The Anatomy of Competition in Economic Development

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The Anatomy of Competition: Competing Communities Discuss the

Same Deal

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About Atlas AdvertisingAtlas Advertising helps economic developers reach national and international prospect and site selection audiences. We deliver branding, website development, GIS mapping, research, social media, and creative services professionally and with a staff experienced in economic development.

Our strategies bridge the gap between exhaustive strategic plans and focused, action that drives results. To further this practice, Atlas is spearheading the first benchmarking effort that compares results from communities all across the US and Europe.

Featured clients:– State of Ohio– Indy Partnership– Right Place, Grand Rapids Michigan– City of Fort Collins

– Alabama Power Company– Hoosier Energy– State of Oregon– City of Richmond, VA

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Questions We Will Answer1. About New Belgium:

– Why did this company decide to conduct an expansion? – Where did it start in the site selection process?– How does a company compare and evaluate presentations

from multiple cities?– For this project, why was Asheville selected?

2. How was this deal experienced from the perspective of the headquarters City?

3. How was this deal experienced from the perspective of a city that competed, but was not selected?

4. How was this deal experienced from the perspective of the city that was selected?

5. About the market today:

– What are the drivers of business relocation and expansion today?

– What communities see the most deals, ranked by population size?

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View the slides, continue the dialogue

• Continue the Conversation: – Follow us on Twitter:

www.twitter.com/AtlasAd– Tweet questions using hashtag #AskAtlas– Join Next Gen Economic Development

Marketers LinkedIn Group• View and share the slides with your

colleagues (available now): http://bit.ly/fQB6hC

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Your Panelists

Ben WrightCEO, Atlas Advertising

[email protected]/atlasad

Josh BirksEconomic Health

DirectorCity of Fort Collins,

[email protected]

Guillermo MazierBusiness Development,

Atlas [email protected]/atlasad

Ben TeagueSenior Vice

President/Executive Director of the

Economic Development

Coalitionbteague@asheville

chamber.org

Kristian D. Bjorson, SIOR

Managing DirectorJones Lang LaSalle

Americas, Inc.

Mark SeltzerDirector of

DevelopmentPIDC

[email protected]

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

About New Belgium: Why did the Company Decide to Conduct an Expansion? What Drove It?

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New Belgium was trying to achieve the following objectives:1. Meet distribution /

customer demands on the East Coast

2. Identify location for a 300K barrel brewing facility (Phase 1) with expansion potential to 600K barrels (Phase 2)

Close on real estate 4Q-2011, conduct detailed design in 2012, commence construction 1Q-2013, ship beer 1Q-2015

75 to 125 employees for Phase 1 plus 50 to 82 employees for Phase 2

$40M to $80M capital investment for Phase 1 plus $40M to $60M capital investment for Phase 2

3. Qualitative considerations: Consistent with culture and

brand - environmentally and socially responsible

Highly efficient & safe for an educated & capable workforce within a walk or bike ride to work

4. Quantitative considerations 150,000 to 300,000 square

feet, plus expansion, on 10 to 20 acres with close proximity to workforce and customers

Annual utility consumption – 10M Kwh of electricity, 720K thermos of natural gas, 96 MG of water flow volume

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

About New Belgium: Where Did it Start in the Site Selection Process?

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The process New Belgium followed

LOCATION ASSESSMENT AND EXECUTION

Pro

jec

t S

tep

s

12/1/10 5/1/11 6/1/114/1/11 7/1/111/1/11 3/1/112/1/11 8/1/11 9/1/11

Project Design & Construction

Location Elimination

High Level Screen

Site Selection

Taxes / Business & Economic Incentives

Real Estate Acquisition

Supply Chain Snapshot

10/1/11 11/1/11

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

About New Belgium: How Did the Company Compare and Evaluate Presentations from Multiple Cities?

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Location Intelligence Model

# Site selection priorities Model FAQ

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Destination location--within 1 hour of a major urban center or a progressive tourist destination

Used CBSA

2Progressive climate - culturally, environmentally, politically, culinarily

Created a cultural Index using number from population that have a high propensity to go to plays, concerts and museums

3 Plentiful water supplyUsed a ratio of water to land from USGS

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Proximity to a town so employees can bike to work, have access to services; or proximity to commuter rail

Brokerage

5Utility availability and reliability

iLocate

6Municipal development favorability (zoning, permitting, fast-tracking)

BEI / Brokerage

7 Vital lifestyleUsed MRI data for population with a high propensity to exercise

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Previously developed site--able to redevelop a beautiful, old building--or a naturally beautiful site

BEI / Brokerage

9Close to a major interstate and off ramp--or at least unfettered access to one

ilocate

10Temperate climate, suitable to natural ventilation

Need definition from client

11 Ability to have an influence BEI / Brokerage

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

For this Project, Why Did Asheville Win?

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Asheville, NC – 163 Craven Street

Weaknesses• No direct flight to Denver• Smallest market under

consideration• Need to assemble and

purchase land

Strengths• The “Fort Collins east of

the Mississippi” with year around activities and tourist destinations

• Culture consistency with site being near the arts district for a walk and bike workforce

• Right to work state• Moderate tax with low

utility costs• Population growth area

Property Description• Approximately 19 acres across

3 separate parcel owners – French Broad River Group (6 acres), McLamb (1.5 acres) and Main Auto Parts (10.35 acres)

• Urban place zoning to be rezoned to commercial industrial

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Chat your Question:

Chat your question to Kris and we’ll post the answers on our LinkedIn group.

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

How was this Deal Experienced from the Perspective of the Headquarters City?

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Role: City of Fort Collins

• The company has a long history and a close relationship with the City of Fort Collins.

• New Belgium reached out to the City about a possible local expansion

• After a brief discussion of the company’s objectives, the City did not hear back, and assumed that the company was looking at locations elsewhere.

• Once the deal was announced• Answered questions from the press

reinforcing the business case for satellite locations

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Experience: The City of Fort Collins’

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Perspective: The City of Fort Collins’

• Economic Development is about influencing good business decisions– A heavy and perishable

product requires short distributions lengths

– Therefore, City assumed expansion would eventually include satellite facilities

• As the HQ City’s focus remains maintaining a strong relationship

Economic Development

Influencing Good

Business Decisions

“Expansion ultimately means continued success for New Belgium – this strengthens their role in our community”

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

How was this deal experienced from the perspective of the competing City?

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Role: Philadelphia Industrial Development Corporation Philadelphia Industrial Development Corporation (PIDC)– Philadelphia’s city-wide economic development corporation– Founded in 1958 as a non-profit, joint venture between the City

of Philadelphia and the Greater Philadelphia Chamber of Commerce

– PIDC plans and implements real estate and financing transactions that attract investment, jobs, and tax bases to PhiladelphiaThe Navy Yard

Former Naval Shipyard, closed in 1996Mixed-use campus that includes office, industrial/manufacturing, and research and development sectorsOver 120 companies with 10,000 employees by end of 2012Major tenants include: Urban Outfitters, Inc., GlaxoSmithKline, Tasty Baking Company, Aker Philadelphia Shipyard, U.S. Navy (NAVSSES), Destination Maternity, Energy Efficient Buildings Hub (EEB Hub)

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Experience: Philadelphia Industrial Development Corporation • Philadelphia: “Smart City. Smart

Choice.”– Central location with unparalleled

transportation and access– Smart and skilled workforce– 46.1 million people live within a 200-mile

radius– Bicycle-friendly community– “Best Beer-Drinking City in America” including

Philly Beer Week: 10-day celebration, featuring hundreds of festivals, dinners, tours, pub crawls, and tastings throughout the region

• PIDC’s role in “Project Jo”– Led recruitment of New Belgium Brewing on

behalf of City of Philadelphia. Integrated City officials, Mayor, Governor’s Action Team

– Gathered project team including architect, developer, and engineer

– Assembled a financial incentive package

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Experience: Philadelphia Industrial Development Corporation • Response package

– Technical: Site conditions, utilities, access, etc.

– General commerce, workforce, and demographics for the City and PA

– Financing and incentives

• Challenges– Major U.S. city– Urban environment– Not as much acreage

as NBB preferred

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Perspective: Philadelphia Industrial Development Corporation • Overcoming obstacles

– Demonstrating locations:

• Updating Master Plan for The Navy Yard• Philadelphia 2035

– Comprehensive plan to guide physical development for the next 25 beyond

– Tool to implement zoning map revisions, effective August 22, 2012

– Educate and empower citizens to play an active role – Making Philadelphia a more competitive place to do

business

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

How was this deal experienced from the perspective of the selected City?

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Role: Asheville-Buncombe County EDC

April 2011The first call:Real estate search

April 2012announcement

June 2011 Community Visit

July 2011Limited RFP

October 2011Traveled to Ft. Collins

September 2011Large NBB Delegation

Site narrowed to “stockyard site”

December 2011NBB Delegation

NBB Delegation attended Brewers Alliance Christmas Party

March 2012NBB Delegation

City Committed infrastructure aid

January 2012Sierra Nevada announcement

February Transportation studies informed City MOU

County assembled and controlled site through optionsEngaged Architect and engineer for pro bono work

Legislation signed by Governor

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Experience: Asheville-Buncombe County EDC

Hurdles:– World Class Competition –

Apples to Apples?– High profile clients

recognized in the market.• Consultant shows EDC real

time tweet at Sept mtg.– Sierra Nevada project at the

same time. Announcing before NBB

– Site: Stream, Brownfield, landfill, on river, flood plain, floodway, urban heart of river arts district.

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Experience: Asheville-Buncombe County EDC

Preliminary Site Concept (Perkins & Will Architects) and Aerial of Downtown Asheville – showing urban location of NBB site 1.5 mi from City Hall:

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Perspective: Asheville-Buncombe County EDC

• Lessons Learned– Authenticity and ‘telling the Asheville story’ (CEO

CEO)– Confidentiality vs. Community Collaboration (100’s of

pro bono hours)– Understand what you control versus uncontrollable

• Sierra announcement, workforce study.• Legislative change to benefit our clients and

successful legislation

• A collective win– River advocates – Community planners and neighborhoods,– Downtown/ river district

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

About the Market Today: What are the Drivers of Business Relocation and Expansion Today?

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Trends in Business Location Decisions in 2012• Information companies have gathered has

remained relatively constant.• The time frame they are making decisions

in has become dramatically shorter. • Companies have cash to make

investments now – and they are doing so. Deal flow has been very high the last two years.

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Top Drivers of Company Relocation Today:

Driver Number of Mentions

%

Growth/Access to Markets 21 31%

Lower Costs 14 21%

Labor/Talent 11 16%

Real Estate 6 9%Transportation/Logistics 6 9%Quality of Life/Amenities 3 4%

Be Closer to Suppliers 2 3%

Unions 1 1%

Separate From HQ 1 1%

Incentives 1 1%Investment Partnerships 1 1%

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How Have Those Criteria Changed Over the Past Few Years?• “Companies are not as reluctant and have the dollars to expand.” • “Lower costs is still tops.” • “Not very much.” • “Yes, but in different ways depending on use and industry.” • “Markets in general have been expanding more rapidly putting

more emphasis on ability to develop project more quickly.” • “I think transportation cost have become more of a realized cost

saving driver for companies, as well as lower employment numbers and higher investment in machinery and equipment.”

• “Labor is first.” • “My clients have just not wanted to make a move until the economy

or their markets started to turn around.” • “Somewhat stayed constant less about cost savings, more about

gaining revenue not In our business of about the last 45 years this is typical.”

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• “They are willing to investigate in studies, but corporations have been hesitant to go forward with large expansion.”

• “We have seen a strong transition from 'strategy' related projects in 2008-2010, to 'expansion' related projects.”

• “Focus on cost reduction to maintain market share.” • “Increasingly important I would say the recession has not

ended and that companies are still skeptical about the current administration and pending financial impacts adopted and pending regulations (health care, energy, etc).”

• “Fewer deals.” • “There is still a magical something relocating to the west

that appeals to many.” • “Transportation costs continue to increase and are

becoming the biggest operating cost factor in some operations. This factor is also driving some of the 'Re-shoring' operations back to the US from overseas.”

How Have Those Criteria Changed Over the Past Few Years?

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The Anatomy of Competition: Competing Communities Discuss the Same Deal

About the Market Today: What Communities See and Close the Most Expansion and Relocation Deals, Grouped by population Size?

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Highest Performers by Market Size, 2011Extra Large Market EDO:

(Over 2,500,000 pop): Large Market EDO

(1,000,000 to 2,500,000 pop):

Large Mid- Market EDO:(250,000 to 1,000,000 pop):

Mid - Market EDO:(100,000 to 250,000 pop):

Small - Market EDO:(25,000 to 100,000 pop):

Micro - Market EDO:(Less than 25,000 pop):

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How do I help my community make the most of its opportunities with expanding and relocating companies? Guillermo Mazier

Business Development, Atlas Advertising

[email protected]/atlasad

For information, call:303 292.3300 ext 232

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Steps you can take to help your community compete:1. Research and benchmarking

– Knowing where you stand – http://Atlas2012BenchmarkingSurvey.questionpro.com

2. Branding and messaging– Any town USA vs. “Your Community”

3. Business development – establishing relationships, making connections

4. Economic development websites and technology

5. Be ready to be evaluated, know your product and have the data to support it.

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Chat your Answer:

What is one thing that you learned in today’s webinar?

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Q+A

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Thank You!

Contact information:

2601 Blake Street, Suite 301Denver, CO 80205

Contact: Guillermo Maziert: 303.292.3300 x 232

[email protected] www.Atlas-Advertising.com

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