Area Development Magazine - Q2 2014

TRANSPORTATION SECTOR DRIVES THE ECONOMY

THE PRODUCTION & HEADQUARTERS CONNECTION

GETTING THE BEST UTILITY PACKAGE

Q2/2014

100 Poised to Capitalize on Economic Growth + 2014

Gold & Silver Shovel Awards 20 STATES RECOGNIZED FOR NEW INVESTMENT AND JOB CREATION www.areadevelopment.com

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A U TO M OT I V E IN M I S S I S S I P P I

mississippi.org/automotive

MISSISSIPPI’S ROLLING OUT VEHICLES IN RECORD NUMBERS. Nissan produces 8 models of vehicles in Canton, Mississippi

Mississippi highly-skilled workforce has produced more than 2 million vehicles in its first decade in the automotive sector. World-class automotive leaders like Nissan, Toyota and PACCAR are thriving in Mississippi – with an inviting business climate and a centralized geographic location for both domestic and global sales. Nearly 200 automotive suppliers call Mississippi home including the state’s newest automotive partner and commercial tire giant, Yokohama Tire Corporation.

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MISSISSIPPI RANKS

TOP 5

MISSISSIPPI’S

ENERGY COSTS up to

20%

MISSISSIPPI RANKS

#2

FOR PERMITTING

DOING BUSINESS LOWER SPEED OVERALL COST OF

Area Development Magazine, 2012

Area Development Magazine, 2012

© Mississippi Development Authority 2014

Find out why more companies keep rolling into Mississippi at mississippi.org/automotive.

THAN THE NATIONAL AVERAGE

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“ MADE IN THE

USA:

“

PERFECTED IN MISSISSIPPI

is the driving force for conducting business. Manufacturers know Mississippi spurs success.

Toyota manufactures its award-winning Corolla in Blue Springs, Mississippi, employing 2,000 automotive workers.

Success in today’s marketplace requires a competitive advantage — and companies are finding that advantage in Mississippi. With low energy rates and lean operating costs, more companies are choosing Mississippi for business investment. The state’s nationally ranked one-stop permitting speed and a highly skilled workforce have created a winning formula for global companies to thrive. As a result, Mississippi landed a string of significant global investment projects in the last 12 months.

Most notably, Yokohama Tire Corporation selected West Point, Mississippi, in April 2013 for its first U.S.-built commercial truck tire plant. Officials broke ground in September 2013 on Phase I of the project, creating 500 jobs with a company investment of $300 million. Future expansions are projected to create 2,000 total jobs with investments exceeding $1.2 billion. Yokohama joins an impressive list of companies that already call Mississippi home including Nissan, Toyota, PACCAR, and nearly 200 automotive suppliers.

Customized skills training and pride in a job well done create Mississippi’s workforce advantage. To meet today’s workforce needs, advanced manufacturers have access to the robust training programs offered by Mississippi’s 15 community colleges throughout the state. These customized workforce programs equip Mississippi workers with the necessary skills to get the job done. Mississippi’s four research universities also provide access to world-class R&D opportunities in aerospace, automotive, advanced materials, and healthcare. Innovation moves from the research lab to commercialization quickly through these strong partnerships with industry.

Mississippi’s automotive industry is a leader in the Southern Automotive Corridor. Nissan North America has had a strong, successful presence in Mississippi for more than a decade. The company has invested more than $2 billion in its Canton operations and employs more than 5,600 workers. Since production began, employees have built more than 2.6 million vehicles. In July, Nissan announced it was constructing a one-million-square-foot supplier park in Canton — the company’s first in North America. The project supports 800 jobs.

Direct foreign investment continues to be a trend in the state known for its centralized location, which provides easy access to many U.S. and international markets, allowing companies to efficiently distribute their products. In January 2014, GRAMMER AG — a leading supplier of automotive interiors and seating systems for commercial vehicles — announced its new Mississippi location and official U.S. headquarters in Lee County, Mississippi. The company will create 650 jobs in two phases in North Mississippi. In September 2013, Germany-based crankshaft manufacturer Feuer Powertrain announced plans to locate its first U.S. operations in Tunica. Feuer will begin production in 2014, adding 300 jobs to Mississippi’s thriving economy.

An environment that supports growth is a top priority for Mississippi’s leaders. In May, Governor Phil Bryant enacted landmark legislation for sales tax exemptions on energy for manufacturing and a 25 percent rebate on research and development costs, helping ensure the state has the capacity to meet companies’ needs. With available sites and a highly skilled workforce, opportunity is abundant is Mississippi.

To learn more, visit www.mississippi.org or call the Locate in Mississippi team at 1.800.360.3323.

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CONTENTS FEATURES

81

72 DEVELOPING A

13 WHY THE C-SUITE SHOULD FOCUS ON INCENTIVES

As governments at all levels increase their use of incentives, companies must figure out how to best capitalize on these offerings to increase their competitive advantage.

76 HOW COMPANIES CAN

GET THE UTILITY PACKAGES THEY NEED

14 TRANSPORTATION

EQUIPMENT: A KEY ECONOMIC DRIVER

Growth in the automotive, aerospace, and other transportation-related manufacturing industries is rolling along at a steady pace.

56 FOOD PROCESSING

COMPANIES’ NEW RECIPES FOR SUCCESS

COVER STORY

SUSTAINABLE FACILITY

From using locally sourced materials during construction to utilizing renewable energy sources to distributing products by rail, each company is embarking on its unique path to sustainability.

A well-designed utility plan takes into account capacity and reliability, and can also deliver a significant, annual cash flow that can be reinvested in the company.

104 THE REGIONAL IMPACT

OF QUALITY OF LIFE ON ENTREPRENEURIAL DECISIONS

While some processors are closing plants to eliminate redundancies, others are expanding to be in closer proximity to customers.

One of the most often cited reasons for the location of a new business is quality of life, yet it is one of the areas policymakers most often overlook.

59 THE PRODUCTION AND

106 QUALITY, SPEED, AND

In many key sectors, the initial alignment of corporate and production operations has shaped regions and influenced the industrial landscape in a very permanent way.

A combination of design-build and precast building systems is helping to deliver high-performance facilities within shorter timeframes and at lower cost.

CORPORATE HEADQUARTERS CONNECTION

VALUE DRIVE THE SITE SELECTION PROCESS

Exclusive O N L I N E Content FEATURES NOW ONLINE...

Stepping Up Your Game Through Productivity Improvement Only those suppliers selling parts and components to original equipment manufacturers (OEMs) who improve their overall productivity faster than their competitors will continue to prosper as the economy revives.

Adapting to Growing Workforce Mobility Issues Tomorrow’s workforce will not necessarily change space requirements but rather how that space is organized and utilized.

Location Notebook: Kentucky As states throughout the nation struggled during the recession, Kentucky quickly acted to help its economy not only recover but also grow.

Location Notebook: Greater Fort Lauderdale A development strategy touting its attractive quality of life as well as favorable business climate has made the Fort Lauderdale area a top choice for headquarters operations.

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

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FOR FREE SITE INFORMATION, CALL

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

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Volume 49 | Number 2

Q2/2014

Quote:

If you don’t like something, change it. If you can’t change it, change your attitude.

Maya Angelou (1928–2014), American author and poet

4 EDITOR’S NOTE — Leaders in Economic Growth and Job Creation

DEPARTMENTS 108 LOOKING BEYOND THE

NUMBERS WHEN ASSESSING A COMMUNITY

Those charged with the location decision should look for tangible evidence that the communities they are considering are taking an integrated approach to community development.

SPECIAL INVESTMENT REPORT 63 TEXAS TODAY: A Magnet for Job Growth — Low taxes, smart regulation, and skilled workers — not to mention probusiness incentives — are among the reasons Texas is continuing to build on its huge and diverse economy.

6 IN FOCUS Tenants Must Plan for the Unimaginable

8 IN THE KNOW • Cities With the Most Buildings Earning the Energy Star • A New Way of Defining STEM Occupations • Corporate Survey Factors Included Within KPMG Report • Business Location Tracker

10 FIRST PERSON Jeff Troan, Director, Lockheed Martin Economic Development Opportunities

12 FRONT LINE Factories of the Future

112 AD INDEX/WEB DIRECTORY

21 SPECIAL REPORT

Ad Index/Web Directory

2014 GOLD & SILVER SHOVEL AWARDS — 20 states are recognized for their achievements in attracting business investment in 2013 and creating high value-added jobs.

Join Our Newsletter areadevelopment.com/newsletter Follow Us On twitter.com/areadevelopment

Online Database Resources www.facilitylocations.com

www.fastfacility.com

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 2014 by Area Development® magazine. ISSN: 1048-6534. Printed in the U.S.A. Area Development® is a registered trademark of Halcyon Business Publications, Inc.

AREA DEVELOPMENT | Q2/2014

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EDITOR’S NOTE

Q2/2014

Leaders in Economic Growth and Job Creation The harsh winter put the brakes on U.S. economic growth, which slowed to a mere 0.1 percent in the first quarter of 2014, according to Commerce Department reports. Nevertheless, the results of PwC’s Q1 Manufacturing Barometer released in midApril reflect rising optimism among U.S. industrial manufacturers.

More than 70 percent of those surveyed expressed optimism about the prospects for the U.S. economy over the next 12 months, reaching the highest level of optimism since the fourth quarter of 2005.

“This improved sentiment bodes well for the year ahead, as management teams continue to indicate consistent near-term spending plans, including hiring more workers, supporting new product development, and investing in IT and R&D,” said Bobby Bono, PwC’s industrial manufacturing leader.

Those spending plans are evident in the projects in each of the 20 states that were awarded Gold or Silver Shovels by Area Development this year. These states are recognized for their efforts in attracting capital investment and job-creation through their pro-business policies, highly developed infrastructures, well-qualified work forces, and creative business assistance programs that convinced companies to locate new facilities within their borders or to expand and add jobs to facilities already there. One state in each of five population categories received a Gold Shovel, with a Silver Shovel going to 15 runner-up states. Additionally, five “projects of the year” (one in each population category) are recognized for their sizable investment and job-creation numbers (see report beginning on page 21).

www.areadevelopment.com EDITORIAL

E-mail: editor@areadevelopment.com Editor Geraldine Gambale Staff and Contributing James Berger Lisa Buddecke Dave Claborn Mark Crawford Dole D. Buss Clare L. Goldsberry Craig Guillot

Editors Beth Mattson-Teig Phillip Perry Jim Romeo Mali R. Schantz-Feld Steve Stackhouse Karen Thuermer

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

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

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

valerie@areadevelopment.com ONLINE SERVICES

Also in this issue is our Leading Locations report wherein 379 MSAs were ranked against 21 economic and workforce indicators to determine the overall leaders, as well as those MSAs leading among small, mid-size, and big cities, and within nine regions of the country (see report beginning on page 81). Despite sluggish U.S. GDP growth, these Leading Locations are MSAs that have managed to land new and expanded businesses and grow their local economies. The rebirth of American manufacturing, advances in technology, and the energy revolution brought about by fracking have all contributed to their growth.

Although the U.S. economy was off to a slow start this year, the OECD is expecting U.S. economic growth to average 2.6 percent in 2014, rising to 3.5 percent in 2015. And the states and MSAs highlighted in this issue will be among the leaders of the predicted economic rebound.

Digital Media Manager Justin Shea (ext. 220)

jshea@areadevelopment.com Business Development Matthew Shea (ext. 231)

mshea@fastfacility.com Web Designer Carmela Emerson

BUSINESS SERVICES Reader Service Barbara Olsen (ext. 225)

olsen@areadevelopment.com Circulation Gertrude Staudt

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

annie@areadevelopment.com EXECUTIVE OFFICES

Editor

Halcyon Business Publications, Inc. President Dennis J. Shea Finance Mary Paulsen

2014 EDITORIAL ADVISORY BOARD Scott Kupperman, Founder, Kupperman Location Solutions, LLC

Scott Redabaugh Managing Director, Jones Lang LaSalle

Gregory Burkart, Managing Director, Specialty Tax Practice Leader, Duff & Phelps, LLC

Bill Luttrell, Senior Locations Strategist, Werner Global Logistics, Werner Enterprises, Inc.

Noah Shlaes Managing Director, Newmark Grubb Knight Frank

Bradley Migdal, Executive Managing Director, Business Incentives Advisory Services, Transwestern

Eric Stavriotis, Senior Vice President, CBRE

Tim Feemster Managing Principal, Foremost Quality Logistics Larry Gigerich Managing Director, Ginovus Minah C. Hall, Managing Director, True Partners Consulting LLC

4

finance@areadevelopment.com

Rose Burden, Executive Director, Southeast Area Negotiated Incentives Leader, Ernst & Young

AREA DEVELOPMENT

John Morris Leader of Industrial Services for the Americas, Cushman & Wakefield, Inc. Kathy Mussio Managing Partner, Atlas Insight

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

FOR FREE SITE INFORMATION, CALL

All correspondence to: Area Development Magazine 400 Post Avenue, Westbury, NY 11590

Phone: Toll Free: Fax:

516.338.0900 800.735.2732 516.338.0100

MEMBER of

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Tenants Must Plan for the Unimaginable

By Nora Hogan, CCIM, SIOR, Principal, Transwestern

Nora Hogan, CCIM, SIOR, is a principal at Transwestern who has completed more than 22 million square feet in transactions since 1984. The tenant advisory professional specializes in real estate transaction and consulting needs for national and local corporate clients, including acquisition and disposition, build-to-suit coordination, and other facility management assignments.

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During 30 years in the business, I’ve never heard a tenant ask, “How would I get out of this lease if I no longer need the space?” And that question needs to be asked when entering a lease. Many companies neglect to plan for a possible shift in their real estate requirements. A firm might need to close parts or all of its operations due to an economic slowdown or industry shift. On the other hand, it may need to expand if business is booming. Certain lease language could prevent a company from expanding in its existing building — forcing a costly relocation.

Tenants must plan for the unimaginable, so it’s wise to keep as many options open as possible. Pay close attention to lease language concerning “use,” “parking” and “assignment and subletting.” Negotiate to keep the “use” as broad as possible, even if the company only needs space for “general office use.” Also, secure as much free parking as possible, whether it’s needed or not. A future expansion or decision to assign more employees to work in less square footage would make extra parking a plus.

For example, we represent a 17,000-square-foot technology company in Dallas that needs another 5,500 square feet. The company next door was marketing 9,000 square feet for sublease, but my tenant could not take any of the space because that company’s lease prohibited subleasing to another tenant in the building. My tenant was prevented from expanding in place, even though no other square footage was available in the building.

Subletting Language

The lease’s assignment and subletting language is key to a tenant’s flexibility.

Subleasing may be a firm’s only option if its real estate needs change, but many companies overlook this portion of the lease and discover costly roadblocks to subleasing space. The following sublease information could save the day if that bridge needs to be crossed: • The most likely sublease candidate is the tenant next door or one that’s nearby in the building.

• A good sublease candidate might have recently toured the building without finding suitable space.

• Secure as many rights as possible to pass along on the sublease, such as those connected to building signage and advertising sublease space.

• Subleases tend to happen quickly so it’s good to strive for a landlord consent time of seven to 10 days.

• Sublease space typically garners lower than current market rates, but a company will not be able to charge those rates unless it’s specified in the original lease.

• In the rare case that a company can secure above-market rent, it’s advisable for the firm to request that expenses, commissions, and tenant improvements be covered first as part of a profit-sharing agreement with the building owner.

• It’s advisable to design space in such a way that it can easily be divided in the future to create functional space for two parties.

Tenants need to plan for future successes or slowdowns and not be singularly focused on the status quo. Business shifts are often unimaginable to the tenant at the beginning of a lease term, but planning for them is as important as negotiating any other element in the agreement. Forward-thinking companies design their space in such a way that it can be easily divided in the future to create functional space for two parties. This is not always easy to do and takes some extra planning, but if companies truly need flexibility, it is worth the extra time and effort.

FOR FREE SITE INFORMATION, CALL

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

MAKE

KENTUCKY A FACTOR IN YOUR SITE SELECTION LOW BUSINESS COSTS CNBC has ranked Kentucky’s business costs the #1 lowest in the nation.

It’s hard to beat that.

LOGISTICAL ADVANTAGE Kentucky is home to two global air cargo hubs and is located at the center of a 34-state distribution area in the eastern U.S. That makes us a logistics dream.

QUALITY WORKFORCE The Kentucky Skills Network provides support for all your training needs. We’re also one of the first states to implement a statewide Work Ready Communities program, ensuring a steady pipeline of skilled talent.

LOW ENERGY COSTS Kentucky boasts the 4th lowest industrial power costs in the country, and the #1 lowest in the eastern U.S. It’s one of the reasons why site consultants have ranked our competitive utility rates #1 in the country.

COMPETITIVE TAX CLIMATE The Tax Foundation ranks Kentucky as the 7th most business-friendly state in the country for new firms and the 6th lowest cost state for new corporate headquarters.

PROGRESSIVE INCENTIVES Kentucky offers a full suite of tax incentive programs that provide the flexible financial assistance businesses need when locating, expanding or reinvesting in Kentucky.

QUALITY OF LIFE Life outside the office just couldn’t be better. Kentucky offers one of the nation’s lowest cost of living rates, and housing costs up to 30 percent lower than the national average.

Top that with breathtaking countryside and vibrant city life, and you have a place that you never want to leave.

Want more information?

ThinkKentucky.com | (800) 626-2930

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IN THE KNOW CITIES WITH THE MOST BUILDINGS EARNING THE ENERGY STAR According to the latest information released by the EPA (http://yosemite.epa.gov/opa/admpress.nsf), Los Angeles has the most Energy Star certified commercial buildings of any U.S. city — 443 in all — maintaining its top ranking each year since this list was released in 2008. To earn the Energy Star seal, commercial buildings must perform in the top 25 percent of 2014 ENERGY STAR TOP CITIES similar buildings, as verified by a licensed professional engiCityNumber of Buildings With Energy Star Seal neer or registered architect. These buildings use an average of 35 percent less energy and emit 35 percent fewer greenhouse 1. Los Angeles 443 gas emissions than average buildings.

2. Washington, D.C.

435

3. Atlanta

318

4. New York

303

5. San Francisco

289

6. Chicago

233

7. Dallas-Fort Worth

229

8. Denver

221

9. Philadelphia

210

10. Houston

204

“Not only are the Energy Star top cities saving money on energy costs and increasing energy efficiency, but they are promoting public health by decreasing greenhouse gas emissions from commercial buildings,” says EPA Administrator Gina McCarthy.

Commercial buildings account for 17 percent of the nation’s greenhouse gas emissions. The data shows that more than 23,000 buildings across America earned EPA’s Energy Star certification by the end of 2013. These buildings saved more than $3.1 billion on utility bills and prevented greenhouse gas emissions equal to the annual electricity use from 2.2 million homes.

A NEW WAY OF DEFINING STEM OCCUPATIONS Workers in STEM (science, technology, engineering, and math) fields play a direct role in driving economic growth. Yet, because of how the STEM economy has been defined, policymakers have mainly focused on supporting workers with at least a bachelor’s (BA) degree, overlooking a strong potential workforce of those with less than a BA. In response to this, a report from the Metropolitan Policy Program at Brookings — The Hidden STEM Economy — presents a new way to define STEM occupations. The approach used does not seek to classify occupations based on what workers do — such as research, mathematical modeling, or programming — but rather what workers need to know to perform their jobs. Brookings’ analysis of the occupational requirements for STEM knowledge finds that: • As of 2011, 26 million U.S. jobs — 20 percent of all jobs — require a high level of knowledge in any one STEM field. STEM

jobs have doubled as a share of all jobs since the Industrial Revolution, from less than 10 percent in 1850 to 20 percent in 2010.

• Half of all STEM jobs are available to workers without a four-year college degree, and these jobs pay $53,000 on average — a wage 10 percent higher than jobs with similar educational requirements. Half of all STEM jobs are in manufactur-

ing, healthcare, or construction industries.

• STEM jobs that require at least a BA are highly clustered in certain metropolitan areas, while sub-BA STEM jobs are

prevalent in every large metropolitan area. Of large metro areas, San Jose, CA, and Washington, D.C., have the most STEMbased economies, but Baton Rouge, LA; Birmingham, AL; and Wichita, KS, have among the largest share of STEM jobs in fields that do not require four-year college degrees.

• More STEM-oriented metropolitan economies perform strongly on a wide variety of economic indicators, from innova-

tion to employment. Job growth, employment rates, patenting, wages, and exports are all higher in more STEM-based economies.

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FOR FREE SITE INFORMATION, CALL

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Track business relocations and expansions on Area Development Online.

Studies/Research/Papers on Area Development Online.

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

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

BUSINESS LOCATION TRACKER Layer3 TV Chooses Denver for Headquarters Campus A tech startup, next-generation, cable provider, Layer3 TV, has selected downtown Denver for its new headquarters, where it will grow its workforce to an estimated 312 employees.

$30 Million Monmouth, IL, Warehouse/Distribution Center to Open Cloverleaf Cold Storage Co. will open a refrigerated warehouse/distribution center in Monmouth, IL, with 155 full-time employees, to serve the Smithfield Farmland Corp.

Online Marketplace Plans New Headquarters in Brooklyn, NY Etsy, an online marketplace for designers and collectors, is expanding its operations and opening its new headquarters in Brooklyn, NY, creating 340 jobs

Probiotic Drinks To Be Produced at Orange County, CA, Plant Yakult U.S.A. Inc., a subsidiary of Japan-based Yakult Honsha Co., has started production of its leading probiotic drink at its newly constructed California plant located in Fountain Valley, Orange County.

Nello Corp. Relocates Operations to South Bend, IN Nello Corp., Inc., a global designer and fabricator of galvanized steel towers and poles, will consolidate its Texas operations to South Bend, IN, creating up to 639 new jobs by 2023.

Food Service Distributor Expanding North Little Rock, AR, Regional Headquarters Ben E. Keith, a distributor of food service products, will invest $60 million to build a new mid-South regional headquarters in North Little Rock, adding 74 jobs and retaining its 260-member workforce.

Electrolux to Advance Manufacturing Capabilities at Its Anderson, SC, Campus Chiquita To Relocate Shipping Hub To Port Of New Orleans Chiquita Brands Int’l. plans to ship 60,000 to 78,000 TEUs annually at the Port of New Orleans, representing a roughly 15 percent increase in current container volumes there.

Electrolux is investing $30 million over the next two years in its 810,000square-foot Anderson facility, which provides top-freezer refrigerators as well as under-the-counter models.

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

CORPORATE SURVEY FACTORS INCLUDED WITHIN KPMG REPORT KPMG’s 2014 Competitive Alternatives report analyzes relative costs of doing business in 10 countries in North America, Europe, and Asia Pacific: Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States. The four largest U.S. metro areas — New York City, Los Angeles, Chicago, and Dallas-Fort Worth — form the U.S. baseline against which costs for major cities in other countries are compared to determine the national results. The results reveal that Germany is the only country among the 10 with business costs higher than those in the U.S. The report also provides information on non-cost factors that influence the business attractiveness of different locations including labor availability and skills, economic conditions, innovation, infrastructure, regulatory environment, cost of living, and quality-of-life factors. The site selection and quality-of-life factors evaluated in Area Development’s 2013 and 2011 Corporate Surveys are mentioned in the report (p. 50), as these factors are included within the scope of KPMG’s analysis.

AREA DEVELOPMENT | Q2/2014

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JEFF TROAN DIRECTOR LOCKHEED MARTIN ECONOMIC DEVELOPMENT OPPORTUNITIES

Is the company active in economic development?

Troan: Yes. We have a very active practice, but are currently concentrating on working with the states and communities where we have a large physical plant and worker population. The goal is to utilize the existing infrastructure and workforce, and negotiate economic development agreements based on worker retention, which is a lot less expensive for the community than bringing in a new employer. The best blend of workforce skills, overhead efficiency, and underlying business climate usually wins; and not just for us, but for our military customers and the community.

The aerospace industry appears to be growing and doing quite well in spite of the recent recession. What is the driving force behind the success of Lockheed Martin and the industry in general?

Troan: The modern aerospace industry is considered by many to have been born in John F. Kennedy’s famous 1962 Rice University speech. In it, he noted that as more engineers and scientists work over longer and longer life spans, it would be inevitable that technology would begin progressing at exponentially increasing levels. We are experiencing that phenomenon today as we see product lifecycles becoming shorter as pace of technology increases. So we are inventing new technologies with desired applications at an exponential rate of growth, and that’s only going to increase in the future. As the pace of engineering quickens, well managed technology companies like Lockheed Martin benefit greatly.

Can you comment on growth activity? Are there more greenfield plants being sited or is M&A activity a factor in growth?

Troan: The major mergers and acquisitions phase of the aerospace sector occurred in the 1990s, and — in fact — generated Lockheed Martin as the result of the merger of Martin Marietta, General Electric Aerospace, Loral Aerospace, parts of General Dynamics, and Lockheed. There were also a number of smaller entities pulled into that vortex. Recent M&A activity in this industry has been geared toward obtaining key technologies needed to advance corporations’ technical capabilities and intellectual property. Those are noble goals and the process works very well.

Today [Lockheed Martin] is in a physical plant consolidation mode, while maintaining our sales and expanding our technical base. While we are open to greenfield sites related to federal government customer preference, mission requirements, or cost necessity, we are less than sold on some of our competitors’ current trends of abandoning heritage communities and large physical plants for greenfield sites. There are practical difficulties with greenfield sites of replicating workforce skills, handling new depreciation expense, and meeting long-term commitments.

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States vie very aggressively for large facilities to boost their economies. What are the top three things that Lockheed Martin looks for that would sway their decision?

Troan: We use a Matrixed Probability Analysis (MPA) when looking at a site for a new program. We put all of the possible locations across a horizontal axis of the matrix, and all of the decision criteria down the vertical axis, and rate each site on a scale of 1 to 10. Generally there are three factors that rise to the top, but not in any particular order — workforce quality, available infrastructure, and taxation. Economic developers play a key role in defining the final cost of all three of these factors.

Can you explain these factors further?

Troan: The best business climate in the world won’t help you perform to the customer’s specifications if they don’t have an adequate workforce.

Workforce development without a doubt is going to be one of the country’s major challenges over the next few decades. And it’s not just a domestic problem — it’s a worldwide problem.

Nothing kills a product’s lifecycle financial performance like a big capital investment on the front end that has to be recovered over 20 years. So, whether we’re looking at siting at one of our existing facilities, or at a greenfield or a brownfield, we are always hunting for existing infrastructure that can be converted to our needs at a lower cost.

Finally, in order for the corporation to maintain a sustainable production model, the underlying business climate has to have a competitive tax structure and cost of living. But you have to be careful. Some low tax jurisdictions have all

FOR FREE SITE INFORMATION, CALL

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their tax revenue set in the property tax category. That inherently precludes any industry that has a lot of capital.

Economic incentives, i.e. tax breaks, commitments to job creation levels, etc., are put forth to attract companies.

How much do these mean to a company like Lockheed Martin?

Troan: Economic development is best viewed as an emerging discipline within microeconomics, aimed at artificially modifying the business climate of a region so that targeted business sectors can operate there with a sustainable production model. So these are balanced partnerships between the corporation, the community, the university system, and the workforce to drive down the cost of a particular product so that industry can produce it in a community with a sustainable business model. This is a targeted model that would not exist otherwise.

The customer gets a lower price for higher quality goods and services, the company gets sales at a reasonable margin for its stockholders, the community gets jobs and a windfall of indirect and induced taxation from the economic activity, the university system gets jobs for its graduates promoting

enrollment, and the workforce gets jobs and new skill sets.

In a good economic development partnership, everyone wins in the long run.

How sustainable is this model with many states/cities being in the red?

Troan: We try and work with the communities in which we do business to achieve a win-win solution wherever possible. The only sustainable way I see for a public sector organization to get out of a deficit is to grow private sector economic activity. Is the economic development model sustainable? I believe so.

THE ASSIGNMENT Area Development staff writer Clare Goldsberry recently interviewed Jeff Troan of Lockheed Martin about economic development issues facing the aerospace industry including priorities when making location decisions and the value of incentives.

When it comes to successfully expanding or relocating your business,

Nebraska’s low energy costs, central geographic location, and high-quality, low-cost workforce SURYLGH VWUDWHJLF DGYDQWDJHV IRU \RXU EXVLQHVV 7R ÀQG RXW KRZ WR KDUQHVV 1HEUDVND·V power, contact the economic development professionals at Nebraska Public Power District.

econdev.nppd.com 800.282.6773, ext. 5534 econdev@nppd.com

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Factories of the Future

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oday everything seems to be “micro-sizing,” including manufacturing. With companies scrutinizing all expenses — including the cost of factory floor square footage, equipment, and energy, some executives are finding that micro production might offer advantages.

GE is one example. In April, its appliance division announced that it was locating its first micro-factory in Louisville, Kentucky. The factory, dubbed “First Build,” is in partnership with Local Motors, an open-source hardware innovator. Kevin Nolan, vice president of Technology for GE Appliances, says the move is important as more appliance companies incorporate electronics into their products.

Industry observers contend that such small production plants will help transcend ideas into viable commercial innovations and give companies a competitive edge. For GE Appliances, this means the company can move select products to larger scale production with less risk since they are tested in this new platform first.

Local Motors has its roots in the automobile industry and is the creator of the Rally Fighter, a vehicle crafter through open-source design on Local Motor’s website.

Rally Fighter is being built in regional micro-factories that employ local workers using available locally made parts.

Products can be customized according to community requirements.

Small-Dimension Products The emphasis on localization is innovative in and of itself. John B. Rogers, Jr., president, CEO, and co-founder of Local Motors, recently stated that he expects this confluence “to trigger an ecosystem of entrepreneurship for businesses that want to build components or aftermarket add-ons.”

In essence, the micro-factory is a small-dimension facto-

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Courtesy: GE

FRONT LINE

The new FirstBuild micro-factory will be located on the University of Louisville Belknap Campus.

By Karen E. Thuermer

ry that does not exceed desktop size and produces smalldimension products. The concept was actually coined by the Mechanical Engineer Laboratory (MEL) of Japan in 1990 and since has been driven by research institutes and universities around the world.

The No. 1 advantage of the micro-factory is that it can save companies significant resources like space, energy, materials, and time. The International Workshop on Microfactories (IWMF), which holds workshops each year, deems that miniaturization technologies have become a global trend supported by governments, companies, and leading research institutions and laboratories.

“The drivers for this trend lie not only in the enhanced functionality of these products but also in the more environmentally friendly production methods that can be used for their manufacture,” IWMF says.

One such contributor is SRI International of Menlo Park, California. SRI is involved in developing ant-like microrobots that can reliably handle solid and liquid materials, including those used in electronics. According to SRI, the micro-robots (referred to by some as “labs on a chip”) are designed to create a better way to assemble components and small structures.

SRI currently is applying its micro-factory technology to the Defense Advanced Research Projects Agency’s Open Manufacturing program. The DARPA program was created "to lower the cost and speed the delivery of high-quality manufactured goods with predictable performance."

SRI’s micro-robots will be used to build smart structures with high-performance mechanics. SRI states: “Our vision is to enable an assembly head containing thousands of micro-robots to manufacture high-quality macro-scale products while providing millimeter-scale structural control.”

FOR FREE SITE INFORMATION, CALL

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INCENTIVES

Why the C-Suite Should Focus on Incentives As governments at all levels increase their use of incentives, companies must figure out how to best capitalize on these offerings to increase their competitive advantage.

By Rebecca Truelove, Principal, Northeast Sub Area; and Judith Garner, Senior Manager, Financial Services Office; Ernst & Young LLP

A

n ancient Chinese proverb says “May you live in interesting times.” For those in the credits and incentives (C&I) business, these are indeed interesting times. In July 2013, Ernst & Young LLP (EY) conducted its second biennial survey of primarily tax and finance executives from Fortune 1000 businesses to assess how these businesses identify, evaluate, negotiate, and optimize credits and incentives to enhance their competitive advantages in the global marketplace. The results from nearly 800 respondents to EY’s survey reveal that sophistication among businesses regarding the availability of C&I is growing, and the profile of those who are most active in this regard is becoming clearer. Those companies that most successfully pursue and secure C&I tend to be more thoughtful, disciplined, and collaborative in their approach and methodology.

Their C-suite is engaged, their processes are focused, and their people are proactive. Their approach is undoubtedly worth evaluating and, where appropriate, implementing.

Before delving into the survey results, it is worth considering some qualitative insights obtained from discussions with corporate clients, executives, and frontline EY professionals engaged in C&I services: • A mixed U.S. economy is creating opportunities. For some, a lackluster economy means lower sales and tighter margins and more competition, leading to consoli-

dation and cost-driven relocations. For others, growth trends are emerging, leading to a need to expand in place or identify new sites. Both circumstances create a compelling reason for companies to look more closely at C&I opportunities that might be available.

• Some jurisdictions are sound; others are under duress. Even in a tepid economy there are pockets of strength.

Business executives have noted that while some jurisdictions have significant resources and flexibility, others are cutting back. In all cases it is important to know what to emphasize and what questions to ask. In that

Continued on page 54

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INDUSTRY REPORT

Transportation Equipment: A Key Economic Driver Growth in the automotive, aerospace, and other transportationrelated manufacturing industries is rolling along at a steady pace.

By Mark Crawford

A

Courtesy: Mississippi Development Authority

key economic driver for industrialized countries is transportation equipment manufacturing — motor vehicles and parts, aircraft/aerospace, trains and related equipment, and ships and boats. The global transportation equipment manufacturing industry generates about $4 trillion in annual revenues — $750 billion of that coming from the U.S. It’s no surprise that transportation equipment output is heavily dependent on economic conditions, federal contracts, and hot sectors with an obvious transportation need (for example, shipping oil from North Dakota by rail).

The U.S. industry is highly concentrated — about 50 large manufacturers produce about three-quarters of all transportation equipment revenue. Motor vehicles and parts account for 65 percent of the total revenue, followed by aviation/aerospace (25 percent), rail (about 5 percent), and ships (about 5 percent). Top manufacturing states include California, Michigan, Indiana, and Texas.

To date, most of this equipment is sold to highly industrialized countries with well-developed economies in North America and Europe. New markets, however, are starting to emerge in rapidly developing countries that have a strong need to deliver freight. The American Trucking Association’s (ATA) U.S. Freight Forecast to 2024 predicts an overall increase in freight volumes for all modes of more than 20 percent — much of that will be moved by truck. Another encouraging sign: U.S. durable goods manufacturers’ shipments of transportation equipment, an indicator of transportation equipment production, rose 4.5 percent year-

Nissan North America team members have produced more than 2.6 million vehicles at their Canton, Mississippi, plant since it first opened a little more than a decade ago.

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to-date in January 2014 — proving that the transportation manufacturing industry is on the move.

Cars and Trucks According to the International Organization of Motor Vehicle Manufacturers (OICA), the U.S. automotive industry grew 6.9 percent in 2013 — one of the strongest gains in the world (only Spain, Romania, Indonesia, Brazil, and Austria were higher). U.S. sales reached 15.6 million cars in 2013, up 7.6 percent compared to 2012. Much of this manufacturing growth is located in the southeastern United States.

“Kia, Hyundai, Porsche, BMW, Volkswagen, Toyota, and Mercedes are continuing to bring jobs into the Southeast,” says Adam Beckerman, partner-in-charge of the Manufacturing and Distribution Group for Habif Arogeti & Wynne LLP, an accounting and businessconsulting firm. “This region offers a friendly business environment, good transportation hubs, favorable climate, and skilled workforce.”

Tennessee is a good example: General Motors, Nissan North America, and Volkswagen Group of America all have major operations here and are supported by more than 1,000 suppliers and related businesses. “About 100,000 Tennesseans are employed in automanufacturing jobs,” says Tom

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

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NORTHROP GRUMMAN EMBRAER HARRIS CORPORATION AAR CORP for selecting The Space Coast as a key location for critical business operations.

Find out why these industry leaders are choosing Florida’s Space Coast.

Contact Gregory Weiner, CEcD Senior Director, Business Development gweiner@SpaceCoastEDC.org www.SpaceCoastEDC.org Or call us today at 321-638-2000

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Location, location, location.

To be at the heart of one of the world’s aerospace capitals – that’s why developers like you are choosing to do business in Greater Montreal.

By setting up shop here, you’ll be in close proximity to two world-class industrial sites, Dorval and Mirabel, Quebec’s highly-skilled workforce, and a network of the world’s top suppliers and subcontractors.

And with the vast amount of commercial space available, you’ll have plenty of room, not only to get your business started but to take it wherever you want to go. By choosing to develop in Greater Montreal, you’re investing in the success of your business.

admtl.com

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THE IDEAL REAL-ESTATE PARTNER Two World-Class Aero-Industrial Sites Aéroports de Montréal (ADM) and its two world-class airports, Montréal-Trudeau and Montréal-Mirabel, offer you the most favorable opportunities for locating or expanding your firm.

At the Heart of Montréal’s Aerospace Industry Greater Montréal is one of the world’s three aerospace capitals, along with Seattle and Toulouse. It is among the rare places in the world where all the main components of an aircraft are manufactured within a 20-mile (30-kilometer) radius. Nearly two-thirds of Canadian production is centered here. More than 250 businesses are located at ADM’s two airports, generating a grand total of 60,000 direct and indirect jobs.

Montréal’s aerospace industry boasts prime contractors, equipment manufacturers, among the world’s top subcontractors and suppliers, as well as a qualified and competitive labor force and unique training centers. The presence of all these key industry players explains why the Greater Montréal region is renowned for its leading-edge expertise in the design, manufacturing, integration, overhaul, and repair of aircraft and aeronautical subsystems.

FOR MORE INFORMATION please contact: Real Estate and Commercial Services Aéroports de Montréal Telephone: 514-394-7201 Fax: 514-394-7356 Developpement.IndustrielADM@admtl.com

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Montréal-Trudeau: Ideal for logistics and aeronautics • 14 million square feet (1.3 million square meters) available for aeronautical development • Located in Québec’s industrial and aerospace heartland • 20 minutes from downtown and accessible via several highways • 4,000-acre (1,620-hectare) site where more than 25,000 people already work • Canada’s largest MRO and aircraft manufacturing center • A congestion-free international airport • More than 30 carriers serving 130 destinations Montréal-Mirabel: Focusing on all-cargo, aeronautics, light manufacturing, tourism, and recreational • 50 million square feet (4.6 million square meters) of land and buildings available for lease • Located in the Laurentians, Québec’s top tourism region • Easy access to all services and a quality labor force • An industrial zone where more than 4,000 people already work • Québec’s second-largest aerospace hub • An aerospace training center and engine test facilities • An international airport with 24/7 cargo and general aviation operations • A regional base for business aviation • A unique motorsports complex

FOLLOW THEIR LEAD! MIRABEL Bombardier Aéronautique Mecachrome Canada Pratt & Whitney Canada Inc. Aérolia Canada Turbomeca Canada (Groupe Safran/Safran Group) Avianor Inc. L-3 Communication MAS Les Investissements Nolinor École des métiers de l’aérospatiale de Montréal Fedex UPS DHL Purolator Worldwide Flight Service Canada Inc. CAE LG Cloutier Aéronautique Inc. DORVAL Bombardier Aéronautique Air Canada Air Inuit Ltée Aero Mag 2000 (YUL) Inc. Air Transat Inc. Aeroterm Kelly Aviation Center Montreal Les entrepôts frigorifiques Conestoga Air Creebec Skyservice Starlink Aviation Execaire (Innotech) Aviation Inc.

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Brewer, president of the Tennessee Automotive Manufacturers Association. “In 2013, Tennessee announced the addition of 7,661 new automotive industry jobs, three new site locations, $1.7 billion in planned investments, and 43 site expansions.”

Interestingly, Mexico also showed solid growth of 1.7 percent in 2013. In fact, IHS Automotive projects that by 2020 Mexico will have the capacity to build one in every four vehicles in North America.

Bloomberg reports that Mexico’s automotive industry is expected to reach 1.69 million cars in 2014, making it the second-largest provider of cars to the U.S., surpassing Japan and trailing only Canada.

Truck manufacturing is also on the rise.

According to the ATA, nearly 70 percent of all freight tonnage in the U.S. is moved by truck.

Shipping nearly nine billion tons of freight annually requires about three million heavy-duty Class-8 trucks.

Key drivers for improved truck sales are increased manufacturing output of consumer goods and the growing need for trucks in emerging countries. In addition, “the average age of fleet vehicles is still fairly high,” states Robert Woodall, director of Sales and Marketing for Peterbilt Motors Company. “As economic conditions improve and freight strengthens, fleets should begin replacing older equipment with new trucks, and even add capacity to their operations.”

Signs of growth are already evident. For exam-

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ple, Volvo Group North America’s heavy-duty truck deliveries jumped 55 percent in February 2014 from a year ago; worldwide heavy-duty truck deliveries for all Volvo brands rose 35 percent.

Trailer orders also got off to a hot start in January, surging 28 percent year-overyear, according to ACT MEXICO’S Research Company (ACT).

“Seven of the 10 trailer cateAUTOMOTIVE gories showed year-overyear growth in January,” INDUSTRY IS says Frank Maly, ACT’s director of Transportation EXPECTED TO Analysis & Research.

Wabash National REACH Corporation, a leading manufacturer of truck trailers, is 1.69 MILLION CARS helping its trucking customers improve efficiency and reduce IN 2014, fleet costs. “We are focusing on improving fuel economy MAKING IT THE through trailer aerodynamic devices,” says Dick Giromini, SECOND-LARGEST president and CEO. “As an industry, we must continue to PROVIDER OF identify and develop lightweight, high-strength materiCARS TO THE als to further reduce truck and trailer weights and UNITED STATES. improve fuel efficiency.”

FOR FREE SITE INFORMATION, CALL

14/05/14 .2:57 800-735-2732, EXT. 225, OR VISIT US ONLINE AT WWW.AREADEVELOPMENT COM PM

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Aviation and Aerospace The U.S. aerospace and defense industry has been dealing with some tough challenges — including sequestration and reduced military contracts. Sales were about the same ($220 billion) in 2012 and 2013. According to the Aerospace Industries Association, even with these economic pressures, U.S. aerospace exports grew in 2013 — especially for civil aircraft. A top performer in this category is Bombardier, which recently closed a $5.2 billion deal for 245 business jets. Strong sales like these have allowed the company to invest billions of dollars in R&D over the last several years.

Any successful manufacturing cluster relies on close collaboration between OEMs and critical vendors and suppliers. South Carolina, for example, has more than 200 aerospace companies, anchored by Boeing’s North Charleston aircraft manufacturing plant. Recently, Toray Industries, a key supplier for Boeing, announced it would build a $1 billion facility in Spartanburg County. It will manufacture carbon fiber composites and other advanced materials for Boeing aircraft. The project represents one of the largest initial capital investments in South Carolina’s history — “a real game-changer for the Upstate and all of South Carolina,” says Governor Nikki Haley.

Aerospace manufacturing often struggles to meet order deadlines, in part because of cumbersome supply chains.

Improved performance, according to Accenture, a management consulting firm, is better integration across the supply chain and managing the efficiency of the full process, from

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design through delivery. “As aerospace supply chains become more diverse, with additional partners involved beyond the original equipment manufacturers, digital integration of the supply chain is going to be a critical differentiator in performance,” explains Accenture Senior Manager Craig Gottlieb.

Railroads Rail equipment manufacturers sell to Class-I railroads and railroad leasing companies, which in turn ship industrial products, including heavy machinery, coal, timber, oil, and coal. As the economy recovers, and demand for rail transportation and equipment continues to rise, railroads are investing millions of dollars in track and equipment upgrades.

One of the greatest boons to railcar manufacturing is the urgent need for transporting oil from the shale plays in Texas and North Dakota. Tank cars currently comprise about 84 percent of the backlogs for rail cars — a reflection of the huge influence of oil production.

“The demand for oil by rail, along with the safety issues, is having an impact on the design of tank cars and their short-term demand,” says Ben Chapman, assistant vice president for Norfolk Southern. “The federal mandate for PTC (Positive Train Control) continues to require a large capital investment for our signaling system and interoperability with the locomotives. Norfolk Southern continues to reinvest in its freight car and locomotive fleet to ensure we can

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meet the projected demands of our customers,” continues Chapman. “In 2014, we expect to invest more than $575 million in equipment upgrades and purchases. Locomotive suppliers are also testing natural gas locomotives powered by liquefied natural gas.”

Passenger cars are also in demand. A recent RailwayAge survey showed that 1,175 passenger cars were delivered in 2013, with an existing backlog of 5,167 cars — a number that has steadily climbed in recent years.

Orders for another 2,600 cars are expected to be placed in 2014. “Big transit agencies, such as the New York City MTA, the Chicago Transit Authority, San Francisco’s BART, the Toronto Transit Commission (TTC), and Washington’s Metropolitan Area Transit Authority (WMATA) were in the midst of big-number deliveries for their respective rapid transit systems,” states RailwayAge. Rapid-transit newcomers like Miami-Dade Transit and Honolulu’s Authority for Rapid Transportation (HART) are also expecting new equipment in 2014.

Locomotive and railroad equipment manufacturers are also looking overseas for growth opportunities — especially in China. “Emerging economies are growing at much faster rates than western economies, presenting potential markets for the industry,” says IBISWorld industry analyst Lauren Setar. She indicates these shifts to emerging economies should boost U.S. industry growth prospects over the next five years.

Shipbuilding The federal government is the largest buyer of U.S.-built military ships. U.S. shipyards also build ships for fishing fleets, cruise lines, barge operators, and cargo-shipping companies. More than 40,000 vessels transport more than one billion tons of cargo in the U.S. every year, with a total market value of $400 billion.

A 2013 report by the U.S. Department of Transportation’s Maritime Administration (MARAD), using 2011 data, indi-

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cated that U.S. shipyards support $36 billion in gross domestic product. About 60 percent of that revenue comes from military shipbuilding and 22 percent from commercial shipbuilding. The top five states for shipbuilding are Virginia, California, Louisiana, Texas, and Mississippi — other shipyards are located along the Great Lakes and the Mississippi and Ohio rivers.

Just as it has stimulated growth in the rail sector, oil from booming oil-shale reservoirs across the country has created a manufacturing rush for big oil tankers to transport oil to refineries. Currently more than one dozen oil tankers and hundreds of smaller tugs and barges are on order at U.S. shipyards.

For example, Aker Philadelphia Shipyard (APSI) is currently constructing two 115,000-deadweight-ton (dwt) crude oil carriers for SeaRiver Maritime, a subsidiary of ExxonMobil. The shipyard has also started building multiple tankers for Crowley Maritime Corporation, with a total contract value of approximately $500 million. When completed in 2015, the first Crowley vessel will be 600 feet long and capable of carrying 50,000 tons of crude oil or refined petroleum products.

“We are excited to partner with Crowley to provide longterm transportation options for the growing U.S. petroleum market,” says Kristian Rokke, president and CEO of APSI. “We have a strong history of building similar product tankers, which are all playing a fundamental role in moving our nation’s energy.”

DOZENS OF

OIL TANKERS & HUNDREDS OF SMALLER

TUGS & BARGES ARE ON ORDER

AT SHIPYARDS IN THE U.S.

FOR FREE SITE INFORMATION, CALL

14/05/14 2:51 PM

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gold and silver

SHOVEL AWARDS

W

inning economic development projects is hard work. Having the right combination of site selection factors isn’t enough these days — with tough competition from other states and even other countries. Making a company’s short list really depends on the location’s marketing skills, truly understanding the needs of the prospect, and being able to quickly customize incentives packages to make a winning offer. Above all, successful states take the time to develop relationships — sometimes years in the making — with industries, companies, and location consultants. This also means following up with companies to see how they are doing, or if they have any specific needs or concerns — long after groundbreaking and ribbon-cutting.

Area Development’s annual Gold and Silver Shovel Awards recognize individual states for their economic development prowess. In this issue we honor 20 states for their achievements in 2013 in garnering company investment and job creation. These states and communities understand economic development. Their governors and legislatures work tirelessly to improve infrastructure, reduce taxes, provide reasonable incentives, and — most of all — establish a cooperative business environment that creates sustainable, good-paying jobs for future generations.

AREA DEVELOPMENT | Q2/2014

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Collectively working across New York State

Nanocenter at SUNYIT

A World-Class Site for Nanoelectronics Manufacturing

www.MarcyNanocenter.com

Largest remaining shovel-ready, greenfield site in New York State’s Tech Valley

W e ’re p u ttin g en erg y into e c o n o mic d ev elo p m ent a c r o ss Up state New York Marketing support • Targeted energy efficiency programs Site development • Grants For more information, email us at ShovelReady@us.ngrid.com.

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Visit www.nationalgrid.com and connect with us on

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15+ MILLION POPULATION CATEGORY

Texas — Gold Shovel In 2013 Chief Executive magazine ranked Texas as the best state for doing business. “The rankings prove that smart policies result in increased investments, jobs, and greater overall economic activity,” states Marshall Cooper, CEO of the magazine.

Texas led the nation in job growth for the fourth straight year, adding 252,400 jobs. More than 10 major industries added jobs in 2013, including professional and business services, education and health services, energy, construction, mining, IT, and manufacturing. Manufacturing employment in Texas has grown by 7.2 percent since 2010. The Lone Star State also led the nation in the total value of shipped manufactured goods.

The Texan economy is driven by energy production, especially in the highly productive, West Texas oil-shale deposits.

Overall the energy sector contributes about $175 billion to the Texas economy. As a result, Texas is also the nation’s leader in petroleum refining and chemical production.

Five of the top-10 development projects are billion-dollar investments related to energy or chemical production. For example, Golden Pass is spending $10 billion to expand its liquefied natural gas (LNG) facility in Port Arthur, and

GOLD

Shovel Winner

TEXAS (pop. 26.05 million) COMPANY

1. Flextronics Motorola 2. Towers Watson 3. Kohl’s Corp.

4. GEICO 5. USAA 6. Golden Pass Products 7. ExxonMobil 8. Tenaris SA 9. Ingleside Ethylene 10. Ascend Performance Materials, LLC

CITY/COUNTY

N/E

Fort Worth

N

Richardson Dallas Katy San Antonio Port Arthur

E N E E N

Baytown Bay City Ingleside Alvin

E N N N

Represents a state/local sponsor

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ExxonMobil is investing $2 billion in its ethylene operations in Baytown. Ascend Performance Materials plans to construct a $1.2 billion, propane dehydrogenation facility in Alvin, creating 100 jobs. And, thanks to hydraulic fracturing needs, Tenaris SA is constructing a $1.5 billion facility to manufacture seamless pipe for the oil and gas industry. The facility is expected to produce 600,000 tons a year of casing and drilling pipe.

Other big announcements were made in the technology, customer service, and insurance sectors. For example, Flextronics recently opened its new manufacturing facility in Fort Worth ($25 million, 2,500 workers) to provide final assembly and customization for Motorola Mobility’s Moto X smartphone. In the field of customer care, Kohl’s Corporation will open a $54.9 million, customer-service operations center in Dallas, which will require 1,500 workers. The state of Texas will contribute $864,000 to the project through the Texas Enterprise Fund.

Florida — Silver Shovel

Florida’s economy is carrying on where it left off in 2013 — with some of the best job growth in the nation. The number of competitive jobs projects won by Florida during fiscal year 2013 jumped almost 25 percent over fiscal year 2012, creating 41 percent more private-sector jobs and nearly 30 percent more capital investments. In April the Scott administration eliminated the manufacturing and equipment sales tax on manufacturing companies, which is expected to save manufacturers in the state more than $140 million annually.

Key industries in Florida are STATE POPULATION 15+ MILLION aerospace and aviation, life sciences, manufacturing, IT, financial and professional services, and logis# JOBS INV. AMT. INDUSTRY tics and distribution. Sectors expected to have the strongest job 2,500 $25 million Smartphones growth over the next three years 1,600 $13 million Heathcare Services are construction (10 percent), pro1,500 $54.9 million Customer Care Center fessional and business services (4.3 1,000 $8.5 million Claims Center percent), and trade, transportation, 1,000 N/A Insurance and utilities (4 percent).

70 $10 billion Natural Gas Exports Over half of Florida’s top-10 economic development projects are 350 $2 billion Chemicals/Ethylene in financial and professional servic600 $1.5 billion Steel Pipe es. These include Bank of America 150 $1.5 billion Chemicals/Ethylene ($13 million, 1,500 jobs), USAA 100 $1.2 billion Chemicals/Propane ($163 million, 1,215 jobs), Dehydrogenation Comprehensive Health

FOR FREE SITE INFORMATION, CALL

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

#

TEXAS

Texas top investment projects, worth more than $17 billion and over 8,800 new jobs, earn the Lone Star State the Gold Shovel Award.

The Texas Economic Development division within the Office of the Governor has been busy. In partnership with our Texas communities, we were awarded the Gold Shovel this year because of our creative solutions for expansion and relocation that allow us to win big projects. Texas leads the nation in economic growth because Texans know that jobs are the engine of a strong marketplace.

Bring your company to Texas where we’re Wide Open for Business.

READ MORE ABOUT ONE OF OUR SUCCESS STORIES HERE: www.texaswideopenforbusiness.com/success

BIG SPACES, BIG OPPORTUNITIES Texas is Wide Open for Business. The Governor’s Offi ce is the place to start — and end — your search.

Office RICK RICK PERRY PERRY

GOVERNOR GOVERNOR OF OF TEXAS TEXAS

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Call today (512) 655−3948

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Management (nearly $2 million, 700 jobs), and Healthplan Holdings ($4.18 million, 1,025 jobs). In Lake Mary, Verizon recently opened a new $50 million, 220,000-square-foot finance center.

Another major financial project is Navy Federal Credit Union’s $200 million expansion in Pensacola, where it is

SILVER Shovel Winner

building 342,000 square feet of office space at its existing campus, creating 1,500 new jobs. To date, the credit union has invested over $225 million in its Pensacola operations.

“Our expansion is key to supporting Navy Federal’s strong growth and we are proud to be part of the economic growth for the area,” says Cutler Dawson, president and CEO at the credit union.

15+

STATE POPULATION

MILLION

FLORIDA (pop. 19.31 million) COMPANY

1. Amazon 2. Bank of America 3. Navy Federal Credit Union 4. USAA Southeast Regional Office 5. Healthplan Holdings 6. Northrop Grumman 7. Verizon 8. Comprehensive Health Management, Inc. 9. The Hertz Corp.

10. Bristol-Meyers Squibb Co.

CITY/COUNTY

N/E # JOBS

INV. AMT.

Tampa Jacksonville Pensacola

N 1,078 E 1,500 E 1,500

$204 million $13 million $200 million

Distribution Financial Services Financial Services

Tampa

E

1,215 $162.8 million

Financial Services

Tampa Melbourne Lake Mary Tampa

E 1,025 N 1,000 N 750 E 700

Estero Tampa

N N

700 579

SILVER Shovel Winner

$4.2 million $69 million $50 million $2 million $68.7 million $21.2 million

INDUSTRY

Professional Services R&D Professional Services Professional Services Headquarters Life Sciences

STATE POPULATION

15+

MILLION

NEW YORK (pop. 19.57 million) COMPANY

CITY/COUNTY

N/E # JOBS

INV. AMT.

1. Global Foundries

Malta

N 1,000

$2 billion

2. Advanced Nanotechnology Solutions Inc. 3. New York Genome Center 4. Corning Inc.

Marcy

N 1,000

N/A

5. Yahoo!

6. Novelis 7. Amneal Pharmaceuticals 8. United Natural Foods, Inc. 9. Hoffman La Roche, Inc. 10. Agrana Fruit

INDUSTRY

IT Research * & Development Nanotechnology

New York City E

400

$135 million

Genomic Sequencing

Erwin

E

250

$250 million

Lockport Oswego Yaphank

E E E

115 $170.6 million 90 $200.7 million 400 $50 million

Materials Processing/ Environmental Techologies Data Center/Call Center Primary Metals Pharmaceuticals

Montgomery

N

362

$60 million

Distribution/Logistics

New York City N Lysander N

235 120

$5 million $53 million

Pharmaceutical R&D Food Processing

*PROJECT OF THE YEAR Represents a state/local sponsor

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FOR FREE SITE INFORMATION, CALL

New York — Silver Shovel Over the 12-month period ending March 2014, New York added 108,200 private-sector jobs, a 1.5 percent increase over the previous year. The TechAmerica Foundation indicates that New York ranked third in the country for high-tech employment in 2012 (behind only California and Texas). New York also placed near the top in more than half of the IT sectors the foundation tracks, including computer systems design.

Therefore, it is not surprising that several of the state’s top-10 development projects in 2013 were IT-related. These include Global Foundries’ research center in Malta (see Project of the Year) and Advanced Nanotechnology Solutions in Marcy, which is creating 1,000 jobs. It will be housed at the $125 million, 253,000-square-foot Computer Chip Commercialization Center, better known as Quad-C at SUNYIT. With an annual operating budget of $500 million, the center will host public-private partnerships through the $1.5 billion Nano Utica initiative.

Other key industries in New York are life sciences, advanced materials, data centers, logistics and distribution, and food processing. Projects in life sciences and pharmaceuticals include the expan-

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gold and silver SHOVEL AWARDS

Project of the Year

Global Foundries MALTA, NEW YORK

sion of the New York Genome Center ($135 million, 400 jobs) and Amneal Pharmaceuticals’ $50 million expansion in Yaphank. Hoffman La Roche also recently opened its $5 million Translational and Clinical Research Center (TCRC) in New York City’s Alexandria Center for Life Science.

“Our location in New York City will enable us to combine our expertise with that of world-class researchers here in a vibrant scientific environment,” sates Judith Dunn, head of the Roche TCRC. “We will be engaging collaborators in a transformative approach to drug development, which will provide solutions for unmet medical needs and ultimately improve the lives of patients and their families.”

8+ to 15 MILLION POPULATION CATEGORY Global Foundries, one of the fastest-growing semiconductor companies in the world, will build a $2 billion, 500,000-squarefoot-plus research and development center at its Fab 8 chip factory in Malta, creating about 1,000 jobs.

The new center, which includes 90,000 square feet of cleanroom and laboratory space for developing new semiconductor technologies, will be the main global R&D center for the company.

The $2 billion expansion will bring the company’s total investment at Fab 8 to nearly $9 billion over the last six years.

“The new center will help us bridge between the lab and the fab by taking research conducted with partners and further developing the technologies to make them ready for volume manufacturing,” states Ajit Manocha, CEO for Global Foundries.

“The growth of GLOBALFOUNDRIES in Saratoga County, through the Technology Development Center (TDC), means an increase in the number of good paying jobs, opportunities for expansion of the supply chain, and the continuation of a robust business environment,” added Dennis Brobston, president of the Saratoga Economic Development Corp.

Georgia — Gold Shovel Building on a strong year in 2013, Georgia’s economy is expected to outperform the national economy in 2014. Thanks to a diverse economy that includes both traditional and knowledge-based industries, the state’s inflation-adjusted GDP is projected to grow 3 percent next year, with a 1.8 percent increase in jobs.

The automotive industry is a key employer in the state. Almost one quarter of the East Coast’s automotive-related exports come from Georgia (valued at nearly $10 billion per year). Over the last few years, auto manufacturers have invested $5.2 billion in their operations within the state. Major manufacturers include General Motors, Honda, Kia, Porsche, and Toyota — all of which are supported by an expanding supplier network.

For example, Inalfa Roof Systems, a provider of vehicle roofing systems, is building a $17.1 million manufacturing plant in Cherokee County, resulting in 300 new jobs. The facility will build components for major OEMs like Hyundai, Kia, Ford, General Motors,

GOLD

Shovel Winner

STATE POPULATION

8+

TO

15

MILLION

GEORGIA (pop. 9.91 million) COMPANY

CITY/COUNTY

N/E # JOBS

1. Engineered Floors

N 2,000

2.

3.

4.

5.

Whitfield and Murray Counties Ethicon Clark Cty. State Farm Insurance Dekalb Cty. General Motors Fulton Cty. Inalfa Roof Systems Cherokee Cty. PulteGroup Atlanta Medient Effingham Cty. AirWatch Fulton Cty. Hostess Brands Columbus/ Muscogee Cty. Koch Foods Harris Cty.

E 75 $185 million N 2,200 $25 million N 1,000 $26 million N 300 $17.1 milllion

6.

7.

8.

9.

10.

INV. AMT.

INDUSTRY

$450 million Flooring* Medical Products Insurance Back Office Software/IT Vehicle Roofing Systems $10 million Corporate Hdqtrs. $90 million Digital Media

N N

310 250

E

800

N

400

$18.2 million Food Processing

E

750

$73 million Food Processing

$4 million Software/IT

*PROJECT OF THE YEAR Represents a state/local sponsor

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2014 Volvo, Chrysler Group, and BMW Group.

Georgia is also well known for its IT sector. The state has one of the fastest-growing information-technology markets in the country, with nearly 200,000 workers. Recent announcements include digital media company Medient, which is developing a $90 million movie and game production facility in Effingham County, creating at least 250 jobs. AirWatch, a leader in mobility technology and security, is expanding its headquarters in Atlanta, creating 800 jobs and investing more than $4 million in new equipment. The expansion is scheduled for completion in 2015.

“We expect to double our size by combining innovative mobile technology and exceptional talent with the state’s economic development resources,” states AirWatch Chairman Alan Dabbiere. “AirWatch and other software companies Project of the Year are playing a critical role in attracting new businesses to the region and solidifying Atlanta as a leading technology player.”

Engineered Floors

WHITFIELD AND MURRAY COUNTIES, GEORGIA

New Jersey — Silver Shovel

Leading carpet manufacturer Engineered Floors, based in Dalton, will invest $450 million to construct new facilities in Whitfield and Murray counties, creating 2,000 new jobs over the next five years. The company already has several manufacturing facilities and a distribution center in northwest Georgia.

New Jersey is the home headquarters for nearly two dozen Fortune 500 companies, including both Fortune 100 and Global 500 organizations. The state has a reputation for leadership in key markets including financial, pharmaceutical, life sciences, IT, aerospace, manufacturing, and logistics.

New Jersey added about 58,000 jobs in 2013, a 1.5 percent growth rate, surpassing the 49,100 jobs the state added in 2012.

Many of these new jobs are high-tech positions — according to the Bureau of Labor Statistics, New Jersey was one of the top states

“We are pleased that these new facilities will allow for further job creation for the area,” comments Robert E. Shaw, CEO of Engineered Floors. “The exemption of sales tax on energy in the manufacturing process that was put in place during the 2012 legislative session makes a significant difference to manufacturers looking to grow and succeed.”

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FOR FREE SITE INFORMATION, CALL

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SILVER Shovel Winner

STATE POPULATION

8+

TO

15

MILLION

NEW JERSEY (pop. 8.86 million) COMPANY

1. Amazon.com 2. Ascena Retail Group/ Dress Barn 3. Burlington Coat Factory 4. CommVault 5. Siemens Healthcare Diagnostics 6. Caduceus 7. Cenlar FSB 8. Berlitz 9. Destination Maternity 10. Innovo

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Robbinsville Mahwah

N 1,400 N 400

$150 million $38 million

Distribution Retail Hdqtrs.

Florence

N

120

$40 million

Retail Hdqtrs.

Tinton Falls Mount Olive

N E

250 500

$87 million $37 million

Technology Life Sciences

Jersey City Ewing West Windsor Moorestown/ Florence East Windsor

E E E N

60 375 30 600

$600,000 $3 million $8 million $50 million

E

50

$3 million

Healthcare Mgmt.

Mortgages Educational Hdqtrs.

Retail Hdqtrs./ Distribution Pharmaceuticals

Represents a state/local sponsor

for tech-job growth last year.

The state’s pharmaceutical industry has stabilized and is regaining economic steam. For example, Merck recently dedicated a new headquarters for its animal health division. Bayer has consolidated its operations from New Jersey and New York into a 650,000-square-foot space in Hanover — its new East Coast headquarters. Siemens Healthcare Diagnostics is also planning a $37 million expansion of its operations in Flanders, Mount Olive Township, creating about 500 jobs.

With its outstanding transportation infrastructure and proximity to the East Coast and Midwest,

GROW

IN NEW JERSEY WE’RE SERIOUS ABOUT BUSINESS

30

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Top Talent Strategic Northeast Location 10 Years Of Grow NJ Tax Breaks Up To $300 Million For Eligible Projects No wonder big names in business are making the move to New Jersey.

FOR FREE SITE INFORMATION, CALL

Seriously, what are you waiting for?

Call 609.297.2200 or email us at serious@choosenj.com ChooseNJ.com

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gold and silver SHOVEL AWARDS New Jersey continues to attract logistics and distribution investment. For example, Amazon.com’s new one-millionsquare-foot, $150-million distribution facility in Robbinsville will employ about 1,400 workers. Destination Maternity is also building a $50 million retail headquarters and distribution center in Moorestown, moving its operation from Philadelphia.

“A critical factor in our decision to relocate to New Jersey was the approval we have obtained from the New Jersey Economic Development Authority for an incentive package of $40 million in benefits, over a 10-year period,” adds Ed Krell, CEO of Destination Maternity.

North Carolina — Silver Shovel

Methodology Area Development’s annual Gold and Silver Shovel Awards recognize states for their achievements in attracting high-value investment projects that will create a significant number of new jobs in their communities. We collected information from all 50 states about their top-10 job-creation and investment projects initiated in 2013 (only those projects that actually had monies invested, “broke ground,” began an expansion, started new hiring, etc. were considered). Based on a combination of weighted

North Carolina has a highly diversified economy that includes traditional industries (for example, lumber, agriculture, and textiles) and knowledge-based industries such as aerospace, biotechnology, alternative energy, and information technology. North Carolina began this high-tech transition over 50 years ago with the establishment of Research Triangle Park in 1960. Today “RTP” is one of the premier high-tech research parks in the country and home to SILVER Shovel Winner more than 170 global companies, including IBM, GSK, Syngenta, RTI International, and Cisco.

COMPANY CITY/COUNTY Some of the strongest job growth in North Carolina is coming 1. MetLife Wake and from its rapidly expanding profesMecklenburg counties sional and business services sector.

2. Electrolux Home Mecklenburg For example, Red Ventures, a comProducts Cty. pany that optimizes online market3. Red Ventures Mecklenburg Cty. ing and data analytics for major 4. Wright Foods Montgomery companies, is expanding its operaCty. tions in Mecklenburg County, creat5. Sturm, Ruger Rockingham & Co. Inc. Cty. ing over 600 new jobs. MetLife, a 6. Gildan Activewear Bladen, life insurance and employee beneRowan, Davie fits company, intends to create counties 7. GE Aviation Ashe, 2,600 jobs in Charlotte and Cary by Buncombe, the end of 2015 through its $125.5 Durham, New million investment in its Hanover counties Mecklenburg County and Wake 8. BioChemtex Sampson Cty. County campuses. “The strong 9. AW North Carolina Durham Cty. sense of community in Cary and 10. Novo Nordisk Johnston Cty. Pharmaceutical Charlotte, as well as the region’s Industries Inc. robust infrastructure and sustain-

factors — including the number of new jobs to be created in relation to the state’s population, the combined dollar amount of the investments, the number of new facilities, the diversity of industry represented — five states achieving the highest weighted overall scores are awarded Area Development’s 2014 Gold Shovels in five population categories: 15+ million, 8+ to 15 million, 5+ to 8 million, 3+ to 5 million, and fewer than 3 million.

Runners up in each of these population categories are awarded 2014 Silver Shovels.

STATE POPULATION

8+

TO

15

MILLION

NORTH CAROLINA (pop. 9.75 million) N/E # JOBS

INV. AMT.

INDUSTRY

N 2,600 $125.5 million

Financial Services

E

810

$85 million

E

603

$2.36 million

Household Appliances Hdqtrs.

Financial Services

E

505

$53 million

Food/Agriculture

N

476

$26 million

Firearms

E

500

$250 million

Textiles

E

242

$195 million

Aviation

E E E

65 56 110

$163 million $112 million $102 million

Chemicals Automotive Biotech/ Pharmaceuticals

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SPECIAL REPORTSPECIAL REPORT

able talent pool, were all compelling reasons for coming here,” says Eric Steigerwalt, executive vice president at MetLife.

More than 40 new manufacturing facilities were announced in North Carolina during 2013. These include Electrolux Home Products ($85 million, 810 jobs), Wright Foods ($53 million, 505 jobs), and Sturm, Ruger & Company ($26 million, 476 jobs). In October 2013 Gildan Activewear indicated it would invest $250 million to expand its yarn-spinning manufacturing facilities in Bladen and Rowan counties and establish a new yarn-spinning facility in Davie County, creating more than 500 jobs.

“These investments will reinforce our position as a global, low-cost manufacturer,” says Chuck Ward, president of Gildan Yarns. “North Carolina provides a qualified textile workforce, competitive energy rates, and a good transportation network, which are all central to our expansion projects.”

SILVER Shovel Winner

STATE POPULATION

8+

TO

15

MILLION

OHIO (pop. 11.54 million) COMPANY

1. GE Aviation 2. Safelite Group 3. Festo Americas 4. imFlux 5.

6.

7.

8.

9.

10.

H.J. Heinz Home Depot JPMorgan Chase Nestle USA Daisy Brand Vitamix Corp.

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Evendale, Peebles, Vandalia Columbus Mason Hamilton

E

225

$390 million

Aerospace/Aviation Technologies

E N N

350 250 221

$20.4 million $250 million $50.7 million

Massillon Troy Columbus Solon Wooster Strongsville

E N E E N E

250 $28 million 125 $104.5 million 500 $10 million 250 $2.5 million 89 $116.2 million 500 $1.3 million

Headquarters Automation Technology Plastics Processing Technology Food Processing Logistics/Distribution Financial Services Food Processing Food Processing Small Appliances (Blenders)

SILVER Shovel Winner

STATE POPULATION

8+

TO

15

MILLION

PENNSYLVANIA (pop. 12.76 million) COMPANY

1. Carlisle Contruction Materials 2. Urban Outfitters 3. American Eagle Outfitters 4. Wal-Mart Stores 5. East Penn Manufacturing Co., Inc. 6. Bell & Evans 7. Gordon Food Service 8. Axalta Coating Systems 9. Church & Dwight Co., Inc. 10. Ellwood Crankshaft and Machine Co.

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Carlisle

E

50

$43 million

Building Products

Philadelphia & Gap

E

2,500

$210 million

Retail Hdqtrs.

Luzerne Bethlehem Berks Cty.

N N E

369 351 400

$160 million $96 million $50 million

Distribution Distribution Batteries

Fredericksburg Imperial Philadelphia & Glen Mills York Cty.

N N N

380 166 332

$39 million $78 million $11 million

N

180

$55 million

Sharon

E

75

$54 million

Food Processing Distribution Paint, Coating & Adhesives Household & Personal Care Products Machining/ Crankshafts

Represents a state/local sponsor

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FOR FREE SITE INFORMATION, CALL

Ohio — Silver Shovel Ohio is getting off to a great start this year — for the month of January 2014, the state ranked second in the nation for job gains with 16,700 jobs (second only to Texas). According to a survey by Forbes, Columbus, Ohio, is also only one of six cities where the population of the core district has grown more than the surrounding suburbs — another good sign of economic recovery.

Key industries in Ohio include professional and financial services, energy, aerospace, automotive, food processing, plastics, chemicals, and logistics and distribution.

Major manufacturing announcements in 2013 included Vitamix Corporation’s $1.3 million expansion in Strongsville (500 jobs).

Festo Americas, which manufactures pneumatic and electromechanical systems and components for process and industrial automation, plans to build a $250 million, state-of-the-art product assembly and distribution center in Mason (250 jobs). The facility will have foreign-trade-zone status, making it easier to support customers throughout North America from a central U.S. location.

Expansions in Ohio’s important food-processing industry include

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Pa. earns 2nd straight silver shovel award And Lehigh Valley once again plays a key role!

…along with its 1.2 million-square-foot distribution center and 350 fulltime jobs in Bethlehem helps the Commonwealth of Pa. repeat this prestigious honor.

Attention shoppers. Are you in the market for a new location? Lehigh Valley Economic Development Corporation is at your service.

Contact Jarrett Witt today at (610) 266-2523 or jwitt@lehighvalley.org

2158 Avenue C, Suite 200, Bethlehem, PA 18017 | Phone: 610-266-6775 | Fax: 610-266-7623 | www.lehighvalley.org

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Nestle USA ($2.5 million, 250 workers) and H.J. Heinz ($28 million, 250 workers). Daisy Brand also plans to build a $116 million production facility in Wooster, creating 89 jobs. This will be the third U.S. facility for the company, the nation’s largest sour cream manufacturer, and serve the East Coast market. Ohio faced tough competition from other Midwest states for the project — key factors that drove the Daisy Brand decision to locate in Ohio included its high-quality supply of cream, abundant clean water, and pro-growth business climate.

Pennsylvania — Silver Shovel With a gross domestic product of more than $600 billion, Pennsylvania has one of the largest economies in the country. It is also highly diverse, ranging from longstanding, traditional industries like agriculture, coal, and steel to innovative, knowledge-based markets, including life sciences, biotechnology, and nanotechnology. In addition, production of natural gas from the Marcellus Shale is stimulating growth in the oil-and-gas and chemical markets.

Industries undertaking major locations or expansions include retail, agribusiness, life sciences, healthcare, advanced manufacturing, and distribution. Urban Outfitters plans a $210 million expansion of its headquarters in Philadelphia and fulfillment center in Gap, Pa., creating a

GOLD

Shovel Winner

total of 2,500 new jobs. Church & Dwight Company, a vitamin manufacturer, plans to invest $55 million in its operations in York County. The new manufacturing line will expand production capacity by 75 percent and employ about 180 people. Strengthening Pennsylvania’s ranking as the fourth-most-valuable food manufacturing industry in the country, Bell & Evans will develop a $39 million food processing plant in Fredericksburg employing 380 people.

With its top transportation infrastructure and central East Coast location, Pennsylvania is also a preferred location for distribution facilities. In 2013 Wal-Mart Stores announced a $96 million distribution facility in Bethlehem (351 jobs) and Gordon Food Service revealed plans for a $78 million facility (166 workers) in Imperial. One of the biggest projects is American Eagle Outfitters’ construction of a onemillion-square-foot, $160 million distribution facility in Luzerne County, creating 369 jobs.

“We are delighted to bring additional jobs to the Pennsylvania community and look forward to working with the state to build this new facility,” commented American Eagle Outfitters former CEO Robert Hanson at the facility’s opening. The company received a funding offer from the Department of Community and Economic Development that includes a $400,000 Pennsylvania First Program grant and a $166,050 Guaranteed Free Training grant for the new workforce.

STATE POPULATION

5+

TO

8

MILLION

MISSOURI (pop. 6.02 million) COMPANY

1. Yanfeng USA 2. CertainTeed Corp.

3. PharmaMedica Research Inc. 4. Aviation Technical Services 5. Grupo Antolin North America 6. Cerner Corp.

7. Boeing 8. Express Scripts 9. Monsanto 10. Ford Motor Company

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Riverside Jonesburg St. Charles

N N N

263 100 320

$45 million $100 million $15 million

Kansas City

N

544

$8 million

Automotive Parts Roofing Shingles Pharmaceutical Research Aircraft MRO

Kansas City

N

118

$16 million

Automotive Parts

Kansas City St. Louis Cty. St. Louis Chesterfield Kansas City

E 15,000 E 800 E 1,600 E 675 E 900

$4.3 billion N/A $57 million $400 million N/A

IT/Healthcare* Research/IT IT/Healthcare Bioscience Automotive

*PROJECT OF THE YEAR Represents a state/local sponsor

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5+ to 8 MILLION POPULATION CATEGORY

Missouri — Gold Shovel Missouri added almost 44,000 jobs in 2013, some of the best jobgrowth numbers in the country.

One reason companies are hiring is the favorable tax structure in the state — according to the Tax Foundation’s 2014 State Business Tax Climate Index, Missouri ranked seventh for the most favorable corporate tax structure in the U.S. Top sectors are automotive,

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As one of the most diverse economies in the U.S., Missouri understands all kinds of business. A rich continuum of talent and resources makes it easier for companies in the fastest growing sectors to compete.

If you’re serious about getting more business for your company, you need to get your business to Missouri. Start by visiting us at ad.missouripartnership.com or by calling 314.725.0949 today!

Missouri Gold Shovel Winner 2014

Cerner – Kansas City, Missouri Project of the Year 2014

ad.missouripartnership.com

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Project of the Year

Cerner Corp.

KANSAS CITY, MISSOURI

A leading provider of IT and technology solutions for hospitals and other healthcare providers, Cerner Corporation will build a $4.3 billion, 4.1-million-square-foot campus in south Kansas City, creating up to 15,000 new jobs. The campus will include office buildings, data centers, a daycare center, and retail shops. Kansas City provided $1.63 billion in tax incentives to win the project.

“Over the 30-plus years we’ve been here, there have been a lot of milestones for the company,” says Cerner co-founder Cliff Illig. “Our preference is to grow in Kansas City. This is as big a statement as we can make about where we want our future.”

“After leading the nation in technology job growth for two years running, Cerner’s historic expansion in Kansas City cements Missouri’s position as hub for high-tech, high-paying jobs,” says governor Jay Nixon. “Today it’s clear that our strategy of providing a competitive business climate and investing in our highly skilled workforce is resulting in more jobs and more investments in the Show-Me State.”

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bioscience, information technology, energy, advanced manufacturing, life sciences, and transportation and logistics. Last year was a good one for automotive in Missouri — General Motors announced plans to invest $133 million in its Wentzville facility. Ford Motor Company is also expanding — the automaker is adding a third production shift for the F-150 and hiring an additional 900 workers at its Kansas City assembly plant, part of a $1.1 billion expansion.

Automotive suppliers also announced significant new investments, including Grupo Antolin North America ($16 million, 118 jobs) and Yanfeng USA ($45 million, 263 workers), which will manufacture interior trim components in Riverside for General Motors.

“Missouri offers an excellent business climate and we are excited to join the state’s strong community of automotive companies,” states David Wang, president of Yanfeng USA. Other hot growth sectors include IT and aerospace. According to the Tech America Foundation, Missouri had the third-fastest rate of technology job growth in 2013 and major IT announcements like Cerner Corporation ($4.3 billion, 15,000 jobs) and Express Scripts ($57 million, 1,600 jobs) back that up. In aerospace, Boeing is expanding its research facilities in St. Louis County and Aviation Technical Services will establish an $8 million maintenance, repair, and overhaul base at Kansas City International Airport, creating about 500 jobs in the next three-to-five years.

Arizona — Silver Shovel Chief Executive magazine ranked Arizona as the sixth-best state in the nation in which to do business in 2013 — a four-spot jump from the previous year’s report. Forbes also picked Arizona to have one of the best economies in the U.S. over the next five years, projecting an economic growth rate of 4.6 percent and job growth of 3 percent.

Key industries in Arizona are aerospace, renewable energy, bioscience, photonics, advanced manufacturing, and IT. Bioscience is quite strong, generating $36 billion in annual revenue and employing more than 100,000 workers. The finance and insurance sector is also expanding — for example, State Farm Insurance will build a $600 million

SILVER Shovel Winner

STATE POPULATION

5+ TO 8

MILLION

ARIZONA (pop. 6.55 million) COMPANY

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Synthetic Sapphire Banking, Finance, Ins./ Hdqtrs.

Information Technology Information Technology Business Support Services Information Technology Banking, Finance, Insurance Information Techology Transportation & Logistics Software Engineering

1. Apple 2. State Farm Insurance

Mesa Tempe

E 700 N 5,000

$1.5 billion $600 million

3. General Motors Corp.

4. IO Data Centers 5. WM Corporate Services 6. Go Daddy 7. Nationstar Mortgage

Chandler Phoenix Phoenix

N E E

738 126 776

$17.7 million $107 million $12 million

Tempe Chandler

N 250 E 1,200

$27 million $8 million

8. ZocDoc 9. WinCo

Scottsdale Phoenix

E N

652 300

$5.98 million $78 million

Chandler

N

141

$11 million

10. Garmin International

Represents a state/local sponsor

FOR FREE SITE INFORMATION, CALL

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gold and silver SHOVEL AWARDS regional headquarters in Tempe, adding 5,000 new jobs.

The hottest sector in Arizona is IT. In Mesa, Apple (through its partner GT Advanced Technologies) will undertake a $1.5 billion expansion to manufacture synthetic sapphire for cell phones, camera lenses, biometric devices, and other products. The project will require 700 new workers.

GoDaddy plans to open a $27 million, 150,000-square foot global technology center in Tempe that will create at least 250 new jobs.

Garmin International, an Olathe, Kansas-based GPS device manufacturer, is also expanding in Arizona. After a nationwide search, the company has decided to build an $11 million, 60,000-square-foot facility in Chandler, where it has leased space for the last five years.

“Garmin has been a longtime employer in Chandler and the greater Phoenix area because of the highly skilled workforce,” says Kevin Rauckman, Garmin’s chief financial officer.

“Investing in the construction of our own facility signals a long-term commitment to Chandler and the state of Arizona.”

Indiana — Silver Shovel Indiana’s manufacturing industry is the driving force behind its economic recovery. Indiana ranked second in the country for manufacturing job growth, with more than 13,400 manufacturing jobs added in 2013. Ball State University’s Center for Business and Economic Research predicts that Indiana’s economy will slightly outperform the nation as a whole in 2014, growing at about 2.2 percent when adjusted for inflation.

Transportation equipment manufacturing continues to create jobs across the state. North-central Indiana (including the Elkhart-Goshen area) is projected to see strong growth in 2014, with GDP rising by 4.6 percent — thanks to its vibrant cluster of automotive manufacturers and suppliers.

For example, Drew Industries, which manufactures components for recreational vehicles, will move its headquarters from New York to Elkhart and expand its manufacturing operations there, investing $12.75 million and hiring up to 800 people by 2015. In another announcement, Grand

Guess who’s coming to Mesa, Arizona?

Apple is joining the likes of Boeing, FUJIFILM, Mitsubishi Gas Chemical Company, Bridgestone Americas, Cessna, Embraer, MD Helicopters, Nammo Talley, TRW, and Banner Health all strategically located in Mesa, Arizona.

As part of the Phoenix-Mesa metro area, Mesa has all the assets and infrastructure to meet the needs for large technology projects.

Learn why your company should be in Mesa. www.mesaaz.gov/economic 480-644-2398

ECONOMIC DEVELOPMENT

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sion is expected to create about 1,400 jobs Other important sectors in the Indiana economy include life sciences and financial and insurance services. For example, American Specialty Health is spending more than $10 million to move its corporate headquarters from California to Carmel, Indiana, where it will create 675 jobs by 2016.

And, Ash Brokerage Corporation ($19.6 million, 115 workers) and NextGear Capital Corporation Shovel Winner STATE POPULATION 5+ TO 8 MILLION ($19.5 million, 169 workers) are both undertaking expansions in the state. (pop. 6.53 million)

Design RV is spending about $11 million to equip four manufacturing plants and establish its headquarters in Middlebury, creating up to 500 new jobs by 2016. In the Kokomo and Tipton areas, Chrysler Group is investing $374 million to expand its facilities, making it the largest transmission manufacturing operation in the world. The expan-

SILVER

INDIANA COMPANY

1. Gordman’s Inc. 2. Chrysler Group, LLC 3. Drew Industries 4. Grand Design RV, LLC 5. American Specialty Health, Inc. 6. The Standard Register Co. 7. Celadon Trucking Services, Inc. 8. PMG Indiana 9. Ash Brokerage Corp.

10. NextGear Capital Corp.

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Monrovia Kokomo & Tipton Goshen Middlebury

N 250 E 1,413

$37.5 million $374 million

Distribution Automotive

E N

800 500

$12.7 million $11.1 million

Carmel

N

675

$10 million

Jeffersonville

N

90

$10 million

Indianapolis

E

500

$5.8 million

Columbus Fort Wayne Carmel

E E E

50 115 169

$23 million $19.6 million $19.5 million

Motor Vehicle Bodies Motor Vehicle Wholesalers Insurance/Corporate Hdqtrs.

Mgmt. Consulting/ Commercial Printing Trucking/Corporate Hdqtrs.

Automotive Insurance/Hdqtrs.

Financial Services/ Hdqtrs.

Represents a state/local sponsor

SILVER Shovel Winner

STATE POPULATION

5+ TO 8

MILLION

TENNESSEE (pop. 6.49 million) COMPANY

1.

2.

3.

4.

Hankook Tire Co., Ltd. ARAMARK UBS Nissan North America, Inc. 5. IBEX Global 6. CalsonicKansei North America, Inc. 7. ProNova Solutions, LLC 8. 9to5 Seating 9. International Paper Company 10. Unilever Manufacturing

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Clarksville Nashville Nashville Smyrna

N 1,800 $800 million N 1,500 $20.8 million N 1,000 $36.5 million E 900 $134.6 million

Tires Office Admin. Services Portfolio Mgmt.

Automotive

Spring Hill Shelbyville, Lewisburg, Smyrna Alcoa

E E

Telemarketing Motor Vehicle Parts

N

525

Union City Memphis

N E

510 $39.5 million 125 $321.4 million

Office Furniture Paper Mill

Covington

E

428 $108.6 million

Food

620 $1.9 million 1,200 $109.6 million $52.8 million

Irradiation Apparatus

Represents a state/local sponsor

38

AREA DEVELOPMENT

FOR FREE SITE INFORMATION, CALL

Tennessee — Silver Shovel According to Tennessee’s 2014 Economic Report, the state is poised for strong growth in 2014 and 2015. Nonfarm employment increased by 1.5 percent from 2010 to 2013, an increase of more than 40,000 jobs — many of them in manufacturing. The greatest gains in 2014 are expected from leisure and hospitality, professional and business services, and the booming transportation equipment manufacturing market.

Tennessee has one of the largest automotive industries in the South. It has generated more than 12 percent of all jobs in the state since the Great Recession and more than one-third of the manufacturing sector’s output growth since 2010. Recent expansions include Nissan North America ($134 million, 900 jobs) and CalsonicKansei North America ($109 million, 1,200 jobs). Hankook Tire Company also plans to locate its first U.S. manufacturing facility in Clarksville. The $800 million manufacturing plant will create 1,800 new jobs and be operational by 2016.

Tennessee will also be home to

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

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Seating CEO Darius Mir. “We are determined to not only bring back manufacturing to the United States, but to reverse a 30-year trend by exporting our high-quality USAmade products competitively to Asia and other countries around the world.

9to5 Seating, which is “reshoring” its furniture manufacturing operations back to the U.S. from China. The company will invest in a $39.5 million facility in Union City and hire 510 people over the next five years. “We chose Union City because of its close proximity to our major markets and the availability of its talented workforce,” says 9to5

GOLD

Shovel Winner

STATE POPULATION

3+

TO

5

MILLION

SOUTH CAROLINA (pop. 4.72 million) COMPANY

1. The Boeing Company 2. Time Warner Cable 3. Keer 4. Element Electronics 5. Colgate-Palmolive Co. 6. STARTEK Inc. 7. Michelin North America, Inc. 8. ZF Transmissions Gray Court LLC 9. Harbor Freight Tools USA, Inc. 10. JN Fibers, Inc.

CITY/COUNTY

Charleston Cty. Lexington Cty. Lancaster Cty. Fairfield Cty. Greenwood Cty. Horry Cty. Anderson Cty. Laurens Cty.

N/E # JOBS

E 2,000

INV. AMT.

$1 billion

INDUSTRY

644 501 500 300

$24 million $218 million $7.5 million $196 million

Telecom Hdqtrs.

Textiles Electronics Consumer Products

N E

665 100

$10 million $200 million

Data Center Hdqtrs.

Tires

E

450

$175 million

Automotive R&D

E

200

$75 million

Distribution

Chester Cty. N

318

$45 million

Plastics, Rubber & Chemicals

*PROJECT OF THE YEAR

SILVER Shovel Winner

STATE POPULATION

3+

TO

5

MILLION

ALABAMA (pop. 4.82 million) COMPANY

CITY/COUNTY

1. Marine Well Containment 2. AlphaPet Inc.

Mobile Bay

N

50

$1.4 billion

Decatur

E

75

$190 million

3. Mercedes Benz U.S. Int’l. Inc. 4. DAS North America 5. North American Lighting Inc. 6. Pharmavite

Vance

N

500

$70 million

Montgomery E Muscle Shoals E

400 275

$36.8 million $36 million

Automotive Automotive

Opelika

E

17

$16.5 million

7. Commercial Jet Inc. 8. Children’s Place

Dothan Fort Payne

N E

500 400

$4.8 million N/A

Auburn Huntsville

N E

400 350

$90 million $6 million

Chemicals & Allied Products Aerospace Distribution/Fulfillment Center Automotive Professional Services /R&D

9. Donghee America 10. Boeing Research & Technology

N/E # JOBS

INV. AMT.

INDUSTRY

Oil & Gas Extraction Chemicals & Allied Products Logistics Management

Represents a state/local sponsor

40

AREA DEVELOPMENT

Project of the Year

Aerospace *

E N E N

Dillon Cty.

3+ to 5 MILLION POPULATION CATEGORY

FOR FREE SITE INFORMATION, CALL

Boeing NORTH CHARLESTON, SOUTH CAROLINA

Boeing plans to expand its 787 Dreamliner campus in North Charleston, investing $1 billion and adding at least 2,000 jobs by 2020. The company is acquiring additional acreage adjacent to its campus to build an information technology “center of excellence” that will require about 1,000 employees; the other 1,000 workers will consist of engineers and production employees.

The expansion is needed to keep up with increased orders for commercial airplanes. “With unprecedented demand for commercial airplanes, including a forecast of another 34,000 airplanes required over the next 20 years, Boeing is positioned for significant and sustained growth in the years ahead,” says Boeing South Carolina spokesperson Candy Eslinger.

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

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SILVER Shovel Winner

STATE POPULATION

3+

TO

5

MILLION

KENTUCKY (pop. 4.38 million) COMPANY

1. Toyota Motor Manufacturing Kentucky 2. PTC Seamless Tube Corp 3. Carriage House Companies, Inc. 4. Hitachi Automotive Systems Americas, Inc. 5. eBay Enterprise 6. Mubea, Inc. 7. Custom Food Products, LLC 8. Dr. Schneider Automotive Systems, Inc. 9. General Dynamics Information Technology 10. Serco

CITY/COUNTY

N/E # JOBS

INV. AMT.

INDUSTRY

Georgetown

E

750 $531.2 million

Automotive

Hopkinsville

N

283 $102.4 million

Steel

Buckner

E

225

$96.8 million

Food

Berea

E

200

$63 million

Louisville Florence Owingsville

E E E

153 230 200

$45 million $44.5 million $44.4 million

E-commerce Automotive Meat Processing/Pkg.

Russell Springs

N

155

$29.9 million

Automotive

London

N 1,000

$18.5 million

Customer Care Center

London

N 1,000

$15 million

Automotive

Medicare/ Medicaid Support Center

Represents a state/local sponsor

SILVER Shovel Winner

STATE POPULATION

3+

TO

5

MILLION

LOUISIANA (pop. 4.60 million) COMPANY

CITY/COUNTY

1. BG Group and Energy Calcasieu Transfer Partners Parish 2. Magnolia LNG Avoyelles Parish 3. Eurochem Iberville Parish 4. G2X Calcasieu Parish 5. South Louisiana St. James Methanol Parish 6. Honeywell East Baton International Rouge, Ascension, and Caddo Parishes 7. IBM East Baton Rouge Parish 8. Danos Terrebonne Parish 9. ISC Constructors East Baton Rouge Parish 10. AAR Aircraft Lake Charles Services, Inc.

N/E # JOBS

INV. AMT.

INDUSTRY

N

250

$9 billion

N

45

$2.2 billion

Oil/Gas Support Operations Industrial Gas

N

200

$1.5 billion

Nitrogeneous Fertilizer

N

243

$1.3 billion

N

63

$1.3 billion

Chemicals/ Green Tech Gas Organic Chemicals

E

291

$1.2 billion

Industrial Gas

N

800

$55 million

E

426

$30 million

E

1,600

$7 million

Computer Systems Design/Services Oil/Gas Field Services/ Supplies Engineering Services

N

500

$2 million

Aviation MRO Services

Represents a state/local sponsor

42

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South Carolina — Gold Shovel Manufacturing continues to drive the South Carolina economy.

One of the greatest strengths of its manufacturing industry is the diversity of its sectors — aerospace, automotive, plastics, chemicals, food processing, textiles, and forestry products are all showing gains. For example, Keer is building a $218 million textile plant in Lancaster County; Harbor Freight Tools USA is undertaking a $75 million expansion of its distribution center in Dillon County; JN Fibers will build a $45 million facility in Chester County; and ColgatePalmolive Company will build a $196 million plant in Greenwood County to manufacture hand soap.

Combined, these four projects represent over 1,300 new jobs.

The transportation equipment manufacturing industry is especially strong in South Carolina. Boeing leads the way in aerospace, with its $1 billion expansion in North Charleston. For the automotive sector, South Carolina has recruited more than $5 billion in capital investment and more than 8,000 jobs since 2011. The state is home to more than 250 automotive manufacturing plants and continues to attract top-tier suppliers, such as ZF Transmissions, a global supplier of driveline and chassis equipment, which recently announced a $175 million expansion of its operations in Laurens County. This will be the third expansion in four years for ZF, bringing the company’s total investment in South Carolina to more than $600 million.

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gold and silver SHOVEL AWARDS South Carolina also supports a booming tire-manufacturing industry, led by Michelin — South Carolina’s largest manufacturing employer. Nine of Michelin North America’s 18 production facilities are located in the state. Over the last several years the company has announced new projects totaling $1.15 billion, which will create nearly 900 new jobs.

Alabama — Silver Shovel Alabama is a leading exporting state — according to the U.S. Department of Commerce, it ranked 23rd for dollar value of exports in 2013. That total value — $19.3 billion — was just shy of the record high of $19.6 billion set in 2012.

In 2013 the leading export was transportation equipment ($8.3 billion, 8.6 percent growth), followed by chemicals ($2.5 billion, 3 percent growth) and primary metal manufacturing ($1.5 billion, 3.9 percent growth). In fact, vehicles and parts have been Alabama’s top export since 1998.

The large number of automotive projects announced in

2013 reflects the huge contribution transportation equipment manufacturing makes to the state’s economy. These projects include Mercedes Benz’s plans to build a $70 million logistics hub in Vance, Tuscaloosa County, creating 500 new jobs. As automobile production increases, so does pressure on suppliers to deliver parts and components. DAS North America, a manufacturer of seat components, will invest nearly $40 million to expand its operations in Montgomery to supply Kia Motors. North American Lighting, which makes taillights and headlights, will undertake a $36 million expansion at its Muscle Shoals factory, creating 275 jobs. In Auburn, Donghee America is building a fuel-tank manufacturing plant to supply the Hyundai assembly plant in Montgomery. Phase one represents a $48 million investment and 80 jobs, but Auburn economic development officials say investment will ultimately grow to $90 million and 400 jobs.

Top projects in other sectors include Boeing Research and Technology ($6 million, Huntsville) and Pharmavite ($16.5 million, Opelika). AlphaPet, a leading manufacturer of poly-

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ethylene terephthalate (PET) resins, announced it would build a $190 million manufacturing plant in Decatur, producing about 500,000 tons of resin per year. “We strongly believe in the future of manufacturing in the USA and believe Decatur is an excellent choice for our current expansion plans,” comments Aloke Lohia, group CEO of Indorama Ventures, parent company of AlphaPet.

Kentucky — Silver Shovel Manufacturing is Kentucky’s third-largest employment sector (13 percent) and contributes about 17 percent to the state GDP. Kentucky exports reached a record $25.3 billion in 2013, with products and services shipped to nearly 200 countries.

Therefore it is no surprise that seven of the state’s top-10 job creation/investment projects for 2013 are in manufacturing — and, as usual, automotive leads the way.

Toyota Motor Manufacturing recently announced plans to expand its Georgetown Project of the Year assembly plant to build the Lexus ES. The $531 million investment will add about 750 jobs. Germany-based Dr. Schneider Automotive Systems is building a $29 million manufacturing operation in Russell Springs to produce high-end vent and trim systems. In Florence, Mubea recently opened a state-of-the-art, $44.5 million tailored rolled blank facility, which will use new techniques to manufacture automotive parts for lighterweight vehicles. “This facility is the only one of its kind in North America,” says Doug Cain, CEO of Mubea North America. “The innovative technology we’ve brought to northCEDAR CITY, ern Kentucky is a key factor in our continuing successful growth.”

UTAH Other major industry announcements include Custom Food Products in Owingsville ($44.4 million, 200 employees) and PTC Seamless Tube Corporation in Hopkinsville ($102 million, 283 jobs). Two of the largest job-creation numbers in the state come from new MSC Aerospace (MSC), in support centers, a growing market in Kentucky. General Dynamics Information partnership with subsidiaries Technology plans to hire up to 1,000 workers at its new customer-care center in London, SyberJet Aircraft and

MSC Aerospace

GOLD

Shovel Winner

STATE POPULATION UNDER

3 MILLION

UTAH (pop. 2.85 million) COMPANY

CITY/COUNTY

N/E # JOBS

1. Blu

Salt Lake City E

2. Solarwinds 3. MSC Aerospace (Syberjet and Metalcraft Divisions) 4. HireVue 5. Emery Refining Contacts 6. Cardon Outreach

Draper Cedar City

7. OOCL 8. Esurance 9. doterra 10. 1-800 Contacts

INV. AMT.

73

$6 million

N 1,040 N 1,200

$50 million $400 million

INDUSTRY

Natural Gas Fueling Stations Software/IT Aerospace *

Salt Lake City N Green River N

540 $30 million 125 $231.8 million

Software/IT Refinery

Sandy

N

308

$5.3 million

Salt Lake City N Ogden N Orem N

300 700 330

$6.8 million $15 million $60 million

Draper

654

$59 million

Healthcare/ Customer Service Logistics Insurance R&D/IT/ Customer Services Fulfillment Center

E

*PROJECT OF THE YEAR Represents a state/local sponsor

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Metalcraft Technologies, will construct a $400 million facility in Cedar City to manufacture business jets, creating 1,200 new jobs.

MSC, which already owns 250,000 square feet of manufacturing and hangar space at the Cedar City airport, makes components for aerospace companies.

Over the 20-year life of the project, MSC will pay nearly $130 million in state taxes and over $1 billion in payroll. “This is a landmark moment for the community of Cedar City and is an economic development game-changer,” says Brennan Wood, economic development director for Cedar City. “A project of this size and scope does not go unnoticed by the manufacturing industry or site selection professionals.”

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

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gold and silver SHOVEL AWARDS which represents an $18.5 million investment. Also in London, Serco recently opened a $15 million Medicare/Medicaid support center that will employ about 1,000 workers.

Louisiana — Silver Shovel In 2013, the U.S. Chamber of Commerce ranked Louisiana as the top export state in the country and second for export growth. Louisiana had its best year for business development in the last six years. The company expansions and relocations announced in 2013 account for about 27,000 new jobs and $26.4 billion in new capital investment, along with hundreds of millions in new sales for suppliers and other smaller businesses across Louisiana.

Much of this impressive growth is driven by the energy sector. In fact, in 2013 Louisiana announced several big energy projects worth $1 billion or more — including BG Group and Energy Transfer Partners’ $9 billion facility in Calcasieu Parish that will employ 250 workers. Another impressive project will be Houston-based G2X’s $1.3 billion natural gas-

to-gasoline facility (also in Calcasieu Parish), creating 243 new direct jobs and 748 indirect jobs. At The Port of Lake Charles, Magnolia LNG plans to invest $2.2 billion to develop a natural gas liquefaction production and export facility, producing about four million metric tons of liquefied natural gas per year. “Southwest Louisiana’s attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility,” indicates Maurice Brand, managing director for Magnolia LNG. Other sectors with strong projects in 2013 include chemicals (Russia-based Eurochem, $1.5 billion), information technology (IBM, $55 million), and engineering (ISC Constructors, $7 million). In aviation, AAR Aircraft Services will establish a $2 million maintenance, repair, and overhaul operation in Lake Charles, hiring 500 workers.

“In 2014, Louisiana will be well-positioned to secure a healthy share of new business investment projects in the U.S.,” says Louisiana Economic Development Secretary Stephen Moret. “Moreover, Louisiana’s economy will experience significant job growth from projects announced in 2008 through 2013 that have not yet fully ramped up.”

Business is soaring in Cedar City, Utah!

+ CEDAR CITY

Cedar City–Iron County Office of Economic Development Director, Brennan M. Wood • 10 N Main St. • Cedar City, UT 84720 (435) 865-5115 • (435) 233-0055 • wbrennan@cedarcity.org

w w w. c e d a r c i t y. o r g Produced in cooperation with The Utah Governor’s Office of Economic Development

business.utah.gov

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2014

Utah has one of the fastest-growing economies in the U.S. — its GDP growth rate of 3.4 percent was seventh-best in the country in 2012, driven by manufacturing and financial and insurance services. In 2013 the U.S. Chamber of Commerce called Utah a “boom state,” declaring it was the only state in the U.S. that placed in the top-10 for economic performance, infrastructure, business climate, exports, workforce, and entrepreneurship.

One reason Utah’s economy is so strong is because it is highly STATE POPULATION UNDER 3 MILLION SILVER Shovel Winner diverse, ranging from energy and traditional manufacturing to aero(pop. 2.94 million) space and defense, life sciences, nanotechnology, IT, electronics, COMPANY CITY/COUNTY N/E # JOBS INV. AMT. INDUSTRY telecommunications, and software 1. Big River Steel Mississippi N 500 $1 billion Steel development. Recent high-tech Cty. developments include SolarWinds’ 2. Welspun Tubular Little Rock E 200 $100 million Steel Pipe (IT management software) plan to 3. Dassault Falcon Jet Little Rock E N/A* $60 million Aircraft/Aviation 4. Hino Motors Marion E 200 $55 million Automotive Parts build a $50 million operations hub Manufacturing in Salt Lake City (1,040 jobs). Also 5. Vikon Farms Arkadelphia N 172 $5.4 million Poultry Processing in the Salt Lake City area, on6. Umarex Fort Smith N 127 $7.5 million Small Arms Mfg. & Distribution demand digital interviewing plat7. Midcontinent Little Rock N 60 $15 million Electric Power form provider HireVue will invest Independent System Transmission $30 million to expand its operaOperator (MISO) tions center, creating 540 new jobs.

8. Remington Arms Lonoke E 51 $23.5 million Ammunition 9. Global Food Group Clinton E 224 $4.7 million Food Processing IT and telecommunications plat10. Inuvo Conway N 50 $1.75 million Information Technology forms are also critical for customersupport, fulfillment, and back* Confidential Represents a state/local sponsor office operations, which continue to grow in Utah. For example, 1800 CONTACTS, the largest retailer of contact lenses in the country, STATE POPULATION UNDER 3 MILLION SILVER Shovel Winner plans to invest $59 million to expand its Salt Lake City opera(pop. 2.88 million) tions. In addition, Cardon COMPANY CITY/COUNTY N/E # JOBS INV. AMT. INDUSTRY Outreach, which works with healthcare providers to recover rev1. Hostess Brands Emporia E 500 $130 million Food enue and bad debt, is also expand2. Unilever Supply Chain New Century E 100 $152.5 million Food ing its operations in Utah, creating 3. Starwood Hotels Wichita N 955 $5 million Customer Service and Resorts over 300 jobs.

4. Netsmart Overland E 417 $27 million Computer Programming “A very positive experience with Technologies Park Services our operations hub in Sandy has 5. E.C. Manufacturing Shawnee N 405 $74 million Electronic Components 6. Quest Diagnostics Lenexa N 500 $10 million Shared Services Support encouraged us to consolidate more 7. AIG PC Global Olathe N 300 $25 million Insurance Services of our back office operations from Services, Inc. other processing centers to Utah, 8. TruHome Solutions Lenexa N 400 $9 million Mortgage and to focus on Utah for our cenLending Services 9. Creekstone Farms Arkansas City N 300 $60 million Food Processing tralized service functions going for10. D.H. Pace Co. Olathe N 281 $14 million Bldg. Eqpt. Hdqtrs. ward,” says Mark Robinson, CEO of Cardon Outreach.

Represents a state/local sponsor

FEWER THAN 3 MILLION POPULATION CATEGORY

Utah — Gold Shovel ARKANSAS

KANSAS

46

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UTAH’S MOUNTAINS ARE HIGH. FORTUNATELY, YOUR OVERHEAD WON’T BE.

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Metro Little Rock— Where America Comes Together The Metro Little Rock Alliance represents a 12-county region with a population of over 1,000,000 people and reflects the mobility of our workforce. It is located in the center of the country and in the second-fastest-growing region of the United States, with 40 percent of the nation’s population and buying power within a 550-mile radius. Little Rock is where “America Comes Together” — located at the crossroads of Interstate 30 and the most heavily traveled interstate in the nation, I-40. Little Rock benefits from a diversified economic base revolving around the following primary industries: advanced manufacturing, aerospace, information technology, medical/healthcare, military, and nonprofit. Kiplinger’s Personal Finance ranked Little Rock #1 of America’s 10 Great Places to Live in August 2013.

Advanced Manufacturing Targeted workforce development curriculum from the region’s community colleges makes advanced manufacturing one of the region’s top employers — both domestic and international. Metro Little Rock excels when it comes to importing materials and shipping the finished product. The Metro Little Rock region is centrally located at the crossroads of major interstate highways (I-30 and I-40), rail lines, and port facilities.

This transportation infrastructure provides easy access to assembly plants and supports just-in-time manufacturing strategies.

Aerospace In 2012, aircraft/spacecraft was Arkansas’s largest export. The sector accounted for 24 percent of Arkansas’s total export value. The region has in excess of 20 aviation and aerospace-related companies, employing approximately 9,000 people.

Information Technology Central Arkansas is one of America’s booming information technology centers, which is one of the many reasons that the world’s major information technology players have chosen to locate in Little Rock and host the nucleus of their network operations within the region.

Military With an annual economic impact of over $900 million, the region boasts the world’s premier C-130 Air Force base and an Arkansas National Guard site providing facilities and weapons ranges for all branches of the U.S. armed forces and civil law enforcement agencies.

Global Nonprofits With the world’s only Master’s degree in Public Service, strong foreign direct capital investment, and institutions like Arkansas Children’s Hospital (www.archildrens.org) and the University of Arkansas for Medical Sciences (www.uams.edu) bringing in world-class talent, Little Rock has become a hub for the location of global nonprofit headquarters.

Universities and Colleges There are 20 institutions of higher education in the Metro Little Rock region totaling approximately 70,000 enrolled students, and 31 percent of Pulaski County’s population has a Bachelor’s degree or higher. The Arkansas Association of Two-Year Colleges works in connection with business to create degree programs tailored to serve the needs of area employers.

To learn more, visit www.metrolittlerockalliance.com or email jdean@littlerockchamber.com or call Joey Dean at 501-377-6006

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When you hit the sweet spot, there’s no stopping you.

Little Rock has been named #1 place to live.

– Kiplinger’s Personal Finance, September 2013

Metro Little Rock is right in the sweet spot of the country.

Me tr oL it tleRo ck A lliance.com

Your business, and your people, can thrive here.

1.8 0 0.9 0 5.6 5 7 7

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Arkansas — Silver Shovel

growers in the region,” says Governor Mike Beebe.

One of the biggest manufacturing projects in the history of the state is Big River Steel’s plan to build a $1.1 billion steel mill in Osceola, which will employ 500 people and produce steel for a variety of industries, including automotive.

Tier-1 and Tier-2 automotive suppliers in the state continue to expand to meet the growing needs of automobile manufacturers. For example, Hino Motors’ plant in Marion will undertake a $55 million expansion to provide components for Toyota’s Tacoma, Tundra, and Sequoia models.

Manufacturing roots run deep in Arkansas. Nearly 14 percent of the state’s workforce is employed in manufacturing.

In fact, Arkansas has the highest percentage of manufacturing employment in the South, and the third-highest in the nation. With this deeply experienced workforce, low business costs, and the second-lowest unionization rate in the country, it is no surprise that manufacturers like to set up operations in Arkansas.

Key industries are timber, paper, agriculture, food processing, and transportation equipment manufacturing. The state is also working hard to accelerate the growth of knowledge-based industries such as aerospace, biotechnology, smart-grid technologies, and software development.

Agriculture and food processing are key drivers of the state economy. Nearly 50,000 people are employed in the food manufacturing industry. Arkansas is the headquarters for Tyson Foods, the third-largest employer in the state.

Major food-industry announcements include Global Food Group’s plans to build a $4.7 million manufacturing and packaging facility in Clinton, which will create 224 new jobs.

Vikon Farms will build a $5.4 million poultry processing plant in Arkadelphia (172 workers) and contract with local growers. “Vikon Farms is doing more than bringing jobs to Arkadelphia; they’re building agricultural partnerships with

Kansas — Silver Shovel

Kansas has long been known for its agricultural, foodprocessing, aviation, renewable energy, and animal science industries. Wichita is the center of aviation manufacturing in the state, which makes 50 percent of all domestic commercial aircraft and 40 percent of global aircraft. Leading manufacturers are Cessna, Bombardier Learjet, Hawker Beechcraft, Airbus, and Boeing.

The Kansas City Animal Health Corridor continues to expand — 40 percent of global animal health and veterinary science interests are located within the corridor. For example, Stason Animal Health, a pharmaceutical company that develops new chemical entities for companion animals, is establishing its corporate headquarters in Kansas City.

Of course, one of the state’s “bread and butter” industries is agriculture and food processing. A SILVER Shovel Winner STATE POPULATION UNDER 3 MILLION rapidly growing food-processing segment is milk production. In 2013 (pop. 2.98 million) Kansas posted the third-largest increase in total pounds of milk COMPANY CITY/COUNTY N/E # JOBS INV. AMT. INDUSTRY production in the country (trailing 1. Aurora Flight Sciences Columbus N 250 $17 million Aerospace only Wisconsin and New York). Top 2. Helen of Troy Olive Branch N 300 $37 million Distribution projects in the food industry 3. Yokohama Tire West Point N 500 $300 million Tires include Hostess Brands ($130 milManufacturing Mississippi lion expansion, 500 jobs), 4. Natron Wood Products Louisville E 200 $10 million Plywood Products Creekstone Farms ($60 million 5. General Dynamics Hattiesburg E 1,000 $7 million Data/Customer Support food-processing facility, 300 jobs), Information Technology and Unilever’s $152.5 million 126 $115 million Wood Pellets 6. Green Circle George Cty. N expansion of its margarine plant in Bio Energy Gardner.

7. Nissan North America Canton N 800 $50 million Logistics Supplier Park Another growing industry in 8. Feuer Powertrain Tunica N 300 $140 million Automotive Kansas is customer support/back GmbH office operations. Quest Diagnostics 9. Toyota Boshoku Mantachie E 180 $21 million Automotive is planning to build a $10 million Mississippi 10. Raytheon Forest E 150 $100 million Aerospace support center in Lenexa (500 jobs).

Starwood Hotels and Resorts is conRepresents a state/local sponsor

MISSISSIPPI

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gold and silver SHOVEL AWARDS structing a $5 million customer service center in Wichita, employing nearly 1,000 workers.

“We look for associates who are dedicated and customerservice oriented, with a desire to contribute to their communities,” says Mark Vondrasek, senior vice president of Distribution, Loyalty, and Partnership marketing for Starwood Hotels. “After reviewing a number of options, Wichita was chosen as the best place to expand our North American customer service operations.”

Mississippi — Silver Shovel Mississippi has one of the better-performing economies in the Southeast. According to the Bureau of Economic Analysis, Mississippi’s economy grew 2.4 percent in 2012, outperforming the Southeast’s 2.1 percent growth average.

Since 2012 the state has announced the creation of more than 6,300 new jobs and more than $1 billion in private sector investment.

Automotive is one of the most important manufacturing industries in Mississippi. Major manufacturers like Nissan, PACCAR, and Toyota are supported by a growing network of suppliers. For example, Yokohama Tire Manufacturing is investing $300 million in a new manufacturing plant in West Point, producing one million tires per year. Nissan’s auto

plant in Canton is developing a $50 million supplier park that will create 800 new jobs — the company’s first major supplier park located in North America. In addition, Germany-based Feuer Powertrain GmbH has started construction on a $140 million plant in Tunica, where it will hire 300 workers to produce crankshafts for the automotive industry.

“After an intensive site selection process, we are convinced locating our first overseas manufacturing facility in Mississippi is ideal for expanding our global manufacturing footprint,” says Bernd Gulden, CEO of Feuer Powertrain GmbH. Other high-tech industries in Mississippi include advanced manufacturing and aerospace. Hybrid Technologies in Hattiesburg, for example, is one of the leading nanotechnology companies in the country.

Important to many advanced manufacturing industries, especially aviation and aerospace, is the use of composite materials to improve specific material properties and reduce weight. Aurora Flight Sciences, a company in Columbus that designs and builds aerospace vehicles, recently opened a new $17 million facility that increases its commercial composites manufacturing operations. •• INFORMATION FOR THIS REPORT WAS COMPILED BY A R E A D EVELOPMENT’S EDITOR, GERALDINE GAMBALE. ARTICLE WAS WRITTEN BY MARK CRAWFORD, STAFF EDITOR.

2014

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

Greg Canfield, Secretary of Commerce Alabama Department of Commerce

401 Adams Avenue Montgomery, AL 36130 800-248-0033 or 334-242-0400 www.madeinalabama.com

The Valley Partnership Located in the Greater Columbus, Georgia, Region, the Valley Partnership includes Chattahoochee, Harris, Marion, Muscogee, Talbot, and Taylor counties in Georgia and Russell County, Alabama. The Valley Partnership in the Columbus, Georgia, region is a public-private partnership focused on business attraction and retention, regional marketing, and advocacy on behalf of Fort Benning and the U.S. Army Maneuver Center of Excellence.

William P. Murphy, Executive Vice President of Economic Development The Valley Partnership

1200 Sixth Avenue P.O. Box 1200 Columbus, GA 31902-1200 706-327-1566 • Fax: 706-327-2137 bmurphy@thevalleypartnership.com www.thevalleypartnership.com

Arizona City of Mesa City of Mesa Office of Economic Development works to enhance Mesa's economy, create quality jobs, increase per capita income, and improve quality of life for residents through attracting companies to Mesa and helping Mesa companies grow and expand. The Office of Economic Development is the primary point of contact for businesses, site selectors, and community stakeholders to obtain technical expertise and support services necessary to properly evaluate the business opportunities in Mesa.

Kim Lofgreen, Marketing and Business Development Manager City of Mesa Office of Economic Development

20 E. Main St. P.O. Box 1466 Mesa, AZ 85211-1466 480-644-2398 • Fax: 480-644-3458 kim.lofgreen@mesaaz.gov www.mesaaz.gov/economic

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SPONSORSSPONSORS Arkansas

Illinois

Kentucky

Metro Little Rock Alliance

Hoosier Energy

The Metro Little Rock Alliance represents a 12-county region with a population of over 1,000,000 people.

It is located in the center of the country and in the second-fastest-growing region of the United States, with 40 percent of the nation’s population and buying power within a 550-mile radius. It’s where “America Comes Together.”

Joey Dean, Executive Director

Hoosier Energy is an electric generation and transmission cooperative providing electricity and other services to 18 electric distribution cooperatives, in central/southern Indiana and southeast Illinois. The Hoosier Energy economic development team provides a wide array of services including site and building searches, incentive guidance, site analysis, and electric rate estimates.

Harold Gutzwiller

Kentucky Cabinet for Economic Development

Metro Little Rock Alliance

One Chamber Plaza Little Rock, AR 72201 1-800-905-6577 • 501-377-6006 jdean@littlerockchamber.com www.metrolittlerockalliance.com

Georgia Dalton-Whitfield County Joint Development Authority The Dalton-Whitfield County Joint Development Authority is a public-private partnership whose goal is to promote economic growth and stability by supporting existing businesses, targeting new businesses, and attracting new investment into the community while providing a full range of economic development services to existing and prospective businesses in Greater Dalton.

Andrew Carnes, Vice President of Economic Development Greater Dalton Chamber of Commerce

100 S Hamilton Street Dalton, Georgia 30720 706-712-0958 • Fax: 706-226-8739 carnes@daltonchamber.org www.locationdalton.com

Georgia Power

Hoosier Energy

P.O. Box 908 Bloomington, IN 47402 812-876-0294 • Cell: 812-360-4796 Fax: 812-876-5030

Kentucky Cabinet for Economic Development

hgutzwiller@HEPN.com www.HoosierSites.com

Mandy.Lambert@ky.gov www.ThinkKentucky.com

Indiana

Berea Industrial Development Authority

Old Capital Annex 300 W. Broadway Frankfort, KY 40601

Columbus Economic Development Board Columbus, Indiana, is known for its manufacturing prowess, engineering strengths, and world-renowned architecture. Significant growth has recently occurred at Cummins Inc., PMG Indiana, Toyota Industrial Equipment and sister firm Toyota Material Handling USA, and many more. Information on recent corporate relocations and expansions is available at www.ColumbusIN.org.

Jason Hester, CEcD – Executive Director Columbus Economic Development Board

500 Franklin Street Columbus, IN 47201 812-378-7300 • Fax: 812-372-6756 jhester@columbusin.org www.ColumbusIN.org

Georgia Power

Hoosier Energy

75 Fifth Street NW, Ste. 175 Atlanta, GA 30308 404-506-2216 • Fax: 404-506-1474

P.O. Box 908 Bloomington, IN 47402 812-876-0294 • Cell: 812-360-4796 Fax: 812-876-5030

Located in the Greater Columbus, Georgia, Region, the Valley Partnership includes Chattahoochee, Harris, Marion, Muscogee, Talbot, and Taylor counties in Georgia and Russell County, Alabama. The Valley Partnership in the Columbus, Georgia, region is a public-private partnership focused on business attraction and retention, regional marketing, and advocacy on behalf of Fort Benning and the U.S. Army Maneuver Center of Excellence.

William P. Murphy, Executive Vice President of Economic Development The Valley Partnership

1200 Sixth Avenue P.O. Box 1200 Columbus, GA 31902-1200 706-327-1566 • Fax: 706-327-2137 bmurphy@thevalleypartnership.com www.thevalleypartnership.com

Berea Industrial Development Authority

212 Chestnut Street Berea, KY 40403 859-228-1040 Mobile: 859-626-2426 Fax: 859-228-1043

Hoosier Energy Hoosier Energy is an electric generation and transmission cooperative providing electricity and other services to 18 electric distribution cooperatives, in central/southern Indiana and southeast Illinois. The Hoosier Energy economic development team provides a wide array of services including site and building searches, incentive guidance, site analysis, and electric rate estimates.

Harold Gutzwiller

The Valley Partnership

Berea is always open for business. We have 473 acres available for building; we are a work-ready certified community, 600 miles from 50 percent of U.S. population; 52 percent of the personal income; and 55 percent of manufacturing employees. We have I-75 running north and south through Berea and east west I-64 only 24 miles to the north.

Thomas McCay, Director of Business Development

tmccay@bereaky.gov http://bereaky.gov/

Georgia Power is the largest subsidiary of Southern Company, one of the nation’s largest generators of electricity. With an international reputation for excellence in economic development, the company has helped bring more than 113,000 jobs and almost $24 billion in investment to Georgia over the last decade.

Jonathan Sangster, General Manager Economic Development

econdevga@southernco.com www.SelectGeorgia.com

Kentucky is open for business. Whether your company is looking for an ideal location, competitive utility rates, a highly skilled labor pool, or flexible workforce development programs, Kentucky is the choice for companies to do business. Explore the many advantages of the Commonwealth and you’ll find Kentucky will go the extra mile to exceed your needs.

Mandy Lambert, Acting Commissioner Department for Business Development

Louisiana Greater New Orleans, Inc. The progress of Greater New Orleans over the past five years has been rapid and dramatic; the publisher of Forbes called it “one of the great turnarounds in American history.” In economic development, we are at the highest point, in every economic ranking, in our history.

Grady Fitzpatrick, Senior Vice President, Business Development Greater New Orleans, Inc.

365 Canal Street, Suite 2300 New Orleans, LA 70130 504-527-6900

hgutzwiller@HEPN.com www.HoosierSites.com

info@gnoinc.org www.gnoinc.org

Kansas Kansas Department of Commerce

Mississippi

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

Barbara Hake, CEcD Business Recruitment Manager

Mississippi Development Authority

Kansas Department of Commerce

1000 SW Jackson, Suite 100 Topeka, KS 66612 913-307-7379 • Cell: 913-375-5835 Fax: 913-307-7392

Opportunity is abundant in Mississippi. A growing list of global companies and entrepreneurs are calling Mississippi home. The state’s strategic location offers easy access to U.S. markets, and recent tax and energy reform add to Mississippi’s growth capacity. Find out why Mississippi is ranked one of the top states to do business at mississippi.org.

Marlo Dorsey, Chief Marketing Officer Mississippi Development Authority mdorsey@mississippi.org www.mississippi.org

bhake@kansascommerce.com KansasCommerce.Com/KBIZ

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gold and silver SHOVEL AWARDS Missouri

New York

Pennsylvania

Missouri Department of Economic Development

Mohawk Valley EDGE

Pennsylvania DCED

The Missouri Department of Economic Development works to create an environment that encourages economic growth by supporting Missouri’s businesses and diverse industries, strengthening our communities, developing a talented and skilled workforce, and maintaining a high quality of life.

Missouri Department of Economic Development

301 W. High Street P.O. Box 1157 Jefferson City, Missouri 65102 573-751-4962 • Fax: 573-526-7700 ecodev@ded.mo.gov www.ded.mo.gov

Missouri Partnership The Missouri Partnership is a public-private, nonprofit corporation responsible for recruiting new jobs and investment to Missouri. Through collaboration with a network of partners across the state, the Missouri Partnership’s dedicated team works to attract new companies by marketing Missouri’s business advantages. For more information, please visit www.ad.missouripartnership.com.

Christopher Chung, CEO Missouri Partnership

120 South Central Ave., Suite 1535 St. Louis, Missouri 63105 314-725-0949 • Fax: 314-725-0743 chris@missouripartnership.com www.ad.missouriparternship.com

New Jersey New Jersey Partnership for Action led by Lt. Governor Kim Guadagno New Jersey offers a powerful combination of business assets including a strategic Northeast location, a highly educated and trained workforce, a comprehensive transportation network, a state-of-the-art communications infrastructure, and a business-friendly environment with powerful new Grow NJ financial incentives.

Tracye McDaniel, President Choose New Jersey, Inc.

201 Rockingham Row Princeton Forrestal Village Princeton, NJ 08540 609-297-2200 • Fax: 609-297-2201 President@choosenj.com www.choosenj.com

Mercer County, NJ, Office of Economic Development and Sustainability As New Jersey’s capital county, Mercer County is a center for commerce and culture in the Garden State.

Located midway between New York City and Philadelphia, Mercer County’s 12 municipalities are home to more than 366,000 people in 226 square miles.

Brian M. Hughes, County Executive Elizabeth M. Muoio, Director Mercer County, New Jersey Office of Economic Development and Sustainability

McDade Administration Building 640 South Broad Street Trenton, New Jersey 08650 609-989-6555 • Fax: 609-695-4943 BusinessAdvocate@MercerCounty.org www.businessinmercer.com

Marcy Nanocenter at SUNYIT is a 430-acre greenfield site in Upstate NY, pre-permitted for semiconductor manufacturing. Since 2000, over $25 million has been invested in infrastructure at the site. Features include in excess of 100MW of power with 99.9999 redundancy, over 6MGD of water, and within a twohour drive of SUNY College of Nanoscale Science and Engineering, Cornell University, RIT, RPI, and Clarkson and Binghamton universities.

Mark Reynolds Marcy Nanocenter at SUNYIT

315-338-0393 Reynolds@mvedge.org www.mvedge.org

National Grid National Grid (LSE: NG; NYSE:NGG) is an electricity and gas company that connects consumers to energy sources through its networks in Northeast U.S. and Great Britain. As part of its continued commitment to the economic well-being of the communities and companies we serve, we have budgeted $12m in 2014 to support economic development in Upstate N.Y. Linda J. Hill, Lead Economic Development Representative National Grid

1125 Broadway Albany, NY 12204 518-433-3691 Mobile: 518-423-5833 Linda.Hill@NationalGrid.com www.Shovelready.com www.nationalgrid.com

Saratoga Economic Development Corp.

Located within 175 miles of Boston, New York City, and Montreal, Saratoga County New York is in the middle of the world’s richest marketplace. Our economy is diverse, ranging from manufacturing to agribusiness, including a growing semiconductor and microelectronics industry sector and a growing highly educated, skilled, and productive workforce.

Dennis Brobston, President Saratoga Economic Development Corporation

28 Clinton Street Saratoga Springs, NY 12866 518-587-0945 • 1-800-587-0945 dbrobston@saratogaedc.com info@saratogaedc.com www.saratogaedc.com

North Carolina ElectriCities of North Carolina, Inc. ElectriCities is a not-for-profit government service organization representing 70+ NC cities and universities that own electric distribution systems. A site selection professional can receive detailed reports from our extensive databases on dozens of NC sites, from mountains to coast, within 48 hours of a request.

We’re your turnkey services partner.

Brenda Daniels, Manager, Economic Development

Pennsylvania. Built to Advance. Pennsylvania’s rich industrial heritage, bolstered by its strategic Northeast location offering prime access to top U.S. markets, has established a rock-solid infrastructure that’s both supporting today’s advanced industries and paving the way to sustain future economies. Pro-business Governor Tom Corbett is revolutionizing Pennsylvania’s jobs climate by lowering taxes and growing the state’s energy sector. By harnessing the world’s second-largest energy field, Pennsylvania is driving down energy costs and reigniting manufacturing. Factor in a highly skilled workforce of 6.4 million and unparalleled collaboration with world-renowned universities, and you’ll see why Pennsylvania is built to advance.

Scott Deitrich, Director Small Business Champion Network Pennsylvania Department of Community and Economic Development

400 North Street, 4th Floor Harrisburg, PA 17120-0225 800-280-3801 ra-dcedsbcn@pa.gov www.newPA.com/sbcn

Lehigh Valley Economic Development Corporation Lehigh Valley Economic Development Corporation is an accredited economic development agency that works to help companies come, start, stay, and grow here in the Lehigh Valley region of Pennsylvania. The scenic Lehigh Valley is the fastest-growing region of Pennsylvania — and a top-75 metro region in the U.S. John McGran, Vice President, Marketing Lehigh Valley Economic Development Corporation

2158 Avenue C, Suite 200 Bethlehem, PA 18017 610-266-6775 • Fax: 610-266-7623 JMcGran@lehighvalley.org www.lehighvalley.org

Tennessee Tennessee Department of Economic andCommunity Development Business is a sound investment in Tennessee. As a fierce competitor on a global scale, the Volunteer State provides expanding or locating companies a central location with unparalleled infrastructure, a highly qualified workforce with a focus on education and training, a low tax burden, and a collaborate environment with a business-friendly administration.

Allen Borden, Assistant Commissioner, Business Development Division Tennessee Department of Economic and Community Development

312 Rosa L. Parks Avenue Nashville, TN 37243-0405 615-532-1294 • Fax: 615-741-7306 allen.borden@tn.gov TNECD.com http://tnecd.com http://tn.gov/ecd

ElectriCities of North Carolina, Inc.

1427 Meadow Wood Blvd.

Raleigh, NC 27604 1-800-768-7697 ext. 6363 Mobile: 919-218-7027 bdaniels@electricities.org www.electricities.com

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SPECIAL REPORT SPECIAL REPORT

C-Suite Focus on Incentives Continued from page 13

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

Jonathan Taylor, Executive Director Economic Development & Tourism Office of Governor Rick Perry www.texaswideopenforbusiness.com biztex@gov.texas.gov

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

Tom Long, Executive Vice President of Business Recruitment San Antonio Economic Development Foundation

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

Utah Utah Governor’s Office of Economic Development The Utah Governor’s Office of Economic Development (GOED) provides resources for the creation, growth, and recruitment of companies to Utah. GOED is your front door to one of the top states for business, according to Forbes, Pollina, and CNBC. This and past years’ winning projects demonstrate the diversity of our economy.

Michael O’Malley, Business Marketing Director Utah Governor’s Office of Economic Development

60 E. South Temple – Third Floor Salt Lake City UT 84111 801-538-8879 • Fax: 801-538-8881 businessutah@utah.gov http://business.utah.gov

Cedar City–Iron County Office of Economic Development Cedar City, Utah, is home to MSC Aerospace, which is expanding its facilities to manufacture the Syberjet SJ30 Aircraft. This project is a 2014 Gold Shovel Project of the Year award winner. Cedar City is an ideal location for companies desiring easy access to markets throughout the western U.S. Brennan Wood, Economic Development Director Cedar City–Iron County Office of Economic Development

10 N Main Street Cedar City, UT 84720 435-865-5115 • Mobile: 435-233-0055 Fax: 435-586-2949 wbrennan@cedarcity.org www.cedarcity.org www.cedarcity.org/523/Office-of-Economic-Development

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way, it may be possible to identify solutions that support the circumstances of each company’s fact pattern. Indeed, many state and city agencies want to find a way to make things work.

• Competition between states and even cities within the same state is on the rise. Elected officials and local leaders know the value of new jobs. As a result, many of them are taking steps to promote their locations. Many have or are creating purpose-built entities to help companies navigate doing business within a state and facilitate access to C&I opportunities.

• C&I competition is now global. Local regional and national governments the world over are recognizing the need to do more in terms of making “theirs” a more attractive place to do business. As a result, steps are being taken not only to expand the range of opportunities but also to streamline application and compliance processes.

• Global competition cuts both ways. It is one thing for a U.S. state or city to present a comprehensive C&I package to convince an existing U.S. business to stay or expand. But today, such offers are being presented more aggressively to non-U.S. firms seeking a U.S. foothold. In short, cities and states are recognizing that they are no longer competing solely against each other — but also with the world.

What characterizes a “very active” company in the C&I space?

Almost 8 percent of companies responding to the EY survey describe themselves as “very active” in pursuing C&I, and these very active companies behave differently from others. Understanding the differences can help improve your own company’s performance in benefiting from business incentives.

• Very active companies are much more likely to describe their approach to obtaining C&I benefits as collaborative.

Collaboration across business functions and geographic units is critical to any C&I initiative. It is only through a comprehensive view of the business that required data can be collected, rational negotiations organized, missteps avoided, and optimal choices executed.

• Very active companies tend to devote greater resources to C&I opportunities. Eighty-three percent of companies surveyed devote less than one full time employee to C&I initiatives. By comparison, 61 percent of very active companies devote one or more full time employee to such efforts.

This allows the more active companies to pursue opportunities to a far greater degree than the other companies.

• Very active companies make greater use of external resources. Sixty-five percent of executives have used a third-party consultant to assist with C&I initiatives within the past two years. The figure rises to 71 percent among

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very active companies. Benefits cited include access to technical expertise and depth of resources.

• Very active companies are investing in technology. Nearly half of executives say their organizations have no tools to track or analyze C&I activities. Many others use basic spreadsheets or outsource their tracking and analysis. It is worth noting that the use of customized tracking tools has almost doubled since the 2011 EY survey (it was 17 percent in 2011), and that 47 percent of companies that are very active in the C&I arena are now using a customized tool.

• Very active companies are improving international coordination. Among organizations expressing some awareness of C&I opportunities, 72 percent are focused primarily on domestic operations. In contrast, 53 percent of very active companies have this focus; many understand that a broader global perspective is beneficial. Survey findings suggest that significant opportunities to optimize global C&I initiatives exist in all companies, even the most active.

How, exactly, are the very active companies successfully pursuing incentives?

To evaluate the opportunity to develop a more focused and coordinated approach to capturing value from credits and incentives in line with the “very active” model outlined above, it is important to first understand the current internal profile of ongoing credits and incentives efforts. This internal assessment could begin with a review of where the company footprint is likely to grow and similarly where it is likely to contract. Then, knowing the landscape for potential incentives triggers, what, if any, are the current capabilities and processes in place for identifying and evaluating credits and incentives opportunities, and are the right departments and stakeholders aware of the value potential and the processes to pursue them? A good indicator of the groundwork for future success in this area could come from the level of confidence as to whether these stakeholders are informed regarding the credits and incentives currently being enjoyed and how well they are actually being utilized.

When reflecting on this assessment, if there is a sense that there are gaps in the ability of the business to implement a credits and incentives approach modeled on the very active companies, businesses may want to give some consideration to prioritizing which resources should be added to support this initiative: ideas could range from modifying job descriptions to include credits and incentives to making proactive investment in tools, technology, and external resources.

Lastly, on a personal level, it would be critical to determine what level of executive sponsorship may be needed from you or your office to successfully create within your organization a more informed, collaborative, and successful

credits and incentives approach. Based on feedback from EY executives, clients, and government economic development officials, taking the time for active reflection and implementation in structuring a more focused and coordinated approach to capturing value from credits and incentives will position your organization to achieve much more value in both one-off and recurring savings. This, of course, will translate into overall stronger group performance and greater earnings per share.

In Sum The competition to attract, retain and grow businesses is on the rise. As local, regional, and national governments the world over do more in the credits and incentives space to become more attractive places to do business, executives should consider how their business organizations can best be structured and positioned to capitalize on the expansion of such government incentives. Based on the 2013 EY biennial tax credits and incentives survey, executives that are interested in obtaining greater value from credits and incentives would do well to lead their businesses to emulate companies who describe themselves as “very active.”

According to the survey results, these companies tend to derive greater benefit across a wide range of both statutory and negotiated or discretionary credits and incentives opportunities. Making the most of opportunities like this requires more than mere awareness, but also a commitment to a systematic and collaborative process equipped with adequate resources. This can drive tremendous value but must be done in the context of an acknowledged quid pro quo: the acceptance of credits and incentives forges a “partnership” between governments and businesses. If a company pursues and accepts an array of tax credits and business incentives, it needs to follow through on its commitment to the local community with investment, jobs, and corporate giving. It is only through such partnership that credits and incentives will be a prosperous cycle in the long run for companies and the communities where they operate. Implemented at the Csuite level for greatest optimization, such a partnership will pay proven dividends for companies that make the differential investment for success.

In short, companies who focus on C&I — and, in particular, those with an engaged C-suite, a disciplined, collaborative process, a global perspective, and a willingness to devote resources and technology to support their corporate goals and objectives — can enjoy a significant competitive advantage that can lead to greater success in the marketplace and set the stage for future growth and success.

Note: The views expressed here are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.

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INDUSTRY REPORT

Food Processing Companies’ New Recipes for Success While some processors are closing plants to eliminate redundancies, others are expanding to be in closer proximity to customers.

By Clare Goldsberry

A

s if it isn’t already apparent, food is big business. It’s also a competitive business, and despite the recession, the industry has experienced mergers and acquisitions at a fairly steady pace over the last few years. For example, in 2010 there were 322 M&A deals, which was a high-water mark during the recession. In 2013, there were 311 deals, roughly the same as in 2012, according to The Food Institute’s Food Business Mergers & Acquisitions 2013 report.

Retailers made up 13 percent of all food industry mergers in 2013, in part because of the “exceptional year that supermarkets had,” says The Food Institute.

Most recently, Albertsons’ parent, Cerberus Capital Management, bought the second-largest retail food chain, Safeway, for over $9 billion. And the deal-making may not be over yet. Analysts are projecting that Kroger, the number-one retail food chain, is eyeing additional acquisitions as well.

Food processors completed the most deals in the food industry in 2013, comprising 34 percent of overall industry mergers and acquisitions, up 27 percent from 2012 to 105 total deals in 2013. Within this group, dairy, meat, and “other” processors saw considerable growth, with the dairy industry doubling mergers from 2012.

Leclerc Foods USA’s $50 million expansion in Phoenix will allow the Canadian firm to position itself in closer access to its U.S. customers.

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What’s Behind Industry Consolidation?

So what does all this consolidation mean? It means that some food processors will close plants to eliminate redundancy, while others will be able to serve a wider geographic swath of consumers in various regions than they had before.

According to Brenen Sieber, partner and managing director for Baker Tilly, a large accountancy and business advisory firm, “Most food processing companies have done well managing through the recession. We’re seeing these deals less motivated by cost rationalization, optimization, and efficiencies and more driven by access to human resources, new technology, and new markets.”

Foreign interest in food processing plants has also been high. For example, last September, U.S. regulators approved the purchase of Virginiabased Smithfield Foods Inc., the world’s largest hog and pork producer, by China’s Shuanghui International Holdings Ltd. At a price of $4.72 billion, this deal represented the biggest purchase by a Chinese company of a U.S. firm.

What’s driving this foreign interest?

Sieber cites emerging markets such as those in Asia, and more demand for pork as diets change. This is also due to “the development of the middle class in Asian countries,” Sieber comments, “and the [Asian] economy becoming more motivated by the Western diet with its higher meat content.” He notes, “It takes six to eight

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pounds of grain to make one pound of meat; the capability of U.S. meat producers offers these foreign companies the opportunity to bring their yield management and meat quality up to a standard that meets the demands of the middle class. It gives them access to technology and supply.”

The Food Institute’s report noted that the second most active group, acquiring 47 food companies, was investment firms and banks. Those included Berkshire Hathaway and 3G Capital’s purchase of H.J. Heinz Co., one of the largest food acquisitions ever.

Sieber notes that there’s a “significant imbalance” with regard to supply and demand with regard to capital.

“There is more capital and buyers than there are sellers, and the only factor that might hold back future M&A activity is finding quality sellers,” he states. “Companies today have the capital and the resources, but if transaction volume is down it’s due to lack of sellers.”

On February 18, Del Monte Foods

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closed on the sale of all its food businesses — and its name — to an unaffiliated company, Del Monte Pacific Ltd., for $1.68 billion. With bases in Singapore and the Philippines, Del Monte Pacific is 67 percent owned by NutriAsia Pacific Ltd. The company gains the Del Monte, Contadina, College Inn, S&W, and other brands and certain assets.

Food Processors Expanding to Get Close to Customers Expansions are in the works for many food processors across North America. A few examples include Maple Donuts Inc., a specialty food processor of donuts and bakery products, which expanded its operations in Erie County, Pennsylvania, creating 60 new jobs and retaining 110 existing positions. Maple Donuts added a 20,000-square-foot expansion to its existing 80,000-square-foot facility.

Canadian company Leclerc Foods, based in Saint-Augustin-De-Demaures, Quebec, recently acquired a 166,500-

square-foot building in Phoenix, Arizona, to expand its food manufacturing operations for Leclerc Foods USA, a maker of cookies, snack bars, and crackers. The $50 million investment will generate up to 100 jobs.

Denis Leclerc, president, quoted in an Arizona Commerce Authority news release, said that the expansion “will allow us to position ourselves near our U.S. clients as well as hone in on food trends in the U.S. West Coast.” He also noted that in addition to increasing production capacity, the company will realize substantial savings on transportation costs by being closer to key markets. This move comes about a year after Leclerc announced plans to expand its Kingsport, Tennessee, plant to add production for granola bars and baked bars.

Quebec, itself, is a major hub for food processors, with more than 2,400 companies. Among well-known firms, Archer Daniels Midland is producing starch and gluten in Candiac, which is part of Vallée-du-Haut-Saint-Laurent.

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Regional Food Processing Capability Adds Value

Expansions are in the works for many food processors across North America.

The area is also known for its vegetable and fruit production, represented by companies like Bonduelle North America and VegPro International.

Recently, the region's Food Commission announced an investment in three new projects designed to improve crops as well as reduce the use of pesticides in fruit and vegetable production, thereby reducing the environmental footprint of agriculture.

In other news, an expansion plan for manufacturing at the Lindt USA

headquarters in Stratham, New Hampshire, will likely begin this spring and roll out over several years, as per FoodBusinessNews.net. Lindt & Sprungli, a premium chocolatier, will add 108,000 square feet that will nearly double the size of the main facility currently operating on the campus. The company previously added 350,000 square feet of production, a cocoa liquor plant, and packaging and distribution space from 2006–2010.

SACRAMENTO Capitalize Your California Dream

According to the Midwest Food Processors Association Inc. (MWFPA), Wisconsin’s Governor Scott Walker recognizes the importance of manufacturing in the state, and that includes food manufacturing. Wisconsin is home to “a large and vibrant food processing sector” with some 1,000 businesses employing more than 63,000 people across the state. “Food processing increases the value of Wisconsin agricultural products by about $12.6 billion,” says Nick George, president of the MWFPA. “It provides processing and shipping jobs, and expands the range of uses for vegetables and other products produced by our farmers. It’s an important step that bridges primary food production with the consumer to deliver nutritious and safe food products.”

It’s no secret that Wisconsin is known for its dairy products, especially Continued on page 62

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SITE SELECTION

The Production and Corporate Headquarters Connection In many key sectors, the initial alignment of corporate and production operations has shaped regions and influenced the industrial landscape in a very permanent way.

By John Minervini, Executive Director, Industrial Brokerage (Los Angeles); and Andy Mace, Managing Director, Global Business Consulting (Conshohocken, Pa.); Cushman & Wakefield

Headquarters of the Johnson & Johnson Company, New Brunswick, New Jersey

H

eadquarters locations frequently trace back to a company’s foundation — when it was launched, and by whom. Bill Gates and Jeff Bezos both were in Seattle when they started Microsoft and Amazon, respectively, which is the main reason those Fortune 50 firms are still there. And when it comes to “industrially focused” companies — those organizations that manufacture and move goods — their bases of operation often have ties to their production operations as well.

In some cases, these correlations shape the evolution of a marketplace.

The pharmaceutical industry in the state of New Jersey is a prime example. When that industry’s founders began operations back in the late 1800s and early 1900s, they needed a place to manufacture. New Jersey had the

land for building and the water for shipping. In short, it was a perfect place to develop plants and headquarters offices alongside them.

Flash forward to 2014, and New Jersey still serves as home to many of these leaders. Johnson & Johnson, which established in New Brunswick in 1885, is still there. Beckton, Dickinson & Company, founded in East Rutherford in 1897, remains a Bergen County-based firm. The list goes on and on.

And during the course of the last century, even as some manufacturing migrated elsewhere, New Jersey’s educational system and specialized labor catering to life sciences research and development, operations, and sales have become second to none.

According to the state of New Jersey’s website, more than 22,000 students graduate from state universities with degrees in life sciences each year. And New Jersey houses the highest concentration of scientific professionals in the United States, with 126,000 life sciences/biopharma workers statewide.

It is little wonder that New Jersey today is known as “The Medicine Chest of the World.”

The Central Role of Resources This phenomenon repeats throughout the country. Arguably, the emergence and solidification of manufacturing industry clusters is quite often resource-based. Just as skilled labor continues to draw pharmaceutical companies to New Jersey, it also is

central to the staying power of Michigan’s automotive industry, California’s high-tech clusters in Silicon Valley and San Diego, and the strength of the garment industry in Los Angeles and New York.

Other industry concentrations have sprung up around the availability of natural resources. Consider the energy industry in oil-rich Houston, the rubber industry in Akron, Ohio (where inexpensive water power from the Ohio canal was key to fueling late 19th century factories), and the furniture industry that thrived in North Carolina with its vast hardwood forests. Salt Lake City’s great outdoors has made it a magnet for hiking, skiing, and other recreational equipment companies.

It is safe to say that this trend will continue. It certainly will be interesting to watch up-and-coming industries like wind and solar. Where will they go? Will new energy clusters emerge in formerly out-of-the-way markets, such as those where fracking is taking place?

Why Would an Industrial Company Move?

Most major industrial corporations have a U.S. headquarters supported by regional offices, and manufacturing and distribution operations scattered across the country. While those satellite operations may shift, headquarters frequently remain anchored in place for generations (a quick look at the histories of some of the country’s oldAREA DEVELOPMENT | Q2/2014

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est corporations confirms this).

Headquarters relocations, when they do happen, typically tie to a major financial event, such as a merger or acquisition.

Last fall, some of our colleagues brokered a 310,000-square-foot headquarters lease for a multinational specialty pharmaceutical company in New Jersey. The firm already had a presence in the local market, and now will consolidate multiple locations and 800 employees into its new U.S. headquarters. The motivator? The client recently acquired a leading global eye health organization. That company had been headquartered in the same location since its founding 160 years ago.

For smaller industrial companies, headquarters relocations often reflect a company lifecycle progression. The start-up location might be the right place for a while, but as the market for the organization’s product grows, or as it begins to try to sell in other parts of the country, things can change. For example, the company may suddenly be located too far from its customers — rendering shipping costs too high and order cycle times too long.

In turn, management then faces the difficult choice to stay and grow in place, or open a plant and/or distribution operation someplace else. Can they achieve the branding they need to become a national or global player in their hometown, or do they need to be in a major market? They may be thinking about opportunities to get bought out, and whether they could be more attractive to an investor if they were based somewhere else.

Geography may not be the only factor. In cases where an industrial headquarters starts out alongside its manufacturing component, the company’s growth may lead to a proximate separation of “church and state.”

For example, our team currently is working with a Los Angeles-area apparel company that houses its warehouse, administrative, and creative design teams in one location (they outsource the manufacturing). The creative team no longer wants to work in a heavy industrial area, so they are bifurcating the operations. However, we are looking within the same market — not

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across the country — because the design team is in place and the executives live locally. Why now? The original owners were recently bought out by an investment team, which is taking the company private. It is a time of transition and one that is logical for this type of cultural rebranding.

LOOKING AHEAD, we expect that mergers and acquisitions, incentives, and taxation will remain the driving factors behind headquarters decision-making for industrial companies.

The Taxation and Incentives Game The bottom line is that most corporations — whether industrial or otherwise — do not move their headquarters without a good reason. In today’s world of mergers and acquisitions, it may well be that the number of corporate moves is growing. Cushman & Wakefield’s Research Services team has tracked nearly four dozen relocations involving headquarters operations larger than 350,000 square feet over the past three years alone.

More and more, taxes and incentives are playing a major part in the decision-making process. Major corpoFOR FREE SITE INFORMATION, CALL

rations will move away from places with high taxation. While straying from our manufacturing focus, Sears provides a good example. The department store chain got a lot of press in 2011, when its management announced it would consider leaving Illinois unless the state awarded it a major tax break. Illinois ultimately created a program that provides Sears with tax credits worth $15 million each year for 10 years, according to a Chicago Tribune article (12/17/2011).

In the interim, however, several sources reported that a number of states, including Indiana, Wisconsin, New Jersey, and Ohio, offered Sears incentives packages in an effort to lure it away from its “home state.” As job creation remains slow, this approach has become common practice.

Some states, including New York and New Jersey, have reacted by creating new incentives programs and changing their taxation and permitting processes to ward off — and perhaps take advantage of — this type of poaching. In fact, the aforementioned New Jersey pharmaceuticals deal was awarded one of the first grants in the Grow NJ program; the firm was approved to receive up to $39.5 million over a 10-year period.

Our colleague Betty McIntosh, an incentives specialist and a managing director in our Global Consulting Group, noted it is important to remember that companies generally do not move because they are chasing incentives. However, incentives may enable them to move to a market they believe will best position them for growth. If a company with 800 employees decides to relocate to another state, some of its workers will come and others will not. The firm faces executive relocation and severance costs; interruption of business; and capital expenditures associated with the move itself, as well as with securing new space and equipment.

According to McIntosh, having significant financial benefits waiting on the other side may be the only way they can justify the choice.

Potential Game-Changers Looking ahead, we expect that mergers and acquisitions, incentives,

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and taxation will remain the driving factors behind headquarters decisionmaking for industrial companies.

That said, some shifts in the business of manufacturing might also come into play.

Following many years of overseas trending, manufacturing companies are again beginning to look at the viability of moving production back to the United States. Major players like GE, Ford, Wal-Mart, and Whirlpool have recommitted to domestic manufacturing. They are investing in nextgeneration plants that reflect a belief that over the next 10 to 15 years their goals and most competitive cost structure will be best realized in the U.S. As locations that offer a balance of lower costs and abundant labor draw attention from a production standpoint, is it possible that they could also lure headquarters operations as well? This is a fair question, especially considering that an entire generation of U.S.-based manufacturing organizations was born during a time when outsourcing production overseas was the only way to compete. If a company’s production is re-sourced to a contract manufacturer somewhere in the 50 states, it just might make sense to locate its executive and design teams nearby.

And in the evolving global marketplace, the same is true for foreign companies with interests in the United States. For example, McIntosh represented a Belgium-based carpet company with a well established sales and distribution arm in Atlanta. The transportation costs of importing product from Europe had become burdensome, so the company built a $70 million manufacturing plant in Georgia.

That facility opened in 2010 and now serves as the company’s U.S. headquarters as well as its domestic production facility.

Without a crystal ball, predicting shifts in headquarters decision-making is challenging, at best. We can say with certainty that for most manufacturing companies, the alignment of their corporate and production operations is — or was — critical to their early progress. And in many key sectors, that initial alignment has shaped regions and influenced the industrial landscape in a very permanent way.

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Food Processing Continued from page 58

its cheese, but the state is also the second-largest producer and processor in the nation of vegetables such as snap beans, potatoes, sweet corn, and green beans.

Additionally, it has strong poultry and beef sectors that are all part of the state’s food manufacturing industry, according to the MWFPA. And speaking of potatoes, let’s not forget Idaho. Jan Rogers, executive director of the Southern Idaho Economic Development Organization, calls Southern Idaho the “epicenter for the food production and processing in Idaho,” something the area has laid claim to for quite a long time. “We rank in the top 13 nationally in 18 different agricultural categories,” notes Rogers, adding that it’s more than just potatoes that makes Idaho famous.

Southern Idaho has a very diverse food basket, ranking 13th nationally in cattle and calves, and ranking first in the nation in commercial trout. The region ranks third in the U.S. for sugar beets, and has recently experienced record years for beets. Additionally, Rogers points out that sugar snap peas were first developed in Southern Idaho. The region even keeps trading places with New York in the category of dairy products — raking third or fourth nationally.

Workforce experience and training is key for any region wanting to attract food processing companies.

“That diversity is what makes us unique in one small region of the U.S. and one small region in Idaho, and gives us a real advantage,” comments Rogers.

“We’ve been in the business of food production for 100 years, and some of our food processors have been here for 100 years as well.”

Some of the new projects in Southern Idaho include Monsanto’s $9.2 million investment in a new Wheat Technology Center for research and development that is scheduled to open this year. McCain Foods is investing $100 million to expand its potato processing facility in 2014. Last year, Glanbia Foods opened a new food science headquarters and Cheese Innovation Center with a $15 million investment. In 2012, Chobani opened the world’s largest yogurt manufacturing plant with a nearly half-billion-dollar investment. And Southern Idaho recently received some foreign investment when Portuguese company Frulact Group, an international fruit processor, announced a new $30+ million plant slated to open this year.

Rogers further notes that workforce experience and training is key for any region wanting to attract employees in the food processing industry. “We have an aggressive community college program to provide specialized training for those newer employees in the food processing industry,” she explains, and “the College of Southern Idaho is starting a new degree in food quality development to enhance and support the regional food industry.”

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By Steve Stackhouse

Low taxes, smart regulation, and skilled workers — not to mention probusiness incentives — are among the reasons Texas is continuing to build on its huge and diverse economy.

A Magnet for Job Growth AREA DEVELOPMENT | Q2/2014

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LETTER FROM THE GOVERNOR

Greetings: Texas Wide Open for Business is more than just positive thinking. It’s an environment we’ve created in the Lone Star State to foster business and entrepreneurship — to train the workforce of the future and make Texas the best place to live, work, and raise a family.

I invite you to bring your company to Texas to take advantage of our fundamentally strong economy as a stepping-stone to success and prosperity.

As a global leader in economic development, Texas is committed to working with employers worldwide to ensure the ideal conditions for job creation and economic prosperity. Our infrastructure, geographic location, and business climate are optimal for business expansion and relocation.

Texas is recognized around the world for its pro-business climate. In 2013, CNBC named Texas “America’s Top State for Economy and Infrastructure,” adding to our state’s growing list of accolades. Texas has also been named the “Best State to Do Business” by Chief Executive magazine for the past nine years in a row. If Texas were a nation, it would rank as the 13th-largest economy in the world based on GDP, and Texas has been the nation’s top exporting state for 12 years. Texas has also created more private-sector jobs than any other state in the nation over the last 10 years.

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In addition to our superior quality of life and robust economic climate, the Lone Star State has one of the lowest business tax burdens in the United States.

Texas also levies no personal income tax, which allows businesses to pass on more value to their employees. We also offer a number of attractive incentives, such as the Texas Enterprise Fund and the Texas Emerging Technology Fund, which have helped bring thousands of jobs to Texas.

In short, Texas is doing what it takes to help businesses succeed and create jobs in our great state. To explore how your business could prosper in Texas, contact Jonathan Taylor, executive director of my Economic Development and Tourism division, at (512) 936-0101 or jtaylor@governor.state.tx.us.

Sincerely,

Rick Perry Governor

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N

o one could ever accuse Texas of doing Antonio, and General Motors has been in Arlington about things on a small scale. A recent case in six decades and now turns out SUVs at a rate of about point: When the state set out to help one a minute.

Toyota make its U.S. operations more effiToyota’s decision, encouraged in part by a $40 million cient and successful, big headlines resultincentive from the governor’s Texas Enterprise Fund, ed. Texas ended up attracting the doesn’t surprise the state’s boosters. It’s a business-friendJapanese automaker’s North American headquarters from ly regulatory environment known for low taxes — in fact, California, where it had been since the 1950s. The new there is no corporate or personal income tax, and the headquarters in the Dallas-area community of Plano means the move of some 4,000 jobs from California, New York, and Kentucky.

At one state-of-the-art campus that will include more than a million square feet and include a $300 million investment, Toyota plans to bring together its North American headquarters for manufacturing, sales and marketing, finance, and corporate operations. “Ultimately, enabling greater collaboration and efficiencies across Toyota will help us become a more dynamic, innovative, and successful organization in North Odessa, Texas, was recently listed in Forbes America,” said Jim Lentz, CEO of magazine as the #2 MSA in America for Toyota’s North America Region, in a Best Job Growth. statement. “With our major North American business affiliates and leadOdessa, Texas, was recently listed in Business Insider as the #2 city for ers together in one location for the Economic Growth. first time, we will be better equipped to speed decision-making, share best CNBC Study Ranks Texas as #1 Business Climate in the Nation. practices, and leverage the combined strength of our employees.”

Odessa, Texas, has experienced the fastest The move underscores the Lone growth in the country from 2010, 15.2 percent - US Department of Commerce Star State’s emergence as an automotive powerhouse, industry-backers in Texas say. It already ranked sixth in the nation in automotive manufacturing employment, according to a Odessa, Texas report from the governor’s office last Now more than ever, Odessa is the right place in Texas to year, with nearly 34,000 workers at live, work and play. Located in the heart of the Permian almost 500 different manufacturing Basin and known around the world, Odessa is the service, operations across the state. The equipment and manufacturing technology hub for the oil industry took a hit during the Great and gas industry. A vibrant, energetic city in West Texas Recession, but auto manufacturing where the sky, literally, is the only limit. employment grew 19 percent in Texas between 2009 and 2012, and auto Visit our new website to learn more. parts manufacturing jumped by 29 percent. Among others, Toyota already was turning out Tacomas and Odessa Development Corporation • www.odessatex.com • 877-363-3772 Tundras at a $2.3 billion facility San

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state regularly performs well in the Tax Foundation’s State Business Tax Climate Index. As Tony Bennett, president of the Texas Association of Manufacturers, declared in a Fort Worth Business Press article about the Toyota deal, Texas is “heaven on earth for manufacturers.”

“When a company that already has a $2.3 billion manufacturing facility in Texas, supporting more than 6,000 jobs, decides to expand in the state, this shows Texas’ economic principles have created a stable environment that welcomes growth and success,” says Jonathan W. Taylor, executive director of the Economic Development and Tourism division in the Office of Governor Rick Perry.

Diverse Moves Toyota’s plans represent a kind of move that has not been uncommon. Another coup came in mid-February, when Occidental Petroleum announced plans for its own California-to-Texas headquarters move. It’s part of a proposed split in the company that would allow Occidental

to focus more on its Permian Basin operations in Texas.

Among others, Raytheon Company last year moved its space and airborne systems unit from Southern California to McKinney, Texas. Calpine Corp. left San Jose for Houston in 2009, and the Dallas area lured Fluor Corp. from Orange County in 2006. According to Texas Governor Rick Perry, some five dozen companies have moved to Texas in the past couple of years.

Texas may be an up-and-coming automotive powerhouse, but as those moves suggest, it is anything but a one-trick pony. For one thing, manufacturing as a whole — not just auto manufacturing — has been gaining. It’s up 7.2 percent since 2010, and Texas leads the nation in the total value of shipments of manufactured goods.

Electronic product manufacturing is a big exporting industry — one of the reasons Texas has been the top exporting state for 11 years in a row.

A look back at the past year provides ample evidence of the economic vitality and diversity that earned the state acclaim last year as the top state for doing business, yet again, according to Area Development’s survey of location consultants. Last fall, for example, marked the grand

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opening of the new Flextronics manufacturing facility, built for final assembly and customization of Motorola Mobility’s Moto X smartphone. It’s the first smartphone to be designed, engineered, and assembled in the United States. USAA is another success story. It announced plans last fall to expand its IT operations in Plano, creating 680 jobs.

GEICO, meanwhile, announced last December that its claims operations in Katy would expand, adding a thousand jobs over three years. “We know from the experience we’ve already had in Houston that it’s a great environment for business, the workforce is excellent, and the quality of life is outstanding,” according to the company’s chairman, president, and CEO, Tony Nicely.

Also, Kohl’s Department Stores announced plans for a customer service operations center in Dallas. Like many other Texas success stories, this one was supported by incentives from the Texas Enterprise Fund, and while that investment was specifically tied to the creation of 144 jobs, Kohl’s ultimately expects to add more than 1,500 new faces. The company began hiring the first 500 people this past spring.

Websense Inc. is yet another company announcing plans for a California-to-Texas move, announcing plans to relocate its corporate headquarters from San Diego to Austin. That would create 445 new jobs. In making the announcement, Websense CEO John McCormack said, “We are expanding our presence into Austin because it represents an energetic, high-technology hub that will further enable us to meet growing demand for our technology and better serve our global customer base.”

Also adding jobs in Austin is Dropbox Inc., which earlier this year announced its intention to create 170 sales and operations positions. According to Sujay Jaswa, vice president of business, “We were drawn to Austin because of the talented people and vibrant tech culture.”

And yet another tech-based company growing in Austin is athenahealth Inc., expanding its operations with 607 jobs. The company’s new Austin facility will support its cloud-based health information technology services platform.

Closing Deals & Financing Prosperity Most of the state’s big economic development head-

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lines were made possible in part by incentives from the Texas Enterprise Fund. It’s a “deal-closing” fund, the largest of its kind in the country, created about a decade ago and replenished by the state legislature every two years. In its first decade or so, the fund has invested half a

billion dollars in business growth projects that have created more than 70,000 jobs and sparked investments totaling some $24 billion.

Because the fund’s focus is being competitive and closing deals, recipients have to be considering sites in other states too, and must not have already made up their minds about where to go. They must be planning to create a significant number of jobs, generally at least 75 for urban developments and 25 or more in rural areas. Those jobs must pay above-average wages compared to others in the area, and the employer must be planning a significant capital investment.

The Texas Enterprise Fund is all about return on the investment of public funds, with award dollars based on everything from the number of new jobs, the average wages to be paid, and the timeframe for hiring. Past awards have ranged from about $200,000 to $50 million. The governor, the lieutenant governor, and the speaker of the House must approve the projects.

Exciting as big economic-development wins may be, it’s equally important that businesses already in Texas are healthy and growing. Among the tools for making that happen is the Texas Product/Business Fund, which helps businesses develop, produce, and commercialize new or improved products. The incentives are aimed especially at the defined industry clusters the state is hoping to grow, including nanotechnology, biotechnology, biomedicine, renewable energy, agriculture, and aerospace.

The state also lends a hand to local communities that aim to support local employers. The Texas Leverage Fund is for those communities that have an economic development sales tax; it provides low-cost loans so those communities can leverage future sales tax revenues to facilitate business expansions, business recruitment, and increased exporting. The industrial revenue bond program, meanwhile, lets local

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governments offer bond financing to cover capital costs for industrial or manufacturing businesses.

Texas continues to sharpen its tools for economic development, according to Taylor. “During its most recent legislative session, Texas expanded the use of community economic development funds for job-related skills training, appropriated $50 million to the Emerging Technology Fund, and reformed its franchise tax to lessen the burden on large and small companies,� he says. “The state also passed a number of tax credit bills, including House Bill 800, which creates R&D incentives by allowing companies a franchise tax credit or a sales exemption for materials, software, and equipment used for R&D purposes.�

Ahead of the Game Having a powerful manufacturing sector is one secret to success in Texas. Another is ensuring that things are not just built there, but conceived and created. A strong R&D culture is essential, and that takes continual nurturing.

That’s where the Texas Emerging Technology Fund comes in. It was created in 2005 to build an advantage in

We’re the

research, development, and commercialization of emerging technologies. Its grants help companies bring new technologies from concept to development, create publicprivate partnerships to encourage research, and help the state’s higher-education institutions recruit and retain some of the world’s best minds for research.

One recent example of the fund’s work was the creation of the Center for Cell and Organ Biotechnology, involving the Texas Heart Institute and Texas A&M University College of Veterinary Medicine and Biomedical Sciences. A $3 million investment from the Texas Emerging Technology Fund got the ball rolling for the center, which will tackle chronic disease for both human and veterinary healthcare, based on cell and organ failure.

Another example is an effort by the Texas Tech University System to expand wind power research and attract industry. For more than four decades, Texas Tech has had one of the nation’s leading wind research programs, and wanted to attract more top talent to leverage its expertise and take advantage of the abundant wind resources. The Texas Emerging Technology Fund chipped

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in $8 million to help the cause. Texas already has developed more wind power generation capacity than any other state, and last year about 10 percent of the state’s power supply came from wind. This past March, Texas set a record for the volume of wind power blowing onto the grid, which at about 10,300 MW represented 29 percent of the electricity on the grid at that moment.

Clusters of Interest The Texas economy is large and diverse, and state and local economic development officials cheer any opportunity to add to the employment base. “Although Texas has a long history with agriculture and energy, our diverse economy is home to industries from biotechnology to telecommunications to manufacturing,” says Taylor. “Our economic development strategy focuses on sectors with high-growth potential, such as advanced technology and manufacturing, information and computer technology, energy, and life sciences.”

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

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

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

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

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Energy — This may be the best known of the state’s longstanding industries. Nearly half of the nation’s operational oil and gas rigs are in Texas — more than 800 of them. But this sector is more than just oil. Texas is a major player in nuclear power, and has more installed wind generation capacity than any other state. It’s the only state with its own electrical grid.

Petroleum Refining and Chemical Products — More than two-dozen refineries call Texas home, providing more than a quarter of the nation’s refining capacity. The ExxonMobil refinery in Baytown is the nation’s largest in terms of input capacity. There also are hundreds of chemical plants, particularly along the Texas Gulf Coast, which is the world’s largest petrochemical complex.

Advanced Technology and Manufacturing — As the headlines above make clear, this is a big and growing sector known for high-paying jobs. This sector includes nanotechnology, semiconductors, and automotive manufacturing. Texas was the birthplace of the integrated circuit, and automotive manufacturing is so big that the state generated nearly $25 billion in transportation equipment exports last year.

Aerospace, Aviation, and Defense — This should come as no surprise, given that Texas is home to a couple of international airlines, two of the busiest airports in the world, the Johnson Space Center, and some 15 military bases. More than 150,000 people work in aerospace and aviation in Texas, and they take home salaries that average about $81,000.

Biotechnology and Life Sciences — Nearly 90,000 Texans make a living in biotech-related sectors. The state is known for groundbreaking research and worldrenowned treatment, thanks in part to the Texas Medical Center in Houston, which is the world’s largest, and MD Anderson Cancer Center, perennially named the best cancer center in the country.

Information and Computer Technology — Two big names in this business are Texas Instruments (TI) and Dell Computers, both founded and based in Texas. TI, in fact, invented the handheld calculator. Texas has the nation’s second-largest number of computer and videogame employees.

Building a Powerful Economy Countless very deliberate efforts have played into the Texas economic development success story. “The Texas business climate provides the best opportunity for success because of our low taxes, smart regulations, fair courts, and skilled workforce,” concludes Taylor. “We provide the freedom and stability employers need to risk their capital, create jobs, and keep more of what they earn.”

FOR FREE SITE8:54 INFORMATION , CALL 5/8/13 PM

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

Jonathan Taylor, Executive Director Economic Development & Tourism Office of Governor Rick Perry www.texaswideopenforbusiness.com biztex@gov.texas.gov

Lubbock Economic Development Alliance Lubbock’s highly skilled and educated workforce, proximity and connection to major national and international markets, and affordable utility and living costs make it the ideal place to grow your business. Our diverse economy is based on manufacturing, agriculture, wholesale and retail trade services, as well as government, education, and healthcare.

Mike Hatley, Director of Business Recruitment

San Angelo Chamber of Commerce San Angelo is a small metro area of 115,000 population located in West Central Texas. Its diverse economy includes manufacturing, retail, medical, education, business services, and energy. San Angelo is a regional center that boasts a commercial airport, four-year university, community college, and Air Force base.

Phil Neighbors, President San Angelo Chamber of Commerce

418 W. Avenue B San Angelo, TX 76903 325-655-4136 • 877-655-4136 Phil@sanangelo.org www.sanangelo.org

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

Tom Long, Executive Vice President of Business Recruitment

1500 Broadway, 6th Floor Lubbock, TX 79401 800-687-5330 Fax: 806-749-4501

602 E. Commerce St. San Antonio, TX 78205 210-226-1394

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

Christian Fletcher, Executive Director Marble Falls Economic Development Corporation

801 Fourth Street Marble Falls, TX 78654 830-798-7079 Fax: 830-798-8558 cfletcher@marblefallseconomy.com www.marblefallseconomy.com

Temple Economic Development Corporation

1 South First Street Temple, TX 76501 254-773-8332

San Antonio Economic Development Foundation

San Antonio Economic Development Foundation

Marble Falls Economic Development Corporation

Temple, Texas, is a community with a diverse economic base that includes healthcare, distribution and warehousing, and manufacturing as its foundation. Within 180 miles of a population of 18 million, Temple is strategically located in the heart of the Texas Triangle (Dallas, Houston, San Antonio, and Austin) on I-35.

Charley Ayres Director of Business Development

cayres@choosetemple.com www.choosetemple.com

Lubbock Economic Development Alliance

mike.hatley@lubbockeda.org www.lubbockeda.org

Temple Economic Development Corporation

TexAmericas Center TexAmericas Center, a land resource of nearly 12,000 acres, is located in Northeast Texas, 18 miles west of Texarkana, in New Boston, Texas.

TexAmericas Center is central to the U.S. population, within 500 miles of the country's geographic and population centers, and within 200 miles of five major cities.

Eric Voyles Chief Economic Development Officer TexAmericas Center

107 Chapel Lane New Boston, TX 75570 903-223-9841 Fax: 903-223-8742

tlong@sanantonioedf.com www.sanantonioedf.com

Eric.Voyles@texamericascenter.com www.texamericascenter.com

The City of Sugar Land Sugar Land is a regional employment center with over 24 million square feet of commercial space and home to corporations such as Minute Maid, Schlumberger, Fluor Corporation, Texas Instruments, and UnitedHealth Group. Sugar Land Regional Airport also has one of the top-ranked FBOs, Global Select FBO. Jennifer A. May Interim Director of Economic Development

Tomball Economic Development Corp.

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

Kelly Violette, Executive Director

City of Sugar Land

Tomball Economic Development Corporation

2700 Town Center Blvd. North Sugar Land, TX 77479 281-275-2229 Fax: 281-275-2217

29201 Quinn Rd., Suite B Tomball, TX 77375 281-401-4086

ecodev@sugarlandtx.gov www.sugarlandecodev.com

kviolette@tomballtxedc.org www.tomballtxedc.org

Odessa Development Corporation Odessa is located in the Permian Basin region of West Texas. Odessa is where you’ll find a friendly work force and highly skilled professionals in all walks of life. We have outstanding medical and educational facilities, as well as economic incentives and work force training programs, if you’re expanding your business.

Guy D. Andrews, Director, Economic Development Odessa Development Corporation

700 North Grant Ave., Ste. 200 Odessa, TX 79761 1-877-363-3772 • 432-333-7881 Fax: 1-432-333-7858

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.

FacilityLocations.com

ecodir@odessaecodev.com www.odessatex.com

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ENERGY/SUSTAINABLE DEVELOPMENT

Developing a Sustainable Facility From using locally sourced materials during construction to utilizing renewable energy sources to distributing products by rail, each company is embarking on its unique path to sustainability.

By Daniel Hartsig, Manager of New Construction – Sustainability Services, Transwestern

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firms are opting to locate new facilities close to rail hubs.

Not only is it cheaper for manufacturers to ship products via rail, it is also more energy efficient. The amount of energy used to create a product is often dwarfed by the amount of energy needed to gather raw materials and distribute the product.

This trend is bringing industrial distribution full circle, as shipping via rail and water were the primary methods in the 1800s. Then, in the 1900s, manufacturers began using trucking and shipping by air as their primary distribution Energy Efficient Distribution by Rail means. Speed, flexibility, and cheap land won out over effiOne of the first things to consider when developing a cient shipping methods. Due to rising costs, both financially new industrial facility is where to build it. More and more, and for the environment, manufacturers are moving toward a new distribution model: connecting the raw material to the factory What does sustainable facility development look like? and the factory to the distribution center by rail for eventual distribution by truck.

However, for heavy materials or international shipping, locating near a waterfront and shipping via water route is still the most effective means of transport.

Locating near a rail hub makes such a significant difference that the U.S. Green Building Council has recognized the effort by some companies, such as Whirlpool Utilizing Corp., to save money and reduce carbon renewable Sourcing dioxide emissions by using rail. The highMATERIALS performance appliance manufacturer relolocally cated distribution centers and manufacturing plants in at least four states to incorporate direct rail connections, reducing its carbon dioxide and nitrogen oxide through a DISTRIBUTING partnership with SmartWay Transport® that products by resulted in achieving a credit toward RAIL LEED® certification.

s an ongoing process, sustainability is a constantly evolving field. Every new facility that is developed has the potential to be more sustainable and energy efficient than the last as new technologies and methodologies are developed. There are many ways to conserve energy throughout the design, construction, and operation of a facility — it’s not all about optimizing existing systems to more efficient settings.

Re-using & conserving water

energy

There are numerous options to consider when building a new facility. No one system is optimal across the board, and peak efficiency looks different at each site.

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FOR FREE SITE INFORMATION, CALL

Sourcing Materials Locally Once a firm chooses the location for the facility, the design and development firms can begin sourcing materials for the property.

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Industrial properties have an advantage over other property types when it comes to the materials used to construct the building. Most industrial properties source materials locally, as developers focus on utilizing the most cost-efficient and easily obtained materials as possible. The building doesn’t have to be made out of bamboo, but it’s important during the construction process to waste as little as possible.

In fact, a food processing plant in China utilized 22 percent post-consumer and 50 percent pre-consumer recycled materials, based on total cost. The facility, for which Transwestern conducted on-site commissioning services, also sourced 52 percent of the materials regionally, including structural steel, concrete, and steel bars. Domestically, a new facility in Kansas sourced 20 percent of construction materials from within 500 miles of the project site.

Sourcing locally expends less energy and resources to obtain construction materials. Office buildings often cannot achieve as high a percentage of locally sourced materials because of the quality and look of materials needed to finish their interiors. Although, it is worth noting that some companies are making great strides in developing quality-finish products from recycled, regional, or renewed materials, such as National Gypsum, Armstrong, Kohler, Steelcase, and Interface.

Most new industrial facilities, specifically distribution centers and food processing facilities, are being constructed out of tiltwall concrete panels or insulated metal panels over

steel frame construction with insulated metal roofs. Interior walls are usually made of insulated metal panel for cold rooms, concrete block for partitions, and steel stud with gypsum wallboard for office partitions.

Re-using and Conserving Water Incorporating on-site water filtration systems is a rapidly growing trend among new developments. These systems often reuse water in two ways: in the boilers for steam and hot water heating systems and in the cooling towers for heat rejection. Without an on-site filtration system, properties would be forced to use either municipally supplied potable water or on-site wells. Having these systems in place on site reduces the potable water requirements for the facility, as well as the need to expend energy to pump groundwater.

As an example, the plant in China was designed to process all wastewater on site. Tertiary water supplies the facility’s cooling towers, and condensation from the HVAC system is collected and rerouted to the cooling towers. With those systems in place, the non-potable water supply for the facility is expected to exceed 60 percent of the cooling tower’s requirements, cutting its potable water demand by 11.2 million gallons per year. Additionally, the plant was able to cut its domestic plumbing fixture water usage to 60 percent of the Environmental Protection Agency’s (EPA) 1992 requirements, saving 790,000 gallons a year.

Even without an on-site filtration system, some facilities

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Visit GrowMetroTulsa.com/MoveForward to download our regional business overview.

Justin McLaughlin, CCE, CEcD | Senior Vice President | Economic Development jmclaughlin@tulsachamber.com | 800.624.6822

©2014 Tulsa Regional Chamber

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are finding ways to reuse and conserve water. For instance, the aforementioned food processing plant in Kansas incorporates a system to use rainwater for urinals and toilets in the office space, as well as for irrigation on the facility grounds.

The Kansas plant also utilizes a high-pressure steam system for process and comfort heating, reducing energy consumption and reusing water. This system was chosen over a hot water system to work in tandem with the large process heat requirements, and it allows for one system to meet the needs of both goals (process and comfort). Heat is reclaimed from the boiler chimneys and reused by the boiler system to reduce the energy required to heat water. The boiler then creates the steam used in the high-pressure steam system.

Additionally, water efficient plumbing fixtures were used to reduce the facility’s water consumption by 35 percent below the 1992 EPA requirements.

many facilities utilize solar panels and wind or water turbines for general electricity use.

Certain fuel-generating methods can also reduce the amount of waste disposed in a landfill. Burning waste from a plant’s own processes is considered a renewable resource and is, in effect, free energy. Though all incineration methods produce greenhouse gasses, agricultural waste and biogas is preferred because the short carbon cycle doesn’t significantly increase the carbon dioxide in the atmosphere. On the other hand, when fossil fuels or consumer waste is burned, carbon dioxide is released that was previously sequestered within the Earth’s crust, increasing the amount in the atmosphere (in addition to many other pollutants).

One of Transwestern’s clients has set a goal of operating only “net zero” facilities by 2040. These facilities would send zero waste to landfills and emit no greenhouse gases. It’s a

BURNING WASTE FROM A PLANT’S OWN PROCESSES IS CONSIDERED A RENEWABLE RESOURCE AND IS, IN EFFECT, FREE ENERGY. Conserving Energy Utilizing renewable energy sources is also a growing trend in industrial facilities in an effort to phase out reliance upon fossil fuels for energy. Non–fossil-fuel-based energy sources emit less greenhouse gas and can earn credits toward LEED certification. Industrial facilities alone account for 28 percent of greenhouse gas emissions in the U.S., and 30 percent of energy used at these facilities is used inefficiently or unnecessarily, according to the year-end 2012 ENERGY STAR® program statistics.

In Australia, a food processing plant installed a solar photovoltaic system that will generate 150,000 kilowatt-hours per year. This $400,000 investment will reduce the plant’s greenhouse gas emissions by 275,000 pounds, offsetting the energy consumption of the office space by 50 percent.

Globally, more plants are turning toward solar thermal hot water systems to expend less energy to heat water for processing. It is an efficient and inexpensive means of preheating water, and one of the biggest advantages of this system is the ability to utilize it, even in colder climates. A typical office building’s domestic hot water demands are only 1 percent to 3 percent of its total energy requirements, so the applications for such systems tend to be small. However,

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lofty goal, but this client already has nine facilities that divert no waste to landfills, so it is very much attainable.

And one facility in Kenya is exploring the possibility of burning local agricultural waste, such as cane sugar or coffee husks, as its source of energy. Key considerations in selecting a biofuel agent are availability and consistency of supply, low moisture content so that less energy is expended to burn off steam, as well as high caloric content, which creates a higher burning temperature.

In Sum There are numerous options to consider when building a new facility. No one system is optimal across the board, and peak efficiency looks different at each site. These are things that have to be taken into consideration for each project.

Designing a sustainable plant is a road with many paths, and each facility has its own end goal, whether it be conserving energy, reusing water, or emitting less greenhouse gases. The field will continue to evolve as better technologies become available and more efficient processes are developed. Market leaders of the future will be the companies that can set clear goals today and muster the determination to make it through the learning curve.

FOR FREE SITE INFORMATION, CALL

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

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ENERGY/INFRASTRUCTURE

How Companies Can Get the Utility Packages They Need A well-designed utility plan takes into account capacity and reliability, and can also deliver a significant, annual cash flow that can be reinvested in the company.

By Cory Wendt, Senior Manager, Baker Tilly

E

nergy availability is a vital factor in any site selection process. Making an energy decision is more than just cost per kilowatt-hour — it should also take into account grid capacity, rate structure, service/distribution, and related utilities, such as wastewater treatment.

The first step in assembling a utility plan is taking the time to truly understand how your operations impact the service infrastructure of the local electrical, water, and gas

utilities. It is important to know usage of natural gas, electricity, and wastewater discharge, both in terms of volume and time of day and year. A company may be a big electricity user, for example, but not require water treatment. Other businesses may consume far less electricity, but have growing water treatment and/or natural gas demands. Company leaders need to know if consumption of these utility resources can be better coordinated to create long-term savings for the company, as well as the utility.

Additionally, as companies plan for growth, they need to be aware of what their future utility requirements will be and how these will impact operational costs. This requires working through various scenarios with your advisor to create a comprehensive plan that can then be used in discussions with utilities.

With the pace of doing business these days, some COOs, CEOs, and plant managers simply see these utility costs as a line item and not something they should try to understand, or influence. Utility functions always have a cost to manufacturers — the key, however, is to understand the “how and why” behind the cost, followed by developing an operational strategy that minimizes the cost.

Be Informed of Current Use Understanding the type of energy user you are is critical for facilitating a strategic dialogue with utilities about bringing your electric load into their service territories. The best cost efficiencies are achieved using a coordinated approach that integrates both energy and related infrastructure needs.

Companies need to understand how important cost of energy is to their long-term economic performance. They also need to know the water disposal costs or volume limits (gallons of flow, chemical oxygen demand, total suspended solids, phosphorus, etc.) that would be imposed for any new sites they are considering. A good way to do this is by overlaying the operating trends of the plant with the energy services costs over time — this helps identify any unusual events or circumstances causing higher cost.

The next step is being sure to understand the structure of the bill (energy cost, delivery fees, demand charges, total

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usage, and minimum and maximum volume requirements) and time of day/year considerations. If there is any indication that the incremental cost of service has increased, complete a rate review or an energy audit at the plant level to determine if the increase is related to a one-time event, or a recurring situation. If a company is only spending $50,000 a year on its utility costs, a formal review with a third-party energy professional may not be worth the time and expense; however, when a company is spending millions of dollars on utilities, identifying even small discrepancies, and controlling these cost-increase factors, will lead to recurring cash savings for years to come.

If existing facilities have high wastewater or electrical bills, it is essential to understand what is causing those high rates. For electrical, perhaps the facility is creating a surge in peak use every morning when ramping up production, resulting in higher, ongoing demand charges (demand charges alone can make up 20 percent of an electrical bill). A possible solution would be the business inquiring about an interruptible rate class if that doesn’t compromise production, or adopting a routine operational start-up strategy that minimizes instantaneous load. For wastewater, is the company discharging high-strength liquid waste at the same time of day the city treatment plant is reaching its maximum capacity? If so, the company can likely work with the utility to determine a better time during the day for discharge, when there is less flow.

Partnering for Long-Term Success Companies that are relocating or expanding need to determine which utility functions are critical to their long-

term growth, and then formulate a plan that identifies the best utility package options. The next step is opening a dialogue with the utilities to find out if they have assets that are a good fit for the company’s operational needs.

Driven by the demands of their regional economies and the industries they serve, many utilities have developed incentives and special programs that enhance the local business environment. Some utilities — such as Duke Energy, based in North Carolina — have dedicated business recruitment staff for specific industry sectors. They advise site selection consultants and company representatives about power costs, infrastructure capabilities, and available sites and buildings that match the client’s needs.

Contacting utility companies early in the site selection process is highly recommended (both for greenfield sites or expansions of existing operations) — especially for utilityintensive operations. Companies working on their own, however, frequently do not compile or analyze the proper usage data that utilities need to make recommendations.

Just ask John Geib, Duke Energy’s director of North Carolina economic development.

“Too often manufacturers only provide minimal electrical information for their energy-intensive projects in the site selection request for proposal (RFP),” he says.

“Usually this is not enough to allow the utility to craft an accurate rate estimate, much less assess a given site for its electrical appropriateness in capacity, reliability, and time to delivery. When companies wait too late in the process to investigate these issues, they often create unintended problems when it’s time for the start-up phase of manufacturing.”

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Site Selection Scenarios

because of shifting economic forces, those industries eventually shut down (“industry contraction”) as the work was When it comes to the cost of energy, rates are regulated outsourced to China and other low-cost countries. North by the Public Service Commission and each state’s specific Carolina, for example, was hit especially hard by the loss of rules; however, other costs such as interconnect/service, most of its textile and furniture industries. demand charges, etc. can fluctuate among providers within Consequently, now these areas have a surplus of capacity, a region. If a facility is part of an energy distribution netinfrastructure, and existing, vacant facilities that can be work that has high transmission fees due to a high cost of brought online quickly. State governments, local economic installation or local end-of-line servicing, an alternative developers, power companies, and other utilities are now provider may be more cost-effective. Customers have more working together to find creative ways to re-deploy these supplier options in deregulated markets. For example, if a “ready and waiting” company is a large assets. This includes propane user in a supporting state rural setting, it may public/private partbe beneficial to nerships via funding approach natural gas E l e c tr i c ity Produc ti on A sse ts for strategic initiasuppliers in that martives or technical ket about running a The past few years have seen an increase in projects that support of projects. natural gas pipeline Baker Tilly has to the area. The supgenerate electricity — driven mostly by the federal 1603 discussed how to plier, in turn, may Grant and the Investment Tax Credit. These programs allowed use some of these pay for some or all of companies to obtain a 30 percent benefit for all assets built strategies effectively, the pipeline installathat are integral to the production of electricity. These include such as New tion in return for a Markets Tax Credits long-term purchase anaerobic digesters and solar, wind, and biomass facilities.

(NMTCs), with Duke agreement (5–10 While most of the opportunities to utilize these incentives Energy’s economic years) going forward. have passed (solar energy projects can still qualify), these development team.

A company will programs did create new dialogue among private industry, These credits are locate a new facility in an area that can public utilities, equity firms, financial institutions, and lease often available for these same economiprovide both its eleccompanies regarding the best ways to support third-party cally distressed or trical and wastewater ownership of energy assets and build out the supporting rural areas, which needs — ideally supinfrastructure. are good targets for plied by a welljob creation through developed, existing investments in new facilities or upgrades to existing operautility infrastructure. However, if “gaps” exist, utilities may tions. To see if a site qualifies for NMTCs, visit cover some or all of these gaps (for example, site-related http://www.bakertilly.com/nmtc-lihtc-tax-credit-mappinginterconnection expenses) to ensure the company locates in tool. its territory. And, where utilities have territories with solid electrical generation assets that aren’t attractive to industry because wastewater treatment infrastructure is absent or Saving Energy, Saving Money inadequate, utilities will often help pay for adding that In this fast-paced, global economy, companies want to infrastructure. focus their attention on what they do best — making their products. They would prefer not to deal with the finer details of utility costs. This is especially true for market secShifting Economics tors that are experiencing rapid growth and have not Utility infrastructure in the U.S. has been built over time slowed down long enough to analyze their utility bills. to service the needs of municipalities and businesses. As It is, however, worth the effort. Developing an integrated, regional and national economics change and industries long-term plan with which to approach your utilities can move in or move out, grid infrastructure, capacity, and save companies millions of dollars when expanding or delivery capabilities will also change. For example, in the building a new facility. This kind of cost reduction is also 1990s a sharp increase in new dairy farms occurred in rural helpful in securing funding from banks and investors. Not areas of the western and southwestern U.S. due to the availonly does a well-designed utility plan reduce infrastructure ability of large tracts of land. As a result, numerous milk costs, it delivers a significant, annual cash flow that can be and dairy product processors followed. Although some of reinvested in the company. the core electrical infrastructure may have existed at fair (or lower than average) pricing, virtually no water or gas infraCory Wendt is a senior manager for Baker Tilly, a Chicago, structure had been installed in many of these rural settings.

Illinois-based accounting and advisory firm, where he works with Utilities also built tremendous infrastructure and capacicompanies on growth strategies related to energy, manufacturing, ty in some regions of the U.S. (Midwest, Southeast) for the and finance. manufacturing industries that were thriving there. However,

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AREA DEVELOPMENT ANALYZES ECONOMIC AND WORKFORCE DATA FOR 379 MSAS, PRODUCING A SNAPSHOT OF THE CITIES ACROSS AMERICA THAT ARE POISED TO CAPITALIZE ON THE NEW POTENTIAL FOR ECONOMIC GROWTH AS THE UNITED STATES LEAVES THE RECESSION BEHIND. A DIVERSIFIED ECONOMIC BASE TOPS THE MOST DESIRABLE TRAITS ~~~~~~~

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

Location profiles/articles researched and written by Dale D. Buss, Staff Editor. Interactive report available at www.areadevelopment.com/Leading-Locations.

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100 LEADING LOCATIONS City / MSA 1 2 3 3T 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 19T 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

San Jose-Sunnyvale-Santa Clara CA Columbus IN Midland TX Fargo ND-MN Bismarck ND Provo-Orem UT San Francisco-San Mateo-Redwood City CA Denver-Aurora-Broomfield CO Odessa TX Grand Forks ND-MN Sioux Falls SD Morgantown WV Trenton-Ewing NJ Nashville-Davidson--Murfreesboro--Franklin TN Austin-Round Rock-San Marcos TX Houston-Sugar Land-Baytown TX Lafayette LA Ithaca NY Santa Ana-Anaheim-Irvine CA Corpus Christi TX Dubuque IA Charleston-North Charleston-Summerville SC Columbia MO Fort Worth-Arlington TX Seattle-Bellevue-Everett WA San Luis Obispo-Paso Robles CA Salt Lake City UT Minneapolis-St. Paul-Bloomington MN-WI Des Moines-West Des Moines IA Boulder CO Portland-Vancouver-Hillsboro OR-WA Napa CA Ames IA Fairbanks AK Lafayette IN Greenville NC Iowa City IA Boston-Cambridge-Quincy MA Charlotte-Gastonia-Rock Hill NC-SC College Station-Bryan TX Pittsburgh PA Grand Rapids-Wyoming MI Fort Collins-Loveland CO Holland-Grand Haven MI Madison WI Orlando-Kissimmee-Sanford FL Dallas-Plano-Irving TX Anchorage AK State College PA Washington-Arlington-Alexandria DC-VA-MD-WV

*2010 Census

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City / MSA

State Population* 1836911 76794 136872 208777 108779 526810 1776095 2543482 137130 98461 228261 129709 366513 1589934 1716289 5946800 273738 101564 3010232 428185 93653 664607 172786 2136022 2644584 269637 1124197 3279833 569633 294567 2226009 136484 89542 97581 201789 189510 152586 2863943 1758038 228660 2356285 774160 299630 263801 568593 2134411 4235751 380821 153990 4377008

51 52 53 54 55 56 57 57T 59 60 61 62 63 63T 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 81T 83 84 85 86 86T 88 89 90 91 92 93 94 95 96 97 98 99 100

Gainesville Lake Charles Lubbock Sioux City Durham-Chapel Hill Naples-Marco Island Elkhart-Goshen La Crosse Bellingham Billings St. Cloud Bethesda-Rockville-Frederick Atlanta-Sandy Springs-Marietta Blacksburg-Christiansburg-Radford Baton Rouge Oklahoma City Spartanburg Cheyenne Fayetteville-Springdale-Rogers Greeley Indianapolis-Carmel Fort Wayne Warren-Troy-Farmington Hills Boise City-Nampa Ogden-Clearfield St. Joseph Tyler Albany-Schenectady-Troy Bakersfield-Delano Columbia Tampa-St. Petersburg-Clearwater Lebanon New York-White Plains-Wayne Waco Burlington-South Burlington Asheville Pensacola-Ferry Pass-Brent Longview Nassau-Suffolk Richmond San Angelo Baltimore-Towson New Orleans-Metairie-Kenner Oshkosh-Neenah Honolulu Waterloo-Cedar Falls Rochester Port St. Lucie Casper San Diego-Carlsbad-San Marcos

State Population* FL LA TX IA-NE-SD NC FL IN WI-MN WA MT MN MD GA VA LA OK SC WY AR-MO CO IN IN MI ID UT MO-KS TX NY CA SC FL PA NY-NJ TX VT NC FL TX NY VA TX MD LA WI HI IA MN FL WY CA

264275 199607 284890 143577 504357 321520 197559 133665 201140 158050 189093 1205162 5268860 162958 802484 1252987 284307 91738 463204 252825 1756241 416257 2475666 616561 547184 127329 209714 870716 839631 767598 2783243 133568 11576251 234906 198627 424858 448991 214369 2832882 1258251 111823 2710489 1167764 166994 953207 167819 186011 424107 75450 3095313

*2010 Census

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METHODOLOGY

Area Development ranked 379 MSAs across 21 economic and work force indicators. These 21 indicators were pulled from seven (7) data sets (sub-categories) originating from four sources: the Bureau of Labor Statistics, Bureau of Economic Analysis, U.S. Census American Community Survey, and Moody’s Analytics.

Each MSA earned a ranking within each of the 21 indicators based on its statistical performance within that indicator. The MSA with the best performance in a certain indicator earned a ranking score of “1” and the MSA with the worst performance earned a ranking score of “379.”

To calculate “Overall Ranking,” we added the total ranking across all indicators for each MSA and then divided by the total number of indicators to reach an average ranking. The MSA with the lowest average earned the #1 overall ranking, while the MSA with the highest average ranked #379 overall.

We also calculated overall ranking across four categories: “Prime Workforce,” “Economic Strength,” “Recession-Busting,” and “Year-Over-Year Growth.” To calculate the overall ranking within these four categories, we produced an average ranking across only certain sub-category indicators.

An indicator did not have to be exclusive to our category rankings. For instance, the “Employment Growth Net 3-Year Change as Percentage of Population” was used within both the “Economic Strength” and “Recession-Busting” categories.

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

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

Why Should I Measure Regional Economic Performance Using Gross Metro Product (GMP)?

By Alexander Miron, Economist, Moody’s Analytics The overwhelming majority of the economic activity that takes place in the U.S. occurs between people or businesses located within metropolitan areas. Metro areas are closely linked to one another by modern financial markets and supply chains, yet each forms a unique node of economic activity. Although many metro areas today experience recessions and recoveries at nearly the same time, there is still considerable variation in regional economic performance. For example, though the Great Recession barely registered in the Houston metro area, Detroit has struggled to hold steady.

Measuring economic performance can be a difficult task, and no single measure offers a complete picture. However, a comparison of gross metro product (GMP), which measures the market value of final goods and services produced within a metro area, is often the best starting point for judging regional performance. This is because few measures can offer as comprehensive of a snapshot of a regional economy. Measures of employment offer a decent gauge of the health of regional labor markets but do not always separate growing economies from stagnant ones. The expansion of a highly productive factory or improvement in production efficiency that results from new technologies can spark a slowdown in hiring in some regions, even while their overall output posts healthy increases.

A more meaningful basis for comparison measures a local economy in terms of the dollar value of its output, or by the income earned by its businesses and residents. GMP, which measures regional output in terms of national prices, offers a standardized way to compare the varied production processes used in different parts of the country. Differences in the trend rate of growth of GMP reflect real differences in industrial structure, the relative mix of goods produced, and the underlying skills of the local population.

Although GMP provides important information about regional growth, like all measures, it is incomplete. GMP offers no information about the sustainability of growth, or regarding income or wealth inequality, which reflect other important dimensions of regional economic performance.

Likewise, GMP provides little information about a region’s resource constraints, its utilization of available productive capacity, or its capacity for growth in the future.

For these reasons, a summary measure that consists of several different economic indicators (preferably, ones that correlate closely with some prior notion of economic performance but do not correlate closely with one another) may provide an even more comprehensive gauge of regional economic performance than any of the indicators considered separately. For example, a summary measure comprised of diverse indicators such as GMP or personal income, productive capacity, a measure of capacity utilization or slack, and an indicator of future growth expectations could serve as a simple but useful tool for comparing two or more metro area economies. www.economy.com/metro-gmp

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After five years of the Great Recession and another long period of economic sluggishness, and still fighting the knock-on effects of fiscal restraints, cities and regions across America are honing their approaches to landing new businesses. On the other side of the equation, U.S. and global companies are loosening their purse strings enough these days to offer significantly more economic development prizes.

For this year’s Leading Locations study, Area Development analyzed economic and work force data for 379 metropolitan statistical areas (MSAs) — both for 2012–2013 and, in some categories, stretching as far back as 2008, the

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The “Strengths” and “Upside” bullet points for each of the nine profiled MSAs was taken from Moody’s Analytics U.S. Précis® Metro reports, which offer concise analysis and data on the current and expected economic conditions for all U.S. metropolitan areas. Each three-page report covers an individual metro area and includes a five-year forecast from Moody's Analytics’ simultaneous econometric model, which is updated monthly.

Forecasts of key indicators that drive metro area economies include Gross Metro Product (GMP), industry diversity, employment, personal income, population, housing activity, migration flows, and personal bankruptcies. Moody's Analytics’ exclusive indicators — including cost of doing business, cost of living, risk-adjusted return, and short- and long-term employment growth — allow for quick and easy comparisons across metro areas.

depths of the recession. The goal was to identify which cities across America are emerging as front-runners in this new era of economic development possibilities — and why.

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The top 100 MSAs in the list demonstrate that a variety of strong individual drivers, or a combination of many factors, can move a city’s attractiveness as a business site into the foreground. Chief among those drivers for 2014 are the renaissance in domestic manufacturing, the gusher of economic blessings flowing from the fracking revolution in U.S. oil and gas fields, and the spread of America’s high-technology dominance to sparkling new urban epicenters even as the birthplaces of this advantage retain their sheen.

But for most cities, the advantages of the moment aren’t enough alone to sustain long-term success as a site-location beacon. They also must respond effectively to the many factors that affect local and regional economic performance, as well as proactively create healthy business climates for the long run, and invest in that future. The locations that best create and sustain such multilevel support not only are best at landing new companies but also excel at supporting local companies and helping them hone their competitiveness with rivals at home and abroad.

Included in our report online is an interactive table that will allow you to view the rankings of all 379 MSAs. The report includes an overall ranking that is based on 21 economic indicators. Area Development also created category rankings that are based on sub-groups of indicators from the 21 used for the overall results (refer to the methodology to learn more). Readers can use filters to easily segment MSAs by region, population size, and state, or use the search field to locate specific MSAs. The expanded version of the chart displays how each city ranks in every one of the 21 indicators used in the study.

of some of America’s top tech schools, including the University of California-Berkeley, and financed by a 39 percent share of all venture-capital investments across the nation in 2013. Increasingly, immigration is a factor as well: There was a 52 percent increase in foreign immigration last year over 2012.

In Silicon Valley, patent registrations rose by 11 percent in 2012 over the year before, while jobs grew by more than 3 percent from 2012 to 2013, and total population grew by 1.3 percent in 2013 over the year prior.

Median household income also began to increase in 2012 after a four-year decline.

Increasingly, non-technology players are taking up residence in Silicon Valley as well, ranging from Ford to

TOP 30 BIG CITIES City / MSA

1 2 3 4 5 6 7 8 9 10 11 12 14 15 16

San Jose-Sunnyvale-Santa Clara, CA

17

(Population: 1,836,911) Overall Rank: 1

19

T

he heart of Silicon Valley continues to drive not only the California economy but also the continuing U.S. lead in digital innovation, entrepreneurship, and growth. Its bellwether employers — including Facebook, Google, Yahoo, and hardware players such as Hewlett-Packard and Cisco — provide the attraction and energy to retain and nurture the world’s richest collection of high-tech talent.

They are fed by science and engineering graduates

Population

Rank

within

Leading Locations

13

BIG CITIES (population > 600,000)

State

18 20 21 22 23 24 25 26 27 28 29 30

San Jose-Sunnyvale-Santa Clara San Francisco-San MateoRedwood City Denver-Aurora-Broomfield Nashville-Davidson-Murfreesboro--Franklin Austin-Round Rock-San Marcos Houston-Sugar Land-Baytown Santa Ana-Anaheim-Irvine Charleston-North CharlestonSummerville Fort Worth-Arlington Seattle-Bellevue-Everett Salt Lake City Minneapolis-St. Paul-Bloomington Portland-Vancouver-Hillsboro Boston-Cambridge-Quincy Charlotte-Gastonia-Rock Hill Pittsburgh Grand Rapids-Wyoming Orlando-Kissimmee-Sanford Dallas-Plano-Irving Washington-ArlingtonAlexandria Bethesda-Rockville-Frederick Atlanta-Sandy Springs-Marietta Baton Rouge Oklahoma City Indianapolis-Carmel Warren-Troy-Farmington Hills Boise City-Nampa Albany-Schenectady-Troy Bakersfield-Delano Columbia

CA CA

1836911 1776095

1 7

CO TN

2543482 1589934

8 14

TX TX CA SC

1716289 5946800 3010232 664607

15 16 19 22

TX WA UT MN-WI OR-WA MA NC-SC PA MI FL TX DC-VAMD-WV MD GA LA OK IN MI ID NY CA SC

2136022 2644584 1124197 3279833 2226009 2863943 1758038 2356285 774160 2134411 4235751 4377008

24 25 27 28 31 38 39 41 42 46 47 50

1205162 5268860 802484 1252987 1756241 2475666 616561 870716 839631 767598

62 63 65 66 71 73 74 78 79 80

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San Francisco-San Mateo-Redwood, CA (Population: 1,776,095) Overall Rank: 7

Nestle. They’re counting on the nation’s most proven crucible for innovation and top-flight digital-era talent to help their own businesses take the next great leap forward.

San Jose STRENGTHS • Highly skilled workers make SAJ an appealing investment location for consumer services.

• Deep linkages with venture capital and angel investors and research institutions throughout the Bay Area.

UPSIDE • SAJ attracts more high-profile tech meetings, and their attendees, away from San Francisco.

• More insourcing of manufacturing enables SAJ to keep and attract new tech production.

T

he San Francisco Bay area is the spiritual home of those who want to have a life as well as a job. One of the most vibrant, diverse, tolerant, exciting and sometimes outrageous cities in the world, San Francisco has relied on these attributes to create a robust economic engine that has been able to power through complications such as the city’s high cost of living.

Continued growth in San Francisco comes in a variety of ways. It’s a major tourism destination, of course, and it has an underappreciated role in global trade, with more than 75 international consulates and 22 foreign-trade offices. San Francisco is home to more than 1,890 technology firms, including digital standouts such as Lucasfilm and Sega of America. The Bay Area’s 41 colleges and universities provide the talent to feed their

Top 20 Big Cities—Year-Over-Year Growth

TOP 20 BIG CITIES—Economic Strength City / MSA

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

86

San Jose-Sunnyvale-Santa Clara San Francisco-San MateoRedwood City Charlotte-Gastonia-Rock Hill Salt Lake City Nashville-Davidson--Murfreesboro --Franklin Houston-Sugar Land-Baytown Santa Ana-Anaheim-Irvine Austin-Round Rock-San Marcos Seattle-Bellevue-Everett Fort Worth-Arlington Minneapolis-St. Paul-Bloomington Portland-Vancouver-Hillsboro Grand Rapids-Wyoming Bakersfield-Delano Denver-Aurora-Broomfield Charleston-North CharlestonSummerville Warren-Troy-Farmington Hills Orlando-Kissimmee-Sanford Tampa-St. Petersburg-Clearwater Boston-Cambridge-Quincy

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State

City / MSA

Population Overall Economic Strength Rank

CA CA

1836911 1776095

2 5

NC-SC UT TN

1758038 1124197 1589934

11 13 15

TX CA TX WA TX MN-WI OR-WA MI CA CO SC

5946800 3010232 1716289 2644584 2136022 3279833 2226009 774160 839631 2543482 664607

17 18 20 22 24 25 29 30 34 37 41

MI FL FL MA

2475666 2134411 2783243 2863943

47 48 49 52

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Santa Ana-Anaheim-Irvine Bakersfield-Delano San Jose-Sunnyvale-Santa Clara San Francisco-San MateoRedwood City Fort Worth-Arlington Denver-Aurora-Broomfield Houston-Sugar Land-Baytown Orlando-Kissimmee-Sanford Charlotte-Gastonia-Rock Hill Tampa-St. Petersburg-Clearwater Salt Lake City Atlanta-Sandy Springs-Marietta Nashville-Davidson-Murfreesboro--Franklin Columbia Portland-Vancouver-Hillsboro Boston-Cambridge-Quincy Austin-Round Rock-San Marcos Seattle-Bellevue-Everett Minneapolis-St. Paul-Bloomington Charleston-North CharlestonSummerville

FOR FREE SITE INFORMATION, CALL

State

Population Overall Year-overYear Growth Rank

CA CA CA CA

3010232 839631 1836911 1776095

3 5 7 12

TX CO TX FL NC-SC FL UT GA TN

2136022 2543482 5946800 2134411 1758038 2783243 1124197 5268860 1589934

15 17 19 19T 23 24 25 26 31

SC OR-WA MA TX WA MN-WI SC

767598 2226009 2863943 1716289 2644584 3279833 664607

34 37 39 42 44 56 57

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demands, and about 54 percent of adults have a college or graduate degree.

Key to the area’s continued growth is its continual development of new economic engines. Now more than 130 biotech companies are located in the city, many of them at Mission Bay, which has become a hub of this increasingly important vertical. The biotech and clean-tech enclave alone has birthed nearly 100 earlystage companies.

San Francisco STRENGTHS • Well-educated and skilled workforce supports robust income gains.

• Increasing cluster of Internet and other tech service companies and workers fosters office market growth.

UPSIDE • Domestic and Asian demand for Internet and mobile services fuels growth among tech firms.

• National housing recovery kick-starts mortgage and other real estate finance output.

Note: Population estimates from 2010 Census

Denver-Aurora-Broomfield, CO (Population: 2,543,482) Overall Rank: 8

T

he mile-high economy of Colorado’s major metropolitan area is built on a number of advantages, including the transformation of its long-existent high-tech cluster by new companies, a historic connection to the newly booming oil and gas industry, a young and geographically loyal workforce, and the inherent advantages of being the only major business hub in the Mountain region.

Model regional cooperation for economic development and the nation’s only all-new major metro airport in the last quarter century contribute as well.

And, no joke — while the economic benefits of Colorado’s marijuana legalization are only beginning, they’ll become an apparent contributor to growth in the Denver area over time. For now, Denver and its environs are coming out of the Great Recession with stronger job growth than originally thought. Last year, the state’s jobs grew by 3.5 percent, revised from an initial estimate of 2.6 percent. That reflected growth in every job sector in the state and continued into 2014.

Software is at the heart of this boom. Growing small

TOP 20 BIG CITIES—Recession-Busting

TOP 20 BIG CITIES—Prime Workforce City / MSA

State

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Denver-Aurora-Broomfield Washington-ArlingtonAlexandria San Jose-Sunnyvale-Santa Clara Pittsburgh Charleston-North CharlestonSummerville Bethesda-Rockville-Frederick Boston-Cambridge-Quincy New Orleans-Metairie-Kenner Akron Providence-Fall River-Warwick Austin-Round Rock-San Marcos New York-White Plains-Wayne Chicago-Joliet-Naperville Oklahoma City San Francisco-San MateoRedwood City Fort Worth-Arlington Boise City-Nampa Philadelphia Houston-Sugar Land-Baytown Nashville-Davidson-Murfreesboro--Franklin

CO DC-VAMD-WV CA PA SC

State

Population Overall

RecessionBusting Rank

Prime

Workforce Rank 1

City / MSA

Population Overall

2543482 4377008

5 7

1836911 2356285 664607

15 20 22

MD MA LA OH RI-MA TX NY-NJ IL OK CA

1205162 2863943 1167764 703200 1600852 1716289 11576251 7883147 1252987 1776095

30 38 42 51 53 63 77 78 79 84

TX ID PA TX TN

2136022 616561 4008994 5946800 1589934

84 86 86T 89 91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

San Jose-Sunnyvale-Santa Clara Austin-Round Rock-San Marcos Charleston-North CharlestonSummerville Nashville-Davidson-Murfreesboro--Franklin Fort Worth-Arlington Grand Rapids-Wyoming Boston-Cambridge-Quincy Houston-Sugar Land-Baytown Pittsburgh Portland-Vancouver-Hillsboro Seattle-Bellevue-Everett San Francisco-San MateoRedwood City Minneapolis-St. PaulBloomington Dallas-Plano-Irving Salt Lake City Louisville-Jefferson County Oklahoma City Washington-ArlingtonAlexandria Indianapolis-Carmel Warren-Troy-Farmington Hills

CA TX SC

1836911

4

1716289 664607

10 19

TN

1589934

22

TX MI MA TX PA OR-WA WA CA

2136022 774160 2863943 5946800 2356285 2226009 2644584 1776095

24 29 31 33 34 35 37 41

MN-WI

3279833

43

TX UT KY-IN OK DC-VAMD-WV IN MI

4235751 1124197 1283566 1252987 4377008

44 45 47 48 50

1756241 2475666

51 58

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Denver STRENGTHS

tech companies, many in the heart of Denver, have collectively added enough jobs lately to offset some layoffs at large tech firms. Pharmaceuticals are chipping in as well, such as Broomfield’s Accera.

• High industrial diversity shields the metro area from employment volatility.

•Highly educated workforce attracts firms wanting to fill high value-added positions.

• Sturdy housing market.

• Strong population growth.

UPSIDE • Lockheed expansion and aerospace contracts lift employment and related manufacturing output more than expected.

MID-SIZE CITIES (population 160,000–600,000)

Fargo, ND-MN (Population: 208,777) Overall Rank: 3T

One Industry or Many Can Lead to Economic Success

T

By Jim Eskew, Vice President, Business Consulting Group, JLL As revealed in the overall “Leading Locations” rankings, there is more than one way to become an attractive location. Some locations have risen on the strength of a dominant industry sector. Others have prevailed by offering low-cost real estate, talent, and other resources in a balanced, diversified economy.

Illustrating the first route — a dominant industry — half of the top 10 overall Leading Locations underscore the economic power of the U.S. oil and gas boom. Five of the top 10 cities in the overall rankings — Midland and Odessa in Texas, and Fargo, Bismarck, and Grand Forks in North Dakota — are experiencing rapid economic growth from the energy sector. North Dakota is notable as one of the least-populated states in the overall rankings to place three of its cities in the top 10.

Information technology is a major economic driver for four of the remaining five cities in the top 10. Silicon Valley, San Francisco, and Provo-Orem are all widely recognized for their technology sectors. Austin, ranked 15th, also has a strong technology sector, although it has a degree of economic diversification, as seen in growth associated with the professional services, financial services, and higher education sectors.

Denver, placed eighth in the overall rankings, is succeeding with a well-balanced economy benefiting from not only energy and information technology, but also financial services, manufacturing, and other industries.

Having learned from the boom-and-bust cycles of the past, some former single-sector cities have actively sought to diversify. One noteworthy example is Pittsburgh, which leapt from an overall rank of 110 last year to a rank of 41 this year. After suffering years of economic losses with the decline of the domestic steel industry, Pittsburgh is experiencing new dynamism as such companies as Computer Sciences Corporation and Google expand their operations.

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he fracking boom in North Dakota continues, bringing lots of jobs, people, and investment to the capital of the Bakken oil-shale formation, Fargo. And after several years of economic bounty — because it’s at the epicenter of the re-establishment of American domestic energy “security” — Fargo is attempting to turn this huge advantage into greater economic diversity and true long-term gain.

The fossil-fuel boom has made Fargo one of the best places in America to find a job and make money. Forbes ranked the area No. 2 in its “Best Small Places for Business and Careers” last August, for instance. And Fargo placed No. 5 in the Milken Institute Best Performing Cities Index in 2014.

This economic vibrancy came on top of an infrastructure that already included world-class education and research and productive employees.

And Fargo is younger than most out-

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siders assume: It was ranked in the top college towns and cities with populations below 250,000 in 2012–2013 by the American Institute for Economic Research.

In fact, there’s also a mini tech boom in and around Fargo that is in the midst of creating a predicted 8,000 jobs including 1,000 alone at Microsoft. All of this activity, in turn, is stimulating the traditional backbones of the Fargo economy, including manufacturing, agriculture, and services.

Fargo STRENGTHS • Diverse but stable economy with well-educated population.

• Relatively low business and living costs with high housing affordability.

• Spillover from the state’s historic oil boom.

UPSIDE • Slow national recovery maintains healthy levels of in-migration.

• NDSU Research Park initiative facilitates spillover growth in high tech.

• Ag prices rebound to historically high levels, boosting farm incomes.

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Provo-Orem, UT (Population: 526,810) Overall Rank: 6

P

rovo and Orem share the eastern shore of Utah Lake and a lot more: explosive economic and job growth as tech employment burgeons and more employers —

TOP 30 MID-SIZE CITIES City / MSA

State

Population

Rank

within

Leading Locations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

90

Fargo Provo-Orem Sioux Falls Trenton-Ewing Lafayette Corpus Christi Columbia San Luis Obispo-Paso Robles Des Moines-West Des Moines Boulder Lafayette Greenville College Station-Bryan Fort Collins-Loveland Holland-Grand Haven Madison Anchorage Gainesville Lake Charles Lubbock Durham-Chapel Hill Naples-Marco Island Elkhart-Goshen Bellingham St. Cloud Blacksburg-ChristiansburgRadford Spartanburg Fayetteville-Springdale-Rogers Greeley Fort Wayne

AREA DEVELOPMENT

ND-MN UT SD NJ LA TX MO CA IA CO IN NC TX CO MI WI AK FL LA TX NC FL IN WA MN VA

208777 526810 228261 366513 273738 428185 172786 269637 569633 294567 201789 189510 228660 299630 263801 568593 380821 264275 199607 284890 504357 321520 197559 201140 189093 162958

3 6 11 13 17 19 23 26 29 30 35 36 40 43 44 45 48 51 52 53 55 56 57 59 61 63

SC AR-MO CO IN

284307 463204 252825 416257

67 69 70 72

R e p o r t

~~~~~~~

locally grown and from around the United States — take advantage of its large population of millennials, entrepreneurial atmosphere, and quality of life.

A recent report from the Milken Institute ranked Provo-Orem as No. 2 in its list of the Top 25 BestPerforming Large Cities for Business, basing its conclusion on growth in jobs, income, and technology output.

That was up five spots from the previous ranking. ProvoOrem also ranked No. 2 in 2013 on the Forbes ranking of “Best Mid-Size Cities for Jobs.” And last June, Forbes also listed Provo as No. 1 “Best Place for Business and Careers.”

The area has been topping so many charts lately because of the strong flow of new college graduates it is producing, especially from huge Brigham Young University, and because of a thriving tech sector. Local successes such as Novell, Nu Skin and Ancestry.com are expanding. Google’s selection of Provo-Orem as just the third city for installation of its new high-speed fiberoptic service will add more momentum to tech growth.

TOP 20 MID-SIZE CITIES—Economic Strength City / MSA

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Lake Charles Elkhart-Goshen Fargo Corpus Christi Lafayette Sioux Falls Longview Trenton-Ewing Greenville San Luis Obispo-Paso Robles Holland-Grand Haven St. Cloud Provo-Orem Fort Wayne Lafayette Naples-Marco Island Des Moines-West Des Moines Spartanburg Boulder Anchorage

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State

LA IN ND-MN TX LA SD TX NJ NC CA MI MN UT IN IN FL IA SC CO AK

Population Overall Economic Strength Rank 199607 197559 208777 428185 273738 228261 214369 366513 189510 269637 263801 189093 526810 416257 201789 321520 569633 284307 294567 380821

4 7 8 12 14 16 21 23 27 32 33 35 36 38 39 40 43 44 45 59

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Provo STRENGTHS • Large, dynamic high-tech industry.

• Stable employment and research spillovers from Brigham Young University.

• Strong population growth and high educational attainment.

• Low business costs.

jobs there are created by existing businesses. TCF Financial, Terex Bid-Well, Adams Thermal Systems, Integra Plastics, and Twin City Fan & Blower have all expanded their footprints in Sioux Falls recently, each citing a favorable tax climate.

UPSIDE • Faster household formation causes increased housing demand, which leads to higher prices and increased construction.

• Demand for locally produced flash memory chips strengthens.

• Low costs and high educational attainment attract new companies.

Sioux Falls, SD (Population: 228,261) Overall Rank: 11

The sky’s the limit in

San Angelo, Texas

S

ioux Falls has acquired a solid reputation as a breath of fresh air from the American prairie, a modern and complete urban center that still serves a large, rural region that has benefited lately from the strong U.S. agricultural economy and a bit from the fracking boom to the state’s north.

The city boasts low costs for doing business, a dependable and well-trained workforce, and a minimum of red tape — things that companies are looking for. At the same time, Sioux Falls boasts a satisfying quality of life and is on the rise as a retirement haven. Forbes has recognized both aspects of the area’s character by ranking Sioux Falls No. 1 on its list of “Best Small Places for Business and Careers” for nine of the last 10 years.

Sioux Falls has proven a growth base for firms in the financial services, medical, and renewable-energy industries because of its collective expertise in manufacturing, research, and back-office operations, as well as its business-friendliness. About 80 percent of new

Skilled Workforce Quality of Life Business Friendly

Chamber of Commerce Economic Development www.sanangelo.org 888-655-4136

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TOP 20 MID-SIZE CITIES—Year-Over-Year Growth City / MSA

1 2 3

Sioux Falls

4

STRENGTHS

5

• Business costs among the lowest in the U.S. • Diverse industrial base.

• Regional hub for education and health services.

6 7 8

UPSIDE

9

• Low business costs draw new corporate operations to the area.

• Pipeline infrastructure and drilling-related development spurs job growth in the region.

10 11 12 13

SMALL CITIES (population <160,000)

14 15 16

Columbus, IN

17

(Population: 76,794) Overall Rank: 2

18 19 20

TOP 20 MID-SIZE CITIES—Prime Workforce City / MSA

State

Trenton-Ewing Corpus Christi Pascagoula Fargo Greeley Bellingham Naples-Marco Island Oshkosh-Neenah Port St. Lucie Sioux Falls Provo-Orem Lafayette Vallejo-Fairfield Lake Charles Greenville Longview Fayetteville-Springdale-Rogers Salinas Asheville Boulder

State

NJ TX MS ND-MN CO WA FL WI FL SD UT LA CA LA NC TX AR-MO CA NC CO

Population Overall Year-overYear Growth Rank 366513 428185 162246 208777 252825 201140 321520 166994 424107 228261 526810 273738 413344 199607 189510 214369 463204 415057 424858 294567

TOP 20 MID-SIZE CITIES—Recession-Busting City / MSA

Population Overall

Prime

State

Population Overall

RecessionBusting Rank

Workforce Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

92

Madison Provo-Orem Columbia Tallahassee Tyler College Station-Bryan Killeen-Temple-Fort Hood Lubbock Augusta-Richmond County Fort Collins-Loveland Fargo Champaign-Urbana Des Moines-West Des Moines Boulder Fayetteville-Springdale-Rogers Columbus Norwich-New London Kalamazoo-Portage Harrisburg-Carlisle Bellingham

AREA DEVELOPMENT

WI UT MO FL TX TX TX TX GA-SC CO ND-MN IL IA CO AR-MO GA-AL CT MI PA WA

568593 526810 172786 367413 209714 228660 405300 284890 556877 299630 208777 231891 569633 294567 463204 294865 278598 326589 549475 201140

2 3 4 6 8 10 12 14 17 21 23 26 29 31 32 34 35 36 37 39

1 4 9 11 14 18 22 27 28 29 30 31 33 38 40 41 45 46 47 48

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Elkhart-Goshen Fargo Lafayette Provo-Orem Holland-Grand Haven Trenton-Ewing Columbia St. Cloud Spartanburg Anchorage Greenville Corpus Christi Eau Claire Sioux Falls San Luis Obispo-Paso Robles Kennewick-Pasco-Richland Ogden-Clearfield Waterloo-Cedar Falls Pensacola-Ferry Pass-Brent Greeley

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IN ND-MN LA UT MI NJ MO MN SC AK NC TX WI SD CA WA UT IA FL CO

197559 208777 273738 526810 263801 366513 172786 189093 284307 380821 189510 428185 161151 228261 269637 253340 547184 167819 448991 252825

6 9 11 12 13 17 21 23 24 27 30 32 35 38 42 46 49 52 52T 54

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A

perfect storm of economic growth has nourished Columbus, Much Depends on Company’s Industry Ind., keeping the little industrial pow& Life Cycle erhouse atop Area Development’s

By Eric Stavriotis, Senior Vice President, CBRE small-cities rankings. The city is beneMany experts would agree that the strongest sector of the economy over fiting from the boom in domestic prothe last five years has been energy. Next in line? Technology clearly is winning the day and helping pull many markets out of the Great Recession. duction of auto engines and other A quick review of the 2014 Leading Locations research confirms what we components, longer looks from site have been seeing from our clients and the markets overall: Companies locators because of Indiana’s new with a preponderance of technology workers are thirsty for more talent, and the needs of these companies can vary significantly based on their right-to-work law, and rising appreciaindustry and life cycle. tion for what AARP called Columbus’s For example, four of the top 10 markets in the overall ranking (San Jose, “under-the-radar charm.”

Provo, San Francisco, and Denver) are emerging or established hubs for Columbus surged by 13 spots to technology talent and have a thriving startup ecosystem. Rounding out the rank No. 2 in the Milken Institute list top 15 are similar tech-savvy markets in Nashville and Austin. All told, 40 percent of the overall top 15 Leading Locations are found on many short of Best-Performing Small Cities in lists for growing or established technology companies.

2013, driven by the community’s topWhat’s fascinating in practice is to see the differences in how technology 10 finishes in job growth, wage companies are buying this workforce and why this changes so much growth and high-tech GDP growth. depending on the industry and life cycle of the company. While many The city has been thriving lately in leading global organizations continue to invest in San Jose, San Francisco, and Austin, so too are early-stage startups, with founders often coming out large part because of the success of of the larger firms seeking out capital from abundant local sources. its biggest employer, Cummins, Conversely, we are seeing a significant amount of technology activity in smallwhich keeps expanding its output of er, regional markets such as Madison, Wisc.; Provo, Utah; Fort Collins and diesel engines for various sizes of Boulder, Col.; Ashville, N.C.; and Tallahassee, Fla. A quick glance of the trucks. In fact, Columbus has more “Prime Workforce Rank” of the mid-size locations will show all six of these markets in the Top 21 on this year’s Leading Locations list. Why are these mechanical engineers per worker types of markets thriving? Many larger companies are diversifying and see the than any other U.S. metro. It also benefit of a footprint that includes mid-size markets with proximity to major universities and a labor pool that values a balance in their work life and perhosts R&D centers for other major sonal life. Other small startups seek to grow in these markets with less comglobal auto suppliers, such as petition, figuring the capital will come find them when the time is right.

Faurecia. A Japan-based fastener manufacturer, Sunright, last year Midland, TX announced its third expansion in the Columbus area.

(Population: 136,872) Columbus has genuine quality-of-life chops as well, Overall Rank: 3 ranking high for its retirement affordability, first-rate park system, innovative architecture, and location less than an hour from Indianapolis.

Columbus, IN STRENGTHS • Strong manufacturing base with exposure to global markets.

• Stable housing market with low foreclosure activity.

• High affordability for residents and businesses.

UPSIDE • Rising educational attainment attracts business investment.

• Sturdy job market induces more residents to relocate to the metro area.

• Small foreclosure inventory pushes house prices up faster than anticipated.

M

idland is the definition of a boomtown. Originally sprung out of the West Texas oil patch decades ago, Midland has entered another era of strong growth thanks to the rebirth of the U.S. oil and gas industry via fracking and horizontal drilling. Now Midland is just trying to keep ahead of all aspects of its resulting growth.

The city posted among the top 10 percentage increases in GMP last year for the fourth year in a row.

Between November 2009 and November 2013, the number of nonfarm jobs in the metro area increased by 25 percent versus just 5.5 percent for the nation as a whole. Its population burgeoned by 4.6 percent in just a year, also topping the country. Personal income per capita grew by 25 percent between 2009 and 2011 as the drilling boom drove other job growth as well.

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Midland STRENGTHS

The flip side for Midland, like neighboring Odessa, has been simply coping with the prodigious growth of the last few years. Average monthly asking-rent prices climbed from less than $600 before the boom hit in 2007 to $1,110 by mid-2013, according to Reis realestate researchers. And rising home prices are squeezing would-be buyers out of the market.

State

Population

Rank

within

Leading Locations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

94

Columbus Midland Bismarck Odessa Grand Forks Morgantown Ithaca Dubuque Napa Ames Fairbanks Iowa City State College Sioux City La Crosse Billings Cheyenne St. Joseph Lebanon San Angelo Casper Winchester St. George Victoria Harrisonburg Elizabethtown Owensboro Goldsboro Williamsport Corvallis

AREA DEVELOPMENT

IN TX ND TX ND-MN WV NY IA CA IA AK IA PA IA-NE-SD WI-MN MT WY MO-KS PA TX WY VA-WV UT TX VA KY KY NC PA OR

STRENGTHS • Oil prices rise more than expected, spurring greater extraction.

• Downtown redevelopment diversifies economy.

Bismarck, ND (Population: 108,779) Overall Rank: 5

C

TOP 30 SMALL CITIES City / MSA

• High energy prices support the economy.

• Employment in the oil industry drives up average earnings.

• Housing market avoided the downturn experienced nationally.

76794 136872 108779 137130 98461 129709 101564 93653 136484 89542 97581 152586 153990 143577 133665 158050 91738 127329 133568 111823 75450 128472 138115 115384 125228 119736 114752 122623 116111 85579

2 3 5 9 10 12 18 21 32 33 34 37 49 54 57 60 68 76 81 91 99 103 105 110 111 113 114 122 123 124

ount Bismarck’s blessings from the appearance of thousands of new oil wells in North Dakota over the last decade. Only half the size of Fargo, N.D., the capital city also is absorbing the economic benefits of job and income growth brought by the fracking revolution.

The Gross Metropolitan Product of Bismarck grew by 8.5 percent in 2012, the seventh-largest rate of any city.

As of last November, no metro area had a lower unemployment rate than Bismarck’s 2.4 percent. And while the

TOP 20 SMALL CITIES—Economic Strength City / MSA

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Columbus Odessa Midland Dubuque Bismarck Napa Morgantown Victoria Grand Forks Williamsport Kokomo San Angelo Billings Winchester Iowa City Fairbanks Ames Sioux City La Crosse Casper

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State

IN TX TX IA ND CA WV TX ND-MN PA IN TX MT VA-WV IA AK IA IA-NE-SD WI-MN WY

Population Overall Economic Strength Rank 76794 137130 136872 93653 108779 136484 129709 115384 98461 116111 98688 111823 158050 128472 152586 97581 89542 143577 133665 75450

1 3 6 9 10 19 26 28 31 42 46 50 51 56 57 58 59 67 83 87

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pace of the oil boom has slowed a bit, it continues: IHS estimates that Bismarck’s GMP will increase by another 3.5 percent this year, leading all U.S. metro areas.

In May, the state launched “Find the Good Life in North Dakota,” a campaign to fill approximately 25,000 job openings for skilled workers. “We need a workforce that we can rely on into the future,” a state official said.

The retail and healthcare hub also ranked No. 4 on the most recent Forbes list of “Best Small Places for Business and Careers,” which cited niceties such as arts and recreation opportunities in Bismarck, influenced by the presence of state government.

ly trained labor pools, either through augmented education on the front end or cooperating with locating and expanding businesses and their specialized workforce needs on the back end.

Consider the role that state and local prime workforce programs have played in helping regions advance in the increasingly crucial biotech industry. Practically every jurisdiction across the country has been actively attempting to build biotech “hotspots” or “corridors”

Bismarck STRENGTHS • Significant energy resources in surrounding areas.

• Stable core employment base in government and healthcare.

• Very low cost of doing business.

UPSIDE • Improved in-migration from the oil boom adds needed depth to the labor force.

• Pipeline infrastructure is updated faster than expected, lowering spread on oil prices.

THE FACTORS PRIME WORK FORCE GROWTH Sluggish U.S. economic growth means that the pool of available labor actually continues to expand even as more companies are hiring again. The problem is that a yawning gap has developed between millions of potentially available workers and the increasingly sophisticated skills they would require to qualify for today’s generally tech-oriented jobs.

Most jobs now require some level of postsecondary education as well as computer skills.

That’s where state, regional, and city economic development programs can prove crucial, helping businesses fulfill their needs for high-

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TOP 20 SMALL CITIES—Year-Over-Year Growth City / MSA

1 2

for a decade now, and the emergent winners are focusing on helping biotech startups attract, develop, and retain the technical and scientific talent that is crucial for their success.

Illinois, for example, reimburses employers up to 50 percent of the costs of training graduate-student employees under its biotech training-assistance program. Missouri has spent $9 million in grants to establish “innovation campuses” where high-school students get extensive training in science and technology fields through apprenticeships with local employers while they also earn college credit.

And, in North Carolina, the legislature has cleverly leveraged the state’s tobacco-settlement payments into three separate trust funds, one of them a long-term

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Columbus Midland Sioux City Grand Forks Napa Bismarck Goldsboro Morgantown Odessa Pueblo Wenatchee-East Wenatchee Wheeling Punta Gorda State College Billings Lebanon Iowa City Mount Vernon-Anacortes St. George Dubuque

State

IN TX IA-NE-SD ND-MN CA ND NC WV TX CO WA WV-OH FL PA MT PA IA WA UT IA

Population Overall Year-overYear Growth Rank 76794 136872 143577 98461 136484 108779 122623 129709 137130 159063 110884 147950 159978 153990 158050 133568 152586 116901 138115 93653

TOP 20 SMALL CITIES—Prime Workforce

TOP 20 SMALL CITIES—Recession-Busting

City / MSA

City / MSA

State

Population Overall

Prime

State

Population Overall

Recession-

Workforce Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

96

2 6 8 10 13 16 21 35 36 43 55 58 59 61 63 65 66 67 69 77

Ithaca Hinesville-Fort Stewart State College Lawton Bend Ames Fairbanks Grand Forks Bismarck Midland Iowa City Morgantown Great Falls Columbus Cheyenne La Crosse Elizabethtown Harrisonburg Manhattan Lawrence

AREA DEVELOPMENT

NY GA PA OK OR IA AK ND-MN ND TX IA WV MT IN WY WI-MN KY VA KS KS

101564 77917 153990 124098 157733 89542 97581 98461 108779 136872 152586 129709 81327 76794 91738 133665 119736 125228 127081 110826

1 9 11 13 16 18 19 24 25 27 28 33 40 44 50 51 55 56 59 61

Busting Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Columbus Odessa Fairbanks Bismarck Dubuque Cleveland Midland Williamsport Elizabethtown Ithaca Grand Forks Owensboro State College Lebanon Morgantown Sandusky La Crosse Logan Goldsboro Billings

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IN TX AK ND IA TN TX PA KY NY ND-MN KY PA PA WV OH WI-MN UT-ID NC MT

76794 137130 97581 108779 93653 115788 136872 116111 119736 101564 98461 114752 153990 133568 129709 77079 133665 125442 122623 158050

1 2 3 5 7 8 14 15 16 18 20 26 28 38 40 63 69 75 79 80

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economic development foundation that committed $60 million to create a statewide training program for biomanufacturing workers. A portion of this grant, along with $4.5 million from the North Carolina Biosciences Organization, provided North Carolina State University in Raleigh with $36 million to train workers for the Research Triangle’s now-burgeoning life-sciences sector.

Vibrant performance in this criterion stands out for some MSAs, where they rank much more highly for worker readiness in the Area Development list for 2014 than in other categories. Tallahassee, Fla., for instance, ranks only No. 108 in the overall list this year — but No. 6 in the “Prime Workforce” criterion. One key for Florida’s capital is that economic development officials effectively harness the wide variety of the city’s highereducation network, not just the prominent Florida State University.

So, for example, Tallahassee Community College has taken a leadership role with the opening of its Advanced Manufacturing Training Center, a 16,000square-foot facility geared toward high-tech and precision-manufacturing training; and the Ghazvini Center for

Healthcare Education, an 85,000-square-foot facility that houses programs in diagnostic medical sonography, emergency medical services, nursing, radiologic technology, and respiratory care.

Even places with generally not as helpful reputations can score big economic development successes with the right type of assistance to help companies create prime workforces. Connecticut, for instance, began a Small Business Express Program in 2012 that offered companies help with developing employee skills as a centerpiece of a menu of lures. More than 1,000 Connecticut companies benefited through early 2014, creating and retaining about 14,000 jobs, the state said.

Economic Strength and Year-Over-Year Growth There’s no denying that the accidents and exigencies of geography and economic legacies continue to hold huge sway over the growth characteristics of MSAs across the United States. Consider that nine of the top10 cities in the Area Development 2014 “Economic Strength” ranking benefited greatly from boom times

WHERE OPPORTUNITY ABOUNDS. WHERE DEVELOPMENT IS CELEBRATED. WHERE INTERNATIONAL CORPORATIONS CALL HOME. SUGAR LAND. Success Thrives Here.

B u i l d i n g P a r t n e r s h i p s w i t h B u s i n e s s | Sugar Lan d Eco De v.co m | 281.275.2229

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TOP 5 NEW ENGLAND CITIES City / MSA

State

Population

Rank

within

Leading Locations 1 2 3

for oil and gas development and refining, or from their area’s historic and growing position at the forefront of a burgeoning area of the global economy. Number 1 in this category, Columbus, Ind., is riding high on Cummins’ leadership in hot-selling diesel engines, while Elkhart-Goshen, Ind. (No. 7) largely is riding the bounce-back in the American recreational-vehicle market. San Jose-Sunnyvale-Santa Clara (Calif.) (No. 2) and San Francisco-San Mateo-Redwood City (No. 5) obviously benefit tremendously from their firm leadership of the digital economy worldwide. And Odessa, Texas (No. 3), Lake Charles, La. (No. 4), Midland, Texas (No. 6),

4 5

Boston-Cambridge-Quincy Burlington-South Burlington Portland-South Portland-Biddeford Manchester Hartford-West HartfordEast Hartford

MA VT ME NH CT

2863943 198627 357412 187596 1121463

38 85 119 152 169

TOP 5 PLAINS CITIES City / MSA

State

Population

Rank

within

Leading Locations 1 2 3 4 5

Fargo Bismarck Grand Forks Sioux Falls Lincoln

ND-MN ND ND-MN SD NE

208777 108779 98461 228261 302157

3 5 10 11 112

WHAT’S YOUR STORY? The Bakken oil boom is one part of our North Dakota success story.

International companies including Amazon.com, Northrop Grumman, LM Wind Power, and FedEx are part of the rest of the story, being written right now in the Grand Forks region. Join them!

Turn the page to your next chapter. Contact the Grand Forks Region EDC to learn more about why we are among the TOP 10 leading locations and how you can become part of our story. grandforks.org | 701.746.2720 98

AREA DEVELOPMENT

AREA0287.indd 1

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Fargo, N.D. (No. 8), and Bismarck, N.D. (No. 10) are capitalizing on the rapid re-ascent of the American energy business.

So maybe the most instructive lessons for economic developers lies in the experience of the one top-ranked city for “Economic Strength” that didn’t benefit from any of these advantages: Dubuque, Iowa (No. 9). Until several years ago, the city at the intersection of Iowa, Illinois, and Wisconsin on the Mississippi River was dealing with devastation wrought by the troubles of both of its key industries: manufacturing and agriculture. Dubuque Packing closed, and then John Deere sliced its workforce by about three-quarters from its peak. Dubuque lost 10 percent of its population.

Then IBM began looking at an empty Depression-era department store for a facility, and local economic development leadership pounced. The city of just 57,000 offered $52 million in incentives to land the 1,300-person IBM site, focusing on the important issue of workplace availability. When IBM expressed concern about the local talent pool, Greater Dubuque downloaded and printed off 600 relevant resumes aspirants

AREA0288.indd 1

had put in its job-search database, according to PSMag.com. And it focused not just on the immediate population but built a case to IBM why the facility could draw workers from as far as 100 miles away from Dubuque — an area that encompasses some other significant cities as well as major universities including the University of Wisconsin-Madison, University of Iowa,

TOP 10 MID-ATLANTIC CITIES City / MSA

State

Population

Rank

within

Leading Locations 1 2 3 4 5 6 7 8 9 10

Trenton-Ewing Ithaca Pittsburgh State College Washington-ArlingtonAlexandria Bethesda-Rockville-Frederick Albany-Schenectady-Troy Lebanon New York-White Plains-Wayne Nassau-Suffolk

NJ NY PA PA DC-VAMD-WV MD NY PA NY-NJ NY

366513 101564 2356285 153990 4377008

13 18 41 49 50

1205162 870716 133568 11576251 2832882

62 78 81 83 89

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S p e c i a l

and University of Northern Iowa.

In 2009, IBM picked Dubuque, and the city hasn’t looked back. Applying lessons learned during that victory, city and regional officials have used a balanced approach that focuses on both local business-retention efforts and outreach to potential new companies. And Dubuque has picked up a diversity of new job-creating projects from companies ranging from Hormel Foods, which invested $36 million in the area last year, to Bodine Electric.

Recession-Busting Attributes Cities and regions across the United States were hit hard by the global financial collapse of 2008 and the subsequent Great Recession, which slashed budgets for many and put them in dire straits. Unlike the federal

State

Population

TOP 20 MIDWEST CITIES

Rank

within

City / MSA

Leading Locations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

100

Morgantown Charleston-North CharlestonSummerville Greenville Charlotte-Gastonia-Rock Hill Orlando-Kissimmee-Sanford Gainesville Durham-Chapel Hill Naples-Marco Island Atlanta-Sandy Springs-Marietta Blacksburg-Christiansburg-Radford Spartanburg Columbia Tampa-St. Petersburg-Clearwater Asheville Pensacola-Ferry Pass-Brent Richmond Port St. Lucie Greenville-Mauldin-Easley Winchester Roanoke AREA DEVELOPMENT

WV SC

129709 664607

12 22

189510 1758038 2134411 264275 504357 321520 5268860 162958 284307 767598 2783243 424858 448991 1258251 424107 636986 128472 308707

36 39 46 51 55 56 63 63T 67 80 81 86 86T 90 98 102 103 104

State

Population

Rank

within

Leading Locations 1 2

NC NC-SC FL FL NC FL GA VA SC SC FL NC FL VA FL SC VA-WV VA

~~~~~~~

government, city and state governments can’t run big or long-term deficits. Consequently, economic development efforts were among the endeavors that suffered in many localities.

But as the U.S. economy has haltingly recovered, many cities also have recovered their wherewithal when it comes to development efforts. And more companies than at any time since before the recession are beginning to open their pocketbooks for projects — whether they’re energy companies participating in the U.S. drilling boom, technology companies expanding to satisfy booming global demand, service outfits continuing to change life as we know it, or American manufacturers that are benefiting from “reshoring” of production and other positive factors. Let’s look at how three MSAs ranked in the top 15

by Area Development as 2014 “Recession-Busting” MSAs are arising from the difficulties of the Great Recession and putting themselves on new growth arcs.

These days it’s difficult to associate economic growth with Alaska, which is long past the peak of capitalization

TOP 20 SOUTH-ATLANTIC CITIES City / MSA

R e p o r t

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Columbus Dubuque Columbia Minneapolis-St. Paul-Bloomington Des Moines-West Des Moines Ames Lafayette Iowa City Grand Rapids-Wyoming Holland-Grand Haven Madison Sioux City Elkhart-Goshen La Crosse St. Cloud Indianapolis-Carmel Fort Wayne Warren-Troy-Farmington Hills St. Joseph Oshkosh-Neenah

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IN IA MO MN-WI IA IA IN IA MI MI WI IA-NE-SD IN WI-MN MN IN IN MI MO-KS WI

76794 93653 172786 3279833 569633 89542 201789 152586 774160 263801 568593 143577 197559 133665 189093 1756241 416257 2475666 127329 166994

2 21 23 28 29 33 35 37 42 44 45 54 57 57T 61 71 72 73 76 94

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on its oil resources. And because most communities in Alaska are highly dependent on state and federal government spending, the recession and topsy-turvy course of U.S. government outlays over the last few years have left the state off balance. But Fairbanks — the No. 3 recession-buster — has emerged atop the rest of the state and is weathering such difficulties better than most other Alaska communities. The anticipated growth in the military and construction sectors has helped out. Despite the Defense Department’s travails, 400 more soldiers are expected for nearby Fort Wainwright. Meanwhile, Fairbanks companies are participating in a mini-boom in exports from Alaska to other Asia-Pacific Rim companies, especially those in China and South Korea.

Southeastern Tennessee is getting more attention as a development hotspot lately. Chattanooga, for instance,

has a big Volkswagen assembly plant and a cutting-edge broadband network for business. Meanwhile, nearby Cleveland, Tenn. (No. 8 recession-buster), relies on a diverse mix of traditional factors to expand its economy.

They include a balance of thriving industries, a seasonable climate, a picturesque location, an ample workforce of qualified people, and access to four different interstate highways within an hour and a half. As a result, Cleveland ranked No. 25 in the 2013 Milken Institute report on the Best Performing Small Cities, ranking especially highly in one-year job and wage growth.

Southeastern Michigan gets all the attention as a manufacturing hub, but southwestern Michigan has been historically strong in various types of manufacturing, including medical devices and office furniture. And now, led by a pair of close but relatively small cities

TOP 10 SOUTHERN CITIES TOP 15 SOUTHWEST CITIES City / MSA

State

Population

City / MSA

2 3 4 5 6 7 8 9 10 11 12 13 14 15

Midland Odessa Austin-Round Rock-San Marcos Houston-Sugar Land-Baytown Corpus Christi Fort Worth-Arlington College Station-Bryan Dallas-Plano-Irving Lubbock Oklahoma City Tyler Waco Longview San Angelo Victoria

TX TX TX TX TX TX TX TX TX OK TX TX TX TX TX

136872 137130 1716289 5946800 428185 2136022 228660 4235751 284890 1252987 209714 234906 214369 111823 115384

3 9 15 16 19 24 40 47 53 66 77 84 88 91 110

State

Population

Rank

Leading Locations 1 2 3 4 5 6 7 8 9 10

Provo-Orem Denver-Aurora-Broomfield Salt Lake City Boulder Fort Collins-Loveland Billings Cheyenne Greeley Boise City-Nampa Ogden-Clearfield

UT CO UT CO CO MT WY CO ID UT

526810 2543482 1124197 294567 299630 158050 91738 252825 616561 547184

1 2 3 4 5 6 7 8 9 10

6 8 27 30 43 60 68 70 74 75

Nashville-Davidson-MurfreesboroFranklin Lafayette Lake Charles Baton Rouge Fayetteville-Springdale-Rogers New Orleans-Metairie-Kenner Houma-Bayou Cane-Thibodaux Elizabethtown Owensboro Louisville-Jefferson County

TN

1589934

14

LA LA LA AR-MO LA LA KY KY KY-IN

273738 199607 802484 463204 1167764 208178 119736 114752 1283566

17 52 65 69 93 106 113 114 120

TOP 15 PACIFIC CITIES City / MSA

State

Population

Rank

within

Leading Locations 2

within

Rank

within

Leading Locations

1

TOP 10 MOUNTAIN CITIES City / MSA

Population

within

Leading Locations 1

State

Rank

3 4 5 6 7 8 9 10 11 12 13 14 15

San Jose-Sunnyvale-Santa Clara San Francisco-San MateoRedwood City Santa Ana-Anaheim-Irvine Seattle-Bellevue-Everett San Luis Obispo-Paso Robles Portland-Vancouver-Hillsboro Napa Fairbanks Anchorage Bellingham Bakersfield-Delano Honolulu San Diego-Carlsbad-San Marcos Oakland-Fremont-Hayward Salinas

CA CA

1836911 1776095

1 7

CA WA CA OR-WA CA AK AK WA CA HI CA CA CA

3010232 2644584 269637 2226009 136484 97581 380821 201140 839631 953207 3095313 2559296 415057

19 25 26 31 32 34 48 59 79 95 100 101 118

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(Holland-Grand Haven, the No. 13 recession-buster), the region is coming back far more quickly from recession than the Detroit area. A number of factors contribute, including how the picturesque area on Lake Michigan’s eastern shore benefits from the strong uptick in tourism

R e p o r t

in Michigan, and particular kinds of manufacturing, such as advanced lightweight materials. Holland-Grand Haven also last year placed No. 1 in an analysis by Farmers Insurance as the “Most Secure” small or mediumsized metropolitan area in the U.S. Measuring criteria including eco-

~~~~~~~

nomic stability, crime statistics, extreme weather, housing depreciation, air quality, life expectancy, and employment, the insurer put a big fat, analytical imprimatur on the vaunted local “quality of life” that Holland-Grand Haven residents long have touted. •

100 Leading Locations Report Sponsors Arkansas

Missouri

North Dakota

Metro Little Rock Alliance

Regional Economic Development, Inc., (REDI)

Grand Forks Region Economic Development Corp.

Joey Dean, Executive Director

Regional Economic Development, Inc., (REDI) is a nonprofit, public/private partnership that collaboratively works to provide economic opportunities for Columbia and Boone County, Missouri. REDI is the local point of contact for any company or entrepreneur looking to successfully locate, grow, or expand their business in Columbia, Boone County, Missouri.

Metro Little Rock Alliance

J. Michael Brooks, President

Access Success: Grand Forks, N.D. — Companies like Amazon.com, Northrop Grumman, LM Wind Power, and J.R. Simplot are accessing success here. Will you be next?

Central North American location, proximity to 50,000+ post-secondary students, the Bakken oil region, Canadian border, unmanned systems test site headquarters, logistics, developmentready properties.

One Chamber Plaza Little Rock, AR 72201 1-800-905-6577 • 501-377-6006

Regional Economic Development, Inc.

Klaus Thiessen, President & CEO

500 East Walnut, Suite 102 Columbia, MO 65201 573-441-5542 or 573-442-8303

Grand Forks Region Economic Development Corp.

The Metro Little Rock Alliance represents a 12county region with a population of over 1,000,000 people. It is located in the center of the country and in the second-fastest-growing region of the United States, with 40 percent of the nation’s population and buying power within a 550-mile radius. It’s where “America Comes Together.”

jdean@littlerockchamber.com www.metrolittlerockalliance.com

Indiana Columbus Economic Development Board Columbus, Indiana, is known for its manufacturing prowess, engineering strengths, and worldrenowned architecture. Highly advanced, durable goods manufacturing drives the local economy, ranking the county in the top 2% of the U.S. for manufacturing employment.

Information on corporate relocations and expansions by Cummins, Toyota, PMG, and more is at www.ColumbusIN.org.

120 N. 4th St. Grand Forks, N.D. 58203 701-746-2720 • Fax: 701-746-2725

JMBrooks@GoColumbiaMO.com www.GoColumbiaMO.com www.ColumbiaREDI.com

klaust@grandforks.org www.grandforks.org

New Jersey

Pennsylvania

Mercer County, NJ, Office of Economic Development and Sustainability

Chamber of Business & Industry of Centre County (CBICC)

As New Jersey’s capital county, Mercer County is a center for commerce and culture in the Garden State. Located midway between New York City and Philadelphia, Mercer County’s 12 municipalities are home to more than 366,000 people in 226 square miles.

With Penn State University’s world-class research and intellectual talent providing a ready-made template for growth, Centre County boosts a flourishing high-tech business sector and a thriving job market. A strong support ecosystem for entrepreneurship and business start-ups makes the area the ideal location to turn innovative ideas into commercial success. A central location and proximity to major transportation corridors add to the benefits of conducting business in Centre County. The CBICC is a valuable resource for information about development opportunities within the region.

Columbus Economic Development Board

Brian M. Hughes, County Executive Elizabeth M. Muoio, Director

500 Franklin Street Columbus, IN 47201 812-378-7300 • Fax: 812-372-6756

Mercer County, New Jersey, Office of Economic Development and Sustainability

Jason Hester, CEcD – Executive Director

jhester@columbusin.org www.ColumbusIN.org

Louisiana Greater New Orleans, Inc. The progress of Greater New Orleans over the past five years has been rapid and dramatic; the publisher of Forbes called it “one of the great turnarounds in American history.” In economic development, we are at the highest point, in every economic ranking, in our history.

McDade Administration Building 640 South Broad Street Trenton, New Jersey 08650 609-989-6555 • Fax: 609-695-4943 BusinessAdvocate@MercerCounty.org www.businessinmercer.com

Vern Squier, CEO Centre County Industrial Development

200 Innovation Boulevard, Suite 150 State College, PA 16803 814-234-1829 vern@cbicc.org www.cbicc.org

Grady Fitzpatrick Senior Vice President, Business Development Greater New Orleans, Inc.

365 Canal Street, Suite 2300 New Orleans, LA 70130 504-527-6900 info@gnoinc.org www.gnoinc.org

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Texas Lubbock Economic Development Alliance Lubbock’s highly skilled and educated workforce, proximity and connection to major national and international markets, and affordable utility and living costs make it the ideal place to grow your business. Our diverse economy is based on manufacturing, agriculture, wholesale and retail trade services, as well as government, education, and healthcare.

Temple Economic Development Corporation

Charley Ayres, Director of Business Development

Temple, Texas, is a community with a diverse economic base that includes healthcare, distribution and warehousing, and manufacturing as its foundation. Within 180 miles of a population of 18 million, Temple is strategically located in the heart of the Texas Triangle (Dallas, Houston, San Antonio, and Austin) on I-35.

Temple Economic Development Corporation

1 South First Street Temple, TX 76501 254-773-8332 cayres@choosetemple.com www.choosetemple.com

Mike Hatley, Director of Business Recruitment Lubbock Economic Development Alliance

1500 Broadway, 6th Floor Lubbock, TX 79401 800-687-5330 • Fax: 806-749-4501 mike.hatley@lubbockeda.org www.lubbockeda.org

#1

Most Economical City for Business – KPMG

Odessa Development Corporation Odessa is located in the Permian Basin region of West Texas. Odessa is where you’ll find a friendly work force and highly skilled professionals in all walks of life. We have outstanding medical and educational facilities, as well as economic incentives and work force training programs, if you’re expanding your business.

Brainpower City in the USA – Forbes

Port in the USA – Business Facilities

Technology Job Growth in the USA – Bureau of Labor Statistics

Guy D. Andrews, Director, Economic Development

Major Economic Development Wins for the Decade

Odessa Development Corporation

– Southern Business and Development

700 North Grant Ave., Ste. 200 Odessa, TX 79761 1-877-363-3772 • 432-333-7881 Fax: 432-333-7858 ecodir@odessaecodev.com www.odessatex.com

San Angelo Chamber of Commerce San Angelo is a small metro area of 115,000 population located in West Central Texas. Its diverse economy includes manufacturing, retail, medical, education, business services, and energy. San Angelo is a regional center that boasts a commercial airport, four-year university, community college, and Air Force base.

Phil Neighbors, President San Angelo Chamber of Commerce

418 W. Avenue B San Angelo, TX 76903 325-655-4136 877-655-4136 Phil@sanangelo.org www.sanangelo.org

The City of Sugar Land Sugar Land is a regional employment center with over 24 million square feet of commercial space and home to corporations such as Minute Maid, Schlumberger, Fluor Corporation, Texas Instruments, and UnitedHealth Group.

Sugar Land Regional Airport also has one of the top-ranked FBOs, Global Select FBO.

IN NEW ORLEANS, GREATNESS IS THE NEW NORMAL

Jennifer A. May, Interim Director of Economic Development

365 Canal Street Suite 2300 New Orleans, LA 504.527.6900 info@gnoinc.org

City of Sugar Land

2700 Town Center Blvd. North Sugar Land, TX 77479 281-275-2229 • Fax: 281-275-2217 ecodev@sugarlandtx.gov www.sugarlandecodev.com

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The Regional Impact of Quality of Life on Entrepreneurial Decisions One of the most often cited reasons for the location of a new business is quality of life, yet it is one of the areas policymakers most often overlook.

By Dan White, Senior Economist; and Douglas Wynne, Associate Economist; Moodyâ&#x20AC;&#x2122;s Analytics

I

n the wake of the Great Recession, local policymakers are working harder than ever to differentiate their areas as friendly to small businesses and economic development. As part of these efforts, billions of public dollars are spent every year to attract companies, big and small, through the use of venture capital, tax incentives, public-private partnerships, workforce training, capital improvements, and many other tools. As economic development has become more competitive, policymakers are offering more and more to attract jobs and new opportunities for their constituencies. Though it is clear that these financial incentives are producing results in some areas, there are other environmental factors that policymakers can improve to attract more new businesses.

One of the areas most overlooked when comparing competing metro areas is a livability factor, or quality of life, that makes certain areas more attractive to individuals and thus businesses. One of the most often cited reasons for the location of a new business, especially a small business, is quality of life, yet it is one of the areas policymakers most often overlook in attracting entrepreneurs and the highly skilled people who most often work for them.1, 2, 3 After all, in addition to the fact

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that an entrepreneur wants to start their business in a place where it can thrive, making economic and tax factors important, the person must also want to live there. This is especially true for high-tech and computer-related businesses that can increasingly be created and sustained virtually anywhere. Quality of life, though not always the first consideration in deciding where to start a business, can be the X factor that differentiates two competitive metro areas.

Objective Subjectivity The primary reason that quality of life is so often overlooked in this process is that it can be difficult to measure objectively. Quality of life is a subjective, intangible thing that can mean different things to different people. People have different priorities in terms of their quality of life, and they cannot be totally controlled for. In addition, things such as geography and weather are out of policymakersâ&#x20AC;&#x2122; control. For example, the mayor of Lincoln, Neb., cannot simply move his city to the beach to attract more tech startups.

This study attempts to construct as objective a measure of quality of life as possible, based on concepts that are widely accepted as contributing to a higher standard of living. More important, it also attempts to include measures that can at least nominally be influenced by local policymakers and their decisions. It is important for the

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partly the result of a dearth of new-business activity, and purpose of this study that quality of life be a dynamic measnot necessarily the total cause of it. ure, susceptible to changes in public policy. Based on this The results of the comparison between QOL and newresearch, this study then attempts to go a step further by business formations show significant, but not perfect, correlacomparing the objective Quality of Life Index, or QOL, to tion. Based solely upon the econometric results business formation in U.S. metropolitan statisof the analysis, QOL factors appear to be able to tical areas. By comparing the measures, we can explain roughly a third of new-business formasee how much entrepreneurial decisions may tions across the country by metro area. be influenced by, or at the very least correlated However, when looked at from a deeper regionto, quality of life. al perspective, QOL takes on a larger signifiTo assemble an objective QOL, a variety of cance within new business formations. Thus, factors were compiled by metro area, ranging while QOL may be only a secondary factor in from life expectancy to the share of childhood determining which metro areas experience the poverty. Data limitations on some variables most new business growth nationwide, it prevented the inclusion of a handful of metro becomes a much more significant driver of areas and all metro divisions from being growth within specific regions themselves. included in this study.4 The most influential variables on new business startups fall under four different cateQUALITY-OF-LIFE Looking to Policy gories, each generally synonymous with a high The results of this study demonstrate that FACTORS APPEAR quality of living: public safety, public educaQOL can be both a cause and an effect of hightion, child welfare and recreation. Data from er business formation rates and economic TO BE ABLE TO 2011 were used, as it was the most recent year development. More important, this study conEXPLAIN ROUGHLY for which full data were available. Specific cludes that there are areas of public policy that measures include: can create a more fertile environment for busiA THIRD OF • Per capita crime rate ness investment beyond the tax and regulatory NEW-BUSINESS • High school or equivalent educational environment. attainment rate Large discrepancies between regional comFORMATIONS • Per capita access to recreational facilities petitors can be used to explain differing results • Percentage of children living in economic development efforts. Metro areas ACROSS THE in poverty under the age of 5 in competitive regions can use a higher QOL as COUNTRY BY a trump card in attracting more entrepreneurs and the highly skilled workers who typically Impacts on Business Formation METRO AREA. work for them. Generally, the greater the differNot surprisingly, the results show a high entiation in QOL, the greater the differentiation quality of life across a large concentration of of the number of successful new businesses relatively established Northeast and upper being started. Furthermore, QOL proved more influential on Midwest and West metro areas. With one notable exception, startups in areas experiencing faster in-migration and popueach of the metro areas in the top 10 score better than averlation growth. Taken in concert with efforts to create a age in each of the four categories. However, particularly low sound business environment from a tax and regulatory perrates for both crime and child poverty are the most common spective, a strong focus on public safety, public education, attribute among metro areas with the highest QOLs. This child welfare, and recreation by local policymakers is vital indicates higher income levels, often accompanied by higher in attracting entrepreneurs and high-skilled workers into the levels of business startups. The major exception in the top local economy. Thus, local policymakers should be con10 is Ocean City, NJ, which has an abnormally high concencerned with making their areas more profitable and more tration of recreational facilities relative to its population. livable.

The 10 metro areas with the lowest QOL scores, by contrast, were across California’s Central Valley and the South.

Notes: Each performed generally poor across all four facets of the 1 McCann, Joseph. “Quality of Life Scores Highest for Florida QOL, with no easily discernible pattern except that each is Entrepreneurs.” University of Florida (2000) home to some of the highest levels of poverty in the country.

2 Pennings, Johannes M., “The Urban Quality of Life and Entrepreneurship.”

In general, the South performed the worst of the four census Academy of Management Journal 25.01 (1982) pp.63-71 3 “What Do the Best Entrepreneurs Want in a City?” Endeavor Insight, regions, with only a handful of metro areas in the top quarFebruary 4, 2014 tile. Metro areas with secularly declining industries such as 4 Data limitations in recreational facilities and new-business formations pronondurable manufacturing and lacking a dynamic private hibited the use of metro divisions. Missing crime data also warranted the service industry driver typically fared the worst within the exclusion of Casper WY, Fayetteville AR, Mankato MN, Manhattan KS, region.

Morgantown WV, North Port FL, Toledo OH, and Tucson AZ. It is important, however, not to jump to conclusions too quickly based solely on these measures. Correlation does For the complete QOL ranking of all 347 MSAs included in this not necessarily indicate causation. Therefore, it is possible, study, email Erlind.Dine@moodys.com and likely probable, that a relatively low QOL is at least AREA DEVELOPMENT | Q2/2014

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CONSTRUCTION/DESIGN

Quality, Speed, and Value Drive the Site Selection Process A combination of design-build and precast building systems is helping to deliver high-performance facilities within shorter timeframes and at lower cost.

By Erik Dunnigan, Vice President – Business Development, Bristol Group, Inc.

Manufactured precast panel for the United States Attorney’s Office

developers, and other commercial entities increasingly are choosing a design-build provider as a strategic partner in the location process. They realize that design-build minimizes risk, eliminates change orders, speeds time to completion, and reduces the cost, ultimately delivering a high-performance facility on a shorter delivery cycle. As an additional way to add value, clients are also starting to take advantage of building systems such as precast, which allow the construction process to begin before crews even hit the job site.

Some Examples

I

n growth, companies find themselves in the dilemma of identifying capital to increase capacity and managing opportunity cost where capital may be deferred. This dilemma is amplified as capacity constraints drive a company to complete the site selection process for an expanding or new facility.

Inherent as part of site selection, there is risk — risk of making the wrong site decision…risk in allocating an appropriate amount of capital…risk in completing a project on schedule and within the budget…risk in minimizing and preparing for natural occurrences, like weather, that we cannot control. In the end, the growth strategy puts an owner, manager, or developer in a situation where the appropriate strategic partner can mean the difference in making a profit or generating a loss.

As a solution, manufacturers,

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Let’s consider the following: Like most manufacturers, Hitachi Automotive Systems places paramount importance on speed of construction to meet production schedules for new automotive components. As in the case of Hitachi, most, if not all, automotive manufacturers actually require the assembly line they’ve created to be approved for production before they will accept delivery of parts from said line. Once approved, the line cannot be moved or altered without going through this entire approval process again. When capacity, or more importantly, time, is limited, these types of requirements have a severe impact on construction schedules.

This is where design-build and precast building systems were combined to produce the best results for Hitachi’s 289,000-square-foot facility to add manufacturing capacity to its FOR FREE SITE INFORMATION, CALL

operations in Georgia. Bristol Group’s design-build capabilities, coupled with the sourcing of local precast components, helped deliver a high-performing facility on an extremely short delivery cycle, thereby lowering the risk for the client and delivering value in five key areas: 1. Speed — Manufacturers need to stick to a schedule and have the expansion or new facility in production as soon as possible. Even while design is wrapping up and prep work for grading and utilities is under way, precast walls can be built simultaneously in a manufacturing facility, and then erected in a short period of time.

This manufacturing process allows design and construction to overlap, further reducing the delivery cycle of a new facility.

In addition, because these components are cast indoors, they are not subject to weather delays, and they reduce the need for onsite labor, which has a much lower rate of productivity.

For example, even with the cold, wet winter in 2013, Bristol Group was able to get Hitachi’s Georgia plant under roof in 2.5 months and delivered a full two months ahead of schedule.

2. Quality control — Precast is manufactured in a controlled environment, which produces the highest degree of quality and ensures uniformity.

This approach can benefit interior function as well. Osram Sylvania, a division of Siemens, asked Bristol Group to assist in site selection and construction of a 7,500-square-foot addition to house

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state-of-the-art recycling machinery to reclaim the phosphorous coating on the interior of fluorescent light bulbs.

Osram Sylvania’s plants typically have process tunnels with varying depths and widths to manage production flow. When the firm trims glass in its process, the excess falls into those tunnels for disposal. The traditional way to create those tunnels is to dig 10 to 12 feet with machinery and pour individual pieces of concrete — repeating the process until complete. This type of construction disrupts production flow and increases the client’s risk because of the inevitable manufacturing downtime.

As an alternative, Bristol Group cast and set each concrete component in its own precast manufacturing facility in Central Kentucky so we didn’t have to disturb operating machinery in the plant or dig excess material in the tunnels. This perfect marriage of the design-build process and our precast manufacturing facility created an innovative solution that saved time, ensured quality, and reduced risk.

3. Durability and performance — It’s not every day that a company is asked to site, design, and construct a building that has blast-rated glazing, ballistic-rated drywall, achieved LEED Silver certification, and won an award from the Associated General Contractors of Kentucky. The United States Attorney’s Office had special safety needs and site constraints in downtown Louisville, Ky., and design-build coupled with precast was part of the solution.

In this case, each precast concrete component underwent a process where it was pre-stressed to increase strength and allow it to age gracefully without distress — resisting wind, impact, and fire. The six-story office building with two levels of secured parking used two sources of precast concrete elements. Architectural panels, structural precast columns, and structural precast beams were manufactured at Bristol Group’s Lexington facility. Bristol Group sourced hollow-core floor slabs from a partnering vendor. The end result was an aesthetically pleasing facility, delivered under budget and on a shorter delivery cycle, and capable of outperforming the industry standards for safety.

4. Operations cost reductions — In all three cases identified, proper siting, design, and inclusion of precast concrete components provided a superior building envelope. These facilities consistently outperform conventional construction by reducing air infiltration and moisture buildup while maintaining an equal cost of construction. The time to delivery also was shorter than the traditional construction process. A masonry building, even if it’s well done, will start to crack. Precast is as airtight after 25 years as it is in the beginning. Along with the fact that concrete is slow to absorb and release heat, these qualities further reduce the overall operating costs, without increasing the construction budget.

5. Tailored design — Finally, as companies work to site their facilities, the aesthetics can make or break the “go/no go” decision. Working with a strategic design/build partner who can explain every building system available allows clients to have a better opportuSLACKWATER PORT INTERSTATE ACCESS nity to meet their expectations. In the case of precast concrete components, these materials can be produced with RAIL ACCESS 2 REGIONAL AIRPORTS a variety of textures, colors, and finishes, including real brick material cast into the panel. Form liners allow for a wide range of appearances from hand-cut stone to lettering and even an organization’s logo. With that said, precast is not always the solution. Therefore choosing the right site selection partner can mean all the difference in the world.

Integrating these processes ensures the client’s expectations of quality, speed, responsive solutions, and — most of all — value are being met. Those expectations aren’t just trends. They are the standards of success for Search our property database the construction industry. As companies strive to decrease www.jeffersoncountyalliance.com construction time and cost, increase facility performance, and manage their risk, choosing the proper partner can define their success.

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Looking Beyond the Numbers When Assessing A Community Those charged with the location decision should look for tangible evidence that the communities they are considering are taking an integrated approach to community development.

By Dean J. Uminski, CEcD, Principal, Crowe Horwath LLP

E

conomic factors and local government incentives have always played an important role in influencing companies’ site selection processes. But the most successful efforts — where a new corporate citizen becomes a valuable addition to a productive and welcoming community — are those in which both economic development and community development factors are balanced and integrated.

When companies seek out new communities in which to expand or relocate facilities, a range of both qualitative and quantitative factors are part of their site selection decision.

Quantitative factors include the basics such as highway, rail, air, or port access; energy availability and costs; and the presence of an adequate and appropriately skilled workforce.

These basics — the required elements for doing business — are often augmented by various state and local incentives such as tax credits and exemptions or favorable financing arrangements.

Qualitative factors, on the other hand, include such features as a low crime rate, good healthcare facilities, varied and affordable housing, and other quality-of-life considerations such as strong local schools and inviting recreational and cultural amenities. Such qualitative factors — by definition — are difficult to measure and quantify, and they are more likely to reflect relocating executives’ personal preferences and subjective judgment.

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Qualitative Issues in Location Decisions

2012 2013

90% 81% 80% 79%

80% 75%

73%

72% 70%

70%

70%

67%

66% 63%

62% 60%

60%

60% 55%

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Source: Area Development’s 28th annual Corporate Survey. All figures are percentages and are the total of “very important” and “important” ratings in the survey and are rounded to nearest whole number.

Community Development Drives Economic Development While local governments and business groups often work hard to sweeten the quantitative factors that drive relocation decisions, companies that are expanding or relocating are beginning to pay increasingly close attention to qualitative factors. This shift in emphasis was illustrated very clearly in Area Development’s 28th annual Corporate Survey.

The vast majority of the survey FOR FREE SITE INFORMATION, CALL

respondents are instrumental in their companies’ relocation or expansion decisions — more than 80 percent of them make either the final decision or a preliminary recommendation. These influential executives were asked to rank the importance of dozens of issues that affect their location decisions.

While the comparative rankings of various issues’ importance are naturally of interest, one particularly striking feature is the growing importance that is given to qualitative issues in general.

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Of the nine quality-of-life factors that were suggested, all were cited as either “important” or “very important” by more than half of the 2013 survey respondents. Even more remarkable is the rapid growth in importance of most of these quality-oflife factors. For example, when compared with the 2012 responses, all but one of the qualitative factors jumped in importance — in some instances by 10 percentage points or more in just a year. Local healthcare facilities, public schools, and recreational opportunities scored particularly dramatic increases in importance.

These sharp increases suggest there’s more going on here than merely a shift in the personal preferences of the executives being surveyed. Such an abrupt jump in the importance of almost all of the quality-of-life factors suggests that a growing number of companies are recognizing the powerful effects such qualitative issues can have on their employees — and ultimately on their companies’ operational and financial performance.

The Importance of Human Capital A somewhat similar shift can be seen in the ranking of quantitative issues. The number-one quantitative issue cited by survey respondents in 2013 was the availability of skilled labor. Just one year earlier skilled labor availability was ranked third, after highway access and labor costs.

The number of survey participants who cited skilled labor availability as either “important” or “very important” jumped more than five percentage points — from 89.4 percent to 95.1 percent — in a single year.

Although the availability of skilled labor is considered a “quantitative” factor, it is in many ways closely related to many of the leading qualitative issues, particularly educational factors.

After all, most of the qualitative factors that make a community an attractive site for corporate relocation and expansion also make it an attractive place for skilled workers to move. This is a good example of the close interrelationship between quantitative and qualitative factors.

In many ways, human capital can

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be as important as financial capital when considering a community for a planned relocation or expansion. The best quantitative factors — including generous incentive packages — cannot turn a poor choice into a good one.

Factors such as a good educational system, low crime, economic vitality and diversity, and the ability to respond to economic downturns or other challenges generally will equal or outweigh targeted incentives.

Community and Economic Development: An Integrated Approach People are the fabric of any community. The goal of community development is to improve the quality of life and promote sustainable human development in such areas as health, education, social integration, environment, and social culture. The healthiest communities are those with a mix of incomes and development activities that can offset each other during economic swings.

The best quantitative factors — including generous incentive packages — cannot turn a poor choice into a good one.

Executives responsible for recommending a location need to recognize and objectively analyze such intangibles. One important feature they should look for is an integrated approach to community and economic development — a community in which the intersection between economic development strategies and community development programs is virtually seamless. If community stakeholders — such as social welfare organizations, charities, the healthcare professions, and neighborhood associations — are not also involved in and committed to economic development efforts, it can be difficult for a relocating business to generate the community support that is needed. You can’t have one without the other.

At the same time, the economic development team should reach out to community organizations for other reasons. Not only does the economic team

need to garner community support, it also should identify unmet needs that business developers can address in order to contribute to the overall cultural and social vitality and long-term sustainability of the community.

Every economic development office or chamber of commerce is going to do its best to present a positive picture of a community, including a positive indication of community support. So an executive with a location decision to make should look beyond the attractive presentations and be alert to less obvious evidence of close cooperation between economic and community development groups. For example, in addition to meeting with a broad cross section of the community — not just the business development organization — it is important to also look for evidence that there is an organized effort to integrate community and economic development — an effort that includes measurable benchmarks.

One especially important component of an integrated economic and community development approach is the community’s strategic plan. In years past, federal financial support encouraged many states and localities to develop comprehensive strategic plans. That momentum has slowed somewhat in recent years, leading many localities to assign a lower priority to actively developing or maintaining their community strategic plans.

While the absence of a structured community strategic plan might not be a firm “deal killer,” most large organizations will regard such an absence as a major concern. Likewise, most relocation consultants will be hesitant to recommend a locality that doesn’t have in place a strategic plan that defines where it wants to be in the future.

Beyond confirming the actual existence of a community strategic plan, companies should also verify that the plan is active and effective and is not just gathering dust in a bookcase in the business development organization’s headquarters. Look for signs that the document is actively used in the organization’s ongoing mission.

The Community Strategic Plan: Key Components In terms of content, a community AREA DEVELOPMENT | Q2/2014

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strategic plan should address communitywide issues, not just economic development. These include major qualitative issues such as schools, employment, crime, homelessness, and community infrastructure.

Several years ago, the American Planning Association issued a Planning Advisory Service Report — “An Economic Development Toolbox: Strategies and Methods” http://www.planning.org/eda/toolkit/

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— which described a number of strategies local governments can use, either alone or with other institutions, to carry out their economic development vision. The report organizes these strategies into the following groups: • Coordination of economic development programs and support services • Business development • Development incentives and financing • Business attraction and retention • Workforce education and training

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ElectriCities’ seasoned, experienced Economic Development staff is dedicated to helping these communities continue to grow and prosper. From site selection to targeted recruiting to grant assistance and marketing, we’ve got all the tools and expertise you need to successfully develop your business.

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• Land supply analysis for business growth • Infrastructure investment • Investment in quality-of-life factors conducive to business innovation It’s noteworthy that coordination between economic development and support services topped the list, with business-oriented quality-of-life factors serving as the other “bookend.”

These strategies can serve as a starting point checklist when reviewing a community’s strategic plan. Depending on community size and circumstances, the list could be condensed into four main components: 1. Workforce development 2. Business retention 3. Business attraction 4. Integration with community development In addition to these components, one more element should be included in the strategic plan — a strategy for organizational sustainability for the economic development organization itself. Those responsible for the location decision should make sure the development organization has a strategy for its own long-term success, so it will be there for the company down the road when further support might be needed.

While tax incentives, grants, transportation access, and other “hard” factors always will be critical in a location decision, qualitative issues seem to play an ever-growing role in attracting the types of companies communities want most. Those executives who are charged with making or influencing site selection decisions should recognize this trend and look for tangible evidence that the communities they are considering are taking an integrated approach to community development — an approach in which business, social, and community organizations operate from a shared vision and a shared set of goals and priorities.

Dean Uminski is a principal with Crowe Horwath LLP in the South Bend, Indiana, office. He can be reached at 574-239-7865 or dean.uminski@crowehorwath.com.

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Vital. Useful. Updated Daily.

The best information on site selection and facility planning available online • Current News: Real estate & industry news, and economic indicator reports updated throughout the day • Valuable Resources: Tax and incentive information, development contacts, and insightful surveys • Latest Studies, Research, White Papers: Aggregated from the top consultants, think tanks and institutions, and distilled into usable information • Reviewable Archives: Search the Area Development archives for content, opinion, and reports spanning the last five years from the top industry minds

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ALABAMA 41

The Valley Partnership www.thevalleypartnership.com www.columbusgachamber.com bmurphy@thevalleypartnership.com

29

37

107 48, 49

CALIFORNIA Sacramento Municipal Utility District www.SMUD.org/EconDev

58

CONNECTICUT Cheshire Economic Development Corp. www.cheshirect.org jsitko@cheshirect.org

74

Greater Fort Lauderdale Alliance www.LessTaxing.com pdoty@gflalliance.org

15

61

28

Georgia Power www.SelectGeorgia.com econdevga@southernco.com

77

The Valley Partnership www.thevalleypartnership.com www.columbusgachamber.com bmurphy@thevalleypartnership.com

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ILLINOIS Hoosier Energy Economic Development www.HoosierSites.com www.HEPN.com hgutzwiller@HEPN.com

79

Columbus Economic Development Board www.columbusIN.org jhester@columbusIN.org

80

Hoosier Energy Economic Development www.HoosierSites.com www.HEPN.com hgutzwiller@HEPN.com

79

Kentucky Cabinet for Economic Development www.ThinkKentucky.com econdev@KY.gov Mandy.Lambert@KY.gov

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Missouri Department of Economic Development www.ded.mo.gov ecodev@ded.mo.gov

35

The Missouri Partnership www.ad.missouripartnership.com chris@missouripartnership.com

35

NEBRASKA Nebraska Public Power District www.nppd.com econdev@nppd.com

11

Choose New Jersey, Inc. www.chooseNJ.com serious@choosenj.com President@choosenj.com

30

Mercer County Office of Economic Development and Sustainability www.businessinmercer.com BusinessAdvocate@MercerCounty.org

84

Mohawk Valley EDGE www.MarcyNanocenter.com www.mvedge.org Reynolds@mvedge.org

22, 23

National Grid www.nationalgrid.com www.Shovelready.com Linda.Hill@NationalGrid.com shovelready@us.ngrid.com

22, 23

Saratoga Economic Development Corp. www.saratogaedc.com dbrobston@saratogaedc.com info@saratogaedc.com

22, 23

NORTH CAROLINA ElectriCities of North Carolina, Inc. www.electricities.com bdaniels@electricities.org

110

Grand Forks Region Economic Development www.grandforks.org klaust@grandforks.org

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PENNSYLVANIA

75

Centre County Chamber of Business & Industry www.cbicc.org ecodev@cbicc.org

43

7

Advertiser

98

Page

Tennessee Department of Economic & Community Development www.tnecd.com www.tn.gov/ecd/ allen.borden@tn.gov

39

TEXAS Amistad Industrial Development www.amistadmexico.com info@amistadmexico.com

18

Lubbock Economic Development Alliance www.lubbockeda.org mike.hatley@lubbockeda.org

68

Marble Falls Economic Development Corp. www.marblefallseconomy.com cfletcher@marblefallseconomy.com

70

Odessa Development Corp. www.odessatex.com ecodir@odessaecodev.com

65

San Angelo Chamber of Commerce Economic Development www.sanangelo.org Phil@sanangelo.org San Antonio Economic Development Foundation www.sanantonioedf.com edf@sanantonioedf.com tlong@sanantonioedf.com

91

67

City of Sugarland www.SugarLandEcoDev.com ecodev@Sugarlandtx.gov

97

Temple Economic Development Corp. www.ChooseTemple.com cayres@ChooseTemple.com

89

TexAmericas Center www.texamericascenter.com Eric.Voyles@texamericascenter.com

69

Texas Office of the Governor Economic Development & Tourism www.texaswideopenforbusiness.com biztex@gov.texas.gov Tomball Economic Development Corp. www.tomballtxedc.org kviolette@tomballtxedc.org

25

66

UTAH Cedar City-Iron County Office of Economic Development www.cedarcity.org www.cedarcity.org/523/ Office-of-Economic-Development wbrennan@cedarcity.org Utah Governor’s Office of Economic Development www.business.utah.gov businessutah@utah.gov

45

47

MEXICO

Tulsa Regional Chamber www.GrowMetroTulsa.com/MoveForward jmclaughlin@tulsachamber.com

KENTUCKY City of Berea www.bereaky.gov tmccay@bereaky.gov

95

OKLAHOMA

KANSAS Kansas Department of Commerce www.KansasCommerce.com/KBIZ bhake@KansasCommerce.com

Columbia Regional Economic Development Inc. www.columbiaredi.com jmbrooks@gocolumbiamo.com

NORTH DAKOTA

INDIANA

Huntington County Economic Development www.hcued.com

MISSOURI

NEW YORK

GEORGIA Dalton-Whitfield County Joint Development Authority www.locationdalton.com carnes@daltonchamber.org

C2, 1

NEW JERSEY

FLORIDA Economic Development Commission of Florida’s Space Coast www.SpaceCoastEDC.org gweiner@SpaceCoastEDC.org

103

Mississippi Development Authority www.Mississippi.org mdorsey@mississippi.org

ARKANSAS

Metro Little Rock Alliance www.metrolittlerockalliance.com jdean@littlerockchamber.com

Greater New Orleans Inc. www.gnoinc.org info@gnoinc.org

MISSISSIPPI

ARIZONA

Economic Development Alliance for Jefferson County www.jeffersoncountyalliance.com

Page

LOUISIANA

Alabama Department of Commerce www.MadeInAlabama.com

City of Mesa Economic Development www.mesaaz.gov/economic kim.lofgreen@mesaaz.gov

Advertiser

73

Pennsylvania Department of Community and Economic Development www.newPA.com/sbcn ra-dcedsbcn@pa.gov

18

CANADA

99

Lehigh Valley Economic Development www.lehighvalley.org JMcGran@lehighvalley.org

Amistad Industrial Development www.amistadmexico.com info@amistadmexico.com

ONTARIO Brampton Economic Development www.brampton.ca/b-more

33

QUEBEC Aéroports de Montréal www.admtl.com Developpement.IndustrielADM @admtl.com

C4

Conférence régionale des élus de la Vallé-du-Haut-Saint-Laurent www.hub-30.com info@hub-30.com

19

16, 17

57

TENNESSEE Knoxville-Oakridge Innovation Valley www.knoxvilleoakridge.com dlawyer@knoxvillechamber.com

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In the last six years, Pennsylvania’s abundant resources have reduced natural gas prices by 50% and electricity prices by 40%.

Pennsylvania has the low-cost energy your business needs. We’ve long been home to an abundance of natural resources. Today, we have the 2nd largest energy field in the world with a diverse energy portfolio that includes coal, utilizing clean-coal technology, nuclear generation, oil, natural gas, hydropower, and other renewables. And to keep fueling growth, Governor Corbett has created the “Energy=Jobs” plan, which leverages our vast energy resources to create more economic opportunity and jobs. So if your business needs affordable and abundant energy, work with Pennsylvania.

energy.newPA.com Tom Corbett, Governor

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