wants a job in the automotive industry is no longer limited to moving to Detroit. That graduate has “place choice” and can weigh their options between moving to Silicon Valley and working for Tesla, or moving to Greenville, South Carolina, where they could work with BMW, or be a researcher in the Clemson University Center for Automotive Research (CU-ICAR).

Sacramento, California, and Tallahassee, Florida, are both great examples of prime areas for an innovation district to grow. Both cities are located in states with strong, growing populations and industry. Both are capital cities with a major higher education institution presence. Sacramento has the University of California, Davis Health Center, the main academic and research campus just 20 miles away, as well as a strong agricultural economy; while Tallahassee leans heavily on its base of state government, a population of over 50,000 students at Florida State University and Florida A&M University, in addition to the city’s population. However, each of these locations have traditionally been large net exporters of talent, as few people stay in the area following graduation. If their institutional assets were leveraged from an economic perspective, and through partnership and place-making, these cities would quickly attract young talent and establish opportunities for entrepreneurship, incubation, technology, and swift economic growth.

This is exactly what is happening at UC Davis’ planned 25-acre Aggie Square innovation district on its Sacramento campus. Just this past April, the chancellor and the mayor of Sacramento jointly unveiled plans for the first eight acres of the project to include office and classroom lifelong learning spaces, two multitenant research buildings, and a mixed-use residential building with active ground-level uses and an outdoor market focused on providing access to healthy food options.

The designs incorporate a mobility hub to encourage alternative modes of transportation, which is anchored by a public Aggie Square that connects buildings. This new public space provides an open area for tenants, residents, and community members to congregate. Once realized, this initiative will leverage the institution and community assets, positioning Sacramento as a hub of the innovation economy.

Innovation districts evolved into the contemporary notion of what they are today by becoming much more integrated into the urban fabric of a community. They are no longer singularly focused research parks in suburban areas, but a mix of different market sectors and purposes in urban landscapes. A prosperous innovation district will have a diversified economy, with a vibrant mix of businesses that support a need for mixed-used development and housing companies across multiple industries.

Ideally, these industries — no matter how disparate — will cross pollinate, coming together through shared discourse to solve a common problem. This sort of innovation leads to notable economic growth and the transformation of several different industries simultaneously.

Bringing together companies with common themes of discourse that result in this level of trailblazing and economic advancement is the most effective way to future-proof an innovation district and ensure that it will continue benefiting the community for years to come.

The three main aspects to consider when planning an innovation district in an urban area are economy, place, and culture. Economic growth comes from diversified industries and research and the innovation ecosystem they provide. Place-making represents the physical, vibrant, mixed-use environment that industry seeks in identifying access to the best and most creative talent. That said, the program activities, cultural efforts, and the curation and cultivation that happen in a remarkable innovation district are just as important as what happens on the place-making and economic side. When planning an innovation district, one of the key questions designers and urban planners must ask themselves is how to bring people together and create both common ground and opportunities to exchange ideas fluidly.

An Emerging Success An excellent case study of a burgeoning innovation district is the one Perkins+Will is helping to design in Oklahoma City, which is home to the state capitol; the University of Oklahoma (OU) Medical Center; the OU Research Park, Oklahoma Medical Research Foundation; Devon Energy; Baker Hughes-GE; Tinker Air Force Base; and the Federal Aviation Administration’s (FAA) Mike Monroney Aeronautical Center; among other entities.

With a number of industries centered in this area, such as aeronautics, oil and gas, biomedical, and healthcare, the burgeoning Oklahoma City Innovation District will be a place where different industries are successfully forging common discourse and effectively demonstrating a positive impact on each sector.

This area has become a significant driver of economic growth for the state of Oklahoma, and the institutions and neighborhoods in this district have a unique stake in supporting its sustained growth and future development.

Additionally, the district is integrating the Medical

Continued on page 55 AREA DEVELOPMENT | Q2 2019

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Texas

SPECIAL LOCATION REPORT

By Tom Gresham

Texas Builds on Its Strengths and Confronts Its Challenges Population growth, a favorable tax climate, and a business-friendly environment are among the factors fueling economic gains and drawing corporate investment to Texas.

T

courtesy Port of Houston

he size and steady growth of the Texas economy makes it enviable to many of its state peers. If it were a country, Texas would have the 10th-largest economy in the world, ahead of Spain, Russia, and Mexico, among others. The state has been the largest exporter in the U.S. for 17 consecutive years, and it shipped $315 billion worth of goods in 2018.1 Unsurprisingly, each year Texas finishes near or at the top of various rankings of the best states for business in the country.

Robert Allen, president and CEO of the Texas Economic Development Corporation, says Texas routinely posts GDP growth of between 3 percent and 5 percent each quarter and “for an economy of our size, those are stunningly large numbers.”

Keys to the state’s success, he notes, include rapid population growth, a favorable tax climate, and a business-friendly environment throughout the state.

“I think one thing that’s been consistent about Texas for the past several years has been this idea

The Port of Houston is the nation’s largest port for foreign waterborne tonnage and an essential economic engine for the state and nation.

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that we are going to foster an environment where businesses of all sizes — small, medium, and large — are able to grow and be successful,” Allen says.

Christian Fletcher, executive director of the Marble Falls Economic Development Corporation, says the size and diversity of Texas helps create a climate where “there is something for everyone.” He explains that Texas’ growth has come sustainably: “I think that state and local leaders understand and appreciate the value of healthy, sustainable growth over a grow-at-all-costs attitude.”

Talent Boom Allen says high-quality talent is the chief driving force for where companies decide to invest in today’s economy, and he hears from executives who choose to invest in Texas that the state’s supply of skilled workers is a key reason for the decision. In fact, 48 Fortune 500 businesses have headquarters in Texas.

Texas has benefited from a snowball effect over the years as businesses follow other businesses that have chosen to open key facilities in the state. In all, Texas has 13 million workers, the second-largest civilian workforce in the U.S. “The No. 1, 2, and 3 issues that executives are looking for these days are talent, talent, and talent,” Allen notes. “With the economy growing at the pace that it’s been growing, jobs are being added fast. I think Texas has been demonstrating to companies that we have the talent to fill those highly technical jobs.”

In a 2018 interview with the Houston Chronicle,2 Robert Kaplan, president of the Federal Reserve Bank of Dallas, said Texas’ population growth stands out alongside sluggish growth elsewhere in the country. He noted that the state’s population has for free site information, visit us online at www.areadevelopment.com

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RESOURCEFUL

Spirit

Spirit of Growth University of Texas Permian Basin

Odessa College

Texas Tech Health Sciences Center

A Workforce Second to None

With abundant energy and 24/7 manufacturing support, Odessa has the infrastructure, skilled workforce and business climate to ensure your company succeeds. With the discovery of oil in the 1920s, Odessa quickly became the regional hub for all manufacturing needs, and our city truly does support a 24/7 manufacturing industry. Response is critical in this industry and our workforce understands that. From machinery manufacturing to chemical and metal manufacturing, Odessa has been the longstanding leader in this industry.

To meet the needs of our growing economy, our three schools of higher education stand ready to help you train the workforce you need.

The University of Texas Permian Basin • Dynamic, growing campus with over 5,000 students • Wagner Noël Performing Arts Center was ranked as one of the top centers in the world • Rapid expansion of degree programs over the last few years Odessa College • 2017 Recipient of the “Rising Star” Award from the Aspen Institute for Community College Excellence.

• Total enrollment of over 7,800 Texas Tech Health Sciences Center • Dedicated to improving the quality of healthcare, medical education and research in the Permian Basin • Medical residency programs • Offers bachelor’s and doctorate degrees in several healthcare fields Find out more about Odessa and how we can train and provide the skilled labor you need by contacting :

Odessa Development Corporation

www.odessatex.com • 432-332-9111

courtesy Texas A&M

“ Much of Texas’ high-performing employee base is drawn from Texas’ top-tier universities, including Texas A&M University, recognized among the best for business, engineering, and more.

grown from 22.5 million a decade ago to more than 28 million in 2018 and is projected to exceed 40 million over the next quarter century, outpacing the rest of the country. Kaplan says population is a major driver of economic growth, providing not only workers but customers for goods and services.

“At a time when the rest of the country is challenged by aging populations, slowing workforce growth, and a loss of working-age population.…Texas is bucking a lot of those trends,” Kaplan told the paper.

Diversification of the Texas economy continues to be a strength for the state, helping it to weather cyclical downturns in the global economy.

Thriving industries The diversification of the Texas economy continues to be a strength for the state, helping it to weather cyclical downturns in the global economy.

Energy justifiably remains the industry most identified with Texas — the state is the country’s largest energy producer — but Allen noted that the state managed to absorb the blow of the 2008 recession because of its variety of robust industries, particularly technology, aerospace, and health care.

The technology boom in the state has been especially beneficial to Texas’ economic climate. Companies such as Apple, Oracle, Google, and Hulu have made large investments in headquarters or other large facilities. Key aerospace companies include Lockheed Martin and Boeing, which recently located the headquarters for its new business unit, Boeing Global Services, to Plano, Texas. McKesson, which moved its headquarters from California to Irving, Texas, is among the large healthcare companies with major presences in the state; and the Texas Medical Center in Houston is the largest medical complex in the world and the eighth-largest business complex in the country with more than 100,000 employees and more than $3 billion in construction projects under way.

A Local Example Throughout Texas, regions enjoy their own distinctive strengths, and growth spreads beyond the state’s largest cities, such as Dallas, Houston, and San Antonio. In Marble Falls, for instance, Fletcher says, “Our bread and butter for decades has been tourism and hospitality,” but the community does not place its sole emphasis there.

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“We’re the hub of the Highland Lakes region of the Texas Hill Country, so we’re surrounded by beautiful scenery, golf courses, wineries and breweries, summer camps and more,” Fletcher says. “Lately, however, our community has become more livable because of expansions in the healthcare sector, new housing developments, and a couple of manufacturing projects in our business and technology park.”

Fletcher says Marble Falls is able to be its own, distinctive place while benefiting from the growth some of the state’s major metro areas are seeing: “We are an hour from Austin and 75 minutes from San Antonio, so we’re close to the action without being in the middle of it. We have a surprisingly large trade and labor shed area for a small town, so it’s like having the best of both worlds.”

The state’s economic growth brings inevitable growing pains. In Marble Falls, for example, Fletcher notes the area’s stiffest ongoing challenges are tied to growth, particularly traffic and affordability.

Statewide Challenges Although Allen sees talent as a strength in Texas, he also views it as the state’s largest challenge. “There’s record-low unemployment right now across the country, and the same is true in Texas, which is great — that’s obviously something that everybody strives for,” Allen says. “But what it means is that there’s this increased competition for talent, so that’s a huge challenge.”

The state’s large research universities are helping with a steady supply of graduates, and Texas’ community college system has a history of producing graduates with technical skills suitable for such fields as energy and manufacturing. The pressure is to continue to adapt to workforce needs and prepare students for evolving career paths.

“If we can’t address the talent needs and make sure that we’re educating the workforce of tomorrow today, then we will not be able to meet that demand that executives expect of us,” Allen explains.

Allen also says transportation is another ongoing challenge for the state. Texas’ size provides advantages, but also makes developing and maintaining an efficient, effective transportation network a difficult task. Nevertheless, the

You’d rather spend your days this way.

Or maybe that way. It’s up to you.

Whether you’re enjoying our businesses or starting one of your own, Marble Falls is where you want to be.

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A TOP 25

TO START A

LUBBOCKEDA.ORG 800.687.5330 • 806.749.4500 | LUBBOCK, TEXAS

state is aggressively and ambitiously tackling the issue, including at its international airports, vast systems of public roads, and rail network, including a proposed high-speed rail project between Houston and Dallas.

A host of ongoing federal and international policy issues, such as trade policy and immigration, could potentially affect Texas. The immigration topic looms especially large in the state. In his 2018 interview with the Houston Chronicle, Kaplan said immigration plays a large part in GDP growth in the state. “If you think you’re going to cut immigration growth by half, you have to recognize that’s inconsistent with growing GDP,” Kaplan told the paper. “That may be a trade-off decision policymakers want to make.

But that’s going to make it harder because you have to grow the workforce to grow GDP.” Allen says executives and economic development officials are watching the immigration debate closely, knowing its potential impact on the state’s economy, but he says the most important thing they want is consistency in how immigration and other federal matters are handled.

“I think part of what has led to our success is executives knowing that if they make a billion-dollar decision on Texas, then the goalposts won’t be moved on them in the middle of the game if they’re willing to commit their funds,” Allen says.

“So I wish I had a crystal ball and could tell where this immigration issue would come out, but I can’t for the time being, and what we can do is focus on what we can impact and influence and to work with businesses to address any particular concerns they have.”

~

1

https://businessintexas.com/why-texas/economic-strength 2 https://www.houstonchronicle.com/business/article/Texas-economy-growing-fast-and-poised-for-more-12935720. php

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

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SPONSORS Lubbock Economic Development Alliance Located in the middle of everywhere, Lubbock serves as the hub for more than 700,000 people. With access to Interstate 27, air service at Lubbock Preston Smith International Airport, a highly skilled workforce, affordable cost of living, and a vibrant cultural scene, Lubbock is the ideal place to grow your business.

Carolyn Rowley, Director of Recruitment & Innovation Lubbock Economic Development Alliance 1500 Broadway, 6th Floor Lubbock, TX 79401 800-687-5330 carolyn.rowley@lubbockeda.org www.lubbockeda.org Marble Falls Economic Development Corporation Located just west of Austin in the Texas Hill Country, Marble Falls has a combination of abundant natural resources, small-town charm, and economic vitality that is unmatched.

Christian Fletcher, CEcD, Executive Director Marble Falls Economic Development Corporation 801 Fourth Street Marble Falls, TX 78654 830-798-7079 cfletcher@marblefallseconomy.com www.marblefallseconomy.com Odessa Development Corporation Odessa, Texas, is located on Interstate 20 in the heart of the Permian Basin of West Texas. Oil and gas is the backbone of its local economy, and the area is known as one of the major oil fields of the world.

Wesley Burnett, Director of Economic Development Odessa Development Corporation 700 N. Grant Avenue Odessa, TX 79761 1-432-333-7880 WBurnett@odessaecodev.com www.odessatex.com Texas Department of Economic Development Low taxes, global access, and competitive incentives — these are just a few reasons companies like Toyota, Boeing, Charles Schwab, and Stanley Black & Decker choose to Go Big in Texas. Add to that world-class infrastructure and the second-largest workforce, and it’s no wonder Texas continues to lead the nation in job creation.

Robert Allen, President and CEO Texas Economic Development Corporation (TxEDC) 1005 Congress Ave., Suite 910 Austin, TX 78701 512-981-6736 robert@businessintexas.com www.GoBigInTexas.com

What Makes a Successful Innovation District?

Continued from page 49

Center and Capitol Environs campuses further into the fabric of the neighborhood, creating new growth opportunities for all parties.

Through the exciting potential the innovation district is fostering, the capacity for new developments and civic investments, as well as business opportunities, is allowing for additional place-making and, in turn, cementing the innovation district’s place as a permanent part of Oklahoma City’s urban framework.

Oklahoma City’s innovation district has also been diligent in ensuring that already established communities, such as its surrounding and historically underrepresented neighborhoods, are being included in the new economic opportunities that are emerging in the area. Instead of being left behind through economic disparity, Perkins+Will is fostering conversations with local educational institutions and organizations regarding training, technical education, and workforce development — allowing individuals without access to an expensive education opportunities for new jobs within the innovation district. These opportunities for upward mobility will allow the residents the chance to build personal wealth. While the value of their property may rise, so may their earning potential, and the innovation district will grow in a more holistic and inclusive manner. This focus on diversity is an increasingly important part of how designers and urban planners must look at future innovation districts.

Looking to the Future — What’s Next?

The conversation surrounding innovation districts is pivoting to center around economic, cultural, and demographic inclusion. As urban designers and planners begin to think about future innovation districts and what those will look like, diversity in terms of the composition of the workforce and the demographic of the community is a priority. Community leaders and designers have begun to think about the foundation of these communities more holistically, making sure to consider ways to combat the issues of affordability and gentrification that technology and innovation can bring within established communities and neighborhoods. Sensitivity must be applied, as these negative impacts threaten to form a consistent level of unemployment around certain demographic sectors.

Walkability is also a concern, with urban planners and designers taking serious care to ensure that people have access to affordable public transportation and are not priced out of accessing possible employment. Thinking about density and mobility in a different way also enables additional opportunities for connection. A foundational principle of innovation districts, this introduces the potential for discourse and innovation that may not be present without this all-inclusive point of view.

The next generation workforce has a different set of values in terms of what is important to them. As technology continues to advance and the trend of innovation districts continues to grow and expand in preferred cities, changing the conversation in a more diverse and inclusive method will ensure that these centers of innovation, economic growth, and cultural transformation continue to prosper, and change the way we look at industry and urban planning for years to come. n

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MARKET ANALYSIS

Growing Markets Positioned for Corporate Location Success Corporate site location projects begin with understanding which regional markets are growing and will provide a long-term pool of skilled workers and a successful economy attractive to the company and its supply chain.

By David J. Robinson, Principal, Montrose Group, LLC

Comparison of Top 10 Largest U.S. Cities 1950 vs. 2018

1950 2018 New York

New York

Chicago

Los Angeles

Philadelphia Chicago Los Angeles

Houston

Detroit Phoenix Baltimore Philadelphia Cleveland

San Antonio

St. Louis

San Diego

Washington, D.C.

Dallas

Boston

San Jose

Source: U.S. Census Bureau Figure 1

H

ouston and New Orleans today are not thought of as economic competitors. Dial back the time machine to 1950 and you would see a different story.

These two cities were running neck-and-neck based upon population and competition for economic success in the New South. Both cities had nearly 600,000 residents and were competing to attract energy and banking investments on a global scale. Both were connected to the Gulf of Mexico and major ports and a supporting finan-

cial services industry. Fast forward nearly 70 years and Houston has quadrupled in population, is the fourthlargest American city and the seventh-largest economy, while New Orleans has lost over 200,000 people, barely makes the top 50 of largest American cities, and is the 45th-largest economy.

Houston is now an American mega-city, but the real question from a corporate site location standpoint is, which are the growing regions today that are attractive for high-wage job and capital investment that could well be the Houston of tomorrow? As Figure 1 illustrates, only four of the top-10 largest cities in 1950 remain on the list of the 10 largest U.S. cities. In 1950, the East Coast and industrial Midwest dominated the high growth regions, while today’s mega cities are dominated by the South and West from a regional perspective.

Growing markets attract substantial economic investment — even as their costs continue to rise. Understanding which regions are growing and developing is measured by a number of economic data points — population growth, GDP growth, unemployment levels, income growth, and poverty reduction, just to name a few. Houston, Phoenix, San Antonio, San Diego, Dallas, and San Jose were all growing mid-sized urban markets over the past several decades. Population shifts to the South and West, in many cases, drove company decisions to locate in these regions, as they could provide a growing pool of skilled labor as well as an increasing number of consumers to whom companies could sell goods and services. Global airports soon followed this business and population base and, all of a sudden, these cities were blowing by the industrial Midwest and well established East Coast cities and creating a new generation of mega city.

A comparison of the largest Metropolitan Statistical Areas (MSAs) is instructive to understand which of the United States’ largest urban markets are succeeding from an economic standpoint. Companies undertaking AREA DEVELOPMENT | Q2 2019

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Top 20 Large MSAs Economic Comparison Ranking Population Growth

GDP Growth

Unemployment Rate

Income Growth

Poverty Reduction

1

Austin

San Jose

Nashville

San Jose

Salt Lake City

2

Houston

Austin

Salt Lake City

San Francisco

San Jose

3

Raleigh

Nashville

San Jose

Seattle

Austin

4

Orlando

San Antonio

San Francisco

Denver

Louisville

5

San Antonio

San Francisco

San Diego

Austin

Denver

6

Dallas

Dallas

Austin

Salt Lake City

St. Louis

7 Denver

Charlotte

Richmond

Detroit

Milwaukee

8

Columbus

Milwaukee

Los Angeles

Minneapolis

9 Charlotte Raleigh

Oklahoma City

Portland

Birmingham

10 Phoenix

Seattle

Minneapolis

Chicago

Seattle

11 Seattle

Louisville

Orlando

Nashville

Nashville

12

Las Vegas

Salt Lake City

San Antonio

Sacramento

Cincinnati

13

Miami

Atlanta

Virginia Beach

San Diego

Detroit

14

By DeanOklahoma Uminski, Principal, Los Angeles

City Crowe Horwath LLP

Washington, D.C.

Dallas

Portland

15 Atlanta

Riverside

Indianapolis

Columbus

Cleveland

16

Washington, D.C.

Houston

Miami

Minneapolis

Hartford

17

San Jose

Miami

Kansas City

Cleveland

Kansas City

Oklahoma City

Jacksonville

Richmond

Houston

Nashville

18 San Francisco

19 Jacksonville Denver Dallas San Antonio

Oklahoma City

20

Memphis

Salt Lake City

Las Vegas

Tampa

Atlanta

Source: St. Louis Federal Reserve Bank FRED System; U.S. Census Bureau Figure 2

a corporate site location project will begin (but not end) the process with a regional market analysis to identify growing markets that provide the best chance to connect with customers and suppliers and gain the workers needed for success. This analysis focuses on regional population, economic and income growth, as well as unemployment levels and poverty rate reductions — all of which illustrate general economic health of a market.

This analysis helps narrow the list of communities in which companies will then review potential sites, real estate options and costs, cost of doing business, and tax incentives — all which are part of the corporate site location process.

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An Economic Comparison of MSAs An economic comparison of the top-20 large MSAs (Figure 2) is based upon a current review of population, GDP, and per capita Income growth (2010–15); unemployment levels in 2017; and poverty reduction rates (2010–15).

First, several MSAs consistently appear to be economic winners based upon these measures including Nashville, Austin, Dallas, Seattle, San Jose, Salt Lake City, Denver, Oklahoma City, San Antonio, and San Francisco; they appear to achieve economic success in nearly all these measures. Also, several growing mega cities and mid-sized communities are worthy of attenfor free site information, visit us online at www.areadevelopment.com

6/5/19 4:14 PM

tion with multiple high-rankings from these economic data points including Miami, Atlanta, Houston, and Minneapolis; they meet economic success by three of these economic measures, illustrating impressive economic success. Finally, communities like Las Vegas; Raleigh; Orlando; Washington, D.C.; Columbus; Richmond; San Diego; Cleveland; Detroit; Kansas City; Louisville; Portland; Charlotte; Jacksonville; and Milwaukee deserve credit for achieving success on two of these important economic rankings.

In the future, the largest metro regions in the nation will again come from the emerging group of mid-sized urban markets. The largest cities of 1950 are not moving up on the list of growing regions — they are moving down. The top-20 growing MSAs not only include the invaders from the South and West — such as Houston, Dallas, San Antonio, and Phoenix — but also include emerging markets such as Austin, Orlando, Raleigh, Las Vegas, Charlotte, Jacksonville, Tampa, Salt Lake City, and Columbus.

Many of these same cities are apparent when growth rates for regional economies are compared. The top-20 fastest-growing U.S. regional economies include tech centers like Austin, San Jose, San Francisco, Seattle, and Ra-

FROM AN INDUSTRY STANDPOINT, TECHNOLOGY-DRIVEN ECONOMIC GROWTH IS CLEARLY THE MAJOR WINNER. leigh; emerging mid-size markets such as Nashville, San Antonio, Charlotte, Jacksonville, Indianapolis, Phoenix, Portland, San Diego, Sacramento, Salt Lake City, and Las Vegas; and mega-regions like Atlanta, Miami, Dallas-Fort Worth, and Denver. From an unemployment standpoint, add in Kansas City, Richmond, Milwaukee, Virginia Beach, and Washington, D.C. But the 50 largest MSAs with the lowest unemployment rates look just like the region’s leading in population and overall economic growth.

As Figure 3 illustrates, traditional East Coast cities of Philadelphia, New York, Boston, and Baltimore, as well as industrial centers such as Buffalo and Cleveland, jump into the top 20 list of income growth. However, the list in general is very similar to economic success as measured by unemployment, population, and overall economic growth.

Income Growth, 2015–2017, for Top-20 MSAs 14 12 10

percent

8 6 4 2

Fr

Sa

n

Sa

n

Jo an se ci sc Se o at N ew tle Yo N as rk hv Po ille rtl an R

iv d e In di rsid an e ap o A lis Ph tla ila nt de a lp h Bo ia s Ba ton lti m or Bu e C ffal ha o rlo tte Sa De lt La tro ke it C C le ity ve la nd St .L ou i A s C us in t ci in nn at i

0

Source: St. Louis Federal Reserve Bank FRED System Figure 3

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Percentage of Population with Bachelor’s Degree 60 50

percent

40 30 20 10 0

Las Vegas

Salt Lake Raleigh Minneapolis Columbus Nashville Charlotte United City States

Source: U.S. Census Bureau Figure 4

From an industry standpoint, technology-driven economic growth is clearly the major winner. The growth of the tech sector in San Jose and San Francisco (aka Silicon Valley), Austin, and Raleigh is clearly the economic driver making these markets attractive for economic investment.

A Comparison of Educational Attainment Levels Energy is the “gasoline” behind markets such as Houston and Oklahoma City. However, mid-sized urban markets that are booming such as Salt Lake City, Las Vegas, Columbus, Charlotte, Minneapolis, and Nashville are driven in large part by growth in the advanced service sector that is attracted to a large pool of highly educated, skilled workers. These growing mid-sized urban markets are succeeding in large part based upon the availability of a highly skilled, college educated workforce. These regions are not large players in the tech sector but in the Information Age they are proving that a large pool of college educated workers can serve to attract economic success.

As Figure 4 illustrates, many of these successful urban centers are approaching 50 percent of their population holding a four-year, bachelor’s degree that is needed for most jobs in financial services, information technology, and corporate headquarters positions — which are driving a post-industrial economy.

Logistics, distribution, and fulfillment centers are

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also a growth market for many of these communities, as traditional retail centers transition and online purchases drive rapid fulfillment center growth led by Amazon and others. Regions like Columbus, Ohio, have over 80,000 logistics jobs driven by three major logistics centers, a large workforce pool, and a competitive tax incentive program for national companies.

Where Population Is Growing Skilled workforce is not the only driver for regional growth. Large-scale demographic changes impact that growth as well. Since the end of World War II, the Western and Southern States have been growing substantially, and that does not appear to be slowing. Population growth impacts economic development. Western and Southern States will continue to grow and present attractive targets for economic growth during 2019.

Picking regions to consider for a corporate site location project often centers on measuring a large number of communities to determine which ones are growing and likely to provide a long-term base of skilled labor and economic activity. Fortunately, major U.S. metro centers offer a wide range of successful regional economies for corporations to choose from.

DAVID J. ROBINSON is Principal of the Montrose Group, LLC and provides corporate site location, economic development planning, and lobbying services to clients across the United States. for free site information, visit us online at www.areadevelopment.com

6/5/19 4:16 PM

Ohio

SPECIAL LOCATION REPORT

By Tom Gresham

Diversification Bolstering Economic Growth in Ohio While building on its existing strengths — including its logistical advantages, low tax burden, and productive workforce — Ohio is seeking to diversify the state’s economy.

E

conomic development leaders In Ohio — the country’s seventh-largest state economy in terms of GDP1 — are aiming to diversify the state’s array of industries to enable continued growth and to bolster resilience to market cycles, positioning Ohio well for both the heady days of growth and the more somber periods of a global downturn.

To that end, Dana Saucier, vice president and head of Economic Development for JobsOhio, a private nonprofit organization dedicated to state economic development, says his organization is targeting nine industries to strengthen and play a vital, enduring role in Ohio’s economy. Each of these identified industries — including manufacturing, financial services, health care, information technology, and energy, among others — is growing at a faster pace in Ohio than in the rest of the Midwest.

Saucier says the state’s Moody’s ranking for industrial diversity improved from 10th in 2007 to eighth in 2017. “We see more opportunities for growth in sectors that are more resilient and less cyclical to increase the state’s share of industries that maintain GDP

Honda Motor Corporation is the state’s largest manufacturing employer.

growth through all business cycles,” Saucier explains.

Among many promising signs, Ohio’s venture capital funding broke the $1 billion mark for the first time in 2018, representing a 150 percent increase over the previous year. Saucier says the funding is leading to more early-stage company growth, primarily in technology and health care. “Wages and GDP are consistently rising in Ohio, and we remain one of the most cost-effective states [in which] to do business,” Saucier notes.

The state aims to look beyond large corporations when working with companies considering an Ohio home. In fact, 80 percent of JobsOhio projects are with small and medium-sized organizations. Ohio led the country with 442 capital project announcements in 2017, according to the Ernst & Young Investment Monitor,2 which ranked Ohio fourth overall for mobile capital investment that year with a total investment of $7.3 billion.

Key Industries A crucial piece of Ohio’s economy remains the manufacturing sector, which employs more than 700,000 people, according to the Ohio Development Services Agency. Ohio is fourth in the country in manufacturing GDP,3 and according to the agency, the state leads the country in the production of plastics and rubber, fabricated metals, and electrical equipment and appliances, while also ranking highly in the production of steel, autos, and trucks — the state’s leading exports are motor vehicles and machinery. Honda Motor is the state’s largest manufacturing employer, followed by GE, Berkshire Hathaway, and Procter & Gamble.

In addition, Saucier says Ohio is seeing a surge in the natural gas industry, pointing to the region’s Marcellus and Utica shale formations as key to the growing interest. “Because of this energy growth, AREA DEVELOPMENT | Q2 2019

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Our sites are ready, can you dig it?

Make Ohio home.

Our SiteOhio program takes site evaluation to a higher standard.

The authentication process is more thorough and stringent than any other in the country. In Ohio, we’ve removed the guesswork so you can build your future day one.

Watch aerial site tours at JobsOhio.com/sites

Welcome to Ohio.

“

Ohio’s central location and ready access to a host of major metro areas appeal to a wide range of industries for logistics purposes.

11 natural gas-fired power plants are under construction or in development in Ohio, helping boost Ohio’s competitiveness across many industries,” Saucier says. “In fact, according to a new IHS Markit study,4 the Ohio Valley region will supply nearly half of the nation’s natural gas and nearly a fifth of natural gas liquids by 2040.”

Saucier also sees growing opportunities in in the technology sector, noting that innovative companies such as BrightEdge, Facebook, Quotient, Upstart, Veeva Systems, Amazon Web Services, and others have recently chosen to invest in Ohio for the first time.

Saucier says the state is boosting its R&D capabilities. “The R&D Center Grant Program is bringing more R&D centers to Ohio, making the state more favorable for investment, high-tech jobs, and talent,” he notes.

Saucier believes Ohio can emerge as a world leader in emerging technologies, particularly pointing to autonomous mobility as an area filled with promise.

“The largest, most advanced independent automotive proving ground in North America is here,” Saucier says. “We are pioneering a ground-based detect-and-avoid radar system that will allow, for the first time, unmanned aircraft to routinely fly beyond operators’ visual line of sight.”

Logistical and Other Strengths According to the Ohio Development Services Agency, 59 percent of the U.S. and Canadian populations are located within 600 miles of the state, and Ohio’s central location and ready access to a host of major metro areas appeal to a wide range of industries for logistics purposes. Walmart, for instance, has five distribution centers in the state, and the company’s 50,000-plus workers make it the largest private employer in Ohio.

“Our integrated transportation infrastructure connected by highways, intermodal facilities and airports, with access to water and low-cost energy enables companies to obtain raw materials, produce goods, and reach customers more efficiently and cost-effectively,” Saucier explains.

Among additional strengths, Saucier points to a workforce of 5.7 million people (total employment is expected to grow 5.3 percent from 2014 to 2024, a projected growth of 300,000 jobs, according to the Ohio Development Services Agency); a research and innovation network consisting of collaborative public and private organizations; accessible academic and

clinical resources; and strong support from the business community. Ohio also is growing its inventory of development-ready sites, where infrastructure and due diligence are already in place, smoothing the way for new facilities. And, the Anderson Economic Group ranked Ohio as having the 11th-lowest tax burden for businesses in the country.5

The Labor Challenge Although the state’s strong business climate provides stability and predictability for companies, as in the rest of the country, the availability of skilled workers is a primary challenge for Ohio’s continued economic development. The state’s labor force participation has dropped from 67 percent before the recession to 62 percent, according to a 2018 Dayton Daily News article.6 In addition, Ohio’s large manufacturing presence also makes it vulnerable to a nationwide downward employment trend in that sector. According to a 2018 article in the Tribune Chronicle,7 manufacturing employment in the state dropped by a third from 2000 to 2017. Despite Ohio’s continued central role in steel and auto manufacturing, overall employment in those industries has been on the decline.

Nevertheless, Saucier says talent is at the top of the wish lists of companies, and JobsOhio has a talent acquisition team dedicated to the issue, developing customized talent development programs related to specific projects. “Ohio’s people are one of the state’s biggest assets,” Saucier says. “Ohio has a skilled workforce…known for their productivity and strong, midwestern work ethic.”

1

https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP https://www.ey.com/Publication/vwLUAssets/ey-2018-us-investment-monitor/$File/ey2018-us-investment-monitor.pdf 3 https://development.ohio.gov/files/research/E1000.pdf 4 https://www.marketwatch.com/press-release/ihs-markit-study-ohio-valley-region-will-supplynearly-half-of-nations-natural-gas-by-2040-2019-03-19 5 https://www.andersoneconomicgroup.com/our-work/reports-articles-and-working-papers/ state-business-tax-rankings/ 6 https://www.daytondailynews.com/news/ohio-hits-employment-record-consumers-continue-spend/pO4UcWLTrvEgrYENP8IjlN/ 7 http://www.tribtoday.com/news/local-news/2018/11/loss-of-manufacturing-jobs-impacts-ohio/ 2

Sponsors JobsOhio JobsOhio, Ohio’s economic development corporation, is a private nonprofit corporation designed to help companies locate, expand, and prosper in Ohio. To understand the needs of growing companies, the JobsOhio team of industry experts provide businesses with the tools necessary to succeed.

Contact us at JobsOhio.com to learn why Ohio is the ideal location for your company.

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WORKFORCE DEVELOPMENT

Corporate Talent Strategy Carefully aligning your company’s talent sourcing strategy with its choice for a new facility location will result in a successful investment decision.

By Jim Eskew, Senior Vice President, JLL Business Consulting

O

rganizations make location decisions when they expand, relocate, or contract their operations.

Their specific goals and objectives clearly influence location choices. After all, there is no “one best place” for all businesses. One of the key factors among typical considerations is the talent sourcing strategy an organization chooses to pursue. Location decisions can be influenced by talent needs as locations each have talent market characteristics that align with different sourcing strategies.

When considering a new location, knowing how markets may enable recruiting goals will help increase chances for success. Talent sourcing strategies include “build” and “buy” scenarios: “Build” strategies include locations where a company can hire trainable workers in the labor force, recruit from local and regional schools, and attract people from outside the region. “Buy” scenarios are supported when new hires have applicable industry experience. Combinations of both approaches are common.

Build vs. Buy Location Illustration High City 1

City 2

City 3

City 4

City 5 Build

64

Every organization is unique, even ones in the same industry. Each company chooses to compete for talent in different ways, resulting in different operating locations.

As an illustration of location choices in this context, three sample cases are summarized below:

Pharmaceutical Research & Development — A drug company’s workforce needs were evolving in response to business model changes. The company historically relied on a smaller employee base heavily weighted to research and discovery, with a smaller number of people focused on clinical trials and product commercialization. As business strategies evolved the company anticipated (1) continued innovation, (2) rapid workforce growth to support clinical trials, and (3) greater need for commercialization skills.

The status quo of operating in a smaller market that had limited relevant industry activity, but with a respected university that supplied talent when rare turnover occurred, was no longer tenable. The company weighed benefits and risks between locations and opted to expand in a location that boasted both respected universities with applicable programs as well as a mature clinical trial industry, and also an active startup life science community that was generating new ideas. A “buy” strategy was key and the location choice was a metropolitan area in the mid-Atlantic region.

Information Technology Services — An information

Cost Volume Conc.

Low

Differences in Location Decisions

Sourcing Strategy

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Buy

technology services company’s existing situation of operating in high-cost locations risked the ability to win future contracts, and their distributed operation created inefficiencies while servicing accounts. The company’s objective was to consolidate applications development and network operations to improve efficiency and gain a competitive pricing advantage in a new location.

The company clearly defined unique workforce skills of the future, evaluated locations throughout the United States, and settled on a location with market attributes that aligned with the chosen “build” strategy. The solufor free site information, visit us online at www.areadevelopment.com

6/5/19 12:38 PM

tion consisted of slow and steady workforce growth in a low-cost, smaller talent market with local and regional colleges engaged to create a long-term talent pipeline.

Recruiting efforts were buoyed by the university system’s commitment to increase graduate output from computer science related disciplines. Additionally, state government contributed significant dollars to incentivize the implementation. The location choice for this “build” strategy was a small metropolitan area in the U.S. South-Central region.

Loan Servicing — A financial services organization needed to choose one or more locations to enable growth for servicing routine loans (general inquiries and counseling) and complex loans (work-outs and modifications).

The company’s existing situation consisted of a distributed operation across three locations, one of which had well above average talents costs and cost of living.

The primary goal for the business was to reduce cost without sacrificing talent knowledge and expertise.

For the routine processes, the company could train new hires up with a minimal amount of customer service or retail experience. For the complex function, the business preferred hiring people with knowledge of the loan servicing industry, often with experience with a specialty (default, foreclosure, etc.). Indicators for locations considered illustrated clear tradeoffs associated with talent market cost and the presence of a mature loan servicing industry. Locations that performed well for one function did not always perform well for the other. After much deliberation, a “buy” strategy was pursued and a consolidation of the two functions ended up in a metropolitan area with moderate costs and a mature industry in the U.S. Southwest region.

These three cases illustrate the influence of talent sourcing and how different business location decisions can be. What is common among each was a robust decision process.

Location Considerations for Executives Risk of a poor location decision — For many companies, the workforce typically represents 70 percent to 80 percent of an organization’s structural cost. This fact alone draws significant focus to talent-related decisions, but there are significant risks beyond base wage costs that organizations face with poor location decisions.

For example, insufficient location evaluation can place companies in areas that are too competitive creating high levels of turnover and wage pressure. And decisions based solely on general population metrics or wage rates can result in shallow depth of talent pool or misaligned skillsets to ramp up or sustain workforce demands, which can have a direct impact on business growth and revenue.

To avoid these risks, it is critical to understand an organization’s talent sourcing strategy and its alignment with different talent markets by asking the right questions.

Decision framework — There is an overall framework that supports location decision-making. There are many questions and considerations to be addressed in the decision process and ones related to talent access, talent pipeline development, cost, and timing associated with a workforce buildup are consistent across organizations.

The answers help solidify a talent sourcing strategy and identify locations that best enable it.

The variability of “build” and “buy” talent sourcing strategies is high because all companies are unique in some way. Thus, planning to compete for talent in a new location requires thoughtful, often creative, solutions. As organizations face these decisions, their chosen recruiting approach can influence their choices.

Since there is no “one best place” for all businesses, careful consideration of talent sourcing and location alignment will result in successful location investment decisions. The question is, which strategy is right for your business? n

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

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Indiana

SPECIAL LOCATION REPORT

By Steve Kaelble

Indiana Is Making Global Connections Both domestic and foreign advanced technology and other firms are investing in Indiana, a state with a well-prepared workforce and lifestyle initiatives to attract younger workers.

Strong connections have long played a key role in Indiana’s economic success. The state likes to call itself the “Crossroads of America,” a reference to both its central location and the easy connections made possible by its solid transportation infrastructure and powerful logistics sector. Indiana’s status as one of the nation’s most manufacturing-intensive states is due in part to strong connections with automotive manufacturing both in-state and just across state lines. Connections in the human body are the focus of Indiana’s world-leading orthopedics industry. Connections to the earth drive its agricultural heritage and its growing ag-biosciences sector.

It’s fitting, then, that Indiana spent 2018 celebrating new connections on a global scale. State and local leaders are eager to attract global investment as well as technology jobs, and know that they need to make it easier to travel between Indiana and overseas destinations. That’s why a new Indianapolis-to-Paris nonstop that launched in 2018 generated

Indiana Lt. Gov. Suzanne Crouch and Jasper County officials joined executives from Premier BioSource, an agriculture biosciences company, on Aug. 30, 2018, to break ground on the company’s 78,000-square-foot farm operation in Rensselaer, Indiana.

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lots of local excitement. It’s not just about shuttling tourists and businesspeople, either. GE Aviation in Lafayette, for example, regularly ships components from Indiana to France, and now can do so more efficiently. “Connectivity is important,” says Elaine Bedel, president of the Indiana Economic Development Corp.

Growing Industry Sectors What makes the Indiana economy tick, and what is driving it into the future? Bedel lists a half dozen sectors of interest: • Advanced manufacturing — More than 14,000 new manufacturing jobs have been pledged in the past year or so, in more than 160 different deals with a combined investment value approaching $6 billion. Business furniture maker Jasper Group, for example, acquired a 1.2 million-square-foot manufacturing facility in the community of Orleans, with plans to add more than 300 jobs by 2021.1 RV maker Winnebago committed 200 or more new jobs with an expansion in northern Indiana.2 Aardvark Straws committed a couple hundred new jobs, recently opened a new Fort Wayne facility, and is working through a months’ long list of back orders, now that paper straws are a hot alternative to plastic.

Manufacturing, says Bedel, has been a big economic driver in Indiana for generations, and still is. “About 20 percent of our workforce works in manufacturing,” she notes.

• Information technology — Indiana landed more than five dozen IT-related commitments in the past year or so, worth more than $600 million in investment and nearly 6,000 new jobs. One of the biggest stories was the announcement last year that Indiabased Infosys would build its U.S. education center for free site information, visit us online at www.areadevelopment.com

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at the edge of Indianapolis International Airport.3 Infosys had just opened its first U.S. innovation and technology hub in Indianapolis earlier in 2018, and the education center plan upped its job commitment from 2,000 to 3,000 new jobs by 2023. The company’s Ravi Kumar explained the expanded commitment by remarking that “Indiana is the right place, at the right time, with the right business climate.”

Meanwhile, Socio, a software-as-a-services company, promised 100 new jobs as part of its Indianapolis expansion.4 And Rural Sourcing chose Fort Wayne for a new software development center that’ll create about 130 jobs.5

Amazon is bringing more than 1,200 jobs to Johnson County, south of Indianapolis.6 FedEx is in the midst of expanding its Indianapolis hub, already the company’s second-biggest, with 16 new aircraft gates and a beefed-up capacity.7 Indianapolis-based Republic Airways is creating a flight training academy and has pledged 600 new jobs.8 • Life sciences — A sector boasting thousands of Indiana jobs, the life sciences sector keeps adding more. The state is home to pharmaceutical giant Eli Lilly & Co., which is pumping millions of dollars into its technology center location. The northern Indiana community of Warsaw was the site of the first orthopedic device manufacturer more than a century ago and is now home to multiple competing manufacturers. One of 2018’s headlines was the promised

• Logistics and transportation — This thriving sector saw two dozen commitments and the promise of more than 5,000 new jobs over the past year.

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SPECIAL LOCATION REPORT

expansion of OrthoPediatrics Corp.’s headquarters in Warsaw.9 • Agriculture and ag-biosciences — Indiana is wellknown for agriculture,10 ranking fifth in corn production, fourth in soybeans, fifth in hogs, second in tomatoes for processing…and it’s #1 in ducks! That’s a magnet for ag production businesses, which are creating jobs by the bushel. For example, Greenleaf Foods, a subsidiary of a Canadian food processor, is building a quarter-million-square-foot facility in Shelbyville that’ll become the largest plant-based protein facility in North America.

Beyond that, says Bedel, is a push in ag technologies: “How do we improve upon traditional farming?” One example is Solinftec, a Brazilian company that chose Purdue University’s research park in West Lafayette for its U.S. headquarters.11 The company helps farmers aggregate data from sensors in fields and on equipment.

• Aerospace and defense — Indiana is not on an ocean, but it’s home to a significant U.S. Navy facility called Naval Support Activity Crane, spread across 97 square miles and home to a noteworthy concentration of scientists and engineers. In 2018, Integrity Defense Services committed 160 support jobs in the Crane area.

In Indianapolis, Rolls-Royce makes engines for numerous U.S. Air Force aircraft, and the company is angling for a contract to supply replacement engines for the B-52 fleet. If it lands the deal, more jobs will

Indiana Gov. Eric J. Holcomb tours GE Aviation in Lafayette, Indiana, on Sept. 18th. The jet engine facility is part of a strong and growing aviation sector in the state.

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result.12 Bedel says the state is working to assist companies such as Rolls-Royce compete successfully for military contracts. “We’re trying to help businesses with what the Defense Department needs.”

Fulfilling Workforce Needs and Changing Misconceptions Bedel says Indiana’s general business climate has been a calling card for expanding companies. “We are very pro-business,” she says, with low taxes, a low cost of doing business, a low cost of living, and a state government with strong cash reserves and a good bond rating. Those last two points, she adds, give businesses comfort that the business climate won’t be eroding: “You want to know once you get there that things are stable.”

The cost of living, she says, has been a powerful draw in persuading technology companies to consider an Indiana address. “If you’re paying someone a salary of $100,000, to use a round number, it would take over $300,000 to have the same quality of life in the San Francisco area.”

That points to the importance of putting the right people on the payroll, and like a lot of states, Indiana doesn’t take for granted the ability to offer appropriately skilled workers. “When you have low unemployment, lower than the national average, that’s one question we’re always getting; how will we find the workforce?” Bedel notes.

Indiana has responded to that challenge in a number of ways, including the Next Level Jobs program. The program offers free job training to eligible individuals in a wide range of in-demand fields, in sectors including advanced manufacturing, building and construction, health and life sciences, IT and business services, and transportation and logistics.

For employers, the program offers generous reimbursement for training the workforce in various highgrowth fields.

As soon as a potential employer decides to locate or expand in Indiana, officials go to work trying to solve the workforce puzzle, Bedel explains. “We’ll help them map out their pipeline,” she says. The work of Ascend Indiana provides an example. The organization helps connect talent with opportunities and, as needed, helps develop talent in partnership with businesses. “We have great collaborations in the state when we call upon universities or a community college or even our high schools,” Bedel says. for free site information, visit us online at www.areadevelopment.com

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Beyond preparing workers already in Indiana, the state has quality-of life-initiatives aimed at helping Indiana attract new residents, including younger workers. A multimillion-dollar trails program, for example, has a goal of ensuring that every Indiana resident is no more than five miles away from a trail. The Indiana Regional Cities Initiative, meanwhile, provides funding for collaborative quality-of-life efforts bringing regions together to make their areas more attractive for talent.

Among some people outside of the state, particularly on the coasts, “there is a perception that nothing is going on in Indiana,” Bedel acknowledges. “We’re starting to make that turn around. We have to get them to come to Indiana and try it out. It pays off, she says, when “once they get here, they don’t want to leave. I hear that often.”

1

ttps://duboiscountyherald.com/b/jasper-group-expands-in-orangeh county https://wsbt.com/news/local/winnebago-to-hold-groundbreaking-for12-million-expansion-in-elkhart-county 3 https://www.infosys.com/newsroom/press-releases/Pages/breaks-groundeducation-center-indianapolis.aspx 4 http://www.areadevelopment.com/newsItems/11-5-2018/socio-indianapolis-indiana.shtml 5 https://www.ruralsourcing.com/press-releases/rural-sourcing-to-expand-itsfootprint-with-a-new-software-development-center-in-fort-wayne-indiana/ 6 https://www.ibj.com/articles/70806-amazon-signs-lease-committingto-80m-greenwood-project 7 https://www.ibj.com/articles/70951-fedexs-15b-investment-in-indy-willexpand-capacity-add-jobs-strengthen-airport-finances 8 https://www.flyingmag.com/republic-airways-launches-flight-trainingacademy 9 https://www.globenewswire.com/news-release/2018/08/14/1551643/0/en/ OrthoPediatrics-Corp-Announces-Expansion-of-its-Warsaw-Headquarters. html 10 http://www.incontext.indiana.edu/2015/may-jun/article1.asp 11 https://indianapublicmedia.org/news/brazilian-ag-tech-companysolinftec-chooses-indiana-for-u.s.-headquarters.php 12 https://www.rolls-royce.com/media/press-releases/2019/26-02-2019-rrselects-indianapolis-site-for-usaf-b-52-engine-assembly.aspx 2

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>

BUSINESS CLIMATE

Working with Communities to Earn a Welcoming Reception Understanding a community’s dynamics and getting its leaders and residents invested in a company’s location plans will lead to a successful project and long-term benefits for all.

By Donald F. Smith, Jr., Ph.D., President, Regional Industrial Development Corporation of Southwestern Pennsylvania

The company and developer need to go directly to the community to lay out project plans and build support among the people who actually live in the community.

A

s we saw with Amazon recently in New York City, making a deal on a location doesn’t mean that facility will ever get built. That’s a lesson large space users have had to learn over and over in recent years, as social media — and its power as a communications platform — has empowered community activists to wage sophisticated campaigns to kill projects.

A project may be carefully planned, overwhelmingly beneficial to the community at large, and it may even have initial support from highranking politicians. And it can still be derailed by a relatively small number of well-organized people with a narrow focus and short-sighted — or self-interested — perspective.

Understanding Community Dynamics When a company takes months to go through an exhaustive process of narrowing down a short list of

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potential locations, negotiates with property owners and government officials, finally comes to a decision it believes in, announces it, informs its employees, and begins to plan the logistics of the move — only to find the project fall through — it can be a huge blow. A company like Amazon has many options and can afford to walk away when unpleasant challenges appear, but for most companies, it’s more complicated.

That is why it is important for companies to understand a community’s dynamics and engage developers from the outset about their ability to navigate whatever approval process will be necessary and to support efforts to obtain any incentives that may be available. Navigating the public approval process for largescale, transformational real estate projects can be challenging; moving through this process effectively can mean the difference between a project being perceived as a great community asset, and being fast-tracked, or being viewed as insufficiently sensitive to community needs and never getting off the ground.

Credibility and Transparency Having worked to build largescale projects in many communities, we’ve learned a few lessons that may be valuable to executives

considering both locations and development partners.

The key to success is credibility.

Credibility is built by demonstrating not only commitment to the vision behind the project, but respect for the opinions of local residents and government agencies. That doesn’t necessarily mean doing everything they want — but it does mean showing that you take their opinions seriously and engaging in good faith discussions — based on facts, data, and market research — before coming to any conclusions. And, of course, transparency is crucially important.

It’s not unusual for a company with plans for a new office headquarters to find a perfect location only to find the community wants affordable housing on that site. Or, if green space or other recreational space is included in the plan, the community might want public access — and a voice in where the access points are located and how they are designed.

A local development partner needs to have deep roots in the community, a knowledge of community needs and key leaders, and the ability to conduct due diligence on any such requests expeditiously.

If a developer can go back to the community and demonstrate that

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

6/5/19 12:42 PM

they’ve taken the requests seriously and can make community leaders feel invested in the decision-making process, it will go a long way toward demonstrating respect and building consensus.

Also, don’t assume that community members can’t become assets themselves. Don’t be afraid to view them as partners and allies. You might be surprised; perhaps community representatives have ideas about sources of funds from foundations or government programs that would actually improve the project and enable you to offer the community some of the amenities it wants.

Building Consensus It’s also important to know that your development partner is well known and respected among government agencies, enabling the developer to move quickly and smoothly through the approval process. Some community members tend to approach new developments and new corporate neighbors with the mindset that they can make unbridled demands, because they believe that developers and corporations always make huge profits and should, therefore, shoulder the burden of solving community needs like traffic control, parking, and infrastructure or the creation of affordable housing. They fail to recognize all the tax dollars that are ultimately going to flow into government budgets as a result of a company decision to locate and build a new facility in their community. That’s on top of the transformative effect a large project can have in stimulating other development nearby and supporting secondary businesses that generate additional tax revenue.

Public issues like infrastructure and urban decay are in play because government investment across the country has lagged for years and poverty-stricken communities have taken the worst of it. But these should be issues for the public sector, and communities should think about how they can help companies and their development partners shoulder that burden through incentives, supportive regulations, and identifying and securing sources of funding that encourage investment in the region. But when that’s not the case, and government officials or community organizations remain unrealistic — as they were in New York City in Amazon’s case — the company and the developer need to work as a team and go directly to the community, with town hall meetings and other forums that lay out the project plans and build support among the people who actually live in the community and are going to be most affected. Earning and leveraging their support is key to making inroads with naysayers trying to stonewall the project.

In essence, corporate executives need to think not only about the business implications of their location decisions — access to markets, transportation networks, pipeline of talent, cost of doing business, etc. — but also about the need to adopt an externally collaborative outlook, getting community residents and leaders invested in their plans.

By doing so, they’ll pave the way toward positive partnerships that will not only lead to successful projects at the outset, but also potentially to longer-term benefits down the line. n

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