< Previous28 MAY 2019 SI T E S E L E C T IO NNORTH AMERICAN REPORTS24531Perks of WorkWith labor markets still tight, industrial rms have begun to offer their workers some of the same types of perks increasingly enjoyed by of ce employees. Cushman & Wake eld surveyed its industrial real estate experts across the country to determine which amenities are most desired by warehouse and manufacturing workers:by G ARY DAUGHTERSgar y.daug hter s @ site s ele c tion.c om1Musical Chairs in MemphisThe former Gibson Guitar factory off Beale Street in Memphis is being converted to house the headquarters of FedEx subsidiary FedEx Logistics, which plans to expand the iconic building to accommodate as many as 1,200 workers, about half of whom will move from current Memphis-area locations. The company put the plan on hold after the shooting death of Greater Memphis Chamber CEO Phil Trenary during a downtown robbery last September. FedEx Logistics re-engaged in the process after receiving reassurances about downtown safety measures. Gibson is moving its Memphis operations to Nashville, where the guitar maker is headquartered.2Top Tech TownsCompTIA, the IT industry trade association, reports U.S. net tech employment totaled an estimated 11.8 million in 2018, an increase of more than 260,000 workers over 2017. Here are the top 10 U.S. cybercities by net tech employment and 2018 jobs growth. 1 Temperature Control — Cooling & Heating2 Access to Public Transportation3 Onsite Food Options4 Gym/Workout Facilities5 Natural Light & Fresh Air6 Electric Vehicle Charging7 Walking Trails & Outdoor Seating8 Games (Ping-Pong, Foosball, Basketball)9 Daycare10 Better Restrooms, Break Areas, Lactation Rooms, Privacy Rooms Source: Cushman & Wake eldNet Tech Jobs Net Tech Jobs Gain New York 659,260 San Francisco +20,566Los Angeles 503,971 San Jose +13,140 Washington, D.C. 437,454 Boston +11,579San Francisco 385,019 Seattle +11,550Boston 373,415 New York +10,440San Jose 371,640 Dallas +9,324Dallas 349,639 Atlanta +8,090Chicago 344,146 Los Angeles +7,632Seattle 298,555 Detroit +6,295Atlanta 261,084 Chicago +5,971 S I T E S E L E C T I O N MAY 2019 29Ranking RoboticsRobot sales in the United States hit a record of nearly 38,000 units in 2018, with density reaching 200 robots per 10,000 employees, according to the Frankfurt-based International Federation of Robotics. The group reports that robot density in the U.S. manufacturing industry now is more than double that of China and ranks No. 7 worldwide. While the automotive sector remains the industry’s most proli c customer, adoption is growing fastest within the food and beverage and plastics and chemicals industries. Walmart, in April, announced that it will have autonomous oor scrubbers in 1,860 stores by early 2020.231Movin’ OnNearly one-half of Canadian workers would pick up and move for the right job, and 22% of Canadian companies have beefed up relocation packages to lure them. More than 500 workers and 600 senior managers responded to the survey by the global staf ng rm Robert Half. 54Source: Robert HalfNikola Finds a HomeNikola Motor Co. has closed on a 390-acre (158-hectare) parcel south of Phoenix and plans to break ground next year on its plant for making hydrogen-electric trucks. Founder and CEO Trevor Milton says the company hopes to produce as many as 50,000 trucks a year at a planned industrial park in Coolidge, Arizona. Milton founded Nikola in Utah and moved its headquarters to Phoenix last year (one of this magazine’s Top Deals of 2018, p. 153), citing greater workforce potential; the company has pledged to hire about 2,000 people for the factory in Coolidge. Lucid Motors, another electric vehicle startup, plans to build a production plant nearby.30 MAY 2019 SI T E S E L E C T IO NINVESTMENT PROFILE:INVEST IN ISRAELThe reach of Israel’s professional services sector extends from inward FDI to multinationals’ entire portfolios.When a location is a candidate for investment by a corporate multinational, supply chain vectors and supplier clusters are always key considerations. In a modern, tech-driven digital economy like Israel’s, that supplier ecosystem often takes the form of service provision — firms and expertise in such professional areas as law, insurance, real estate and accounting, among other professions.How deep is their knowledge base? Consider the fact that one of the most respected cross-border investment and business law firms in Israel — Amit, Pollak, Matalon & Co. (APM & Co.) — was founded in 1956 by Nahum Amit, known by many as one of the founding fathers of the nation’s manufacturing sector. Today the firm represents worldwide clients from an array of global sectors, from defense and energy to real estate, high-tech and, of course, Israel’s potent venture capital community.Ziva Eger, Chief Executive of Invest in Israel and the Industrial Cooperation Authority (ICA) at the Israeli Ministry of Economy and Industry, says professional services firms are a key part of intersectoral roundtables that Invest in Israel regularly convenes. Their contributions have been particularly noticeable since Israel launched an intellectual property (IP) tax regime as part of the 2017-2018 state budget that is tailored to the post-BEPS world, encouraging multinationals to consolidate IP ownership and profits in Israel along with existing Israeli R&D functions.“While taxes may be inevitable, innovation is not,” she says. “Though increasingly essential, innovation still needs to be fostered and nurtured. That is why Israel, renowned as the ‘Startup Nation,’ continues to take bold and innovative steps to make sure that its economy remains competitive, and that its innovation and professional services ecosystem remains among the global leaders for the foreseeable future.”Sometimes the company growth comes from the services sector itself. Case in point: Fiverr, a Tel Aviv–based firm that was an Israeli startup in 2010. Today, the online marketplace for freelancers to share professional services to customers worldwide has delivered more than 40 million “gigs” — or jobs — across 190 countries.Generalists WelcomeGlobal consultancy PwC is a respected part of the Israeli services ecosystem, and in 2018 launched in Tel Aviv a global Cybersecurity Centre of Excellence. A recent PwC report noted the importance of Israeli innovation: “From agtech to biotech, and from mobiletech to cleantech to real estate services, the innovation unfolding commands the attention of sovereign and institutional, family office, and private equity by ADAM BRUNSadam.br uns @ site s ele c tion.c omGlobal SavvyZiva Eger, Chief Executive, Invest in Israel S I T E S E L E C T I O N MAY 2019 31This Investment Profile was prepared under the auspices of Invest in Israel, an integrative body within the Ministry of Economy and Industry that serves as a one-stop shop for a wide range of potential and existing investors, identifying lucrative investment opportunities, mapping potential obstacles and helping to fast-track investment. For more information, visit www.investinisrael.gov.il or send an email to InvestInIsrael@economy.gov.il.investors from around the world,” PwC stated. “Moreover, as the government endeavors to grow Israel’s non-tech economy, its support for growing these sectors is likely to expand. This includes a plan to expand tourism from 3% to 10% of GDP … With the growth of tourism, the corollary demand for both real estate and infrastructure — and sustainability — over the longer term merits a close look from global real assets.”Rubi Suliman, advisory and high-tech leader for PwC’s Tel Aviv office, says the sheer volume and diversity of multinational corporate activity in Israel — where more than 7,000 tech companies have operations — automatically raise the game of PwC and other service providers.“The service providers are multinational as well,” he says. They also are multilingual. “You have to be very, very global. In a small country, people tend to be generalists. In the eyes of clients, that’s an advantage in most cases. A client expects a service provider to provide a full 360-degree solution around his business.”Asked how business tourism and general tourism might prepare the way for more FDI, Suliman says, “Endless amounts of delegations are coming” to see Israeli innovation in action, including a surge of Asian visitors. Investments in R&D and innovation centers often follow. Past government focal points have included cybersecurity and fintech, he says. Autonomous driving is next, as a plan aimed for 2022 aims to feature companies operating autonomous fleets within Tel Aviv. “In a small country it is easier to regulate things and to change things,” he says. “I think it’s a great test place for autonomous vehicles and many other technologies.”Service provision increasingly includes REITs and other real estate players. “A lot of the world’s largest real estate investors are talking about being service providers rather than fixed asset managers,” says Dr. Alexis Crow, Lead, Geopolitical Investing, for PwC, noting that many are working more like hospitality providers.“There are many Israeli WeWork-like companies,” Suliman adds, “and some of the municipalities are opening coworking spaces. Everyone is into this,” including PwC itself, as it plans to move to a tech-enabled space in the center of Tel Aviv that’s more attuned to the new generation.Suliman says Israeli-based resources and talent are brought to bear on companies’ global business, issues and challenges. “Cybersecurity is a great example,” he says. “It’s one of those areas that very distinctly shows the advantage of Israeli knowledge” when it comes to critical infrastructure for large industries or financial institutions. “We are definitely drawing from that talent, and creating something for the entire network.”That talent base is increasing, as Israel’s positive population growth includes attraction from abroad. “One person I mentored is looking at opportunities in Europe, and I’m also encouraging him to think about Israel,” says Crow. Ironically, for those who think of Israel as a political hot spot, she’s also witnessed migration to Israel from European countries where politics have grown polarized.“They bring their capital, and their desire to invest,” she says, with notable numbers coming from France, Italy and the UK. There’s also strong inbound and outbound activity with the U.S., as expats in both lands rethink where to call home. The flow includes businesses emerging from Israeli universities.“The number of entrepreneurs coming from the top three universities is staggering,” says Suliman. Combine that with the professional sectors, and it makes for “a tremendous stream of talent flowing in and out.”A stream that continues to slake the corporate thirst for innovation and progress. Dr. Alexis Crow, Lead, Geopolitical Investing, PwCRubi Suliman, PwC Advisory and High-Tech Leader, Tel AvivNew laws give green light for more growers and processors in South Carolina and other states.Nat Bradford believes hemp has great potential to fl ower into a major segment of South Carolina’s already robust agriculture economy. Bradford, one of the fi rst farmers selected last year to grow industrial hemp for research purposes in the Palmetto State, says although the hemp he is growing and selecting is for CBD (cannabidiol oil) genetics, he believes hemp’s biggest impact will be with hemp grain and fi ber and their expanding uses.“CBD will eventually level off with a relatively small number of farmers and growers producing CBD crops measured in thousands of acres, whereas the global need for hemp grain and fi ber will see hundreds of millions of acres annually,” says Bradford, a seventh-generation farmer in Sumter. “South Carolina farmers are uniquely poised to greatly benefi t from the global demand because of its long growing season, allowing the potential of a double crop. Our rich soils and large tracts of fl at land throughout the Pee Dee are suited to industrial hemp grand production.”South Carolina’s advantages, Bradford says, include virtually limitless underground water available at no cost for farmers. at contrasts with other states with expensive water and less rainfall. Bradford also cites proximity to the Port of Charleston for ease of exportation.Bradford’s fi rst crop focused on hemp trials to determine best genetics for the Southeast, and by JOHN MCCURRYe ditor @ site s ele c tion.c omINDUSTRIAL HEMP & CANNABISHemp Leaf IllustrationPhoto courtesy of GettyImagesTheGambit32 MAY 2019 SI T E S E L E C T IO N34 MAY 2019 SI T E S E L E C T IO Nbegin what he says his family is most known for: breeding for the best attributes a plant has to offer.Industry publication Hemp Industry Daily recently pegged South Carolina as one of several emerging markets in the U.S., and noted that production could boom once the cap of 20 farmers growing the plant is lifted. Update: That cap is gone as of March 28, when Gov. Henry McMaster signed The Hemp Farming Act into law. That followed passage of the federal Farm Bill in late 2018 by Congress, which removed hemp from the controlled substance list.The Farm Bill’s passage keeps a number of industrial hemp projects moving forward across the nation. In New York, Ontario-based Canopy Growth Corporation — a recent recipient of a $4 billion investment by alcoholic beverage giant Constellation Brands — in January was granted a license by the state to process and produce hemp, and plans to establish a hemp industrial park in the Southern Tier region thanks to supportive policies that include New York’s Hemp Research Pilot Program. The company, currently evaluating sites, plans to invest $100 million to $150 million.Sound Wellness, a subsidiary of Jushi Inc., plans to invest more than $5 million in a high-tech hemp processing operation on the east side of Buffalo. Jushi expects to create approximately 30-65 jobs in the area. The site will allow Sound Wellness to create advanced product formulations using CBD distillate, CBD isolate, and water-soluble CBD.In Florida, California-based Youngevity International’s subsidiary Khrysos Industries has closed on land where one of two planned buildings will be dedicated to hemp genetic research with the aim at increasing specific yields of certain cannabinoids. Additionally, the company announced it has leased another Central Florida facility that will serve as the assembly, manufacturing and production facility for Khrysos’ one-ton Hyper Supercritical extraction systems.Top 10 Hemp States by Licensed Outdoor Cultivation Acreage STATE ACREAGE 1 Colorado 12,042 2 Kentucky 12,800 3 Oregon 3,500 4 North Dakota 3,100 5 Minnesota 2,000 6 New York 2,000 7 North Carolina 1,930 8 Tennessee 718 9 Vermont 560 10 Nevada 490 Source: Hemp Industry DailyA HEMP TOP 10Hemp Industry Daily cites cannabis research firm Brightfield Group’s estimates that the U.S. market for hemp-derived CBD will surge from $291 million in 2017 to $1.65 billion by 2021 — growth of more than 500% in just four years. Products include flowers, seed or seed oil, fiber, CBD extract, So where might that growth sprout? The publication ranks the top contenders (above), presented in order from largest to smallest based on number of acres licensed in 2017, but with this caveat: “While Kentucky had more actual acres licensed [12,800] than Colorado [12,042] in 2017, we rank Colorado as No. 1 due to other market considerations.” More than half the nation’s 2017 hemp production occurred in Colorado, and the state “has more acres in production, more farmers growing the crop, more processors extracting CBD from hemp and more market opportunities for selling the plant than any other state.”Altogether, the Top 10 states have licensed 1,211 growers and 278 processors, though Colorado, Minnesota, Vermont and Nevada have no licensing requirement for processors. — Adam BrunsHow to Cultivate a SectorHugh Weathers, South Carolina’s agriculture commissioner, is bullish on hemp, but believes the state’s burgeoning hemp community needs more actionable data before the industry can shift into high gear. He met with several hemp processors in March interested in locating in South Carolina. There are currently about seven operating in the state. The new state law will allow South Carolina to become more competitive with neighboring states such as North Carolina, Tennessee and Kentucky.“We want to develop a hemp sector on a smaller scale, but the same way we have developed a tire sector, an automotive sector and an aerospace sector,” Weathers says. But first, some research is needed to fill in the gaps of what he describes as inconsistencies and inaccuracies surrounding hemp.“We will have our hemp community [ask] the five or six pertinent questions they want answered about hemp and our department will put them out to scientists, economists and consultants,” Weathers says. “I feel like we need to do this for our farmers and processors for 2020 and beyond so South Carolina can be a go-to state to invest in the hemp industry.”Weathers estimates South Carolina can probably support more than 20 hemp processors once more farmers join the production effort.This year, Clemson University will grow hemp on five research farms spread across the state. That effort should help pinpoint the best areas for hemp farming, says Weathers, who has visited 18 of the state’s 20 first hemp farms, located in 15 counties.“We need another growing year to see where the hemp plant is best suited,” Weathers says. S I T E S E L E C T I O N MAY 2019 3536 MAY 2019 SI T E S E L E C T IO NINVESTMENT PROFILE:CONSUMERS ENERGYIn Southwest Michigan, saving lives and saving energy go hand in hand — thanks largely to an innovative program administered by Consumers Energy. e Business Energy E ciency New Construction Program of Consumers Energy has been used to support more than expansion projects by various hospitals, medical clinics and life-science companies throughout the greater Kalamazoo-Portage region of Southwest Michigan. ese include advanced air distribution through water-cooled condensers; boiler tune-ups; installation of high-e ciency air-conditioning systems; central lighting controls; LED tube lighting; enhanced snow melt controls; advanced power strips; and a wide variety of other energy-saving tactics and systems.by RON S TARNERr on. s t ar ner @ site s ele c tion.c omSaving Energy,Saving LivesInnovative Consumers Energy program helps life-science cluster thrive in Michigan. S I T E S E L E C T I O N MAY 2019 37This Investment Profile was prepared under the auspices of Consumers Energy Company. For more information, contact Dan Gretzner at 517-788-7144 or go to www.ConsumersEnergy.com/econdev.“If you look at just large health care and hospital projects in the Kalamazoo area, we have assisted organizations with energy-saving projects from to the present,” says Amy Glapinski, senior program manager of commercial and industrial specialties and multifamily for clean energy products for Consumers Energy. “One large health care organization accounted for of those projects, while a second large health care organization accounted for another . ese two customers were responsible for percent of the projects.” e other percent came from smaller health care customers in the Kalamazoo and Portage area. “Statewide, you will see a similar story,” notes Glapinski. “Where there are larger population centers, there are naturally larger pockets of health care campuses, and in these areas you will see these programs be utilized greatly as well.” e savings add up. e projects conducted in the Kalamazoo-Portage area have already amounted to $, in incentives for Consumers Energy customers, with percent of that coming in electric usage. e energy savings, meanwhile, add up into the millions. Consumers Energy calculates that the energy savings in the rst year alone from the regional projects accounted for , megawatt hours of electricity and , million cubic feet of natural gas.Jill Bland, managing partner of Southwest Michigan First, notes that two local companies — P zer and Stryker — showed interest when Consumers Energy o ered this program to large medical customers. e energy e ciency incentives o ered a prized tool in the toolbox. P zer Global Supply announced a $-million, -job, ,-sq.-ft. expansion of its sterile drug manufacturing operation in Portage, just a quarter mile from where Stryker Instruments is building a new ,-sq.-ft. facility to house the company’s instruments division, including research and development operations, o ce space and new product training facilities.Working with Consumers Energy, competitive energy infrastructure installation and other electric and natural gas support will help save Stryker signi cant annual energy costs. Once this facility is complete this year, Stryker will create about new jobs.About a half mile away, Stryker Medical is doing an additional $ -million, -job, ,-sq.-ft. expansion of an operation that makes hospital beds and other hospital furniture. “ ey are building from a sustainable perspective,” says Bland. “Consumers Energy is a partner with all of these projects.”Stryker purchased acres from P zer in order to do its medical instruments project in the City of Portage. “P zer had excess land, and we linked the two companies,” notes Bland. “ ey began having conversations a year before the deal was put together. e current Stryker Instruments project will sit on roughly acres of that property. We worked with the city on how we could utilize the existing streets around the parcel. e company is very considerate of the community. ey decided to put a new roadway to the property to keep tra c o the residential street.”New lighting, as well as new walking, biking and hiking trails, will all be available to both Stryker workers and area residents. “We worked with the Michigan Department of Transportation to determine how best to install new signaling on Portage Road,” says Bland. “We also worked with the Michigan Economic Development Corp. and the city on tax abatement and a million-dollar business development grant.”She adds that “this new plant is absolutely a landmark facility. is is an R&D center that will be spectacular.” We have assisted organizations with 113 energy-saving projects from 2009 to the present.” — Amy Glapinski, Consumers EnergyWe have assisted organizations Next >