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new plant or facility in a struggling community can have a dramatic effect. So can the location of a fresh industry in an area previously unidentified with that specific business. These breakthrough facilities impact their communities by bringing new jobs, new industry and often new opportunities.
With the slowdown in the economy under way, worldwide corporate real estate location takes on added importance. The economic impact of a corporate relocation can affect an entire area as well as a specific industry. With business executives watching the bottom line, savvy relocation directors are looking for novel sites and receptive communities willing to provide incentives to enhance the deal.
Site Selection‘s survey of nearly 3,000 global economic development groups turned up a varied list of breakthrough projects. Following are some sample deals from that survey that demonstrate a commitment to getting the business.
Alberdingk Boley GmbH – Statesville, N.C. Statesville is the first US operation for this German-based company. The Dusseldorf firm is a manufacturer of chemical binders to be used as additives for color printing products and other industries. The US $20 million facility will employ nearly 100 in a city of 22,000. The city of Statesville sold property in the city’s business and industrial park at a reduced rate to attract the German firm. The state of North Carolina offered job tax credits, investment tax credits and worker training programs. “We have a philosophy where we realize that business and industry are our backbone,” says Jeff McKay of the Greater Statesville Development Corporation. “We try to enact policy that speaks to the business climate here.”
ClosetMaid – Grantsville, Md. The Florida-based storage and shelving company is locating a 200,000-sq. ft. (18,580-sq. m) facility in economically distressed Garrett County in western Maryland. The site is expected to employ 600 to 800 within the next five years. The carrot in this deal is the One Maryland Program. The One Maryland Program fund, which ClosetMaid is eligible for up to $5.5 million in tax credits, enables companies to qualify for tax credits and financial assistance in distressed areas of Maryland. The state has designated as distressed those areas with high unemployment and low per-capita income. The unemployment rate in Garrett County in 1999 was 8.5 percent. “Maryland did an outstanding job,” said Rob Clements, president of ClosetMaid. “The professionalism of the state, combined with the One Maryland Program, was what attracted us.”
General Electric – Louisville, Ky. General Electric had already announced it would move its refrigerator line production to Mexico. Greater Louisville Inc. knew they needed to enhance its allure to keep this product line and to retain jobs in the area. With the help of local and state officials, Greater Louisville Inc. worked to amend the Kentucky Industrial Revitalization Act (KIRA). KIRA provides tax incentives to existing companies that are in danger of reducing their work force or closing their facilities. With its $200 million investment, GE will now be able to deduct the entire $1.1 million it pays each year in corporate license taxes for 10 years. The incentive has saved 3,442 jobs in the local area.
PeopleSupport.Com – St. Louis, Mo. PeopleSupport was looking for a location to move additional high-cost operations from California. The company wanted a site for the e-commerce customer care center that would appeal to the firm’s young employees. Enter the St. Louis Regional Chamber & Growth Association (RCGA). The RCGA helped the company locate an historic building at the corner of a MetroLink station in downtown St. Louis. Low-interest loans from the City of St. Louis Development Corporation enabled PeopleSupport to invest $4 million into the project in renovations. The company projects to have nearly 1,200 employees by the end of this year.
Pirelli – Rome, Ga. The Italian tire manufacturer announced a $140 million facility that would employ 300 workers in the northwest Georgia town within three years. The 400,000-sq.-ft. (37,160 sq. m.) facility is billed as a state-of-the-art manufacturing plant, which will use a unique robot-enabled manufacturing system. The plant will be the only one of its kind within the US. The company will also move some of its headquarters facilities to the plant.
Precision Response Corporation – Perrine, Fla. PRC opened its $7.7 million South Dade County call center in March of last year. The facility marks the first major development project in the area since the devastation of Hurricane Andrew in 1992. Due to strict time constraints, government officials expedited permits and applications for Qualified Target Industry Tax Refunds. PRC also used the Jobs for Hiring WAGES incentive Fund, which was created with the help of the Beacon Council, the economic development firm instrumental in negotiating the PRC deal. Precision hired 127 welfare to work or WAGES participants as part of an 840-employee work force.
RAND Corporation – Pittsburgh, Pa. The Pittsburgh Regional Alliance coordinated a $500,000 matching investment from the University of Pittsburgh to set up a Health Research Institute. This was a critical component to RAND’s relocation. The PRA also provided access for RAND management to the Pittsburgh area’s largest corporate CEOs so RAND could pitch its consulting resources. The $25 million facility is expected to employ nearly 300 in the area.
Royal Dutch Shell – Huizhou, Guangdong Province, China. A joint venture with the China National Offshore Oil Corporation and Royal Dutch Shell represents the largest foreign investment in China. The $4.3 billion petrochemical plant agreement was 12 years in the making. With China’s heavy reliance on imported oil, the facility would enable the Chinese to become more energy self-sufficient. The proposed plant is expected to come on line in 2005. A possible future refinery was inked into the agreement. However plans were not yet finalized for it.
Ryder Integrated Logistics – Roanoke, Texas. Expanding the local community’s work force by 25 percent within four months is an incredible bonus for a small city such as Roanoke. Ryder was looking for a key distribution site for one of only three centers the company is establishing for its new e-commerce supply centers. Ryder leased 176,000-sq.-ft. (16,350-sq. m.) site installing 88 bays and state-of-the-art shipping technology. The city of Roanoke, located near the Dallas-Fort Worth metroplex, is a central location and is near the Dallas Ft. Worth area, which is recognized as a key transportation hub.
U.S. Patent & Trademark Office – Alexandria, Va. Moving 7,000 employees into a campus-like setting takes careful consideration. The US Patent Office consulted the city of Alexandria for help. City officials put in place a master-zoning plan that allowed the US Patent Office to build out its 2.5 million sq. ft. of space (232,250 sq. m.). The facility offered easy access to public transportation. Necessary public highway improvements were also crucial to finalizing the deal.
