Project-Winning Tips for Economic Developers
February 23, 2017
In October 2016, DCI launched a new podcast, “The Project: Inside Corporate Location Decisions,” designed to give listeners an inside look at how cities and states compete for corporate relocation and expansion projects. To date, my co-host Andy Levine and I have produced a dozen episodes, which involved interviews with 24 company executives, site selection consultants and economic developers.
Needless to say, we’ve had a lot through frank conversations with decision makers about why a location was selected and what it took to close the deal.
With that in mind, we compiled the following project-winning tips for economic developers gleaned from “The Project.”
1. Never Underestimate the Power of an Existing Building
In episode #2, which profiles Dana Incorporated’s decision to locate a $70 million manufacturing plant in Toledo, Ohio, the company reveals that, if the community hadn’t had the foresight to build a 100,000-square-foot spec building, the deal would have gone somewhere else. Paul Toth, CEO of the Toledo-Lucas County Port Authority, says the decision to construct the building came about after a 2010 study by CBRE revealed that 85% of the companies coming into a community are looking for an existing building. Only about 15% are willing to build their own facility on a brownfield, greenfield or in an industrial park or build-to-suit.
2. Roll Out the Red Carpet
In episode #3, CAEK, a women-run startup reveals that they chose Reno, Nevada, over locating in Silicon Valley because the Economic Development Authority of Western Nevada (EDAWN) went above and beyond to roll out the red carpet for the company during their visit. A key turning point for the project was a casual dinner where local business leaders joined the startup owners to talk frankly about the local business climate and their experiences operating there.
3. Show Them Your Downtown, Not Just Your Shovel-Ready Sites
When site selectors and company executives come to town for a site tour, they’re not just there to see the proposed site or building, they want to see all that the community has to offer. In episode #4, the City of Owensboro reveals that they came dangerously close to losing a $2 million project from customer experience company Alorica. The saving grace, ultimately, was that the company’s project team fell in love with the city’s vibrant downtown, which Owensboro has spent more than $120 million to redevelop over the last seven years. After seeing the downtown, Alorica changed their course and asked to see a building there, where they ultimately located.
4. Know When to Go “All In” with the Business Deal
The Kenosha Area Business Alliance (KABA)’s secret to persuading Vonco Products to move from Lake Villa, Illinois to Salem, Wisconsin was going “all in” on their final offer. Todd Battle, President of KABA, could sense that the deal was trending away from him and, instead of retreating, he came to the company with an offer to build an 80,000-square-foot manufacturing facility for them, essentially “at cost.” This move was certainly risky, but, as the company tells it, it’s what landed KABA the deal in the end.
5. Keep An Eye on Growing Companies with Operations in Your Region
If a company is headquartered elsewhere but has successful operations in your region already, they may very well be quietly considering a relocation. That was the case for Hotwire Communications, which had outgrown its headquarters in Bala Cynwyd, Pennsylvania and began exploring a new location around its other current operations without the help of consultants or economic development organizations. Ultimately, their search led them to Southeast Florida, where they had existing operations and a growing customer base. The key to sealing the deal was that Greater Fort Lauderdale Alliance and the state caught onto their decision process and moved quickly to secure an incentive package to facilitate their move.
DCI will continue to release a new episode every two weeks (every other Monday morning) in the months ahead. We certainly encourage you to subscribe on iTunes and leave us a review. If there is a new project in your region that might be an interesting fit for “The Project,” we want to hear from you.
We hope you’ll keep listening. There are many more projects to come.