Wednesday, January 10 2018
By Lisa A. Bastian, President, Bastian PR
In this brave new world of two-day delivery being the norm for online purchases, it seems people expect speedy delivery of just about everything that affects their personal and professional lives.
In the economic development world, that idea is somewhat embodied in the increasingly popular concept of "shovel-ready" sites available to relocating and expanding businesses. After all, time is money. And if a site is ready to roll now for development to meet production timelines, without the need to wait months for loads of research, what's not to love about that?
But the devil is in the details. The definition of what makes one site "ready to go" in one state can differ in another state. Typically a shovel-ready site is one whose ownership is clearly established and is ready for development, and is currently – or could be quickly – serviced by local utilities and infrastructure.
Move up the spectrum, and you'll find any number of "certified" shovel-ready sites, meaning they have undergone more intense scrutiny. While the definition of what certified means varies, the same criteria tends to be the same within a state. However, that definition can drastically morph once state lines are crossed unless a national certification standard is embraced.
What follows are a few examples of how some organizations are finding success with this exciting and increasingly popular economic development tool.
Iowa Competes Fiercely With Independently Certified Sites
Of the 1,200-plus sites listed on the LocationOne database used by Iowa Economic Development Authority (IEDA), over 350 are at least 50 acres in size. Among all those contenders are 19 properties showcased in the state's Certified Sites (CS) program, offering shovel-ready land ranging from 50 to almost 600 acres in size. Seven more are in the process of becoming certified.
Since its establishment in 2012, this successful economic development endeavor "has generated $491 million in capital investments by various companies," points out Amy Kuhlers, IEDA program manager. "The Certified Sites program was a contributing for all of them to select sites here." The existence of such a program "can knock out about 95 percent of our competition" very quickly when Iowa is competing with other states offering similar sites a business desires that have not gone through the same due diligence – or can't offer the same development benefits "if time is of the essence."
Key criteria need to be met for certification. Typically the sites need to be outside a 100-year flood plain; be free of environmental concerns, wetlands, endangered species or other mitigating issues prior to development; not have archeological impediments (e.g, Indian artifacts); have specific levels of infrastructure and utilities, etc. Securing the vital information needing to be researched requires various geotech, environmental and archeological surveys. With Iowa's program all this consulting work is paid for by IEDA, but applicants are responsible for all the engineering survey expenses incurred during stage three of the certification process.
Since Iowa communities approach IEDA to pursue certification, not the other way around, this is not a state government-driven process. Many times representatives from the county, city and/or utility companies where the site is located form a team to work on making the goal of certification happen. Twice a year time, in January and July, communities can put forth sites to be considered for inclusion in the CS program. If approved, the sites begin a three-stage process that can take up to two years to complete.
However, not all the communities decide to finish what they started, for myriad reasons. "We've had some cities get through stage two and then decide [to stop]," says Kuhlers. "If that happens, the site is still marketed and available – but not as a certified site."
Unlike some states who certify shovel-ready sites by their own criteria (which can vary widely from state to state), Iowa’s Certified Sites program was designed and implemented by the nationally recognized site-selection firm McCallum Sweeney Consulting. (View an online map showing all sites and parks the firm has certified as of 11/2017 at https://goo.gl/ummZ2w.)
"We're in it for the long haul, and think we're using the most robust certification program out there; it gives us credibility as a state," remarks Kanan Kappelman, IEDA marketing manager. "When we look back over the [history] of our CS program, it's clear a focus on quality – not quantity – as the determinator for our program's success." This isn't a numbers game, she emphasizes, so having the most certified sites is never the goal. "Increasingly, people are realizing the benefits of our certification program; how having certified sites are meeting the needs of businesses wanting to find the right site quickly so they can begin operations sooner."
All of Iowa's CS sites are certified for five years, no matter their size. After five years re-certification costs less as another full round of surveys in some areas is not needed. However, there will be some important questions that need to be asked due to the passage of 60 months of time. For example, are all landowners still ready to sell? Should the site continue to be available in its same size, or would it be better to break it up into smaller certified parcels?
IEDA knows its CS program must adapt to future industry changes. That's why they recently introduced an off-shoot program geared primarily at green sustainability concepts with help from McCallum Sweeney. Adding another layer of classification, it's geared more for office park and company HQ projects than industrial ones.
Interestingly, this green program can allow for the possibility that certain natural impediments (such as wetlands) which normally would be non-qualifiers for certified sites would be acceptable, even embraced. For example, a company setting up on a green site might build around wetlands, or create a rain garden area nearby in a park. "As far as we know, Iowa is the only state offering a green certification program like this at this moment," explains Kuhlers.
IEDA's first green business park is expected to be certified in late 2018, while a second green business park has just begun the certification process.
Wisconsin's Certified Program Spurs Industrial Site Growth
Established in 2013, the Certified in Wisconsin program pre-certifies industrial sites as development ready to promote development of commercial properties throughout the state. By certifying these sites meet common basic development requirements, the state has been attracting businesses seeking to build their new projects quickly sans red tape.
"The beauty of our program is that once a site is certified, all of the information a developer needs to make a quick decision is easily available," says Coleman Peiffer, business and investment attraction director for Wisconsin Economic Development Corporation (WEDC). This includes data about utility and transportation infrastructure, environmental assessments and quality of labor.
"We avoid using the phrase 'shovel ready' in Wisconsin, as it's a pretty ambiguous term that means different things to different people," notes Peiffer. "Every developer may say their site is shovel ready, but in reality there is probably some survey that needs to be done to make it ready. With our program, due to all the due diligence that already has been conducted, development can happen very rapidly – sometimes as soon as two weeks at some sites."
WEDC now markets 17 certified sites, and adds about two new ones a year. Each one must offer a minimum of 20 contiguous acres without wetlands. Currently those sites are home to 21 active developments projects "expected to generate $389 million in capital investment and create nearly 2,300 jobs," he says. While other factors certainly contributed to the selection of those Wisconsin sites by companies, for at least three of the projects, the elimination of development "speed bumps" by the certification process was the deciding factor. One of those projects represents a $50 million capital investment; the other, $70 million.
"Our largest development on a certified site is a new Dollar General distribution center, which just opened in Janesville," explains Peiffer. "It’s a $100 million facility creating about 500 jobs just north of the Illinois-Wisconsin border in Rock County."
Company and local officials told WEDC that Dollar General was on an accelerated timeline to develop the site, and that the ability to make use of a certified site was a key role in their decision to build in Janesville. “Shovel-ready certification, particularly for large square footage and fast-tracked projects, has been a game-changer for the Janesville-Beloit region," says James Otterstein, economic development manager of the Rock County Development Agency.
Railroad Expands Nascent Nationwide Certified Sites Program
States aren't the only entities getting into the site certification game.
This past November BNSF Railway Company announced three new properties had been awarded its Certified Site designation, meaning there are now 13 BNSF Certified Sites around the nation.
This strategic program is designed to address the increasing demand for customer site locations by developing various types of facilities across BNSF’s network. The program's goal is to provide an inventory of rail-served sites that are available for immediate development.
The transportation titan purports that businesses seeking to locate at any of these properties could save six to nine months of construction time as a result of the in-depth certification analysis it has done. The research process included an evaluation of environmental and geotechnical standards, available utilities, site availability, and existing and projected infrastructure. These sites all have been reviewed by an industry expert to ensure accurate, reliable data.
BNSF launched its Site Certification Program in March 2016 by choosing four industrial sites in Shelby, Montana; Shafter, California; Newton, Kansas; and Temple, Texas. That first group of site certifications garnered not only inquiries about them from potential customers, but also inquiries from communities interested in having an industrial site certified by the railroad.
To be considered a certified site, industrial sites agree to submit documentation allowing the railroad to review evidence of a commitment by both the owner and the community to develop a high-quality industrial park or site strongly supported by a public-private collaboration and existing investments.
Colby Tanner, BNSF's assistant vice president, Economic Development, says that by performing the upfront legwork to confirm a site is rail-served and shovel-ready, BNSF’s Site Certification Program "creates significant value for customers by accelerating the process needed to support customer growth and development.”
Details for all 13 BNSF Certified Sites are found at available online at https://goo.gl/n5sQcU. Here is brief information about some of the newer ones.
Avard, Oklahoma: Avard Regional Industrial Rail Park features 390 acres available for development. It offers access to a 6,000-foot rail siding which will serve as a foundation for additional rail spurs as more industries arrive in the park.
Minot, North Dakota: The Industrial Park of Minot has 386 rail-served acres ready for development, is zoned heavy industrial, and offers convenient access to three U.S. highways. Eighty acres on the site already are graded and ready for immediate construction.
Sioux Falls, South Dakota: Foundation Park, located near Minnesota and Iowa state lines (and intersection of I-29 and I-90), features over 425 acres. Its first tenant has begun construction on a cold-storage facility there.
It's clear the marketing and acceptance of fast-tracked sites is not a fad. Companies of all sizes are embracing them as another type of incentive for choosing one site over another, and as a competitive advantage for operational development. As programs for these sites mature and expand nationwide, expect their roles grow in importance as they support the expansion of the American Dream across all industries in decades to come. Χ
Bio: Veteran business communicator Lisa A. Bastian is an award-winning journalist and editor who has authored well over 500 articles for national magazines focused on economic development, global trade and related industries. Since 1986, she has served clients nationwide with her editorial and copy writing skills (see BastianPR.com). Lisa lives in San Antonio, Texas, with her family, and is a former president/board member of the local chapter of the International Association of Business Communicators.