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From Site Selection magazine, March 2016

A Pair of Kings Takes It

New leadership in this year’s winning states for attracting new facilities are looking ahead, not behind, at how to keep their states at the top of their game.


Texas and Kentucky have again won the Governors Cups for attracting new facilities the previous year — Texas for total qualifying projects and Kentucky for total projects per capita (a widely applauded recognition added to this facilities race in 2014).

As Yogi Berra would say, it’s like déjà vu all over again. Except this time the new governor involved, Matt Bevin, is on the Kentucky side. Last March, Texas Gov. Greg Abbott made his first appearance in the pages of Site Selection when he accepted the Governor’s Cup for total project activity in 2014, having just taken office a few weeks previously.

Gov. Bevin of Kentucky has that experience this year as the Commonwealth claims the other Governor’s Cup — he just took office in December 2015. Both governors in this situation transferred credit for their wins immediately to those economic development professionals on the state and local levels who did the hard work of attracting new businesses and retaining and growing existing ones during the calendar years for which they were recognized.

Six governors, illustrated above, made the Top 5 states in either the Total Projects or Total Per Capita Projects Governors Cup contests — see the chart for the Top 10 States in each category. Gov. Matt Bevin of Kentucky, lower right, won first place in the Per Capita Projects contest and came in fifth in total projects.
Illustrations by Bob Gravlee

The Governors Cups reflect yearly project totals as tracked by the Conway Projects Database. Qualifying projects must meet one or more of these criteria for inclusion in the database: a minimum capital investment of $1 million, 20 or more new jobs created, and 20,000 or more square feet of new space.

Both Texas and Kentucky increased their winning totals in 2015. Texas finished the year with 702 projects, up from 689 last year; Kentucky had 285, up from 258. Ohio claimed second place in both total projects and total projects per capita in last year’s facilities race — ditto the previous year — and it retains that recognition on the total projects side with 517 projects (down from 582 in 2015). Nebraska ranks second on the per capita side with 118 projects.


by Number of Projects
State 2015
4North Carolina3004
Source: Conway Projects Database


by Projects Per Capita
State 2015
2Nebraska 118 28
3Ohio 517 2
4Illinois 413 8
5Kansas 93 4
6Louisiana 148 3
7North Carolina 300 6
8Iowa 92 10
9South Dakota 24 5
10 Alabama 127 16
Source: Conway Projects Database

Changing of the Guard

Step back from the numbers and the bigger picture comes into view: Two new governors inherit state business climates that while not perfect are strong enough to deliver trophies for attracting facilities. More to the point, the economic developers on the front lines secured the capital investment that resulted in the Cups. But some new generals are now in charge, and they intend for their states to keep winning.

Greg Abbott has one year as Governor of Texas behind him. Now it’s on to the next.

“We are going to go to work every single day to continue to win this — that is our goal and our aspiration,” he tells Site Selection.

This year, business attraction is taking place in Texas against the backdrop of lower oil and gas prices, which directly affects energy, one of the Lone Star State’s key industry sectors — but just one.

“One of the reasons so many businesses and individuals choose to relocate to Texas is because we have the model of governing that promotes individual prosperity and the ability for businesses to grow and expand. We are able to do that, and improve on that, despite the downturn in oil prices,” says Abbott. The downturn began during the last legislative session in Austin, he recalls. “We knew what was going to happen, and we prepared for it. We put aside $10 billion in a rainy day fund and left another $4 billion in our checking account, leaving Texas with the strongest balance sheet of any state in the nation.” Another step taken, says Abbott, that will allow Texas to attract more investment and to grow existing industry, was cutting taxes on businesses, families and homeowners.

“We have no personal income tax nor corporate income tax, but we do have a business franchise tax known as the margin tax that we slashed by 25 percent,” says the governor. “We also cut property taxes for homeowners. So the cost of doing business, as low as it was before, got even lower. We cut regulations and sped up the permitting process to make it even easier for businesses to come here and to grow here.”

Severance taxes are particularly linked to oil, gas and other commodities, so that revenue is particularly vulnerable until oil prices climb again, as they invariably do. Even there, says Abbott, there is no cause for concern. “The primary use of the revenue that comes from the severance tax goes into the rainy day fund or our savings account. General revenue comes mainly from other sources. So the downturn will have minimal effect on the way we run the government.”

Gravy for the Meal

A native Texan, Abbott points out that every decade has seen a downturn in oil prices like that of today, “and every decade we have come out of it. The important point is that Texas was hit hard in the 1980s, and at that time we understood Texas had to diversify our economy. The reason Texas has continued to prosper over this past year is because we succeeded in diversifying our economy. Even as Texas was challenged over this past year, it was still third in the nation in creating new jobs. It has not been a problem for the Texas economy as a whole.”

"As great as Texas is now, its future is even more promising. We will continue to make the case that Texas is the right location for businesses and their employees."
— Texas Governor Greg Abbott

Technology, including data centers; financial services; and health care and life sciences are among the state’s most active industry sectors, “and they have nothing whatsoever to do with the energy sector,” notes Abbott. Aerospace, logistics, food processing and other sectors also are seeing healthy rates of investment. “Oil and gas used to be a key component of the Texas economy. Now, it’s like gravy on the meal, and the meal is based on so many other sectors. The more we pump oil, that’s more gravy for the meal.”

Technology companies in particular have made a bee line from California to Texas, particularly the Austin area (think Apple and Oracle among others), citing lower living and tax costs. Austin is a high-tech hub, but Abbott points out that there are more technology workers in the Dallas-Fort Worth and Houston metro areas than in Austin, and San Antonio’s not far behind.

That’s a key point. Amazon operates three fulfillment centers in North Texas alone. Gov. Abbott says executives at the Seattle-based e-commerce giant recently told him Texas’ workforce is the main driver of its facilities growth in the state. “We know that quality of workforce is one of the most important issues employers look at when they consider which location to move to. For that reason, we have a laser-like focus on continuing to improve the quality of our workforce.”

During this same time, says Abbott, Texas made two important investments that he says will make its business climate the strongest in the nation for the next decade.

2015 TOP TEXAS PROJECTS by Capital Investment

Company City Product $US Millions
Rio Grande LNG Brownsville Natural Gas Liquid Extraction 8,000
Sempra Energy Port Arthur Natural Gas Distribution 4,000
Phillips 66 Freeport Crude Petroleum and Natural Gas Extraction 3,500
Gerson Lehrman Group Austin Financial Services 2,600
Total Petrochemicals & Refining USA Port Arthur Petroleum Refineries 1,600
General Motors Arlington Automobiles 1,400
Facebook Fort Worth Information Services 1,200
Lockheed Martin Fort Worth Aircraft 1,200
Newfield Exploration Co. The Woodlands Crude Petroleum and Natural Gas Extraction 1,200
ME Global Freeport Steel Foundry 1,000
Texas LNG Brownsville Natural Gas Liquid Extraction 1,000
Coastal Power Systems Tomball Electronic Components 900
Golden Stones LP Houston Building Materials 840
Yara International Asa Freeport Ammonia 600
BASF SE Freeport Basic Organic Chemicals 490
Daikin Industries Houston HVAC Equipment 410
Castleton Commodities International Corpus Christi Natural Gas Distribution 400
Magellan Midstream Partners Corpus Christi Petroleum Refineries 400
Kinder Morgan Galena Park Natural Gas 360
Liberty Mutual Holding Co. Plano Property Insurance 355
Ragingwire Data Centers Garland Data Center 330
Aligned Data Centers Plano Data Processing 300
Corrigan OSB Livingston Wood Products 280
Ryze Renewables Port Arthur Recyclable Materials 200
Schlumberger Sugar Land Oil and Gas Field Operations 200
Source: Conway Projects Database

“First,” he says, “we set money aside to build the best infrastructure of any state in the country.” How much money? “About $4 billion per year for the next 10 years, or about $40 billion, to build more roads so that people and businesses can move around in our fast growing cities, to unclog the roadways. We know that is an important quality-of-life issue, and we want to ensure that businesses that come here will have a top-notch quality of life.”

Education is the second, says Abbott, “from early education all the way through higher education.” The University Research Initiative is a recent example. “This is a new fund that is attracting the best and brightest researchers from across the country, and we’ve already seen tangible results.”

Texas in recent months has added four more universities to Carnegie Foundation Tier One status, “giving employers access to the best and brightest students graduating from some of the premier universities in the United States, and opportunities to collaborate with the best and brightest researchers in the country,” Abbott relates. Three were already on the list — UT at Austin, Texas A&M and Rice University. The newcomers are UT at Dallas, UT at Arlington, the University of North Texas and Texas Tech.

What’s the plan for 2016? “As great as Texas is now, its future is even more promising,” says Abbott, who intends to build on the business climate attributes this year that have worked so well in the past. “We will continue to make the case that Texas is the right location for businesses and their employees.”

The Per Capita Prize: How to Keep Winning It

If Kentucky’s new governor, Matt Bevin, accomplishes even a fraction of what he intends to in the next few years, the Bluegrass State will remain a daunting defender of the Governor’s Cup awarded on per capita projects. It’s even a strong contender in the total projects Cup race, finishing in fifth place in that contest with 285 projects in 2015.

"Right-to-work legislation has come to every single state in the South except for us, to every state in the manufacturing belt in America, and we are the buckle of that belt."
— Kentucky Governor Matt Bevin

“I can’t lay claim to any of that, but we are very grateful nonetheless,” says Gov. Bevin, who comes to his new role as Kentucky’s Chief Executive from the business world. “I do speak the language of business. That’s where I come from. I’m a business person and entrepreneur, someone who has dealt with the regulatory and tax hurdles and burdens that are often placed on businesses. I know what it’s like to be on the other side of that equation. When legislation and regulations are passed, there are costs associated with that — an absolute cost, an opportunity cost. Being able to understand that and speak that language is helpful. It affords me the opportunity to be more than just sympathetic to business, but to be empathetic, and there’s a big difference. In just a couple of months, that has given me the ability to connect with some of our business community, and that has given some hope and excitement that as sharp as we have been, we will be sharper still in the years to come.”

Governor Bevin has a few areas in which he plans to demonstrate that.

2015 TOP KENTUCKY PROJECTS by Capital Investment

Company City Product $US Millions
Ford Motor Louisville Automobiles 1,300
General Motors Bowling Green Automobiles 439
United Parcel Service Louisville Couriers 309
Logan Aluminum Russellville Aluminum 290
Bowling Green Metalforming Bowling Green Fabricated Metal Products 261
FedEx Corp. Boone County Couriers 199
Fritz Winter Franklin Iron and Steel Mills 194
Fedex Corporation Boone County Couriers 150
North American Stainless Ghent Stainless Steel 150
Toyota Motor Manufacturing Georgetown Automobiles 124
Deutsche Post Ag Erlanger Couriers 108
DHL Express Hebron Couriers 108
Robert Bosch Automotive Steering Florence Steering and Suspension Components 85
International Paper Maysville Paper Manufacturer 80
Catalent Pharma Solutions Winchester Labeling 62
Kobe Steet Bowling Green Nonferrous Forging 57
River View Coal Waverly Bituminous Coal 40
Eagle Manufacturing Co. Boone County Auto Parts 35
Valvoline International Lexington Petroleum Products 35
Brown-Forman Corp. Louisville Bourbon 34
Four Roses Distillery Lawrenceburg Distillery 34
EDAC Composites Erlanger Plastic Products 32
iHerb Hebron General Warehousing and Storage 30
Thorntons Louisville Convenience Stores & Truck Stops 28
Koch Filter Corporation Louisville Filtration Products 26
Automatic Data Processing Louisville Data Processing 26
Source: Conway Projects Database

Shoring Up the Financial Foundation

“People want to see us get our financial house in order, first of all,” he says. “No one wants to be in, expand in or relocate to a state that is becoming fiscally insolvent. We have struggled with unfunded pension liabilities and a variety of other things — with getting our financial foundation straight. So my number one focus, driven by what I know as a business person and as someone who knows the investment world a bit, and by what my peers and taxpayers are saying, is to get the financial house in order, to stop the financial bleeding. This must be done.

“Second,” the governor continues, “and in a similar vein, is to get our credit rating straightened out, which is largely driven by the first part. The credit rating agencies are indicating that if we don’t start to take that seriously, they would have no alternative [but to downgrade]. Well, there’s no cold water to a business looking to expand or relocate than that. I get that from a business point of view.

“I also hear from bigger businesses in particular, as well as small, the desire for right-to-work legislation,” says Bevin. “We probably don’t have the legislative appetite for that in this session, so it’s not likely to happen this calendar year, but it will come. Right-to-work legislation has come to every single state in the South except for us, to every state in the manufacturing belt in America, and we are the buckle of that belt. It extends from the Canadian border, including Wisconsin, all the way to the Gulf, and we’re smack dab in the middle. I have seen studies that state that a full third of companies have stated that they will not look to expand in a state in any significant way that has not passed this. That’s not to say that two thirds won’t expand, but why would we want to fish in a pond that is two thirds the size of a pond others are fishing in? To handcuff ourselves is a bad idea.”

If that is sounding like the language of businesses that intend to succeed, wait. There’s more.

“People desperately want to see some tort reform. Kentucky is known to be a state that is litigiously friendly — to the detriment of business and to the detriment of our economy,” says Bevin. “People want us to get our healthcare situation in place. They want a healthy populace, healthy employees.” School choice is another area where Kentucky can better compete nationally, because the issue is important to facility locators working on site strategies that may involve personnel relocations, he relates.

Putting the ‘Work’ in Workforce Development

Workforce development is another arena ripe for attention, says Bevin, pointing to “thousands of unfilled jobs right now. The growth [Site Selection] reports on and that has been stellar to the degree it has been relative to others could be so much more robust — so much stronger and better if we had the kinds of workforce development programs in place to ensure that people were workforce ready. Having degrees is of no value to people if they are not skilled at what employers want.”

Outcomes-based funding and using public education dollars to ensure students are ready for the post-secondary world are very much on the governor’s agenda. Look for greater use of certification programs and degree program redesigns that better align with industry requirements.

“I just put out a budget that calls for spending $100 million over the next two years on workforce development. The plan is for people in the private sector and the education community, together with their locally elected officials, will work together and come forward with a solution where they, in collaboration with each other, with their own skin in the game financial and otherwise, will come up with solutions and the state will help prime that pump. That’s where I want to spend that money.

“As a business person, these are the kinds of things that have always intrigued me,” Bevin adds. “I am intrigued by situations where you take an idea and you turn it into opportunity — you create jobs, economic growth. I want this state to be the very best version of itself in doing that.”

On the Border

On February 22nd, Gov. Greg Abbott met with Mexico President Enrique Peña Nieto in Houston to follow up on issues the two leaders first discussed in Mexico City in September.

“The focus of this meeting was two-fold,” the governor told Site Selection. “One is the burgeoning private-sector development of the energy sector in Mexico and the role Texas businesses can play in that. The second is working to expand trade with Mexico, which is Texas’ largest trading partner.” (See the New Mexico Spotlight for a conversation with Gov. Susana Martinez about, among other topics, her state’s efforts in these areas.)

Laredo, Texas, on Interstate 35, is the largest inland trading port in the world, Gov. Abbott points out. “But the trade areas between Texas and Mexico are vast and large, including, along the Rio Grande Valley, Brownsville and McAllen and the many cities in Cameron and Hidalgo Counties and elsewhere where commerce is bustling – Laredo and El Paso and others. We are working to improve infrastructure at those trading locations and to expedite trade. Time is money, and we want to speed up that process.”

California businesses with trade operations in Texas tell Gov. Abbott they are there because of the efficiency of the Texas locations. “Trade along the border is going to continue to increase and be a source of prosperity for the state,” he predicts.



2015 2014 State Facilities Per Million
1 4 Nevada 53 18.7
2 2 Wyoming 7 12.0
3 1 Utah 33 11.2
4 8 Idaho 17 10.4
T5 3 Arizona 68 10.1
T5 6 New Mexico 21 10.1
7 7 Montana 9 8.8
8 5 Colorado 33 6.2
Region Average 10.3


2015 2014 State Facilities Per Million
1 2 Oregon 20 5.0
2 3 Washington 34 4.8
3 4 California 155 4.0
4 5 Hawaii 5 3.5
5 1 Alaska 2 2.7
Region Average 4.2

South Central

2015 2014 State Facilities Per Million
1 1 Kentucky 285 64.6
2 2 Louisiana 148 31.8
3 5 Alabama 127 26.2
4 4 Texas 702 26.0
5 3 Tennessee 157 24.0
6 6 Oklahoma 84 21.7
7 8 Mississippi 42 14.0
8 7 Arkansas 31 10.5
Region Average 27.5

West North Central

2015 2014 State Facilities Per Million
1 7 Nebraska 118 62.7
2 1 Kansas 93 32.0
3 3 Iowa 92 29.6
4 2 South Dakota 24 28.1
5 4 North Dakota 15 20.3
T6 5 Minnesota 76 13.9
T6 6 Missouri 84 13.9
Region Average 23.9

East North Central

2015 2014 State Facilities Per Million
1 1 Ohio 517 44.6
2 2 Illinois 413 32.1
3 3 Indiana 166 25.2
4 5 Michigan 217 21.9
5 4 Wisconsin 111 19.3
Region Average 30.4


2015 2014 State Facilities Per Million
1 1 Pennsylvania 202 15.8
2 7 Rhode Island 15 14.2
3 3 Maine 18 13.5
4 2 Vermont 6 9.6
5 6 Connecticut 33 9.2
6 4 Massachusetts 59 8.7
7 5 New York 109 5.5
8 8 New Jersey 45 5.0
9 9 New Hampshire 6 4.5
Region Average 8.8

South Atlantic

2015 2014 State Facilities Per Million
1 1 North Carolina 300 30.2
2 2 Georgia 211 20.9
3 4 Virginia 167 20.1
4 3 South Carolina 96 19.9
5 9 District Of Columbia 11 16.7
6 5 Maryland 57 9.5
7 7 West Virginia 14 7.6
8 8 Florida 145 7.3
9 6 Delaware 5 5.3
Region Average 16.1

by Total Facilities

East North Central

2015 2014 State Facilities
1 1 Ohio 517
2 2 Illinois 413
3 3 Michigan 217
4 4 Indiana 166
5 5 Wisconsin 111
Region Total 1,424


2015 2014 State Facilities
1 1 Arizona 68
2 4 Nevada 53
T3 3 Colorado 33
T3 2 Utah 33
5 5 New Mexico 21
6 6 Idaho 17
7 8 Montana 9
8 7 Wyoming 7
Region Total 241


2015 2014 State Facilities
1 1 Pennsylvania 202
2 2 New York 109
3 3 Massachusetts 59
4 4 New Jersey 45
5 5 Connecticut 33
6 6 Maine 18
7 8 Rhode Island 15
T8 9 New Hampshire 6
T8 7 Vermont 6
Region Total 493


2015 2014 State Facilities
1 1 California 155
2 2 Washington 34
3 3 Oregon 20
4 5 Hawaii 5
5 4 Alaska 2
Region Total 216

South Central

2015 2014 State Facilities
1 1 Texas 702
2 2 Kentucky 285
3 4 Tennessee 157
4 3 Louisiana 148
5 5 Alabama 127
6 6 Oklahoma 84
7 8 Mississippi 42
8 7 Arkansas 31
Region Total 1,576

West North Central

2015 2014 State Facilities
1 6 Nebraska 118
2 1 Kansas 93
3 4 Iowa 92
4 3 Missouri 84
5 2 Minnesota 76
6 5 South Dakota 24
7 7 North Dakota 15
Region Total 502

South Atlantic

2015 2014 State Facilities
1 1 North Carolina 300
2 2 Georgia 211
3 3 Virginia 167
4 4 Florida 145
5 5 South Carolina 96
6 6 Maryland 57
7 7 West Virginia 14
8 9 District of Columbia 11
9 8 Delaware 5
Region Total 1,006


Top Projects by Capital Investment

Company City State Product New/
$US Millions
Odebrecht Parkersburg W.Va. Oil Production N 3,000
American Specialty Alloys Pineville La. Aluminum Mill N 2,400
Live Oak LNG Lake Charles La. LNG N 2,000
ams Ag Marcy N.Y. Wafer Fabrication N 2,000
Essar Steel Minnesota LLC Hibbing Minn. Taconite N 1,800

Top Projects by Size

Company City State Product New/
Sq. Ft. x 1,000
Daikin Industries Houston Texas HVAC Equipment N 3,767
Wal-mart Stores, Inc. Davenport Fla. Retail Merchandise N 1,800
Georgia-Pacific LLC Rancho Cucamonga Calif. Paper Products N 1,600
Nissan North America Smyrna Tenn. Auto Parts N 1,500
Dollar Tree, Inc. Cowpens S.C. Retail Merchandise N 1,500

Top Projects by Jobs Created

Company City State Product New/
Navy Federal Credit Union Pensacola Fla. Financial Services 5,000
AB Volvo Charleston S.C. Automobiles 4,000
Community Health Systems, Inc. Nashville Tenn. Customer Service N 1,500, Inc. Dallas Texas Retail Merchandise N 1,500
Barclays Shared Services Private Ltd. Hamilton Ohio Customer Service N 1,500


Top Projects by Capital Investment

Company Location Country Product New/
$US Millions
Steelhead LNG Corp. Port Alberni, B.C. Canada Liquid Natural Gas 30,000
Teck Coal Limited Wood Buffalo, Alta. Canada Oil Sands Processing N 20,000
Suncor Energy Inc./Teck Resources Ltd/Total E&P Canada Ltd Wood Buffalo, Alta. Canada Bitumen Processing N 13,500
Woodside Energy Holdings PTY Ltd. Prince Rupert, B.C. Canada Liquid Natural Gas N 10,000
ExxonMobil Canada Ltd/Imperial Oil Limited Wood Buffalo, Alta. Canada Bitumen Processing 8,900

Top Projects by Size

Company Location Country Product New/
Sq. Ft. x 1,000
Zotye Holding Group Co., Ltd. Changzhou, Jiangsu Sheng China Electric Vehicles 3,660
Liuzhou Xinyu Textile (Group) Co., Ltd Liuzhou, Guangxi China Textiles N 2,852
Xinyi Glass Holdings Limited Malacca, Melaka Malaysia Photovoltaic Glass N 2,852
Bayerische Motoren Werke Ag Wallersdorf, Bavaria Germany Automobiles 2,153
Tianjin Port Wallenius WilhelmsenVehicle Logistics Tianjin, Tianjin China Automobiles N 2,100

Top Projects by Jobs Created

Company Location Country Product New/
MGlo-Tech Enterprises Bhiwadi, Rajasthan India Cellular Telephones N 7,500
PT Chang Shin Reksa Jaya Garut, Jawa Barat Indonesia Shoes N 5,500
Adis Dimension Footwear, PT Majalengka, Jawa Barat Indonesia Shoes N 5,500
Taiwan Semiconductor Manufacturing Co. Taichung Taiwan Semiconductor Components N 5,000
Ultratech Cement Limited Satna, Madhya Pradesh India Cement N 5,000
Chung Jye Vietnam Shoe Production Co., Ltd. Phuc Thanh, Tinh Hai Duong Vietnam Shoes N 5,000
Wuhan China Star Optoelectronics Technology Co., Ltd. Wuhan, Hubei Sheng China LCD Panels N 5,000
ZTE Corporation Changsha, Hunan Sheng China Mobile Phones N 5,000
Grupo Bafar, S.a.b. de C.v. La Piedad Cavadas Mexico Meat Processing N 5,000
Source: Conway Projects Database

Mark Arend
Editor in Chief of Site Selection magazine

Mark Arend

Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.


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