Up-and-Comers: Site Consultants Reveal Their = Long-Term Picks

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Plants Sites & Parks=20 Magazine:January 2004 =
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Feature=20

Up-and-Comers: Site Consultants Reveal Their Long-Term=20 Picks

By Nan Bauroth

Corporate = site location is=20 part art, part science. While economic data analysis is one = skill=20 necessary to help a client pinpoint the perfect spot for a = facility,=20 successful site consultants must possess many talents, one = of which=20 is crystal ball gazing.

So, in the spirit of the = New=20 Year, we asked a number of consultants to venture out on a = limb and=20 predict those places they believe could be hot spots in the = next few=20 years.

As to the criteria for their picks, = consultants began=20 with the same caveat: =93Our top two criteria would be the = company=92s=20 top two,=94 stresses David Brandon, senior vice president = and=20 principal of The Pathfinders, a Dallas firm specializing in = site=20 selection and labor market analysis.

That said, = Brandon adds=20 that labor force and overall operational profile are most=20 critical.

Dennis Donovan, director of = global site=20 selection at the Wadley Donovan Group, a Grubb & Ellis = Co. based=20 in Edison, N.J., echoed the emphasis on labor force at a = reasonable=20 cost.

=93When the economy gets back into full swing = and=20 employment demand picks up, shortly thereafter worker = shortages will=20 emerge in the U.S.,=94 Donovan asserts. =93They will become = exacerbated=20 over time to the point where the U.S. Department of Labor is = predicting a 28-million-worker shortage by = 2030.=94

He=20 maintains that most experts believe that by 2006, the United = States=20 will start to experience noticeable shortages across skill = sets. =93It=20 will only get worse with temporary lulls due to periods of = economic=20 instability, so it=92s a crucial issue in getting new=20 facilities.=94

Donovan=92s second criterion is the = speed of=20 establishing new facilities. =93Time to market, I call = it,=94 he says.=20 =93That translates into location requirements that, at = minimum, are=20 certified pre-permitted sites, and fast-track = construction.=94 That=20 also means communities with a suitable inventory of = available=20 buildings.

Donovan=92s third factor, which relates = to supply=20 chain and logistics, was shipping time to market. = =93Transportation=20 infrastructure and freight costs are becoming more=20 important.=94

Although the consultants = interviewed=20 intuitively applied measuring sticks such as workforce = projections=20 in making their picks, they also relied heavily on = individual=20 assessment and wisdom of experience. Then again, such = intangible=20 assets are often a corporate location advisor=92s real value = in=20 helping clients find an ideal site.

Globetrotting: = Overseas Sites with Promise

Go east, young man.=20 According to Angelos Angelou, principal economist with = Austin,=20 Texas-based Angelou Economics, an independent economic = development=20 consulting and site selection firm, the least expensive = country to=20 look at for manufacturing will be the Philippines. =

=93Momentum=20 is also being picked up in China,=94 he adds, noting that he = senses=20 cities such as Xian and Chengdu have all the right = ingredients in=20 terms of educational infrastructure as well as skilled = labor.=20 Bangalore, India, is another place he feels will be=20 attractive.

In the biotech/life sciences area, = Angelou likes=20 Switzerland and the Kuhl region of Germany, including = Strasburg.=20 =93Dresden is the place to be in terms of semiconductor = industry.=94=20 Portugal is another up and comer in his book.

Donovan = thinks=20 Estonia, Bulgaria and Romania are undiscovered. =93We=92ll = start seeing=20 some South American areas such as Ecuador, which has adopted = the=20 dollar, and Paraguay, in the future,=94 he = adds.

Back to the=20 USA: Rising Stars

The sleeper theme in this = country is=20 rural America.

According to Michael Hickey, president = of=20 Hickey & Associates, a site selection consultant based = in=20 Minneapolis, small towns with a population of around 300,000 = (outside the MSA for a city) are attractive for several=20 reasons.

=93They are sleeper communities because = first, they=20 have a very solid work and worth ethic. They also usually = have an=20 available labor source. And no matter where you are, they = usually=20 have a good community college to help train and develop = people in=20 conjunction with the company.=94

He notes that to = attract=20 companies, however, rural areas must have bandwidth. Toward = that=20 end, Sen. Norm Coleman of Minnesota has introduced a = =93Rural=20 Renaissance=94 bill in the U.S. Senate to help small town = America=20 rebuild its Main Streets and lure companies = back.

Hickey=92s=20 favorite regions for rural business regeneration are the = upper=20 Midwest and Southeast. In Donovan=92s view, going more rural = means,=20 =93You=92re talking about smaller metro areas and larger = non-metro=20 areas, where a company can serve its markets, but at a = low-cost,=20 high-quality location.=94

In dealing with small = towns, permits=20 are easy to do, many will have a shell-building program, and = occupancy costs and taxes are lower. =93Smaller communities = and=20 non-metro areas I see doing exceptionally well in the next = decade,=20 and this holds for all regions,=94 says Donovan.

In = the=20 Northwest, Donovan likes places such as Pendleton, Ore., or = Pullman,=20 Wash.; in the Southwest, towns like Bullhead City, Ariz., or = Farmington, N.M. In the upper Plains, he sees Dickinson, = N.D., or a=20 Grant Island, Neb. Down South, he points to Lufkin, Texas; = Meridian,=20 Miss.; or Muscle Shoals, Ala. In the Northeast, he is = enthusiastic=20 about Vineland, N.J.; Altoona, Pa.; and Oneida, N.Y. =

Brandon=20 is also excited about less populated regions. =93One of the = things we=20 have leaned toward over the last few years are secondary, = tertiary=20 and quaternary markets, away from major metro = concentrations, that=20 offer the kind of amenities and business operating features = you can=20 find in a major metro area, but at a smaller = scale.=94

He cites=20 Prescott Valley, Ariz. =93A very attractive area 100 miles = north of=20 Phoenix and separated from it by distance and also = geography. There=20 is a real appeal to the community, but it has not been as = well known=20 as it should have been.=94

When it comes to heavy = industrial=20 activities, Brandon chose Longview, Wash. =93People might = not think of=20 it, but it has immediate access to Portland and Vancouver, = and all=20 the power, water, people with skills, and real estate you = need to=20 operate an industrial pursuit. Longview also has a very = embracing=20 and encouraging attitude.=94

Another favorite sleeper = of=20 Brandon=92s is Bryan/College Station in Texas, home of Texas = A&M=20 University. =93The town is working hard to establish itself = as a=20 research center but also has all the ingredients in our = opinion that=20 would encourage manufacturing and production of goods, as = well as=20 research on new technologies.

=93This area is small, = but now=20 coming into its own, and will be better known in the course = of five=20 years.=94

In studying the American horizon, Angelou = is hot on=20 states with political leadership working to rekindle = economic=20 development. Examples include Texas, New York and New = Mexico.=20

=93Albany, N.Y., is now a place of focus. In Texas, = I would=20 say the Sugarlands region in Houston and Foard County are up = and=20 comers. Albuquerque will also be a major = winner.=94

Angelou=20 also sees a possible resurgence in Winston-Salem, N.C., = which has=20 been plagued with chronic manufacturing losses. =

=93If the=20 region follows an economic strategy, it could potentially = become a=20 hotbed for design-related activities=97biotech, software = engineering,=20 product development and industrial = design.

=93We=20 discovered the region=92s assets rely on historical and = present talent=20 to design textiles, furniture, etc. This was the first = region to=20 have an arts council, so by trying to bring those forces = together=20 and brand themselves, they could begin to make a=20 difference.=94

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Up-and-Comers: Site Consultants Reveal Their Long-Term=20 Picks