Wednesday, September 23 2015
Shovel ready sites can give communities seeking to attract distributors and manufacturers a strong competitive advantage. Shovel ready sites are designated locations primed for economic development, allowing companies to break ground rather than first having to address planning, zoning, infrastructural engineering, and other regulations that typically must be checked off before labor can be deployed on the site.
Iowa is turning into a leader for shovel ready sites, with seven counties participating in a Shovel Ready Certification Program that certifies projects as shovel ready and puts them into a local, regional and statewide inventory that is strongly marketed to prospective clients. In July, the state’s governor, Terry Branstad, announced six new shovel ready sites. One of the sites, the Marion Enterprise Center, received $5.5 million from Marion to build roads, sewers and other infrastructural shovel-ready amenities. The state of Iowa recently certified a yet unnamed “super park” of 582 acres shovel ready for agriculture, aviation, industrial and public projects in Cedar Rapids.
What qualifies as a shovel ready can vary by jurisdiction, but if standards are too low and in the end inconvenience or delay the aims of businesses, it can damage a community’s ability to attract future capital investment. In Tennessee, a site must have at least 20 acres ready for development, adhere to zoning standards that allow for straightforward development, have utilities that extend to the site and road access of a quality that can handle trucks. Many states observe similar standards.
Beyond time savings, shovel ready sites minimize risk in that companies are dealing with a known quantity when it comes to infrastructure and the regulatory environment. Large-scale projects tend to come with more risk and so making site location shovel ready in such cases can go a long way in reassuring prospective businesses.
“It answers so much additional information that you would otherwise have to learn on your own,” said Frank Spano, managing director of Austin Consulting Group in Cleveland. “The more information you have on a site, the better. It minimizes unknowns and costs."
A shovel ready site in and of itself is unlikely to attract businesses: the site’s geographical location is just as important a consideration. Therefore it behooves communities to offer enough acreage and other specifications for the types of businesses they are looking to attract and are likely to settle in a particular geographical area. Shovel ready sites in America’s heartland near rail lines, for instance, tend to be well suited for agri-businesses.
“Businesses are in a process of elimination,” among communities they are considering, said Dee Baird, president and CEO of the Cedar Rapids Metro Economic Alliance. “We want to have tools in our toolbox that prevent us from being eliminated.”
Conroe, TX, is counting on two shovel ready sites to help the community sell its strategic location – along road routes in a business-friendly that are a close proximity to global centers of commerce in Houston and Dallas and home to an airport that is in the process of expanding its capacity. Conroe Park North caters to machine and industrial clients, while Deison Technology Park provides shovel ready office and research space.
Consultants can conduct due-diligence studies on behalf of companies to determine whether a shovel ready site meets their needs. They can help communities determine what type of companies their prospective shovel ready sites are best suited to cater to. El Paso and Juarez, Mexico, are looking to attract an auto assembly plant, which generally require close proximity to roadways, rail lines, airports and supply chains. Public sector leaders are working with consultants, including AngelouEconomics, to conduct an evaluation and site selection process. Having a shovel ready site can help El Paso/Juarez rise among the rankings in that selection process.
Phoenix’s slow real estate and job recovery has led to an increased focus on shovel-ready office and commercial development. The worry among industry and political leaders, according to the Phoenix Business Journal, is that competing cities like Denver and Salt Lake City have more shovel-ready space. If Phoenix’s market rebound since the economic crisis were healthier, more speculative construction would likely occur. Instead, Phoenix finds itself being overlooked by some investors. Responding to this shortage, financial and professional services firm JLL recently completed a 215-acre land deal near I-10 that will support a $300 million mixed-use business park. The shovel-ready site will be the largest freeway industrial employment site in Phoenix.
Getting sites shovel ready involves many different players at various levels working together over an extended period of time. The state has to allocate staff resources toward defining its requirements for site certification and shovel readiness, rallying support, locating prospective sites, hiring a consulting firm that is familiar with and helps communities understand the process of site certification and shovel-readiness. The state must partner with local governments, and both must put budgets in place to facilitate the process.
Having a website that provides key specs, like utility capacity, transportation links, location advantages, total acreage and cost per acre, and types of businesses the site can accommodate, along with an aerial view of the property itself, can help pique interest in a community’s shovel ready offerings. Having representatives who can further explain the property and gain the confidence of prospective investors is also crucial. Monument West, an economic development organization in Wisconsin...a good example of this : http://www.momentumwest.org/momentum-west/gold-shovel-ready/gold-shovel-ready-sites.
It can be challenging, said Baird, “to convince people to stay at the table when [the process] gets expensive or overwhelming.” Cedar Rapids’ super park took three years to go through the process of becoming shovel ready, and Baird estimates that it could take another two to attract the right client(s).
However, shovel ready sites can save companies a lot of needless hassle, and in the end, that’s good for business.
Prior to joining AngelouEconomics, Yannis reported on economic and political issues in Asia, Africa and the US, for publications across the political spectrum, including Time, Newsweek, Forbes, the Wall St. Journal, Washington Times and New York Times.
His examination of developmental dynamics in numerous cultural and geographical settings has sharpened his understanding of how best to maximize economic potential within local and global contexts.