Community Survivors Outwit Outlast Outplay

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Community Survivors Outwit Outlast
Outplay
Gulf Power Economic Symposium September 11, 2007
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Presentation Overview

• Introduction to McCallum Sweeney Consulting
• Facility Siting Fundamentals
• Facility Siting Process
• Characteristics of Survivors
• How your site can survive in the Facility Siting
  Process

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Introduction

• MSC specializes in site selection and incentive
  negotiation services
• MSC was established in July 2000 by Ed McCallum
  and Mark Sweeney
• MSC brings more than 50 years of combined
  location consulting experience to our clients
  worldwide
• MSC is committed to providing our clients with
  uncompromised service, conducting site selection
  and incentive negotiations with the highest
  standards of integrity

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IntroductionClients
Site Selection
Economic Development
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Fundamentals of the Facility Siting Process
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Fundamentals

• Profit driven
• Deadline driven
• Competitive
• Comprehensive
• Risk averse

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Facility Siting Process Fundamentals

• Profit driven
• Investment for purpose of return
• Deadline driven
• Both the site selection and project start-up
• Competitive
• Multiple location options
• Comprehensive
• Complex decision involving most functional areas
• Risk averse

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Competitive Site SelectionScreening Process
Candidate Locations

• Define Search Region
• Center-of-Market Analysis

Regional Screening - Project Criteria RFP
Proposal Screening
Site Visits / Comparative Assessment
Cost Modeling / Incentives
Risk Analysis
Site Decision
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How Can I Survive?

• BE PREPARED!

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Characteristics of Survivors

• Strong strategic plans with pro-active marketing
  strategies
• Professional economic development teams
• Sites that are ready to go
• Comprehensive training / workforce development
  programs
• Flexible incentive programs

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Characteristics of SurvivorsStrong Strategic
Plans

• Economic development strategic plans that are
  grounded in reality, well-supported and acted
  upon
• Leadership that supports and understand the
  business recruitment process
• Private sector partners that are actively involved

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Characteristics of SurvivorsStrong Strategic
Plans

• Product knowledge
• Know your community
• Strengths and weaknesses
• Customer knowledge
• Know your customer (target industries)
• Their location requirements
• Develop Product
• Do you have the assets required to attract your
  targets?

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Characteristics of SurvivorsStrong Strategic
Plans
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Characteristics of SurvivorsProactive Marketing

• Communicate
• Tricky in Economic Development
• No one knows where a company might be in the
  investment decision process
• Paybacks are not immediate
• Try, try again!

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Characteristics of SurvivorsProactive Marketing

• Face-to-face
• Build a relationship first
• Sell later
• Web site
• Direct mail (email)
• Newsletters
• Conferences
• Target Industry

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Characteristics of SurvivorsProfessional ED Team

• What does this mean?
• Responsiveness
• Ability to position a community (maximize
  strengths and mitigate weaknesses) to win the
  project
• Ability to know when a project does not make
  sense and the willingness to say No Thanks.
• Why is it important?
• Clients put a lot of stock in how well a team
  works together
• Clients notice the little things

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Characteristics of SurvivorsProject Ready Sites

• Property
• Sites

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Characteristics of SurvivorsProject Ready Sites

• What do you need?
• Sites that are Ready To Go
• Project Ready Sites
• Certified Sites
• Shovel Ready Sites
• Job Ready Sites

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Characteristics of SurvivorsProject Ready Sites

• Why are they important?
• Fundamentals
• Deadline driven
• Risk Averse
• Competitive
• At the end of the day, companies do not build
  facilities in communities they build them on
  sites.

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Characteristics of SurvivorsProject 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

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Characteristics of SurvivorsWorkforce Training

• Workforce training that is coordinated, flexible,
  comprehensive
• Recruiting and screening
• Pre-employment training
• Post-employment training

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Characteristics of SurvivorsFlexible Incentives

• Incentives that are targeted and flexible
• Capital Cost Incentives
• Grants to offset infrastructure costs
• Recruiting, Screening, Pre-employment training
  costs
• Sales tax exemptions
• Recurring Cost Incentives
• Tax incentives
• Utility rate riders

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Surviving in the Siting Process
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Surviving in the Siting ProcessBasic Rules of
the Road

• Operate in a Project Environment
• Deadline driven
• generally unreasonable
• not 9 to 5!
• Customer-oriented / customized
• cant rely strictly on boilerplate
• communication skills
• Competitive
• very competitive environment
• someone else doing the same thing as you, only
  better!

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Facility Siting Process

• Planning Phase
• Conception
• Feasibility
• Investment Decision

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

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

• Phase III
• Negotiations
• Evaluation
• Site Due Diligence
• Risk Analysis
• Selection
• Announcement

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Process Phase I

• Project definition and scope
• Parameters, decision criteria, search region
• Regional screening (GIS)
• Attraction and aversion factors
• Markets Raw material, product
• Transportation network
• Competitor locations
• Existing facility locations
• Labor market characteristics
• Energy market characteristics
• Areas of Interest

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Sample Screening Criteria
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Process Phase I

• Request for Proposal
• Defines project and information needs
• Deadlines!
• Strong emphasis on available property
• Evaluate
• Screen against project criteria
• Candidate Communities

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Surviving in the Site Selection Process Phase I

• Defining Areas of Interest
• Have a great website can prospects find you
  quickly and find out what they need to know about
  your community
• Image building are you top of mind to decision
  makers in your key target industries?
• Relationship marketing do we know you? Do we
  know your community?

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Surviving in the Site Selection Process Phase I

• Request for Proposal
• Will focus on local site-specific issues
• Less likely to ask for basic, secondary source
  information
• Common to have follow-up questions
• KNOW YOUR SITES

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Facility Siting Process
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Process Phase II

• Community visits
• Detailed data gathering
• Meet with existing industry
• Meet with community leaders
• Site evaluation
• Physical inspection / site data
• Detailed evaluation of site conditions
• Readiness

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Process Phase IIEvaluation of Site Conditions

• Location
• Configuration
• Topography
• Access
• Zoning
• Neighboring land use
• Environmental (Phase I)

• Ownership
• Construction feasibility
• Infrastructure
• Utilities
• Acquisition cost
• Total development cost

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Process Phase IIEvaluation of Operating
Conditions

• Labor market
• availability
• quality / ethic
• wages / benefits
• Training resources
• Education resources
• higher education
• vocational education

• Utility services
• reliability
• costs
• Taxes
• income, sales, property
• Leadership
• Community acceptance
• Incentives

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Process Phase IIEvaluation of Living Conditions

• Attractiveness
• Physical conditions
• Movement / congestion
• Housing
• availability, costs
• Recreation
• Cultural

• Education
• facilities
• achievement
• Medical / health care
• facilities / capabilities
• costs
• Shopping
• Hotel / meeting space

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Process Phase II

• Comparative analyses
• Must and Want scoring
• Financial pro-formas
• Incentive evaluations
• Risk identification
• Finalist Communities

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Surviving in the Site Selection Process Phase
II

• Phase II Field Work
• Support for multiple visits
• Visit and site booklets
• Itineraries (with names)
• Maps!
• Detailed information gathering
• Site, operating and living conditions
• Lots of numbers!
• Follow instructions!

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Surviving in the Site Selection Process Phase
II

• Answer the questions
• Meet the deadlines!
• Know your site and building products be
  prepared to answer detailed questions
• Provide back up documentation as requested
• Provide support for multiple site visits
• Be prepared to provide lots of information and
  data

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Facility Siting Process
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Process - Phase III

• Finalist Communities
• All finalist locations are acceptable
• Time to distinguish among finalists
• Custom Incentive Evaluation
• Numerous iterations and What If ?s
• All types of subjective factors
• Responsiveness, professionalism

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Process - Phase III

• Negotiations
• Property
• Infrastructure
• Utilities
• Transportation
• Training
• Taxes

• Due diligence
• Site
• Incentives (documentation)
• Comparative evaluations
• Financial
• Risk
• Other issues

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Surviving in the Site Selection ProcessPhase III

• Incentives
• Know your weaknesses make sure your incentives
  mitigate those weaknesses
• Be prepared for customized incentive evaluations
  and lots of what if scenarios
• Know when to hold em Know when to fold em
• Dont write a check your
• Incentive Due Diligence
• Be prepared to provide back-up documentation on
  incentives specifically on process and legal
  authority

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Surviving in the Site Selection ProcessPhase III

• Site Due Diligence
• Be prepared to provide back-up documentation on
  site characteristics
• Soils evaluation / geotech investigation
• Environmental phases (I and II)
• Wetlands delineation
• Be prepared for site acquisition negotiations
• Purchase option / purchase terms
• Boundary surveys
• Utility access
• Transportation access
• Financing alternatives

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Surviving in the Site Selection ProcessPhase III

• Be responsive
• Have relevant subject-matter experts on hand to
  answer questions
• Be professional
• It can be intense, dont let it get to you
• Stand out from the crowd
• Opposition Research
• Go the extra mile
• but dont overstep the boundaries

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Surviving in the Site Selection ProcessPhase III

• Selection
• Be patient
• .. but not too patient
• Communication
• Recognize that the company and community will
  have different objectives
• Manage
• You will have an opportunity to get your word out
  even if it is not on announcement day
• Typically short preparation deadline

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McCallum Sweeney Consulting

• Jeannette T. Goldsmith
• PrincipalMcCallum Sweeney Consulting200 N.
  Main Street - 303Greenville, SC
  29601864-672-1600864-672-1610
  (fax)jgoldsmith_at_mccallumsweeney.comwww.mccallum
  sweeney.com