Area Development Q4 Issue 2021 by Area Development

AREADEVELO SITE

AND

FACILITY

PLANNING

Q4/2021

NO EASY FIX

FOR SUPPLY CHAIN STRUGGLES 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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Home to the most scientists, engineers and diners per square mile. Come for the workforce. Stay for the pork roll. There’s an alchemy at work here that’s unlike anywhere else in the world. A unique set of New Jersey attributes that when mixed together sparks ideas, transforms businesses, and powers the people that run them. We’re not just any state. We’re the State of Innovation.

NJinnovation.com

Choose New Jersey received a support grant from the Business Action Center, a division of the Department of State.

CONTENTS

Cover Story

NOEASY FIX

FOR SUPPLY CHAIN STRUGGLES Labor shortages intertwined with other supply chain issues are creating gridlock at the nation’s ports.

features

14 Ramping Up

Cybersecurity in the Industrial Sector Industrial and other types of facilities are smarter and more computerized (more hackable) than they were in the past, but cyber awareness and security has not kept pace.

FOOD PROCESSING

80 The Next Generation of Cold Chain Logistics

68 Communicating Your

The Challenges of Renovating an Existing Facility Into a Food Plant

Project’s Value to Local Stakeholders

Through the use of economic impact studies, a company can demonstrate the value of its project to government officials and local residents.

LIFE SCIENCES

Shaping Compliance for Your New Biomanufacturing Facility

20 On the Hunt for a

88 Solutions for

Decisively Navigating the Location Decision Effective site selection involves factoring the stakeholder criteria matrix, site conditions, and everchanging market forces into the final decision.

93 Annual Select Sites Directory

Productive New Biomanufacturing Site?

26 Location Factors for Cell and Gene Therapy Companies

Area Development® Site & Facility Planning (ISSN 1048-6534, USPS 345-510 ) Q4 2021, Vol. 56, Issue 4. Published quarterly by Halcyon Business Publications, Inc., 30 Jericho Executive Plaza– Ste 400W Jericho, NY 11753. Periodicals postage paid at Jericho, NY, and additional mailing offices. POSTMASTER: Send address changes to Area Development, Circulation Department, 30 Jericho Executive Plaza– Ste 400W Jericho, NY 11753.

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

12/6/21 4:36 PM

Volume 56 | Number 4 Q4/2021

“

departments

We need to understand that we as citizens and as a government in any community…have no more important obligation than to educate those who are going to replace us.

4 Editor’s Note

General Colin Powell (1937–2021),

”

former chairman of the Joint Chiefs of Staff (1989–1993) and U.S. Secretary of State (2001–2005)

C onsumer Spending & Business Innovation Foster Growth

In Focus

T he Future of Sustainability in Real Estate

In Focus

T he Challenge of Finding Improved Land

10 Front Line

W eighing the Costs and Benefits of Digitization

special supplement

36 The “Great Resignation” Is Impacting Corporate Relocations

First Person

Rocki Rockingham, Chief Human Resources Officer, GE Appliances

96 Ad Index/Web Directory

44 Workforce Development Programs Are in Overdrive 52 Adapting to Agility:

Leveraging a “Hub and Spoke” Model

58 Labor Challenges in the

Industrial and Manufacturing Sectors Persist

62 Talent-Based Location Strategies

exclusive online content

• Front Line: Infrastructure Investment Faces Hurdles • In Focus: A PFAS State of Mind • Greater Richmond Area Provides Flexible Office-Space Solutions

special report

INNOVATION CORRIDORS By actively putting together the resources needed for innovative companies to survive and thrive, innovation districts and corridors have found a recipe for success.

• Construction vs. Production: Tips for Constructing Capital Projects Within an Operating Plant • How an International Business Can Enter the U.S. Market Via M&A • Front Line: Finding, Creating, and Supporting Talent • Tennessee: A Growing Capital of Electric Vehicle Production

Subscribers requesting address changes must provide both old and new addresses.Single copies, $20. Yearly subscription U.S. & Canada, $75; foreign, $95. © Copyright 2021 by Area Development® magazine. ISSN: 1048-6534. Printed in the U.S.A. Area Development® is a registered trademark of Halcyon Business Publications, Inc.

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EDITORS NOTE

Q4/2021

Consumer Spending & Business Innovation Foster Growth

espite challenges being experience in the supply chain, as the year comes to a close, the Conference Board projects that 2021 annual growth will come in at 5.5 percent (year-over-year), although growth will slow to 3.5 percent (year-over-year) in 2022 and 2.9 percent (year-over-year) in 2023.1 A resurgence in COVID-19 cases and rising interest rates in response to inflation are deemed responsible for this moderation in growth; nonetheless an expansion in consumer spending will still drive economic growth. Among the industries that have experienced growth this past year are the food/agri-business and the bio/pharma sectors. This year has been a busy one for the construction of new facilities in the food/ agri-business sector — up 40 percent over 2020 in the first seven months of the 2021, according to Dodge Data & Analytics.2 Additionally, online purchasing of food surged from 4.5 percent of market share to 12.5 percent as of January 2021. This has had a tremendous effect on food processing and distribution companies that now need to expand their cold chain logistics and automation systems. As for the bio/pharma sector, in addition to the vaccines and hundreds of tests, drugs, and devices granted emergency use authorization during the COVID-19 pandemic, according to Deloitte,3 there are more than 900 companies across the globe focused on advanced biopharma therapies and more than 1,000 cell and gene therapy clinical trials under way. In order to keep up with this biology-based innovation, biomanufacturing organizations are expanding their footprints. These organizations need to be in proximity to research and development (R&D) facilities, supply partners, and a qualified labor pool, among other considerations. A highly educated and highly trained workforce is vital to the success of these innovative operations. These innovative companies, among others, are finding success in so-called hubs or corridors of innovation that provide access to research and medical institutions, other large companies and startups, experts in their respective fields, and the entrepreneurs who bring new ideas to market. They put together the resources needed for innovative companies to survive and thrive.

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

Tom Gresham Mark Schantz Steve Kaelble Karen Thuermer

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

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

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

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

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

CIRCULATION circ@areadevelopment.com

FINANCE

Editor

finance@areadevelopment.com

EXECUTIVE OFFICES Halcyon Business Publications, Inc.

2021 Editorial Advisory Board Bradley Migdal, Senior Managing Director, Business Incentives Practice, Cushman & Wakefield, Inc.

Josh Bays, Principal, Site Selection Group, LLC

Stephen Gray, CEO, Gray

Marc Beauchamp, President and CEO, The CAI Global Group

Anthony Johnson, LEED AP; President, Industrial Business Unit, Clayco

H. Robert Boehringer, III, Managing Director, Global Location and Expansion Services, KPMG

Michael Kruklinski, Head of Real Estate, Siemens Energy and Siemens USA

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

Brian Corde, Managing Partner, Atlas Insight, LLC

Scott Kupperman, Founder, Kupperman Location Solutions, LLC

Eric Stavriotis, Senior Vice President, Advisory & Transaction Services, CBRE

Les Cranmer, Senior Managing Director, Savills

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

Margy Sweeney, Founder & CEO, Akrete, Inc.

Kate Crowley, Principal, Baker Tilly Capital, LLC Dennis Cuneo, Partner, Fisher & Phillips LLP Amy Gerber, Executive Managing Director, Business Incentives Practice, Cushman & Wakefield

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Bill Luttrell, Director of Corporate Real Estate, Werner Enterprises, Inc.

Dan White, Director, Government Consulting and Fiscal Policy Research, Moody’s Analytics Joshua Wright, Vice President, Economic & Workforce Development, Emsi

President Dennis J. Shea Business/Finance Assistant Barbara Olsen (ext. 225) olsen@areadevelopment.com All correspondence to: Area Development Magazine 30 Jericho Executive Plaza– Ste 400W Jericho, NY 11753 Phone: 516.338.0900 Toll Free: 800.735.2732 Fax: 516.338.0100

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

12/3/21 11:40 AM

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IN FOCUS The Future of Sustainability in Real Estate As they realize the impact the built world has on the environment, companies are increasingly transitioning to cleaner, greener facilities and operations.

BY KRISTIN MUELLER, Chief Operating Officer,

JLL PROPERTY MANAGEMENT With responsibility for executing JLL Property Management’s services platform, Kristin Mueller ensures consistency in standards across the firm’s third-party portfolio and drives results and efficiencies across the business.

With heightened pressure for businesses to adopt sustainable business practices, the commercial real estate industry has a viable role to play in the fight against climate change. In fact, according to the U.S. Energy Information Administration (EIA), the built world accounts for more than 40 percent of the planet’s carbon emissions,1 which means that the real estate industry can play a major role in the solution. Climate change is also becoming a financial risk for companies. With the misconception that sustainability equipped buildings are extremely costly, there are many considerable no- to lowcost options available for decarbonization, according to JLL’s latest

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global research report, Decarbonizing the Built Environment.2 The report states that 43 percent of investors have a net zero carbon race-to-zero goal, and 38 percent of investors say they have published or measured environmental goals, like having wind- or solarpowered capabilities. However, to make a reasonable difference on our environment, these numbers need to continue to grow. The first step is education and understanding exactly

• Procuring renewable electricity — Implementing a strategy that procures renewable energy can make a whirlwind of difference. • Building an on-site energy project — On-site energy is often the most cost-effective solution in the long run, reducing the cost of transmission and distribution from the local utility at the source. • Implementing energy conservation measures — Fully reviewing equipment and usage can help de-

THE COMMERCIAL REAL ESTATE INDUSTRY HAS A VIABLE ROLE TO PLAY IN THE FIGHT AGAINST CLIMATE CHANGE. how industry leaders can put this into action.

A few ways in which businesses can reimagine their carbon-reduction objectives are through: • Establishing an operational carbon baseline — In the built environment, an operational carbon baseline is an inventory of sources of carbon emissions from a property’s operations. Reviewing snapshots from one or many years can help measure its progress in reducing emissions.

termine carbon footprint and how to lessen it. For example, installing LED lighting, making HVAC improvements, and installing energy-efficient windows are all ways to reduce footprint. Other tactics can be shutting the lights off during certain periods of the day, like California has been doing to save on energy consumption. Sustainable certifications, like the LEED rating system,3 are also important for investors to keep an eye on. These certifications guide property

owners and managers as they develop their plans for reduced operating costs, enhanced building efficiency, and increased asset value. Continued learning around how these certifications are evolving and what they say about your property is also reaffirmation to the people inside the building, who are growing more and more conscious of what businesses are doing to make an impact. Certifications are an indicator of a building that provides its occupants an environment conducive to productivity, comfort, health, and well-being. These certifications are expected to continue to grow and become a prominent part in both updating old buildings and as a focal point for new development. More and more companies are participating in the “race to zero” to transition to cleaner and greener operations, both for the impact the built world has on the environment and due to stakeholder and occupier pressure. Through a strategic plan, businesses can start to make a major difference and help shape a greener built world for years to come. 1

https://www.eia.gov/tools/faqs/faq. php?id=86&t=1 https://www.us.jll.com/en/trends-andinsights/research/decarbonizing-thebuilt-environment 3 https://www.usgbc.org/leed 2

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“FINDING STEM TALENT DOESN’T HAVE TO BE DIFFICULT.” PRAMOD RAHEJA, CEO AND CO-FOUNDER OF AIRGILITY

For Airgility, a company developing autonomous vehicles designed for disaster response situations, only the best and brightest STEM workers will do. Its affiliation with a University of Maryland incubator has been crucial to finding talent. And that’s just one of the ways being in Maryland helps them thrive.

Get to know Airgility’s story and get to know the talent surrounding them at open.maryland.gov/innovation. Innovation lives here.

IN FOCUS The Challenge of Finding Improved Land Because improved land is hard to come by, more investors and developers are evaluating true greenfield opportunities in far outer rings of major markets.

BY LEE LOFTIS, National Director, Land Acquisitions,

MOHR CAPITAL Lee Loftis locates and acquires land sites for Mohr Capital’s speculative and build-to-suit industrial development projects.

Across the nation, finding well-positioned, developable land with utilities and infrastructure has become almost impossible in some areas. Just about all of it has been scooped up by hungry buyers. Competition for land zoned for industrial/warehouse development is particularly intense. Owners with any inclination of selling have already done so, or their land is under contract. For the owners still holding onto their land, the question is, what will entice them to finally sell? Buyers would be wrong to assume it’s all about price. The market has reached a remarkable level of efficiency when it comes to pricing, and developers know exactly how much

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they’re willing to offer for a piece of land based on construction costs and lease rates. Many sellers, driven by concerns about capital gains taxes, have put land under contract stipulating a closing by year-end. Though many buyers have agreed, it will be interesting to see how many are truly able to close. If those deals fall through, opportunities

it’s ever been. Homeowners, even if they want to take advantage of the high values by selling, are concerned they won’t be able to find another home comparable or better than what they have now without overpaying. In the current land market, owners feel the same way. While land values might be tempting, owners are worried

CURRENT MARKET DYNAMICS FOR COMMERCIAL LAND ACQUISITIONS ARE REMARKABLY SIMILAR TO THE RESIDENTIAL SINGLE-FAMILY HOME MARKET. might arise in first quarter 2022. Successful developers who are closely attuned to the market will be able to strike quickly and capitalize on these unclosed deals.

Mirroring Residential Market Current market dynamics for commercial land acquisitions are remarkably similar to the residential single-family home market, where a lack of supply has resulted in skyrocketing price growth in most markets. The same has happened with land. In the residential market, inventory is lower than

they won’t be able to find a better investment to fulfill 1031 exchange requirements, causing them to pump the brakes on selling.

Creating Opportunities For seasoned developers, current market conditions are creating more opportunities for discussions around joint ventures as a way to get owners on board with developing their property. For some owners, this eliminates concerns about selling land and not maximizing potential income. Because improved

land is hard to come by, more land investors and developers are evaluating true greenfield opportunities in far outer rings of major markets. For example, in DallasFort Worth, investors and developers are looking as far south as Midlothian, nearly 30 miles away from either city. Considerations for greenfield acquisition are quite different than improved land. Notably, buyers must factor in additional risk related to timing and cost of utilities and infrastructure. Timing adds a lot of risk because no one knows what the market will be like by the time the land is ready for vertical development. As the time horizon for development extends, the accuracy of market predictions diminishes. New distribution markets are emerging as tenant demand, available sites, and rental rates continue to push boundaries. The key for all parties will be knowing how far and in which direction to push the development envelope. Market-savvy, pioneering developers will be the most likely to be rewarded, while exploratory investors might be left waiting for the next cycle.

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

11/29/21 2:29 PM

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FRONT LINE Weighing the Costs and Benefits of Digitization Although the pandemic accelerated growth in e-commerce, will companies continue to increase their investment in digital technologies?

services, innovations, and technologies. The reason, they say, is new e-commerce entrants, changing consumer behaviors and needs, new industries entering online trading, and emerging markets where e-commerce is growing exponentially. A report published by McKinsey & Co.2 points out how the most notable sign that digital sales have come of age is the comfort B2B buyers display in making large new purchases and re-orders online.

Keeping Up With the Pace of Digitization

BY KAREN E. THUERMER

Many businesses have benefited enormously from digital sales during the pandemic. Not only did Covid-19 alter consumer buying patterns; digital platforms accelerated online consumption and redefined business models. The trend has especially impacted companies once classified as traditional freight forwarders that now operate as integrated, third-party logistics (3PL) service providers. Consequently, 3PLs that traditionally are hired to partner with brands have even greater responsibility (and opportunities) to handle all aspects of the supply chain. Consultants at Armstrong & Armstrong, Inc. earmark e-commerce as the most rapidly growing 3PL market segment and estimate U.S. 3PL e-commerce revenues reached $53.3 billion in 10

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2020, producing a threeyear compound annual growth rate (CAGR) of 28 percent as e-commerce purchases exploded during the pandemic.1 Adoption of digital platforms is at the heart of this growth.

But will industry keep up with the fast pace of digitalization and continue to increase investment in digital technologies? A study by the OECD3 notes that although some online activity may decline as COVID-19 treatments begin to emerge and enable greater in-person

E-COMMERCE WILL CONTINUE TO EVOLVE IN SCALE AND DEMAND, AND TYPES OF SERVICES, INNOVATIONS, AND TECHNOLOGIES. “Digitalization is the driver that defines much of ‘the new normal’ in global forwarding,” observes Nick Bailey, head of research at Transport Intelligence (Ti). “This is true of both the incumbent forwarders who have added technology and technical expertise to their capabilities in recent years, as well as digital forwarding startups,” he says. Industry observers maintain that e-commerce will continue to evolve in scale and demand, and types of

interactions, it is likely to remain high in areas for which the pandemic has acted as a catalyst, including telework, ecommerce, e-health, and e-payments. Additionally, a recent report by McKinsey & Co. entitled “Can Companies Build on Their Digital Surge?”4 warns that while industries across countries and regions experienced an average of 20 percent growth in “fully digital” users in the six months ending April 2021, the acceleration into digital channels may be leveling

off. The reason, it says, is this approach requires more than just “being agile.” It requires a commitment to trusting and using data, testing initiatives in real-world settings based on a flexible foundation, and accepting mistakes as the price for learning. McKinsey & Co. further writes that with advances in technology, such as the growth of cloud and increasingly advanced analytics, companies can stand up whole businesses and channels in days and weeks once their strategy is in place. In short, “Digital is here to stay…and the pace of change is continuing to accelerate.” Regardless of how the crisis and its aftermath unfold, OECD maintains there is no doubt that digital technologies will continue to transform the way we live and work. It particularly notes how the emergence of 5G and the IoT will further fuel the production of data and add urgency to ongoing policy discussions around data governance, privacy, and security. “These issues may become even more acute as firms weigh the costs and benefits of increasing automation — especially in manufacturing facilities — to increase resilience against future health crises and, in doing so, boost the importance of data flows between firms,” OECD concludes. 1

https://www.prnewswire.com/newsreleases/rising-tide-the-rapid-growth-ofe-commerce-logistics-3pl-solutions-lastmile-delivery-and-the-dominance-ofamazon-301137811.html 2 https://www.mckinsey.com/businessfunctions/marketing-and-sales/ourinsights/these-eight-charts-show-howcovid-19-has-changed-b2b-sales-forever 3 https://www.oecd.org/digital/digitaleconomy-outlook-covid.pdf 4 https://www.mckinsey.com/businessfunctions/mckinsey-digital/our-insights/ can-companies-build-on-their-digitalsurge

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FIRST PERSON

to opportunities that align with their skillsets and experiences. In our plants, that means a good environment with ergonomically friendly workstations, higher-level work such as problem solving and a focus on new technology, education and training opportunities, competitive pay, and a robust benefits package that fits them at every stage of their life.

The social unrest experienced during the pandemic has also brought to the forefront diversity and inclusion (D&I) issues in the workplace. How are D&I initiatives being implemented at GEA? Rockingham: At GE Appliances, we work to ensure a safe and inclusive workplace where everyone is valued, and the power of diversity brings us closer to our customers, communities, and each other. We want diversity of thought because we know it will make us a stronger company. Each function has a D&I Talent Counsel that is championing our goals. This includes formal mentoring, which is critical to helping employees be successful and grow their careers. We believe our team needs to reflect the people we serve. This is a journey, and we are setting stretch goals to grow our diverse workforce over the next several years.

ROCKI ROCKINGHAM, CHIEF HUMAN RESOURCES OFFICER GE APPLIANCES

Despite the high unemployment rate created by the pandemic, companies are still struggling to find skilled labor. How does GE Appliances’ workplace culture factor into attracting these workers? Rockingham: Having a great culture is critical to attracting talent and our success. This year, 81 percent of employees said GE Appliances is a great place to work – beating the national average and earning the global “Great Place to Work” recognition. In times of crisis, employees want to hear directly from their leaders. GEA’s President and CEO Kevin Nolan began weekly video updates to employees early in the pandemic that provided information and guidance as the team worked together in uncharted territory. We also implemented new texting tools to keep better connected with production employees and link them to important information. It’s so important that people feel valued and have a plan for growth and development. We believe in creating a work environment where people can chart their own career path and have access

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The need for empathetic leadership has also been brought to the forefront. How is that displayed at GE Appliances? Rockingham: At GEA, we recognize and acknowledge the “how” matters — and that means actionable change. Since the start of the pandemic, the company has been guided by three principles: protect our people, take care of our customers, and support our communities. The team paused plant operations for one week at the beginning of the pandemic to enhance safety precautions inside our facilities. The business has remained operational since that time while continuing to support our employees and following strict safety measures. More than 1,000 managers and employees came together to work our assembly lines to address pandemic staffing pressures as production employees needed flexibility to manage their personal lives. While challenging, it brought renewed respect for the work being done and sparked ideas by our engineering teams to improve our assembly operations. It was a tremendous outpouring of teamwork.

What other strategies can company leaders use to attract and engage employees — especially millennials — who want to work for companies whose values align with theirs? for free site information, visit us online at www.areadevelopment.com

11/29/21 2:34 PM

Rockingham: Millennials and Gen Z want meaningful work with a good company where they can achieve their dreams. At GE Appliances, our pipeline starts with more than 450 co-ops and interns who join us each year for significant work experiences. From there we offer numerous rotational training and development programs in digital technology, finance, manufacturing, engineering, and Industry 4.0 that lead to positions in many different parts of our business. Culturally, we like to find employees with potential and give them stretch assignments with as much coaching as needed. Trusting them and setting them up for success early in their careers is very empowering. We also actively engage them in our community and volunteer efforts and offer them additional professional and personal development through our affinity groups and early-career networks. Early-career employees expect rich experiences and opportunities for exposure and connection. Employees also want to know what the company stands for. We’ve been intentional about our response to social issues and acted.

How does the company engage with the community to build a positive relationship, and why is that important? Rockingham: GE Appliances is actively engaged in the communities where we have operations, and this has been a part of the company’s DNA for decades. For example, in our plant communities when supplies were scarce early in the pandemic, our engineers made face shields and intubation boxes for local hospitals. Our Sourcing team used their global expertise to procure needed supplies and then donated them. The team also introduced the GEA 4 Heroes Campaign where the company donated appliances to 2,000 frontline healthcare workers and first responders in almost every state, partnering with the United Way to help identify those in need. Our employees volunteered more than 20,000 hours last year. We are also focused on the economic health of the community. That means partnering with government officials and community leaders on investment decisions and bringing more suppliers to the community. These partnerships create jobs, generate tax income, and build the community.

How does GE Appliances continue to engage/retain its workforce once it brings them on board? Rockingham: We are continuing to evolve our culture, where people feel connected to the value they bring to the business and to the consumer. This is taking shape in many ways from our 12 D&I Talent Counsels who have revised their

functional onboarding processes and mentoring to our improved Rewards & Recognition system. Our affinity networks allow for deeper connections to many different employees and the business through professional development, community service, and engagement activities. There’s more flexibility in work schedules and location that addresses the needs of individuals. Our overall health and wellness umbrella is called WellWithin — where we support employees’ physical, emotional, and financial health. Finally, we offer competitive pay and benefits, which is something we monitor closely and are always looking for ways to improve.

What specific internal and/or external training initiatives does the company have in place to make sure it has a pipeline of talent? Rockingham: GE Appliances believes in developing talent in-house and through community partnerships. For example, GEA funded and crafted a blueprint for bridging the manufacturing skills gap that led to the creation of the Greater Louisville Chapter of the Kentucky Federation for Advanced Manufacturing Education (KY FAME), a group of area manufacturing companies taking action to fill the pipeline of mid-skill manufacturing workers. In 2019, GE Appliances began the two-year Industry 4.0 Development Program targeting recent engineering college graduates or midcareer employees who want to work in the company’s nine smart factories in the U.S. The company also offers the Edison Engineering Development Program, where participants gain three years of experience solving real world problems across five different roles while earning a master’s degree. Other community partnerships include the Academies of Louisville, a Jefferson County Public Schools initiative that mixes career-oriented classes with core content to enable students to explore high-demand fields; and GEA2DAY, that allows high school seniors to join a new, weekly two-day workforce that pays $17.00 an hour and up to $6,000 per year in college tuition.

THE ASSIGNMENT In August, Rocki Rockingham was named Chief Human Resources Officer for GE Appliances. Area Development’s editor recently asked her about the company’s strategy to build upon its recent global “Great Place to Work” recognition and to create a workplace culture that attracts and retains top talent.

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ASSET MANAGEMENT

Ramping Up Cybersecurity in the Industrial Sector Industrial and other types of facilities are smarter and more computerized (more hackable) than they were in the past, but cyber awareness and security has not kept pace. By Jason Lund, Managing Director, Technology Infrastructure, Property Management Group, JLL

• • Manufacturing/Fabrication:

he world of real estate is making significant strides toward adopting the latest and most innovative technologies. But with more tech comes heightened risk. One of the latest ransomware attacks this year impacted up to 1,500 businesses globally by targeting U.S. IT company, Kaseya.1 Brazilian meatpacking company, JBS, also experienced a cybersecurity attack that forced the company to shut down operations,2 which could have been detrimental to its supply chain and to the U.S. food supply. In January 2021, a hacker was able to break into a water treatment plant system (by stealing an employee’s username and password) in an attempt to modify the chemical components that were treating drinking water.3 This could have impacted hundreds of households’ drinking water.

Risks for Industrial Properties On the surface, industrial might appear to be relatively safe in comparison to other property types. We tend to think of four concrete walls and a rooftop with a lot of space inside for tenants to do their business. With such low complexity, how much could a cyber actor do? Well, not all industrial is created equal. A summary review of different types of industrial quickly shows potential vulnerabilities:

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These types of industrial properties rely heavily on “up-time,” meaning all systems up and running as products are produced. Cyber threats to this business would include any action that could disrupt production and throw off timelines and schedules. Additionally, for products manufactured robotically, machines are calibrated by computer to cut, stamp, score, heat, and cool to certain parameters and specifications to create the desired product. These parameters are set by computer and can be altered slightly by bad actors. Pipes and screws, parts for cars, parts for home appliances, electrical equipment to be used in homes, cars, and home electronics are all made with very precise measured specifications. If these specifications are altered in any way (much like the cyber terrorist that attempted to alter the drinking water purification chemicals in San Francisco), the product is at best ruined and thrown away, at worst utilized in some larger project only to have the defects revealed in some type of failure.

• • Food Processing:

Thinking again of vulnerabilities, freezer space and refrigerated spaces are critical for prevention of salmonella poisoning. These

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temperature-specific spaces are set at temperatures electronically and monitored electronically to ensure safety. Frozen food manufacturers of products including pies and cakes, fast-food dinners, processed meats all use chemicals for preservation of food, cleaning raw foods, and even for color enrichment. These types of chemicals and the measurements per pie/meal/product are handled robotically and through computers. Throwing these measurements off, mis-calibrating refrigeration and freezer spaces allowing food to spoil or become contaminated can cause major disruption and potentially dangerous food products.

• • Pharmaceutical, R&D:

These types of industrial are also heavily reliant on computerized robotics for production and fabrication of products. Alterations in the formulas of drugs, slight modifications in the processing of them, or modifications in a product in research can cause significant disruption. Temperature control for spaces is also very important to many of the businesses of this type, in addition to particle management in air systems of “clean rooms” of various levels. All of these are set and monitored using computers.

• • Shipping and Distribution:

This type of industrial also relies heavily on “up-time” and is extremely sophisticated in our current day and age of major distribution and shipping companies. So much so that these types of logistics companies don’t typically allow any type of vendor to access their critical logistics sites without scrutiny and background validation. What could go wrong with a package? Not much, but think of that package as one of millions handled every day (by computers) and the record-keeping of where it came from, where it is going, routing how to get it there, on what form of transportation, the labeling and coding, etc. All of the scanning and record-keeping of these millions of packages is handled through computers and bar codes and tracked continually.

Crossover Between IT and OT You might ask, don’t these vulnerabilities reside with the tenant, not the industrial property owner? That is largely correct; however, why would the large distribution companies completely restrict access to their buildings from all vendors unless they are vetted? It is because of the crossover between IT and OT. IT stands for Information Technology. This is the type of technology just mentioned for the large logistics companies — the information about packages and how they

track them — where they came from and where they are going — and bill them. This is the tenant’s technology in running its business. OT stands for Operational Technology. This is technology that runs from a computer but can make physical things happen in the real world, i.e., using your cell phone to turn on the lights in your home, lock your doors, turn on your electric car, etc. Within real estate, this would include HVAC units, elevators, door locks, fire/life/safety alarms and equipment, etc. The reason logistics companies don’t permit thirdparty vendors to enter their buildings is because of the crossover between IT and OT. Vendors that are responsible for OT systems in a building will maintain their systems physically through inspection and upkeep. However, they will typically log their maintenance and bill and receive payments through IT systems. In 2014, Home Depot was hacked4 and Target had already been hacked through the theft of credentials from a thirdparty vendor on their buildings. In the case of Target, the username and passwords of a HVAC contractor were stolen. You might think that this was a long time ago and has been fixed by now. Surprisingly, although large retailers and logistics companies are very much on top of this, most of industrial real estate still is not. These vulnerabilities and crossovers still exist and are actually worse today than they were in 2014. Industrial buildings and all types of buildings are smarter and more computerized (more hackable) than they were then, but cyber awareness and security has not kept pace.

Better Understanding Cybersecurity As our high-tech world advances, more risks will be created. We don’t want to go backward or stop our progress, but it’s imperative companies get proactive about their cybersecurity risks and establish a plan. So, what’s the solution to prevent hackers from breaking into our IT and OT systems? A better understanding of cybersecurity and its philosophy is a great place to start.

• T here is no one solution to buy or one thing to do to

become cybersecure. Just as technological systems are in fact systems with many component parts, so to cybersecurity must be factored into all of the systems and pieces of the whole.

• C ybersecurity is not an “end point or finish line” goal; it is an ongoing process to be maintained and improved over time. Much like physical security, cybersecurity must be constantly present and maintained but also dynamic. As criminals invent new methods to penetrate and steal, cybersecurity must adapt and AREA DEVELOPMENT | Q4 2021

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invent new countermeasures and protocols based on a dynamic environment.

• C ybersecurity is focused not just on preventing attacks

but on response and recovery. The old saying “a criminal only has to be right one time” is very much in play. With all the prevention and security methods available, it still only takes one penetration to cause a significant disruption. From a cyber standpoint then, the very next questions are, “How fast can we shut down the attack?” and “How fast can we recover?” These aspects of cyber are the other keys to a full strategy — prevention, response, recovery.

Strategies to Aid in Cybersecurity Professional real estate investors or owners of real estate do not have the time to learn cybersecurity fully nor should they. However, what steps could be considered to improve an overall cybersecurity profile in existing real estate and existing real estate portfolios?

• • Converging Networks:

A converged network is a secure environment for tenants on-site, but what happens in a hybrid work environment? More and more employees are working from the office a few days a week, and then from their homes or local coffee shops on alternate days. Public networks are often cyber threat environments, and employees using them can infect your systems. A good strategy (that can be facilitated by your converged network operator/provider) is a Virtual Private Network. This allows an employee or occupant to access your operations but through a “virtual tunnel” that would exclude much of the danger

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Real estate professionals employ many third-party consultants to oversee their real estate and operations. Recognizing cybersecurity as a critical need is another key component of a successful cybersecurity plan. A third-party resource can free up landlords’ and business owners’ time and allows trained industry professionals to monitor the property’s security 24/7. Working with the right partner can alleviate the stressors of cybersecurity threats, and just like property managers are hired to manage assets, they can also manage the resources in the fight against hackers and craft a plan to enforce a more strategic and safe technology infrastructure.

to manufacturing would include any action that could disrupt production and throw off timelines and schedules.

• • Virtual Private Networks (VPN):

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• • Cybersecurity Consultation:

Cyber threats

Most real estate already has many operating networks within a single building installed by various vendors and tenants or occupants. Reducing the number of networks (systems that use the Internet to monitor and control physical aspects of a building remotely), converging these networks onto a single or a few larger networks that are professionally overseen and managed by an operator that is responsible for cybersecurity and full operations is a very positive step.

prevalent in public networks. It’s critical for employees to log into their company’s networks using a VPN system and use challenging passwords when working online and not in the physical office, which has the highest level of security when on a converged network.

The Way Forward

How can industrial facilities move forward with a better cybersecurity plan? First things first: bring the conversation to the table if it’s not already part of greater discussions. Industrial real estate, more so than any other type of real estate, houses a very wide range of potential users. Industrial assets need cybersecurity and, in some ways, more so than most property types. The varied uses within industrial facilities are wide open to cyber threat, and with crossovers from IT to OT, significant damage can be done. Although there are strategies to aid in improving your cybersecurity and also fruitful conversations to be had, most important would be to begin a relationship with consultants in this industry that can guide you based on your particular needs and on the characteristics of your business model. As noted, cybersecurity is about prevention, response, and recovery. As with all things, the details to make this happen are what is next. n 1

https://www.reuters.com/technology/hackers-demand-70-million-liberate-data-held-bycompanies-hit-mass-cyberattack-2021-07-05/ https://www.npr.org/2021/07/05/1011700976/the-food-industry-may-be-finally-payingattention-to-its-weakness-to-cyberattack 3 https://www.nbcnews.com/tech/security/hacker-tried-poison-calif-water-supply-waseasy-entering-password-rcna1206 4 https://www.usatoday.com/story/money/business/2014/11/06/home-depot-hackersstolen-data/18613167/ 2

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LIFE SCIENCES

Shaping Compliance for Your New Biomanufacturing Facility If you have a new biomanufacturing site in the works, you can open doors to a productive, compliance-forward facility with these strategies. By Roger Humphrey, President, Life Sciences Division, JLL

xtreme demand…vigorous reshoring… unprecedented funding…the biotech boom is upon us — and inspiring industry leaders to ask how real estate can help scale up productivity and innovation. Now the hunt is on for new sites where compliance and operational practices won’t just avert disruption — they’ll actively fuel speed to market, too. Pressure is mounting to expand production capacity, but this is not a sector where any quality industrial space will cut it. In the highly regulated biologics arena, shrewd biomanufacturing site selection is critical to short- and long-term success. As JLL’s Travis McCready notes in his recent Area Development article,1 compliance and operations play a vital part in accelerating an effective site launch. To reduce risk and extract the most value possible from a biomanufacturing facility, companies need to be able to anticipate and address regulatory and technical operational challenges from the get-go. Following is a closer examination of why compliance and operations considerations need a front seat in planning — and opening — an agile, resilient biomanufacturing facility.

How to Fuel Biomanufacturing Facility Compliance A hair-raising two thirds of drug shortages are triggered by manufacturing disruptions related to product or facility quality problems. But rigorously informed quality and safety standards help alleviate the kinds of

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missteps that lead to compliance issues — and their cascading disruptions and cost impacts. With life sciences enforcement on the rise across the board,2 biotech companies must ensure prospective facilities will be managed in compliance with constantly evolving FDA regulations governing safety, sanitation, and quality-control procedures. To proceed, consider the following best compliancerelated practices for all biomanufacturing facilities — new and old alike: 1. Proactively monitor and anticipate regulatory inspection and enforcement priorities. Requirements and enforcement trends are perpetually changing, as the FDA and other authorities raise new issues and uncover enhanced compliance practices. Case in point: the FDA’s closer focus on pest control in recent years led directly to updated requirements and additional enforcement activity. Prepare for inspections and avert unexpected enforcement attention by staying abreast of evolving regulatory trends. 2. Increase visibility around compliance and enforcement which could impact facilities. Too often, facilities compliance knowledge and experience is siloed, with disparate parties responsible for compliance, facility engineering, manufacturing, and quality. A more collaborative approach will help your organization efficiently share news and insights to improve facilities quality across the entire system. For example, if you establish a central facilities compliance team, they can easily exfor free site information, visit us online at www.areadevelopment.com

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change information and innovation happening at one site to others. 3. Coordinate efforts to vet facilities vendors for regulatory compliance. It’s not uncommon for a facilities team to choose a janitorial, pest control, calibration, or other project vendor before the compliance team has a chance to determine whether their qualifications meet good practice (GxP) standards. One way forward: Give facilities teams access to a centralized platform for vendor compliance checks. 4. Ensure compliance documentation stays up to date and meets changing regulatory standards. GxP data must meet numerous rules regarding backup, security, accuracy, documentation, and other elements of recordkeeping. Simply storing data in the wrong format can result in noncompliance. If your compliance documentation practices aren’t up to par in other facilities, now may be the time to upgrade validated technology and centralize record-keeping for new and existing facilities alike. 5. Verify facilities operations achieve the International Standards Organization’s IS0 9001, ISO 14001, and ISO 45001 certifications. Maintaining appropriate ISO certifications can help ensure operations support your organization’s quality, safety, and sustainability goals, while also helping curb costs and foster consumer confidence. 6. Create a culture of compliance across facilities teams. The most effective biomanufacturing facilities teams bring a compliance mindset to work each day. To cultivate a compliance culture across your organization, consider forming global quality and compliance teams, and investing in sophisticated facility technology and compliance metrics to support consistency across all GxP facilities.

Foster Operational Scalability and Agility by Design In addition to compliance, the operational strategies you enable during construction or buildout will affect the facility’s ability to run efficiently once online. If you’re planning to open or adapt a new site, an important early step is to anticipate any and all operational details. For instance, by calculating how much power and water the facility will need over time, and proactively locating utility connections, you can ensure buildout has the resources and access points it needs to fulfill current and future production orders.

Infrastructure design also has a major impact on performance and costs. Too large a boiler, for example, may cost you more in terms of additional staff required by law to operate, wasted energy, dollars, and space — whereas one that’s too small will end up costing more to maintain or upgrade, with precious time lost. Anticipate properly and you’ll get just-right solutions. And do sweat the small stuff. A seemingly simple decision, like positioning a piece of heavy equipment adjacent to electrical switch gear, could create outsized problems down the road by inadvertently limiting the ability to expand as production needs increase. Every operational model should also purposefully foster agility. Research priorities can and will shift quickly, as do lab and production technologies. Scaling biotech companies3 need manufacturing facilities that can scale and be adapted for change as needed — while maintaining cost control. Operational models should allow for seamless reconfiguring between changing production schemes, so that facilities have the protocol and equipment they need to efficiently turn over labs and rapidly configure multiple types of setups. Be sure to build in operational resiliency as well. The COVID-19 pandemic helped shine a light on the need for preparedness for a range of disruptions. Whether it’s a future pandemic, hurricane, or wildfire, facility operations should be prepared for any possible disaster. A strong business continuity plan will help restore operations and mitigate the impact of an external event on manufacturing operations.

Power Up Facilities With the Right People and Technology Biotech facilities require more sophisticated management expertise than manufacturing facilities in other sectors. But by investing in state-of-the-art operational technology and expertise, you can optimize facilities operating costs to allocate more spend to research and development — while maintaining highly productive production environments. On the facility tech side, this might entail leveraging digital technologies to monitor facility performance, avert equipment failure, decrease energy waste, and streamline the time-intensive facility compliance process. Speaking of time management, advanced technology can also help facility teams automate work-order management, detect burned-out lightbulbs via sensor, and handily manage inventory and vendors across multiple properties at the same time. Continued on page 24 AREA DEVELOPMENT | Q4 2021

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LIFE SCIENCES

On the Hunt for a Productive New Biomanufacturing Site? Real estate and facility strategy can fuel efficiency, scale, and speed to market for your new biomanufacturing operation. By Travis McCready, Executive Director, U.S. Life Sciences Markets, JLL

Courtesy: ScieGen Pharmaceuticals

logics therapies, the industry response to COVID-19 will mid explosive demand for biology-based have lasting impact, too. Urgent vaccine production is innovation, many biomanufacturing organizations driving a reinvention of life sciences manufacturing and are expanding their footprints, requiring creating a ripple effect of accelerated production. Since advanced real estate strategies to optimize their growth the pandemic began, 600 tests, drugs, and devices were plans. With shrewd site selection, workplace design, granted emergency-use and facility management, authorizations, a previlaunching your new ously seldom-used regusite can be a boon to latory pathway, with many production — while expected to gain Phase fueling efficiency and II approval over the next attracting prize talent three years. Additionally, over the long term. broad-based support for Expansion may well be reshoring of manufactururgent, considering growing will likely increase ing pressure for warppotential speed to market speed innovation and proand profitability into the duction. Today’s biologics future. are supporting a global patient base that’s only going to increase. Thanks Critical Key Steps ScieGen Pharmaceuticals’ $15.5 million expansion project to continuing breakTo keep up with all in Hauppauge, N.Y., involves converting 65,000 square throughs in medicine, the momentum, biotech feet of existing warehouse space into new lab and office facilities. more people live longer innovators need access to lives — and seek out more well-located, compliancetherapies as they age. Meanwhile, millennials are reachforward, talent-friendly manufacturing facilities. Following their earning potential, and many prioritize spending ing are three critical key steps to accelerate opening on personalized care. — and position the location for longer-term agility and Worldwide pharmaceutical sales are predicted to esinnovation. calate at a compound annual growth rate (CAGR) of 7.4 percent through 2026, to nearly $1.4 trillion in sales, Step 1: according to JLL’s 2021 Life Sciences Real Estate OutFoster innovation with look.1 This represents a major spike in the next six years tech-fueled site selection. compared with the previous six, when sales grew at just Choosing the right location is critical to efficiency, 2.9 percent. Notably, much of this growth is expected compliance, and talent considerations alike. You’ll need from biotechnology-driven therapeutics sales, which on to weigh a range of competing criteria, including proxtheir own are on pace to grow at a momentous 10.1 perimity to research and development (R&D) facilities, supcent through 2026. ply partners, and labor pool. In addition to meeting rising demand for general bioFor example, choosing a Good Manufacturing Practic-

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es (GMP) facility near R&D operations can shorten the supply chain and allow for collaboration between researchers and manufacturing staff that will develop and refine processes, particularly for smallbatch, clinical trial manufacturing. Generally, it’s also important to look for facilities with generous, clear heights; ample utilities; and backup power; as well as easy access to major transportation infrastructure. Yet, it’s challenging to find ready-touse biopharmaceutical production space in the U.S. — especially near the most advanced clusters in Boston and San Francisco. According to JLL research, longterm employment increases, industry and demographic shifts, record funding, tight vacancies, and rising rents are all signs of space limitations in the life sciences real estate market. Fortunately, advanced data and analytics tools can bring accuracy and speed to your search, helping you elevate worthy location options and avoid costly missteps. By visualizing multiple sites against your criteria, you can assess the pros and cons of any location, from macroeconomic data and tax incentives, to prospective path, to ownership and flexibility. If your initial searches aren’t promising, it may be worthwhile to consider adaptive reuse. Building a new facility in the right location is complex and timeconsuming — a mismatch for fostering innovation. Leasing and adapting an existing GMP space can help your organization expand production faster, leaving more resources for R&D. Consider, for inspiration, the Seattle developers who are converting a former T-Mobile data center space in the crowded Bothell submarket.2 Other creative adaptive re-use stories include repurposing a former ice-skating rink, a printing press facility, vacant malls, and big-box stores. Once you’ve narrowed down the right location, turn to a project management team to help accelerate facility buildout from design and site plan review through implementation. An experienced project manager can help navigate the entire process, from facility system decisions like electricals and HEPA filtration, to procurement and contracts, to commissioning and validating production processes.

out will perform better if they are supported by the space to do their best work. Integrate human experience into design strategy from the outset. You might begin by providing space for employee well-being features, such as natural light, outdoor views, plants, and high-quality indoor air. Most leading life sciences organizations have already recognized these advantages in other facilities, but today’s in-demand biomanufacturing specialists are also uninspired by the windowless and cramped settings of traditional manufacturing facilities. Create flexibility in your buildout throughout, to support a quality work environment while also strengthening organizational agility. After all, research priorities can change rapidly, as can manufacturing technologies. To avert functional obsolescence, incorporate flexible design principles that allow for new configurations and foster more agile operations, like “plug-and-play” equipment, moveable workbenches, and retractable electrical coils. Other strategies include adding thick floor slabs in corridors to support movement of heavy equipment in and out without damaging the floor. Space configuration can also play a role in improving the human experience at work. As biomanufacturing becomes more collaborative, laboratory researchers, engineers, and data scientists alike will increasingly work alongside each other at intervals through the pre-clinical manufacturing process. Often this cross-section of colleagues requires a mix of collaboration-oriented workspaces that they can claim as needed. Positioned in lower floors near entrances and exits, these collaborative areas can also help facilitate flexible working patterns while showcasing a culture of collaboration. By offering inviting, well-lit spaces with video-conferencing capabilities, whiteboards, and open seating, your organization can show it values idea exchange and multidisciplinary innovation. Other ways to leverage workplace design to support recruitment and retention include on-site cafeterias, huddle booths, informal lounges, and other casual socialization areas — balanced by their opposites: quiet rooms and/or a library for heads-down work.

TODAY’S “BIOLOGICS

ARE SUPPORTING A GLOBAL PATIENT BASE THAT’S ONLY GOING TO INCREASE.

Step 2:

Design flexible space for the people who will use it. Biomanufacturing facilities are first and foremost a workplace. The people who work there day in and day

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”

Step 3:

Boost productivity with leading facilities management. Biopharmaceutical manufacturing has traditionally been resource- and cost-intensive, in part due to its low yields and relatively high level of waste. With facilfor free site information, visit us online at www.areadevelopment.com

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ity management (FM) best practices, however, organizations can make significant gains in efficiency. Effective FM teams can start with the basics, solving facilities distractions and making repairs as they come up to create a reliable environment that supports core employee productivity. They can also perform mundane, yet critical, operational tasks such as providing a steady supply of clean glassware and research or testing inventory so that their teams don’t have to. But they can go further, too. With preventative maintenance practices, FM experts can avert costly replacements, extending equipment life — and long-term value. Importantly, experienced life sciences facility managers know that manufacturing facilities for breakthrough therapies need more specialized knowledge than is needed for facilities in other manufacturing sectors. In fact, for biologics, cell and gene therapy, and other emerging biotechnology modalities, manufacturing facilities demand the same kinds of compliance, quality control, and maintenance strategies as are required in R&D environments. To produce, test, and improve development of today’s increasingly sophisticated class of drugs, companies need access to compliant, GMP facilities. They need to know their facilities are in continual compliance with FDA regulations governing safety, sanitation, and qualitycontrol procedures from production and processing through packaging. By partnering with a trusted facilities management provider, biomanufacturing leaders can stay laser-focused on their core work, entrusting their partner with the critical matter of compliance. Worthy FM service providers can add further value by

contributing a deep bench of skilled workforce. Leading providers will have invested in talent, technologies, and best practices to manage the most challenging, highly specialized lab and manufacturing environments across the life sciences industry. They may also be able to offer substantial pricing discounts on supplies and services through their own vetted supplier networks. If you’re considering enlisting a third-party facility management company, look for parties with a deep track record in facilitating regulatory compliance, operational consistency, and quality assurance in diverse, sophisticated facilities. To support quality and optimize uptime, enlist select FM leaders early in the process to create standard operating procedures for safety, calibration, quality assurance, and other critical areas well before production begins — and to maintain 99 percent uptime and rigorous regulatory compliance from there on out.

An accelerated site launch is only the beginning. In the coming months and years, biotechnology companies can expect to see more demand for their products — if they step up to the opportunity now. Breakthrough treatments will always be needed, and a growing global population guarantees demand will only continue to increase. Whether you’re preparing to launch a site to support clinical trials, or for full-scale to-market production, providing the right facility — in the right location and with the right strategy — will help advance the global effort to improve quality of life for people around the world. n 1 2

https://www.us.jll.com/en/trends-and-insights/research/life-sciences-real-estate-outlook https://www.jll.co.uk/content/dam/jll-com/documents/pdf/research/jll-uk-2020-uslife-sciences-real-estate-outlook.pdf

Shaping Compliance for Your New Biomanufacturing Facility – Continued from page 19 On the staffing side, fill your operations benches wisely by following best industry practices. Technical operations in a biotech plant require various highly specific skill sets and types of support. Some areas will likely be subject to more regulatory issues than others, requiring more compliance hands on deck. Other areas will need more technical engineering expertise. But too few, or too many, people in a given role or location can be risky in its own way. Under-staffing poses operational risks, raises the potential for equipment issues, and generally drains efficiency; while over-staffing creates unnecessary cost burdens and can even diminish staff morale. Benchmark staffing and operations against other organizations — and within your own facilities — to assess what will be too many, or too few, of the specific kinds of professionals you need on the floor and throughout the manufacturing facility.

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Prioritize Facility Strategy — While Keeping Innovation Front and Center Operational efficiency and leading compliance practices are proving more important than ever amid the burgeoning biotech boom. Increasingly, bringing breakthrough innovation to market depends on access to reliable facilities, where processes won’t be disrupted by compliance issues or operational breakdowns. A worthy biomanufacturing facility management program enables both compliance and operational excellence, directly feeding scalability and productivity so biotech leaders can keep their focus trained on the life-enhancing work of pursuing new therapies, relentlessly. n 1

https://www.areadevelopment.com/Biotech/Q4-2021/on-_the-hunt-for-productive-newbiomanufacturing-site.shtml https://www2.deloitte.com/us/en/pages/regulatory/articles/life-sciences-regulatoryoutlook.html 3 https://www.us.jll.com/en/views/four-questions-for-scaling-biotech-companies 2

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LIFE SCIENCES

Location Factors for Cell and Gene Therapy Companies The rise of cell and gene therapy (CGT) demands a strong supply chain, manufacturing operations, and specialized talent. By Catherine Scangarella, Chief Business Development Officer, Choose New Jersey

uch as penicillin and other antibiotics transformed health and longevity in the 20th century, biopharma is transforming the 21st century. Cell and gene therapies (CGTs) are cutting-edge technologies that are improving the effectiveness of drugs, reducing side-effects, and treating diseases that were once thought of as insurmountable. Presently, there are approximately 900 companies worldwide focused on these advanced therapies,1 and over 1,000 cell and/or gene therapy clinical trials currently under way. A rise in the clinical pipeline, coupled with a rising number of regulatory approvals for advanced therapies, has significantly driven the market. The global cell and gene therapy manufacturing market size is expected to reach $57.4 billion by 2028, according to a new report by Grand View Research, Inc.2 The market is estimated to expand at a compound annual growth rate (CAGR) of 20.3 percent from 2021 to 2028. Traditional supply chain models will not effectively meet the needs of these companies that are producing personalized therapies that must quickly and efficiently be delivered to their customers and patients. Supply chains that support the manufacturing and delivery of cell and gene therapies are long, complex, and highly controlled. As such, companies across the globe are looking to the United States to find locations with a thriving innovation ecosystem and a strong mix of a highly skilled workforce, robust supply chains, and manufacturing centers to meet their growing needs.

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Ideal Location Factors for CGT Companies Ability to hire specialized talent: The cell and gene therapy industry is growing rapidly and there is deepening demand for a highly educated, highly trained workforce. Cell and gene therapy manufacturing is a complex, largely manual process that requires numerous skilled employees in an extremely monitored environment. Markets with a large pharmaceutical footprint are often the most appealing, as manufacturers can utilize the talent pool from industries where traditional, chemical-based medicines are made, or markets where other regulated industries manufacturing products for human consumption, like cosmetics and nutraceuticals, are based. To address workforce needs, the New Jersey Institute of Technology (NJIT), in collaboration with New Jersey Innovation Institute (NJII) is offering a professional science master’s degree program and professional graduate certificate in cell and gene therapy — the only one of its kind in the United States. In addition, NJII developed a cutting-edge apprenticeship program where select students are trained for the field of bio-manufacturing over an 18-month period. Proximity to robust transportation systems: The highly specialized manufacturing process required for cell and gene therapy imposes significant burdens due to the complexities associated with transporting, storing, and processing raw materials and shipping finished products. The production of cell therapies requires even greater vigilance against threats that can degrade purity, potency, and efficacy. for free site information, visit us online at www.areadevelopment.com

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To date, the majority of cell and gene manufacturing companies are located in the northeast United States. The highly connected, affluent, and concentrated Boston–New York City–Philadelphia–Washington, D.C., markets offer logistical supply chain solutions for cell and gene therapy companies that need to move drug products quickly. The East Coast’s vast transportation system can easily expedite express deliveries to maintain the integrity of cell and gene therapies, and access to transportation systems make it easy to move products across the country or around the world.

global constraints, there are a number of markets across the United States that offer a supportive ecosystem for these developers to thrive. Cell and gene therapy companies succeed when they can tap into an innovation ecosystem that includes incubators and accelerators, research parks and hubs, and the ability to partner with research universities, medical schools, and hospitals. Much of the initial stage research is happening in Boston, and companies that are further along in product development have turned their focus to the New York-New Jersey area.

Cluster of Contract Development and Manufacturing Organizations (CDMOs) and Contract Research Organizations (CROs): Cell and gene therapy developers benefit from cities and regions featuring a “cluster” of CDMOs and CROs to move “from bench to bedside.” CDMOs help companies translate a drug into scalable, commercialized treatment, while CROs manage clinical trials. As many CDMOs in Europe have been booked since COVID-19, this presents a unique opportunity for the United States to attract international companies to establish their operations here.

Looking Ahead

A supportive ecosystem where innovation thrives: As cell and gene therapy developers are struggling with

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Cell and gene therapy, while still a burgeoning industry, presents a real opportunity for future economic growth for select markets across the country. Despite significant disruptions in the supply chain caused by the COVID-19 pandemic, cell and gene therapy R&D and commercialization continued to accelerate in the marketplace. As we look ahead, the U.S. market should be focused on ways to attract, support, and retain cell and gene therapy companies, which will ultimately drive investment, employment, and — most importantly — save lives. n 1

https://www2.deloitte.com/us/en/insights/industry/life-sciences/operating-models-forgene-cell-therapy-manufacturing-process.html https://www.prnewswire.com/news-releases/cell-and-gene-therapy-manufacturingmarket-size-worth-57-4-billion-by-2028-grand-view-research-inc-301366859.html

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COVER STORY

NO EASY FIX

FOR SUPPLY CHAIN STRUGGLES Labor shortages intertwined with other supply chain issues are creating gridlock at the nation’s ports.

he growing number of ships queuing outside the ports of Los Angeles and Long Beach, which are responsible for approximately 40 percent of the nation’s imports, stems from a surge in cargo that was anticipated over a year ago. In March 2020, just one month into the pandemic, terminal operators implemented container storage programs, anticipating a short but intense spike in May 2020, when the pandemic was originally expected to end. At the height of the global health crisis, nonessential merchandise was put into storage to make way for critical cargo such as personal protective equipment, medical supplies, ventilators, and other essentials being expedited through the ports. The short but intense spike snowballed into the daunting situation we are facing today.

Globalization has increased dramatically in the last 40 years due to innovations in containerized shipping, concentrated production centers overseas, and a just-in-time fulfillment system that, until recently, delivered what was needed, when it was needed. It is an efficient but fragile system that relies on the seamless transfer of goods from production to consumption — certainly one that was not prepared for this level of economy-wide disruption.

Labor Shortages Among the Concerns As we’ve witnessed, dislocations at any point of the supply chain result in a bullwhip effect, where relatively small changes set off a chain reaction. Usually, these disruptions are localized, and equilibrium is restored relatively quickly; however,

By Thomas Galvin, Research Manager, Transwestern

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LOGISTICS/INFRASTRUCTURE

this is not a normal case. And one of the biggest culprits in this mess? Labor shortages. The unloading of cargo ships is also the third rail of U.S. shipping policy, domestic terminal productivity, and, in effect, the monopoly of longshore dockside labor. The International Longshoremen’s Association, AFL-CIO, the largest union of maritime workers in North America, has long fought the automation of terminals to increase the speed at which ships could be unloaded as a means of preserving high-paying union jobs. Currently at the ports of Los Angeles and Long Beach, ships greater than 6,000 TEUs (20-foot-equivalent units) take an average of 48 seconds to move a container, which is double the amount of time per TEU at automated Chinese ports. Little work can be done to address this issue until after July 2022, when the current labor contract between the dockworkers

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DISLOCATIONS AT ANY POINT OF THE SUPPLY CHAIN RESULT IN A BULLWHIP EFFECT, WHERE RELATIVELY SMALL CHANGES SET OFF A CHAIN REACTION.

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COVER STORY and terminal operators is set to expire. Should automation be a concession of the next labor contract, it would require hundreds of millions of dollars and years to fully implement before benefits are realized.

The Chassis Issue While not the only issue, unloading efficiency is one in a long series of interconnected bottlenecks. Once the container is off the boat, it needs somewhere to go. The Harbor Trucking Association, a coalition of intermodal carriers and draymen, is one of the parties responsible for transporting containers from the port to the receiving warehouse. To do this, a chassis is required to haul the container to the warehouse, and another chassis is then returned to the port along with an empty container. Typically, there is a healthy balance between full and empty containers and the chassis that is needed to haul them. But if there is an imbalance between sending and receiving, there will be a shortage of chassis at the port and goods will pile up until the chassis arrive to haul the goods away. At present, the high container volumes are stretching assets beyond capacity, and the shared pool of chassis used to keep the gears of commerce running is showing strain. The dwell time of chassis, or the time chassis spend waiting between port trips, has increased to over nine days, due in part to the shortage of drayage drivers. (For reference, dwell times that exceed four days limit their overall availability and negatively impact marine terminal productivity.) Once the container has a chassis and a driver, it is sent to the receiving warehouse where goods are unloaded, broken down, and repackaged for their next destination — retail stores, other warehouses, or the customer’s front porch.

Heightened Consumer Spending/Panic Buying Orders are typically fulfilled by warehouse workers, commonly referred to as pickers and packers. Oftentimes, these positions are subject to high turnover due to lower wages and few worker protections, though the tide is turning. California Assembly Bill 701, passed in September 2021, regulates warehouse performance metrics and offers protections to workers should they not meet certain productivity quotas. While this type of legislation may reduce turnover, employers are simultaneously faced with rising costs as more workers are needed to fulfill the influx of orders fueled by consumer spending that has surpassed prepandemic levels. At the height of the pandemic, 15.7 percent of all retail goods were e-commerce sales. That figure has drifted down to 13.3 percent as restrictions on

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brick-and-mortar shops have been lifted. In addition to home delivery, retailers are restocking shelves in anticipation of a “normal” holiday shopping season, and in many cases ordering more to replenish supplies that were drawn down over the pandemic. This can be seen in the inventory-to-sales ratio, which is the amount of goods on hand relative to the amount of goods sold. The inventory-to-sales ratio hit an all-time low of 1.07 in April 2021, meaning retailers sold nearly 100 percent of their existing inventory. This is leading to panic buying as supply chain disruptions are being factored into restocking decisions. More orders of overseas goods lead to more ships docked outside of Los Angeles and Long Beach, which requires more chassis and drayage drivers to haul more containers, which in turn requires more warehouse workers and delivery drivers — all of which are in limited supply.

Some Remedies In March 2021, the Biden administration created a task force to address growing supply chain issues. The administration met with port stakeholders to adopt 24/7 operations at the Port of Los Angeles to increase throughput of cargo containers. In addition, the administration has secured commitments from Walmart, Target, Home Depot, Samsung, UPS, and FedEx to take extraordinary measures to ensure additional freight movement, including extending hours and even chartering private cargo ships at significant expense to move cargo through less congested U.S. ports. To address the lack of truckers and draymen, the Biden administration is exploring the possibility of lowering the legal age of interstate truck drivers from 21 to 18. Other potential remedies include adding trucking to the list of jobs exempt from immigration certification and limiting the restriction on fully vaccinated essential workers from Canada and Mexico. In fact, a non-vocational high school in California is offering a truck-driving course to encourage the younger generation’s workforce to pursue a career in the industry. To address a shortage of warehouse workers, Amazon announced it was hiring 75,000 employees in the U.S. and Canada with increased pay, generous signing bonuses, and vaccination bonuses. Amazon is also targeting high school graduates, offering full college tuition for frontline workers. The entirety of 2022 may not see much relief, and some of the bigger picture issues will persist for years to come, according to U.S. Transportation Secretary Pete Buttigieg’s assessment of the supply chain situation. Over time, new ships, containers, and chassis can be built, but we can’t ignore the human component as we strive to improve supply chain resiliency. n for free site information, visit us online at www.areadevelopment.com

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The “Great Resignation” Is Impacting Corporate Relocations Workforce Development Programs Are in Overdrive Adapting to Agility: Leveraging a “Hub and Spoke” Model Labor Challenges in the Industrial and Manufacturing Sectors Persist Talent-Based Location Strategies in the Workforce’s Future

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America’s top state for talent

Virginia continues to raise the bar when it comes to talent development. Virginia Talent Accelerator Program: Fully customized workforce recruitment and training solutions — at no cost to eligible companies Tech Talent Investment Program: America's largest investment in computer science education ($2 billion in new public/private funding), doubling annual grads in CS and related fields Computer Science in K-12: First state to incorporate computer science, including coding, as a mandatory part of the curriculum for all public school students (K-12)

FINDING, CREATING, & SUPPORTING TALENT IN

The Virginia Talent Accelerator Program supports a wide range of job creation projects, from manufacturing operations to GSK’s consumer healthcare research and development center, which is creating 150 new jobs.

VIRGINIA Jason El Koubi Interim CEO

Virginia Economic Development Partnership 901 East Cary Street Richmond, VA 23219

inding, creating, and supporting talent is what the Virginia Talent Accelerator Program is all about. It’s a workforce incentive that’s far more than simply a training program, according to Mike Grundmann, who oversees the program as senior vice president of talent solutions for the Virginia Economic Development Partnership (VEDP). Training is imperative, to be sure, but first a company must recruit the right people to benefit from the training.

804.545.5600 info@vedp.org VEDP.org

aches that arise when an employer chooses a new location or expands an existing one. “When a leadership team is starting a new facility, they have a lot competing for their attention — from managing construction schedules and equipment validation to personal things like relocating and settling their own families,” Grundmann explains. “Having somebody step in with all the expertise and resources that the Virginia Talent Accelerator Program brings feels like a lifeline to them.”

Getting Off to The program takes aim at a Positive Start both challenges. It’s deliv“Once a company chooses ered by VEDP in partnership Virginia, we immediately make with higher ed institutions plans for a comprehensive — most commonly a comneeds analysis,” Grundmann munity college that is part of says. “This usually takes place the Virginia Community Colat a company location, where lege System (VCCS). Recruitwe can observe similar proment and training solutions Morgan Olson’s pre-hire training is conducted cesses and meet with the are fully customized to each as part of the Virginia Talent Accelerator Program. company’s operations, human client’s unique operations, resources, and subject-matter equipment, standards, and experts.” culture, and all program services are offered at no cost to eligible companies. Virginia Talent Accelerator Program representatives Considering the impact of the Virginia Talent Acceland the company get to work benchmarking best erator program, it comes as no surprise that Virginia’s practices and identifying deliverables. “We typically workforce development programs were recently do this in full collaboration with the nearest commuranked No. 2 in the country in Area Development’s nity college,” Grundmann explains. “Each is stocked annual survey of site selection consultants. with Industry 4.0 training simulators, precision machining, welding, and robotics equipment.” The whole idea is to ease the talent-related head34 • WORKFORCE

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The Virginia Talent Accelerator’s focus is on teaching new production hires how to apply their skills to each company’s unique processes, equipment, and procedures, which makes the program great for manufacturing clients, but plenty of others, too, from distribution to research and technology development operations to headquarters locations. As long as multiple states are under consideration and the project includes a significant capital investment, pays competitive wages, and creates at least 25 new jobs for manufacturing and distribution operations — 50 for all others — the project is eligible. How long will the Virginia Talent Accelerator Program stick around to help? The duration of its support is flexible, Grundmann says. “We continue delivering customized recruiting and training services until we’ve fulfilled all the commitments made in our scope of work and our trainee count meets the job creation stated in the project announcement.”

Helping Smaller Companies — and Metros — Compete

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manufacture a new line of data center cooling solutions and was evaluating current locations, including a facility in Virginia’s Rockbridge County. With help from the Virginia Talent Accelerator Program, the company’s recruitment effort included radio ads, a customized jobs landing page, a residential mailer, multichannel job postings, and other recruitment campaigns. As new processes come online, the program provides customized training on Modine’s unique processes and procedures. “The Virginia Talent Accelerator Program’s recruitment team clearly brings a lot of expertise that we don’t have

BY HELPING TO RECRUIT AND TRAIN WORKERS, THE VIRGINIA TALENT ACCELERATOR PROGRAM GIVES COMPANIES LOCATED IN VIRGINIA A COMPETITIVE EDGE.

The program was created in 2019, and a key motivator was the need to help Virginia’s rural and smaller metro areas become more competitive for job creation. The very first project was Morgan Olson’s new 703-job delivery van assembly project in the community of Danville, Grundmann says. “The original plan projected that it would take three years for the operation to reach 703 employees. With Virginia Talent Accelerator Program support, Morgan Olson is on track to reach that milestone in half the time.” Some of the best opportunities for job creation involve smaller expansions of existing manufacturers, he says. For example, Modine Manufacturing Co. wanted to

in-house,” says Matt Niebur, Modine’s plant manager. “We’re getting excellent support, and that’s been a huge addition for us.” Grundmann notes that this program is just one of the tools in the toolkit for helping new companies. For one thing, the state benefits from highly ranked educational institutions. Plus, “job creation projects in Virginia have the opportunity to choose between the full-service Virginia Talent Accelerator Program and the grant-based Virginia Jobs Investment Program. Offering a choice like that is unique to Virginia and one of the innovative things we’re doing.” 2021 • 35

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THE “GREAT RESIGNATION” IS IMPACTING CORPORATE RELOCATIONS The remote working trend established during the pandemic has caused many employees to reprioritize their lives, while companies are reevaluating their location decisions.

“I

’m mad as hell and I’m not going to take it any-

more” declared the longtime news anchor Howard Beale in the 1975 film classic Network. A similar debate is raging across the world about the future of work, and there is a lot more at issue than how often to commute. The way of working that is emerging could alter the basic elements of our work life. • A whopping 65 percent of employees said they are looking for a new job, according to a PwC survey;

• And 88 percent of executives said their company is experiencing higher turnover than normal.1 Most businesses are struggling to fill open jobs. Many have raised wages and offered bonuses to no avail. What has resulted is an intense competition for talent.

A L o n g - Te r m S h o r t a g e o f W o r k e r s The new report by economic data and analytics firm Emsi | Burning Glass,2 highlights how the mass exodus of baby-boomers from the workforce, record low participation rates among the working-age population, and the lowest birth rates in U.S. history will all lead to a long-term shortage of workers. Already, businesses have begun offering higher wages, bonuses, and even offering remote work as an incentive to keep their workers from leaving. “The fact is, competition for talent is going to become brutal,” said Emsi Director of Staffing Product Ron Hetrick. “Businesses can no longer assume there will be enough people to go around. We are already starting to see substantial rises in wages as the market works to find the new equilibrium, along with production slowdowns from those companies that cannot find the talent.”3 The relationship between employer and prospective employee is being inverted, and that means reevaluating pay and benefits. The younger generation is more interested in the balance between the hours

By Susan Arledge, SIOR, ESRP Real Estate

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THE PANDEMIC HAS MADE one thing clear — where companies do business matters.

they spend at work and the hours they spend with friends and families. Strictly speaking, there isn’t actually a labor shortage — defined as not enough available workers to fill open jobs — because there are 9.5 million people classified as unemployed and looking for work, and there are 9.2 million job openings. It’s more a case of what employers have been calling “The Great Resignation,” as more employees switch jobs. Microsoft’s 2021 Work Trend Index found that 41 percent of the workforce is considering leaving their employer this year,4 with many looking for better pay and benefits, as well as more worker-friendly policies. This huge number of pandemic-exhausted employees has caused many to reprioritize their lives and leave their jobs.

G o n e t o Te x a s ( a n d F l o r i d a ) The pandemic has made one thing clear — where companies do business matters. It’s why a recent survey of CEOs by Chief Executive magazine shows that 44 percent are more open than before the pandemic to examining new locations for their business, and more than one third of CEOs are considering shifting or opening significant operations in a new state.5 Countless companies nationwide have already announced major decisions to relocate as they reassess everything from business costs, skyrocketing taxes, and regulations that will impact their talent attraction and retention. The quality of life in states like Texas

and Florida, and the ease of doing business there, effectively gives employees an immediate 11–13 percent pay increase because they’re not going to be paying California or New York State and New York City taxes. The prospects of a diverse talent pool, lower corporate and personal taxes, a cheaper cost of living, and lifestyle benefits in these two states are driving more executives to look south. As one executive said, it’s almost corporate malfeasance for a C-level executive at a Fortune 500 publicly traded company in San Francisco or New York not to be considering or studying a potential move. The CEO of FileTrail, an information risk management company, commented on his firm’s recent relocation to Austin: “My employees were constantly saying, ‘Look, my commute is horrible, and my rent is astronomical for what I’m getting,’ To be perfectly honest, I also told them, ‘I’m not going to pay you $400,000 per year so you can buy a house in Silicon Valley.’ So, we were really looking at improving their lives and moving somewhere where they could start accumulating assets.”6 Many tech startups were having trouble hiring in the San Francisco Bay area, so they have moved out or are allowing people to work from wherever they choose in order to improve their quality of life. People are realizing that a commute is mostly a disruption,

Continued on page 40

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HUDSONALPHA FINDS BIOTECH SUPPORT IN

HUNTSVILLE, ALABAMA Mary Shirley-Howell, Director of Business Recruitment

Aerial of HudsonAlpha Institute of Biotechnology Campus current buildings. Two additional buildings, 900 and 1000 Hudson Way, are not shown, but currently under construction.

HudsonAlpha Institute for Biotechnology 601 Genome Way Huntsville, AL 35806

here are many reasons Alabama is the place to go for growing your business. Numerous state and local initiatives focus on fostering innovation and development, promoting a conducive business climate, intentionally enhancing diversity, and funding workforce development training. Alabama is creating more high-tech, high-skilled jobs than ever before and bolstering their well-regarded workforce development programs to grow even stronger. Some of their primary resources are the workforce development agency, Alabama Industrial Development Training (AIDT), and an increased collaboration between the state’s commercial and education communities. Alabama Industrial Development Training (AIDT) is a workforce development agency that represents an increased collaboration between the state’s commercial and educational communities. All of this allows new businesses to receive individualized attention and benefits, such as pre-employment selection and training, leadership development, on-the-job training, and assessments. In addition to upskilling existing workers, the Alabama Innovation Commission seeks to retain new STEM graduates from the state’s 60 degree-granting institutions. “Increasingly, high-performing companies from around the world are discovering that Alabama offers a great business climate and a support system that includes top-flight job training services,” said Greg Canfield, secretary of the Alabama Department of Commerce.

In the Heart of a Biotech Innovation Region North Alabama, long known for its highly educated “rocket scientist” workforce, is steadily becoming the

256.327.9591 mshirleyhowell@hudsonalpha.org www.hudsonalpha.org/innovate

heart of a biotech innovation region stretching from Nashville to Atlanta to Birmingham. A key leader in this is HudsonAlpha Institute for Biotechnology, a life science business campus accelerating new therapeutics, medical devices, diagnostics, agricultural genomics, and other innovations to the marketplace by co-locating genomic R&D, workforce training, startups, and established bioscience enterprises. Today, over 1,000 people work on the HudsonAlpha campus, which is home to more than 45 biotech companies and the Institute’s nonprofit genomic research laboratories.

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NORTH ALABAMA, LONG KNOWN FOR ITS HIGHLY EDUCATED “ROCKET SCIENTIST” WORKFORCE, IS STEADILY BECOMING THE HEART OF A BIOTECH INNOVATION REGION.

HudsonAlpha: A Place for Collaboration The HudsonAlpha campus is designed to be a place of scientific advancement and collaboration. As an active part of Huntsville, the biggest and fastest-growing city in the state and one of the most lauded cities in the country, HudsonAlpha strengthens and diversifies the region’s economy and workforce. For their companies’ partnerships or the shipment of their products, HudsonAlpha and Huntsville position their organizations for success. Growing biotech businesses is part of HudsonAlpha’s mission. Learn more about how you can improve your competitive edge by locating your bioscience company on the HudsonAlpha campus. Reach out to learn more or schedule a visit to Huntsville — a top-10 tech town and 3rd best place to live in the U.S. according to US News & World Report in 2021-2022.

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Where Are the Top U.S. Cities for Remote Workers?

The “Great Resignation” Continued from page 37

and business travel is not like vacation travel. In late 2019, Florida signed legislation with the goal of making it the No. 1 state in the nation for workforce education by 2030. That timing was fortuitous — the pandemic put those efforts to the test immediately. The experience led to the “Get There Florida” initiative, a partnership with the state’s university and technical colleges to accelerate the time to completion of in-demand industry certifications, from advanced manufacturing and logistics to healthcare and information technology.

R e m o t e Wo r k Is Here to Stay Remote work, in some manner, is here to stay, as evidenced by the fact that large organizations are suddenly hiring for a new position that will change work life forever: “chief remote work officer” or “head of remote work.” Companies are looking at making future real estate decisions through a team of technology, human resources, and real estate executives, as remote work teams become the standard. Just as CFOs evolved from merely managing a company’s accounting to important executives who advance growth, chief human resource officers (CHROs) are evolving from payroll and employee benefits managers to Csuite advisors that are maximizing human capital to achieve better business outcomes. Disability insurance company

These markets are emerging as top locations, now that workers are accustomed to the flexibility that telework provides and the fact that onein-three jobs can be done remotely. By looking at housing affordability, access to natural amenities, access to urban amenities, and remote friendliness (a blend of resident satisfaction and the city’s historical ability to attract and retain remote workers), Apartment List identified the 10 best cities for remote workers.10 1 2 3 4 5 6 7 8 9 10

Provo, UT Ft. Collins, CO Boise, ID Raleigh, NC Tempe, AZ Austin, TX Beaverton, OR Denver, CO Asheville, NC Ann Arbor, MI

The top 10 includes three cities with populations of over 250,000 — Raleigh, Austin, and Denver. Apartment List says these cities were among the fastest risers before the pandemic because their tech economies offered cost-ofliving advantages over San Francisco, Seattle, New York City, and Boston. However, as more people move to Raleigh, Austin, and Denver, their costof-living advantage is deteriorating.

Breeze surveyed 1,000 Americans who are working or looking for work that can be done remotely asking what they would give up if their employer offered them fulltime remote work.7 The results showed that: • 15 percent would take a pay cut of 25 percent, which showcases how desirable full-time remote work remains, and how much workers are willing to give up for it. • 39 percent of workers would give up their health insurance benefits. • 46 percent would give up a quarter of their paid time off, and 15 percent would give up all their paid time off. • 53 percent would work an extra 10 hours per week. • 36 percent would give up their 401(k) or other retirement plan. • 52 percent would give up Netflix, Amazon, or their favorite streaming service for the next year. For now, workers seem to hold all the cards in negotiations with prospective employers, with quit rates high and labor shortages pushing up wages. However, there is also another side to this: Perhaps the most disturbing finding — Two-thirds of supervisors surveyed by the HR Knowledge Center at the Society of Human Resources Management said they considered remote employees “more easily replaceable” than onsite workers.8

Concern/Cost of E m p loye e Tu r n ove r I s Ve r y R e a l The average cost of employee turnover for a 150-person company is $921,865, and studies show 35 percent of current employees who are looking for new opportunities are seeking better compen-

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sation.9 That has HR leaders really concerned. Not only is wage pressure an issue, but employees are under pressure to perform. For example, many Amazon workers have spoken out about grueling conditions at warehouse locations and say they are under intense pressure to work faster. Packers at some Amazon warehouses are required to pack at a rate of 700 items per hour, and workers can be fired for missing rates. Pickers can be expected to always pick 400 units within an hour or within seven seconds from picking an item. Employees are tracked by a computer the entire time. Warehouse employers are responding to the worker shortage in a variety of ways. They are raising wages, offering signing bonuses and incentives, and even offering more flexibility in shifts and allowing paid time off to be taken in smaller increments than a day or half-day. Others are investing more in the employees already there, deploying warehouse labor management systems and also allowing robots to take on more of the work. For example, Pitney Bowes is installing automated parcel sorting systems from Ambi Robotics in its e-commerce hubs, which will help it increase sortation speeds and help current employees as labor costs rise. DHL is using more Locus Robotics assisted picking robots to bring items to human pickers, reducing the time employees spend walking and increasing the time they spend picking items. Robotics have partially eased the sting of labor shortages, but the fundamental driver of warehouse employment demand, in particular, is the e-commerce boom, and that is not going to change anytime soon.

https://www.pwc.com/us/en/library/pulse-survey/future-of-work.html https://www.economicmodeling.com/demographic-drought/ https://www.prweb.com/releases/new_emsi_study_historic_decline_ of_u_s_population_growth_is_leading_to_transformation_of_labor_markets_college_enrollment/prweb17913673.htm 4 https://www.forbes.com/sites/lucianapaulise/2021/07/21/the-great-resignation-microsoft-predicts-41-attrition/?sh=82f12a62d4d1 5 https://chiefexecutive.net/up-for-grabs-the-best-worst-states-for-business/ 6 https://www.wfaa.com/article/money/economy/the-cost-differencebetween-california-and-texas-explained/287-c9be70b2-561c-41f4-94ff579489be1a55 7 https://www.meetbreeze.com/blog/employees-give-up-benefits-salaryremain-remote/ 8 https://www.seattletimes.com/explore/careers/survey-most-managers-sayremote-workers-are-more-easily-replaceable/ 9 https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/ pages/turnover-tsunami-expected-once-pandemic-ends.aspx 10 https://www.apartmentlist.com/renter-life/best-cities-for-remote-workers

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ARKANSAS WORKFORCE FIT FOR THE FUTURE Eleven Future Fit program students graduated from SAU-Tech’s campus in 2020. Of these 11 graduates, each received a full-time job offer.

Arkansas Economic Development Commission

501-682-7306 info@arkansasedc.com https://www.arkansasedc.com

1 Commerce Way, Ste. 601 Little Rock, AR 72202

very day, manufacturing companies are hard at work in Arkansas, producing vital goods and materials that help power the global economy.

Manufacturing plays a major role in Arkansas’ economy, accounting for 14.93 percent of the state’s economic output, which totaled $19.56 billion in 2019, according to the National Association of Manufacturers (NAM).1 Manufacturing is also one of the largest industry employers in the state of Arkansas (and is the fifth-largest employer in the United States), according to the U.S. Census Bureau,2 employing approximately 148,000 Arkansans, or 11.84 percent of the state’s population. This sector provides high-paying roles for people across Arkansas, with an average annual compensation of $61,389.83.

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Despite its economic importance, the manufacturing industry is facing a workforce shortage across the United States. In the next decade, the industry will need to fill four million positions with highly skilled and technically advanced workers. According to a recent industry report from Deloitte, there are an average of 400,000 job postings per month in the manufacturing industry.3

Arkansas is already tackling this problem with a range of initiatives, including conducting meetings with local manufacturing companies to understand their needs and collaborating on workforce development programs. With local industry and educational partners, the Arkansas Economic Development Commission (AEDC) has developed a workforce development training course called Future Fit that aims to directly address the current and future needs of the manufacturing industry.

Future Fit is an industry-designed training program that was facilitated by AEDC and is delivered by local community colleges, which helps identify and place qualified individuals into well-paying, entry-level jobs with participating companies in Arkansas. With Future Fit, individuals complete in-classroom, hands-on, and online training that empowers them with the sought-after skills to begin entry-level employment. The program is designed to accommodate a wide range of potential employees, including high school graduates not planning to attend college, military veterans, unemployed or underemployed individuals, and non-violent offenders. While developing the program, AEDC conducted more than 1,800 face-to-face meetings with local Arkansas companies to determine their needs and found 10,000

THE AEDC HAS DEVELOPED A WORKFORCE DEVELOPMENT TRAINING COURSE CALLED FUTURE FIT THAT AIMS TO DIRECTLY ADDRESS THE CURRENT AND FUTURE NEEDS OF THE MANUFACTURING INDUSTRY. unfilled jobs. Of those unfilled jobs, 26.2 percent require no formal education, and 52.5 percent require a high school diploma or GED. Through Future Fit, individuals can learn the skills necessary to succeed in these manufacturing jobs through 120 hours of hands-on and online training. This program opens up opportunities for high-paying and stable jobs for Arkansas residents and a steady pipeline of workers for the state’s growing manufacturing industry. 1

https://www.nam.org/state-manufacturing-data/2021-arkansas-manufacturing-facts/ https://www.census.gov/library/stories/2020/10/manufacturing-still-among-top-fiveunited-states-employers.html 3 https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/energy-resources/ deloitte-nl-eri-2021-manufacturing-industry-outlook.pdf 2

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EMPLOYEES THRIVE HERE “ With a dedicated workforce, beautiful outdoors and low cost of living, Arkansas is hard to beat.” Annemarie Dillard Jazic, Vice President Dillard’s

To learn more about how inspiring Arkansas businesses are leading the way to a strong economy, visit ArkansasEDC.com/whyarkansas or scan to watch the video.

WORKFORCE DEVELOPMENT PROGRAMS ARE IN OVERDRIVE Job losses resulting from the pandemic have made upskilling of workers for the post-COVID economy even more critical, and government and private organizations are stepping up.

tates have always competed for new development projects and expansions to broaden their tax base and create good-paying jobs for their workers. Incentive packages typically include free workforce recruitment, training, and other support, as long as the companies hit their investment and employment goals. However, the COVID-19 has disrupted the U.S. economy, resulting in the loss of nearly 20 million jobs and the closure and bankruptcy of thousands of companies, while other businesses turned to Industry 4.0, such as automation and robotics, and invested in the communication technologies required for remote work to stay in operation. The COVID-19 pandemic has hurt every business sector and driven many employees to retire or quit.

This is especially hard on the manufacturing industry, where an enormous skills gap already exists. To create the most competitive labor pool, workforce development departments have brought technology to the forefront, especially for recruitment, training, and “upskilling” to different positions, or even entry into completely different industries. Some workforce development programs like Georgia Quick Start, LED FastStart, and AIDT have been around for years. But state workforce development departments — as well as private organizations — across the nation are now being even more creative and proactive in advancing the skills of workers to help them build rewarding careers in these challenging times.

Rapid Response Teams In light of the economic losses caused by the pandemic, Alabama’s Rapid Response Team moves quickly to assist companies and employees that have been negatively impacted by staff reductions or reduced operations. Team members visit with upper management and employees on site to provide advice on unemployment compensation, pension benefits, health insurance, and other job-seeking concerns, including training and upskilling to new positions. New Hampshire’s NH Works is a similar program that delivers early intervention re-employment services as quickly as possible, at no cost to the By Mark Crawford

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Launched in 2014, the U.S. Chamber of Commerce Foundation’s TALENT PIPELINE MANAGEMENT (TPM) program is active in 37 states.

businesses or employees who are suffering from layoffs and/or closings. The rapid-response team helps individuals design a plan for re-employment, including coursework and upskilling, and advises them on state and federal programs that can assist them during their transition.

C u s t o m i z e d Ta le n t P i p e l i n e s Launched in 2014, the U.S. Chamber of Commerce Foundation’s Talent Pipeline Management (TPM) program is active in 37 states.1 TPM helps companies build scalable, sustainable pipelines of skilled workers for their industries and collaborate with their educational/training partners on developing curriculum. “The TPM approach builds external pipelines — adequately preparing talent that has yet to walk through the door—as well as long-term strategies for backfilling, upskilling, career pathway development, and succession planning,” states the U.S. Chamber of Commerce. Businesses collaborate to manage these talent “supply chains” by projecting employment needs using real-time data and developing focused training solutions. In Kentucky, for example, “We continue to adjust to new information derived through TPM data and we have found ways to adapt our collaborative work to statewide initiatives,” says LaKisha Miller, TPM director for the state of Kentucky.2

frastructure to meet the challenges of the pandemic-reduced workforce and the growing skills gap. In Arizona, local and industry partners collaborated to launch Drive48, a 13,000-square-foot workforce training facility located at Central Arizona College. The Drive48 facility houses multiple assembly robots used for training technicians in programming, maintenance, problem solving, troubleshooting, safety, general system requirements, and more for the region’s booming automotive and advanced manufacturing industries. In Missouri, Ozarks Technical Community College is building a $40 million center for advanced manufacturing in Springfield, which will feature educational and training opportunities in robotics, fabrication, mechatronics, automation, and drafting and design. And LED FastStart in Louisiana has committed $1.2 million to build a 50,000-square-foot digital library at Grambling State University and strengthen local partnerships with leading advanced technology companies in the region.

P r i v a t e - S e c t o r Tr a i n i n g a n d D e v e lo p m e n t Up to 4.9 million low-wage U.S. workers may need to transition into higher-wage roles and develop new skills to remain employed in the digital

E x p a n d i n g E d u c a t i o n a l I n f r a s t r u c t u re States are building more training assets and in-

Continued on page 48

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GEORGIA IS A DRAW FOR TALENT

A versatile Georgia workforce is trained and ready to meet a variety of needs.

Georgia Department of Economic Development 75 Fifth St. NW, Suite 1200 Atlanta, Georgia 30308 404-962-4000 Georgia.org

rom top-ranking colleges and universities to Georgia Quick Start — the No. 1 workforce development program in the country — Georgia invests in preparing talent. Locate or expand here, and you’ll find a versatile Georgia workforce that can meet a variety of needs. With a labor force of 5.3 million out of a population of 10.7 million, Georgia is a draw for talent, ranking 6th in the nation for net migration from 2018–2019. The state has an especially strong talent pool in transportation and material moving (380,000 workers); production (315,000); and computer and mathematical occupations (nearly 150,000). Leading specialized-skills workers include avionics technicians, aircraft assemblers, tire builders, cooling and freezing equipment operators, and food scientists. Additionally, Georgia is home to 52,000 software developers and programmers; 21,000 computer and information analysts; and 44,000 engineers (6,000 industrial, 5,000 electrical, 2,500 aerospace). Businesses are also operating in an employment-at-will and right-to-work state, with low unionization. Georgia’s dedicated workforce continues to grow, thanks to its universities, technical colleges, and Georgia Quick Start program. Each year, Georgia’s 85 accredited public and private universities award more than 132,000 degrees and certificates. Home to two of the nation’s top public universities — Georgia Tech and the University of Georgia — and to two of the nation’s top five HBCUs — Spelman College and Morehouse College — the state is renowned for the strong and diverse talent produced here. Many students in Georgia benefit from the merit-based HOPE scholarship

program, which provides tuition assistance to students pursuing a certificate or diploma. Since its launch in 1993, HOPE has provided more than $12.6 billion in scholarships and grants for two million of Georgia’s top students. Through the Technical College System of Georgia, the HOPE Career Grant provides tuition-free training in 17 “high-demand” occupations.

“

GEORGIA’S DEDICATED WORKFORCE CONTINUES TO GROW, THANKS TO ITS UNIVERSITIES, TECHNICAL COLLEGES, AND GEORGIA QUICK START PROGRAM.

Georgia also offers Georgia Quick Start, the No. 1 training program in the United States. Founded 40+ years ago, more than one million employees have received training specific to the needs of the employer — evidence of Georgia’s ongoing partnership with companies in the state. Georgia’s industry-specific designated centers across the state meet business needs in advanced manufacturing, aviation, bioscience, cybersecurity, film, and fintech. The Technical College System of Georgia provides the training for free, and companies may use all materials for future in-house training. For businesses creating jobs or upgrading the skills of current employees in Georgia, it’s a win-win — better trained employees, higher productivity, and zero cost to the bottom line. For more on Georgia’s workforce, visit: georgia.org/competitive-advantages/workforce-education.

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EXE M P L A RY SERV I C E . EXCE P T I ON A L LY QUA L I F I ED.

Georgia.org/workforce

Workforce Development Programs Are in Overdrive Continued from page 45

economy, according to McKinsey.3 Thus, in early 2020, Coursera launched its Workforce Recovery Initiative to help governments respond to the unemployment crisis caused by the pandemic. To date, this program has supported displaced workers in more than 25 states by providing free access to thousands of online courses for skills training. In Tennessee, for example, through the Tennessee Department of Labor and Workforce Development (TDLWD)-Coursera partnership, thousands of Tennesseans have skilled up and returned to work. “Our work with the state of Tennessee has already helped thousands of hard-working citizens prepare for high-demand local jobs, including roles in IT support and contact tracing,” says Jeff Maggioncalda, Coursera CEO.4 Merit, which provides digital credential issuing, verification, and reporting for government agencies, launched its WorkNow program to assist states with their efforts to get millions of unemployed people back to work. By digitally tracking workers’ skills and credentials, workforce development leaders can be more effective in directing training resources toward programs and employee groups that will gain the most economic benefit. In a public-private development initiative, Back to Work Rhode Island has partnered with Google Cloud to create an online career platform that provides laid-off workers with the tools for finding jobs and being matched with meaningful career opportunities through a virtual career center. “Our collaboration with Google Cloud has married accessible technology with government innovation to train and connect workers with the resources they need to access indemand jobs,” says Sarah Blusiewicz,5 assistant director of workforce development for Rhode Island’s Department of Labor and Training.

U p s k i l l i n g To o l s a n d Te c h n o lo g i e s Reskilling, upskilling, and increased training will play an important part in the nation’s economic recovery. Business models have been severely disrupted, and employers are now forced to pivot and reallocate their workers into unfamiliar roles. Digital technologies and connectivity have become

essential tools for supporting and retraining displaced workers, as well as recruiting them. In Wisconsin, the Workforce Solutions Initiative includes the launch of a virtual career center and a mobile career lab, which delivers workforce-related services throughout the state. Virginia’s Talent Accelerator Program provides technology-based training and recruitment solutions that are fully customized to a company’s unique operations, including simulations, broadcast-quality videos, illustrated work instructions, instructor-led classroom sessions, animations, and e-learning modules. JumpStartAL, a private-public partnership in Alabama, uses virtual reality (VR) training solutions from job simulator TRANSFRVR to provide new education and training programs that are accessed remotely. “The initiative will highlight career paths needed for Alabama to meet its goal to increase its workforce by 500,000 highly skilled workers by 2025,” according to state sources.6

M o v i n g Fo r w a rd w i t h W I N To mitigate the dire impacts from COVID-19, the National Governors Association (NGA), with founding sponsorship from the Cognization Foundation, launched the Workforce Innovation Network (WIN) to help states recover from the pandemic. Launched in January 2021, the objective of WIN is to secure assistance for displaced workers and affected businesses, while building new frameworks and interventions to support a more equitable economic recovery. “As governors lead efforts to promote equitable and forward-looking economic recovery in their states and territories, the Workforce Innovation Network helps facilitate innovative state-level policy solutions that improve employment and workforce outcomes,” says the NGA.7 WIN provides funding to help states build capacity for near-term innovation and longer-term strategies to prepare their workforces for a post-COVID-19 economy. WIN plans to focus on four areas: expanding access to essential support services, rapidly connecting job-seekers to work, advancing digital access and skill development, and enhancing job quality for all workers. To join WIN and receive grants to undertake this work, states must submit detailed proposals about how they will create new virtual service delivery

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Up to 4.9 million low-wage U.S. workers may need to transition into higher-wage roles and DEVELOP NEW SKILLS to remain employed in the digital economy, according to McKinsey.

platforms, digital inclusion and skill development strategies, and equitable access to high-quality work opportunities via the adoption of new state job quality and self-sufficiency standards. States that have joined WIN so far include Alabama, Arizona, Colorado, Hawaii, Illinois, Maine, Missouri, New Mexico, Nevada, and Washington. As transformation accelerates, partnerships will become more critical, says Kevin Mills, head of Government Partnerships at Coursera.8 Workforce agencies and employers need to work closely to anchor training initiatives to high-demand skills, as well as provide direct pathways to job placement. Aggregating and using real-time progression and outcomes data will help workforce development agencies personalize career exploration, reskilling, and job placement for unemployed workers.

“Workforce development programs will be key to increasing equitable participation in the digital economy,” Mills says. “Collaboration among workforce development agencies, educators, and employers will be critical to level the playing field for workers and unlock economic opportunity for communities across the country.”

https://www.uschamberfoundation.org/sites/default/files/2020USCCF_ TPMUpskillReport.pdf https://www.kychamber.com/news/2021/06/09/united-we-stand-kentuckyssignature-industries-team-talent-pipeline-management 3 https://www.businesswire.com/news/home/20210609005235/en/CourseraGlobal-Skills-Report-2021-Finds-US-Behind-in-Digital-Skills-Ranked-29th-Globally 4 https://www.tn.gov/workforce/general-resources/news/2021/4/8/tennesseeoffers-free-online-courses-to-advance-careers.html 5 https://www.googlecloudpresscorner.com/2021-03-01-State-of-Rhode-IslandPartners-with-Google-Cloud-to-Reimagine-the-Future-of-Workforce-Development 6 https://www.birminghamtimes.com/2020/07/jumpstartal-launches-innovative-workforce-initiative-in-alabama/ 7 https://www.nga.org/news/press-releases/national-governors-association-cognizantu-s-foundation-launch-workforce-innovation-network-to-support-a-robust-equitablerecovery/ 8 https://www.nawb.org/modernizing-workforce-development-programs 2

Site and Facility Planning E-mail Newsletter This Week Area Development editors aggregate the most industry-relevant site and facility planning features and commentary from the best sources around the web. Also included is a roundup of the most important news items from the Area Development Online News Desk.

The Insider Exclusive online content including the latest industry-wide studies and research as well as features from Area Development magazine focusing on all aspects of site and facility planning.

Delivering What the Others Don’t For more information or to sign up, go to

www.areadevelopment.com/newsletter 2021 • 49

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IOWA’S

SKILLED WORKFORCE CREATES OPPORTUNITY FOR SUCCESS Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 USA

s industry leaders contend with headwinds from an evolving business landscape and shifts in workforce readiness and availability, innovative solutions are necessary to mitigate these challenges and realize sustained growth. With a deep understanding of the needs of today’s business leaders, Iowa presents an attractive option for relocation or expansion. Ripe for new opportunities, cities across the state are home to a skilled workforce that fuels a commitment to innovation. And with dynamic communities, business-friendly regulations, efficient infrastructure, and extensive workforce training programs, Iowa stands ready to take your business to the next level.

Investment in the Future Fuels Fast Growth In Council Bluffs, you’ll find no shortage of transformative placemaking projects and collaborative programs designed to meet the region’s current and future talent needs. This includes partnerships with the city, county, local organizations, school districts, and Iowa Western Community College, in addition to collective resource groups, which allow for quick action. The community is ready to accelerate entrepreneurship, grow businesses, and more. Visit councilbluffsiowa.com for more information. The city of Norwalk has grown 43 percent in the last 10 years due to its top-ranked school districts, available commercial land, and new home construction — all of which have proven attractive to its workforce. This very workforce has helped Norwalk achieve a markedly low business turnover rate and reinvest significantly back into the community, cementing Norwalk as one of the fastest-growing areas in the Des Moines metro. Learn more at norwalk.iowa.gov.

With a deep understanding of the needs of today’s business leaders, the state of Iowa presents an attractive option for relocation or expansion.

515.348.6200 opportunities@iowaeda.com www.iowaeda.com

Prime Locations Provide Connections to the World The Quad Cities is an attractive option for leaders looking for an accessible location and booming economy. Creative energy, homegrown businesses, and legacy companies shape a region that’s both down to earth and inspired by innovation. The forward-thinking communities lie along the mighty Mississippi River, a vital part of Iowa’s infrastructure. The five largest industries providing employment and training opportunities include manufacturing, agricultural innovation, corporate operations, defense, and logistics. Discover more at quadcitieschamber.com.

“

IOWA STANDS READY TO TAKE YOUR BUSINESS TO THE NEXT LEVEL.

In central Iowa, Grinnell continues to attract innovators and thought leaders, thanks to its low cost of living, central geographic location, and innovative contributions from its world-renowned liberal arts college. The community prides itself on keeping its talent pool at home, retaining graduates from a world-class education, which means more motivated laborers, lower startup and training costs, a shorter training period, and homegrown pride in quality and productivity. Visit grinnelliowa.gov for more info. Iowa is committed to investing in the men and women who fuel the economy by providing the skills and opportunities they need to excel in their fields. Considering relocation or expansion? Find out how Iowa’s workforce can benefit your business at IowaEDA.com.

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READY TO EXPAND OR RELOCATE YOUR BUSINESS? Iowa is the perfect place. Ripe for new opportunities, cities across the state are home to a skilled workforce that fuels our commitment to innovation. In Council Bluffs, you’ll find transformative placemaking projects and collaborative programs designed to meet the region’s current and future talent needs. Norwalk, which has grown 43% in the last 10 years, is primed for your next big expansion project with its low business turnover rate and readily available labor force. The Quad Cities is an ideal balance, where residents appreciate a great life outside of work and industry leaders value the highly skilled manufacturing workforce and accessible location. And Grinnell continues to attract innovators and thought leaders thanks to its low cost of living, growing economy and innovative contributions from its world-renowned liberal arts college. With forward-thinking communities, businessfriendly regulations and innovative training programs that refine our strong work ethic, Iowa is ready to take your business to the next level.

iowaeda.com

advancesouthwestiowa.com

norwalk.iowa.gov

quadcitieschamber.com

grinnelliowa.gov

ADAPTING TO AGILITY: LEVERAGING A “HUB AND SPOKE” MODEL As a company’s workforce becomes more dispersed, they need to rethink not only how they support those employees but also the physical footprint of their business.

s businesses navigate a new world following the global pandemic, most will need to adapt to a more agile workplace. An overarching

HUB AND SPOKE OFFICE Satellite Office

result of the pandemic was the population diffusion of city centers. As COVID cases continue to affect our society, a return to downtown metro areas has been slow and methodical. This shift is leading many companies to reconsider and evaluate the hub and spoke model MODEL across their business footprint.

The “Hub and Spoke” Model

Home Office

Satellite Office

Centralized Office

Shared Service Office

As population shifts away from major “hub” markets, businesses and real estate developers are reimagining how to help people work. A hub and spoke model of centralized offices (hubs) downtown and satellite offices (spokes) in the surrounding areas is not a new concept. What’s changed is the demand for “spoke” offices and the definition of what a “spoke” can be.

“ S p o k e s ” o f t h e Fu t u re

Satellite Office

The availability of affordable technology for every person to own and use within their home has made high-level, productive remote work possible. As remote workers now enjoy a similar

By D avid Hickey and Guy Douetil, Managing Directors, Hickey and Associates 52 • WORKFORCE

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BUSINESSES AND EMPLOYEES are both reaping the rewards of a more agile, dispersed workforce and workplace.

degree of “business infrastructure” historically only available at company offices, an opportunity to innovate where and how we work has arrived.

T h e N ew H y b r i d Wo r k M o d e l A dispersed workforce and the resulting demand for agility has created an immediate need for businesses to rethink how they support their workers. Working from home or the office is no longer a binary decision. Now, remote work can mean from home, a shared service office (spoke), a company provided satellite office (spoke), or a combination of the like.

Shared Benefits Businesses and employees are both reaping the rewards of a more agile, dispersed workforce and workplace. Individuals have enjoyed significant work/ life balance improvements. Commute times have decreased on average by one and a half hours a day, which means significant cost savings on transportation, food, maintenance, and other related expenses. More importantly, as stated, the ability for people to choose where and how they work has provided a better work/life balance. Businesses that have embraced agility are realizing the benefits as well. Reduced real estate cost, improved staff retention/attraction, and additional flexibility allow for a more sustainable business model. Let’s not overlook the importance of staff retention and attraction. Cost of real estate is nothing compared to the cost of high turnover or the need to outsource recruiters and staffing agencies to fill jobs.

N o n t ra d i t i o n a l Wo r k s p a ce s and the Service Office Boom Smart companies are those that are open and able to adapt as markets and times change. One trend that early adopters of the hybrid hub and spoke model are moving toward is the use of defunct shopping centers. The trend of re-adapting shopping malls and strip centers as offices is driven by developers because people exist in those areas who can support the economic needs of the business, including having

the demographics surrounding these areas to provide workers. Repurposing desolate shopping centers as shared service offices and “last mile” fulfillment centers allows businesses to go where people already live, utilize existing real estate in a tight market, and better position themselves in a dynamic and difficult supply chain logistics environment.

Feasibility Not all markets are suitable for hub and spoke models. Hickey and Associates, in conjunction with Instant Group,1 has developed a propensity model to determine which mega cities around the world are most hospitable for satellite offices. The following attributes were found to be the main determinants: • Commute time – 30% • Share of population age 35+ – 20% • Median household income – 20% • Total employment by selected occupation – 15% • Concentration of employment by selected occupation – 15% A hub and spoke model is not the right answer for all markets, but large markets that experienced drastic, “overnight” changes in population density due to the pandemic are prime candidates for adopting a workplace model that mirrors the how and why of the new workforce.

To p 5 P r i o r i t i e s A c c o r d i n g t o Corporate Real Estate Executives As workforce trends change, so do real estate portfolios. Prioritizing location strategy that can meet labor demands now, and in the future, has led corporate real estate executives to focus on the following: 1. A lign CRE outcomes with corporate strategy — Increase agility, decrease cost, increase employee engagement and productivity. 2. Understand your demographics — What demographics and roles already exist within your workforce? 3. Review the geographical footprint of your workforce — How might this change in the future?

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4. Map out the function locations your current portfolio supports — Where do the gaps exist? 5. Build out your future portfolio — Focus on your people and the business needs.

Upskilling Contrary to popular belief, enhanced unemployment is not the main reason businesses are finding it difficult to fill low-level positions. Many people used quarantine to their advantage by training for better jobs and taking the “leap” into new professions that time and money constraints would have made riskier in the past. Automation is the future, and the future is here. Physically tedious positions such as warehouse sorters, grocery packers for delivery, and even flipping French fries at a fast-food restaurant have already or will soon be replaced with AI-enabled robotics. Companies need workers that have skills for the future, now. Developing an agile, upskilled workforce for the jobs of today and “tomorrow” is the next great

challenge for businesses.

Moving Forward As of now, businesses are still working to navigate the future of their workplace coming out of the pandemic. Some expect workers back to the city center office. Some have fully embraced work-from-home and remote work. Some are offering a truly hybrid option of all the above. No one knows just yet how to perfectly adapt with our new normal of agile, dispersed labor markets. What we do know is embracing what works, where it works, and how it works can be supported with detailed data, indexing, and analytics. By leveraging strategic tools and innovative thinking, smart companies will discover the optimal solutions that are the best fit for the business, along with its workforce.

https://www.hickeyandassociates.com/hickey-and-the-instant-group-released-jointreport-on-the-future-of-the-office/

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TENNESSEE IS

LEADING THE CHARGE WE’RE POWERING A NEW ERA OF AUTOMOTIVE MANUFACTURING TENNESSEE WILL SOON BE HOME TO FORD’S BLUE OVAL CITY—THE LARGEST, MOST ADVANCED, AND MOST EFFICIENT AUTOMOTIVE PRODUCTION CAMPUS IN ITS 118-YEAR HISTORY.

welcome to tennessee

MISSOURI

TAKES WORKFORCE DEVELOPMENT SERIOUSLY

Kristie Davis, Director

OTC’s Plaster Center for Advanced Manufacturing in Springfield, MO, will serve as a regional hub for advanced manufacturing and technology-related education and training.

Missouri One Start

P.O. Box 478 301 W. High Street Jefferson City, MO 65102

issouri One Start, the state’s workforce recruitment, training, and upskilling division, continues to gain in popularity among companies looking to build or maintain their workforce. A well-established program, it has trained more than 815,000 workers and assisted over 7,000 companies to date. In spite of the disruptions of the COVID-19 pandemic, it trained 47,000 employees across 234 companies in 2020. One Start’s programs are highly flexible and are designed to work in lock-step with eligible companies to address their unique workforce challenges. Companies within the program can choose to utilize training funds via One Start’s network of community colleges and tech schools, or they can utilize industry or in-house experts, either at their facility or via an industry-recognized training facility. Recruitment services are understandably popular. One Start’s branded recruitment is now one of the program’s most requested offerings. Since the spring of 2020, they’ve been providing services similar to an ad agency. One Start develops a custom microsite branded to each company, and then promotes the job openings with paid social media, reaching potential employees within a radius of the business’s location. These microsites create a two-click path that knocks down barriers that might otherwise frustrate applicants or prevent them from applying. Graphics, copy, media plan, and an analytics report are provided free-ofcharge to eligible companies in One Start’s program. The fact that Missouri takes workforce development seriously can be seen in the expansions of One Start’s partner community colleges and tech schools’ cen-

573-526-9239 MissouriOneStart.com

ters of excellence across the state. Ozarks Technical Community College’s 120,000-square-foot Robert W. Plaster Center for Advanced Manufacturing, Kansas City’s Metropolitan Community College renovation of its 101,108-square-foot Advanced Skills Institute, and State Fair Community College’s 38,500-square-foot Olen Howard Workforce Innovation Center in Sedalia all speak to the commitment of the state in creating a future-forward pipeline of talent.

“

ONE START’S PROGRAMS ARE HIGHLY FLEXIBLE AND ARE DESIGNED TO WORK IN LOCK-STEP WITH ELIGIBLE COMPANIES TO ADDRESS THEIR UNIQUE WORKFORCE CHALLENGES.

Rounding out that pipeline is Apprenticeship Missouri, ranked #2 in the nation for completed apprenticeships. Missouri Apprentice Connect provides a free portal to match Missourians with opportunities and businesses with the apprenticeship program. Since launch, the Missouri Chamber Foundation was awarded a $6 million grant from the U.S. Department of Labor to create nearly 5,300 tech industry apprenticeships. The Show-Me State continues to demonstrate its commitment to a skilled workforce. With a myriad of programs and opportunities available, it’s easy to see why businesses in Missouri continue to be recognized on Fortune’s list of best companies to work for and why the state continues to see hundreds of millions of dollars in investments.

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A Division of the Missouri Department of Economic Development

LABOR CHALLENGES IN THE INDUSTRIAL AND MANUFACTURING SECTORS PERSIST Despite an improving economy, businesses are continuing to face obstacles in finding, training, and retaining enough qualified workers.

s the U.S. economy emerges from the 2020 recession, the U.S. labor market remains an area of concern for occupiers, investors, and the commercial real estate industry. The impact of the pandemic on the labor market has

been sharp and severe, especially within urban areas. Although the economy is now well on its way to recovery, significant challenges remain, including labor supply-demand imbalances and a drop in labor force participation.

Industrial Jobs Recovery K-Shaped Employment in industrial subsectors (ths.) and position relative to pre-pandemic peak Non E-Commerce: 89.7% of all industrial jobs Transportation ex. Final Mile

-2.9% 12,500

1,400

-3.0%

1,300

900 800 Jul-21

10,500

1,000

Jul-21

May-21

Mar-21

Jan-21

Nov-20

Sep-20

Jul-20

May-20

Jan-20

3,000

Mar-20

-7.4%

11,000

May-21

3,500

+16.8%

Mar-21

4,000

1,100

Jan-21

11,500

1,200

Nov-20

4,500

Sep-20

12,000

5,000

+10.7%

Jul-20

5,500

Final Mile

1,500

May-20

6,000

Mar-20

13,000

Warehousing 1,600

Jan-20

6,500

Wholesale Manufacturing (RHS)

E-Commerce: 10.3% of all industrial jobs

Source: U.S Bureau of Labor Statistics

By C arolyn Salzer, Director, Americas Head of Industrial Research, Logistics & Industrial Services, Cushman & Wakefield 58 • WORKFORCE

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THE IMPACT OF THE PANDEMIC on the labor market has been sharp and severe, especially within urban areas.

A Constant Pain Point With unemployment benefits having ended for millions of Americans on September 5, it remains to be seen how labor markets will respond. The COVID-19 pandemic sparked the acceleration of e-commerce/ online shopping demand, which drove a greater need for space in the industrial real estate world. This acceleration also brought about labor challenges for the industrial and manufacturing sectors. Though it’s been an issue throughout the current expansion, finding, training, and retaining an efficient industrial workforce remains a constant pain point for most distributors and manufacturers. At the end of the summer, warehouse employment reached a new high after a months-long dip, but companies are still scrambling to keep pace with demand. There were 1.44 million workers in the warehouse and storage industry in July, according to the Bureau of Labor Statistics (BLS).1 This surpassed the previous record high set in November 2020 and is the third consecutive month employment in the sector has grown. Even with the surge in employment, many companies continue to face hiring obstacles today. Factors such as substantial unemployment benefits continuing in most states, lack of affordable childcare, school closures due to exposure, and constant pandemic-related health concerns have made staffing warehouses and manufacturing facilities more difficult. As e-commerce has become more prominent, its seasonal influence on hiring patterns throughout the year has followed suit. Seasonal demand for workers has become more acute during the holiday period, with November to January being the most impacted. This also has resulted in a greater number of seasonal layoffs during the spring, with April to June most prominent. Occupiers who are trying to attract talent in warehousing/final mile — whether e-commerce related or not — will find certain months of the year to be more challenging than others. For these reasons, retention will be critical.

Tro u b le s F i l l i n g E n t r y - L eve l R o le s Despite high unemployment rates brought on by the pandemic, manufacturers are also having trouble filling entry-level roles. Between December 2020

and February 2021, The Manufacturing Institute and Deloitte surveyed over 800 U.S. manufacturers about hiring. They found manufacturers are having trouble filling 46 percent of open positions due to a mismatch in skills2 — a 12 percent increase over the 2018 survey. This is believed to be caused by competition in the warehouse/distribution sector and by automation. Manufacturers would benefit by beginning to look to tech and automation as not just replacing workers but creating new jobs and programs that are better for workers and higher-paying. U.S. manufacturers need to prioritize retraining programs, access to STEM education, and training on vocational/trade skills if they want to attract labor to their industry. With the holiday season just around the corner, it will become increasingly difficult to find seasonal workers as well as to retain top talent among companies. With the pandemic still impacting the country, online shopping is likely to be popular again this year. Demand may require temporary labor to manage the influx of orders. Solving for the immediate need is the priority, but as seasonal demands turn into longer stretches of time throughout the year, a more strategic approach may be warranted. Companies with warehousing needs are responding to the shortage in a variety of ways. One of the top ways is increasing hourly pay. The preliminary average hourly earnings in the industry were $22.47 in June 2021, up from $21.99 in March, according to the BLS.3 The Wall Street Journal recently reported that logistics executives were increasing wages for e-commerce workers, jumping from between $13 to $15 an hour in recent years to as much as $19 an hour in some markets, led by the sector’s biggest operators.4 Another approach to solving labor challenges is to consider automation and robotics to supplement the labor force. Sorting systems in e-commerce hubs can increase sortation speeds and help current employees more easily complete tasks. Though it can be an effective solution, the capital investment is large. In MHI’s annual report with Deloitte, the percentage of supply chain and manufacturing leaders reporting they were using automation and robotics was 38 percent in 2021,5 slightly higher than 35 percent of 2021 • 59

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respondents in 2016. However, robotics was also one of the top three areas respondents were increasing investment in. Robotics have partially eased the sting of labor shortages, but many tasks still cannot be completed by a robot. So how can warehousing and manufacturing companies work to retain their workforce and attract new hires to meet their ever-evolving needs? Share knowledge. Consider forming an informal group of human resources and operations managers among other local employers to discuss successful

strategies for effective worker recruiting and retention. Ensure periodic and ongoing conversations with operations, facility management, HR, IT, and other stakeholders at the facility and corporate level to discuss future plans for operational improvements, automation, or anticipated changes in workforce requirements. Diversify the labor pool. Consider potential worker pools in the community that remain untapped. The majority of industrial, warehousing, and manufacturing jobs are filled by men. There is potential to attract more women to the workforce by adjusting hiring

LEHIGH VALLEY FILLING THE TALENT PIPELINE

George Lewis Vice President of Marketing, Communications, and Research

Lehigh Valley, Pa., is making advancements in workforce and talent-supply needs through an innovative coalition of business, education, and community leaders that is helping employers attract and retain the talent they need.

Lehigh Valley Economic Development Corporation 2158 Avenue C, Suite 200 Bethlehem, PA 18017

mployers need the right talent. This has become the primary focus of smart economic development. The Lehigh Valley, a two-county region in eastern Pennsylvania, understood the shift toward attracting and retaining talent early on, and took action. The Lehigh Valley Economic Development Corporation, which has a history of building partnerships, brought together business, education, and community leaders to create an Education and Talent Supply Council in 2015. Its goal is to identify regional talent gaps and implement strategies that direct people to high-demand careers and make sure they are prepared to succeed in those jobs. This unique coalition works to ensure the Lehigh Valley has a strong talent pipeline between employers and the region’s education system, from K-12 to colleges and universities, including Lehigh University and Lafay-

610-266-6775 glewis@lehighvalley.org www.lehighvalley.org www.lvmadepossible.com

ette College, Northampton Community College, and Lehigh Carbon Community College. This fall, the council is completing its third comprehensive assessment of the Lehigh Valley’s talent market. The study, funded by the Commonwealth of Pennsylvania, identifies and assesses regional strategies, evaluates talent market changes resulting from COVID-19, and spurs action. In six years, the coalition has accomplished significant advancements in skills training, internships, and career pathways. This progress has been driven by research and focused on specific regional needs. They include an annual program to help employers start or expand internship programs, publication of career pathway resource guides directing secondary school students toward high-demand jobs, and a regional branding campaign to attract top talent: Made Possible in Lehigh Valley.

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practices and addressing other challenges that deter women from applying for these jobs. Invest in training and education. Proper training is a necessity for developing efficient and savvy workers. It is extremely important that new hires be trained properly from the start. Retention could also be improved if workers have opportunities to take classes or complete courses that prepare them for advancement within the company. Provide family-oriented benefits. As children have returned to school or daycare, there are still frequent outbreaks and situations where children need to be sent home or quarantined due to the pandemic. There is a strong possibility that workers may be supporting school-age children with virtual learning or may not have access to childcare or family/eldercare options, limiting their ability to go to an on-site job or to work the hours required. Offering flexibility in schedules and potential childcare options could be a differentiator in attracting labor.

LVEDC | 7" X 5" | LVE2766 LIFE SCIENCES CAMPAIGN – PRINT AD

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Enable facility access/transportation. Before the boom of e-commerce, many large warehouses or manufacturing plants were traditionally in locations requiring a commute by car. Now it is essential for most companies to have an infill/last mile location for fulfillment in large metro areas. Shuttles, carpooling options, or access to public transit can make the commute easier and more appealing for workers. The pressures on the industrial labor markets are real and lasting, and while there are many potential solutions and paths forward, the reality is that many companies are going to struggle to fill roles in the short- and medium-terms. The most successful firms will look at the problem holistically and be proactive with a range of strategies and tactics that compensate for the workplace challenges.

https://www.bls.gov/iag/tgs/iag493.htm https://www.supplychaindive.com/news/manufacturing-labor-employment-hiringshortage-factory-deloitte/599949/ 3 https://www.supplychaindive.com/news/warehouse-employment-robotics-laborautomation-jobs/604920/ 4 https://www.wsj.com/articles/logistics-operators-raise-pay-enlist-robots-to-meetholiday-demand-11632657600#:~:text=Wages%20for%20e%2Dcommerce%20 workers,by%20the%20sector’s%20biggest%20operators 5 https://locusrobotics.com/wp-content/uploads/MHI-Annual-Industry-report-2021.pdf 2

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TALENT-BASED LOCATION STRATEGIES Today’s highly competitive market for technical talent is leading many companies to consider entering lesser-known geographies where they can find more accessible pools of high-quality and cost-effective talent in a lower-risk hiring environment.

s the U.S. economy continues its recovery from the impacts of the COVID-19 pandemic, employers are encountering an increasingly difficult talent landscape fraught with challenges related to the attraction and retention of the talent upon which their business relies. This is particularly true for the most advanced technical job roles. Amid this environment, companies are relying on their site selection consultants to develop talent-

based location strategies that help ameliorate these challenges. Utilizing market data in more creative ways can help companies gain competitive advantage by identifying new pools of accessible technical talent. The current situation in the U.S. has been coined the “Great Resignation” as turnover rates are spiking for all positions across different industries and skill sets. The tightening of the labor supply coupled with increased demand for new hiring across the economy is creating serious challenges for companies as they look to increase headcount or at least replace employees lost to attrition. Oversaturated labor market conditions for tech talent are no longer found only in the most established tech hubs (e.g., Bay Area, Seattle, New York, etc.) but most of the second-tier talent markets (e.g., Atlanta, Austin, Denver, etc.) are also finding that the demand for tech talent is outpacing supply as larger companies dramatically increase their hiring in these once emerging geographies. However, the pandemic’s effect of loosening the hold of geography on companies’ talent acquisition is also creating new opportunities for employers to test and tap into lesser-known pools of quality, cost-effective talent in less competitive environments. The top questions we’re currently receiving from our tech clients (or companies in other industry verticals hiring technical talent) reflect this current situation.

By C hris Volney, Senior Director, CBRE Labor Analytics 62 • WORKFORCE

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UTILIZING MARKET DATA in more creative ways can help companies gain competitive advantage by identifying new pools of ACCESSIBLE TECHNICAL TALENT.

relationship and client’s unique competitive positioning)

Ta l e n t S u p p l y What We’re Being Asked • Can we identify multiple “under-the-radar” markets with smaller pools of high-quality talent? • Will candidates in the candidate markets possess the specific technical skill sets necessary to be successful at our company? • Where has tech talent migrated to since the pandemic began? • How is increased remote work (and hiring) affecting local labor market dynamics? • How can new talent markets help advance our diversity, equity, and inclusion goals? • Where can we find lower cost talent while maintaining candidate quality and limiting risk from future wage inflation? • How can we reduce risk from employee turnover? • Which markets will limit turnover risk? To answer these questions, site selection consultants are utilizing real-time, historical, and forwardlooking data to uncover less competitive high-quality markets where clients can establish themselves as an “employer of choice” and better position themselves to access and retain top technical talent. To identify these talent pools, consultants are using a variety of data sets that generally fit into three primary categories: • Talent supply (availability and quality) • Talent cost (current costs and historical wage inflation) • Competitive environment (supply vs. demand

Talent supply generally refers to the assessment of the total availability, specialization, and quality of the labor pool in a market. To understand which markets will provide the best match for our clients’ targeted talent profiles we assess multiple factors including: • Talent depth + density: This is not just the total depth of the talent pool for the targeted job titles (e.g., software engineer, data scientist, etc.) but also the density (per 10,000 labor force) of that talent to highlight a market’s relative specialization. • Skill set specialization: Understanding the depth of talent pool based only on occupational categories fails to paint a full picture of the market’s alignment with a client’s preferred talent base. Because of this, we’re also comparing markets based on the presence and specialization among key skill sets such as programming languages (e.g., C++, Python) and other specialized technical skills (e.g., AI, data analytics, cybersecurity). • Growth forecasts: Historical views and future forecasts of talent pool growth by occupation and skill set help us form a view on the likely future supply growth of a candidate market and the client’s ability to scale headcount there. • In-migration: While the migration of talent has received a large amount of media attention since the pandemic’s onset, most markets have not seen major changes in the talent supply based on migration alone. With that said, monitoring the migration of tech talent by age and years of experience does help uncover new opportunities for our clients. • Talent pipeline: The creation of new talent as

Continued on page 66

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THE FUTURE OF BIOSCIENCE IS IN

PUERTO RICO Pharmaceuticals facility in Puerto Rico

Michael P. Gay, CEcD Chief Business Development Officer

Invest Puerto Rico

he onset of the pandemic exposed the vulnerability of the U.S. pharma supply chain and its reliance on life-critical medical devices and pharmaceuticals manufactured in China and other countries. For this reason, Invest Puerto Rico, the island’s economic development organization whose mission is to attract new business and capital investment, determined a need to prioritize the bioscience space during these times. As part of the United States, goods manufactured on the island are considered Made in USA, positioning Puerto Rico as a viable option to secure the nation’s life-critical supply chains. This is one of many competitive advantages that InvestPR looks to promote to drive the successful relocation to Puerto Rico of pharma companies looking for business opportunities in the sector.

“

Puerto Rico is uniquely positioned to lead the way in the bioscience sector. Real estate on the island offers companies access to move-in-ready properties with industry support to enable them to design, retrofit or build new world-class customized life science facilities. Architects, designers, engineers, developers, plant managers, and contract manufacturing operations cater to the needs of global life science researchers and manufacturers. Together with their bioscience talent and expertise, businesses like these provide cost-effective services, making Puerto Rico the most competitive location in the U.S.

+1 (787) 966-7642 info@investpr.org www.investpr.org

Supporting this is Puerto Rico’s logistics infrastructure, which acts as a launchpad from which manufacturers can transport goods worldwide. Strategically located in the Caribbean, Puerto Rico’s three international air transshipment hubs, 11 seaports, and 11 regional airports allow manufacturers and service exporters to take advantage of the island’s benefits. Major global logistics companies have invested millions in strengthening Puerto Rico’s cold storage facilities, located strategically across the island and adjacent to the international airport in San Juan. These investments further solidify Puerto Rico’s market leadership position, providing the necessary features and services to help manufacturers grow.

REAL ESTATE IN PUERTO RICO OFFERS COMPANIES ACCESS TO MOVE-INREADY PROPERTIES WITH INDUSTRY SUPPORT TO ENABLE THEM TO DESIGN, RETROFIT OR BUILD NEW WORLD-CLASS CUSTOMIZED LIFE SCIENCE FACILITIES. Puerto Rico’s bioscience expertise, combined with its unique assets — from available real estate to a talented, bilingual workforce to a business-friendly ecosystem under a familiar U.S. playing field and advanced infrastructure — make it primed to support innovation and leadership in the sector.

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Talent-Based Continued from page 63

measured by the university graduate pipeline is often a much more meaningful driver of talent supply growth over the long term than in-migration. Understanding the size and specialization of a market’s graduate pipeline by degree program can help predict the future trajectory of a market’s growth.

• Talent supply vs. demand: Measured in the form of professionals per job posting, this ratio compares the total pool of qualified candidates versus the number of unique active job postings hiring for the same talent profiles (occupations and skill sets) and helps to understand a company’s potential hiring risk in a candidate market.

• Diversity, equity, and inclusion: Clients are increasingly interested in measuring how a market is positioned to advance their goals around creating a workforce that is racially and ethnically diverse, has improved gender representation, and is located in a city and state whose laws and policies create an equitable and inclusive environment.

• Turnover/company tenure: Two measures that help to highlight the real-time competitive environment in the market are annual turnover rates by job title/skill set and a market’s average company tenure rate for those same roles. This helps to measure the current demonstrated attrition risk in a market.

Ta le n t C o s t The cost of talent is often not the primary driver for our clients as they seek to identify new pools of high-quality technical talent. Supply and quality tend to come first in the discussion, but the ability to balance supply factors with cost-effective talent is undoubtedly important. When measuring cost, we’ll look at: • Current talent costs: What are the potential cost savings versus existing markets (e.g., SF Bay Area) for the job roles and skill sets the client is looking to hire for? What is the salary spread between median market wages and top of market talent costs (e.g., 90th percentile of pay scale)? • Wage inflation risk: How rapidly have talent costs increased historically, and what are the future projections? How will these trends impact future cost-savings potential? • Competitor-specific wage analysis: How should each client position themselves in the market to best compete for talent based on both base wages, bonuses, and other employee perks?

• Client’s competitive positioning: Not all competition is created equal, and it’s important to understand how each individual company will be able to compete against other employers in the market with active hiring demands. To this end, it’s helpful to understand historical patterns of where companies have gained talent from and where they’ve lost employees to in the recent past and have this as an input into the site selection process. Finding talent markets within the United States offering pools of cost-effective high-quality technical talent with limited competitive risk is increasingly difficult, especially as many of the major tech employers have looked outside gateway markets to satisfy their hiring demands. Instead of picking one market to open an office, many clients CBRE Labor Analytics is working with are choosing to pre-qualify multiple smaller and emerging geographies for targeted remote hiring, where they can test out a labor market’s alignment with their hiring needs, while hopefully also gaining a first-mover advantage that positions them as a preferred employer.

Competitive Environment

Five Recommendations

The opportunity to hire and retain quality technical talent is determined not just by a market’s supply of talent but also by how many other employers are targeting that same talent base and at what volume (i.e., demand). This relationship between supply and demand is too often overlooked, but by accurately assessing the balance between these two factors a company will better understand its ability and positioning to tap into the local talent pool and access a market’s top talent. Some of the key measures to assess the competitive talent environment are:

The following are five recommendations for corporate decision-makers as they’re investigating new markets for the hiring of tech talent in today’s hyper-competitive environment: 1. Skills matter — Just because a market has a deep bench of the occupations for which you’re looking to hire does not necessarily mean those employees will also have the needed skill sets; it’s helpful to understand the depth and density of key occupations AND skill sets. 2. Consider find vs. foster strategies for increasing diversity — Identifying markets where the overall workforce

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TALENT SUPPLY generally refers to the assessment of the total availability, SPECIALIZATION, AND QUALITY of the labor pool in a market.

is more diverse than the tech-only talent pool offers opportunities for employers to proactively “foster” diversity by finding new ways to source more diverse candidates who are already in the local market.

panies do you have a strong track record of attracting talent from and whom do you lose to? Incorporate this into your location decisions and potentially embrace markets where “good competition” is located.

3. Beware wage inflation — Focusing on current talent costs only creates a potential high-risk blind spot. Understanding the historical and projected future rate of wage growth in a market helps to estimate longer-term savings potential and can also be an important proxy for understanding the overall saturation levels of the local talent market.

5. Don’t forget demand — Focusing only on the current supply of talent without assessing the demand for that talent has led many companies into entering highly competitive markets where they experience challenges accessing the labor pool. Understanding who else is hiring in the market, as well as the relationship between supply and demand, will be a critical decision factor.

4. Know your competitive positioning — Which com-

SPONSORS ALABAMA

IOWA

PUERTO RICO

Mary Shirley-Howell, Director of Business Recruitment HudsonAlpha Institute for Biotechnology 601 Genome Way Huntsville, AL 35806 256-327-9591 mshirleyhowell@hudsonalpha.org www.hudsonalpha.org/innovate

Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 515-348-6200 opportunities@iowaeda.com www.iowaeda.com

Michael P. Gay, CEcD Chief Business Development Officer Invest Puerto Rico 1-787-966-7642 info@investpr.org www.investpr.org

MISSOURI

VIRGINIA

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

Jason El Koubi, Interim CEO Virginia Economic Development Partnership 901 East Cary Street Richmond, VA 23219 804-545-5600 info@vedp.org www.vedp.org

ARKANSAS Arkansas Economic Development Commission

1 Commerce Way, Ste. 601 Little Rock, AR 72202 501-682-7306 info@arkansasedc.com https://www.arkansasedc.com

GEORGIA Georgia Department of Economic Development

75 Fifth St. NW, Suite 1200 Atlanta, Georgia 30308 404-962-4000 Georgia.org

PENNSYLVANIA George Lewis, Vice President of Marketing, Communications, and Research

Lehigh Valley Economic Development Corporation

2158 Avenue C, Suite 200 Bethlehem, PA 18017 610-266-6775 glewis@lehighvalley.org www.lehighvalley.org www.lvmadepossible.com

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SITE SELECTION STRATEGY

Communicating Your Project’s Value to Local Stakeholders Through the use of economic impact studies, a company can demonstrate the value of its project to government officials and local residents. By Chris Chmura, Ph.D., Founder & CEO; Xiaobing Shuai, Ph.D., Director of Research and Senior Economist; and Bryan Shelly, Ph.D., Managing Director of Consulting; Chmura Economics & Analytics

ongratulations. Your business is growing! Revenue is up, and you just launched a new product that is flying off the shelves. The only problem is you need to hire more people and you have no place to put them. You have hired a site selector, and they have found the perfect location — good access to interstates, labor, and everything else you could want. The only concern is the public. The community likes its small-town rural feel and is worried your project will change their lifestyle too much. You need an economic impact study. Put simply, an economic impact study estimates the ripple impact of your expansion or relocation. In addition to your direct hires, jobs are created in the region when your firm purchases from local suppliers and your employees spend some of their income in the

Economic Impact of Manufacturing Facility

1.0

Direct Impact

4.52

Employment Multiplier

1.20

Induced Impact

2.32 Indirect Impact

An additional 3.52 jobs are created for every one new job at a manufacturing facility.

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region. Measuring the full impact of your expansion on the region can help convince two key constituencies to support your project: government officials and the public.

Garnering Government and Public Support Many projects need approval from government officials, who want to know that tax revenues from the expansion exceed additional costs for public services such as police and fire protection, teachers, and infrastructure. When you equip local and state officials with an unbiased assessment of your likely financial impact on the area, you provide them with evidence that your project helps the people they were elected or appointed to serve. A good economic impact study will demonstrate your commitment to helping local officials do their job and may create goodwill that will pay dividends for years to come. An economic impact study also helps assure the public of the real benefits that will come to them from your project. If the everyday person understands the public services that the local government can now offer because of increased tax revenue, the naysayers will have a much harder time inciting opposition. That connection to enhanced services is a crucial part of the economic impact. The public needs to under-

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

12/3/21 11:51 AM

stand that new projects expand the local tax base, and this additional revenue can be used to hire new teachers, expand the broadband network, or construct new parks or libraries to improve the quality of life for everyone.

Measuring a Project’s Impact A good study measures your project’s economic impact in four ways. First, it measures the direct impact of your project. The direct impact consists of the jobs, sales or output, and compensation directly created by your firm’s expansion. For a very simplified example, if Company X wants to open a new location that employs 20 people with an average annual salary of $60,000 and projected annual sales of $3 million, the estimated direct economic impact on the surrounding area equals $3 million, including $1.2 million in wages and salaries. Second, an economic impact study measures the indirect impact of your project. The indirect impact consists of the jobs, sales or output, and compensation created by regional companies that supply goods and services to the new or newly expanded industry. Company X will need to buy desks, chairs, lighting, and countless other things to set up its new office and run its business. That will create demand that local companies can fill, and they should see growth as a result. Third, an economic impact study measures the induced impact of your project. The induced impact consists of all the jobs, sales or output, and compensation that your employees and suppliers’ employees create when they spend their wages at local establishments. Every time one of Company X’s new employees eats out, goes to the grocery store, or takes in a movie, it counts toward the company’s induced impact. Finally, an economic impact study identifies the fiscal impact of additional revenue collected by the local and state government. Sources of revenue include corporate and personal income taxes, property taxes, retail sales tax, and others. A credible study limits its expectations and does not reach too far to make the potential revenue as large as possible. Estimating the number of dogs per household and the ensuing dog license fees collected is a bit farfetched! Of course, the simplified examples above understate the complexity of forecasting the future impact of a project. A business or a potential project can connect with the local communities in various ways. The closer the linkage with the local region, the bigger the economic impact will be. Economic impact studies rely on multipliers to represent such linkages. Multipliers are typically estimated taking into consideration the regional

industry mix, supply capacity, economic diversity, wages, labor supply, and other factors. Different types of industries vary with regard to their multipliers, which are used to identify the number of additional jobs created and sales generated. For example, a motor vehicle manufacturing plant in the Detroit-Warren-Dearborn, Michigan, metropolitan area has a total employment multiplier of 4.52 (1.00 from the direct impact, 2.32 from the indirect impact, and 1.20 from the induced impact). This means that an additional 3.52 jobs are created for every 1 new job at the motor vehicle plant. Manufacturing industries’ multipliers are generally larger because of all the supplies that are purchased in the manufacturing process. On the other hand, offices of lawyers in the Detroit metro area have a much smaller employment multiplier of 1.64, in part because they purchase fewer supplies. However, because the compensation of lawyers is relatively high, the multiplier from the induced or household impact is 0.42 larger and an indirect impact of 0.22. The direct impact is 1.0. Another consideration when producing economic impacts is that the multiplier will be larger when the region is larger because of the depth of the supply chain. If, for example, the economic impact was limited to Wayne County, Michigan, the multiplier would be smaller than for the entire Detroit metro area.

A Powerful Tool While the examples above focus on manufacturing industries, economic impact studies are powerful tools that can be utilized by everyone in local communities to demonstrate their contributions to local economy. Holding a music festival, hosting a flower show, or building a walking trail — all of which enrich people’s lives — benefit local regions economically. In these cases, organizers can utilize economic impact studies to raise funds and gather public support. The Union Cycliste Internationale (UCI) World Road Cycling Championships event held in Richmond, Virginia, in September 2015 is an example of how an event can benefit a region and economic development. This event, which occurred in the United States for only the second time in its history, brought an estimated 645,000 spectators from around the world and an estimated $23 million in economic impact on the Richmond metropolitan statistical area. Based on the exposure and visibility through national and international media attention, the region and state likely benefited well after the successful completion of the UCI Championships. n

Contact: Andrew Martelli • 84 South Main Street Cheshire, CT 06410 • 203-271-6670 • Email: andrew.martelli@cheshirect.org • www.cheshirect.org

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IT’S NO SECRET THAT the recipe for economic success usually includes generous portions of innovation and technology. That has been part of the economic development story for many years in such places as Boston, Seattle, the Research Triangle, and Silicon Valley. But just as you can find more and more cuttingedge restaurants and exceptional craft breweries in sometimes surprising places beyond the most obvious locales, the innovation-based recipe for success is being served up in smaller communities, too, far beyond the places that may first come to mind. When it comes to building

INNOVATION CORRIDORS By actively putting together the resources needed for innovative companies to survive and thrive, innovation districts and corridors have found a recipe for success.

an innovation corridor or innovation district, the traditional addresses don’t have a monopoly on brains and forward-thinking.

“New

Geography of Innovation”

BY STEVE KAELBLE

The Brookings Institution a few years ago studied what it called the “new geography of innovation,” and for their purposes, the researchers defined innovation districts as “geographic areas where leading-edge anchor institutions and companies cluster and connect with startups, business incubators, and accelerators. They are also physically compact, transit-accessible, and technically wired, and offer mixed-use housing, office, and retail.”1

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

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residents.3 The study found a strong correlation between patent concentration and the presence of major research institutions as well as big companies involved in science and technology. A fifth of the cities were in California, including #1 San Jose-Sunnyvale-Santa Clara. It’s no surprise given the presence of Silicon Valley and such players as Apple, Google, and the newly renamed Meta. New York and Colorado had three cities each, and North Carolina and Washington State had two. You probably would not be surprised to find a place like Rochester, Minnesota, on the list, once you consider the fact that the Mayo Clinic is there. Again, the recipe for success was a combination of research institutions and big corporate players in research-driven fields.

The institution’s research found that there’s plenty going on in such obvious places as Research Triangle Park, Boston, and San Francisco. But it also pinpointed emerging districts near anchor institutions in downtowns and midtowns of such places as Atlanta, Baltimore, Brooklyn, Buffalo, Cambridge, Chicago, Cleveland, Detroit, Houston, Philadelphia, Pittsburgh, Portland, Providence, St. Louis, and San Diego.2

Stirring Together the Ingredients

Even that list is just a sampling of the locations that are actively trying to put the pieces together so that innovative companies can thrive. Innovation districts, wherever they sprout, can “provide a strong foundation for the creation and expansion of firms and jobs by helping companies, entrepreneurs, universities, researchers, and investors — across sectors and disciplines — coinvent and co-produce new discoveries for the market,” according to Brookings. What’s more, they can counteract some of the forces of social inequality and urban sprawl.

The economic assets include the people and institutions actually driving innovation. That can include research and medical institutions, big companies and startups, the experts in various fields, and the entrepreneurs who bring new ideas to market.

One way to identify innovation corridors is to measure the outcomes. Perhaps the most recognizable identifier of innovation is a patent, so when 24/7 Wall St. set out to find the country’s most innovative cities, it tracked the number of patents granted in a single year, per 100,000

Every innovation corridor has its own distinct elements, ingredients in its recipe for success that set it apart. Yet there are some overall characteristics that underly this model of economic development and growth. The Brookings research boils it down into three key areas: economic assets, physical assets, and networking assets.

For example, Corvallis, Oregon, #10 on the 24/7 Wall St. list of innovative cities, gets a powerful boost from the presence of Oregon State University. Having Caterpillar Inc. in town helps Peoria, Illinois, listed as #22, as does the Peoria NEXT Innovation Center that connects Caterpillar and others with institutions such as Bradley University. Meanwhile, #20 is Columbus, Indiana, which may be 50 miles from the nearest big research university but is the headquarters of Cummins Inc., an innovative Fortune 500 player in engines and power generation. These innovation drivers are key ingredients, but just as a loaf of bread needs yeast, these ingredients need “innovation cultivators” to help them rise to the occasion and thrive. That could include incubators and accelerators, tech transfer offices,

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Roanoke Region of Virginia: Growing Research and Innovation

Technology is being created, manufactured, and distributed in the Roanoke Region’s innovation corridor.

The Virginia Tech Carilion School of Medicine and Fralin Biomedical Institute in downtown Roanoke, Virginia

In the Roanoke Region of Virginia, we have a clear vision of the future. In our plan, businesses, government, and education work together seamlessly to build workforce and drive innovation. Lucky for you, we are well on our way.

Just like Roanoke’s burgeoning biotech hub, many of the innovation corridors on the horizon have excellent startup support, new infrastructure projects coming online each year, and coworking spaces and accelerators that create the perfect environment for collaborative research. So, what does the Roanoke Region have that the others don’t? For starters, our beautiful mountain metro is actually a place where people want to live. With trails, rivers, and greenways marbling our urban core, you can walk out the front door of your office and be mountain biking in minutes; a couple minutes more and you’re at your choice of 16 breweries; a few more and you’re home. No commute, no traffic, no urban sprawl — making attracting and retaining top talent effortless. Location, location, location — it’s an old saying for a reason. Because it matters. In our innovation corridor you can create the latest technology, manufacture it here, distribute it here, and have it shipped to 2/3 of the U.S. population within a day’s drive — one-stop shopping for industries of any sector. Regional leadership developed 50- to 100-acre, pad-ready sites that are municipally owned, have utilities in place, and are strategically located to make any innovation-based company thrive. With over $560 million in annual research spending at Virginia Tech, Virginia Tech Carilion School of Medicine (VTC), and the Fralin Biomedical Institute (the latter two located in downtown Roanoke), there has never been a better time for life science, innovation, technology, and advanced manufacturing in our region.

and job training organizations. And because innovation is so dependent upon people, it’s vital to have neighborhood-building amenities that make the area attractive to those people, from grocery stores to coffeeshops to medical offices to dog parks.

Physical assets, according to Brookings, may be public or private. They can include roads and parks, as well as homes for the people and buildings for the businesses and institutions. Physical assets need to be digitally accessible, now more than ever. And finally, to take the recipe metaphor one step further, these ingredients need to be mixed together. That’s where networking assets come in — and, in this case, we’re talking about people networking. This is how information is shared, how ideas come together, how collaboration happens. The most advanced university won’t support local innovation if its brains don’t network with the right elements of the business world. The most ambitious local startup might miss the best opportunities if it doesn’t network with nearby subject-matter experts. These connections are what turn regular cities and regions into innovation corridors. Take Ann Arbor, Michigan, as an example. 24/7 Wall St. had it sixth on the list of most innovative cities, not a big surprise given the presence of the University of Michigan. But it also has Ann

Don’t believe the hype? Ask any question you want during an unprecedented conversation with top innovation leadership. Join Michael Freidlander, Ph.D., the executive director of the Fralin Biomedical Institute; Don Halliwell, the chief financial officer of Carilion Clinic; and John Hull, the executive director of the Roanoke Regional Partnership, for a webinar on the future of innovation. Get details at Roanoke.org/Innovation-Corridor. Copy supplied by the Roanoke Regional Partnership

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AS BROOKINGS HAS CONCLUDED, THE INNOVATION DISTRICT IS A POWERFUL PATH TO MITIGATING MANY OF THE COUNTRY’S LONGSTANDING CHALLENGES, FROM ECONOMIC HARDSHIP TO INEQUALITY.

Arbor SPARK, with its stated goal of “cultivating a network of business and manufacturing excellence.”

Making Innovation Connections The greater Phoenix area is a good example of how innovation can be at the center of economic development, with the help of local institutions. Indeed, Arizona State University has established seven Innovation Zones to help companies connect their dreams and goals with the resources of the university, offering access to a diverse pipeline of student talent as well as staff and faculty at a leading research institution. Also valuable, of course, is the ability to hire new grads with innovation-oriented educational backgrounds — and indeed, more than half of the university’s graduates begin their careers in-state. The university offers an online zone selector to help companies figure out the most ideal spot. Innovation Zones are located at different addresses across the region, each with its own areas of specialization. They include the Phoenix Biomedical Campus, the ASU Polytechnic campus, the ASU Scottsdale

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INNOVATION CORRIDORS Innovation Center, the ASU Research Park, and the Novus Innovation Corridor, which is located on the university’s Tempe campus.

It’s an area with resources to support growth of technology companies and, at the same time, attract a talented and diverse workforce.

Novus, for example, encompasses more than 350 acres and includes more than 10 million square feet of opportunity. Like many innovation districts, it blends technology uses with retail services and is punctuated by parks, bike paths, and sidewalks for walkability.

Beyond the people connections with academic experts and technology workers, companies locating in the Norfolk Innovation Corridor can tap into a variety of economic incentives. Examples include abatement of the Business, Professional and Occupational License taxes and a 50 percent reduction in planning, zoning, and building permit fees.

Local economic development and educational leaders are also cooking up an innovation recipe in Norfolk, Virginia. The area they’ve identified as the Norfolk Innovation Corridor stretches from Old Dominion University to Norfolk State University and includes the Eastern Virginia Medical School.

Also in Virginia, the Roanoke Innovation Corridor is a place where leading biomedical researchers, students, care providers, and businesses thrive through collaboration. The corridor offers brand new interdisciplinary training and research facilities through the Fralin Biomedical Research In-

Lexington, KY: A Strong Foundation for Life Sciences A strong support system with six major medical centers and Kentucky’s only R&D business park Sitting at the crossroads of two major interstates — I-75 and I-64 — and within a day’s drive to over two-thirds of the U.S. population, Lexington is the innovation corridor of Kentucky’s life sciences industry. Six major medical centers support a strong base of healthcare providers, employing almost 20,000 healthcare A product development initiative (PDI) grant practitioners and technicians, making the location quotient above enabled the Coldstream Research Campus to receive $500,000 in matching funds to average at 1.20. In addition, Lexington is home to the University develop lab space in the new building, of Kentucky Coldstream Research Campus, the only research The CORE. and development business park in the state. Coldstream, a 735acre office park, was specifically designed for recruiting high-tech and biotech companies, as well as university centers and startups. The CORE, a new $15 million development, broke ground at Coldstream in early 2021. Lexington’s economy has a unique support system that serves as the foundation of its strong, well-established life sciences industry. Its workforce, strategic geographic location, low cost of doing business, and high quality of life are among the city’s strongest assets. Lexington has leveraged its culture of innovation and commercialization, a superior business climate, the University of Kentucky’s top-ranked research programs, and an expansive network of medical centers to provide an environment where a diverse life sciences industry can grow. To learn more about Life Sciences in Lexington, visit locateinlexington.com. Copy supplied by Commerce Lexington

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ROANOKE INNOVATION CORRIDOR Virginia’s Burgeoning Biotech Region

WE HAVE A CLEAR VISION OF THE FUTURE. In our plan, businesses

$560

million research spending at VT

and education work together seamlessly to build workforce and drive innovation.

STRATEGIC LEADERSHIP

We developed 50- to 100acre, pad-ready sites and an incubator for life sciences, innovation, technology, and advanced manufacturing.

colleges & universities within an hour

MICHAEL FRIEDLANDER, PH.D. Fralin Biomedical Research Institute at VTC

“We had to build a base that wasn’t about hype. Now we have a solid, outstanding biomedical research enterprise.

40 research teams

You don’t need a sales pitch and hype. What has been built speaks for itself.”

JOIN OUR LIVE WEB CHAT WITH

TOP INNOVATION LEADERS Contact: John Hull john@roanoke.org 540-343-2012

Roanoke.org/Innovation

BECAUSE INNOVATION IS SO DEPENDENT UPON PEOPLE, IT’S VITAL TO HAVE NEIGHBORHOOD-BUILDING AMENITIES THAT MAKE THE AREA ATTRACTIVE TO THOSE PEOPLE.

ASU INNOVATION ZONES OFFER OPPORTUNITIES TO DEVELOP SOLUTIONS The seven zones provide an institutional commitment to collaboration and growth. Comprised of seven unique locations throughout Greater Phoenix, ASU Innovation Zones is a development portfolio designed to support communities that value collaboration. 1. ASU Health Futures Center — Located in Phoenix and adjacent to Mayo Clinic Phoenix Hospital, this zone will foster innovation in medicine and healthcare. Located at the Novus Innovation Corridor, the Novus 777 Tower is part of a plan for more than 10 million square feet of mixed-use opportunities directly adjacent to the ASU Tempe campus.

2. ASU Polytechnic Innovation Zone — Located in Mesa and adjacent to the ASU Polytechnic campus, this zone has a focus on interdisciplinary opportunities.

3. ASU Research Park — Located in Tempe, this zone is primed for companies that require connections to an established commercial corridor. 4. ASU West Campus Innovation Zone — Located in Glendale and adjacent to the ASU West campus, this zone is a future mixed-use development. 5. Novus Innovation Corridor — Located in Tempe and adjacent to ASU’s main campus, this zone will be 10M square feet of mixed-use opportunities. 6. Phoenix Biomedical Campus — Located in downtown Phoenix and near the ASU downtown campus, this zone is planned for 6M square feet of biomedical-related facilities. 7. SkySong, the ASU Scottsdale Innovation Center — Located in Scottsdale, this zone is a high-growth community for technology-based businesses. Through innovative partnerships, the Zones provide opportunities for developing solutions to challenges with an institutional commitment to collaboration, growth and impact on a global scale. Come innovate with us. Copy supplied by Arizona State University Office of Economic Development

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INNOVATION CORRIDORS

Lexington, Kentucky is what a great place to do business looks like. A city with smart, educated talent, thriving in a community with a high quality of life. stitute and Carilion Clinic, in addition to strong academic and economic partnerships between Carilion Clinic, Virginia Tech, Virginia Western Community College, Jefferson College of Health Sciences at Carilion Clinic, and Radford University. Consider Lexington, Kentucky, as another prime example of innovationfocused development opportunities that are happening in areas outside what one used to think of as the most obvious innovation hubs. The presence of the University of Kentucky provides valuable access to talented partners, and companies that make a connection to the university can set up shop within Coldstream Research Campus. It’s zoned for R&D, advanced manufacturing, and office use, and it’s tied into inquiring university minds.

Innovation-oriented businesses also might seek an address at the Blazer Parkway Technology Center in Lexington. Its Tech Center and Data Center buildings feature such innovation necessities as redundant power and fiber, along with flexible, easy-to-configure wall panels that can adapt a facility layout as needs change. These and other addresses in this innovation-oriented corridor are located just an hour from the bigger cities of Louisville and

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INNOVATION CORRIDORS

Cincinnati, which are innovation hubs in their own right. The Texas Innovation Corridor similarly has its own place on the map between two other prime innovation dots: Austin and San Antonio. It claims its own innovation ecosystem, with a pair of counties that together have a patents-percapita ratio that’s 11 times the state average and nine times the U.S. norm.

Having Texas State University in San Marcos helps tremendously, given its strong research in such areas as materials science, nanotechnology, life sciences, and computer science. The university’s STAR Park — STAR is short for Science, Technology and Advanced Research — is a technology incubator for startup and early-stage businesses, offering research connections and access to such things as wet labs and clean space. There are also numerous co-working and collaboration spaces across the Texas Innovation Corridor, as well as the Texas State Center for Innovation and Entrepreneurship.

Philadelphia’s University City district has had similar success. Its anchors include the University of Pennsylvania, Drexel University, and the University City Science Center, and its impact has been not only business success, but also economic revitalization. The Houston Innovation Corridor, likewise, has had powerful economic and social benefits, creating fruitful innovation partnerships and transforming neighborhoods. WHEN IT COMES TO BUILDING Its anchors include Texas Medical Center and Rice University. AN INNOVATION CORRIDOR Similar anchor-plus developments can be found all over — in OR DISTRICT, THE TRADITIONAL St. Louis, Pittsburgh, Atlanta, and Detroit, to name a few. As BrookADDRESSES DON’T HAVE A ings notes, “Virtually every major MONOPOLY ON BRAINS AND city in the United States has an ‘anchor-plus’ play.”

FORWARD-THINKING.

And Hartford, Conn., has dubbed itself as an Innovation Destination. The city’s initiative aims to facilitate connections with its entrepreneurial community and support startups and second-stage companies throughout the Hartford region.

Varying Innovation Approaches The Brookings researchers who have explored the growth in innovation districts have identified a number of different ways these areas can develop and be organized. One common way to go is known as “anchor plus,” which is a large-scale mixed-use development that has a major anchor institution surrounded by related spinoffs and entrepreneurs. For example, Kendall Square in Cambridge, Massachusetts,

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is powered by such institutions as nearby Massachusetts Institute of Technology, Massachusetts General Hospital, and Harvard’s medical school. It has resulted in extraordinary accomplishments among nearby life sciences and information technology companies.

Another approach is the “re-imagined urban area” model, which typically springs up in an industrial or warehouse district near a historic waterfront. Brookings cites such examples as Boston’s South Waterfront, Mission Bay in San Francisco, the South Lake Union area of Seattle, and the Brooklyn Navy Yard in New York City. The other primary model is known as the “urbanized science park,” and one of the best-known innovation corridors in the country — Research Triangle Park in North Carolina — fits into this mold. Its history goes way back to the middle of the last century, when the state was in economic decline and local leaders sought to better retain university graduates and build new vitality. A group of governments, universities, and business interests partnered to get the ball rolling in 1959.

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SPONSORS ARIZONA Research Triangle Park is considered the country’s largest research park, and it’s anchored by North Carolina State University, Duke University, and University of North Carolina at Chapel Hill. Firms such as IBM and BurroughsWellcome located R&D facilities in the area early on, and the word spread that it was a great place for emerging research and technology companies. By the 1990s, the region encompassing Raleigh, Durham, and Chapel Hill was well-known as “The Research Triangle.” A state that was struggling in the 1950s now is among the top three states in bioscience employment, and it’s a leader in important fields such as vaccine research and manufacturing. That kind of success, of course, inspired others. Just a few examples include University Research Park at the University of Wisconsin-Madison, University of Virginia Research Park in Charlottesville, and the University of Arizona Tech Park in Tucson. These kinds of innovation districts typically have strong ties to major research universities, though not all such developments are in big urban areas.

An example of a development that sprouted away from a big city is Purdue Research Park. Much of its work in commercialization and economic development happens in the small university town of West Lafayette, Indiana, in a 725-acre technology park that’s home to more than 100 technology companies. Since its founding in the 1990s, Purdue Research Park has added locations elsewhere in Indiana. Countless other developments across the country fit into one of these formats and can be considered innovation districts or corridors. With so much future prosperity likely to be linked to technology development, that’s a good thing. As Brookings has concluded, the innovation district is a powerful path to mitigating many of the country’s longstanding challenges, from economic hardship to inequality: “Innovation districts have the unique potential to spur productive, inclusive, and sustainable economic development.” •• 1

https://c24215cec6c97b637db6-9c0895f07c3474f6636f95b6bf3db172.ssl.cf1.rackcdn. com/content/metro-innovation-districts/~/media/programs/metro/ images/innovation/innovationdistricts1.pdf 2 https://www.brookings.edu/essay/rise-of-innovation-districts/ 3 https://247wallst.com/special-report/2018/10/30/americas-most-innovative-cities-2/

Arizona State University Innovation Zones ASU Innovation Zones provide unparalleled opportunities to co-locate and collaborate with the largest research university in the nation. Consisting of prime locations, 3mart city infrastructure, Class A office space, and build-to-suit options, Innovation Zones also provide an opportunity to work in close proximity with ASU staff, students, and faculty. Aric H. Bopp, CEcD, Executive Director Economic Development and Innovation Zones Arizona State University 300 East University Drive, Suite 145 Tempe, AZ 85257 480-727-6347 Aric.Bopp@asu.edu oed.asu.edu

KENTUCKY Commerce Lexington Commerce Lexington focuses its energies and resources on the core components of its comprehensive approach to regional economic development including assisting business retention and expansion; encouraging entrepreneurial activity; and recruiting new business investment. Regionalism is a key effort and Commerce Lexington works closely with all its partners to promote the region. Gina Greathouse, Executive Vice President Commerce Lexington 330 East Main Street, Suite 205 Lexington, KY 40507 859-226-1623 ggreathouse@commercelexington.com www.locateinlexington.com

VIRGINIA Roanoke Regional Partnership The Roanoke Regional Partnership serves as connectors for businesses looking to relocate and expand, matching your needs and questions with resources and answers. We’re a one-stop-shop for learning, evaluating, and connecting with the largest metro in Western Virginia with over 330,000 workers, located on both I-81 and I-64. John Hull, Executive Director Roanoke Regional Partnership 540-343-2012 john@roanoke.org www.roanoke.org

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FOOD PROCESSING

The Next Generation of Cold Chain Logistics In order to meet consumer demand for fresh food delivery, food processing and distribution companies are expanding cold chain logistics and automation systems.

By Brian Chatham, Project Manager; Jeremy Klysen, Business Development Manager; Joseph Scovronski, Senior Architect; Burns &. McDonnell

rior to the COVID-19 pandemic, millennials purchased half their grocery products online, and e-commerce grocery shopping made up 4.5 percent of market share. As of January 2021, that same share is up to 12.5 percent and projected to rise another 9 percent by 2025 — creating a tipping point in consumer buying habits. While food suppliers have traditionally had the capacity to prepare for seasonal demands, the pandemic has skyrocketed consumer ecommerce and grocery purchases, leaving stores scrambling to pick up the slack and meet today’s unprecedented requirements. Now more than ever, food processing and distribution companies are aiming to expand cold chain logistics and automation systems — rather than creating a new inhouse engineering department — to keep pace with demand and position for future growth. To achieve success in developing, designing, building, and maintaining complex, automated cold envelope facilities, we’re finding that a multilayered, integrated design-build approach is key from concept through completion.

Integrated Team, Holistic Solutions Cold chain logistics solutions must balance product output, operations efficiency, and return on investment. There are few firms that have the required knowledge and deep experience with this multitiered, special-skills process of automated cold envelope solutions, which perfectly fit the mold of integrated design-build project delivery. This delivery model allows the engineer and general contractor to be in sync on design, procurement, and

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construction, while also maintaining the standards needed for engineering, equipment, piping, materials, and more. By having the entire team engaged upfront, the project business case can be optimized in a way that provides industry-leading client return on investment. Simply put, this model creates higher-performing solutions and more predictable project outcomes.

Intricate Development of Multifaceted Facilities Envision an extremely cold submarine, on land, storing your frozen foods. For the facility to fulfill its required functions, the envelope must be configured with the structure wrapped by an insulated airtight envelope. The inside environment of a building needs to accommodate a variety of perishable foods and goods, often requiring multiple temperature zones. Climatic conditions exert significant pressure on the exterior of the building containing refrigerated areas, allowing moist air to find its way through any nook and cranny to infiltrate into the cold environment. The operations and building systems are dependent upon the envelope working continuously to prevent condensation and the formation of frost. Adding complexity to maintaining a consistent interior environment, the facility requires multiple openings to allow free movement of material handling equipment (conveyors, pallet jacket, forklifts, etc.) uninterrupted through multiple temperature zones. There are many detailed tasks that must be accomplished in these unique conditions around the clock.

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Like Rebecca Corbin Challenging times drive big decisions and none bigger than what to do with your business when a global pandemic hits. Assessing the situation quickly, Rebecca decided to invest in growth to support her firm’s clients through deeply challenging times. She had choices about where to grow her business and she chose Connecticut; to build a new headquarters, double the size of her team and invest in the future of our state. What’s next?

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Magnet for educated and diverse talent. Located in America’s top state for talent and business, Greater Richmond, Virginia, is home to the talented workers you are looking for. Compared to U.S. averages, the region is home to a higher percentage of diverse talent (39% vs. 32%) and more workers who have attained a bachelor’s degree or higher (38% vs. 34%). It’s no wonder there are 12 Fortune 1000 headquarters located here along with major

divisional headquarters making the region a perfect spot for both the Hub and Spoke approach. And thanks to the region’s east coast proximity to major markets, our workforce pipeline is primed with more than 1 million higher education students within 150 miles. For your next site selection project, choose Greater Richmond, Virginia, capital of CNBC’s Best State for Business.

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The Next Generation of Cold Chain Logistics – Continued from page 80 On top of that, cold working environments — especially those accommodating freezers — are becoming increasingly difficult to staff as cost-effective cold environments are needed in more urban and suburban areas. It’s complicated. Smaller, more efficient facilities are needed to overcome site constraints. Automation allows owners and operators to maximize efficiencies within their facilities, where severe temperatures and challenging productivity rates are more conducive to a mechanical workforce. Greenfield development is optimal in providing the most cost-effective square footage vertically and horizontally for a distribution center equipped with an automated storage and retrieval system. Automation storage and retrieval systems provide a 30 percent increase in storage density by maximizing the building height from 60 to 120 feet, to reducing the overall footprint of the storage area. Modularization offers an ideal method to create cold storage facilities quickly, safely, and in a manner that fits well into the fabric of existing development zones in most suburban and urban areas. Although existing structures may not be as tall (usually only 25 to 30 feet), they allow for project completion from 50 percent to 100 percent more quickly than new builds. This discrepancy in project delivery speed is due to less permitting, which can be cumbersome, and reduced material procurement needs such as structural steel, which is in short supply.

Speed to market makes up for the additional machinery necessary to operate lengthwise in typical warehouse layouts. One key component of successful, cost-effective plan implementation is maintaining established relationships with suppliers, as well as understanding the steel materials and specialized machinery that optimize build cold facilities. Long-standing relationships and decades of experience result in quickly ordered, price-controlled and diverse options tailored to the food company’s needs among multiple best-fit vendors.

Tackling Challenges to Maximize Value As consumer demands and expectations evolve, so do the core elements in logistics, causing providers to rethink the right fit for any given demographic. Even with automation and adaptive reuse design solutions, executing cold chain logistics projects is complex and requires a comprehensive approach to identify and manage challenges. Building in an urban area calls for consideration of road infrastructure for large freight loading and unloading, local and state regulations for facility height and overall size, exterior materials to blend into urban fabric, and so much more. Equally as important as procuring the right materials for the project is balancing financial solutions with site challenges, consumer demand, and level of technology desired. n

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FOOD PROCESSING

The Challenges of Renovating an Existing Facility Into a Food Plant Renovating an existing facility seems faster and cheaper than going with a greenfield site — but when it comes to a food plant, that might not be the case.

By David C. Dixon, President, davidcdixonLLC

effrey Counsell’s article in Area Development, “Siting identified by a competent existing conditions survey, i.e., a New Production Plant: A Challenge Intensifies”1, remaining life of mechanical equipment or roof leaks, etc. My goal here is to highlight the most critical, yet was an excellent discussion of a new dynamic in often missed, challenges to renovating an existing buildfood plant site selection: avoiding second-generation ing into a food plant. food plants solely due to the potential risk of pathogens. I also teach this tactic of risk management. Early in my Speed to Market career, I saw projects where First, is it faster? Maybe. second-, third- or fourthThe existing new building built generation food plants were on spec with an abnormally seen as a bargain, because strong roof structure and no their square-foot costs were floor yet? Absolutely faster, but very low. They were on the very hard to find. An existing market because they had been clean building acquired early closed down by the previous enough to begin renovations owner due to microbiological before the onset of winter, contamination! The new most likely faster. Anything buyers were thrilled that they else, it’s a toss-up. Start tearsnagged a facility at such a ing up half the floor slabs, low price. start reinforcing roof trusses, An interstitial space with access and headroom requires Jeff is one of the few real stub your toe on a few “unangood planning and 4–6 feet of height, minimum. estate executives with deep ticipated conditions,” and your knowledge of the tradeoffs inschedule advantage evaporates. volved in renovating existing buildings into food plants. Is it cheaper? Unlikely. The market is tight for good Rather, it is the norm that corporate real estate directors properties, and competing sectors have more ready cash and real estate brokers tasked with finding properties than the food sector. Try to find the perfect building in view them through the lens of a long and successful a state with recently legalized adult use cannabis! Add career in corporate real estate: unit cost, comps, incenthe cost of bringing in a larger water line, larger electritives, taxes, and perhaps demographics. Too often, the cal service, and replacing many of the floor slabs to get technical fit-for-use issues described in Jeff’s article are proper pitch and drainage and your cost advantage vs. analyzed later in the game, after investment expectagreenfield narrows. And don’t forget, these are building tions are already set. investments that are depreciated over 20+ years. They The belief that finding an existing facility is faster translate to pennies on cost-per-case. Don’t step over and cheaper than greenfield remains firmly entrenched. dollars to pick up dimes. This overview assumes the target building has no risk of pathogen contamination. It doesn’t talk about rarer Tactics to Consider problems like previous freezer floor heaving or corroded under slab drainage and washouts you could drop a The Floor: A wise man once said, “If you have a refrigerator into. It sidesteps the obvious that can be

••

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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

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“

dollar to spend, spend it on the floor!” The equipment layout, the wall and door locations, and how the room is operated and sanitized dictate the floor pitches and drain locations. In a smaller room, you can create the floor pitch by spending more on the polyurethane floor topping. You can trench in additional drains, but you need to pay attention to under-slab drain piping slopes. You can squeegee to a dished spot drain. But you can’t live with an existing floor pitch that flows water toward a wall. Sometimes it takes time to advance the preliminary process and architectural design sufficiently to finally conclude that the floor slab needs to be replaced. Hit these topics first. And don’t get me started on an existing five-inch floor slab with a single layer of wire mesh!

TOO OFTEN, THE TECHNICAL FIT-FOR-USE ISSUES ARE ANALYZED LATER IN THE GAME, AFTER INVESTMENT EXPECTATIONS ARE ALREADY SET.

• • The Roof: A wise man also once said, “The build-

ing is an umbrella that keeps rain off my process!” When analyzing an existing building, it takes a while to ascertain remaining available roof load needed for your 10,000-lb. hygienic air handlers (RMAU), the 50 lb./ square foot needed for IMP ceilings, and the other superimposed or suspended loads. The tactics to consider here are many: • Strip off a ballasted roof and replace with a fully adhered membrane to free up structural capacity. • Position the RMAU across a beam, not in the center of the bay, and address this positioning with additional ductwork. • Add stub columns to four building columns and support a galvanized platform above the roof onto which you place that RMAU. This one is quite common, but each of these structures can cost over $100,000. And if you are very unlucky, you will be setting all this with a helicopter! • Sidestep the issue by shifting those loads to column support or floor support. It is common for finished case conveyors, pneumatic or disc conveyors, or pipe racks, for example, to be knee-braced off a column. As a last resort, run columns to the floor, but be ready to hear the howls from process planners and operations folks after they realize how much of the floor is impeded by those columns and the protective bollards. • Lastly, and most annoyingly, maneuver additional trusses into existing bays or reinforce trusses with new metal and welding — tricky and not risk free…nor cheap…nor fast.

••

Vertical clearance: Finally, that same verbose man also said, “All mistakes are made in section, few in plan!” A paraphrase of Spock’s criticism of Khan failing to think in three dimensions, it nevertheless is true — and often missed. Just some Fermi math for three-high racking in a cooler: six feet tier-to-tier with first pallet off the floor, 32 inches from top of stack to sprinkler head; another foot to the ceiling and a six-foot interstitial space, and you will need 28 feet clear to first obstruction. Few available buildings are that tall. Miss this one

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and expect your contractors or maintenance staff to drag themselves forward under beams to get to a connection or caulk a penetration. Good luck! But here also, we have some workarounds for tight spaces: • Run utilities in open joists or trusses. In the right direction, laterals can be run between joists, but don’t create a pocket in liquid utilities by diving under a solid I-beam. And drilling a hole through structural web to pass a sprinkler main through? Here be dragons! • Carefully plan any horizontal ductwork so that there are no crosses in the interstitial space that create further impediments in an already tight space. Better yet, avoid any horizontal ductwork runs in the interstitial. • Locate as much as you can in the higher section of the roof peak and run laterals to the sides — feasible on a two-pitch roof, more difficult with a more complicated roof layout. • Carefully coordinate evaps with the racks inside coolers and freezers, and please let everyone know you will lose top-tier pallet positions on both sides. • Always install lighting suspended from the IMP ceiling. When you flush mount fixtures you have more need to access the box created from inside the interstitial space. • It is good practice in any case, but the less going on in the interstitial space, the better — less need for access. Avoid pumps, electrical panels that need access, etc. None of this is easy. 3-D design helps greatly. It takes time and it forces decisions by all disciplines earlier in the design process. And if this article has dissuaded you from renovating an existing building into a food plant, see my article from last year2 for suggestions for shortening the process of finding and building on a greenfield site!

• • Next up: tricks for designing under a sale-leaseback scenario where the shell is owned by a developer. n

https://www.areadevelopment.com/FoodProcessing/Q4-2018-food-processing-guide/ siting-new-production-plant-challenge-intensifies.shtml https://www.areadevelopment.com/foodprocessing/q4-2020/finding-the-sweet-spot-infood-plant-location-decisions.shtml

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

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INVEST_AreaDevelopment.pdf

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4:42 PM

SITE SELECTION

Solutions for Decisively Navigating the Location Decision Effective site selection involves factoring the stakeholder criteria matrix, site conditions, and ever-changing market forces into the final decision. By Cole Williams, P.E., Vice President, Engineering, Goodwin Mills Cawood (GMC), Inc., Alabama

ite selection professionals travel all over the United States, looking at hundreds of potential sites for development with a goal of finding suitable sites for their clients. What does it mean to achieve success? Ultimately, they must be incredibly efficient in evaluating and narrowing site lists, while balancing a seemingly endless spectrum of potential conditions and visualizing optimal scenarios for the end user’s product/facility. In the context of site selection, many challenges need to be decisively navigated.

• • High-definition vision: Real

solutions that decisively navigate site selection are key to generating a successful site plan, which ensures the end users’ requirements are met. As design professionals work to assist the site selection process, the goal is to deliver a conservative vision of the site plan that can be modified or adjusted to the specific needs of the prospect and ultimately meet the vision of the end user. The more detailed the information provided results in casting a vision of increasingly higher definition for site selection professionals and prospects. Using location, acreage, availability of utilities, and potential development complications as limiting factors can help design professionals

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Using location, acreage, availability of utilities, and potential development complications as limiting factors can help design professionals deliver a simple site plan that satisfies the site criteria matrix. Pictured here is the Hyundai manufacturing facility in Montgomery, Alabama.

deliver a simple site plan to demonstrate site viability to evaluate against and satisfy the site criteria matrix.

• • Urgency: As availability de-

creases, having these early insights works toward successfully identifying

size and lot configuration criteria to enable the process to move forward. In many instances, a basic site plan that can be presented to community development professionals, affiliated brokers, site selection consultants, or design/build contractors helps projects effectively advance.

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

12/3/21 11:46 AM

Site Selection Drivers

• • Evolving drivers – the site

criteria matrix: Multiple interrelated drivers influence site selection. While in the past site selection was motivated by budget dollars, this is no longer the case in many industries. In today’s everchanging climate, land and construction cost often take lower priority to speed to market, which makes locally driven site factors more critical. Today’s industry leaders want to get to market as quickly as possible, addressing the particulars motivating their growth, and they are willing to spend more money to ensure speed to market. And, the norms are changing, as stakeholders are more concerned with the present, not 10 years into the future.

• • Region-specific knowledge: Site-specific knowl-

edge (soil conditions, grading, weather tendencies, endangered species concerns, stream/wetland constraints, AHJ permitting) is key in any region. Providing stakeholders with extensive information — and the population of technical experts touching the project who have a wealth of regional-specific knowledge about construction, utilities, environmental concerns, local politics, and construction risks — can play an important role in the process. Avoiding future problems is always a concern, and design professionals can help end-users avoid potential pitfalls like soil issues, environmental constraints, and construction delays, which could mean they miss their window for development.

• • Age of COVID adds to market fluctuation:

Though there will certainly be different issues to tackle in the years ahead, the change in the age of COVID-19 has been unprecedented. Like other industries, site selection, engineering, and design have been deeply impacted. Therefore, the best options today might be dramatically different in just a few years. The industry saw a time-sensitive shift to e-commerce and support of shipping/distribution networks for providers, and the easing of COVID-19 restrictions has already seen a slowing of the development pace of some e-retailers, especially in states/areas that have recovered the quickest. Consider an example: For developer-led projects for a certain e-retailer, the timing to develop and construct plays a crucial role in site selection. Speed to market is critical to their processes, the rise of an unexpected

Real solutions that decisively navigate site selection are key to generating a successful site plan, which ensures the end users’ requirements are met. Pictured here is the Amazon sort facility in Bessemer, Alabama.

site constraint could negatively impact the delivery of the building, which may mean a shelved project for one region and a shift in focus to projects without issues. Often this means sites with streams or wetlands are removed from consideration due to the time to permit (nationwide or individually) because of increased risk factors during the Corps of Engineers (COE) permitting processes.

Optimizing the Process: Site Plan Development As selection teams generate a site plan, it is crucial to define the regulatory context and site conditions to envision how the facility would ultimately work on the site.

• • Local Influences: As each state is different, indus-

trial leaders and selection teams aim to understand how industrial access funding flows from the state to the enduser’s project, as well as the restrictions that apply, and this could have an impact on timing of the development. Project leaders aim to acquire a good working knowledge of environmental constraints in their region. For example, in Alabama, a biologically diverse region, it is difficult to find a 100-acre site without wetlands, making impact crucial for project stakeholders. Schedule is important because the site must be prepared as needed by project stakeholders. Understanding how restrictions on habitat development, like bats protected under the Endangered Species Act, can substantially restrict construction schedules is extremely helpful in avoiding such risks.

• • Clear and defined parameters: Selection teams

also seek to make decisions with clear and defined paAREA DEVELOPMENT | Q4 2021

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rameters in the site selection process to ensure the project can be completed as presented. Stakeholders and project teams look to connect with the right people, be that a utility provider or local municipality. This is important to ensure accurate answers for vital topics including permit processes, incentives, environmental constraints, and more. Every industry is unique, which makes answering site selection queries a unique challenge. And, as leaders get closer to the decision, the questions become even more difficult to answer, elevating the vital importance of identifying the right people for responses.

OUR NAME HAS CHANGED OVER THE YEARS, BUT OUR FOCUS HAS STAYED THE SAME We are committed to helping new and expanding companies recruit and train the skilled workforce they need to be successful

• • Capture/provide reliable data + optimize

limited information: Getting accurate, reliable information can prove elusive to project teams, so engineers often must use limited information (aerial maps, 10/5/2 ft. GIS contours, and tax maps) to find sites that meet the fundamentals of suitability and practicality. Looking at the challenges through the eyes of the stakeholders — economic development professionals, site selection groups, local brokers, or end-users — impacts the engineers’ processes. Consider an example: Economic development professionals want help with a specific project they’re hoping to win, while local brokers are often affiliated with national entities and have multiple sites in multiple cities to review. The closer the consulting engineer can get to the source, the better the information in understanding the stakeholder’s point of view.

••

1961 2021

Visualize completed project: Site selection leaders can also understandably struggle to visualize the big picture or put the end user’s product/facility into a tangible vision. Engineers work to gather the information needed, no matter how limited, and generate a box diagram to help others — site selection professionals to local economic developers — visualize the final product/facility. Practical and functional site selection is effectively executed when it addresses all the concerns — i.e., grades, utilities, access, etc. — and visualizes the end user’s product/facility in a way that will work should the site be selected.

Insight into Selection

Find out more at www.readysc.org

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••

Addressing significant issues: When navigating site viability against the criteria matrix of stakeholders, communication is the element vital to success. While parameters can be fluid from stakeholder to stakeholder, understanding the crucial parameters and significant priorities is important. Without that for free site information, visit us online at www.areadevelopment.com

12/3/21 11:47 AM

conditions, regulatory issues, and ever-changing market forces into the decision. When multiple dynamic solutions are decisively navigated to serve stakeholder objectives, selection teams navigate leaders to success. n

understanding, selection teams might address potential issues that are unimportant to stakeholders while simultaneously missing significant issues. Effective communication is also invaluable in understanding goals, which provides the insight to recommend whether the client should pursue a site or move on.

••

Sufficient, correct information to advance selection: Having correct in-

formation in sufficient quantities allows selection teams to choose the proper approach for the project and stakeholders. Given that site selection has become more time-sensitive, and as businesses react to everchanging markets, site selection “inner circles” are more willing to share information on the front end to keep the process moving and avoid mistakes and costly delays. This information often includes motivational factors such as market, utilities, employees, and seclusion, which is extremely helpful to engineers; after all, a large, 400-acre prison site will have different needs than a 400-acre industrial site. Stakeholders are often articulate, able to explain their WA needs, describe their processes, and provide crucial information to speed up site selection. OR Industrial leaders, in particular, know their motives and drivers and can convey the information NV to engineers to speed the process of site selection. Selection CA teams can then leverage stakeholder needs at the local level with their extensive knowledge of the area to accelerate the site selection process and avoid costly delays.

Solutions for Decisively Navigating Site Selection Effective site selection involves factoring the stakeholder criteria matrix, site

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AREA DEVELOPMENT | Q4 2021

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Our economic development experts strategically facilitate business location and expansion within Nevada. Our dedicated team can assist with energy pricing and renewable tariffs, site visits, and all the critical data necessary to make an informed decision for business investment in Nevada. Count on our team to help manage every step of your site location decision process. Learn more at nvenergy.com/econdev

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SELECT SITES DIRECTORY 2022

ALABAMA

FLORIDA

Destin Wells, SVP Business Development Enterprise Florida, Inc. 800 North Magnolia Ave., Suite 1100 Orlando, FL 32803 407-956-5600 dwells@enterpriseflorida.com www.enterpriseflorida.com

ARIZONA

GEORGIA

Aric H. Bopp, CEcD Executive Director, Economic Development and Innovation Zones Arizona State University Office of Economic Development 300 East University Drive, Suite 145 Tempe, AZ 85257 480-727-6347 Aric.Bopp@asu.edu oed.asu.edu https://innovationzones.asu.edu

ARKANSAS Arkansas Economic Development Commission 1 Commerce Way, Ste. 601 Little Rock, AR 72202 501-682-7306 info@arkansasedc.com https://www.arkansasedc.com

CONNECTICUT Ben Dwyer AdvanceCT 470 James Street, Suite 9 New Haven, CT 06513 bdwyer@advancect.org www.advancect.org Andrew Martelli, Coordinator of Economic Development Town of Cheshire 84 South Main Street Cheshire, CT 06410 203-271-6670 Andrew.Martelli@cheshirect.org https://www.cheshirect.org

Jeff Taylor, Commissioner, Business Development  Kentucky Cabinet for Economic Development Old Capitol Annex 300 W Broadway Frankfort, KY 40601 502-564-7670 EconDev@ky.gov CED.ky.gov

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

Georgia Department of Economic Development 75 Fifth St. NW, Suite 1200 Atlanta, Georgia 30308 404-962-4000 Georgia.org

MARYLAND

IOWA

Sherri Diehl, Director, Office of Marketing Maryland Department of Commerce 401 E. Pratt Street Baltimore, MD 21202 410-767-6835 sherri.diehl@maryland.gov https://commerce.maryland.gov/

Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 USA 515.348.6200 opportunities@iowaeda.com www.iowaeda.com

KANSAS Paul Hughes, Deputy Director of Business Development Kansas Department of Commerce 1000 S.W. Jackson Street Topeka, KS 66612 785-296-7284 Paul.Hughes@ks.gov www.kansascommerce.gov

MICHIGAN

KENTUCKY

MISSISSIPPI

Gina Greathouse, Executive Vice President Commerce Lexington 330 East Main Street, Suite 205 Lexington, KY 40507 859-226-1623 ggreathouse@commercelexington.com www.locateinlexington.com

Laura Hipp, Interim Executive Director Mississippi Development Authority 501 N. West Street Jackson, MS, 39201 P.O. Box 849 Jackson, MS, 39205 601-359-3449 or 1-800-360-3323 lhipp@mississippi.org mississippi.org

Tyler Rossmaessler, Executive Director Flint & Genesee Economic Alliance 519 S. Saginaw St., Suite 200 Flint, MI 48502 810-600-1404 info@flintandgenesee.org www.developflintandgenesee.org

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MISSOURI

OHIO

SOUTH CAROLINA

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

Andrew Deye, VP, Strategy JobsOhio 41 S High St #1500 Columbus, OH 43215 855-874-2530 JobsOhio.com

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

NEW JERSEY Cathy Scangarella, Chief Business Development Officer Choose New Jersey One Gateway Center 11-43 Raymond Plaza W #1420 Newark, NJ 07102 609-297-2203 cscangarella@choosenj.com www.choosenj.com

Sandy S. Castor Director, Office of Business Engagement Middlesex County, NJ County Administration Building 75 Bayard Street, 4th Floor New Brunswick, NJ 08901 732-745-4343 biz@co.middlesex.nj.us http://www.middlesexcountynj.gov DiscoverMiddlesex.com/biz

PENNSYLVANIA

Brad Neese, VP Economic Development South Carolina Technical College System 803-896-5376 neese@sctechsystem.edu http://sctechsystem.edu

Don Cunningham, President and CEO Lehigh Valley Economic Development Corporation 2158 Avenue C, Suite 200 Bethlehem, PA 18017 610-266-6775 www.lehighvalley.org

TENNESSEE

PUERTO RICO

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

Michael P. Gay, CEcD Chief Business Development Officer Invest Puerto Rico 787-966-7642 info@investpr.org www.investpr.org

focus:tomball, tx From corner stores to Fortune 500 companies, Tomball is focused on business! A skilled workforce, low property taxes, and a wellconnected transportation system provide an ideal backdrop for your business to prosper. The Tomball Economic Development Corporation promotes job creation by encouraging attraction, expansion and retention of businesses through: assisting with site selection; identifying incentives; connecting to workforce resources; and providing business and industry data.

expand relocate improve

tomballtxedc.org •–•–• (281)401-4086

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

12/6/21 1:22 PM

TEXAS Kelly Violette, CEcD, PCED, AICP Executive Director Tomball Economic Development Corporation 29201 Quinn Road, Suite B Tomball, TX 77375 281-401-4086 kviolette@tomballtxedc.org www.tomballtxedc.org

VIRGINIA Jennifer Wakefield, President & CEO Greater Richmond Partnership 901 East Byrd Street, Ste. 801 Richmond, VA 23219 804-928-7476 jwakefield@grpva.com www.grpva.com

1 MILLION SQ. FT. AVAILABLE FOR DEVELOPMENT

John Hull, Executive Director Roanoke Regional Partnership 540-343-2012 john@roanoke.org www.roanoke.org

WHERE BIOTECH IS AT.

Jason El Koubi, Interim CEO Virginia Economic Development Partnership 901 East Cary Street Richmond, VA 23219 804-545-5600 info@vedp.org www.vedp.org

CANADA Jean-Marc Juteau, Life Sciences Commissioner City of Laval 1555 Chomedey Blvd., Suite 100 Laval (Québec) H7V 3Z1 450-978-6888, ext. 5066 Canada info@citebiotech.com https://www.citebiotech.com/biotechcity.html Len Magyar, Development Commissioner City of Woodstock 500 Dundas Street, P. O. Box 1539 Woodstock, ON N4S 0A7 519-539-2382 x 2112 Fax: 519-539-3275 lmagyar@cityofwoodstock.ca www.cometothecrossroads.com www.cityofwoodstock.ca

Located in Greater Montreal, Biotech City is a biotechnology, life sciences and technology centre. Phase II is ready to welcome companies from the life sciences sector, particularly biofabrication and technology. •

Access to a large talent pool

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Property tax credits available for major construction work

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Quick access to airports, highways and public transportation

citebiotech.com PHASE II

AREA DEVELOPMENT | 2022 Select Sites Directory

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ADINDEXWEBDIRECTORY

Advertiser

Page Advertiser

ALABAMA

HudsonAlpha Institute for Biotechnology mshirleyhowell@hudsonalpha.org www.hudsonalpha.org/innovate

KENTUCKY 25, 39

ARIZONA

Arizona State University Office of Economic Development Aric.Bopp@asu.edu oed.asu.edu https://innovationzones.asu.edu

Commerce Lexington 77 ggreathouse@commercelexington.com www.LocateInLexington.com Kentucky Cabinet for Economic Development 5 EconDev@ky.gov CED.ky.gov

LOUISIANA

Louisiana Economic Development www.OpportunityLouisiana.com

ARKANSAS

Arkansas Economic Development Commission 43 info@arkansasedc.com www.ArkansasEDC.com

MARYLAND

CONNECTICUT

MICHIGAN

AdvanceCT 81 bdwyer@advancect.org www.AdvanceCT.org Cheshire Economic Development Department Andrew.Martelli@cheshirect.org www.CheshireCT.org

FLORIDA

Enterprise Florida, Inc. dwells@enterpriseflorida.com www.EnterpriseFlorida.com

MISSOURI

IDAHO

Emsi 54 www.EconomicModeling.com

IOWA

Iowa Economic Development Authority 51 opportunities@iowaeda.com www.IowaEDA.com

KANSAS

Kansas Department of Commerce Paul.Hughes@ks.gov www.KansasCommerce.gov

Flint & Genesee Economic Alliance info@flintandgenesee.org www.developflintandgenesee.org

MISSISSIPPI

17, 47

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

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

NEVADA

NV Energy www.NVenergy.com

AREA DEVELOPMENT

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PUERTO RICO

Invest Puerto Rico info@investpr.org www.InvestPR.org

65, 87

SOUTH CAROLINA

Santee Cooper Economic Development 83 wmccall@SanteeCooper.com www.PoweringSC.com South Carolina Technical College System neese@sctechsystem.edu www.SCTechSystem.edu

TENNESSEE

Tennessee Department of Economic & Community Development allen.borden@tn.gov www.TNecd.com

Tomball Economic Development Corporation 94 kviolette@tomballtxedc.org www.TomballTXedc.org

VIRGINIA 57

Choose New Jersey, Inc. cscangarella@choosenj.com www.ChooseNJ.com

Middlesex County biz@co.middlesex.nj.us http://www.middlesexcountynj.gov DiscoverMiddlesex.com/biz

Greater Richmond Partnership www.GRPVA.com

Roanoke Regional Partnership john@roanoke.org www.Roanoke.org

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

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

QUEBEC

JobsOhio C4 JobsOhio.com

PENNSYLVANIA

32, 33, C3

CANADA ONTARIO

OHIO 1

Page

TEXAS

NEW JERSEY

Lehigh Valley Economic Development www.LehighValley.org

Maryland Department of Commerce www.Open.Maryland.gov www.Commerce.Maryland.gov

GEORGIA

Georgia Department of Economic Development www.Georgia.org

Page Advertiser

City of Laval info@citebiotech.com https://www.citebiotech.com/ biotech-city.html www.Laval.ca

27, 61

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

12/7/21 1:21 PM

America’s top state for talent

Virginia continues to raise the bar on talent development. Virginia Talent Accelerator Program: Fully customized workforce recruitment and training solutions — at no cost to eligible companies Tech Talent Investment Program: America’s largest investment in computer science education ($2 billion in new public/ private funding), doubling annual grads in CS and related fields Computer Science in K-12: First state to incorporate computer science, including coding, as a mandatory part of the curriculum for all public school students (K-12)

Area Development Q4 Issue 2021

Articles inside

Talent-Based Location Strategies

Adapting to Agility Leveraging a “Hub and Spoke” Model

The Challenges of Renovating an Existing Facility Into a Food Plant

The Next Generation of Cold Chain Logistics

Workforce Development Programs Are in Overdrive

On the Hunt for a Productive New Biomanufacturing Site?

Shaping Compliance for Your New Biomanufacturing Facility

Ramping Up Cybersecurity in the Industrial Sector