Under the Radar: Telecommunications Firm Quietly Explores Headquarters Relocation
November 14, 2016
(Episode 5 of “The Project: Inside Corporate Location Decisions”)
Hotwire Communications is a fast-growing, privately held company that was rapidly outgrowing its headquarters in Bala Cynwyd, Pennsylvania. When they began exploring a new location, they did so quietly without the help of consultants or economic development organizations. Their search led them to purchase a 180,000 square foot building in Fort Lauderdale that was a perfect match with their needs. And they called upon both the city and the state for a $1.9 million incentive package that would seal the deal.
We interview Dan O’Connell, Vice President of Sales for Hotwire Communications and Bob Swindell, President/CEO of the Greater Fort Lauderdale Alliance in this episode.
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Andy Levine (DCI): A headquarters relocation is the Holy Grail of economic development projects. And when a publicly-held company relocates its corporate headquarters, it’s almost always a complicated process. They hire consultants. They reach out to a short list of communities to gather data. They often create a competition between these different communities, and sometimes, in a very public way.
Patience Fairbrother (DCI): Today’s story illustrates how privately-held companies can operate differently. We’ll take a closer look at Hotwire Communications, a fast-growing firm that had expanded to over a thousand employees. Their search happened quietly, but they ultimately announced their decision to move their corporate headquarters from Bala Cynwyd, Pennsylvania, to Fort Lauderdale, Florida.
Andy: So welcome to Episode 5 of The Project: Inside Corporate Location Decisions. I’m Andy Levine of Development Counsellors International.
Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s cohost of The Project. Every two weeks, we bring you a new story of a recent corporate location decision. We’ll share an inside look from company executives, economic developers, and site selection consultants.
Andy: So in today’s podcast, we’re gonna hear from two key players. Dan O’Connell is the vice president of sales for Hotwire Communications, and he was part of the team that explored a new location for the company’s corporate headquarters. Bob Swindell is President and CEO of the Greater Fort Lauderdale Alliance. We’re gonna start out with Dan and simply get a better feel for Hotwire Communications.
Dan O’Connell (Hotwire Communications): So Hotwire provides customized communications and entertainment solutions for residential communities, small and medium businesses, the hospitality market, student housing, and senior and assisted living communities. We do so over 100% fiber optic network. We offer gigabit internet speeds into the residential space. In fact, this year, we’ve upgraded our capability to offer 10 gigabit speeds into the residential space.
We were founded in 2000 in Bala Cynwyd, Pennsylvania, by Michael Karp and Kristin Johnson Karp. And we’ve been in the Florida market for about 11 years. We came down here in about 2005.
Patience: So the company has been headquartered in Bala Cynwyd, Pennsylvania, which is a suburb of Philadelphia, since its founding in 2000. But the growth is happening in Florida.
Dan: Florida has been a very fast-growing market for us. As I said, we’ve been here for about 11 years. We have a higher concentration of customers in Florida today and more employees in Florida today than we have anywhere else. And I think, you know, our senior leadership, about a year ago, said, “Look, to accommodate the growth that we know is coming and the employee staffing that we’re gonna have to do, we’re running out of space. We’re gonna need to do one of a couple of things. We can go get additional space to accommodate the growth or we can look to consolidate.”
Andy: The short list was pretty short, the company looked at three different possibilities.
Dan: I think there were three areas that we looked at seriously: Southeast Florida, Atlanta, and Philadelphia. You know, Philadelphia, obviously, because we’re already there. Atlanta is a high-growth market for us. It’s a great business climate, great transportation hub, so a lot of good reasons to look at that market at well. But Southeast Florida, not only for the reasons I’ve mentioned, but once we got into the negotiations and started looking specifically at properties, the way the state and the community stepped up really just kind of sealed the deal.
Patience: So the company is exploring its options in each community. But Florida is emerging as a favorite for a couple of different reasons. One, that’s where the growth is already occurring. Approximately 60% of the company’s staff is already based in Florida. And number two, Hotwire’s had good success of finding the right talent in Southeast Florida.
Andy: And the company is exploring these three options completely on its own. No consultants have been hired, they haven’t engaged the help of an economic development group in any way, but that changes when they located building that’s a perfect fit for Hotwire, a former bank headquarters.
Patience: That seems to be a pattern in some of our recent podcasts.
Andy: Yes, it does, Patience. Let’s go back to Dan OConnell of Hotwire.
Dan: Yes, we did, in fact, do site visits to each of the market areas that we were giving consideration to. But I think, you know, once, honestly, once this property was identified, first of all, architecturally and aesthetically, it’s a beautiful building.
It’s 180,000 square feet, so it’s going to accommodate our immediate needs very easily as well as growth well into the future. The location, again, perfect ease of access to 95, and so many of our customers and prospective customers, as we build out data labs and video labs and a customer demonstration experience center at this location. We just felt it checked all the boxes. It was hurricane-ready. There was nothing lacking, quite honestly. So I think, once identified, it was a pretty quick decision, a quick process.
Patience: And here’s where the economic development community comes in. Here’s Bob Swindell with the Greater Fort Lauderdale Alliance.
Bob Swindell (Greater Fort Lauderdale Alliance): They reached out to the City of Fort Lauderdale. They found a building that they liked, explained that they were relocating their headquarters. So the City reached out to us and said, “We got what looks like a phenomenal company, thinking about moving their headquarters from the Northeast. We need help in putting together a package along with a great building that they found.”
Andy: The cost of the building was \$21 million. Hotwire Communications made it clear to everyone that if the deal was going to happen, it had to move quickly. So the Greater Fort Lauderdale Alliance, Enterprise Florida, and the City of Fort Lauderdale sprung into action. They secured a \$1.9 million-incentive package in just two weeks. That kind of speed is pretty much unheard of in economic development circles.
Bob: It speaks volumes about the City and the State of Florida that when it’s an urgent situation, and people understand that it’s just not being urgent for the sake of being urgent, it’s like, you know, this company has a contract that they can lose the building if we don’t get this done in time, so it was in everybody’s best interest to work quickly and to make sure the pieces came together for them.
Patience: So as a final question, Andy asked Bob Swindell about the importance of the incentive package.
Andy: If you had to guess, let’s say the incentives package did not come through, do you think the company would have, perhaps, passed on Fort Lauderdale or what would be your perspective on that?
Bob: I think they would have passed on that building, and when that happens, you pretty much start… Like someone buying a house, when they sort of get their heart set on something that they found that’s a perfect fit in the executives’ minds’ eye, and that project thing, then that building falls through, your human nature is, “Well, let’s go back really to the starting blocks again, and go back to what’s… re-look at our requirements are for a facility, and let’s start the search process again.”
And I think in that kind of situation, there’s a strong probably that you can lose the client when they go back again and start all over.
Andy: So Patience, here we are at the takeaways part of this episode.
Patience: Which is your favorite part.
Andy: Indeed, it is. I will let you start off.
Patience: Great. Often, government is criticized for not being able to move at the speed of business, and that really wasn’t the case here. Hotwire came to the Greater Fort Lauderdale Alliance and said, “We need this to move fast or it’s not going to happen.” And the Alliance really brought this into shape very quickly. They worked with the State, they worked with the City, and they got this $1.9 million-incentive package approved in just two weeks, which is really unheard of in most states.
Andy: Two weeks is pretty amazing. In most states, you’re talking months to get something like this going.
Andy: Well, let me take us in a different direction. So when most companies are first exploring a project, they don’t contact an economic development organization, and this certainly was the case with Hotwire Communications. In fact, it didn’t reach out to the Greater Fort Lauderdale Alliance until the very end of the process, as the incentives discussion. So within that, there is a message for economic development groups.
They need to keep a close eye on companies that are headquartered elsewhere, but are indeed growing within their own community.
Patience: It’s really keeping your ear to the ground, and closely monitoring that growth.
Andy: Absolutely. They are a community’s best opportunity to add new functions. And in the case of Hotwire, the ultimate new function, the corporate headquarters was added in Greater Fort Lauderdale.
Patience: So that is a wrap on Episode 5 of The Project: Inside Corporate Location Decisions.
Andy: We wanna thank Dan OConnell of Hotwire Communications as well as Bob Swindell of the Greater Fort Lauderdale Alliance. We also wanna thank Maggie Gunther also so the Alliance as well Sean Helton of Enterprise Florida. They helped make all these interviews happen.
Patience: The Project’s theme song comes courtesy of Evan Levine and his jazz trio. The Project is sponsored by DCI. We are the leader in marketing places and have served in over 450 cities, states, regions, and countries. You can learn more about us at aboutdci.com.
Andy: We hope you’ve enjoyed this program about Hotwire Communications and Greater Fort Lauderdale. If you have a recent project that has happened in your community, please let us know. We’re always on the lookout for new stories.
Patience: We’re hard at work on new episodes of The Project. We hope you will keep listening. There are many more projects to come.