Economic Development Site Selection Seminar: Is your Community Ready?

Economic Development Site Selection Seminar: Is your Community Ready?Buckeye PowerEconomic Development Site Selection SeminarNovember 7, 2006

Site Selectors 101 Boot Camp – Part 1September 7th, 2011Ed McCallum, Senior Principal

MSC Overview

• Specializes in site selection and incentive negotiation services

• Established in July 2000 by Ed McCallum and Mark Sweeney

• Brings more than 50 years of combined location consulting experience to our clients worldwide

• Provides clients with uncompromised service, conducting site selection and incentive negotiations with the highest standards of integrity

Introduction

Introduction Private Sector Clients

KasleSteel

Boy Scouts of America

SGL Automotive CarbonFibers LLC joint venture American Titanium Works

http://www.power.alstom.com/

Introduction Economic Development Clients

INDIANA MUNICIPALPOWER AGENCY

Charleston Regional Development Alliance

Presentation Overview

• IS YOUR COMMUNITY READY?

– The Competitive Environment

– Managing Your Site Inventory

– Responding to RFPs

– Preparing for Site Visits

The Competitive Environment

Buckeye PowerEconomic Development Site Selection SeminarNovember 7, 2006

Ed McCallum, Senior Principal


• Attracting investment and jobs is highly competitive, and being prepared creates a competitive advantage


• Company decision-making timeframes are getting shorter

• Communities need to be prepared with sites that are ready for development

Site Selection Factors

Strategic Planning - Growth/Location Center of Market Analyses Regional Definition Competition Analysis

MarketingHuman Resources

Financial Logistics/Transportation

SiteDevelopment Negotiations

Manufacturing/Production

Other

Work Ethic/Labor Climate Assessments Competitive Wage Surveys Productivity Assessments Qualitative Evaluations Training Resources Demographic Survey Legal Environment

Pro-Forma Analysis Breakeven Analysis Recurring and Nonrecurring Cost

Comparisons Optimization Studies Sensitivity Analysis Project Financing Alternatives Risk Analysis

Topographic Surveys Environmental Conditions Boundary Surveys Zoning Status/Modification Access and Site Planning Permitting

Infrastructure Suitability Project Scheduling Sensitivity Support Services Assessment Expandability/Flexibility Determinations

Livability, Quality of Life Assessment Factor Ratings (Kepner-Tregoe Decision Making) Market Assessment Engineering/Construction/Cost Comparisons

Real Estate Negotiations Incentive Negotiations Site Acquisition Purchase Options

Product Distribution Evaluation Raw Material Identification Comparative Transportation

Cost Analysis Multi-Model Scenario Studies


Competitive Site Selection Screening Process

Candidate Locations

Site Decision

Define Search Region - Center-of-Market Analysis

Decision-Making Analysis

Regional Screening- Project Criteria (Musts & Wants)

Proposal Screening

Risk Analysis

Comparative Assessment


Project Time Line

The Old Way

The New Way

Response Time and Information RelevanceIn

form

atio

n fr

om C

andi

date

Project Time Line

Response Time and Information Relevance

Information Management (The old Way)

The Old Way The New Way

Desire vs. RealityQ

ualit

y of

Can

dida

te S

ite

Site Readiness

Process vs. Reality

Planning Phase Phase

IPhase II Phase

III

Affecting the Decision

Influencing

Where your advantages are perceived as important

Planning Phase Phase I Phase II Phase III

Positioning

Where your assets are recognized as relevant

Critical Factors in Site Selection

Recurring Cost Assessment

Transportation Costs

Utilities

Wages and Benfits

Income Tax

Local Occupational Tax

Franchise Tax

Real Property

Personal Property

Inventory Tax

Uemployment Insurance

Critical Factors in Site SelectionRecurring and Non-Recurring Costs

$540,000

$5,150,000

$7,500,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

Alternative 1 Alternative 2 Alternative 3

Non-Recurring Costs

Series1

Critical Factors in Site SelectionCombined NPV

$70,123,839

$71,784,910

$71,241,385

$69,000,000

$69,500,000

$70,000,000

$70,500,000

$71,000,000

$71,500,000

$72,000,000

Alternative 1 Alternative 2 Alternative 3

10 Yr. NPV at 10.0%

Series1

Fundamentals of Facility Siting

• Profit Driven– Part of an overall capital investment decision

• Deadline Driven– Market opportunities must be seized quickly

• Comprehensive– Impacts and is impacted by many aspects of a company

• Risk Averse– Favors location that are less risky


Profit Driven• Think of the siting process as part of the overall capital

investment decision • Models for evaluating capital investment

– NPV

– Payback Period

– IRR• Bottom line: Timing is Critical!


Deadline Driven• Increasing speed / shorter time frame is dominant

theme in recent years– Market opportunities must be seized quickly

– Once decision made to move forward, want minimum time spent on location decision and start-up

– Strongly favors prepared locations with project-ready sites


Competitive• Most investment activity has choices with regard to

location– Industrial: contiguous region or regions

– Office: selected metropolitan areas

– Not just competing with neighboring counties – competing with

locations all over the world


Risk Averse• Siting decisions must account for risk

– Identify risks

– Assess probability

– Estimate impact

• Favors locations that are project-ready because they are less risky


• Speed– Siting decision and project development

• Confidentiality– Critical for a variety of reasons

• Professionalism– Integrity, reliability

• Determination and persistence

Managing Your Site Inventory


Kimberly Williams, Consultant


Responding to RFP

Preparing for Site Visits

Overview: Facility Sting Process

Why Establish a Site Inventory?

• Company decision-making timeframes are getting shorter

• Communities need to be prepared to respond quickly with sites that are ready for development


• Fundamentals– Deadline driven– Risk averse

• “Land” and “site” are not synonymous


• It is a logical step to creating “shovel-ready” sites– Available: it really is for sale, preferably with established terms

and conditions– Fully-served: if all utilities are not already at the site, then at

least plans and price tags have been developed– Developable: wetlands delineated and mitigated, environmental

assessments (and mitigation, if necessary) are complete

Fundamentals of Site Inventory

• Create both a hard copy and electronic file for each site

• Maintain all information in both hard copy and electronic format

Fundamentals of Site Inventory

• Visuals are extremely important– Identify the site boundaries on maps!!!– Include a north arrow, scale, data source,

and date

Components of a Site Inventory

• Site Characteristics• Zoning• Transportation• Utilities• Environmental• Emergency Protective Services*• Workforce*• Education*• Labor Management Relations*

*Data on these items is most often maintained at the community or county level, but certain site-specific items should be included in the site inventory.

Site Characteristics

• Data– Size– Configuration / shape– Number of parcels– Property ownership / control– Easements and right-of-ways– Topography– Bodies of water– Soil types

Site Characteristics

• Visuals / attachments– General location map– Aerial photograph– Topographic map– FEMA floodplain map– Ownership map / tax map– Documentation of property availability– Easements / right-of-ways map– Soils map

Zoning

• Data– Zoning designation(s) of the site– Surrounding zoning / land use– Process for rezoning (if applicable)

• Visuals / attachments– Zoning map– Letter of willingness to considering rezoning

(if applicable)

Transportation

• Data– Roads– Rail– Airports– Ports

• Visuals / attachments– Transportation infrastructure maps– Letter from rail service provider

Utilities

• Data– Electric– Natural gas– Water– Sewer

• Visuals / attachments– Utility infrastructure maps– If utilities are not at the site, a letter from the

service providers regarding utility extension

Environmental

• Data– Studies: Phase I Environmental, Geotechnical Assessment,

Wetlands Delineation, Archaeological– Permitting process– Mineral rights ownership (if applicable)– Any past mining / drilling (if applicable)– Sink holes, natural springs, caves (if applicable)

• Visuals / attachments– Copies of studies– Map of mining / drilling locations– Map of sink holes, natural springs, cave locations

Emergency Protective Services

• Data– Ambulance / EMT

• Provider, distance from site, personnel– Fire

• Provider, resources, distance from site, personnel, insurance rating

– Police• Provider, resources, personnel

Workforce

• Data– Largest employers– Largest manufacturers– Recent new or expanding projects– Recent closings or layoffs– Employment statistics

Education

• Data– Public School Districts (K-12)

• Enrollment, spending, student / teacher ratio– Community colleges, technical schools

• Enrollment, distance from site, programs– Universities

• Enrollment, distance from site, programs

Labor Management Relations

• Data– Largest unionized companies

• Union(s), number of employees, % unionized

Economic Development Site Selection Seminar: Is your Community Ready?Buckeye PowerEconomic Development Site Selection SeminarNovember 7, 2006

Site Selectors 101 Boot Camp – Part 2September 7th, 2011Ed McCallum, Senior Principal

Responding to RFPs


Kimberly Williams, Consultant

Planning Phase

•Conception•Feasibility•Investment Decision

Phase I

•Alignment/Criteria•Regional Analysis•Areas of Interest•RFP•Candidate Communities

Phase II

•Community Visits•Site Evaluation•Comparative Analyses•Finalist Communities

Phase III

•Negotiations•Evaluation•Site Due Diligence•Selection•Announcement


Responding to RFP



Context of the RFP Process

• Through advances in technology and the increased availability of data, the initial steps of the site selection process can be conducted in-house, without contacting the state or local economic development officials

• When you are contacted, you are already an “Area of Interest”

Fundamentals of Responding

• Strive to be– Accurate– Timely– Complete

• Use communication to distinguish your community– Acknowledge receipt of RFP– Follow-up after sending proposal

Fundamentals of Responding

• Focus on providing the information that is requested

• Supplement the submission with other information you would like to provide

Responding to RFPs

• Use a 3-ring window-view binder– Provides space for a cover page– Allows contents to be removed, copied, and

replaced– Keeps materials intact

Responding to RFPs

• Prepare each cover page to include– Project name– Site name– Location (City, County, State)– Submitting organization– Date of submission

• Label the spine of the binder

Responding to RFPs

• When submitting more than one site, include all parallel / common information (i.e., cover letter, road maps, etc.) with each site

Responding to RFPs

• Provide a Table of Contents or Reference Page at the front of the submission

• Use tabs or colored paper to separate sections and attachments

Responding to RFPs

• Any large documents that cannot be bound (i.e., E-size plats) should be placed in sheet protector sleeves

Responding to RFPs

• When submitting more than one site, create a CD for each site

• Place CD within the binder sleeve, or an adhesive CD sleeve

Summary

• Characteristics of a good proposal– Clearly labeled– Organized– Thorough– Meets deadline




Planning Phase


Phase I


Phase II


Phase III


Planning Phase


Phase I


Phase II


Phase III



Responding to RFP



Fundamentals for Site Visits

• Goal is to understand

– Site conditions

and / or

– Operating conditions

and / or

– Living conditions


• Understand the function of the visit, and who is coming– Where are they in the site selection process

– What specific information is required for next step or project

milestone

– If possible, get names and positions

– There are only two leaders (Clients and Yours)


• Provide materials– Itineraries (with names)– Site summary sheet– Maps!!!

• Provide – What they ask for first– What you think they need next– NEVER refer back to “information I have already

sent you” (have duplicates)


• Review the project drivers and specifications, and be prepared to address how the site meets them

• Assemble a site visit team that can provide additional expertise

• Control the experts – you are in charge, not them


• Make sure that all members of the site visit team are familiar with– Project specifications

– Site that was submitted

– Who is in charge (it is not them)

Conducting Site Visits

• Position– Strengths to match client needs

• Maximize value– Mitigate weaknesses

• Minimize impact

• Communicate– Answer the questions!

Zen According to MSC

• You are a service organization first– Know where you are in site selection process– Answer the questions asked– Facilitate information flow– Provide support as necessary

• You are a sales organization last– Selling does no good if you are eliminated

due to lack of information

6 Legitimate Points of Contact

• Verification of receipt of RFP• Questions about the RFP• RFP response is on its way – Verification of receipt to

consultant• Follow up – are there any questions about the RFP• Follow up on Status

Summary



What Does This Mean For You?

• Siting is a process driven by some key fundamental issues– Understanding those fundamentals and the process will enable

you to better influence the decision

• Responsiveness with quality, critical, and relevant information is the best way to influence the decision

• Know your product, know your customer, and respond appropriately

McCallum Sweeney Consulting

Ed McCallumSenior Principal

McCallum Sweeney Consulting550 S. Main Street - #550Greenville, SC 29601

864-672-1600864-672-1610 (fax)

[email protected]

www.mccallumsweeney.com

Documents

Economic Development Site Selection Seminar: Is your Community Ready?