Economic Development Site Selection
Seminar:
Is your
Ready?
Site
Selectors
101 Community
Boot Camp –
Part 1
Buckeye Power
September
7th, 2011 Site Selection Seminar
Economic Development
Ed McCallum, Senior Principal
November 7, 2006
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
SGL Automotive Carbon
Fibers LLC joint venture
American Titanium Works
Kasle
Steel
Boy Scouts of America
Introduction
Economic Development Clients
INDIANA MUNICIPAL
POWER 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 Power
Economic Development Site Selection Seminar
November 7, 2006
Ed McCallum, Senior Principal
The Competitive Environment
• Attracting investment and jobs is highly
competitive, and being prepared creates
a competitive advantage
The Competitive Environment
• Company decision-making timeframes
are getting shorter
• Communities need to be prepared with
sites that are ready for development
Site Selection Factors
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Strategic Planning - Growth/Location
Center of Market Analyses
Regional Definition
Competition Analysis
Pro-Forma Analysis
Breakeven Analysis
Recurring and Nonrecurring Cost
Comparisons
Optimization Studies
Sensitivity Analysis
Project Financing
Alternatives
Risk Analysis
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Topographic Surveys
Environmental Conditions
Boundary Surveys
Zoning Status/Modification
Access and Site Planning
Permitting
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Work Ethic/Labor Climate Assessments
Competitive Wage Surveys
Productivity Assessments
Qualitative Evaluations
Training Resources
Demographic Survey
Legal Environment
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Marketing
Human
Resources
Logistics/
Transportation
Financial
Site
Development
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Product Distribution Evaluation
Raw Material Identification
Comparative Transportation
Cost Analysis
Multi-Model Scenario Studies
Negotiations
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Manufacturing/
Production
Infrastructure Suitability
Project Scheduling Sensitivity
Support Services Assessment
Expandability/Flexibility Determinations
Other
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Real Estate Negotiations
Incentive Negotiations
Site Acquisition
Purchase Options
Livability, Quality of Life Assessment
Factor Ratings (Kepner-Tregoe Decision Making)
Market Assessment
Engineering/Construction/Cost Comparisons
The Competitive Environment
Competitive Site Selection Screening Process
Candidate Locations
Define Search Region
- Center-of-Market Analysis
Regional Screening
- Project Criteria (Musts & Wants)
Proposal Screening
Comparative Assessment
Decision-Making Analysis
Risk Analysis
Site Decision
The Competitive Environment
Information from Candidate
Response
ResponseTime
Timeand
andInformation
InformationRelevance
Relevance
The Old Way
The New Way
Project Time Line
Project Time Line
Information Management
(The old Way)
The Old Way
The New Way
Quality of Candidate Site
Desire vs. Reality
Site Readiness
Process vs. Reality
Planning
Phase
Phase I
Phase II
Phase III
Affecting the Decision
Planning
Phase
Phase I
Where your assets
are recognized as
relevant
Phase II
Phase III
Where your
advantages are
perceived as
important
Critical Factors in Site Selection
Local Occupational Tax
Recurring Cost Assessment
Franchise Tax
Income Tax
Real Property
Personal Property
Utilities
Inventory Tax
Uemployment Insurance
Transportation Costs
Wages and Benfits
Critical Factors in Site Selection
Recurring and Non-Recurring Costs
Non-Recurring Costs
$8,000,000
$7,000,000
$6,000,000
$5,000,000
Series1
$7,500,000
$4,000,000
$3,000,000
$5,150,000
$2,000,000
$1,000,000
$540,000
$0
Alternative 1
Alternative 2
Alternative 3
Critical Factors in Site Selection
Combined NPV
10 Yr. NPV at 10.0%
$72,000,000
$71,500,000
$71,000,000
Series1
$71,784,910
$70,500,000
$71,241,385
$70,000,000
$70,123,839
$69,500,000
$69,000,000
Alternative 1
Alternative 2
Alternative 3
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
Fundamentals of Facility Siting
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!
Fundamentals of Facility Siting
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
Fundamentals of Facility Siting
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
Fundamentals of Facility Siting
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
The Competitive Environment
• Speed
– Siting decision and project development
• Confidentiality
– Critical for a variety of reasons
• Professionalism
– Integrity, reliability
• Determination and persistence
Managing Your Site Inventory
Buckeye Power
Economic Development Site Selection Seminar
November 7, 2006
Kimberly Williams, Consultant
Overview: Facility Sting Process
Managing
Your Site
Inventory
Responding
to RFP
Preparing
for
Site Visits
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
Why Establish a Site Inventory?
• Fundamentals
– Deadline driven
– Risk averse
• “Land” and “site” are not synonymous
Why Establish a Site Inventory?
• It is a logical step to creating “shovelready” 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
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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
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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
Ready?
Site
Selectors
101 Community
Boot Camp –
Part 2
Buckeye Power
September
7th, 2011 Site Selection Seminar
Economic Development
Ed McCallum, Senior Principal
November 7, 2006
Responding to RFPs
Buckeye Power
Economic Development Site Selection Seminar
November 7, 2006
Kimberly Williams, Consultant
Overview: Facility Sting Process
Planning
Phase
Phase I
Phase II
Phase III
•Conception
•Alignment/Criteria
•Community Visits
•Negotiations
•Feasibility
•Regional Analysis
•Site Evaluation
•Evaluation
•Investment
Decision
•Areas of Interest
•Comparative Analyses
•Site Due Diligence
•RFP
•Finalist Communities
•Selection
•Announcement
•Candidate
Communities
Managing
Your Site
Inventory
Responding
to RFP
Preparing
for
Site Visits
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
Preparing for Site Visits
Buckeye Power
Economic Development Site Selection Seminar
November 7, 2006
Ed McCallum, Senior Principal
Overview: Facility Sting Process
Planning
Phase
Phase I
Phase II
Phase III
•Conception
•Alignment/Criteria
•Community Visits
•Negotiations
•Feasibility
•Regional Analysis
•Site Evaluation
•Evaluation
•Investment
Decision
•Areas of Interest
•Comparative Analyses
•Site Due Diligence
•RFP
•Finalist Communities
•Selection
•Announcement
•Candidate
Communities
Managing
Your Site
Inventory
Responding
to RFP
Preparing
for
Site Visits
Fundamentals for Site Visits
• Goal is to understand
– Site conditions
and / or
– Operating conditions
and / or
– Living conditions
Preparing for Site Visits
• 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)
Preparing for Site Visits
• 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)
Preparing for Site Visits
• 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
Preparing for Site Visits
• 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
Buckeye Power
Economic Development Site Selection Seminar
November 7, 2006
Ed McCallum, Senior Principal
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 McCallum
Senior Principal
McCallum Sweeney Consulting
550 S. Main Street - #550
Greenville, SC 29601
864-672-1600
864-672-1610 (fax)
emccallum@mccallumsweeney.com
www.mccallumsweeney.com