hen the U.S. economy and local tax revenues started heading south in mid-2008, economic development organizations all over the country faced a dilemma. Hunker down and wait for signs of growth before investing more resources into marketing and trade missions, or devote even more time and money to reaching target industries with the community's case for promoting business expansion?
Nearly two years later, the results of those decisions are in, as the choices made by community leaders in late 2008 and early 2009 laid the groundwork for corporate site selection patterns over the past 12 months.
While business location decision-making varied by industry, one constant remained true for local and regional economic development agencies: Fortune favored the bold.
Robert Ingram, president and CEO of the Baldwin County Economic Development Alliance in Daphne-Fairhope, Ala., spoke for many of Site Selection's Top Economic Development Groups of the Year when he said: "When things started going bad, we started working harder. We got very aggressive with our marketing in 2008 and 2009. We really started pushing hard and making contacts with companies we had worked with in the past. That contributed greatly to the fact that we did not have the down year that many other people had last year."
The Top Ten Groups of 2009 have many things in common, but being bashful is not one of them. While many other communities pulled back on their purse strings and retrenched, the winning organizations made a conscious effort to go the other way.
"A great deal of marketing is building personal relationships," says Ingram. "We intensified our networking efforts when things started getting bad."
The payback for those efforts last year was increased jobs, capital investment and facility space in the form of corporate expansion projects in the 10 winning communities of America. Site Selection bases its annual awards on four primary criteria — jobs, capital investment, jobs per capita and investment per capita — along with a few subjective criteria: depth and breadth of economic growth; ability to generate breakthrough deals; quantification of the host group's contribution to those deals; overall economic vitality; and the ability to document the corporate project activity.
Based upon those criteria, Site Selection announces the winners of the Top Economic Development Group Awards for 2009:
Baldwin County Economic
Robert Ingram, President & CEO
With corporate facility projects totaling $1.8 billion in capital investment and creating 3,486 jobs, the small-town community of Daphne-Fairhope became one of the juggernaut micropolitan areas of 2009.
Anchored by the $1.75-billion announcement from Hybrid Kinetic Motors in Bay Minette (see p. 436), Baldwin produced one of the most impressive one-year performances by a micropolitan in the history of the Top Group Awards.
But the growth did not stop there. The county also won significant facility investments from Team Green in Foley; Connexion Technologies in Gulf Shores; L.A. Candies in Spanish Fort; Champion Generators in Lillian; PLUS Diagnostics in Daphne; and Segers Aero Corp. in Fairhope.
"We decided to target higher-paying industries," says Ingram. "We started going to top consultants' meetings and talking to them. We began to do a better job of targeting the companies that we were working with, and we had incentives that were geared to those companies. That effort has paid off very much in the aerospace industry and the maritime industry for this region."
Among other factors in his community's success, Ingram cited the availability of a 3,000-acre (1,215-hectare), shovel-ready site, a location between Mobile and Pensacola, and "great public-private support."
Baton Rouge Area
Chamber of Commerce
Baton Rouge, Louisiana
Adam Knapp, President & CEO
Cajun country served up some home cooking for expanding companies in 2009, as corporate facility projects brought $1.52 billion in capital investment and 3,142 new jobs to the Baton Rouge area of Louisiana.
"About four years ago, we shifted our strategy on how we do economic development work," says Knapp. "The quality of our team was elevated and they became known nationally. We implemented a very strong regional focus that tied together all nine parishes and branded our region nationally. The state has also put together a very competitive organization that is able to compete financially and do deals. The results came home to roost in 2009 as our national recognition paid off."
ExxonMobil's $500-million diesel fuel refinery expansion in East Baton Rouge and SNF Holding Company's $362-million specialty chemicals plant investment in Iberville topped the list of large projects in the area last year.
"SNF Holding had been in the works for 24 months. They pulled financing together and closed in the second quarter," adds Knapp. "That was one of our biggest jobs wins of the year, creating 512 jobs. They are ramping up construction now."
Knapp says his area benefited from having the lowest home foreclosure rate among the largest 100 metros in the U.S. last year. "While the rest of the country saw the recession unfolding around them because of the housing bubble effect, we did not have a significant devaluation of the housing market in Baton Rouge," he notes.
Charlotte Chamber of Commerce
Charlotte, North Carolina
Jeff Edge, Senior Vice President of Economic Development
Charlotte Regional Partnership
Charlotte, North Carolina
Ronnie Bryant, President & CEO
Bolstered by the efforts of two economic development organizations, the greater Charlotte area turned in a record-breaking performance in 2009, generating 11,761 new jobs and $1.34 billion in capital investment from corporate facility projects.
Employment-creating behemoths like Neighborhood Assistance Corp. of America (2,114 jobs) and Zenta (1,250 jobs) led the way as communities throughout the bi-state region reaped the benefit of the work of these two groups.
Charlotte's emergence as an energy engineering hub propelled many big deals, notes Edge of the Charlotte Chamber. "It started years ago as Duke Energy started to outsource a lot of the engineering work that they did," he says. "Competitors saw that and said, 'We have to be in Charlotte.' As a result, these engineering firms are now doing this work in Charlotte for energy companies all over the world."
The focus on international projects paid off too. "When the dollar is struggling abroad, that opens up opportunities to get foreign firms here," Edge adds. "We had 14 deals that we landed last year from foreign companies. We continue to do well with firms in Germany; and overall in Europe we saw great activity." A German energy firm has illustrated Edge's points perfectly: After making facility investments in 2009, Siemens just announced in March 2010 its intent to invest $135 million more to make Charlotte a hub of gas and steam turbine and generator production. The firm plans to increase its Charlotte payroll by 1,000 jobs to 1,800 over the next five years.
The Charlotte Regional Partnership's Bryant says the region's success in 2009 was no accident. "We have always been a basic blocking and tackling organization. The highest return on investment for us is to get out and meet with as many investors as possible, both nationally and internationally," he says. "We increased our marketing budget in 2009 and spent the year doing more marketing activities. While our competition was doing less, we were doing more."
The group targets six core industries: health care, finance, film, motorsports, defense and energy. All six produced deals for Charlotte in 2009. "Charlotte is still one of the most competitive markets in the country," notes Bryant. "Our geographical position, our transportation infrastructure, and the quality and quantity of our work force enable us to compete not just against other locations in the Southeast, but against New York and Boston."
Dallas Regional Chamber
Dallas-Fort Worth-Arlington, Texas
Mike Rosa, Vice President of Economic Development
With 9,596 new jobs and $904 million in capital investment from corporate facility deals in 2009, the Dallas-Forth Worth Metroplex celebrated the final days of the old Texas Stadium by chalking up a series of solid project wins.
From Cisco Systems' $180-million investment into a new data center in Collin to EFW's $32-million aerospace manufacturing plant expansion in Fort Worth, DFW flexed its economic muscle in a variety of sectors.
"We have some pretty aggressive cities here," says Rosa. "DFW is a little different. We have a dozen cities in our region that have a population of 100,000 or more. It is not that way in other metropolitan areas in Texas. It is more important here to have good regional cooperation, because companies are looking at a lot of different places."
Lately, companies in California have been looking at DFW with a keen eye. "We are seeing some headquarters come here from California," adds Rosa. "We had a rush where it seemed like every project was chasing a blank check, but we are seeing less of that now. The companies are now saying, 'Where can we locate where we can be smarter?' We have a lower-cost profile. DFW is pretty cost effective for the quality you get. Our critical mass stacks up with the biggest metros in the country, and the price is good."
David Berzina, executive vice president of economic development for the Fort Worth Chamber of Commerce, says a surge in Asian manufacturers seeking U.S. sites has been a boon the area. "Q-Edge, a subsidiary of Foxconn out of Taiwan, brought 500 jobs in computer electronics," he says. "They manufacture Apple laptops. The project was slated to be in California, but they decided to come here instead. They went into an existing facility in Alliance that was vacant; they set up an assembly line with 300 people from day one. Upon full employment, they could have 1,500 people working there."
Greater Houston Partnership
Jeff Moseley, President & CEO
Houston is already known as the oil and gas capital of America. In 2009, the Texas metro only added to that legacy as refinery expansions and related projects contributed hundreds of millions of dollars in capital spending to the Gulf Coast region.
Valero Refining, ExxonMobil, Lubrizoil, Core Laboratories, Lufkin Automation, Hunting Energy Services and other firms announced sizable facility investments in places like Houston, Baytown, Deer Park, Freeport, Missouri City, Conroe and other communities throughout greater Houston.
Altogether, the haul of corporate expansion projects brought 4,523 new jobs and $1.13 billion in capital investment to the region in 2009.
"This success goes right back to our strategic plan that embedded economic development into our 10-year goals," says Moseley. "That is a bedrock philosophical principle for our organization. We were then able to invite the business community to invest in Opportunity Houston. We assembled over $32 million that could be used in identifying and recruiting prospects. OH allows us to more vigorously pursue leads that can tap into state resources as well."
One of the larger recruitment prizes of 2009 was Farouk Systems, a personal care products manufacturer that is generating 1,200 jobs in Houston and Harris County. Headquartered in Houston, the company makes hair irons and other hair-care products.
"Farouk is representative of a larger trend of going from offshoring to onshoring," adds Moseley. "The company has chosen to relocate manufacturing jobs from China and Korea to Houston for a number of macro reasons and also because they like Houston."
Kansas City Area Development Council
Kansas City, Kansas-Missouri
Bob Marcusse, President & CEO
Building upon a solid base of existing industries and enhancing that foundation with investments from emerging businesses enabled the bi-state Kansas City area to record a banner year in 2009.
Indicative of these trends were new corporate facility projects announced last year by U.S. Bank in Overland Park, Kan., and Smith Electric Vehicles Corp. in Kansas City, Mo.
The $50-million investment by U.S. Bank adds 1,350 jobs to the market and strengthens one of Kansas City's core industries. Smith, meanwhile, represents a breakthrough for the region.
"Originally founded in the U.K., Smith is the only U.S. company that is now producing electric trucks," says Marcusse. "They just received a $22-million grant from the U.S. Department of Energy. They produce delivery vehicles used for urban routes. These trucks will travel 150 miles [241 km.] a day. They are used by Pepsi, UPS and FedEx. This is their world headquarters and first production site. By the end of this year, they plan to have about 200 workers. This is a company that will help take us into the future."
The present isn't too shabby either. In 2009, the Kansas City Area Development Council helped the region land $1.01 billion in capital investment that will result in the creation of 6,523 jobs for residents in Kansas and Missouri.
When asked what triggered this wave of expansion, Marcusse says: "We added about $1 million a year to our funding base several years ago. That allowed us to spend a lot more time in the field."
Nashville Area Chamber of Commerce
Ralph Schulz, President & CEO
Corporate facility deals in the Nashville area contributed $1.87 billion in capital investment and 4,437 new jobs to the region. Leading the way in employment creation were several large projects in the medical technology and health-care fields.
The biggest of those came from Nashville Medical Trade Mart and Simplex Healthcare. The Market Center Management Co. of Dallas announced plans in November to locate the world's first medical trade center on the site of the current Nashville Convention Center. Developers say the project will cost $250 million and result in the creation of 2,700 jobs.
Simplex, based in Williamson County, began occupying 91,253 sq. ft. (8,477 sq. m.) of headquarters and operations space in Franklin in November and plans to hire 300 people over the next two years. The company makes a range of health-care products for patients with diabetes.
"Nashville continues to be an affordable place and is very well located with a vibrant higher-education system that generates an excellent work force," Schulz says of the city that is home to Vanderbilt and several other colleges. "Going beyond that, I have to attribute our success to our team approach toward attracting companies and building businesses in Nashville. The mayor's office is very strong and aggressive, and the chamber effort has been outstanding. Over the last year, there was a lot of opportunity for people who support our funding to withdraw, and they didn't."
Schulz says he expects 2010 to be even better. "About 21.6 percent of our employment income is generated by entrepreneurial activities," he says. "There is so much more opportunity for that now. We have 32 companies in the pipeline at the moment. If they all culminate, we will see an additional $725 million in capital investment, 4 million square feet [371,600 sq. m.] of new space and 9,200 new jobs."
Pittsburgh Regional Alliance
Dennis Yablonsky, CEO, Allegheny Conference on Community Development and Affiliates
Dewitt Peart, President, Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference
The Pittsburgh region of southwestern Pennsylvania landed $2 billion in corporate facility deals and more than 6,000 new jobs in 2009. The architects of that work were the Allegheny Conference on Community Development and its affiliate, the Pittsburgh Regional Alliance.
Exelon Generation Company LLC and Providence Point provided the two largest investments in 2009, accounting for $600 million and $300 million, respectively. Other big deals came from Thermo Fisher Scientific, Dbmotion, Education Management, Keystone Midstream Services and Mitsubishi Electric. Each accounted for more than $15 million in new capital spending.
"We saw great activity in our energy sector," says Yablonsky. "We had a total of 44 wins in the energy sector and about 25 of those were in natural gas. The Marcellus Shale discovery really increased our activity in the natural gas supply chain."
Peart noted that Pittsburgh's hosting of the G-20 Summit last fall created "a lot of buzz and a lot of traffic" for the region. "We are now heavily promoting Pittsburgh internationally," he says. "Pittsburgh is on the global stage now and that will continue to bear fruit for us."
Yablonsky says the region will continue to target these five industries: energy; advanced manufacturing; health care and the life sciences; information technology; and financial and other business sectors.
"About 80 percent of our projects last year came in those sectors," he adds. "People still see this region as very competitive in these industries. Going forward, we will continue to promote economic diversification for the entire region."
Select Greater Philadelphia
Thomas Morr, President & CEO
With $2.12 billion in new capital investment and 9,075 jobs generated by 77 corporate facility deals in the metro area, greater Philadelphia rose to the top ranks of high-performing communities in 2009.
Two companies reached or surpassed the half-billion-dollar mark with their announced projects: Catapult Holdings, which is investing $550 million into a new headquarters in Camden, N.J., and HelioSphera U.S., which is committing $500 million for a thin-film photovoltaics plant in Philadelphia.
"Real estate is bought, not sold," says Morr. "Our job is to help people find the best place for them to be. We want to make sure they make intelligent decisions. The cost advantages are very much in our favor, and the bulk of our work force is in knowledge-intensive industries. The University of Pennsylvania is a tremendous source of entry-level talent. A lot of research that leads to new company formation is based right here. We graduate about 77,000 total graduates, from associate's degrees on up, each year in the region. We have 360,000 students going to classes every day at one of our 92 colleges and universities in the area.
"This area was once the center of the industrial revolution," Morr adds. "The manufacturing that is here now is very different from what it once was. Today, we make satellites, helicopters, ships and pharmaceuticals. It is much more technical work today. In fact, one out of every six jobs in this region is in the life-science sector. This was the birthplace of health care in the U.S., and it was also the location of the first biotech center in the country."
World Business Chicago
Rita Athas, President & CEO
The Windy City definitely had the wind in its sails in 2009, as the greater Chicago region landed $2.16 billion in capital investment and 4,735 new jobs last year.
Major investments came from Union Pacific Railroad ($370 million in Joliet), GFX Corp. ($200 million in Aurora) and Rackspace Hosting ($150 million in Elk Grove Village). The biggest employment generators came from Panduit Corp. (768 jobs in Tinley Park) and National City Mortgage (400 jobs in Downers Grove).
And that's not even counting the United Airlines headquarters relocation, which moved 2,600 people into the Willis Tower in downtown Chicago. "That was extremely big for us," says Athas. "The reason they chose to move downtown was because they knew the talent was here. By being in the central city, they can attract the people they want to work for them."
Athas says the fundamentals of Chicago remain strong. "Chicago is seen as the capital of the Midwest," she says. "It provides the experience and the transportation network that are critical to so many companies. And our industrial market is bouncing back, but in a different way than before. Companies are expanding more in the area of advanced technology now. A good example is Ford Motor Co. They decided to move manufacturing from Kentucky back to Chicago, and access to technology and technical skills had a lot to do with that." Chicago is also seeing solid growth in life sciences, Athas notes. "With both Abbott Labs and Baxter here, their presence is prompting the rapid growth of many smaller biotech companies," she says. "Takeda Pharmaceutical also announced a move of their research facilities here. This is a real growth area for us."