< Previous68 JANUARY 2025 SITE SELECTION COMMUNITIES SHOULDN’T OVERLOOK ‘BREAD & BUTTER’ I f a megasite search is likely in 2025, the following observations and considerations should add depth to your location analysis. Site Selection thanks Dennis Donovan, principal, and Linda Burns, incentives practice leader, at Wadley, Donovan, Gutshaw Consulting, based in Bridgewater, New Jersey, for sharing their insights. At least 36 states have certified site programs. Most include megasites. The generally accepted minimum size for a megasite is 1,000 acres. However, we believe that 500 acres, if the preponderance is contiguous, qualifies as a megasite. Megasites should have all the infrastructure in place or funding/pre-permitting to expeditiously install requisite infrastructure. Megasites should be rail served and ideally have highway access. Developmental challenges that would drop a potential megasite from being considered as a location include electric power transmission congestion, absence of electric power resiliency, a site that does not have large tracts of contiguous usable land, citizen opposition to site development, height restrictions and natural disaster risk such as flooding. Megasite development costs should include a combination of state funding, possible federal funding, local foundation, private developer funding participation and local community funding such as tax increment financing/ tax increment reinvestment zone. States are being overly aggressive in creating megasites. In many states, the inventory of developable land with utilities within close enough proximity to realistically tap into is in short supply. One overlooked dynamic to megasites is ensuring that there will be an adequate supply of both construction and a pipeline of ongoing labor with technical training resources. On a recent project we worked on in the Mid-Atlantic, our client selected a megasite for several reasons: • At some 1,500 acres the size and configuration were attractive. • The state and community agreed to provide funding for upgrading electric power, including another substation. • On-site solar power could be generated. • There was a nearby available building to allow for test production. • An ample supply of qualified labor was available. This was a major selling point vis-à- vis other potential sites. A host of megasites have been directed at the EV assembly, battery and supply chain network. This is risky as there will likely be failures and consolidation within the EV-related sector based on sales projections and the renewed focus on fossil fuels to reduce logistics costs. Mega projects do not constitute a significant proportion of overall industrial location activity. The overwhelming majority of projects tend to be small to mid-size (often fewer than 50 acres and fewer than 250 employees). Communities would be well advised not to overlook the “bread and butter” site selection projects. Plus, these projects will not break the bank on consuming often scarce resources such as labor, electric power and water. A current electric arc furnace steel mill project of ours qualifies as an example of a workable-scale project for fewer acres at 400 acres but still a very significant project scope: capex of over $500 million and 150 jobs at average wages of $70,000. Linda Burns Dennis Donovan70 JANUARY 2025 SITE SELECTION Zoning and permitting hurdles: • Incompatible current zoning with a difficult path to rezoning • Complex or lengthy permitting processes • Local regulations that restrict development Lack of neighborhood stakeholders’ engagement: • Limited or no awareness among nearby stakeholders about the site’s proposed large- scale redevelopment • Absence of community approval for potential changes resulting from the development • Potential for controversy leading to negative publicity or legal challenges related to the project Limited understanding of site attributes or lack of transparency: • Withheld or restricted access to previously completed due diligence reports • Unverified assumptions about infrastructure viability, zoning and other critical criteria without written confirmation or sign-off from respective stakeholder • Disclosure of potential challenges or red flags without basic mitigation plans. At the end of the day, we are acutely aware that no site is perfect. We often favor candidates which have been passed over for other projects as they are much better informed than fresh unvetted sites. Identifying the potential barriers to development up front and having even a rough outline of how they might be resolved speaks volumes. Is there an ideal way to distribute site development costs among the state, county and investor? O’Connor: There is not a universally ideal way to distribute site development costs, as the approach can vary significantly based on local economic conditions, policy priorities and the specific project requirements. However, a balanced approach that distributes costs and risks among the state, county and investor is often considered most effective. The key is to create a partnership where all parties have a vested interest in the project’s success while ensuring that public investments generate significant community benefits. It is also important to involve economic development professionals, legal experts and financial advisors in structuring these agreements to ensure they are equitable and compliant with relevant laws and regulations. What’s your take on how aggressively states are building inventories of megasites? What are the successful ones doing right? O’Connor: Several states have been building inventories of megasites to attract large-scale industrial development. The successful ones are employing a range of strategies to differentiate themselves and increase their attractiveness to potential investors. States that are particularly successful in this arena — such as Tennessee, South Carolina and Ohio — often combine many different strategies. They tend to take a holistic and proactive approach that goes beyond just offering land, focusing on creating a comprehensive ecosystem conducive to industrial development. The key to success appears to be a combination of significant upfront investment, strategic planning and a commitment to making the development process as smooth and attractive as possible for potential investors. This approach not only helps attract initial investments but also builds a reputation that can lead to further development opportunities in the future. Think of a project you worked on where it came down to two or three megasites, and one ultimately was chosen by the client — what were the factors that put the winning site over the top? O’Connor: While cost, timing and site quality are paramount to any site selection decision- maker, one often overlooked factor boils down to first impressions. Beyond potential ROI, cost efficiencies and other quantifiable decision criteria, the “nearly impossible” to measure factor of community-cultural fit is exceedingly important to many companies considering a decades-long capital investment. No client is eager to invest in a community in which they do not feel welcome. Our clients want to be good neighbors, partners and contributors. Therefore, a great deal of our clients prioritize areas they find favorably aligned with their company values. Communities where there is an evident strong partnership/collaboration between the public and private sector carry significant weight. The experience, introductions and engagement from an initial tour can often prove just as valuable as the real estate itself. INVESTMENT PROFILE: PFLUGERVILLE, TEXAS How Pfl ugerville guides and supports budding entrepreneurs. M ost of us dream of one day launching a new business and being our own boss. In Pfl ugerville, Texas, a growing number of people are doing just that. A north Austin suburb of close to , people, Pfl ugerville has long been known as a hub of innovation, with dozens of manufacturers engaged in everything from D printing to new technologies. Today, that spirit of innovation produces a wave of entrepreneurs who branch out and create new companies of their own. Pfl ugerville, nestled in the heart of Central Texas’ high-tech mecca alongside Austin and Round Rock, is attracting world-changing talent. Because of that, the Pfl ugerville Community Development Corporation recently launched the Entrepreneur Hub. e idea is to equip budding entrepreneurs with the resources and information they need to be successful. Off erings of the Hub include funding resources, legal resources, personalized mentorship, and access to other tools essential to helping businesses grow. Crystal Connally, business retention and workforce director for the PCDC, says the PCDC is launching the Startup Support Center Platform in January , and it is going to be a diff erence- maker. “It will guide entrepreneurs from the initial idea stage to the actual realization of a business, product or new technology,” she says. “Each entrepreneur will have access to mentors and learning modules. e program will connect them to funding resources they need to grow their ventures. In addition, we will off er workshops and network opportunities for entrepreneurs.” Pfl ugerville appeals to entrepreneurs because it attracts the types of people who think creatively and have the ambition to build a business. More than half the adult workers in Pfl ugerville hold either a bachelor’s degree or a post-graduate degree. e median household income in the community is over $,; and more than two-thirds of residents in the city are homeowners. “Entrepreneurship impacts individuals and the whole community,” says Connally. “Providing support is important because entrepreneurs are the innovators who create the new technologies and the new products. If an idea makes it to the market, the success creates a diverse and healthy business climate which builds wealth in the community.” More than new businesses were established in Pfl ugerville last year, and many more are percolating. e PCDC Is connecting entrepreneurs in Pfl ugerville to resources such as the Central Texas Angel Network; the Economic Growth Business Incubator; the Small Business Development Center of Southwest Texas; the Texas Venture Alliance; the LinkedIn Learning Upskilling Database; Workforce Solutions Capital Area; the downloadable Business Resource Booklet; by RON STARNER ron.starner@siteselection.com New Business Is Popping Up Everywhere In Pfl ugerville The Highway 130 Intersection is a hub of commerce in Pfl ugerville, Texas. Photo courtesy of PCDC 72 JANUARY 2025 SITE SELECTIONWomen’s Meetup for entrepreneurship in Pfl ugerville is a new community program sponsored by PCDC. Photo courtesy of PCDC three ventures that would go on to revolutionize the consumer electronics, digital imaging and network security & transactional privacy worlds: Skipstone, Nordview and Layer Networks. Mitchell was also involved in a startup for medical devices in the brain imaging sector. His past led him to partner with the PCDC to help others build their own businesses. “I came on board with the PCDC last January. Everything came together at the right time. It was obvious that there was this wealth of desire to start new businesses in Pfl ugerville. I had talked to many local people in the last few years, and they all wanted to leave the corporate world and start their own venture. at led to putting together the Entrepreneur Hub for Pfl ugerville.” Mitchell says all entrepreneurs need access to the same things: capital, guidance and mentoring. “ e new platform will provide these services. e portal will be available through the PCDC website so that entrepreneurs can receive that essential support online. In addition, we invite entrepreneurs to meet with our staff . Being able to talk through issues with real people makes a big diff erence.” How a City Bridges the Gap Dexter Jones concurs. Founder and owner of VIPS Personal Protection LLC, Jones got the entrepreneurial bug when he retired from the Texas Alcoholic Beverage Commission in . His idea? Launch an elite personal security business; and he did it in Pfl ugerville. “I always wanted to break the cycle of poverty in my family, and I always wanted to be an entrepreneur,” he recalls. “My involvement in business formation led me to become involved with the PCDC. I joined a steering committee, and I shared my ideas on what I would like to see happen in this community.” Establishment of the Entrepreneur Hub and Startup Support Center Platform followed. Jones adds that every entrepreneur needs help putting together a business plan, networking with other business owners and fi nding a mentor. “PCDC has those resources to connect entrepreneurs to people who can help them,” he says. “When I needed guidance, they helped me. Pfl ugerville is a breeding ground for successful entrepreneurs. PCDC is making huge strides in bringing investors and capital to the community. ey bridge the gap.” and the new Startup Support Center Platform. Anyone who joins the Entrepreneur Exchange Network immediately receives access to all of these resources, as well as other benefi ts and services off ered through the PCDC and the Pfl ugerville Library small business resources. An early success story from this program is Pfl ugerville Venture Week. “ is year, we held the fi rst ever Pfl ugerville Venture Week during the fi rst week of October,” says Connally. “We highlighted fi ve of our local entrepreneurs and created videos about their ventures. ey talked about their ideas and how being an entrepreneur has changed their lives. We held four dynamic meetups during the event. First, the HER Texas Meetup for female entrepreneurs took place at West Pecan Coff ee & Beer, where attendees gathered to discuss innovation and network. We also hosted the Entrepreneur Exchange in partnership with Comerica Bank and the Pfl ugerville Chamber of Commerce. Additionally, Venture Connect, hosted at Prost Alehouse, featured entrepreneurs pitching their innovative business and product ideas to an audience. “Finally, PCDC hosted a lunch and learn where startup entrepreneurs learned from the Austin Angel Network and Business Center Lender (BCL) of Texas about what is required to gain access to capital. e PCDC is excited to begin the planning process for their upcoming annual Venture Week in the fall.” It Takes One to Know One — or Two Connally says PCDC knows what entrepreneurs need because the organization aligned with successful local entrepreneurs — Oscar R. Mitchell and Dexter Jones. A serial entrepreneur and a PCDC board member, Mitchell has made a career out of building successful companies, primarily in the scalable hardware/software systems & network security sectors. Between and , Mitchell and some of his colleagues at IBM worked together to launch This Investment Profile was prepared under the auspices of the Pflugerville Community Development Corp. For more information, contact Veronica Ramirez at veronicar@pfdevelopment.com. On the web, go to www.pfdevelopment.com. SITE SELECTION JANUARY 2025 73 Pfl ugerville is a breeding ground for successful entrepreneurs. PCDC is making huge strides in bringing investors and capital to the community. They bridge the gap.” — Dexter Jones , Founder and CEO, VIPS Personal Protection LLC Pfl ugerville is a breeding ground for 74 JANUARY 2025 SITE SELECTION A New Tech Index Emerges from the Data Blending hard infrastructure information with talent metrics shows where tech reigns supreme — and where it’s spilling over to next. W hat if you could marry the most granular tech infrastructure data with tech talent metrics and corporate facility project numbers from tech-aligned industry sectors such as software development, data centers and telecommunications? Why, then you’d have something like Site Selection’s North American Tech Hubs Index, presented here for the fi rst time thanks to analytics performed by Site Selection Director of Programming & Analytics Daniel Boyer with collaboration and data from CBRE’s Tech Talent Scorecard, CompTIA’s CyberStates report and TeleGeography’s robust new Market Connectivity Scorecard, which tracks , markets globally across data points. e top tech hubs emerging from the data include both well-established markets and what some might consider upstarts, topped by Washington, D.C., Dallas-Fort Worth and Atlanta (see map). Some of North America’s highest- population metro areas dominate, but in terms of emerging locations things get interesting with such markets as Austin by ADAM BRUNS adam.bruns@siteselection.com EMERGING TECH HUBS In No. 1 tech hub metro Washington, D.C., there will be plenty of tech wizardry on display at the forthcoming National Geographic Museum of Exploration on the organization’s “reimagined” headquarters campus in the Golden Triangle area. Visualization by REDVERTEX, based on designs by Hickok Cole, Inc. Methodology: e new Site Selection North American Tech Hub Index includes the following sources and weighted criteria: TeleGeography: Market Connectivity Score (data center development, internet exchanges, cloud regions, subsea cables and more); Market Connectivity Growth Score; CompTIA: Tech Employment; Tech Employment Per Capita (our calculations); Tech Job Growth ; Tech Job Growth per capita (our calculations); Tech Job Growth (projected); Tech Job Growth per capita (projected; our calculations); Site Selection: Projects since Jan. in tech-affi liated NAICS codes (software, IT, data centers, etc.); Projects per capita; Jobs and capex affi liated with those projects (cumulative and per capita); CBRE Tech Talent Scorecard Data ( top markets). SITE SELECTION JANUARY 2025 75 at No. 8, Columbus at No. 10, Denver at No. 11 and Calgary and San Antonio at Nos. 17 and 18, respectively. The Northern Virginia data center market may be the first thing one thinks of when examining the tech footprint of the nation’s capital. But it goes beyond that to such factors as the highest proportion of college graduates of any metro area and, combined with No. 24 Baltimore, the third- highest concentration of life sciences research talent, according to a 2023 CBRE report. Last spring’s latest report from CompTIA (one of the sources for this new index) showed more tech job postings in the nation’s capital region than in such leading tech cities as New York, San Francisco, Dallas and Chicago. Pitchbook had this to say about the region’s startup culture when it released its Global VC Ecosystems report in September 2024: “Since Q3 2018, DC has seen more homegrown startup financing and LP capital raised than either Seattle or Austin, two cities more typically associated with the tech universe,” and cities ranked No. 12 and No. 8, respectively, in Site Selection’s new index. Two of those metros came together in 2024 when Austin-based Capital Factory opened Station DC in the D.C.’s Union Market District. The space is intended as a place to bring tech entrepreneurs and policymakers together, and is backed by a $2 million grant from the DC Council. The footprint also encompasses companies such as cybersecurity leader Virtru, founded in the city in 2012, which in 2023 unveiled a new HQ and tech center it calls The HUB on Pennsylvania Avenue. The company was the first awardee of the D.C. Vitality Fund, an incentive program designed to cultivate innovation, in-person collaboration and job opportunities in D.C. “Washington, D.C. serves as a financial, political and innovation epicenter,” said John Ackerly, co-founder and CEO of Virtru, at the September 2023 ribbon-cutting. “There is no greater place for Virtru to continue to grow and scale.” Through the Vitality Fund, Virtru and another expanding firm, Quadrant Strategies, will create an estimated 275 new jobs, lease 33,000 sq. ft. and invest $6 million in their office spaces, said a release from Mayor Muriel Bowser’s office, noting the projects are expected to generate $1.8 million in tax revenue for the District. Analysis by Those In the Know Of this first attempt at blending of tech talent and tech hard infrastructure data, TeleGeography’s Senior Manager of Infrastructure Research Jonathan Hjembo says, “I think this is a terrific idea. The correlation likely depends on the extent and type of infrastructure deployment being tracked. No component of digital infrastructure works in isolation. Data centers, network, IX, cloud, etc., are tightly interdependent. The more we incorporate different types of infrastructure that’s critical to developing communications hubs, the more interesting I think the correlation will be between infrastructure concentration and tech talent concentration.” Hjembo shares the following notes about a few of the top hubs in the ranking: Washington (NoVA): “The crippling power transmission crisis in Northern Virginia hasn’t dampened demand for new capacity in the world’s largest data center market. Yes, the short-term inability to bring new data centers online in parts of the region has acted as a catalyst to move some development elsewhere, particularly to the Washington, D.C. 1 2 8 18 19 21 24 9 3 4 13 14 15 16 5 6 20 10 11 12 22 23 17 25 7 Dallas-Fort Worth, TX Atlanta, GA New York, NY San Francisco, CA Chicago, IL Phoenix, AZ Austin, TX Toronto, ON Columbus, OH Denver, CO Seattle, WA Boston, MA Miami, FL Los Angeles, CA Houston, TX Calgary, AB San Antonio, TX Charlotte, NC Minneapolis-St. Paul, MN Richmond, VA Portland, OR Kansas City, MO-KS Baltimore, MD Vancouver, BC NORTH AMERICAN TECH HUBS INDEXNext >