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n a repeat of 2001’s one-two finish, Chicago and Detroit head up Site Selection‘s list of top U.S. metropolitan areas for new and expanded facilities in 2002. While the order and the approximate winning margin are the same as last year, the pace was off considerably. Both metros were off by about 300 total facilities from 2001 &150; yet another indicator of a down economy. The two cities have dominated the category for several years. Detroit claimed the top spot for four years running prior to Chicago’s two-year reign.
In fact, in the 14 years Site Selection has compiled a Top Metros rankings, just three cities have topped the list: Chicago, Detroit and Dallas/Fort Worth, which was the winner for the first six years. Dallas/Fort Worth remained in the Top 10 through 1999 and this year finished 24th. While some metro areas have dominated the rankings, no city has been able to make the Top 10 every year.
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Conway Data’s New Plant Database indicates that in 2002, Chicago posted 574 new and expanded facilities while Detroit was a not-so-close second with 367. After the top two, the order of the other top 10 metros is completely different this year. Cincinnati made its strongest showing ever and its first appearance in the Top 10 since 1999 by finishing a strong third with 336. The Queen City was followed by New York, Memphis, Minneapolis-St. Paul, Charlotte-Gastonia-Rock Hill, Nassau-Suffolk, N.Y., Washington, D.C. and Grand Rapids-Muskegon-Holland, Mich. Barely missing the Top 10 was Philadelphia, which finished with 154 projects.
Investment in Chicago projects in 2002 was more than $13 billion. New York was second with nearly $5.6 billion while Detroit was third with $4.8 billion.
The 2002 Top 10 list includes two newcomers since compilation of Site Selection‘s first Top Metros rankings in 1989: Memphis, which finished a strong fifth, and Nassau-Suffolk, N.Y., which came in eighth. New York maintained its fourth spot. Houston, which was fifth in 2001, fell to 26th. Also falling out of the Top 10 was Orange County, which dropped from seventh to 33rd. Cleveland slid from ninth to 14th and Atlanta dropped from 10th to 15th.
Two metros on the list, New York and Nassau-Suffolk, rank among the highest-cost metropolitan areas to do business, according to economy.com. Conversely, just one metropolitan area on Site Selection‘s list, Minneapolis-St. Paul, made the rankings of the top 10 metro areas in the latest Competitiveness Report issued by Beacon Hill Institute at Suffolk University in Boston. Chicago was 29th on that list.
Holding Steady
Studies indicate Chicago fares better than many cities when the economy goes south. Paul O’Connor, executive director of World Business Chicago, says an analysis of the national economy over the last dozen years shows Chicago suffers less than other major cities. He cites the fact that Chicago created more than 479,000 private-sector jobs in the 1990s. Since 1990, the city has added 255,000 new jobs in software development and applications, engineering, marketing, consulting and management services.
No small factor in Chicago’s success has been its attention to infrastructure. Since 1989, the city has invested $11 billion in infrastructure improvements.
In today’s digital economy, Chicago is also a leader, sitting at the top of a list of the 30 most Internet-accessible cities in the U.S. compiled by Ohio State University researchers. Chicago was ranked first because it had the most total Internet paths available between it and every other city. It leads the nation partly because it is one of the original network access points and is helped by being a major transportation center.
Top new projects in the Chicago area include the $100-million Solo Cup facility, the $84-million Wrigley Innovation Center and a $33-million General Motors distribution center in Bolingbrook. Top Expansions include a $40-million project by Blommer Chocolate Co.
Expansion projects dominated Detroit development in 2002. Naturally, many were automobile-related. Leading the way is a $644-million expansion in Flat Rock by AutoAlliance International (AAI), a joint venture between Ford Motor Co. and Mazda Motor Corporation. The project, which will prepare the existing facility for new vehicle production, will retain about 1,900 jobs and add between 1,200 and 1,400 new jobs in coming years.
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In the Cincinnati area, projects were more diverse, ranging from an $81-million expansion of Ford‘s truck transmission plant in Sharonville, Ohio, to a $40-million expansion of L’Oreal USA‘s facility in Florence, Ky.
To be sure, New York’s project portfolio is full of Manhattan office and hotel builds. Outside of these two dominant categories, one of the largest job promises is that of Fresh Direct, an online food delivery service which will invest $100 million and create 652 jobs in Long Island City.
Many of Memphis’ projects were expansions of distribution centers, which are in no short supply in the region. With the world’s largest air cargo airport, the third largest rail center in the U.S. and the fourth largest inland port in the U.S., the region has been a prime target of firms looking to site a distribution facility. The largest expansion in this category during 2002 in the Memphis metro area was a $50-million project at Williams-Sonoma‘s Olive Branch, Miss., facility, which will add 50 jobs. Most DC expansions were more in the range of J.M. Smucker‘s $5-million project.
Robert Huggins Associates, a U.K.-based economics consultancy and think tank, ranked Minneapolis-St. Paul as the world’s most knowledge-competitive region in its report, “World Knowledge Competitiveness Index 2002.” The study cites the area for its number of managers per 1,000 inhabitants; the number of IT, computer manufacturing, biotech and automotive engineering employees per 1,000 inhabitants and the number of patents registered per million people. Adding to the region’s growing reputation for biotech investment is a $10-million project by Protein Design Labs in Plymouth. PDL is a leader in development of humanized monoclonal antibodies to treat various diseases.
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Charlotte reports a recovering economy with more than 12,000 new jobs announced during 2002. A December Money magazine article pronounced the city as one of the Top Ten Places to Live. Last year’s announced projects include Johnson & Wales University’s plan to build an $82-million Charlotte campus in 2004.
Long associated with defense industries, the economy of the Nassau/Suffolk region is diversifying. Nassau County is focusing its efforts on attracting biotechnology, software and technology development, high-skilled professionals and service providers, banking/financial firms, healthcare projects and the entertainment industry.
Eli Lilly‘s $425-million, 700-employee insulin manufacturing facility in Prince William County, Va., was the largest manufacturing project in the Washington, D.C. metro area in 2002. The region also got a boost from the announcement of a $53-million Sysco food distribution center in Warren County, Va.
Rounding out this year’s Top 10 Metros is Grand Rapids-Muskegon-Holland, Mich., a familiar region on the list. This area saw several huge projects in 2002, including a $99-million expansion by Delphi Automotive Systems in Wyoming and a $97-million, 625-employee Gentex facility which will manufacture electronic automotive mirrors.
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