Area Development Q3 Issue 2018

SATISFYING FINTECH NEEDS

TOP STATES for Doing Business

BENEFITS OF MODULAR CONSTRUCTION

SURVEY

AREADEVELOPMENT S I T E

A N D

FA C I L I T Y

P L A N N I N G

Q3/2018

BIG DATA T HE A NA LY T I C AL POWER OF DATA S C I E NC E I S I N F L U E NC I N G E V E RY T HI NG F R OM T HE L O C AT I O N DE C I S I O N T O O P E R AT I O NS O N T HE S HO P F L O OR .

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

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adidas

Constellium

Facebook

Shire

Starbucks

voestalpine

LET’S BREAK GROUND

TOGETHER

Global brands from adidas to Starbucks have taken advantage of the due diligence behind the Georgia Ready for Accelerated Development (GRAD) Sites Program.

Wetlands Delineation Phase I Environmental Study Cultural and Endangered Species Study Geotechnical Study Zoning, Utilities and Accessibility

Find the perfect location for your business.

Visit Georgia.org/SiteSelector to explore more than 60 certified sites, including drone footage, that are shovel-ready.

We SPEAK Business

Georgia Department of Economic Development

CONTENTS

COVER STORY

FEATURES 12 Which Locations Are

42 Technology Upending

Irrespective of their size, the strongest markets for financial technology companies have a workforce that aligns to best serve all distinctive skill set and cost requirements.

Technology’s radical transformations of industry are changing not only company operations but also how sites are selected.

Drawing FinTech Companies?

16 Integrating Technology

44 You’ve Found the Perfect

Into the Corporate Headquarters Facility

How Can Big Data Enable More Efficient and Effective Location Decisions and Planning?

24 Modular Construction

Projects Cut Costs and Timelines

Early commitment from buyers and all stakeholders is imperative to a successful modular construction project, which can deliver on cost savings and shorten timeliness.

Exclusive Online Content • IN FOCUS: Make Way for Game-Changers

NOW ONLINE...

Site — Now What?

Businesses that utilize technology to ensure their corporate headquarters are ready for the future will realize productivity, economic, and other gains.

19 Big Data

• IN FOCUS: Examining Commerce’s Misguided Auto Imports Investigation How Family-Friendly Workplace Policies Can Help Solve America’s Labor Shortage

the Location Decision Process

A site’s existing conditions, zoning regulations, and surroundings are just some of the elements that must be considered in order to turn the site into the ideal location for your project.

65 Negotiating Incentives for Your Next Capital Investment

When selecting a site for your next U.S. capital investment, keep in mind that incentives alone won’t transform a bad location into a good one. However, a good incentive package can improve a project’s bottom line and solve site-related issues.

www.areadevelopment.com

Plastics Industry Flourishes in Response to Market Demand A Smarter Way to Incentivize For Industrial Development, Rail Is the Gravy Train Orlando: A Prime Destination for a STEM Workforce

Area Development® Site & Facility Planning (USPS 345-510) is published four times per year (Q1, Q2, Q3, and Q4) at Richmond, VA, by Halcyon Business Publications, Inc., 400 Post Ave., Westbury, NY 11590.

Periodicals postage paid at Westbury, NY, and additional offices. Single copies, $10. Yearly subscription U.S. & Canada, $75; foreign, $95.

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Volume 53 | Number 3 Q3/2018

Quote:

“The goal is to turn data into information, and information into insight.”

Carly Fiorina (1954– ), former Chief Executive Officer of Hewlett-Packard Co. and Global Board Chair of Opportunity International

SPECIAL REPORTS 27

DEPARTMENTS

2018 Top States for Doing Business

4 Editor’s note

Rising Above the Flood of Data

Competitive labor environments and leading workforce development programs, low taxes and utility costs, favorable regulatory environments, and cooperative state governments are among the top-ranked states’ pro-business attributes.

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6 In Focus

The Pitfalls of Being in the Running for Amazon HQ2

6 Front Line

Union Activity Showing Recent Spikes

Editor’s Report

10 First Person

Sarah Boisvert, Founder, Fab Lab Hub

Location Canada

68 Ad Index/Web Directory

Despite the uncertain investment environment brought about by renegotiation of NAFTA and new U.S.-imposed tariffs, Canada continues to promote FDI by maintaining an open economy, investing in its workforce, and engaging in regional trade partnerships.

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Online Database Resources www.facilitylocations.com

Follow Us On twitter.com/areadevelopment

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POSTMASTER: Send address changes to Area Development, Circulation Department, 400 Post Ave., Westbury, NY 11590. Subscribers requesting address changes must provide both old and new addresses. © Copyright 2018 by Area Development® magazine. ISSN: 1048-6534. Printed in the U.S.A. Area Development® is a registered trademark of Halcyon Business Publications, Inc.

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EDITOR’SNOTE

Q3/2018

Rising Above the Flood of Data For the last few years, “Big Data” has been one of the hottest buzzwords around. It’s used to describe the process of analyzing complex data sets to help make better decisions. In the case of our readers, that might mean decisions as to where to locate their next facility, find the workforce their company needs, or improve operations on the shop floor.

Interestingly, data science that encompasses predictive models is disrupting the conventional location decision process. Those charged with choosing the next site for their facility collect data about labor, real estate, and utility costs as well as taxes and infrastructure. But now they can even utilize data to determine their company’s cultural fit in a prospective location. Data about a location’s lifestyle trends — i.e., residential developments, hotels, restaurants, shopping venues, cultural events, and more — as well as from social media sites can be used to determine how well a company will “fit” into a particular community now and, importantly, in the future. To find out more, read this month’s “Big Data” cover story.

However, can companies actually collect too much data? That’s the suggestion of a recent IndustryWeek article.1 For example, the IIoT (Industrial Internet of Things) has automated data collection on the shop floor and reduced its costs. Nonetheless, the collection of data requires hardware and software along with maintenance of these conduits. And storing all the collected data is another added expense. Only necessary data should be collected, and the bottom line is it needs to be analyzed in order to be useful. Let’s not forget that “the goal is to turn data into information, and information into insight,” according to Carly Fiorina, the former CEO of Hewlett-Packard Co. It’s also important to note that increased cybersecurity goes hand-in-hand with the collection of data. Businesses need to protect the vast amounts of data they are collecting because just as big data analytics presents them with enhanced business intelligence, it also enhances opportunities for cybercriminals. Luckily, though, the collection and analysis of data about incidents of cybercrime are helping to thwart these very activities.

It seems big data is being used everywhere — in manufacturing, logistics, financial services, medicine/healthcare, social media and beyond. Whether we like it or not, we cannot staunch the flood of data.

www.areadevelopment.com EDITORIAL E-mail: editor@areadevelopment.com Editor Geraldine Gambale Staff and Contributing Editors Dale D. Buss Tom Gresham Dave Claborn Cynthia Kincaid Mark Crawford Phillip Perry Dan Emerson Mark Schantz Tom Ewing Steve Kaelble Clare L. Goldsberry 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 Digital Media Manager Justin Shea (ext. 220) jshea@areadevelopment.com Business Development Matthew Shea (ext. 231) mshea@fastfacility.com Web Designer Carmela Emerson

Editor

Circulation circ@areadevelopment.com

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https://www.industryweek.com/technology-and-iiot/drowning-data-consequences-having-too-much-good-thing

EXECUTIVE OFFICES Halcyon Business Publications, Inc.

2018 Editorial Advisory Board Aaron Ahlburn Managing Director, Industrial and Logistics Research, JLL

Stephen Gray CEO, Gray Construction

Josh Bays, Principal, Site Selection Group, LLC

Minah C. Hall Managing Director, True Partners Consulting LLC

Marc Beauchamp, President and CEO, The CAI Global Group

Trula Hensler Senior Marketing Manager, Baker Tilly Virchow Krause, LLP

Christine Bustamante National Co-Leader, Global Location and Expansion Services, KPMG

Scott Kupperman Founder, Kupperman Location Solutions, LLC

Gregory Burkart Managing Director, Business Incentives Advisory, Duff & Phelps, LLC

Dan Levine Practice Leader, Location Strategies and Economic Development, Oxford Economics, Inc.

Brian Corde Managing Partner, Atlas Insight, LLC

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

Les Cranmer Senior Managing Director, Savills Studley

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

Dennis Cuneo Partner, Fisher & Phillips LLP

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President Dennis J. Shea John Morris Leader of Industrial Services for the Americas, Cushman & Wakefield, Inc.

Finance Mary Paulsen finance@areadevelopment.com

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

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

Eric Stavriotis Senior Vice President, Advisory & Transaction Services, CBRE Thomas Stringer Esq., Managing Director & Practice Leader, Site Selection & Business Incentives, BDO Consulting Dean J. Uminski Executive, Site Selection Consulting, Crowe Horwath LLP Dan White Senior Economist, Moody’s Analytics

All correspondence to: Area Development Magazine 400 Post Avenue, Westbury, NY 11590 516.338.0900 Phone: Toll Free: 800.735.2732 Fax: 516.338.0100

Joshua Wright Director of Economic Development, Emsi

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INFOCUS The Pitfalls of Being in the Running for Amazon HQ2

By Tim Cook, CEO, and Katie Culp, KSM Location Advisors

Only one city can win the project, leaving the losers to explain why they were so heavily invested in trying to land the HQ2, which may ultimately come with its own set of challenges.

TIM COOK, CEO

of KSM Location Advisors, works closely with companies across the country during the site selection process, assisting with identifying available sites, providing comparative analysis of qualified locations, and assisting in negotiating and securing economic development programs. He is also partner-in-charge of Katz, Sapper & Miller’s State and Local Tax Group.

KATIE CULP is

president of KSM Location Advisors, part of the Katz, Sapper & Miller Network. Previously Culp led Cassidy Turley’s (now Cushman & Wakefield) national Location Advisory and Incentives practice, working with corporate clients to make fully informed location decisions and maximize state and local incentives packages.

As we near the one-year mark since Amazon initiated its HQ2 search, the excitement and hoopla that greeted this economic development Super Bowl has given way to the criticism that’s inevitably foisted upon this sort of undertaking: The jobs, capital investment, and various other benefits are undeniable, but is the cost too high?

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The elongation of the search process has enabled critics to answer this question with an expanded list of complaints. Here are just a few of the recurring criticisms: Transportation infrastructure — For already congested areas such as Boston and D.C., the perils of another 50,000 workers commuting to and from work is apparent. But even for those medium- to small-sized cities, is it possible to accommodate the daily flow of such an exponential increase in people — even if the hiring comes in phases?

Housing — While existing homeowners might welcome the increase in overall property values that will accompany so many new high-paying jobs, others fear that such an invasion will exponentially inflate the costs for homebuyers and decimate housing inventories. This pain could be especially acute in the current economy where home prices are soaring, and inventories are low nationwide.

In a case of bad timing, this issue has been front and center at the home of Amazon’s first headquarters as Seattle has struggled with the political fallout from its recently passed — and quickly repealed — “head tax,” which was aimed at providing funding for homeless services and affordable housing.

of those officials have likely offered hundreds of millions (if not billions) of dollars in an effort to stand out.

Distraction — Considering that the starting number of 238 competing cities has been reduced to the current number of 20 and will ultimately result in only one winner, some argue that the resources invested by the losing 237 locations could have been better invested, especially for a project that was, for the losing suitors, a longshot at best.

As site consultants, we’ve voiced from day one that the benefits of a project of this size greatly overwhelm whatever negative impacts — perceived or real — come with it. Any city with a viable chance to compete is justified in doing so. But in a day and age where every political action is endlessly autopsied, the 19 cities and regions that are left empty-handed at the end of the day may have much explaining to do. The same may hold true for the eventual winner.

FRONTLINE

Incentives — Similar to the venom leveled at cities for the hundreds of millions of dollars that are spent to save sports franchises, whatever hefty price tag comes with HQ2 is certain to receive massive criticism from watchdog groups, incentive-hating commentators, and potentially voters.

The process — Amazon came under fire early on for pitting states, cities, and regions against one another in a bidding war sometimes described as a race to the bottom. As a result, cities such as San Antonio chose to not even submit a bid. The secretive nature of the submission process has resulted in public attacks against elected officials for not divulging the details of their bids, especially given that some

Union Activity Showing Recent Spikes

By Dan Emerson

Although unions’ influence in the U.S. has diminished over the last four decades, they are still playing a key role in manufacturing and, more recently, the distribution sector.

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On May 31st, 178 workers at Boeing’s factory in North Charleston, S.C., voted to unionize, more than a year after a broader union vote failed at the plant that makes Boeing 787 airliners.

Although the number is a relatively small share of Boeing’s 6,749 workers in the Charleston area, the vote is considered “a major victory for organized labor in South Carolina, which has the nation’s smallest number — 2.6 percent — of workers who belong to a union,” the Charleston Post and Courier reported.1 Does the Charleston vote portend a resurgence of labor unions in the United States, which have had shrinking memberships for decades?

A recent article on Manufacturing. net declared, “Organized labor is showing new signs of life.” According to the article, last year, U.S. labor unions — whose membership has been shrinking for decades — added 262,000 new recruits.2 The percentage of manufacturing industry (durable and nondurable goods) workers in unions edged up to 9.1 percent in 2017 from 8.8 percent in 2016, according to Labor Department data. The share of all American workers belonging to labor unions held steady in 2017, matching the historic low of 10.7 percent set in the prior year, said the Department.3 Unions’ Continuing Role While unions’ influence has been diminished, they still have a role to play in sectors like manufacturing and distribution, says John Budd, a professor of Work and Organizations in the Carlson School of Management at the University of Minnesota.

Forty years ago, more than one third of manufacturing workers were represented by unions. Now, that figure is closer to 10 percent, Budd says.

Even in the formerly union-dominated auto industry, union membership has dropped from more than 60 percent in the early ’80s, to 20 percent or less.

In the auto industry, unions have had difficulty unionizing new plant locations; a number of those new auto plants have opened in the South, where unions have historically had much less influence, Budd notes.

“The UAW has tried for decades”

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to unionize new U.S. plants opened

by Asian and European automakers without much success. “Companies are very strategic about where they open plants, often choosing rural areas where unionization doesn’t have a strong history, and not opening plants in cities, to keep labor costs low.”

While employers and labor unions have traditionally been adversaries, they have sometimes collaborated in employee training and re-training programs. That isn’t as common anymore, Budd says. “When unions feel their existence threatened, training becomes a luxury. In some places, unions feel so threatened, they end up spending most of their time fighting to survive.”

“

The distribution sector — which has been transformed by the rapid growth of online retailers and has grown briskly in recent years — has shown an increase in union activity.

Over the years, some of the issues that have spurred union activity — such as workplace safety, hours, or other ways workers are treated — have become less urgent, at least in the U.S., Budd points out. “Research shows workers typically turn to unionization when they are dissatisfied,” he says. But workplace improvements like better HR practices, increased safety protection, and higher minimum wages have made employees less likely to unionize. “Employees may feel because they are being treated well, they wouldn’t benefit from a union,” Budd explains.

In recent years, in some settings, union participation has been supplanted by other grassroots worker movements like the “Fight for 15” effort that helped bring about higher minimum wages in some states and cities. Still, Budd says, it would be foolish to suggest that labor unions will soon be a thing of the past just because overall union membership

has declined in the U.S. “Just because (growth in unions) doesn’t look likely where we sit today, doesn’t mean we couldn’t be surprised. As recently as five years ago, we wouldn’t have used ‘fast food’ and unions in the same sentence,” he says.

Although there hasn’t been a lot of fast food unionization, fast food chains have been impacted by grassroots campaigns for higher wages.

Unionizing the Distribution Sector The distribution sector — which has been transformed by the rapid growth of online retailers like Amazon and has grown briskly in recent years — has shown an increase in union activity, Budd says. Earlier this year, 250,000 Teamsters authorized a strike at UPS, before settling on a deal.4 Retailing giant Amazon was batting a thousand in its efforts to quash any attempts at organizing its workers — until this year. In June, Amazon employees in Italy made history, announcing the first-ever direct agreement between unions and the company anywhere in the world. The Italian agreement addresses excessive work scheduling, a common complaint at Amazon fulfillment centers worldwide. It is intended to ensure fairness in scheduling. The union’s win in Italy followed months of protests and organizing by Italian and German workers.

Before Amazon, the commercial distribution sector was highly unionized, Budd says. “But Amazon has been changing the model in a lot of ways, with very aggressive efforts to keep labor unions out. As in the auto sector, companies have been strategic in choosing locations for new facilities.

Many of them are in rural areas where they aren’t a lot of options for decentpaying employment; employees don’t want to rock the boat,” Budd explains.

Will Amazon’s Italian labor agreement be replicated in the U.S. or elsewhere? That remains to be seen, Budd says.

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https://www.postandcourier.com/business/boeing-s-flight-lineworkers-in-north-charleston-vote-for/article_d0a31e80-64da11e8-b01f-1395d3a99745.html 2 https://www.manufacturing.net/news/2018/06/surprise-unionsshow-signs-revival-despite-setbacks 3 http://www.industryweek.com/talent/us-union-membershiprate-steady-record-low-while-manufacturing-edges 4 http://fortune.com/2018/06/06/ups-teamsters-strike-july-contract/

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TN

MS

LA

GA

FL

FIRSTPERSON SARAH BOISVERT

FOUNDER

FAB LAB HUB

How would you define the “new collar” workforce?

Boisvert: Blue-collar jobs have become digital, and new collar workers utilize innovative digital technologies such as 3D printing, CAD design, artificial intelligence (AI), and robotics to produce advanced manufacturing products such as electric cars, microfluidic devices, autonomous vehicles, and drones. While new collar jobs can exist in any industry, they are mostly found in smart manufacturing for Industry 4.0 that integrates the biological, physical, and digital worlds.

What prompted you to undertake the research on the new collar workforce?

Boisvert: Fab Labs at community colleges in the U.S. were asking me to help develop curriculum for workforce training. I wanted to understand exactly what smart manufacturing skills for Industry 4.0 were required by industry so that we could accurately address their needs. As is often the case in market research, the results were surprising and shaped my ideas for training programs.

You interviewed more than 200 manufacturing executives about the skills gap. What were the most significant results from your research and surveys?

Boisvert: The skills gap is immediate. One interviewee told me that engineers are now a dime a dozen in many specialties, but finding a good digital machinist is next to impossible. In order to meet smart manufacturing’s demand for workers, I realized I needed to develop training programs that were skillspecific, short in duration, and affordable.

The digital badge platform developed by IBM and Mozilla is a perfect solution. Working with employers, Fab Lab Hub designed digital badges for new collar jobs that could be combined into master badges for such positions as 3D printing operator, CAD designer, predictive analyst, or laser service technician. The digital badges combine coursework with projects in Fab Labs, to meet employer needs for problem-solving and hands-on experience. The online certification platform documents the student’s activities in identifying the problem, creating a solution, and iterating the process through photos, videos, and other online tools.

Digital badges not only certify accomplishment of a skill, they also give the employers an opportunity to see first-hand the student’s problem-solving skills.

What were the most surprising results?

Boisvert: I expected more specific technical skills to be named by manufacturers in the survey. Surprisingly, the top skill 95 percent of the respondents cited was problem-solving. With technologies evolving at a rapid pace, new collar workers need to be able to quickly add new tools to the factory floor, successfully integrating them into traditional processes. Like everywhere else in today’s life, speed is essential for smart manufacturing, so delays cut right to the bottom line.

Hands-on experience was a close second, and as I put these two skills together, I realized they are exactly what we teach in Fab Labs, which center around project-based learning utilizing digital fabrication tools like laser cutters, CNC machines, 3D printing, and CAD design. It seemed obvious that I needed to look at a new type of education model that combined project-based learning and hands-on experience in order to train the new collar worker in the skills the manufacturing industry demanded.

What are some of the most needed new collar positions? What are the job descriptions?

Boisvert: Operating and repairing 3D printers requires a new skill set that is rapidly changing. Since production machines

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have not been tried and tested for decades like subtractive tools, a large part of the job involves problem-solving machine operation issues.

Despite R&D in artificial intelligence and the promise of “machines that make machines,” at the moment robotics and automation technology still require humans to design, program, monitor, and yes, repair co-bots. Recently at a Society of Manufacturing Engineers conference and trade show, I met a young man in the exhibit booth of a robotics company. His entire job revolved around keeping the robots up and running. For any kid who has had fun participating in FIRST robotics competitions, this is a dream job that is just an extension of play.

The 2016 Global Manufacturing Competitiveness Index compiled by Deloitte Touche Tohmatsu, Ltd. and the U.S. Council on Competitiveness reported that, for both China and the United States, predictive analytics ranked as the most important technology for global competitive advantage. While the robots turn the screws and do other repetitive and boring tasks, it is the human ability to decipher big data and stay ahead of the machines that makes the difference in digital factories.

How should manufacturers start developing a new collar workforce?

What are the best ways they can be proactive?

Boisvert: Manufacturers need to immediately support creating programs in fab labs and maker spaces as well as at community colleges. Funding non-profits that supplement traditional education is key to growing a thriving community of young people who aspire to work in manufacturing. So are apprenticeships — anything that provides a hands-on component is vital to building the new collar workforce. While apprenticeships result in a more experienced worker, at the moment there is little time to waste in getting people onto the factory floor with basic skills.

If manufacturers get serious about building the new collar workforce, how much of a dent will it make in the skills gap?

Boisvert: For 2025, which is only a few years away, companies need to support a transition in community colleges and trade schools to new innovative training programs that are skill-specific. Also, sending current employees for digital badges will enhance in-house skills. If started now, support for fab labs in high schools, trade schools, and community colleges will increase the number of workers with the skills manufacturers want. It is especially important to fund training programs for teachers so that they can embrace innovative and very different models. We have to start to think progressively if we want to close the skills gap and capture a place in manufacturing’s future.

Those who don’t will be left behind.

THE ASSIGNMENT With more than 30 years of experience in the design, development, and commercialization of high-technology products utilizing digital fabrication methods, including laser machining and 3D printing, Sarah Boisvert has a deep knowledge of manufacturing. In 2012, she founded Fab Lab Hub, part of the MIT CBA-based Fab Lab Network, to foster entrepreneurship and workforce training in digital fabrication manufacturing skills. Area Development interviewed her recently to discuss her new book, The New Collar Workforce, and the importance of this workforce to the future of U.S. manufacturing.

HIGH-TECH TRAINING Mississippi’s network of 15 community and junior colleges work directly with employers to design and implement customized jobtraining programs meeting and exceeding your company’s specific personnel needs.

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WORKFORCE

mississippi.org/workforce

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FINTECH/SITE SELECTION

Which Locations Are Drawing FinTech Companies?

Irrespective of their size, the strongest markets for financial technology companies have a workforce that aligns to best serve all distinctive skill set and cost requirements.

By Tedd Carrison, Senior Financial Analyst, CBRE; and Kristin Sexton, Senior Managing Director, CBRE Labor Analytics

A

s financial technology, or “FinTech,” grows from an obscure corner of the digital market to a source of mainstream trends and broad-reaching innovations, the cities that cultivate FinTech companies are no longer limited to large, traditional financial centers. Recent growth in the industries comprising FinTech has been distributed among markets, primarily in the South and West, that show the right combination of attributes to attract today’s employers.

CBRE has consulted many FinTech firms as they navigate the site location process, providing unique insight into the priorities that drive them. As with location decisions across other industries, cost, talent, and infrastructure play primary roles. But, while many financial start-ups were once tethered to a few dominant clusters of tech and banking expertise, smaller, less costly options have gained viability, facilitated largely by innovations to worker connectedness and information sharing, as well as a reshuffling of financial talent between markets.

For example, in 2015, the concentration of finance and insurance firms with fewer than 20 employees in Salt Lake City and Oklahoma City exceeded the national average by more than 30 percent, according to the most recent data from the U.S. Census Bureau’s Statistics of U.S. Businesses (SUSB).1 Denver, Kansas City, Phoenix, and Las Vegas each showed concentrations that were more than 20 percent higher than the national average.

Today’s growing FinTech markets are smaller cities that tend to share a vibrant professional services economy, advanced telecommunications infrastructure, growing pool of college-educated and tech-focused millennials, limited regula-

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tory landscapes, and low taxes. These markets often provide business amenities and opportunities similar to the nation’s largest metropolitan areas, while offering lower costs and greater alignment with the growth patterns of today’s millennial workforce, such as affordable housing and plentiful outdoor recreation options in the Sunbelt and Mountain/West. The most successful markets for FinTech will largely be dependent on the types of skill sets businesses are targeting. Whether it be customer service, sales, tech or executive talent, the strongest markets will have a workforce that aligns to best serve all distinctive skill set and cost requirements, largely irrespective of overall size.

In fact, many of the nation’s largest banking centers, including New York, Chicago, Boston, and San Francisco, still have not returned to pre-recession financial employment, despite a national net increase of 88,000 jobs in the sector between 2006 and 2017, according to annual averages from the U.S. Bureau of Labor Statistics (BLS).2 In the most recent data from its employer survey, the BLS shows that the 10 largest metros for financial employment in 2017 were down by 25,100 employees, collectively, compared to 2006 — and that number includes significant growth in Dallas and Phoenix, which saw increases of 59,800 and 31,000, respectively.

Conversely, the next 40 largest metros showed collective growth of 102,700 financial jobs between 2006

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workforce, such as affordable housing and plentiful outdoor recreation options in the Sunbelt and Mountain/West. The most successful markets for FinTech will largely be dependent on the types of skill sets businesses are targeting. Whether it be customer service, sales, tech or executive talent, the strongest markets will have a workforce that aligns to best serve all distinctive skill set and cost requirements, largely irrespective of overall size.

In fact, many of the nation’s largest banking centers, including New York, Chicago, Boston, and San Francisco, still have not returned to prerecession financial employment, despite a national net increase of 88,000 jobs in the sector between 2006 and 2017, according to annual averages from the U.S. Bureau of Labor Statistics (BLS).2 In the most recent data from its employer survey, the BLS shows that the 10 largest metros for financial employment in 2017 were down by 25,100 employees, collectively, compared to 2006 — and that number includes significant growth in Dallas and Phoenix, which saw increases of 59,800 and 31,000, respectively.

Conversely, the next 40 largest metros showed collective growth of 102,700 financial jobs between 2006 and 2017, indicating that much of the post-recession activity in this sector has been redistributed to moderately sized metros like Nashville (+17,600) and Columbus, Ohio (+10,800), and away from the largest markets that historically dominated the industry.

This is not to say that the established markets don’t still have outsized influence. More than a quarter of all FinTech venture capital deals since 2012 (and 43 percent of total funding) were in either New York or San Francisco (excluding Silicon Valley to the south), according to 2017 data from PwC/CB Insights MoneyTree.3 But as many of these companies mature beyond their early seeding stages, the costs, regulations, and talent competition in these cities can become prohibitive.

While the ideal location for every project or firm will differ, the core attributes of successful, nontraditional FinTech centers can be categorized between “active” and “next-generation” markets. Active markets show large volumes and concentrations of financial services employment paired with significant growth, according to a 2016 CBRE report on the U.S. financial services industry.4 These markets have excellent supply and quality of talent, but success may also rely heavily on competitive positioning amid upward pressure on wages and high demand for talent. By comparison, next-generation markets show similar signs of financial services growth but are smaller and less costly than their active counterparts.

According to the CBRE report, next-generation markets like Kansas City, Indianapolis, and Boise have a stronger-than-traditional base of financial services employment but offer a more “off-the-radar” opportunity to be a preferred employer, typically at lower costs.

Among the active FinTech markets that have thrived in recent years, three stand out as illustrative examples:

TOP-RANKED ENVIRONMENT From a skilled and productive workforce to the state’s low corporate tax rate, Mississippi’s pro-business environment fosters growth and attracts new investment, so much so the state was named the #8 Overall Best State to do Business.

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Charlotte Charlotte has long been a financial center. In fact, with 71 financial institutions based in the metro and total assets hitting $2.27 trillion, Charlotte is the third-largest banking center in the U.S., surpassed only by New York City and San Francisco.5 Today, it also has a burgeoning tech economy that has leveraged its financial strength to support more than 70 local FinTech firms, including AvidXchange and LendingTree, Inc., according to

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employer survey

Location Economics

2017

BLS shows the

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THE NEW SCIENCE FOR A DVA N C E D S I T E S E L E C T I O N

largest metros for financial employment Down by 25,100 employees compared to 2006

Industry-leading labor data and customized indices to navigate complex real estate decisions

That number includes significant growth in Dallas and Phoenix which saw increases of 59,800 and 31,000, respectively

Software • Interactive apps • Consulting

National to neighborhood analyses

the Charlotte Chamber.

Between 2011 and 2016, Charlotte’s tech occupations grew by an astounding 77.1 percent and millennials in their 20s grew by 13.3 percent, according to CBRE’s 2017 Scoring Tech Talent Report.6 Despite all this growth, Charlotte’s relative business costs remained 11 percent below the national average, according to the CBRE report — a striking statistic. However, it should be noted that although Charlotte remains one of the nation’s strongest financial centers — and at a significant discount to more mature markets like Manhattan, Los Angeles, and Boston — a successful operation may see significant competition from the dominant presence of existing financial services and FinTech firms.

Detroit

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In a region still working to retool its industrial economy for the Information Age, Detroit is emerging as an unlikely counterpoint to the Rust Belt cliché that it once epitomized.

Between 2012 and 2017, Detroit added 16,800 jobs across the financial and “information” industries, which include software companies and data processing firms, according to the BLS. This is 1,600 more jobs than Chicago, a metro

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with twice Detroit’s population, added in the same industries over the same period — and more than the corresponding job growth in Cleveland, Kansas City, Milwaukee, Minneapolis, Pittsburgh, and St. Louis combined.

Online mortgage provider Quicken Loans Inc. is headquartered here, among other FinTech companies that are calling the Motor City home. Last year, the Detroit-based financial media company Benzinga partnered with the Michigan Economic Development Corporation (MEDC) to form the Detroit FinTech Association, a trade group to promote the city’s budding FinTech ecosystem and provide resources to local entrepreneurs.

Salt Lake City In recent years, Salt Lake City has harnessed a strong mix of low costs, millennial magnetism, and tech expertise to spur significant growth — both demographically and economically.

Between 2011 and 2017, employment in Salt Lake City’s financial and information industries grew by 20.6 percent, nearly three times the corresponding national increase of 7.6 percent, according to the BLS. Census data show that during this same period, the total population of the Salt Lake City MSA increased by more than 100,000 residents (10.6 percent vs. 5.5 percent nationally) and nearly a quarter of that growth came from migrants — both international and domestic — who have flocked to the metro since 2010.

Salt Lake City is home to the fourth-largest global location of Goldman Sachs, according to the Economic Development Corporation of Utah (edcUTAH), and it also serves as a hub for other major financial institutions.

In CBRE’s 2017 Scoring Tech Talent report, Salt Lake City’s relative business costs are 12 percent below the national average. Additionally, Utah has one of the best tax climates in the nation, ranking #8 in the Tax Foundation’s most recent State Business Tax Climate Index.7 BLS data show that, among the 50 largest metros by employment, Salt Lake City has the second-lowest median annual salary in business/finance occupations ($58,870) and 15th-lowest salary in computer/math occupations ($77,080). Both figures compare favorably to the corresponding national median salaries of $67,720 and $84,560, respectively.

However, there are signs that Salt Lake City is starting to become more competitive. Historically, costs have remained lower than the national average, but demand for talent is at an all-time high, driven by large expansions of technology and financial services throughout the metro and Lehi Valley. A smaller metro with a labor force of 650,000 and unemployment hovering at 3 percent for the last year, Salt Lake City’s ability for growth is naturally capped and starting to put pressure on existing businesses and new entrants alike.

The metros above are among many showing recent strength in FinTech. As this field has evolved, so too have the markets that support and nurture it. These cities, and metros like them, are well positioned to benefit as FinTech grows as a major economic driver in the years to come. ■

TAILOR-MADE FOR SUCCESS From Toyota’s Advanced Manufacturing Technician Program at Itawamba Community College in north Mississippi to Ingalls Shipbuilding’s Maritime Training Center on the Mississippi Gulf Coast Community College’s Pascagoula campus, Mississippians are trained to meet the needs of a wide spectrum of industries.

Let Mississippi supply your company with a tailor-made workforce.

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1

https://www.census.gov/data/tables/2015/econ/susb/2015-susb-annual.html https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm https://www.cbinsights.com/research/fintech/ 4 https://www.cbre.us/research-and-reports/2016-U-S-Financial-Services 5 https://www.bizjournals.com/charlotte/news/2017/05/23/charlotte-drops-tothird-largest-banking-hub-in-u-s.html 6 https://www.cbre.us/research-and-reports/Scoring-Tech-Talent-2017 7 https://taxfoundation.org/publications/state-business-tax-climate-index/ 2 3

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ASSET MANAGEMENT

Integrating Technology Into the Corporate Headquarters Facility Businesses that utilize technology to ensure their corporate headquarters are ready for the future will realize productivity, economic, and other gains.

By Jim Nannini, Vice President, Building Wide Systems Integration North America, Johnson Controls

The Georgia-Pacific headquarters in Atlanta, Georgia, is undergoing a digital transformation with help from Johnson Controls and Molex which will improve operational efficiency and enhance employee productivity and comfort.

A

s businesses move toward digital transformation, building owners are forced to make decisions to ensure their facilities are future-ready in order to stay competitive. This holds especially true for corporate headquarters as the state of their properties plays a major role in attracting and retaining talent.

Creating a smart building can offer employees and future staff a more comfortable and productive working environment, but it can be difficult for owners to determine how to best approach transforming their facilities.

Finding the Right Approach Integrated building systems are the foundation of a smart building — whether through a technology retrofit or new construction project. This convergence happens when a building’s digital and its physical structure connect to technology operating in the facility to allow the implementation of integrated building systems for a comprehensive approach to building management. Whether the facility is a hospital, school, or corporate headquarters, a building is only truly intelligent when previously siloed systems — such as lighting, HVAC, access controls — connect with one another to share information.

Once building owners decide to engage in a digital transformation of their

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building, it’s critical to bring together key stakeholders before starting the project to determine the desired outcomes of their future-ready building, define the buildings purpose and vision, uncover priorities, and maximize every dollar spent. While each facility seeks unique outcomes, it’s crucial that upgrades are integrated as a functional whole and not thought of as a collection of independent systems. This is key because if integration is attempted after systems have been installed and construction is complete, the process is much more costly, difficult, and timeconsuming to maintain. Following this approach beforehand can also reduce any risks associated with the project.

Regardless of the distinct needs of the building, owners should make sure they plan for a digital transformation that is smart, secured, integrated, and sustainable for today and the future to fully reap the benefits of technology integration.

The Benefits of Technology Integration From the optimization of systems, software, and network infrastructure to improved communications, the benefits of transforming to a digital building are plentiful. Ultimately, facilities gain a more unified, secure, and resilient infrastructure through the convergence of building, business, and vertical market systems.

For corporate headquarters, building owners will have objectives based on their business needs, but many of the advantages of digitally transform-

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ing their property are similar across the board. Integration enables more meaningful and actionable data from the building’s systems, ensuring more efficient and cost-effective building management. The real-time data collected from integrated systems can help building owners better understand how the space is utilized and make improvements accordingly to provide a more efficient, optimized, and productive workplace.

For example, if there is an important meeting happening in a specific conference room, the building management system (BMS) can be connected to conference room scheduling to ensure temperature and lighting are customized to meet the unique needs of the occupants in the room. Not only can monitoring temperature and lighting boost employee productivity, but it can also help building owners save money in the long run. By tracking light levels, building owners can recognize peak electrical demands and adjust building systems as appropriate during different hours of the day and week. The company can use information gathered to determine how long employees are in certain areas of the office and analyze those findings to determine performance during specific times of the day.

In addition, security and life safety systems should be considered in the integration process as they’re beneficial to ensuring a safe and comfortable corporate headquarters.

When connected, security managements systems can communicate with building management systems for increased occupant safety and reduced utility consumption. For instance, when an employee “badges” into the building, the security system can alert the building system to automatically enable HVAC and lighting within the zone. Similarly, when the employee checks out of the building, the lighting and HVAC that was authorized will shut down.

It’s critical for building owners to evaluate current systems and identify how they can be optimized with the new lighting and HVAC systems to keep people and assets more secure. In the event of an emergency, when connected, HVAC equipment can communicate with sensors to alert the mass notification system on the location of the threat and help guide occupants to safety.

By breaking down the technology integration process, any building can be successful in accomplishing its desired end result as long as the defined business outcomes are considered during every step of the integration process. This approach can help building owners balance the benefits and risks associated with the upgrades they wish to make.

A completely connected, digital environment is advantageous to owners and employees, as a holistic view of facility management can provide insights to help positively impact future business decisions. n

CHOOSE

ROCHESTER NEW HAMPSHIRE AEROSPACE COMPOSITES Talent #1 State in the Northeast for Workforce Development

Ideal Location Boston MSA

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Smart Sites are a slam-dunk choice for companies that are ready to grow now.

Faster construction, fewer uncertainties and less risk for companies and site selectors alike — that’s the genius of the Smart Sites qualification program. But that’s not all. Our many Smart Sites are located in some of the best places in America to live and do business.

To learn more about these properties and our growing list of other Smart Sites, contact Brenda Daniels at 800.768.7697 ext. 6363 or bdaniels@electricities.org. It’s a no-brainer.

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BIG DATA

HOW CAN

BIG DATA ENABLE MORE EFFICIENT AND EFFECTIVE LOCATION DECISIONS AND PLANNING?

By Katie Ballard-Bloomfield, MANAGER, Quantitative Economics and Statistics (QUEST); Dominick Brook, SENIOR MANAGER; and Martin Polivka, SENIOR CONSULTANT, Indirect Tax; Ernst & Young LLP

How Can BIG DAT A Enable More Efficient and Opportunities Effectiveand Location challenges present themselves in harnessing analytical power of internal Decisions andthe Planning? and external data.

Companies are rapidly adopting big data analytics, enabling data-driven business decisions. In a late 2017 survey, Forbes found that over half of respondents reported using big data in some capacity — up from less than 20 percent in 2015.1 But how can this information be applied to site selection? This article outlines key considerations in how big data — specifically in the form of large, detailed, observation-level data sets (“microdata”) — can be used to inform company location strategies.

OPPORTUNITIES While most companies draw from external data sources and also perform internal data analytics, these processes are often not linked — a significant missed opportunity.

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Key data points to consider in your next location decision: Current and future talent access for specific occupations/roles Labor costs and future wage pressures Real estate availability, cost, buildout Tax impact Incentive availability and timing Utility costs Transportation costs Infrastructure Quality of life/local amenities Impact on existing employees

Build on prior experience: Internal company data can help organizations make more informed decisions about future locations. Companies should bring together internal stakeholders from more than just real estate — human resources/talent; supply chain/ procurement; sales/distribution; tax; and others — to understand what factors have historically been key to a location’s success (or challenges). Internal observationlevel data can provide valuable insights — even for new markets. Examples include identifying critical roles based on employee function analyses, mapping existing supplier and distribution networks from procurement data, and describing employee willingness to relocate.

Add new sources of “micro” external data: To improve the predictive strength of external data, internal microdata should inform the selection of specific metrics from detailed external national, regional, and local microeconomic — not macroeconomic — data sets. These metrics could include specific occupations and employee skills, detailed industry/individual employer investment activity and linkages, line-item business costs, and local infrastructure and amenities. Companies must critically evaluate the quality and reliability of the source and the comparability of data points, which may require imputation and mathematical analysis.

NAVIGATING CHALLENGES Synthesize disparate data points to achieve new insights: The real power of data comes from combining internal and external microdata in a way that

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is meaningful and specific to the project. Often, the story may vary depending on whether you’re looking individually at suppliers, labor availability, or costs.

The internal stakeholder group should identify the critical evaluation factors to carry the greatest analytical weight — thus linking internal experience and external data.

Navigate the incentive process: With advanced data tools, companies are able to benchmark historical awards for similar projects, which provides an understanding of the potential range of cost offset across locations. This range can be compared against the estimated cost differentials among locations. Once incentive agreements have been finalized, cutting-edge compliance tools can help companies track agreement reporting requirements and deadlines, and can minimize potential penalties.

Consider the investment life cycle: Many companies may not consider the impact of timing on the success of a project. Companies should consider future labor needs and market trends, such as aging workforce, skills production, and recent industry growth that could put pressure on existing worker supply and wages. Similarly, an incentive package that takes 20 years to realize may be less attractive than a smaller offer realized more immediately.

Apply smart visualizations to produce quick insights: Data visualization allows users to quickly process large quantities of data to highlight trends and outliers. However, companies should deploy these tools in a thoughtful way, considering which metrics or comparisons add the most value.

IN SUM Big data analytics helps companies make more informed location decisions by moving beyond aggregate macroeconomic indicators to provide more customized and relevant evaluation metrics based on historical company experience. • • • • 1

“53% of Companies Are Adopting Big Data Analytics,” 2017 Big Data Analytics Market Study, via Forbes Magazine, December 24, 2017, ©2017 Dresner Advisory Services.

The views expressed are those of the authors and do not necessarily reflect the views of Ernst & Young LLP or any member firm of the Global EY organization.

9/7/18 2:44 PM

THREE TIPS

FOR USING LABOR MARKET DATA

By Wayne Gearey, SENIOR VICE PRESIDENT, Data Science, Emsi

Labor market information is critical, but companies must know the uses and limitations of such data in order to select the optimal location for success.

The U.S. government collects heaps of information on labor market conditions in every state, metro area, county, and, in some cases, ZIP code and census tract. These data points range from how much software engineers earn by region to the projected growth of detailed manufacturing industries.

In addition to established, structured labor market information from public sources like the Bureau of Labor Statistics, there are various sources of proprietary labor data that aggregate online job postings and resumes and can offer more timely, granular insights.

Labor market information, particularly from a cross-section of sources, is extremely valuable to the location decision process. Labor accounts for 60 percent to 80 percent of corporate expenses. To sustain operations and support financial growth, businesses need to know where to be to attract and keep employees at every level of their organization.

As a result, the demand for fast and accurate answers to labor-driven research questions has become an important core competency for most organizations. Great labor analytics begins with great data, but labor data can be hard to find for many reasons: • Government-sourced labor market information is typically outdated.

•S pecific labor requirements or specialized skills rarely map to the general labor categories or job titles most commonly listed by the BLS. •W hen labor data is available, it is rarely at the city or street level of detail needed to make evidencedbased labor decisions or real-world market comparisons.

•C orporations, even in the same industry, have unique labor requirements from market to market.

Corporations will spend extensive time, money, and resources on gathering data and creating customized labor analytics. To reveal markets of opportunity, a successful labor analytical process should keep these three tips in mind:

1. Assess labor on not only cost and availability, but sustainability. Corporations that are expanding, moving, or consolidating operations are in need of talent. Labor cost, availability, and sustainability analysis will help these corporations accelerate their long-term productivity while avoiding costly transitional mistakes.

2. Blend labor market indicators such as earnings, education, and population growth with socioeconomic information such as demographics, cost of living, crime, and transportation networks to identify and demonstrate unique community strengths.

3. Recognize that site selection is a science.

Understanding business and community ecosystems takes more than pulling a few numbers. The competitive nature of site selection is evolving toward highly complex data modeling that eliminates errors or assumptions that often emerge with the random scoring and ranking of markets.

Finding the right location for business operations is a critical decision for every company. Labor market information is a driving force for site selection decisions, and as such, it’s critical that companies know the limitations — and many uses — of labor data so they can pinpoint the optimal market for success.

• • • •

INDUSTRY 4.0:

THE INFLUENCE OF BIG DATA ON THE MANUFACTURING FLOOR

By Stephen Gray, PRESIDENT & CEO, Gray Construction

By effectively embracing the Industrial Internet of Things (IIoT), the manufacturing sector can analyze processes and identify optimization possibilities.

Although still relatively in its infancy, the Internet of Things (IoT) is having a dramatic impact on society as a whole for consumers and businesses alike. The manufacturing industry is no exception, where the increased connectivity is commonly known as Industry 4.0 or the Industrial Internet of Things (IIoT).

The key driver behind the IoT is the results it creates. Consumer expectations are evolving with significant influence from millennials, and manufacturers must rapidly respond and become smarter in order to meet this evolving demand. As a result, new

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and existing facilities are being upgraded to be highly automated and ready for the IIoT. Given the growing demand from consumers for insight into the source of their products and the production process, the availability of data direct to the consumer is a trend that’s only expected to grow.

SMARTER PLANT OPERATIONS According to a study from PricewaterhouseCoopers, the technology associated with Industry 4.0 is projected to increase revenues by 37 percent over the next five years.1 Business Insider reports global manufacturers will invest $70 billion in IoT solutions2 in 2020, which is up $29 billion from 2015. The manufacturing sector is expected to spend more than any other industry — $189 billion in 2018 alone.

Manufacturers recognize the positive impact the IoT is having from the beginning of the production process all the way through to distribution. IDC and SAP have found that 60 percent of global manufacturers3 will use analytics data that is tracked by using connected devices to analyze processes and identify optimization possibilities.

Modern plant floors for advanced manufacturing facilities have shifted considerably from the days of Henry Ford’s assembly line. Today’s manufacturing operations consist of technology throughout including sensors, tagging capabilities, controls, and automated capabilities.

“The capabilities provided by embracing the IIoT enable manufacturers to produce more consistent, quality products and adapt to rapidly changing consumer demand. The improvements in speed to market for new products often justify the investment enabling the IIoT for a manufacturer,” says Walker Mattox, managing director of GraySolutions, a new Gray company focusing on industrial automation and enabling the IIoT for customers.

The big data provided from these new IIoT abilities drives manufacturers to greater safety, quality, efficiency, flexibility, security, and optimization for packaging and supply chain. In fact, the previously mentioned PricewaterhouseCoopers study predicts that manufacturing production efficiency would increase some 50 percent in the next several years.

THE IIOT DIFFERENCE To be clear, the IIoT doesn’t mean that manufacturing operations were inept before Industry 4.0 came

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along. It does, however, speak to the continuous improvement philosophy many manufacturers embrace.

The IIoT allows accessibility to information and data that weren’t previously available and has improved the speed of data collection.

Manufacturing involves deep levels of complexity, and the connectivity IIoT brings enables increased collection of data, leading to enhanced productivity. Manufacturers also have greater control of their operations.

“Now, plant connectivity is delivering information technology results with an operations technology mindset,” says Don Pearson, chief strategy officer for industrial platform provider Inductive Automation, in a recent issue of the GrayWay.4 He likens modern industrial connectivity platforms to a Swiss army knife for their ability to provide modular solutions in all manufacturing operations.

Facilities are also taking advantage of the concepts introduced by the IIoT to drive further value from investments in energy monitoring usage, building control, and even LEED certifications.

Big data is changing the world, and the manufacturing industry has more to gain than many other sectors if connectivity is effectively embraced.

• • • • 1

https://www.strategyand.pwc.com/industry4-0 https://www.skyhookwireless.com/blog/iot/internet-of-things-statistics https://www.newgenapps.com/blog/8-uses-applications-and-benefits-of-industrial-iot-inmanufacturing 4 https://www.gray.com/news/blog/2018/07/11/enabling-the-iiot-collecting-data-eliminating-pain-points 2

3

THE PROMISE OF PREDICTIVE ANALYTICS IN SITE SELECTION

By Clark Dean, SENIOR MANAGING DIRECTOR Transwestern

Data science that encompasses analytically rigorous predictive models has the ability to disrupt the conventional location decision process.

Data science is unlocking new opportunities for creating value across business enterprises. Leaders have always grappled with uncertainty as they plan and execute business plans — particularly when it comes to making critical decisions around relocating or expanding locations — but evolving data sources,

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analytical tools, and computational capabilities can now enable them to reduce that uncertainty and make better decisions than ever before. Learning from how data science is being applied to other business sectors, commercial real estate decisionmakers can find new ways to optimize outcomes and create unexpected value for their businesses.

Advanced applications of new data sets have already shaken up the ways companies market their products and services. By combining deterministic customer data — which represents discrete verifiable information about a customer’s stated preferences — and probabilistic customer data — which uses algorithms to predict customer behavior based on similar patterns of behavior across populations and multiple devices — marketers can often suggest compelling offerings to customers before they even know they may want them. The results can be stunning. Coupons for baby food and diapers arrive before pregnancies are announced. Furniture ads pop up before homes are purchased.

In the field of commercial real estate, similar techniques are enabling some investors to better predict value swings in buildings and neighborhoods — producing more useful estimates of value than conventional hedonic analyses. Up to this point, most advances in the application of data science in real estate have been made by investors, while most site selection processes remain reliant on aggregating simple layers of deterministic data paired with more qualitative information on location reputation and branding.

DATA THAT CAN PREDICT CULTURAL FIT Conventional site selection models have historically been driven by deterministic information related to verifiable factors like cost and availability of labor and real estate, transportation, quality of life, tax rates, and incentives. Data from these factors are collected, weighted, and analyzed to narrow down site alternatives and target locations that represent the best combination of a company’s preferences.

Although most site selection consultants now use geographic information systems to produce beautifully layered heat maps and dashboards for visually guiding decision-makers, they rarely apply data science to the underlying variables to truly optimize solutions. And the static deterministic factors themselves provide limited insight into what has become the holy grail of many contemporary site selection

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pursuits — cultural fit.

New sources of deterministic and probabilistic information promise to substantially change the game for site selection. Just as businesses are combining information derived from modern data aggregators like social media sites, peer-to-peer exchanges, wireless providers, and payment companies to drive marketing algorithms, real estate investors and appraisers are beginning to integrate information from these sources to identify previously indiscernible micro-market factors at scale.

Until recently, it has been extremely difficult to apply meaningful data science around lifestyle trends and unofficial hubs that may impact targeted recruitment and retention. But now real-time, aggregated knowledge about openings and popularity of hotels, residential developments, restaurants and bars, coffee shops, art galleries, cultural events, and festivals may provide unique insights into changing market trends and the potential flow of talent into specific areas. Similar knowledge about people’s movements, characteristics, and activities can provide rich measurements to help define the current and future state of an area’s labor, employment, culture, education, entertainment, transportation, pollution, and crime.

STRESS-TESTED SITE OPTIMIZATION MODELS The transformative potential of such predictive analytics on real estate investment and development is enormous, but these advancements should prove equally profound in the site selection space, enabling users to predict the impact of important decision factors that may change over time and algorithmically optimize location decisions.

What if a company could base its location decisions not merely on an area’s historic information, but on its probable future characteristics as well?

What if current widely used deterministic data could be integrated with probabilistic information from modern data aggregators to drive algorithmic site optimization models that can be stress tested to assess both opportunity and risk?

A shift toward analytically rigorous predictive models promises to enable trend-beating outcomes that can substantially surpass the value expected from conventional site selection processes. Just as data science has transformed marketing strategy and results, so too can it transform real estate strategy and the outcomes achieved by truly optimized site solutions. • • • •

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CONSTRUCTION/DESIGN

Modular Construction Projects Cut Costs and Timelines Early commitment from buyers and all stakeholders is imperative to a successful modular construction project, which can deliver on cost savings and shorten timeliness.

By Cliff Reese, PE, Business Leader and Senior Associate, SSOE Group

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t is easy to understand the concept of breaking down a larger, more complex system into smaller, more manageable parts. In fact, modularization goes one step further to increase flexibility by allowing replacement or addition of any one component or module without affecting the rest of the system.

Modular design, or modularization, is a design approach that subdivides a building into smaller parts, modules, or skids, which can be independently created and then combined with different systems to drive multiple functionalities.

Modular construction allows parts to be assembled at another location and then brought to the final site for finishing.

Increasingly, more companies are embracing modularization and standardization as cost savings are a major draw. Standardized design reduces costs to install and commission when all controls, electrical, and sanitation systems are of a standard design and pre-packaged. In addition, facilities use a smaller footprint since they build the same modules repeatedly, which allows for specification, thus improving quality.

With modularization, the decision to install capital can be delayed to when market demand is anticipated. For example, the first rollout may take longer as managers consider market factors, pricing, and volume demand. They tend to make more conservative estimates in an initial modularization project when they are unsure about how costs will play out. However, with subsequent rollouts, overall costs will likely be lower as companies gain efficiencies, and, consequently, the project timeline will be shorter.

Labor and Safety The gains on modularity increase as the work sites become more remote. Shipping into distant locations and bringing in skilled labor can be challenging for any organization. For some large projects, work crews can be commissioned for a year or more. Sitelabor costs can be significantly reduced with proper early planning during modularization. Pre-planning will also allow managers to keep a tight estimate on capital costs.

A strong technical leader from an experienced team will work with clients’ staff to get detail decisions made quickly and efficiently. The technology might not be new, but it’s the optimization of the delivery that makes the difference.

A recent paper plant project with a standardized design has incorporated modular construction into its regular

To optimize AWP, project leaders seek to understand how the work is being done, and how it needs to be done to avoid helping one group and hurting another.

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production flow. All high elevation work — above a certain story level — is done in a controlled yard environment, which reduces the likelihood of accidents. Heavy equipment, such as steel erection and mobile cranes, can be particularly dangerous, especially with numerous people moving around a site.

The plant’s design/build cycle was condensed due to market demands. It was losing too much time in unique site construction and needed to move to a standard design to prevent lost opportunities. The facility moved to a standardized design and has optimized for modular construction, incorporating it into the regular flow.

moved by rail or truck.

Once modules are in place, anchoring and pipe fitting occurs and utilities are connected. Standard modules make this process smooth since components fit together easily. The larger the module, the fewer pipe breaks and connections of equipment between two modules.

It’s All in the Planning

One of the most challenging aspects of modularization is gathering enough information and including the level of detail necessary before work can start. Project leaders must know their process design, agree on standards, and decide at what level modularization should occur. Some companies Advanced Work Packaging (AWP) are enthusiastic about the possibility of modularization beTo significantly optimize the efficiency of site-labor costs as cause they never considered something other than design, well as the project schedule, project leaders can also consider bid, build before. They are excited to try something unique Advanced Work Packaging (AWP). AWP is very similar to and different.

LEAN project delivery, and is the term Early commitment from buyers and used on the process aspect of projects. all stakeholders is imperative to a sucThe challenge with AWP today is with EARLY cessful modular construction project. the contracting strategy. Depending on COMMITMENT In many cases, initial ideas and process how the contracting strategy is set up, flow diagrams are formed, but the deciAWP allows for easier flow of informaFROM BUYERS & sion to modularize is made too far into tion. (In a perfect world, all professionals ALL STAKEHOLDERS the planning stage and, consequently, would share information openly, yet conIS IMPERATIVE TO A the project fails. tracts in the industry don’t always supSUCCESSFUL MODULAR It is important to have a good relaport that type of collaboration.) tionship among the entire project team With AWP and the right contracts in CONSTRUCTION and understand their efficiencies, how place, this approach allows project leaders PROJECT. they are set up, and their capabilities for to streamline the decisions that need to moving materials in and finished projbe made to release work, thereby limiting ects out. Since the planning stage can be waste. In this way AWP aligns with LEAN long, many feel that it is unproductive. project delivery.

However, the project team can use the time to think proacTo optimize AWP, project leaders seek to understand how tively instead of falling into the reactive mode. The team can the work is being done, and how it needs to be done to avoid manage some aspects of the job that are not time-critical but helping one group and hurting another. This means all disare important from a larger perspective. ciplines and subs need be involved and collaborating to do Inevitably, design variability is almost always a factor this successfully. in every project, but particularly in those that are larger in Understanding the role of technology, project teams can scope and more time-consuming. If a project manager, for plan work packages, but much of the coordination depends example, is suddenly replaced after a two-year time span, not only on different software for different disciplines, but the details and design will most likely be altered slightly. also how information is transferred back and forth. ThereSound planning proactively minimizes such changes. fore, a key challenge that needs to be address for AWP to be

effective is upfront planning on how data will be exchanged as packages are created.

Global Benefits

Global companies also can reap the benefits of modularization as processes can be implemented anywhere in the Standards and Modules world. Historically, organizations looking to expand overStandardization is the process of setting generally uniseas must deal with many complex transitions. However, form characteristics for a particular design. It works in tanturning to modular execution will help simplify processes dem with modularization, producing high volumes at low in any country and make all jobs easier and much more efmanufacturing costs. Also, standardization allows managers ficient in the long term. n to be more open-minded, moving beyond the reason of “be cause it’s always done this way,” to exploring more efficient CLIFF REESE, PE, is a business leader and senior associate with design and construction processes and ideas.

SSOE Group, a global project delivery firm for architecture, During modularization, standard construction is started engineering, and construction management. With more than with the largest portion possible. Modules themselves can 30 years of technical and leadership experience in global engineering and chemical manufacturing organizations, Cliff specializes in be extremely large — almost 600 tons or the size of a football technology implementation as well as new process and developfield. If the site is near water or adjacent to a dock, large ment programs. He can be reached in SSOE’s Midland, modules can be transported by ship. Smaller modules are Michigan, office at 989-835-3950 or Cliff.Reese@ssoe.com.

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SITE CONSULTANTS

TOP STATES for DOING BUSINESS SURVEY 2 0 1 8

20 Top States

Competitive labor environments and leading workforce development programs, low taxes and utility costs, favorable regulatory environments, and cooperative state governments are among the top-ranked states’ pro-business attributes.

By Steve Kaelble

1. Georgia 2. Texas 3. Alabama 4. Tennessee 5. South Carolina 6. North Carolina 7. Louisiana 8. Mississippi 9. Indiana 10. Florida 11. Ohio 12. Arizona 13T. Kentucky 13T. Virginia 15. Arkansas 16. Oklahoma 17. Utah 18T. Michigan 18T. New York 20. Nevada

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METHODOLOGY Our 2018 Top States for Doing Business rankings reflect the results of our recent survey asking the consultants to give us their top state picks in 11 categories that impact companies’ location and

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here’ a lot of prestige that comes from landing big-headline development projects, so it’s no wonder that states put powerful effort into making themselves great places to do business. Business success is a key component in a state’s economic health and, ultimately, individual prosperity and quality of life.

Creating an environment as a top state for doing business is no easy task, though. It requires attention to a lot of detail, from tax policies to economic development programs to regulatory matters to support for a well-qualified workforce. Our survey identifies 11 separate components that each play a key role in just how ideal a state is as a place for doing business. Needless to say, the ones that do well in a lot of these areas tend to fare well overall.

As competitive as the environment is, with ever-shifting policies and programs, it’s clear that some states have Overall Cost of really figured out how Doing Business to hit the sweet spot.

Georgia tops the list this year, as it has since 1. Texas 2014. Second-place 2. Tennessee Texas was third last year 3T. Georgia and the year before, and 3T. Alabama third-place Alabama was 5T. South Carolina in the sixth spot in 2017 and 2016. Regular ap 5T. Mississippi pearances at or near the 5T. Indiana top are a reflection of 8. North Carolina success, and the ongo 9T. Louisiana ing success that builds 9T. Florida upon past wins and positive reputations.

Other: KY

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facility plans. The states in each category were ranked based on their number of mentions in the particular category and total mentions in all 11 categories were calculated to rank the top 20 states overall.

OVERALL COST OF DOING BUSINESS Of the 11 other categories listed in our Top States for Doing Business report, nearly all have some impact on the cost of doing business. Achieving an exceptional cost picture isn’t just a matter of having low taxes or utility rates or a lower average wage —It’s the sum total of many accomplishments.

Texas leads the way in this category again, which isn’t a big surprise due to the fact that it is a recognized leader in many of the things that go into the overall cost of doing business. It tops the list in corporate tax environment and competitive labor environment, two of the biggest cost factors, and it’s in the top five in incentive programs, access to capital, and a favorable regulatory environment. Texas also is in the top five states whose economic development policies are seen as the most improved.

Much of the same can be said about Tennessee, which ranks second for its overall cost of doing business, and is rated highly for its competitive labor environment, generous business incentives, positive tax picture, favorable regulatory environment, reasonable utility rates, easily accessed project funding, exceptional workforce development concepts, and outstanding shovel-ready sites — ranking first in this last category. Hit on all of the cylinders in this manner, and you’re bound to reduce the cost of doing business.

Indeed, most of the states rated highly for their overall cost of doing business are also well-regarded across the entire survey. Georgia and Alabama tie for third and can be found at or near the top of numerous other categories. It’s worth noting that all of the states honored in this category — except for Indiana — are in the South. There are plenty of excellent reasons to do business in other areas of the country, but it often will cost you more.

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

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2018 Top States Commentary

BY ALEX FREI, Senior Vice President, Advisory & Transaction Services, Location Incentives, CBRE

Based on our Location Incentives’ collective team experience, it’s no surprise to see that the Southeastern States dominate the top 10 rankings of this survey.

The leading votegetter of the survey, Georgia has done a superb job of looking at economic development

holistically, balancing its cost of doing business environment with the right business incentives toolkit and the most recognized workforce development program.

Access to skilled labor has and will continue to be the focus of most employers and having an elite workforce development program to offset any skills shortages due to tight labor market conditions is required to remain relevant as a top site

selection destination.

Texas lags Georgia in the survey by a large margin specific to the workforce development category; however, the Lone Star State benefits from an ever-growing skilled labor pool that makes up for its lacking workforce development toolkit. Alabama, Louisiana, Tennessee, and South Carolina rank closely behind Georgia for their respective workforce development

programs.

The key variable of overall cost of doing business is led by Texas; however, case studies are showing that the costs of labor and real estate, for example, have been trending upward for many years and are now showing Texas to be significantly less competitive than as little as five years ago.

It is important for states that have led the country

in job growth over the last decade to be aware that a plateau may be coming and that they will need to continue to adjust their economic development tool chests to keep attracting growth versus adopting a complacent and less aggressive policy.

There is no finish line in the race for economic development success, so states can never take their foot off the accelerator!

CORPORATE TAX ENVIRONMENT According to the Tax Foundation, most states have corporate income taxes, but there are significant differences from state to state. 1 Rates range from 3 to 12 percent, though half a dozen states don’t have a corporate income tax at all. Of course, corporate income taxation is just one piece of the overall tax environment. Property taxes, franchise or receipts taxes, inventory taxes, sales taxes, and various other elements add into the picture — not to Corporate Tax mention the highly Environment important credits and exemptions that subtract from the 1. Texas total tax bill.

2T. Tennessee At the top of the 2T. Florida list for corporate 4. Georgia tax environment is 5T. North Carolina Texas, which levies no corporate or 5T. Nevada personal income 5T. South Dakota tax. Policymak 8. South Carolina ers, who reduced 9T. Virginia the franchise tax 9T. Utah a few years ago, have signaled that Others: AL, IN, AZ, LA they aren’t yet done

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cutting, and the Tax Foundation suggests there is room to improve. That organization, in fact, has said the state’s remaining franchise tax is the main thing standing in the way of a top three ranking in its own state tax climate evaluations.

Tied for second are two states that also are without a personal income tax, Tennessee and Florida.

Tennessee, too, has some room to improve, according to the Tax Foundation, especially when it comes to the sales tax. Of course, there are significant sales tax exemptions that help facilitate business activities there. The Tax Foundation lists Florida among the top five states with the best business tax climates, and lawmakers there have continued to pursue positive changes. 2 Multiple reductions and exemptions are coming online, and even some creative ways to redirect taxes, including the option to reduce certain tax liabilities by contributing to scholarship programs.

Georgi a i s hi gh on t hi s l i st agai n, thanks to its numerous p rograms ai med at l oweri n g business t ax es. There are ex emp t i ons coveri ng many business act i vi t i es, and comp ani es can ear n credits f or creat i ng j ob s, p art i cul arl y i n st rategic indust ri es, and al so f or hi ri ng d i sad vant aged wor ker s, ret rai ni ng work ers, i ncreasi ng ex p orts, conducti ng R&D, and a host of ot her si t uat i on s. Tying and round i ng out t he t op f i ve are more repeat honorees i n t hi s cat egory: N evad a, N ort h Carolina, and S out h Dak ot a.

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

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Dennis Kelley Plant Manager Drug Plastics and Glass Co.

Getting the most out of your land means getting in touch with Hoosier Energy. By working hand-in-hand with Bartholomew County REMC the two helped Drug Plastics identify a prime location near interstate and rail access, which was vital to keeping the firm competitive. And with operating 24 hours a day, 7 days a week, Drug Plastics needed a consistently reliable source of energy. Hoosier Energy fit the bill. And even kept that bill low by assisting with advantageous transformer locations and incentives for energy efficiency. We won’t just find you a piece of land. We’ll find you peace of mind.

hoosier energy rural electric cooperative is an equal opportunity employer.

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BUSINESS INCENTIVE PROGRAMS Launching or expanding an operation can be incredibly expensive, but generous incentive programs ease the way virtually everywhere. Some, of course, are more generous than others, and South Carolina tops this category once again. Its menu of incentives is long and diverse — many focus on lowering corporate Business Incentives income, sales or local Programs property taxes. But many of its economic 1. South Carolina development suc 2T. Georgia cesses are also driven 2T. Alabama by job development credits, workforce de 4. Mississippi velopment incentives, 5. Texas and grants from such 6T. Tennessee discretionary funds 6T. Louisiana as the Set-Aside Pro 8. Oklahoma gram, the Rural Infrastructure Fund, and 9T. Indiana the Governor’s Clos 9T. Ohio ing Fund, all of which 9T. New York can be tailored to an 9T. New Jersey individual company’s Others: VA, KY needs.

Georgia and Alabama are tied for Access to Capital second in the realm of & Project Funding business incentives.

Given that business incentives often are 1. California targeted at reducing 2T. Texas taxes and that Georgia 2T. New York is one of the leading 4. North Carolina corporate tax environ 5T. Georgia ments, its high ranking here is not surprising.

5T. Massachusetts But there are also in 7. Florida centives that directly 8T. Tennessee or indirectly help small 8T. Illinois businesses get revved 10. Louisiana up, including tax credits for angel investors Others: CO, NJ, MI, PA, CT, MD who put their faith in fledgling companies.

Alabama, meanwhile, has a wide range of incentives rewarding those that launch or expand an operation, or refurbish facilities. There are credits encouraging capital investment, and jobs credits that can result in a refund of 3 percent of the payroll, or even more, for up to a decade.

Similarly, diverse incentive programs lure companies to Mississippi — through business loans, tax incentives, economic development grants, assistance for small or minority-owned companies, and funds aimed

2018 Top States Commentary

BY TRACY SHARP, Chief Operating Officer, Boyette Strategic Advisors

The 2018 Top States for Doing Business continue to be dominated by Southern States with Georgia topping the list for the fifth year, and Texas, Tennessee, and South Carolina remaining in the top five. Alabama moved into the top five, edging out Louisiana, which remained in the top 10.

From 2017 to 2018 the top 10 only changed slightly, with Florida

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moving from 12th to 10th place and edging Ohio out of the top 10.

One observation is that the majority of the top states have aggressive utility economic development programs, such as TVA, FPL, the SC Power Team, and Georgia Power. This is important as these states have resources other than the state and local EDO that can provide additional funding and assistance with site development, incentives,

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and other programs.

Another observation is that three of the top 10 states — Texas, Tennessee, and Florida — have no personal income tax. With that said, based on the survey results, the following states rank in the top five for corporate tax environment: Texas (1), Tennessee (2), Florida (2), Georgia (4), and North Carolina tied with Nevada and South Dakota for fifth place. These results are somewhat in line with

the Tax Foundation’s 2018 State Business Tax Climate Index ranking of corporate taxes1 as follows: South Dakota (1); North Carolina (3); Georgia (10); Florida (19); and Tennessee (21). Texas is surprisingly ranked 49th for corporate taxes by the Tax Foundation, but its overall ranking in the Tax Foundation’s 2018 State Business Tax Climate2 is 13th. Other than Texas, the best overall ranking on the Index is South Dakota (2), Florida (4),

North Carolina (11), and Tennessee (14).

The majority of the Southern States also rank high related to competitive labor environment, workforce development programs, shovel-ready sites, incentives and economic development policies, indicating they will probably be seen again next year.

1

https://taxfoundation.org/corporatetaxes-2018-state-business-tax-climateindex/ 2 https://taxfoundation.org/publications/state-business-tax-climateindex/

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at employers already up and running and eager to thrive. And Texas is well-known for its generous business incentives, including the deal-closing Texas Enterprise Fund that has helped create more than 80,000 jobs since its launch 14 years ago.

ACCESS TO CAPITAL AND PROJECT FUNDING

snare four-fifths of the nation’s venture capital funds.

Many states find that specialized funding programs make a real difference in helping harder-to-finance companies get their projects going. Such Texas initiatives as LiftFund and PeopleFund, for example, aim to elevate businesses that have trouble accessing more traditional financing. Innovate NY and the Linked Deposit Program similarly strive to help those less able to land bank financing. California companies benefit from a long list of targeted funding programs.

The time-worn adage “it takes money to make money” is most definitely true in the world of business expansion and location. Incentives may help pay back some of the investment cost that goes with opening or expanding a new business location, but those doors could never open without capital and project funding, usually in the millions or even billions of dollars.

California, New York and Texas once again comprise the top three states in access to capital and project funding, albeit in a slightly different order from last year. All three are solid centers of traditional financial services activity, and magnets for venture capital.

In fact, one recent report from PricewaterhouseCoopers and Introducing PORT HOUSTON DIRECT a higher degree of service and CB Insights 3 found that these stability for importers and exporters. A vast network of interstate highways three states plus Massachuand three Class-One railways connect Houston with an inland market of setts (also on this list) together approximately 100 million customers within 1,000 miles of the port. Over 25 million square feet of distribution centers near the port and other centers are growing around the Houston metropolitan area, making Port Houston the preferred port of call along the U.S. Gulf Coast.

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2T. North Carolina 4. Florida 5. Tennessee 6T. Alabama 6T. Indiana 6T. Arizona 9T. Utah 9T. Ohio Other: SC, MS

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2018 Top States Commentary

BY VON HATLEY, Managing Director, Jones Walker Consulting LLC

When I look at the survey results, there is regional clustering of perceived performance throughout the states based on physical location. This year, 8 of the top 10 highest performing states have borders on either the southern East or Gulf coasts, and this is consistent with results over the past several years.

By looking at the relative distribution of the votes among the leading states for each of the categories, one can determine if there is opportunity to take action to increase a state’s relative position.

By focusing on target criteria, it provides policy opportunity to brand overall attractiveness for potential investment. For criteria such as business incentives, favorable general regulatory

environment, utility rates, and most improved economic development policies, the distribution of the votes between the leading states was rather minimal.

For other criteria, such as cooperation and responsiveness, shovelready sites, access to capital, and overall corporate tax structure, the top states leading here are showing a more commanding position.

This is especially

true with the states perceived as having the leading workforce development programs, a key criterion for most all siting decisions.

It appears that the states of Georgia, Alabama, Louisiana, North Carolina, South Carolina, and Tennessee are beginning to run away from the pack in this category, and given their collective history, it would be particularly costly for a new state to catch up to

these current levels of performance.

For the states that aren’t in the top 10, it appears that there is ample opportunity to create policy to get on to the leader board. Whatever criteria leaders choose, the program design inherently must include an implementation timeline longer than the incumbent political administration to achieve meaningful results.

COMPETITIVE LABOR ENVIRONMENT

LEADING WORKFORCE DEVELOPMENT PROGRAMS

Productivity is ever-increasing, but for many companies, labor remains one of the biggest costs of doing business. Indeed, access to qualified and affordable labor is the top concern of most companies making a location decision. A competitive labor environment is the byproduct of a strong pool of available labor supported by a solid network of educational institutions and programs that help companies arrange the tailored training that their workers need to succeed.

Texas once again tops this list for a number of reasons.

The Lone Star State has a vast array of colleges and universities that turn out well-qualified employees. Helping companies tap into just the right educational expertise are such initiatives as the Skills Development Fund, which provides money for community or technical colleges to partner with businesses on training programs.

Tied for second are Georgia and North Carolina. They can point to multiple factors that make their labor environment competitive. For one thing, both states have right-to-work laws (as do nine of the top 10 states in this category). Georgia boasts an educational environment that turns out a steady stream of skilled employees, starting with publicly funded pre-K education, ongoing programs targeted at improving elementary and secondary teaching quality, and generous scholarships for higher education.

North Carolina is well-known for its Tier 1 research universities, but also has some of the nation’s most comprehensive technical and advanced vocational programs.

As stated, workforce development is a critical part of the labor environment. In the best of circumstances, a state’s workforce development programs have created a pool of properly skilled labor that’s ready to be hired as the need arises. There are Leading Workforce often gaps, though, but Development a solid workforce dePrograms velopment program can fill in the gaps in a way 1. Georgia that is tailored to an 2. Alabama employer’s needs.

3. Louisiana Georgia is the leader 4T. South Carolina in this category, thanks to a variety of factors.

4T. Tennessee The Workforce Division 6. North Carolina of the Georgia Depart 7T. Virginia ment of Economic 7T. Ohio Development has the 9. Florida responsibility of ensuring that education and 10T. Mississippi training programs are 10T. Iowa aligned with what in 10T. California dustry is demanding.

The Technical College

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The

Deciding Factor.

A quality workforce makes the difference between failure and success.

That’s why site selection professionals have ranked Georgia Quick Start the No. 1 workforce training program in the United States in nine out of nine annual surveys conducted

by Area Development magazine.

9

And that’s why the offer of Quick Start’s customized training has been the deciding factor for companies across the globe choosing to invest in Georgia.

N INE ANNUAL SURVEYS N INE CONSECUTIVE WINS

GeorgiaQuickStart.org

System of Georgia is heavily involved in the effort, and even has tuition-free 1. Tennessee programs in a dozen 2. Georgia and a half highdemand careers.

3. Alabama And the Georgia 4. South Carolina QuickStart program, 5. North Carolina which provides free 6. Ohio customized services 7. Texas for companies, has helped a million 8T. Indiana people raise their 8T. Mississippi skill levels.

10T. Kentucky Louisiana, ranked 10T. Louisiana third this year, is Other: AR, VA, IA, WI highly regarded as well for a number of reasons. Beyond standard workforce programs, the state benefits from such ideas as a state-funded initiative to triple the undergraduate degrees awarded by the University of Louisiana at Lafayette School of Computing & Informatics. That kind of support helped information technology and consulting firm CGI decide to expand its IT center of excellence. 4 Tennessee (which tied for fourth in this category with South Carolina), has gotten a lot of attention with its ambitious “Drive to 55” program with a target of equipping 55 percent of Tennesseans with a college degree or certificate by 2025. The Tennessee Promise and Tennessee Reconnect programs provide the backbone of this initiative, by ensuring that all Tennessee high school graduates can have two years of tuition-free education at any of the state’s community colleges or colleges of applied technology. That promise recently was extended to cover all Tennessee adults wishing to attend college for the first time or return to wrap up a degree.

And Florida, in ninth place, has a strong network of educational institutions along with an array of customized training programs and incentives such as CareerSource Florida. Its FloridaFlex program, in fact, handles not just training but recruiting and hiring.

Shovel Ready Sites Program

SHOVEL-READY SITES PROGRAM Real estate transactions and site development are incredibly complicated matters. Even a simple sale of a home generates a stack of paperwork following weeks of due diligence on the part of title professionals and other experts. That’s nothing compared with what it takes to transform an undeveloped site of hundreds of

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acres into a new factory or distribution center or other kind of facility. There are ownership matters to resolve, utilities to arrange, infrastructure to develop, technical studies to conduct, zoning matters to consider, and other headaches to deal with.

No wonder shovel-ready sites are considered a dealmaker in many instances. What they’re called and what the designation means varies from state to state, but in general it’s a confirmation that the key details have already been checked out and resolved. Tennessee is top-ranked here again this year, with its Select Tennessee Certified Sites Program with a few dozen sites that are ready to roll.

No. 2 Georgia, meanwhile, has the GRAD program, short for Georgia Ready for Accelerated Development.

More than 60 sites are ready to go, having already had an environmental assessment, geotechnical investigation, zoning designation, and utility service assessment, to name a few details. Alabama, ranking third, calls the concept AdvantageSite, and there are some five dozen sites that fit the bill. It’s a public-private partnership that ensures a site is ready for prospective industry to get going on a project, with preliminary work completed and all the paperwork in hand. In Kentucky, the concept goes by the name Build-Ready Sites, and there are prime possibilities waiting for shovels in more than a dozen Kentucky counties.

COOPERATIVE AND RESPONSIVE STATE GOVERNMENT At his inauguration in 1981, President Ronald Reagan famously declared that “government is the problem.” The leaders in this category might beg to differ, as they’re being recognized for being part of the solution to the challenge of running a successful business.

Many states claim that they roll out the red carpet and put out the welcome mat for business prospects, but being business-friendly is more than just words. It’s an active effort to break down barriers that stand in the way of busi-

Cooperative & Responsive State Government 1. Georgia 2. South Carolina 3. North Carolina 4. Alabama 5. Tennessee 6T. Mississippi 6T. Louisiana 8. Arizona 9T. Indiana 9T. Virginia Others: OH, TX, AR

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ideal spot, then easing the path of obtaining approvals and creating project-specific incentive packages.

South Carolina regularly ranks near the top in this category, as well. Its services are similarly geared toward easing the location/expansion process, but the state also recognizes that all partners need to be at the top of their game in providing a cooperative and responsive effort. That’s why the state offers consultation assistance to its local governments to help them improve their own economic development responsiveness and professionalism.

The aversion to red tape can be found up and down this category of business-friendly states. Eighth-place Arizona describes its regulatory environment as “minimalist,” and has undertaken focused efforts to remove burdensome regulations and create resources for business-targeted assistance.

ness success, facilitate deals, and swiftly move what can be complicated processes down the road to completion.

1T. Georgia States that excel in 1T. Alabama this area want business dealings to feel less 3. Texas like the picture Reagan 4. South Carolina painted and more like 5. Tennessee “phone a friend” or a 6. Louisiana transaction at the cof7. Mississippi fee shop on the corner.

Topping this catego8. Florida ry once again is GeorOthers: NC, IN, AR, gia, which provides a KY, UT, KS, NV wealth of support for businesses considering locations there as well as those already planted there and working to expand.

Its staff includes industry-specific experts and people with contact lists packed with supporters willing to help. The aim is to simplify the process of locating the

Favorable General Regulatory Environment

FAVORABLE GENERAL REGULATORY ENVIRONMENT When it comes to business regulations, the climate can make or break the viability of a location or expan-

Designed with the

MODERN WORKFORCE in mind

Camp Hall is a new breed of commerce park— one thoughtfully constructed for human connection and ready to meet the demands of the 21st century.

Beyond its extensive benefits of location and infrastructure, the Charleston, SC region stands ready with a workforce of over 350,000.

Camp Hall creates a place of commerce, convenience and community where the workforce can truly thrive in all areas of their lives.

13 to 600 acre build-ready tracts now available.

Camp Hall Charleston interna international Airport Port of charleston AAtlantic OCEAN

Learn more about how Camp Hall outshines other industrial work spaces at

www.camphall.com.

Home to Volvo’s only U.S. car manufacturing facility.

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Favorable Utility Rates

sion project, as well as the ongoing health of the operation. En1. Alabama vironmental laws and 2. Georgia how they are enforced can determine whether 3T. Indiana a particular site will 3T. Ohio work or not, and there 3T. Michigan are numerous other 6T. Kentucky legal considerations 6T. North Carolina that also impact the big picture and bottom 8. Tennessee line. Workers’ compen9T. South Carolina sation laws and other 9T. Arizona labor factors can be a 9T. Virginia big deal, as can variOther: AK, ID, CO ous other administrative hurdles — or lack thereof.

Georgia moves up to the top in this category this year, in a tie with Alabama. Just one example of this is the streamlined process for environmental permitting in Alabama. Its Department of Environmental Management includes a Permit Coordination and Development Center that aligns administrative functions and communications with an aim of creating hassle-free interactions with businesses.

Texas also regularly rates highly in this regard.

Though some analyses suggest there’s still room for improvement, Texas has recognized that this kind of burden comes not just in the form of business regulations, but also the impact of legal rulings. That explains its longstanding crusade for tort reform, aimed at reducing business liabilities and minimizing business risks. Mississippi, ranking seventh, has made a similar commitment.

FAVORABLE UTILITY RATES Big users of energy pay close attention to utility rates, as the cost of energy, in particular, can be a major part of operational expenses. That’s especially the case for such users as manufacturing operations and data centers. But as with everything else, determining the place with the most favorable rates is a lot more complicated than looking up prices on a table, because big users can often land special incentives, discounted rates, and improvements to the infrastructure.

That said, the top states on this list do fare pretty well on the rate tables. The U.S. Energy Information Administration 5 keeps tabs on such things as electric rates, and the four states topping this category all fall

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around or below the middle of the price list. Again, that’s a base residential rate and not what a big industrial user would expect to pay, but it certainly doesn’t hurt to start in a good spot. Tied-for-third-place Indiana, for example, is near the bottom in average electric costs, and below the national average in natural gas.

For businesses, utilities such as Alabama Power offer dozens of pricing options that consider the type of business and the specific energy requirements.

Demand pricing might be the best bet, or time-of-use pricing, or real-time pricing, or some variation. Picking the right option can make all the difference in solving the utility cost equation.

The right spot on the map can play a role in the availability of competitive utility services. Kentucky, for example, sits right on the interstate natural gas pipeline corridor, which means supply is not an issue, and it has exceptional access to naturally flowing water supplies, too. Its electric rates are made more competitive by Kentucky’s extensive coal reserves.

MOST IMPROVED ECONOMIC DEVELOPMENT POLICIES The business of economic development is highly competitive, and the landscape changes all the time.

Factors that added up to a good deal five years ago might be just average today, as states continually revise and improve their policies and programs. As good as the states profiled here are as locations for busiMost Improved ness success, there Economic is always room for Development improvement in incenPolicies tives, tax rates, workforce development 1. Alabama programs, and all of 2. Georgia the other factors that make a state attractive 3. Texas to businesses.

4T. South Carolina Category-topping 4T. Mississippi Alabama, for ex6. Tennessee ample, has continued 7T. Louisiana to pursue legislation aimed at boosting 7T. Indiana business-friendliness 9. Arizona and encouraging re10. Kentucky gional cooperation for Other: FL, OH,AR the benefit of all. The same can be said in

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states up and down the list, such as in Texas, which made it to the top of the CNBC “Top States for Business” list 6 by continuing to promote the gospel of low taxes, restrained spending, and smart regulation. Indiana, tied for seventh on the list, included workforce training initiatives among its new laws for 2018. A new secretary and cabinet for workforce training will oversee programs that in the past have been spread across multiple agencies. 7 Kentucky, meanwhile, is boosting its competitiveness with a number of new ideas. The KY Innovation initiative is putting in place a regional approach for developing high-tech businesses that have a big potential to grow. Kentucky is also building upon its highly regarded apprenticeship program. And the state has partnered with neighboring Indiana on an exchange program that allows disadvantaged business enterprises to work on federally funded transportation projects across both states with a single certification.

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https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2018/ http://www.deanmead.com/2018/03/2018-florida-legislature-enacts-numerous-state-and-localtax-changes/ 3 https://www.pwc.com/us/en/technology/assets/MoneyTree_Report_2018_Q1_FINAL.pdf 4 https://www.seattletimes.com/business/cgi-expanding-in-louisiana-400-new-jobs-projected/ 5 https://www.eia.gov/state/rankings/#/series/31 6 https://www.cnbc.com/2018/06/29/texas-rebounds-to-become-americas-top-state-for-businessin-2018.html 7 https://www.indystar.com/story/news/politics/2018/02/13/alcohol-marijuana-abortion-votingeducation-and-more-where-bills-stand-halfway-point-2018-legislativ/317437002/ 2

Visit us online:

www.areadevelopment.com

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SPONSORS

FLORIDA

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

Tim Vanderhoof, Senior Vice President, Business Development Enterprise Florida, Inc. 800 N. Magnolia Ave, Suite 1100 Orlando, FL 32803 407-956-5600 tvanderhoof@EnterpriseFlorida.com www.enterpriseflorida.com

GEORGIA

Georgia Department of Economic Development (GDEcD) The Georgia Department of Economic Development (GDEcD) is the state’s sales and marketing arm, the lead agency for attracting new business investment, encouraging the expansion of existing industry and small businesses, aligning workforce education and training with in-demand jobs, locating new markets for Georgia products, attracting tourists to Georgia, and promoting the state as a destination for arts and location for film, music and digital entertainment projects, as well as planning and mobilizing state resources for economic development.

ILLINOIS/INDIANA

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

Harold Gutzwiller, Manager, Economic Development/Key Accounts Hoosier Energy P.O. Box 908 Bloomington, IN 47402 812-876-0294 • Fax: 812-876-5030 Cell: 812-360-4796 hgutzwiller@HEPN.com www.HoosierSites.com

INDIANA

Indiana Municipal Power Agency (IMPA) IMPA is a wholesale power provider to 61 communities in Indiana and Ohio. IMPA is proud to partner with its member communities and their local economic development professionals, to support their economic and community development efforts.

Tom Croteau, Deputy Commissioner, Global Commerce Georgia Department of Economic Development 75 Fifth Street, N.W., Ste. 1200 Atlanta, GA 30308 404-962-4000 communications@georgia.org www.Georgia.org

Bryan Brackemyre, Vice President of Member Services Indiana Municipal Power Agency 11610 North College Avenue Carmel, IN 46032 317-575-3879 • Mobile: 317-903-9721 bryanb@impa.com http://www.impa.com

Georgia Ports Authority Georgia’s ports provide greater scheduling flexibility and market reach with direct links to I-95 and I-16, on-terminal rail, and 38 weekly container ship calls. The Savannah market features enough space in industrial parks to add 15 million square feet within 15 miles of the Port of Savannah, while Georgia offers a business-friendly tax structure and targeted workforce training.

KENTUCKY

Patricia Richardson, Manager, Commercial Communication Georgia Ports Authority P.O. Box 2406 Savannah, GA 31402 912-964-3996 prichardson@gaports.com www.gaports.com Georgia Quick Start Georgia Quick Start, the nation’s oldest and most successful workforce training organization, provides comprehensive, customized training — free of charge — to qualified companies locating or expanding in Georgia to ensure the highest quality work force required for business success.

Rodger Brown, Executive Director of Marketing Georgia Quick Start 75 Fifth Street, NW, Ste. 400 Atlanta, GA 30308 404-253-2800 Fax: 404-253-2821 RBrown@georgiaquickstart.org www.GeorgiaQuickStart.org

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Kentucky Cabinet for Economic Development Kentucky is working to become the engineering and manufacturing center of the U.S., and companies from all over the world are locating or expanding in the Bluegrass State. Our pro-business government, rightto-work status, and ability to move at the speed of business are leading to record-breaking growth.

John Bevington Commissioner for Business Development Kentucky Cabinet for Economic Development 300 West Broadway Frankfort, KY 40601 502-564-7670 • 1-800-626-2930 Econdev@ky.gov www.thinkkentucky.com

MICHIGAN

Michigan Economic Development Corporation (MEDC) The Michigan Economic Development Corporation is the arm of the state which helps transform the Michigan economy by growing and attracting businesses and revitalizing its urban centers by providing the tools and environment to drive job creation and investment. MEDC is the first point of contact for businesses, entrepreneurs, and communities — locally, nationally and globally — looking to succeed in Michigan.

Michigan Economic Development Corporation 300 N. Washington Sq. Lansing, MI 48913 888-522-0103 www.michiganbusiness.org

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

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MISSISSIPPI

TENNESSEE

Billy Klauser, Chief Economic Development Officer Mississippi Development Authority Post Office Box 849 Jackson, MS 39205 800-360-3323 Fax: 601-359-4339 bklauser@mississippi.org www.mississippi.org

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

Mississippi Development Authority Consistently ranked as a top state for business, Mississippi’s portfolio of national and global companies continues to grow. From the state’s one-stop permitting process to its business-friendly climate, more companies are discovering how a Mississippi location and workforce give them a competitive advantage. Find out why Mississippi works at www. mississippi.org.

SOUTH CAROLINA

TEXAS

Santee Cooper Camp Hall is a first-of-its-kind, master-planned industrial work space designed for today’s evolving workforce. Developed by Santee Cooper and located near the business epicenter of the south — Charleston, S.C. — Camp Hall stands ready to meet the needs of modern industries and their valued employees.

Dan Camp Santee Cooper 114 Three Point Drive Ridgeville, SC 29472 843-761-4070 Dan.Camp@santeecooper.com www.CampHall.com

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

Port Houston Smart businesses choose Port Houston as the best location for their businesses for many reasons including cost savings as well as access to critical transportation infrastructure. Find out how we can help your business locate, operate, and succeed within the port’s premium, lowcost logistics chain of its ship channel and intermodal connections. Port Houston’s portfolio also includes numerous and available foreign-trade zones that provide port clients valuable operating cost savings.

Shane Williams Port Houston 111 East Loop North Houston, TX 77029 713-670-2487 smwilliams@poha.com http://porthouston.com/ftz/

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 AREA DEVELOPMENT | Q3/2018

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ADVANCED TECHNOLOGY/ SITE SELECTION

Technology Upending the Location Decision Process Technology’s radical transformations of industry are changing not only company operations but also how sites are selected.

By Tom Gresham

T

he exponential progress of technology has brought an overwhelming sense of change to industries of all kinds, and those advances are showing no signs of slowing. Businesses and organizations of every stripe are pursuing new ways of working with the benefit of rapidly developing technologies such as augmented and virtual reality, 3D printing, robotics, computer processing, blockchain, nanotechnology, and the Internet of Things (IoT), among other advances.

Jack Uldrich, a global futurist and author, says centuries-old industries could be poised for radical, sweeping transformation from new technological developments.1 Additionally these tech-based changes will have widespread impact on site selection and economic development. That’s because, in myriad ways, technology is changing how commercial properties are used, located, and operated — and those changes are coming quickly.

“There are a lot of new dynamics taking place right now, and it’s creating a lot of change,” says Tom Stringer, managing director of Corporate Real Estate Advisory - Site Selection and Incentives for BDO, which provides accounting, tax, audit, and consulting services. “The one consistency is speed,” he notes. “Everything is much, much faster than ever before.”

Tech-Fueled Operations Technology already affects the way sites operate on a day-to-day basis,

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A fluid-cooling panel designed by Shanhui Fan, professor of electrical engineering at Stanford, and former research associates Aaswath Raman and Eli Goldstein being tested on the roof of the Packard Electrical Engineering Building at Stanford University

and more changes are imminent as existing technology blossoms and its capabilities grow. For instance, Uldrich points to artificial intelligence and the evolution of smart buildings that use AI to more efficiently manage energy and water usage, among other tasks.

Advances in material science could overhaul the way temperatures in buildings are maintained, Uldrich says. SkyCool Systems, for instance, uses cooling panels to provide renewable cooling to buildings and reduce cooling costs for facility owners.2 Uldrich says the technology may require more development to become affordable and impactful for most

sites but “I can almost guarantee you it’s going to get more affordable and it’s going to get better over time. As it does, that world could change,” he projects. “If I’m a property developer or owner, I want to start investigating that material and making sure I know what’s happening with it.”

Another innovator that Uldrich cites to demonstrate the potential of technology to make a major impact on the commercial real estate sector is Katerra, a tech-based global construction company. The company leverages AI, robotics, 3D printing, and sophisticated use of data “to fundamentally rethink how buildings can be built.” Ka-

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

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terra’s employment of tech-based solutions to construction challenges opens a new door in the field and could serve as an example that will lead to more efficient construction projects that accelerate the development process, getting buildings built and operational at light speed when compared to the current standard, Uldrich says.

Selecting a Site The accelerated progress of technology has not only changed the way companies do business — it also has changed the way they choose where to do business. Stringer says companies often employ sophisticated data analysis to narrow their sights to locations that make sense for their businesses. He notes that it’s “truncating the site selection process because a lot of folks really understand where they need to be and what their pain points are. There’s not as much time spent figuring that out.” According to Stringer, “There are so many new diagnostic tools. It means bettereducated clients who really know what they want.”

Technology companies are proliferating in the current environment, and they have somewhat distinctive needs when selecting a site. However, the most important factor in site selection decisions for technology companies — one they share with other industries — continues to be access to a skilled workforce.

As an example of the emphasis on access to talent among tech companies, Gregory Burkart, managing director and leader of the Site Selection and Incentives Advisory Practice at Duff & Phelps, points to the highly publicized Amazon RFP for a new headquarters and the stress it placed on the availability of a skilled workforce. Tech companies especially prize highly educated millennials, so they gravitate toward communities that appeal to that demographic, Burkart says.

The eternal search for the best talent pools means tech companies often are grouped around similar communities, such as Silicon Valley; Austin, Texas; and Nashville, Tennessee. Burkart says tech companies are always looking for the next hot tech market because they know they can’t afford to miss the workers who will populate it.

Because talent is in high demand, tech companies are locked in a highly competitive battle to secure it, Stringer says. “In the tech space, the hunt for talent is pretty extreme.

That is really driving a lot of the decisions that are being made. They’re looking at the university systems in the area and whether the ecosystem is there to support the workforce flow that they need, so tracking the number of people with the requisite engineering, computer science, and mathematics degrees is really important from a site selection standpoint in the tech world,” notes Stringer. In that search for talent, Stringer also says that a key consideration for tech companies often is where their competitors have locations.

Being close to the competition offers another way to access

talent in the appropriate field.

Increasingly, tech companies also are considering the political landscape when determining where to open a new location. Stringer says companies want to make sure they don’t settle somewhere that would potentially prove alienating for their employees, such as through legislation that makes some of them feel unwelcome. In addition, he says companies seek locations where the relationship between government and industry is a positive one — and unlikely to vary greatly by the political party in power. “If you look at it that way, you’ll find that some states really rise to the top,” Stringer says.

Of course, tech companies must ensure that communities possess the infrastructure to support them in a potential new home. As a result, Stringer says data centers continue to gain importance: “They seem to be growing by the day in terms of scope and size, whether it’s shared or it’s for a sole user” and they are “a huge economic development boon for certain communities.” Decisions for choosing sites for data centers tend to be driven by an assessment of the power costs and reliability.

Companies will consider the stability of the local power grid and how prone the area is to natural disasters.

Tech’s Transformative Power According to Uldrich, the ripples from technological advances could increasingly become waves that wash away whole systems and well-established practices. As an example of the way technology seems likely to create a series of seismic shifts, Uldrich points to 3D printing, which he believes could disrupt the global supply chain. For instance, Adidas has begun to 3D print shoes. If Adidas and other shoe companies begin to 3D print shoes on a massive scale, Uldrich believes shoes no longer will be made in factories that are located far from most of their consumers. Instead, the shoes will be printed close to the consumers in smaller facilities.

“It’s not just going to be shoes,” Uldrich says. “It’s going to be aircraft engine parts, which General Electric has said they’re going to start 3D printing in a couple of years. It’s going to be lots of different things. As that happens, not only are the shipping and trucking industries disrupted but so is the storage industry and how we think about where we locate new manufacturing facilities.”

There are few, if any, industries unlikely to see major changes in the coming years. And although the scope of tech-driven change promises to be momentous, the specific shape of that change can be difficult to project — in part because innovations yet to be seen will emerge. One thing is certain, though, Uldrich says, “It will be interesting.” n 1

http://www.areadevelopment.com/advanced-manufacturing/Q2-2018/disruptive-technologieschanging-the-business-landscape.shtml

2

https://www.ted.com/talks/aaswath_raman_how_we_can_turn_the_cold_of_outer_space_into _a_renewable_resource

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PROJECT PLANNING

You’ve Found the Perfect Site — Now What?

A site’s existing conditions, zoning regulations, and surroundings are just some of the elements that must be considered in order to turn the site into the ideal location for your project.

By Brent Maugel, Founder and President, Maugel Architects

I

f you’ve found the perfect site, congratulations! To architects, planners, and problem-solvers, a perfect site might sound like a dream — but starting with a blank canvas is harder than one thinks. When you consider zoning regulations, financial goals, environmental and sustainability objectives, quality standards, and a vision for what the project can be, the canvas isn’t as blank anymore.

As you embark on your design journey, here are the top five things to consider:

1. Existing Conditions There is a story in every site waiting to be discovered, particularly when it comes to natural features. Study every inch with scrutiny and intrigue. Considerations should include vehicular and pedestrian access, views, topography, drainage, wetlands delineations, seismic zones, and endangered species. Yes, endangered species. I’ve seen many a perfect site rendered virtually valueless by updated wetlands regulations, the presence of four-toed salamanders, or northern red-bellied cooters (that’s a turtle).

A thorough understanding of your site’s natural features can help you avoid a design dilemma. We were once presented with a site where a portion of the premises was

Shown here is an example of how cutting in interior courtyards brings natural light into a former warehouse space.

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too steep to park on, so available parking was limiting the square footage allowed for the existing structure. We flipped the building to the sloped portion of the site, designed an addition and significantly reduced the footprint by making it three-stories tall. This gave way to a large, flat parking field that increased the allowable square footage, and the site was suddenly three times more valuable.

2. Zoning Regulations When zoning regulations are outdated, they can be restrictive. But, in general, zoning is our friend. Many jurisdictions now allow — and often endorse — special permitting as a means to foster better combinations of open space and built space.

Occasionally, zoning changes or overlay districts present tremendous development opportunities. For example, a suburb outside of Boston recently rewrote the zoning bylaws to allow retail, restaurants, entertainment, and multifamily housing within an office park. The result was a highly successful “live-work-play” community that significantly increased usable square footage while improving the town’s amenities and tax base.

3. Quality Over Quantity A common struggle throughout one’s design journey is the tug-of-war between return on investment and the size of a project. While site characteristics and zoning certainly influence decisions about size, quality must never be left out of the equation.

We worked on a collection of dilapidated mill buildings along a beautiful river where we designed waterfront housing with a marina, keeping the original 11-foot ceilings. But the developer insisted on adding a floor and more units, thus creating eight-foot ceilings instead. As a result, the entire mill character was lost. While size is important, it cannot be a higher priority over quality and character (although you might want to reduce the maximum square footage allowed by 10 percent to make the permitting process a more enjoyable experience).

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

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CROSSROADS

Shown here is an example of a former industrial building that was repositioned for commercial space.

4. Context Visual and physical impact on a site’s surroundings must be considered. Most major developments are not stand-alone structures isolated as objects in a field. They are next to office buildings, neighborhoods, churches, and schools. Gestures to the context of the site might include elements of a particular architectural style, a local or regional architectural need or tradition, or even a local iconic form.

We planned and designed a four-building mixed-use campus amidst apple orchards and farms in a conservative and wealthy community with antiquated zoning bylaws and architectural gems within its border. To fit the surrounding context, we presented designs featuring brick façades with large stone-arched entryways and a steeply pitched roof on a turret. A three-story building was designed to appear as a two-story structure with the top floor concealed under a French mansard roof. The campus is now considered by most in town to be one of its new gems.

5. Visual Distinction An undiscovered property value escalator is what we call visual distinction. It’s the first impression “wow factor” that causes an observer to take a second look and explore further.

A well-designed site can increase in value well beyond its brick and mortar costs. Considerations include proper siting and massing of the building, materials, articulation, natural light, repetition, rhythm, balance, symmetry, asymmetry, color, light, shade, and shadow.

We worked on a 600,000-square-foot big box site that had adequate parking and a great location, but the façade was dated with some interior spaces nearly 400 feet from windows. We designed new façades and cut outdoor landscaped courtyards into the darkest parts of the building, creating 500-linear feet of new floor-to-roof windows. The furthest point from natural light was reduced from 400 feet to just over 100 feet, and the visual impact of the façade design and courtyards resulted in the previously empty building being fully leased in a matter of months Keeping these details in mind will help you turn that perfect site into a picture-perfect project. ■

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CANADA

CANADA REMAINS A PREMIER INVESTMENT DESTINATION Despite the uncertain investment environment brought about by renegotiation of NAFTA and new U.S.-imposed tariffs, Canada continues to promote FDI by maintaining an open economy, investing in its workforce, and engaging in regional trade partnerships.

A

t first glance, 2017 was not the best year for foreign direct investment (FDI) in Canada. FDI inflows into Canada decreased by 36.4 percent to $31.5 billion, mainly due to an overall decline in global FDI which fell by 23 percent to $1.43 trillion. Important divestitures by foreign-based companies in the oil and mining sectors in Canada also contributed to the decline of FDI inflows. Although there was a general decrease of inflows from the U.S. into Canada, the decline in FDI from other parts of the world was much more pronounced.

However, as Erik Hertzberg, journalist for Bloomberg, wrote, “Outside of oil and gas, foreign investors haven’t given up on the Canadian economy.”1 In fact, the manufacturing sector did incredibly well in 2017: FDI inflows in manufacturing showed an impressive 94.5 percent increase in 2017, almost doubling since 2016, a clear indicator that Canada is a destination of choice for growing manufacturing companies.

FDI stock measures the total level of direct investment at a given point in time. In Canada, excluding oil and gas from the equation, it grew by 4.7 percent, a larger increase than in the past two years. Including oil and gas in the evaluation of FDI stock results in a 1.9 percent increase during the past year. Furthermore, although the manufacturing sector did not drive the growth in FDI stock, it still holds the largest share at 21.4 percent, followed closely by the management of companies and enterprises sector totaling 20.7 percent.

In recent years, the Canadian government has been making FDI a priority, namely by improving the FDI attraction strategy and program structure. The Advisory Council on Economic Growth, established by

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Canada’s Minister of Finance, mentioned in its “Bringing Foreign Direct Investment to Canada” report2 that “there is no clear national strategy,” resulting in many initiatives being introduced in the 2017 federal budget. Those initiatives include Innovation Canada, a one-stop-shop for innovating businesses that need support and funding; the Clean Growth Hub, a group dedicated to guiding clean technology producers through the various services and programs applicable to them; and the Innovation Superclusters Initiative, a program supporting businessled innovation superclusters in various industries such as advanced manufacturing, artificial intelligence, and clean resources.

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By Marc Beauchamp, Vice President & Partner, The CAI Global Group

The federal government also simplified its program offerings by consolidating innovation funding programs, resulting in a more cost-effective overall structure. The Strategic Innovation Fund (SIF) is a product of the consolidation of various innovation programs with a total budget of $1.26 billion over five years to support large projects leading to significant investment and job growth.

The launch of Invest in Canada by the Government of Canada in March 2018 marked an important development for FDI attraction and the jobs that come with it. The organization was created to position Canada as a top destination for global investment and to make it easy for investors to build innovative and global businesses in

Canada. The establishment of a federal government agency dedicated to FDI attraction is a first-time development for Canada and sends a clear message to foreign investors that Canada intends to pull its weight on the global stage.

“Canada has an extraordinarily positive global brand — by leveraging that, we can highlight Canada’s status as a premier investment destination,” says Invest in Canada CEO Ian McKay. “Companies that are already invested in Canada are expanding rapidly. And those that are not yet here are having a good, hard look at all of our competitive advantages — talent, market access, and a best-in-class business environment.”

NAFTA RENEGOTIATIONS AND THEIR IMPACT ON FDI IN CANADA The NAFTA renegotiations began on August 2017 and, since then, a number of chapters have been successfully updated and closed. As we went to press, NAFTA negotiations with Mexico have culminated, although many details need to be worked out, and Canada is working to iron out some sticking points with the U.S. on a renegotiated trade pact.

Recently, the U.S. applied a 25 percent tariff on steel and a 10 percent tariff on aluminum imports from Canada and other countries, claiming a risk to national security as per the Trade Expansion Act of 1962. The U.S. is also hinting at an automobile tariff in the near future, an industry with heavily integrated supply chains in every NAFTA country. This could

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CANADA

Message from Canada’s Minister of International Trade Diversification As Canada’s Minister of International Trade Diversification, I am delighted to welcome readers of the 2018 edition of Location Canada, produced by Area Development for over two decades.

Global investors recognize Canada is increasingly the home of innovation, creativity, and a stable and growing economy that delivers secure returns. In Canada, investors find a regulatory environment that supports openness to trade, investment, and talent, with rock-solid investor protections.

CANADA IS A TOP INVESTMENT DESTINATION. Canada provides investors with global ambition, unparalleled market access. Businesses operating in Canada already benefit from preferential access to 44 foreign markets around the world; with the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), this access will expand to over 1.5 billion of the world’s wealthiest consumers and a combined GDP of over US$50 trillion, representing almost two thirds of the world’s output of goods and services.

The Canadian government has also announced a number of initiatives as part of Canada’s Innovation Agenda — an ambitious plan that fundamentally enhances how foreign investors can participate in the Canadian economy. The new Canada Infrastructure Bank, Canada’s new Global Skills Strategy, its Strategic Investment Fund, and Venture Capital Action Plan provide tremendous opportunities for foreign investors to benefit from and participate in Canadian economic growth.

In March 2018 we launched Invest in Canada, a single-window service to help business focus on securing the right location and the tools to move swiftly toward their investment. By bringing together industry, community partners, and all levels of government, Invest in Canada will provide seamless service that will make it easier for international investors to build innovative and global businesses in Canada.

THERE HAS NEVER BEEN A BETTER TIME TO INVEST IN CANADA. Canada is one of the best places in the world to do business. Canada remains the easiest place to start a business in the OECD and offers foreign investors the best availability of skilled labor and highest R&D spending (as a share of GDP) in the G20, which we also lead for the Democracy Index, the Social Progress Imperative, and the Global Peace Index.

Your operations will benefit from the most highly educated workforce in the OECD and a highly competitive research and development tax environment. Canada is one of the most open and multicultural countries in the world, and investors can rely on a financial system that is ranked as one of the most stable in the world.

I invite you to read the following pages and to visit www.investincanada.com to learn more about how you can benefit by investing in Canada.

Sincerely, The Honourable Jim Carr Minister of International Trade Diversification

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CANADA the 21st century economy and global investors are recognizing that.”

“Although the global context is tainted with uncertainty and the business relationship between Canada and the U.S. has become unstable, our businesses are pursuing their expansion projects, increasing their competitiveness, and creating quality jobs,” says Carl Viel, president and CEO of Québec International, a public agency pursuing inward FDI attraction for the Québec City metropolitan region.

Representatives from economic development agencies in Montreal, Toronto, and Vancouver are also seeing normal growth in their respective business environments. In other words, tangible impacts of the NAFTA renegotiations are not yet being observed in the Canadian business environment. Raymond Bachand, Quebec’s chief negotiator for NAFTA, claims that Canada’s value proposition has actually improved in recent months in terms of workforce, immigration policies, research and development skills, and the government’s financial health.

Dominique Anglade, Quebec’s deputy premier and minister of Economy, Science and Innovation, who is responsible for its digital strategy, believes that this continuous economic strength results from the Foreign Direct Investment Inflows fact that with regard to and Outflows, 2017 attracting FDI, “we are a very stable region that is well positioned in terms of talent, costs, and access Foreign Direct Investment Canadian Direct Investment in Canada: Inflows (FDI) Abroad: Outflows (CDIA) to market.” As a matter of fact, according to the World 2017 $M Growth % 2017 $M Growth % 99,910 2.5 To the World From the World 31,462 -36.4 Bank’s Doing Business 81,893 12.0 To the U.S. From the U.S. 23,172 -14.4 2018 report, Canada is the 18th easiest country to do business in among 190 2017 $M Growth % 2017 $M Growth % economies.3 As previously 12,724 0.2 51,032 130.4 mentioned, Canada is also a Trade and Transportation Trade and Transportation member of major free trade 9,825 94.5 agreements, namely NAFTA, 27,282 23.1 Manufacturing CETA (with the European Finance and Insurance 7,336 -6.2 Union), and the CPTPP Other Industries 14,684 -36.8 (with Pacific Rim countries), Other Industries 6,395 -12.2 providing access to a large Finance and Insurance 10,390 516.3 and diversified market, an Management of Companies and Enterprises 4,196 -27.5 important attraction tool to Management of Companies and Enterprises -833 N/A Manufacturing bring in foreign investors.

-9,014 N/A -2,647 N/A Mining and Oil and Gas Extraction Although Canada’s potentially prove more damaging than the current tariffs on steel and aluminum. Following these new tariffs, many countries, Canada included, have retaliated with tariffs on American products such as steel, aluminum, and various food products, resulting in a situation that is now being described as a trade war.

Although the NAFTA renegotiations and a trade war between Canada and the U.S. are two entirely separate issues, they nonetheless affect one another and the relationship between the two long-term allies. It is safe to say that the North American business community has remained in a state of uncertainty since the beginning of the NAFTA renegotiations last year. What was once a stable and successful agreement since its signature in 1994 has now become a source of concern for all parties involved.

“NAFTA, after 25 years, is due for a tune up, but it is the framework for an integrated North American economy that has benefited all three partners significantly,” says McKay. “Adding CETA, CPTPP, and all of Canada’s bilateral trade deals, investors here have unfettered access to a market of 1.7 billion consumers.

Canada is well positioned to tackle the challenges of

Mining and Oil and Gas Extraction

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business environment is still showing evident signs of economic prosperity, the current context seems to be making some foreign investors hesitant when it comes time to finalize an investment in the region. What we are seeing is a delay in making final decisions around investments because investors want to make sure that the uncertainty is behind them.

WHAT’S NEXT? Although most individuals were hoping for the agreement to be finalized in 2018, NAFTA renegotiations have not yet neared a conclusion as of press time.

Knowing that it could take up to six months for Congress to vote on a new agreement, and with the U.S. midterm elections to occur in November, it is highly unlikely that a new and improved NAFTA will be unveiled prior to 2019.

With the world economy buffeted by the strongest challenges to globalization in the past 50 years, investors are being confronted with a higher degree

of uncertainty. As a country that is a 10th of the size of its largest trading partner and immediate neighbor, Canada does not have the same clout to influence the global trading system as its partners. However, Canada is betting that maintaining and deepening economic ties to the rest of the world will ensure its continued growth.

Canada will continue to promote FDI by maintaining an open economy. By investing in its workforce through both education and an open immigration system, it will continue to provide the highly trained personnel sought by investors. Furthermore, by engaging in regional trade partnerships that stretch across the globe, it will ensure that the country will continue to be integrated into global supply chains. The message being sent is that Canada will be an attractive destination for foreign investment in the coming years no matter what happens to the global economy. https://www.bloomberg.com/news/articles/2018-04-25/foreign-investment-in-canada-is-only-reallyslowing-in-energy https://www.budget.gc.ca/aceg-ccce/pdf/foreign-investment-investisseurs-etrangers-eng.pdf 3 https://tradingeconomics.com/canada/ease-of-doing-business 1

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CANADA

INNOVATIVE SUPERCLUSTERS TO FOSTER ECONOMIC GROWTH The Government of Canada is investing C$950 million in five economic superclusters aimed at making the nation a world-leading center for innovation.

By The Honourable Navdeep Bains,PC,MP; Minister of Innovation, Science and Economic Development

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anada’s economy is strong and the fastest growing in the G7.

Since our government was elected, over half a million full-time jobs have been created, and we have the lowest unemployment rate since 1976.

We’re considered one of the world’s best countries in which to do business — ranking fifth among Forbes’ best countries for business in 2018.1 And we have the world’s highest proportion of adults with a university degree — 55 percent compared with an OECD average of 35 percent.

I always say that Canada’s number one resource isn’t a natural resource; it’s our talent, our people. Take, for example, our world-class researchers: We’ve got people like Jeff Dahn, who pioneered lithium-ion battery technology at Dalhousie University and is now working with Tesla to further his research. We’ve got Caroline Colijn, a Canada 150 Research Chair in Mathematics for Infection, Evolution and Public Health at Simon Fraser University. Or the University of Alberta’s Richard Sutton, whose expertise in machine learning is helping transform Edmonton’s reputation from an energy and mining town to a high-tech hub.

Now combine that talent with our technical expertise and commercialization know-how, with the one million kids that our government is helping to teach to code so that they have the skills for the jobs of the future, and with our areas of industrial strength…If we do that, partnership, collaboration, and innovation will occur at a level that will

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literally transform the Canadian economy.

[In order to] make this transformation happen…we put forward the Innovation and Skills Plan to help Canadian innovators build global firms and create good-quality jobs. We [have] invested in new, cuttingedge programs and policies to make Canada the best place to develop and attract world-class talent, build new technologies, gain new customers, and receive capital to scale. At the center of this plan are superclusters, [which] are important because what they really mean is industry and good jobs.

Imagine an ecosystem where businesses of all sizes, academic and research institutions, as well as other innovation actors

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Industry is at a Crossroads.

It’s called Woodstock, Ontario, Canada The City of Woodstock is a rapidly growing, industry based community, centrally located in Southwestern Ontario’s manufacturing corridor. Uniquely positioned at the crossroads of super-highways 401 and 403, Woodstock boasts one of the most optimal ground transportation systems in the province. Quick and easy access to international airports, shipping ports and rail systems, further add to Woodstock’s logistical excellence.

With these attributes Woodstock has attracted more than $2 billion in new investment and created more than 4500 private sector jobs over the last decade.

At the intersections of industry, productivity and sustainability, it’s not surprising why economic powerhouses such as Toyota, Sysco & General Motors continue to invest in the City of Woodstock.

(519) 539 2382 x2115 information@cityofwoodstock.ca

www.cometothecrossroads.com

CANADA’S INNOVATION SUPERCLUSTERS THE OCEAN SUPERCLUSTER (based in Atlantic Canada) will use innovation to improve competitiveness in Canada’s oceanbased industries, including fisheries, oil and gas, and clean energy. Petroleum Research Newfoundland and Labrador and more than 110 partners aim to maximize the economic potential and sustainability of Canada’s oceans.

THE SCALE.AI SUPERCLUSTER (based in Quebec) will make Canada a world leading exporter by building intelligent supply chains through artificial intelligence and robotics.

Optel Group and more than 110 partners aim to bolster Canadian leadership in artificial intelligence and robotics to build intelligent supply chains.

THE ADVANCED MANUFACTURING SUPERCLUSTER (based in Ontario) will connect Canada’s technology strengths to our manufacturing industry to make Canada a world manufacturing leader in the economy of tomorrow. Linamar and more than 130 partners aim to supercharge Canadian manufacturing competitiveness by making manufacturers the ultimate tech integrators.

THE PROTEIN INDUSTRIES SUPERCLUSTER (based in the Prairies) will make Canada a leading source for plant proteins and help feed the world. Protein Industries Canada and more than 100 partners aim to position Canada as the world’s paramount supplier of plant-based proteins and to capture global markets.

THE DIGITAL TECHNOLOGY SUPERCLUSTER (based in British Columbia) will use big data and digital technologies to unlock new potential in important sectors like healthcare, forestry, and manufacturing. TELUS and more than 270 partners aim to make Canada a hub for developing and applying digital technology.

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collaborate to make ideas grow.

Being close together results in supply-chain benefits, knowledge sharing, and collaboration. It drives competition and attracts companies from around the world to invest in Canada.

As innovation hotbeds, superclusters develop new innovations and infrastructure, and they hire and cultivate a growing pool of talent. Superclusters are job-creators. Around the world you can find clusters in industries such as digital technology, medicine, and clean technology. So why not [in Canada]? We certainly have the talent.

We put a challenge to industry: “You are the experts, so you collaborate with schools, not-forprofits, and your competitors to come up with the best pitches for Canadian superclusters — la crème de la crème…We’ll commit up to $950 million to invest in your ideas, and you match it dollar for dollar.”

The response to the challenge was pretty impressive — more than 50 proposals from over 1,000 businesses with over 350 partners, including 100 academic institutions. And the ideas were really innovative. We carefully weighed the options and invited nine proposals with outstanding potential to accelerate economic growth to submit final applications.

Superclusters will contribute over $50 billion to our GDP and create an estimated minimum of 50,000 jobs over the next 10 years…As part of the deal, we expect superclusters to not just grow our economy but also advance Canadian values like diversity and gender equality.

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HERE [IS THE FINAL LIST OF THE FIVE]CANADIAN SUPERCLUSTERS: • The Ocean Supercluster will use innovation to improve competitiveness in Canada’s ocean-based industries.

This includes fisheries, oil and gas, and clean energy.

• The SCALE.AI Supercluster will help Canada become a world-leading exporter. It will enable businesses to further develop in the areas of artificial intelligence and robotics.

UCPR-AreaDevelopmentAd.pdf 1 2018-09-06 1:50:42 PM • The Advanced Manufacturing Supercluster will connect Canada’s technology strengths to our manufacturing industry to make us a world

manufacturing leader in the economy of tomorrow.

• The Protein Industries Supercluster will make Canada the world’s leading source for plant proteins and help feed the world.

• And the Digital Technology Supercluster will use big data and digital technologies to unlock new potential in important sectors like healthcare, forestry, and manufacturing.

This article was excerpted from a speech by Minister Bains to introduce the Superclusters in February 2018.

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CANADA

THE CANADIAN LABOR FORCE WORKS FOR SUCCESS A highly educated, diverse, low-cost workforce is drawing businesses to set up their facilities in Canada.

BY STEVE KAELBLE

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he story is the same no matter where you are considering locating your next project. The people you hire will make or break your success, so you need access to workers who are available, with the right skills and the right work ethic — at the right price.

In these kinds of considerations, Canada’s labor force measures up well.

EDUCATIONAL ACHIEVEMENT A great place to begin is how well-prepared the workforce is to meet the needs of employers. According to research shared by JPMorgan Chase,1 nearly two thirds of Canadian adults have earned a postsecondary degree. Workers and researchers with backgrounds in science, technology, engineering, and math are among the most highly sought, of course, and almost one in five Canadian students is pursuing a STEM education. At the doctorate level, STEM students make up more than half of the enrollment.

Research from the Organization for Economic Cooperation and Development2 backs this up. Canada ranks second in the percentage of 25-to-34-year-olds with tertiary education, and also second in similarly educated 55-to-64-year-olds. The United States is a bit behind Canada in attainment among the older group, but far behind on the measure of younger

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workers’ educational level. The OECD report notes, “As globalization and technology continue to reshape the needs of labor markets worldwide, the demand for individuals with a broader knowledge base and more specialized skills continues to rise.”

A specialized people skill that is sometimes underrated and definitely challenging to measure is collaboration in problem-solving. What employer wouldn’t want a workforce full of people who solve problems well together? It turns out that Canada is a good place to find that kind of skill, too, according to the OECD. The organization’s Program for International Student Assessment (PISA) measures and compares various capabilities of those studying to enter the workforce. One of its more unusual assessments3 looked into how well students can navigate group dynamics, resolve disagreements, and overcome obstacles as a group. Canada ranked fifth on this measure — well ahead of the United States.

Canada does well on the PISA rankings in general,4 one of a select few countries to land in the top 10 in math, science, and reading assessments. The results are impressive when Canada’s provinces are considered individually, too. For example, in the science rankings, if the three Canadian provinces of Alberta, British Columbia, and Quebec were separate countries, they would make up three of the world’s top five jurisdictions.

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9/11/18 3:30 PM

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

Visit – www.areadevelopment.com

Providing What Others Don’t

CANADA It takes a strong education system to be such an achiever. As a general rule, Canada’s educators place a high priority on literacy. There have been concerted and successful efforts to ensure equity in educational quality for all students. As a result, there’s not a lot of achievement difference between Canadian students who are socioeconomically disadvantaged compared with those who have fewer socioeconomic challenges.

Quality is strong beyond the postsecondary level, too. Three universities in Canada are among the world’s top 50 global universities, according to USNews & World Report.5 University of Toronto is 20th on the list, University of British Columbia in Vancouver places 20th, and McGill University in Montreal is 49th. Canadian universities, in fact, are drawing increasing enrollment interest among non-Canadian, international students, according to USNews.

WELCOMING IMMIGRATION POLICIES Quality education is just part of the story, though.

Canada expands its talent pool through welcoming immigration policies.6 In fact, about a fifth of the Canadian population was born elsewhere and immigrated to Canada, and the rate is even higher in such population areas as Toronto, where as much as half the population started out life in a different country.

Canadians, as a general rule, see immigration as a key to the nation’s economic success. Government policies are particularly designed to roll out the red carpet for foreign-born individuals who bring important job skills, educational achievements, and language proficiency.

The Canadian federal government works hand-inhand with provincial leadership to help companies recruit and retain the kinds of skilled international talent they need to succeed. Canada’s Global Skills Strategy is a fast-track program aimed at making this happen. In a variety of situations, the program promises two-week processing of work permit applications. The strategy also exempts a variety of highly skilled workers and researchers from work permits if they’re needed for relatively short-term work in Canada. Other government programs ensure that immigration goes smoothly, and that new residents transition well to their life in Canada.

The result of this welcoming attitude is an incredibly diverse society. Global companies serving the world from Canada gain from the country’s diversity in terms of language and ethnicity. Take British Columbia as an example of multilingual possibilities. More than 400,000 of its workers speak one of the Chinese dialects as their first language, and 139,000 list Punjabi as their first

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language. In the country as a whole, most people speak English and/or French, of course, but some 1.2 million speak Mandarin or Cantonese.7

A DIVERSITY OF SKILLS & LOW COSTS The Canadian economy is diverse, which results in a workforce with skills in a lot of different areas.

Statistics Canada reports8 that about 80 percent of the workforce can be found in services-producing sectors.

Of the 13 million Canadians whose work falls in this category, nearly a million provide technical, scientific, or professional services. Outside the services-producing realm, the biggest sector by far is manufacturing.

The makeup varies from one province to another, but services typically are strong across the nation. British Columbia, for example, reports that more than a quarter of its workforce is in a knowledge-based industry, more than any other individual sector. Services-producing sectors employ the majority in this province, as is also the case in Alberta, though resource-related jobs add up to a significant number as well.

And then there’s the issue of labor expense.

Workforce-related costs tend to be the biggest part of an operational budget, but it’s not just wages. Benefits add a non-insignificant sum, especially healthcare benefits. That’s one area where Canada has a clear advantage over its neighbor to the south. Because universal healthcare is in place, the typical company’s employer health costs are much less. In Ontario, for example, they average about a third of the cost in the United States.

WORK-LIFE BALANCE One more thing about the Canadian labor force that’s well-known and much appreciated by employers: the culture that workers create and maintain. Corporate and government policies help ensure a healthy work-life balance, and workers respond with a strong work ethic and a courteous, cooperative, and efficient approach to the job they do. It’s a characteristic that may be hard to quantify, but the aim of mutual success is a real thing in Canadian workplaces.

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https://commercial.jpmorganchase.com/pages/commercial-banking/executive-connect/doingbusiness-in-canada https://data.oecd.org/eduatt/population-with-tertiary-education.htm 3 https://read.oecd-ilibrary.org/education/pisa-2015-results-volume-v_9789264285521-en#page196 4 https://www.bbc.com/news/business-40708421 5 https://www.usnews.com/education/best-global-universities/canada 6 https://www.npr.org/sections/parallels/2017/01/26/511625609/for-a-stark-contrast-to-u-s-immigration-policy-try-canada 7 https://www.babbel.com/en/magazine/most-spoken-languages-in-canada/ 8 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410020201 2

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MyVMC.ca

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Vaughan is redefining 21st century downtowns. As the largest master-planned community in Canada, the Vaughan Metropolitan Centre is brimming with opportunity. New talent, innovation, and urban amenities are already attracting top employers, including: KPMG, Harley-Davidson Canada, PwC, GFL Environmental, and Miller Thomson LLP. The VMC is a choice destination for businesses and residents in the Greater Toronto Area and beyond.

Book your consultation now. ecd@vaughan.ca

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universities in Canada: University of Toronto

and York University 45 Minutes by subway to Torontoâ&#x20AC;&#x2122;s Financial District 1.5 Million+ square feet of office space planned 750,000 square feet of retail commercial space planned 12,000 residential units planned 20,000 transit riders moving through downtown

daily by 2019 Financial incentives for new office development

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VAUGHAN’S AMBITIOUS NEW DOWNTOWN is ready to be your HQ, too If you could design a downtown from scratch, what would it look like? Would it have a tight, walkable street grid and public transit and easy access to highways? Would it be close to the airport and have lively public squares with sidewalk patios? Would it have office and condo towers a short stroll away from an ecological oasis with mature oak trees?

Pearson International — Canada’s busiest and largest airport — is just 15 minutes away. Within this transit network are naturalized greenspaces, public squares, and cultural facilities in prominent walkable locations. A mixed-use tower currently under construction will have a 100,000-square-foot YMCA and a public library.

This downtown is real and rising north of Toronto, Ontario, North America’s 4th-largest market. The Vaughan Metropolitan Centre (VMC) is an emerging downtown with unprecedented access to talent, Class A office space, multi-modal mobility, and urban amenities.

Companies and developers are buying into this vision and making it reality. KPMG, Miller Thomson, GFL Environmental Inc., Harley-Davidson Canada, and PwC have invested in the VMC to be near their clients and a highly educated professional workforce.

Residential developers are moving even faster than expected with sold out condo towers and space for 34,000 residents in the pipeline.

The vision to create a downtown core in the middle of a suburb has existed since the 1990s but crystallized in 2011 when resources were invested in realizing it.

The VMC is massively ambitious but grounded in high Vaughan’s population boomed over that time frame demand for accessible-yet-urban space in the Greater and as it continues to grow (now 334,499), there’s Toronto Area. To accelerate office development, huge demand for a financial and cultural nerve the City of Vaughan has implemented a Community center. From the start, Mayor Maurizio Bevilacqua has Improvement Plan (CIP) that provides financial insisted that the VMC break the mold: “It’s going to incentives for office projects over be an expression of avant-garde 75,350 square feet. thinking. We’re not comparing our city to any other city; we’re Now is the time to join the avantactually creating our own city with Vau gh an Ec o n o m ic an d garde and secure customized our own signature.”

C u lt u ral De ve lo pm e n t office space with room to grow in Canada’s most exciting The plan is built on seamless 2141 Major Mackenzie Drive development. mobility and signature amenities.

Vaughan, ON L6A 1T1 Being at the intersection of To learn more three highways makes driving 905-832-8526 visit myVMC.ca easy while downtown Toronto is Toll-Free: 844-832-2212 or contact Vaughan Economic a quick 45-minute subway ride and Cultural Development. away. For the frequent fliers,

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CITY OF WOODSTOCK, ONTARIO The Crossroads of Business The City of Woodstock is a dynamic and growing community of 41,000 located in the heart of southwestern Ontario at the crossroads of super highways 401 and 403. The city’s progressive actions have made it a leader in the region for conservation, environmental initiatives, and long-term commitment to managed growth.

Park Business Community is located just off Highway 2, approximately five kilometers from the Highway 2/401 interchange. A third business park, CommerceWay, opened in 2005 and is located along the north side of Highway 401. The fourth and newest, North East Business Park, is located less than one mile from the Toyota Motor Manufacturing plant.

Woodstock has roots in both agriculture and manufacturing, as the recognized dairy capital of Canada and as home to Toyota’s second Canadian manufacturing facility. With a skilled workforce, affordable housing, and a new community hospital, Woodstock truly is a growing city with a lot of rural, small-town charm.

Industrial land prices range from $115,000 to $145,000 per acre, depending upon proximity to the Highway 401/403 corridor. All of our business parks are fully serviced.

Woodstock also maintains a business-friendly environment through such policies as no development charges on industrial construction.

In Woodstock, just-in-time delivery is a part of daily Our people know how to work hard and they have life. With an excellent supply of serviced and zoned attained the skills to ensure the success of well over industrial land, the community is eager to meet the 140 manufacturers who make Woodstock their home. needs of new and expanding businesses. Woodstock Combine all this with a relaxed is capable of servicing a 100lifestyle and real affordability and acre industrial site for large-scale L e n Magyar, you’ll see why Woodstock continues manufacturers.

Development Commissioner to attract more than its share of new business.

The City of Woodstock owns City of Woodstock and maintains four industrial 500 Dundas Street, P.O. Box 1539 If you want to know more about business parks, all located in Woodstock, ON N4S 0A7 Woodstock, close proximity to the Highway 519-539-2382, ext. 2112 visit our website at 401/403 interchange. The www.cometothecrossroads.com Pattullo Ridge Business Park is or call us at located at the Highway 59/401 lmagyar@cityofwoodstock.ca 519-539-2382, ext. 2115. interchange, while the Bysham www.cometothecrossroads.com

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BUILD ON SHERBROOKE’S STRENGTHS SHERBROOKE HAS IT ALL: a strong, diversified economy driven by innovation, operating costs among the lowest in North America, a pool of skilled workers, modern infrastructure, a dynamic University Pole, a strategic geographic advantage — steps away from the American border — a high rate of bilingualism, and an exceptional quality of life!

over 100 R&D units and a well-established network within the industry. This asset sets Sherbrooke apart from all other Canadian cities of similar size and provides a skilled workforce that is essential to business growth.

Connected Located 30 minutes away from the United States, Sherbrooke features a business-friendly environment with eight industrial and scientific parks, a business accelerator/incubator (Espace-inc), and a multitenant premises for science companies featuring a leading-edge custom lab space (Espace LABz).

At the crossroads of several highways and railway lines, Sherbrooke is an urban setting nestled in nature, amid breathtaking lakes and mountains.

Intelligent Canadian business has ranked Sherbrooke — in the southeast of the Province of Québec — among the top 10 most business-friendly places in Canada (2016). Sherbrooke was also named one of the bestperforming entrepreneurial communities in Canada for two consecutive years (2016 and 2017) and ranks among the 21 smartest communities in the world (2015).

Competitive Sherbrooke features major competitive advantages, namely property tax credits (5 and 10 years), subsidies for locating in Sherbrooke, provincial R&D tax credits, industrial and scientific land starting at CAN$1/sq. ft., etc.

This clearly demonstrates the dynamic spirit of innovation and entrepreneurship that drives Sherbrooke, as much within its business and research sector as in its academic institutions and economic development partners.

Involved Sherbrooke Innopole, a para-municipal corporation dedicated to the economic development of the High-Performance industrial and high-value-added services sectors Sherbrooke focuses on five key industries (clusters), of the City of Sherbrooke, is the one-stop shop for generators of both wealth and growth, to guide its your business project. Our industry industrial economic development experts offer effective personalized based on a knowledge-based Sh e rbro o k e I n n o po le guidance, including real estate economy: Advanced Manufacturing, services and liaison with municipal Information Technologies, Sherbrooke Economic authorities, help with regulation Cleantech, Life Sciences, and MicroDevelopment and available funds, contact Nanotechnologies. They encompass 1308 de Portland Blvd. references (suppliers, subcontractors, more than 650 companies totaling P.O. Box 1355 distributors, consultants, etc.), 18,800 jobs.

Sherbrooke, QC J1H 5L9 integration services for key 819-821-5577 employees, soft-landing program Innovative with international partners, and The world-renowned Sherbrooke 1-877-211-5326 much more.

University Pole — comprised of two universities and three colleges — has info@sherbrooke-innopole.com Learn more at a remarkable capacity for research sherbrooke-innopole.com sherbrooke-innopole.com and technology development with

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PRESCOTT AND RUSSELL: The Best Location Your Business Needs In Prescott and Russell, agriculture, manufacturing, and warehousing Prescott and Russell, part of Ontario East, is located between converge to make and store local, organic food and specialty productions.

Montreal and Toronto, as well as 100 km from the U.S. border.

With its 93 ready-for-investment sites, Prescott and Russell offers The creation of the Eastern Ontario Agri-Food Network (EOAN) shovel-ready vacant land with fresh water, high-speed Internet, has helped many local producers and food processors and a robust electric power system ready to not only build your provide outstanding services, opportunities, and support. business project but to run your business efficiently. Each property Innovators create and sell more products has easy access to major Trans-Canadian through an abundant supply ready-to-ship highways, international airports, ports, and C ar ole Lav ign e, chain. railroads.

In Prescott and Russell, agriculture, manufacturing, and warehousing converge to make and store local, organic food and specialty productions. From craft brewers to environmentally conscious products, the region is ready to provide convenient and diverse warehousing options, wholesale distribution centres along with its large and reliable freight transportation hub.

Economic Development and Tourism Director

••

United Counties of Prescott and Russell 1-613-675-4661 ext. 8100

••

CLavigne@prescott-russell.on.ca http://bit.ly/investUCPR

Join already established businesses in a variety of sectors, with a reputation for innovation, culture, and sustainability, and where it is easier to access large markets from low-cost land.

Locate Your Business in Canada’s 3rd-Largest Mega Region: 22 Million People and a $530 Billion Economy — The Rise of the MegaRegion by Richard Florida, Tim Gulden, and Charlotta Mellander, October 2007

C h r is K in g,

CEO

••

Quinte Economic Development Commission

QUINTE

Economic Development Commission The Bay of Quinte Region, a Canadian logistics and manufacturing hub, is home to multinational companies and innovative SMEs. Located between Toronto and Montreal and along highway 401, the Bay of Quinte’s access to major Canadian and U.S. markets lowers your ongoing operational costs and makes it easy to run worldwide logistics. Our lowcost investment-ready land and available buildings, zero development charges, and a fast tracked development process lower your startup costs. Procter & Gamble, Nestle, McKesson, and Kellogg have achieved success in the Bay of Quinte region.

•• P.O. Box 610 284B Wallbridge Loyalist Rd. Belleville, Ontario, Canada K8N 5B3 613-961-7990 • Toll Free: 1-866-961-7990 Fax: 613-961-7998

••

chris@quintedevelopment.com www.quintedevelopment.com

Let Quinte Economic Development Commission’s experienced team provide confidential project support and assist you in meeting your start-up goals. The Quinte Economic Development Commission represents the Bay of Quinte Region in Ontario, Canada, consisting of the City of Belleville, the City of Quinte West, and the Municipality of Brighton.

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SITE SELECTION SITE SELECTION WAS REINVENTED WAS HERE. ArkansasEDC.com/area REINVENTED HERE.

Site selectors told us they wanted a website that facilitated efficient and informed decisions.

We responded with a new site that quickly lets you find incentives, available locations and anything else you need, in a few simple clicks. See how weâ&#x20AC;&#x2122;re reinventing site selection and making it even easier to do business here, at the new ArkansasEDC.com/area.

AEDC 35704-6 PIN DROP Area Development_rr.indd 1

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INCENTIVES

Negotiating Incentives for Your Next Capital Investment When selecting a site for your next U.S. capital investment, keep in mind that incentives alone won’t transform a bad location into a good one. However, a good incentive package can improve a project’s bottom line and solve site-related issues.

HOW TO NEGOTIATE AN INCENTIVES PACKAGE

1 2 3 4 5 6 7 8

Lay the Groundwork Through the RFP Process

Analyze the Real Value of Incentives Offerings

Negotiate Based on Direct & Indirect Benefits to the Community

Identify Gaps or Shortfalls

Apply for Incentives

Draft Project Agreements for Approved Incentives Evaluate Tax Implications of Incentives Implement/Comply with Requirements for Incentives Received

By Dave Cooper, Shareholder, Maynard Cooper Gale P.C.

A

s attorneys representing companies in their site selection process, our goal is not only to reduce a company’s risk, but to increase their return on investment through an effective incentive negotiation process. We work with our clients to create a structure for their project that will result in the most profitable business case for the company on a risk-adjusted basis. This location should also be compatible with a company’s culture and long-term strategic goals. A critical component to increasing the profitability of a new project is a well-tailored incentive package.

Types of Incentives State and local governments, as well as the federal government, provide various types of incentives to encourage business growth, project development, and job creation. Incentives come in many forms and while they fall into several different categories, it is helpful to sort them based upon their relative impact on the project: • Up-Front Incentives: These are direct offsets to the company’s capital investment and may include grants, free or discounted land, construction period sales tax exemptions, and other incentives that reduce the initial capital outlay for the project. Permitting and impact fee waivers may also fall into this category. These up-front incentives often carry the most weight for a proj-

ect since they directly reduce the company’s budgeted capital expenditures.

• Ongoing Incentives: These are direct offsets to the operating costs of the project and may include ad valorem tax abatements, withholding tax rebates, jobs or investment-based tax credits, training grants and reimbursements, and similar incentives. These also carry significant value but should be discounted to present value since these incentives may not be realized until several years after the start of the project.

• Public Infrastructure: These incentives make the project site more suitable for the company and can benefit the project by providing utility lines, road access, and similar infrastructure requirements. Since these are typically off-site improvements, they may still benefit the project but typically are not a direct offset to the company’s capital budget. As such, the value of these incentives may be discounted accordingly. Further, these infrastructure improvements often require public bidding and, depending upon the source of funding, may include additional environmental reviews, low-to-moderate income hiring requirements, and other constraints, which can further reduce their effective value to the project.

• Soft Incentives: These include expedited permitting, in-kind training services, appointment of a community liaison, and other offers that may AREA DEVELOPMENT | Q3/2018

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value based on a predetermined discount rate. It is imporstreamline the development process or help the company intant to determine your internal discount rate up front. This tegrate in the community. Soft incentives can have a material is typically the company’s weighted average cost of capital, impact on the project’s success, so while the value of these though companies have used various formulas for determinmay be difficult to quantify, they shouldn’t be overlooked. ing this percentage on different projects. Discount rates typiThese incentives often become part of the company’s subjeccally range between 4 percent and 12 percent, with 8 percent tive review of the project’s “fit” for a particular community. being a typical rate for comparing future cash flows, • Utility Incentives: These include negotiated utility net of incentives, for manufacturing projects. rates and other grants or utility bill credits that As noted in the RFP article, the project may be realized because of the site selection team should avoid location bias of indiprocess. These may operate as direct offvidual members of the project team. One sets to capital or ongoing incentives. It The best method for area in which location bias might imis important to negotiate utility agreedetermining incentive pact a project decision is on the estabments concurrently with state and value is to focus on the lishment of the discount rate. If the local incentive negotiations. cost of doing business discount rate is not established at the at a particular site, outset, the project team may adjust Starting the Process net of incentives, rather the rate to favor one community over The first step to negotiating a than focusing on a another. For example, if “Community beneficial incentive package is to stated value for a A” offers most of its incentives on an run an effective Request for Proposal up-front basis and “Community B” ofprocess. As noted in “An Effective particular incentive. fers most of its incentives on an ongoing RFP Process for Your Next U.S. Capital basis, then Community A would benefit Investment”1, the RFP process lays the from a high discount rate and, vice versa, Comgroundwork for incentive negotiations by munity B would benefit from a low discount creating a competitive environment, building rate. By establishing the discount rate up front and credibility and rapport with communities, and exposing comparing incentives over time with a net present value forgaps or weaknesses in a location’s fit for the project. mula, Communities A and B would be properly compared without location bias.

Analyzing Incentive Offers Once an incentive offer is submitted through the RFP process, the first step is to determine the real value of the Negotiating Incentives incentives for your project. Some incentives may look valuTo effectively negotiate incentives, it is critical that the able in an incentive offer, but the actual value to the project company understand the community’s perspective. This is a is minimal. For example, it may be difficult for a company business deal for them as well as for the company. By underto realize the full value of a nonrefundable state income tax standing how a community will benefit from your project, credit if the company does not expect to have taxable income you will be better equipped to negotiate a favorable incenfor several years. tive package.

Likewise, a company may not realize the value of a new A community should perform a cost benefit analysis that wastewater treatment facility that is offered as an “incenbuilds its business case for incentivizing your company to tive” if minor upgrades to the existing treatment facility locate. You can support this effort by conducting your own would satisfy the needs of the project. Communities someanalysis to estimate the direct and indirect benefit of the times use new projects as an opportunity to build infrastrucproject to the community. This often gives a company the ture for their future growth plans, beyond the needs of your ability to negotiate for specific incentives, since it has already project. While this may be a wise move for the community, calculated the marginal increase in revenue that the project you should adjust the value of the incentives according to will provide to the state and community. For example, if you the actual benefit derived from those improvements. plan to develop a manufacturing facility on a greenfield site The best method for determining incentive value is to and the community is hesitant to provide a certain level of focus on the cost of doing business at a particular site, net grant funding, you could calculate the projected incremental of incentives, rather than focusing on a stated value for a property tax revenue for the community, net of abatements, particular incentive. A company should work with their and use this number to support the grant request. consultant to prepare a multi-site analysis of their up-front It is important for an incentive package to align with the capital costs and ongoing operating costs. This analysis needs of the project. To facilitate this alignment, you should should include labor, logistics, tax, utilities, site preparation, identify gaps or shortfalls in the site as they relate to the project. and construction costs. A good analytical model will enable Identifying these gaps further supports your request for specific the company to evaluate the actual, comparative cost of the incentives that will enable the community to make up for any project rather than focusing on the “discount” that may be site-related shortfalls. This is particularly true with respect to offered from an incentive package. site and infrastructure issues but may also apply to workforce Since many incentives are realized over time, the comparissues and other shortcomings that are not related to the site ative analysis should discount future cash flows to present itself. Rather than asking for an increase in incentives without

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any basis for the request, it is more meaningful to have specific reasons for the request, particularly when those reasons stem from a location-related shortfall.

Applying for Incentives The approval process for many incentives requires the submission of applications as well as public meetings to vote on these incentives. The process may include several long lead-time items, which can jeopardize the project’s overall timeline if not considered in advance. Always request a summary of the timeline for approval of each incentive offered by the state or community.

The incentive approval process may also jeopardize the confidentiality of the project. The further that your company progresses in the incentive process, the more difficult it becomes to maintain confidentiality. This is because many incentive programs require a public approval process, which may require disclosure of the company name. While you should usually have the community execute a nondisclosure agreement, if there is not an option to maintain confidentiality, you need to be aware of this up front and make plans to address any publicity that may arise during the incentive approval process.

Drafting Project Agreements You should memorialize all state and local commitments in writing. While it’s important to develop trust between the company and community, each party’s respective commitments should be spelled out in a project agreement. Memories fade and personnel change over time. What remains is the written agreement between the parties. Though it’s important to maintain the goodwill of the community and have a strong working relationship with them, ultimately you must have a written agreement to support your project.

When negotiating project agreements, you should also consider the relative importance of your project agreement wish list. Some issues are worth pushing and others may require you to make minor concessions. Making some concessions in the process is important to maintain goodwill with the community; you may need it in the future. When problems arise, you will need to keep community relations intact to facilitate the community’s assistance with these issues.

The company should pay attention to clawbacks, recapture provisions, and performance-based requirements. It should expect the community to include these types of provisions, but they should be closely scrutinized to avoid unintended consequences, such as incentive recaptures that are disproportional to a shortfall in the company’s commitments.

It’s important to include any ancillary or “soft” incentives in the drafting process as well. It may be easy to focus on the big-ticket items such as cash grants and property tax abatements, but the training incentives, utility contracts, and similar incentives should not be overlooked.

Maintaining leverage during the incentive negotiation and project agreement drafting process is critical. Leverage comes from having competing options for the project. The competing option may be an alternate site in another state or country, or it could be the option to not move forward with

the project at all if certain financial metrics are not achieved.

These competing options should be maintained as long as reasonably possible, but a company should not drag along a competing community merely for leverage. It is, however, important to have legitimate location alternatives in the event of a major, unforeseen issue at the preferred site, which might cause the company to select an alternate location.

Evaluating Tax Implications of Incentives Historically, incentive grants and property contributions were tax-free for the company since they were excluded from gross income and treated as a non-shareholder contribution to capital for federal tax purposes. However, the Tax Cuts and Jobs Act of 2017 amended Internal Revenue Code Section 118 so that those incentives are now included in the gross income of the company.

The revised Section 118 now provides that “any contribution by any governmental entity or civic group” is no longer considered a “contribution to the capital of the taxpayer.”

Instead, contributions of cash or property from state and local governments will be considered taxable income to the company.

This tax change will impact the value assigned to various incentives and will require an analysis of the effects of federal income tax on the overall project costs. This tax treatment may also cause a company to negotiate more heavily for abatements and other tax credits over cash or property contributions since those abatements and credits typically do not count as gross income to the recipient. Companies may need to consider other transaction structures to minimize this impact. While cash grants and property contributions have traditionally been the most valuable type of incentive, the new tax laws will require an adjustment to the realized value of those incentives based upon the tax implications to the company.

Implementing Incentives Once the project agreements and other incentive documents are signed and project development begins, the company, along with its external team, must begin tracking incentives and any triggering events for submission of forms, compliance certificates, requests for reimbursement, hiring requirements, and other project information. It is a good practice to create a project checklist or use project management software to track each of these items so that deadlines aren’t missed.

In addition to preparing incentive checklists, you should obtain a project agreement transcript and compliance binder to maintain the documents in an easily-accessible form in the event a question arises about any deal points.

Ultimately, a good incentive package is one that meets the needs of the project. This begins with the RFP process, continues with teamwork from the company’s internal project team and its external advisors, and culminates in the successful implementation of a project through partnership with the community. n 1

http://www.areadevelopment.com/LocationUSA/2018-US-inward-investment-guide/an-effectiveRFP-process-for-your-next-US-capital-investment.shtml

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ADINDEXWEBDIRECTORY Advertiser

Page Advertiser

ALABAMA

AIDT 9 www.AIDT.edu Alabama Department of Commerce www.madeinalabama.com

26

ARKANSAS

Arkansas Economic Development Commission 64 www.ArkansasEDC.com/area

CONNECTICUT

Cheshire Economic Development Corporation www.CheshireCT.org JSitko@CheshireCT.org

FLORIDA

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

12

7

GEORGIA

Georgia Department of Economic Development www.Georgia.org communications@georgia.org

C2, 1

Georgia Ports Authority www.gaports.com prichardson@gaports.com

C3

Georgia Quick Start www.GeorgiaQuickStart.org RBrown@georgiaquickstart.org

35

Hoosier Energy Power Network www.HoosierSites.com hgutzwiller@HEPN.com

Hoosier Energy Power Network www.HoosierSites.com hgutzwiller@HEPN.com

31

Indiana Municipal Power Agency www.impa.com bryanb@impa.com

39

KENTUCKY

Kentucky Cabinet for Economic Development www.ThinkKentucky.com Econdev@ky.gov

31

C4

Michigan Economic Development Corporation www.MichiganBusiness.org

5

MISSISSIPPI

Mississippi Development Authority www.Mississippi.org bklauser@mississippi.org

11, 13, 15

NEW HAMPSHIRE

City of Rochester www.RochesterEDC.com Karen.pollard@rochesternh.net

17

ElectriCities of North Carolina, Inc. www.electricities.com bdaniels@electricities.org Santee Cooper www.camphall.com

TEXAS

Port Houston http://porthouston.com/ftz/ smwilliams@poha.com

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VIRGINIA

Virginiaâ&#x20AC;&#x2122;s Industrial Advancement Alliance 45 www.VIAalliance.org jlewis@viaalliance.org info@viaalliance.org

CANADA ONTARIO

MICHIGAN

SOUTH CAROLINA

Emsi 14 www.EconomicModeling.com/cre

ILLINOIS

INDIANA

NORTH CAROLINA

IDAHO

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Quinte Economic Development Commission 51 www.QuinteDevelopment.com chris@quintedevelopment.com United Counties of Prescott & Russell Economic Development www.en.Prescott-Russell.on.ca http://bit.ly/investUCPR CLavigne@prescott-russell.on.ca City of Vaughan myVMC.ca ecd@vaughan.ca

59

City of Woodstock www.ComeToTheCrossroads.com lmagyar@cityofwoodstock.ca

53

QUEBEC 37

55

Sherbrooke Innopole www.Sherbrooke-Innopole.com info@sherbrooke-innopole.com

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TENNESSEE

Tennessee Department of Economic and Community Development 29 www.TN.gov/ecd.com allen.borden@tn.gov

Statement of Ownership, Management and Circulation. Publication Title: Area Development. Publication Number: 345-510. Filing Date: 10/1/2018. Issue Frequency: 4x. Number of issues published annually: 4. Annual Subscription Price: $75. Complete mailing address of known office of publication: 400 Post Ave. Westbury, NY 11590-2226. Contact person: Dennis J. Shea. Telephone: (516) 338-0900. Publisher name: Dennis J. Shea. Editor name: Geraldine Gambale. 400 Post Ave. Westbury, NY 11590-2226. Owner: Halcyon Business Publications, Inc. 400 Post Ave. Westbury, NY 11590-2226. Stockholders owning or holding 1% or more of total stock: President Dennis J. Shea and Secretary Randi S. Shea. 400 Post Ave. Westbury, NY 11590-2226. Known bondholders, mortgagees and other security holders owning or holding 1% or more of total amount of bonds, mortgages or other securities: None. Publication title: Area Development. Issue date for circulation data below: Q2 2018. Extent and nature of circulation: corporate real estate executives. Average number of copies of each issue during preceding 12 months: Total number of copies: 40,192. Legitimate paid/requested distribution: Outside country paid/requested mail subscriptions stated on PS 3541: 21,461. In-county paid/requested mail subscriptions stated on PS 3541: 0. Sales through dealers and carriers, street vendors, counter sales and other paid/ requested distribution outside USPS: 0. Requested copies distributed by other mail classes through USPS: 0. Total paid/requested circulation: 21,461. Non-requested distribution: Outside county non-requested copies stated on PS 3541: 17,754. In-county non-requested copies stated on PS 3541: 0. Non-requested copies distributed through USPS by other classes of mail: 0. Non-requested copies distributed outside the mail: 308. Total non-requested distribution: 18,062.

Total distribution: 39,523. Copies not distributed: 669. Total: 40,192. Percent paid/requested circulation: 54.3%. Number of copies of single issue published nearest to filing date: Total number of copies: 43,249. Legitimate paid/requested distribution: Outside county paid/requested mail subscriptions stated on PS 3541: 23,246. In-county paid/requested mail subscriptions stated on PS 3541: 0. Sales through dealers and carriers, street vendors, counter sales and other paid/ requested distribution outside USPS: 0. Requested copies distributed by other mail classes: 0. Total paid/requested circulation: 23,246. Non-requested distribution: Outside county non-requested copies stated on PS 3541: 18,869. In-county non-requested copies stated on PS 3541: 0. Non-requested copies distributed through USPS by other classes of mail: 0. Non-requested copies distributed outside the mail: 350. Total non-requested distribution: 19,219. Total distribution: 42,465. Copies not distributed: 784. Total: 43,249. Percent paid/requested circulation: 54.7%. Publication of Statement of Ownership for a requester publication is required and will be printed in the Q3 2018 issue of this publication. I certify that all information furnished on this form is true and complete: Dennis J. Shea, Publisher.

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