The Best of the Best: Site Selection Assistance From Coast to Coast
From Nevada to New Jersey, these seven U.S. locations attract site selectors looking for long-term logistics efficiency and economic success.
Geography. Cost of living. Taxes. Utilities. Managing the many facets involved in site selection can be challenging, if not overwhelming at times, whether companies are expanding business and logistics operations to a nearby city or moving their headquarters to a different state.
To help simplify the process and manage the uncertainties, economic development organizations around the United States are working alongside realtors, utility providers, government officials, and other professionals to offer assistance to site selectors during every step. As a result of their offerings—from workforce training programs to incentives information to construction cost data—the following cities and states are becoming popular destinations for site selectors from all regions of the country.
COLUMBUS, OHIO: FIRSTHAND CONNECTIVITY
Since its founding in 2010, Columbus 2020, an economic development organization for the 11-county Columbus region, has worked with local and state-based partners to help improve and diversify the area's economy, which is currently one of the nation's fastest growing. Featuring 20 economic development professionals, the organization collaborates with realtors, utility providers, and state economic development partner JobsOhio to help site selectors develop new businesses, expand existing businesses, and survey land for future opportunities.
Columbus 2020 works with companies from the beginning of the site selection process to ensure they understand their project requirements and receive all the key information they need to make intelligent decisions that will result in longstanding success.
"For logistics companies, we commonly address topics such as access to markets, unique infrastructure and transportation modes, available real estate, and major cost factors including wages, tax environment, and incentive programming," says Matt McCollister, senior vice president of economic development, Columbus 2020. "We also work with our existing logistics companies and partners to help site selectors better understand the market."
To accomplish that goal, Columbus 2020 team members connect prospective clients with existing logistics company developers who can share their firsthand experiences in the region. As potential clients consider their next options, they also receive documents such as wage and benefit surveys that supplement their personal conversations with raw data.
This connectivity continues until the prospective clients decide where to purchase or lease property and build their businesses.
"As a project progresses, the information becomes more granular and localized," McCollister explains. "Our team works with clients throughout the entire site selection process to ensure they have the information they need to make an informed decision."
The team's site selection process seems to be working so far. Since initiating a Regional Growth Strategy in 2010—to add 150,000 net new jobs and generate $8 billion of capital investment—the organization is achieving its goals ahead of schedule and preparing for continued economic growth.
INDIANAPOLIS: THE CROSSROADS OF AMERICA
More than 250,000 Indiana residents are currently employed in the state's $9.8-billion logistics sector, according to Indy Partnership, the Indy Chamber's regional economic development marketing organization. More than 89,000 of those employees are based in Indianapolis, home to an estimated 1,500 logistics-focused companies.
These figures will likely continue to rise as the "Crossroads of America" can reach nearly 80 percent of the U.S. population within a two-day drive. Indiana features a renowned highway infrastructure (I-65, I-69, I-70, I-74, and I-465), five major railroads, and one of the nation's largest airports. Because of accessibility to these transportation modes, the Indy Chamber receives a variety of requests from site selectors through Indy Partnership.
"Through project management and research, Indy Partnership is able to tailor the most pertinent information a site selector needs," says Joe Pellman, director, marketing and communications, Indy Chamber. "This includes, but is not limited to, information on geography, taxes, cost of living, education, workforce, and commuting patterns."
Indy Partnership works closely with local economic development organizations throughout the region to help clients determine the most suitable location, whether they are seeking rural, suburban, or urban communities. The organization often provides full-service overviews of the region when serving as hosts to current or prospective site selection clients.
"From driving to property visits and regional amenities, to meetings with state and local officials, as well as corporate and community leaders, Indy Partnership serves as the catalyst for meaningful conversations with decision makers," Pellman says.
Renowned for employing more logistics professionals per capita than any other metro area, Indianapolis—and its streamlined air, highway, and railway infrastructure; industrial parks; and wide selection of universities that offer logistics degree programs—will continue to attract site selectors from around the world.
KANSAS CITY: A NATURAL CHOICE FOR LOGISTICS
Thanks to its intermodal parks, central location, and highway, rail, and waterway infrastructure, Kansas City has been a transportation hub for decades. In recent years, it has also become a hot spot for site selectors interested in developing distribution centers. In fact, within the past five years alone, an average of 4 million square feet of speculative space has been added in the area, according to KC SmartPort, a nonprofit economic development organization.
"More than 5.8 million square feet of speculative industrial space hit the market in 2015," says Morgan Bell, manager, business development, KC SmartPort. "The demand of retailers, e-commerce companies, and industrial parts supply companies is meeting this supply."
Kansas City market size totals approximately 225 million square feet, and its current vacancy rate is about 7.5 percent. The area also has 2.5 million square feet of net absorption, as roughly 4.6 million square feet is under construction. In response to steadily rising demand for land, KC Smartport represents the 18-county region's logistics sector. In particular, it helps freight-based clients, including companies that specialize in distribution and warehousing, understand the region's supply chain and how it compares to competing cities, so that they will consider the area for future developments.
"What differentiates KC Smartport is that it is a logistics group, so it is a natural choice for logistics companies," says Chris Gutierrez, president, KC Smartport. "It works for investors, and was created by, funded by, and is focused on the supply chain sector."
To streamline the site selection process, KC Smartport packages and submits clients' real estate needs as one proposal, while typically acting as the lead for each site selection project. Kansas- and Missouri-based real estate and utility partners, among other professionals, work directly with KC Smartport throughout the entire process.
"Although we work as the lead for most projects, from time to time we also follow the direction of the organization that brought us the project," Gutierrez says. "When this occurs, they lead the project during the entire process, while we provide assistance until it is completed."
NEBRASKA: LOGISTICAL INCENTIVES
More than 10 years ago, the Nebraska Department of Economic Development decided to conduct an experiment: Assign a business development professional to work with the logistics sector to identify the benefits of locating distribution, logistics, and warehousing projects in Nebraska. Shortly after, the Nebraska Logistics Council was developed as a means to unite logistics professionals, government officials and agencies, and economic developers to share their expertise and determine how to attract new logistics projects to Nebraska.
The council has focused on four primary advantages—competitive labor wages, affordable land for development, low trucking and rail costs, and electricity (Nebraska is the only state where every electric utility is publicly owned)—that illustrate why logistics professionals should consider conducting business in the state.
"As a result, we have been able to assemble some of the best people in banking, law, logistics, real estate, and transportation to help our economic developers find real-time answers for prospects' projects," says Sheila O'Connor, vice president, Nebraska Trucking Association. "Economic developers on a state, county, or city level, as well as chambers of commerce statewide, can access one of these partners with just a phone call or an email."
In addition, the Nebraska Trucking Association, as well as the Nebraska Logistics Council, which was developed under the umbrella of the Nebraska Trucking Association, has established partnerships with other state agencies to help improve the supply chain sector. For example, to attract young people to logistics, the association works with partners within the state's public and private universities, community colleges, and K-12 school systems to provide career education and job training, including a transportation, distribution, warehousing, and logistics curriculum.
"From the regulatory side, we work closely with the Nebraska State Patrol, as well as the Department of Motor Vehicles and the Department of Roads," says O'Connor. "Nebraska was recently one of the first states to raise its motor vehicle fuel tax and create an infrastructure bank to ensure it has one of the nation's safest, most efficient, and least congested road systems."
Site selectors also are attracted to the incentives the Nebraska Advantage Act offers, such as a research and development advantage and a customized job training advantage.
"Nebraska also offers additional development assistance programs, including tax increment financing, community development block grants, customized job training programs, and industrial revenue bonds," adds Mark C. Becker, supervisor, corporate media and media services, Nebraska Public Power District.
NEW JERSEY: COMPLIMENTARY SERVICES FOR SITE SELECTORS
As a public-private economic development partnership, the New Jersey Partnership for Action (PFA) connects companies with resources such as incentives information and workforce training as they prepare to develop their businesses in the state. The partnership features four members: the New Jersey Business Action Center, which applies a customer-oriented approach to interaction with state government officials; the New Jersey Economic Development Authority, known as the state's financing arm; the Office of the Secretary of Higher Education; and Choose New Jersey.
Choose New Jersey is privately funded and supported by business, association, higher education, labor, and public utilities leaders. Consequently, it is able to offer site selectors a wide range of services, whether they are interested in relocating or expanding, including legal and regulatory assistance, specialized labor, and utilities information.
While overseeing marketing and business attraction initiatives, Choose New Jersey also serves as a conduit to the complimentary services provided by its public and private partners to ensure a smooth process—from planning to move in. Complimentary services vary from research and planning to customized request-for-proposal responses, including detailed market assessments.
New Jersey-based companies may also qualify for tax credits as a result of the Grow New Jersey Assistance Program. By creating at least 25 full-time jobs, or retaining 35 full-time employees, companies based in the logistics sector may qualify for tax credits, which range from $500 to $5,000 per job annually for 10 years.
"The Grow New Jersey Assistance Program is among the most powerful incentive programs in the country, as it helps high-cost New Jersey become more competitive for coveted industrial projects, including large fulfillment centers," explains John Boyd, principal, Boyd Co. Inc. "In terms of state economic development, Choose New Jersey is the apparatus, and does a superb job in supplying site-seeking companies with data—particularly construction, labor, and real estate costs."
RENO, NEVADA: A CENTRAL HUB FOR DISTRIBUTION
For years, the greater Reno, Nev., area has been considered a hot spot for distribution centers. Not only is it strategically located among the 11 western states—and within 500 miles of 18 percent of the U.S. population—it also features two major highway corridors (I-80 and U.S. Route 395), two of the nation's largest railroads (Union Pacific and Burlington Northern Santa Fe), and the Reno-Tahoe International Airport, which provides daily UPS, FedEx, and DHL servivce, according to the Bender Group.
"Reno is the most ideally located central hub for distribution in the western United States," says Mike Kazmierski, president and CEO, Economic Development Authority of Western Nevada (EDAWN). "Aside from offering one-day truck transit to seven states—reaching more than 50 million customers—the area also provides one-day truck transit to five major ports serving the Pacific Rim."
Site selectors are also attracted to the Reno-Tahoe International Airport's cargo traffic, which was measured at 138 million pounds in 2015, according to the EDAWN. They are also attracted to the state's tax advantages, including no franchise, income, or inventory taxes, among other benefits.
"Moreover, in 2015, Nevada's average industrial electric rates were 7 percent lower than the U.S. average, and nearly 43 percent lower than California," Kazmierski adds. "And they have dropped even lower since then."
Due to each of these advantages, the area is also home to one of the United States' largest industrial parks: the 107,000-acre Tahoe Reno Industrial Center. Located about 15 minutes from the Reno Tahoe International Airport, the Industrial Center has roughly 15,000 acres in Phase I, Phase II, and Phase III zoned for industrial use, as well as future plans for expansion. Approximately 130 companies currently use the park.
Furthermore, the Reno-Sparks metro area now has more than 500,000 residents, as Washoe County's annual growth rate is currently estimated to be 3 percent. And a steadily rising number of students are pursuing degrees at Reno-based University of Nevada, where attendance has recently increased to 21,000.
ST. LOUIS: THE GATEWAY TO THE WORLD
St. Louis is often referred to as the "Gateway to the West." But perhaps that description no longer applies, especially as the city's central location—within 500 miles of 30 percent of the U.S. population, according to the St. Louis Regional Chamber—continues to attract logistics site selectors from all over the country and around the world.
"The confluence of the Mississippi, Missouri, and Illinois rivers in one metropolitan area in the middle of the United States, combined with a temperate climate, are gifts that St. Louis residents have leveraged," says Jim Alexander, vice president, economic development, St. Louis Regional Chamber. "It makes perfect sense to have built six major inland ports, six Class I railroads, four U.S. interstates, and two international airports with two foreign trade zones. After all, St. Louis is not only the Gateway to the West; it is also the Gateway to the World."
Aside from its wide selection of transportation modes, the St. Louis region also provides logistics site selectors a variety of economic benefits, including a lower-than-average cost of living, when compared to the U.S. median, and a favorably ranked Business Tax Climate Index (for the state of Missouri). It also offers the ninth-lowest business location cost of large U.S. metro areas, according to the St. Louis Regional Chamber.
At the same time, the area also offers a substantial logistics labor force—more than 90,000 professionals are employed by 6,800 firms in the wholesale trade, transportation, and warehousing fields—as well as a reputable educational system that features four-year institutions such as Washington University and Saint Louis University, each of which offers undergraduate and graduate degrees in supply chain management.
In response to each of these site selection assets, the St. Louis Regional Freightway, an organization that works closely with private industry and state, regional, and local economic development agencies and government officials to increase economic growth throughout the region, was developed. Since its founding, the organization has served three primary purposes: To foster and lead economic growth in the region's freight industry sector; to further develop the region's freight industry through public and private infrastructure projects and freight-related investments; and to market the region's wide array of transportation modes.
"These efforts will help bridge the gap between public infrastructure investment and private logistics capacity and manufacturing," says Mary Lamie, executive director, St. Louis Regional Freightway. "In addition, we are leading activities to enhance the area's freight network, while also providing a point of contact for site selectors, real estate brokers, developers, and logistics businesses considering the St. Louis region for industrial expansion."