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
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
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
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
The Competitive Environment
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
The Competitive Environment
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
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 PowerEconomic Development Site Selection SeminarNovember 7, 2006
Kimberly Williams, Consultant
Managing Your Site Inventory
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
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 “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
Buckeye PowerEconomic Development Site Selection SeminarNovember 7, 2006
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
Managing Your Site Inventory
Responding to RFP
Preparing for Site Visits
Overview: Facility Sting Process
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 PowerEconomic Development Site Selection SeminarNovember 7, 2006
Ed McCallum, Senior Principal
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
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
Managing Your Site Inventory
Responding to RFP
Preparing for Site Visits
Overview: Facility Sting Process
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 PowerEconomic Development Site Selection SeminarNovember 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 McCallumSenior Principal
McCallum Sweeney Consulting550 S. Main Street - #550Greenville, SC 29601
864-672-1600864-672-1610 (fax)
www.mccallumsweeney.com