Big decisions are rarely an easy task, especially when hundreds of millions of dollars and a company’s future may depend on them. Investments like Intel’s US$2 billion expansion in New Mexico or IBM’s $2.5 billion in East Fishkill, N.Y., aren’t decided with a blindfold, a dart and a map. No, instead many hours of research and a myriad of location factors come into play. That’s why site selectors depend so heavily on superior customer service, whether it be dependable and accurate information, tax breaks or fast-paced permitting, to move forward with any new facility or expansion decision. For most corporations, state and local economic developers are the best source for the information they need. Those groups that do the best job in helping businesses do site work win the facilities … as well as a spot on Site Selection‘s Top 10 Economic Development Groups of 2000. Choosing the Top 10 Groups for 2000 was not an easy task, but Site Selection editors established some hard and fast criteria for making the short list. Those criteria included the following:
The per capita criteria level the playing field, allowing smaller communities such as Broomfield, Colo., and Albuquerque, N.M., to compete with statewide agencies. Once a short list of top group contenders was established, then more subjective issues came into play. These subjective criteria, which were judged by Site Selection editors, included innovation, customer service, leadership and value-adding programs. It is important to note, however, that only the groups that submitted materials for the project were considered. Here’s a brief look at each of Site Selection‘s Top 10 Economic Development Groups of 2000. |
Albuquerque, N.M.
www.abq.org
$2.8 billion, 3,175 jobs
Every economic development group seems to be targeting high-tech companies to boost their local economies, but some seem to be doing a better job than others. Take for example Albuquerque Economic Development Inc. . In 2000, AED attracted such names as Intel (see the cover story for more information) Eclipse Aviation, Sennheiser Electronic GmbH, Philips Semiconductors and LightPath Technologies, among others.
With recent moves made by AED, Albuquerque’s high-tech star is sure to shine even brighter than before. The group implemented a new targeted marketing campaign last year to recruit high-tech industries in the fields of optics and photonics, biomedical and biotech, as well as information technology and software. Albuquerque’s economic development organization is even playing a key role in the development of the New Mexico Optics Industry Assoc. (NMOIA at www.nmoptics.org), which has the short-term goal of developing a directory that includes a buyer’s guide and a long-term goal of creating a job bank with free listings for members through the NMOIA Web site.
These sorts of efforts seem to be paying off. In November, Newsweek ranked Albuquerque No. 7 in its “Top 10 Tech Centers.” Tech centers were described as large metropolitan areas having the infrastructure, capital, research institutions and cultural resources to attract companies and the all-important talent. Albuquerque beat out such locations as Chicago, New York and Atlanta in the ranking.
AED played a major role in both the $2 billion Intel and $400 million Philips Semiconductor expansions, and it helped bring to Albuquerque a new company with major bucks to spend. Eclipse Aviation is investing some $300 million to locate its corporate headquarters and new manufacturing center in Albuquerque. AED President Gary Tonjes said his group helped bring together all the right people to make this deal happen.
“The mayor and city council, supported by the city’s aviation and economic development departments, were all outstanding,” Tonjes says. “The city immediately recognized the potential value of this project, and its representatives were unwavering in their commitment to win this project.”
Broomfield, Colo.
www.broomfieldedc.com
$527.5 million, 6,579 jobs
In 1998, Broomfield Economic Development Corp. reported some $246 million in new investments; in 1999, the group increased that amount to $457 million; and in 2000, Broomfield Economic Development exceeded $527 million in capital investments from Corporate America.
“This is truly remarkable for a city of 40,000 residents,” says Donald G. Dunshee, president and CEO of the Broomfield Economic Development Group. “Announcements that were made last year include Sun Microsystems, Colorado Campus, Level 3 Communications, 360 Networks and Nextlinks.”
Broomfield has experienced so much growth that on Nov. 15 the community will become its own city and county. The soon-to-be city’s economic development group expects to continue that growth by providing information about available space as well as developing new facilities for use. “We secured a developer last year to build another 3,000-acre (1,215-hectare) business park to accommodate the land building needs of Broomfield for the next decade,” Dunshee explains. “The city is now attracting 1 million to 2 million sq. ft. (92,903 to 185,806 sq. m.) of new user and speculative Class A office and industrial development a year, and without this new business park, our land supply would be inadequate to meet our needs in two to three years.”
Broomfield Economic Development Corp. also completed and adopted a new five-year strategic plan in 2000. “This plan is expected to continue the economic vitality Broomfield has seen over the last four years,” Dunshee says. “The goals as completed will support the existing businesses and allow attraction of other firms to the city.”
Such efforts have worked thus far. Last year, Level 3 Communications added 350 new jobs in the area; Sun Microsystems added another 900 jobs; 360 Networks added 600 positions; and Nextlink created 150 jobs for the area. These four companies alone invested some $207.5 million in the area.
Many companies suggest the area’s appeal is related to the Denver area’s concentration of other high-tech companies and workers. 360 Networks’ Senior Vice President of Network Operations Dave Love says: “We selected the Denver area because of the wealth of networking companies. It’s kind of the hub of a lot of that type of activity. We selected Broomfield specifically because a lot of employees (in Colorado) were up in that area. Also, the whole Interlocken [Business Park] corridor has a lot of growth in companies and employees.”
New York
www.empire.state.ny.us
$11.9 billion, 90,855 jobs
It’s no surprise that Empire State Development Corp. made Site Selection‘s Top 10 Economic Development Groups for 2000 — the group did help land one of the largest corporate locations of the year (see the “Top Deals of 2000”). With a little help from ESD, IBM located its $2.5 billion chip wafer plant in East Fishkill, N.Y., which represents the single-largest capital investment in the state’s history.
IBM’s decision weighed heavily upon the SEMI-NY site offered by the state. The SEMI-NY initiative was spearheaded by ESD, and it was established to help win the “next generation” chip plants by providing pre-permitted sites to semiconductor manufacturers.
Though its size is impressive, IBM’s announcement was not the only one to take place in New York last year. ESD landed some $11.9 billion in investments for the state in 2000. Among the key players in that investment total are Adelphia Communications’ $100 million investment in Buffalo, General Motors’ $500 million engine plant in Tonawanda, Philips Semiconductor’s $100 million investment in East Fishkill, and Delta Airlines’ $1.6 billion expansion project at John F. Kennedy International Airport, which will create 6,000 new jobs.
The state of New York expects such announcements to continue with the establishment of even more business-friendly initiatives last year. For instance, the state’s Economic Development Zones program was expanded and renamed the Empire Zones program. As part of the expansion of the program, three new tax credits were established: the tax reduction tax credit, the real property tax credit, and sales tax exemption for tangible personal property and services.
The state also eliminated the Gross Receipts Tax on energy for businesses in 2000. The tax was eliminated immediately for manufacturers and industrial energy customers and made retroactive to Jan. 1, 2000. For all other businesses, the tax will be eliminated over a five-year period, and the gross receipts tax for residential customers will be reduced 40 percent during the same time frame. “When this is fully implemented, these measures will provide $330 million in annual tax savings, bolstering efforts to attract and retain jobs across New York State,” reports ESD Chairman Charles Gargano. “The 2000-01 budget also eliminates the sales tax on the transmission and distribution of gas and electricity for commercial customers, saving New York businesses nearly $150 million.”
The sales tax will be phased out over the four years that began Sept. 1, 2000.
Winchester, Tenn.
www.fcidb-tn.org
$509 million, 1,000 jobs
Not to imply that the Franklin County Industrial Development Board doesn’t work equally as hard as Site Selection‘s other Top 10 Groups, but location does make some economic developers’ job a bit easier. Franklin County may be just one of those locations.
“Winchester, the county seat, is only 89 miles (143 km.) from Nashville, Tenn.; 59 miles (95 km.) from Chattanooga, Tenn.; and 45 miles (72 km.) from Huntsville, Ala.,” says Henry G. Huerkamp, executive director with the Franklin County Industrial Development Board. “And both Nashville and
Chattanooga can be accessed via a four-lane connector road to Interstate 24.”
This sort of access has made the area attractive to many. In 2000, Franklin County Industrial Development Board came in second only to Broomfield Economic Development for investment dollars per capita. Franklin County reported $12,944 per person in its service area, compared to $13,189 for Broomfield, Colo.
Nissan Motor certainly found the area’s access much to its liking. In 1991, the company first purchased land for an engine assembly plant, and in 2000 the Japanese automaker revealed plans (after corporate restructuring) that it would add 500,000 sq. ft. (46,452 sq. m.) and create 1,000 to 1,200 new jobs over the next three years. The $500 million assembly plant expansion will accommodate Nissan’s new facility in Canton, Miss.
Though the company didn’t look at other markets, Franklin County Industrial Development Board stilled provided strong assistance in the project. “Our office assisted them in infrastructure surveys, labor availability surveys and more,” says Huerkamp. “In Tennessee, we have strong support for the automotive industry.”
Besides automotive, Franklin County is also working to attract plastic injection molding, warehouse/distribution, call centers and high-technology-related industries. “The reason for the emphasis on technology is that we have Arnold Engineering Development Center located on the Arnold Air Force Base and our proximity to Redstone Arsenal in Huntsville, Ala.,” says Huerkamp.
Louisville, Ky.
www.GreaterLouisville.com
$503.8 million, 5,263 jobs
Although Louisville, Ky., may be more known for its baseball bats, Greater Louisville Inc. has taken some big swings at new industries and brought in a number of runs. In the past, Louisville has landed major facilities from UPS and Ford Motor Co., but in 2000 the city moved into new arenas. In February 2000, the city formally launched a $65 million development project to transform a historic warehouse district along East Main Street into “eMainUSA,” a high-tech corridor for electronic commerce. The first tenant to move into eMain is bCatalyst, a business accelerator that helps startup companies grow more quickly. “We’re excited to be a part of this great environment,” says bCatalyst CEO Keith Williams. “eMain and bCatalyst will grow together to make Louisville a major player in the new economy.”
Louisville has already seen a lot of high-tech development. Last year, Tube Turn Technologies invested $30 million and created 180 jobs in the area, while High Speed Access invested some $20.8 million and created 493 jobs. Patrion Inc., a Web-based marketplace for long-term care providers and medical supply wholesalers, is expanding by 290 new jobs.
Greater Louisville also launched the Greater Louisville Health Enterprises Network last year. The network consists of six different strategies:
- to establish knowledge networking capabilities for health-related enterprises,
- to collect and disseminate data on the health-related economy,
- to develop a promotional/marketing plan that aligns the region with the community’s vision for this industry sector,
- to improve access to capital for health-related companies,
- to increase and improve the availability of a skilled work force for health-related companies, and
- to create a world-class infrastructure for health-related enterprises.
“The network is working to help the community fully achieve its goal of making Greater Louisville a location of choice for health-related enterprises by creating a forum for companies to share information and ideas,” says Joe Reagan, executive vice president of Greater Louisville Inc. “To achieve its goal, the group continually seeks to be aware of the current state of Louisville’s health-related economy and recommends ways to build on current strengths while working to eliminate current weaknesses.”
Richmond, Va.
www.grpva.com
$1.99 billion, 13,228 jobs
Tobacco is no longer the name of the game in the Greater Richmond area thanks to the Greater Richmond Partnership. Technology-related industries now lead the way in the evolving Richmond economy.
In December, the GRP, along with the Virginia Economic Development Partnership and Henrico County Economic Development Authority, worked with Infineon Technologies, formerly White Oak Semiconductor, to win the group’s 1,100-job expansion. “We decided to expand our operations in Virginia because of the ongoing technology and education infrastructure assistance from the state and Henrico County,” says Henry Becker, president of Infineon Technologies Richmond. “Because of our recent success, we were already in the process of hiring 300 new employees. Our partnership with Gov. Gilmore and the Commonwealth of Virginia made the difference in our final decision.” High-tech, however, is not GRP’s only target. In 2000, the economic development group put a new focus on international outreach programs, including services in Taipei and Seoul. “These international offices join the GRP European office, started in 1994,” says Gregory H. Wingfield, title with GRP. “Currently, the international prospect activity generated by these three offices account for nearly 10 percent of our deal flow.”
Along with opening up the two new offices, GRP created a new International Directory, which lists international companies with operations in the region. GRP also worked with two Korean television stations to help create a documentary on how Greater Richmond was transforming its economy away from tobacco to technology. The organization held an “Invest in America Day” in Nuremberg, Germany, in April 2000, which attracted more than 100 German businessmen and resulted in 45 leads and prospects.
As an example of Richmond’s appeal to foreign investors, Zurich, Switzerland-based Larson Mardon Packaging selected Greater Richmond for a new $45 million manufacturing facility that will create up to 150 jobs.
But perhaps the biggest example of the area’s changing economy is the announcement of Capital One’s expansion in Richmond. Capital One is consolidating its Richmond operations into three distinct campuses in Goochland, Henrico and Chesterfield counties. The investment for the company’s statewide investments will total $700 million and will create some 7,000 jobs (see Virginia Economic Development’s profile below for more detail).
Montreal, Quebec
www.invest-quebec.com
$22.3 billion, 50,200 jobs
The third time is a charm or at least it is for Invest Quebec. Making Site Selection‘s Top 10 Economic Development Groups for the third year in a row, the Canadian provincial economic development group helped bring some $22.3 billion to Quebec and assisted in the creation of more than 50,000 jobs in 2000.
Invest Quebec also moved forward on several initiatives last year that is sure to keep the group atop many economic development lists. One of those moves was to establish e-Commerce Place in Montreal (www.electroniccommerceplace.com). The project includes a building complex totaling 3 million sq. ft. (278,709 sq. m.) that is fully wired for the new Internet economy. But besides the prestigious location and infrastructure, Invest Quebec sweetened the pot even further.
“Companies that are eligible to locate in the complex may receive significant tax incentives extending up to a maximum of 10 years,” says Louis L. Roquet, president and CEO of the group.
The tax breaks include a 25 percent reduction on salary, with a maximum of $10,000 per employee, for five years. Eligible businesses include corporations with operations in Quebec that is not otherwise exempt from federal taxes and either develops or supplies products and services relating to e-business or operates as an e-business solutions provider.
In other high-tech moves, Invest Quebec has worked with private developers on the Technopole Angus project to revitalize the industrial market of East-end Montreal, where the locomotive industry once operated. To attract technology firms, the project brings together industrial infrastructures, entrepreneurs and a 40 percent tax credit for each job created. Invest Quebec provided a $1 million loan to the development last year. The project landed its first tenant in February 2000: Locoshop Angus.
In other news, Invest Quebec has helped bring the call center industry to the province in full force. ACI Telecentrics established a new call center in Sherbrooke last year. “The American company’s first call center in Quebec and in Canada required an investment of more than $10.8 million,” says Roquet. “Invest Quebec provided financial support of $3.9 million for the creation of 600 new jobs over the next two years.”
Other call centers announced in Quebec last year include the following roster of companies: ProVente, Belron Canada, Communications ITG, Corp. MemberWorks Canada, Datacom Marketing and Support E-C. Altogether this group created some 1,586 jobs.
Lansing, Mich.
www.michigan.org
$4.2 billion, 24,473 jobs
If you’re named the winner of Site Selection‘s Governor’s Cup for the fourth year in a row (see the March 2000 issue), it only makes sense to also be named one of the magazine’s Top 10 Economic Development Groups of 2000. And so, with Michigan Economic Development Corp.’s (MEDC) $4.2 billion in investments and 24,473 new jobs, the group has once again found itself listed among the cream of the crop in terms of economic development.
Doug Rothwell, president and CEO of MEDC, cites the group’s willingness to help companies find the workers they need as key to its success. “In May 2000, the MEDC switched its entire $5 million business attraction advertising campaign to a People Recruitment effort,” he explains. “This program recognizes the No. 1 concern of Michigan businesses: finding skilled workers. The Web-based program markets to high-tech workers, allowing them to post their resumes online, while business can post job openings. The program also attempts to attract more workers to relocate to Michigan.”
In other high-tech efforts the state, with support from MEDC, extended the Michigan Economic Growth Authority (MEGA) tax credits for four more years, and it now includes high-tech firms. The High-tech MEGAs allow smaller firms that make major investments in R&D to be eligible for business tax credits. “This program is targeted at the small and medium-sized high-tech firms that Michigan wants to attract and grow within our state,” says Rothwell.
Such emphasis on high-tech development has brought several new companies to the state. Nanovation announced one breakthrough deal last year. The company, which designs, develops and manufactures integrated optic devices, chose Northville Township (part of the Detroit metro area) for its $41.6 million facility, which will create 539 jobs. “This investment represents a recognition that Michigan and the Midwest is a high-tech center that can compete with California and other traditional high-tech states,” says Rothwell.
Though technology is a new course of action for the MEDC, the group has not forgotten its roots. MEDC continues to work with the ever-present auto industry as well as distribution with much success. Last year, General Motors Corp. announced that it will invest approximately $1.1 billion in Delta Township (Lansing) for a new assembly plant, and Target Corp. chose Charleston Township (Kalamazoo) for its $89 million distribution center that will create 900 new jobs.
Jackson, Miss.
www.mississippi.org
$4.3 billion, 8,000 jobs
A new statewide economic development plan and a $950 million investment from Nissan helped land the Mississippi Development Authority (MDA) in Site Selection‘s Top 10 Economic Development Groups of 2000.
The new economic plan, known as Advantage Mississippi, was adopted by a special session of the state Legislature last September. The Advantage Mississippi program consists of four primary components:
- The Mississippi Jobs Act, which allows qualifying business to receive up to four percent of their employees’ wages back at the end of each quarter as a rebate from the Mississippi Tax Commission.
- The Growth and Prosperity Act, which provides 10-year tax exemptions (excluding school taxes) to qualifying companies locating in designated counties.
- Tax credit amendments that target high-tech, research and higher-paying jobs.
- Work-force training and retraining amendments that allow the state to make multiyear commitments for work-force training and retention support.
“[Advantage Mississippi] helps the state make the short list of major corporate entities looking to relocate or expand while at the same time broadening the state’s ability to assist existing businesses,” says MDA Executive Director J. C. Burns.
The program definitely makes Burns’ job an easier one, but investments like Nissan’s show that the state’s economic development group can do some pretty amazing things without the new program. The new Nissan plant is the company’s first announcement since 1999. MDA and other state and local officials helped sculpt a $295 million incentive package to entice the automaker from such hot auto markets as Alabama that were also considered by Nissan.
But incentives weren’t the only draw. “An available, high-quality work force, a good site and infrastructure, a supportive business climate, and excellent cooperation and commitment from leaders at the state, local and federal levels” were all components of Nissan’s decision, according to the official expansion announcement.
Richmond, Va.
www.YesVirginia.com
$6.3 billion, 45,528 jobs
Virginia racked up yet another winning year thanks in part to the Virginia Economic Development Partnership (VEDP). In fact, according to VEDP Executive Director Mark R. Kilduff, “Virginia achieved the best year ever in terms of capital investment — $6.3 billion in one calendar year is a state record.”
VEDP expects to continue that success with tools established during 2000. In November, VEDP unveiled VirginiaScan, its latest Web-enabled site search tool. VirginiaScan allows corporate executives to search an online database of the state’s sites and buildings from anywhere in the world. According to VEDP, the site uses cold-fusion technology that “provides the quickest, most accurate preliminary site search on the Web.” VirginiaScan joined another feature on the economic development groups’ Web site called Hot Spots. The Hot Spots feature emphasizes the state’s rural communities that have available shell buildings and abundant labor.
Such efforts by VEDP have definitely put the Commonwealth on the map for site selectors, especially for those of the high-tech ilk. Last year alone Virginia had two major chip fab expansions announced by Infineon Technologies ($1.1 billion) and Dominion Semiconductor ($700 million), together creating some 1,700 jobs. In other high-tech arenas, Echostar Communications Corp. located a new customer service center in Montgomery County in southwest Virginia, and AOL is investing some $555 million for a second tech center in Prince William County.
VEDP’s biggest win in 2000, however, came from a financial services company, Capital One. With a total investment of $700 million, Capital One will hire a total of more than 8,000 new associates throughout the state by 2004, representing the largest business expansion plan announced in Virginia history. The Commonwealth successfully beat out Florida and Texas for the newest expansion, which is centered on a new facility in Goochland County (Richmond). Both the VEDP and Greater Richmond Partnership (see above) helped keep the expansions in Virginia.
“Capital One’s decision to consolidate and expand our local presence was based on our confidence in the company’s ability to maintain a robust growth rate, the positive business environment at the state and local levels in Virginia and the availability of talented and dependable workers here in the greater Richmond area,” says Nigel Morris, president and COO of Capital One.
Continue to Top Groups: Honorable Mentions