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Economic Development Site Selection Seminar: Is your Community Ready?

Economic Development Site Selection Seminar: Is your Community Ready?. Site Selectors 101 Boot Camp – Part 1. Buckeye Power Economic Development Site Selection Seminar November 7, 2006. September 7 th , 2011 Ed McCallum, Senior Principal. MSC Overview.

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Economic Development Site Selection Seminar: Is your Community Ready?

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  1. Economic Development Site Selection Seminar: Is your Community Ready? Site Selectors 101 Boot Camp – Part 1 Buckeye Power Economic Development Site Selection Seminar November 7, 2006 September 7th, 2011 Ed McCallum, Senior Principal

  2. MSC Overview • Specializes in site selection and incentive negotiation services • Established in July 2000 by Ed McCallum and Mark Sweeney • Brings more than 50 years of combined location consulting experience to our clients worldwide • Provides clients with uncompromised service, conducting site selection and incentive negotiations with the highest standards of integrity

  3. Introduction

  4. Kasle Steel Introduction Private Sector Clients SGL Automotive Carbon Fibers LLC joint venture Boy Scouts of America American Titanium Works

  5. Introduction Economic Development Clients Charleston Regional Development Alliance

  6. Presentation Overview • IS YOUR COMMUNITY READY? • The Competitive Environment • Managing Your Site Inventory • Responding to RFPs • Preparing for Site Visits

  7. The Competitive Environment Buckeye Power Economic Development Site Selection Seminar November 7, 2006 Ed McCallum, Senior Principal

  8. The Competitive Environment • Attracting investment and jobs is highly competitive, and being prepared creates a competitive advantage

  9. The Competitive Environment • Company decision-making timeframes are getting shorter • Communities need to be prepared with sites that are ready for development

  10. Work Ethic/Labor Climate Assessments • Competitive Wage Surveys • Productivity Assessments • Qualitative Evaluations • Training Resources • Demographic Survey • Legal Environment • Strategic Planning - Growth/Location • Center of Market Analyses • Regional Definition • Competition Analysis • Pro-Forma Analysis • Breakeven Analysis • Recurring and Nonrecurring Cost Comparisons • Optimization Studies • Sensitivity Analysis • Project Financing • Alternatives • Risk Analysis • Product Distribution Evaluation • Raw Material Identification • Comparative Transportation Cost Analysis • Multi-Model Scenario Studies Human Resources Marketing Financial Logistics/ Transportation Site Development Negotiations • Real Estate Negotiations • Incentive Negotiations • Site Acquisition • Purchase Options • Topographic Surveys • Environmental Conditions • Boundary Surveys • Zoning Status/Modification • Access and Site Planning • Permitting Other Manufacturing/ Production • Infrastructure Suitability • Project Scheduling Sensitivity • Support Services Assessment • Expandability/Flexibility Determinations • Livability, Quality of Life Assessment • Factor Ratings (Kepner-Tregoe Decision Making) • Market Assessment • Engineering/Construction/Cost Comparisons Site Selection Factors

  11. The Competitive Environment

  12. Competitive Site Selection Screening Process Candidate Locations Define Search Region - Center-of-Market Analysis Regional Screening - Project Criteria (Musts & Wants) Proposal Screening Comparative Assessment Decision-Making Analysis Risk Analysis Site Decision

  13. The Competitive Environment Response Time and Information Relevance Response Time and Information Relevance The Old Way The New Way Information from Candidate Project Time Line Project Time Line

  14. Information Management (The old Way) The Old Way The New Way

  15. Desire vs. Reality Quality of Candidate Site Site Readiness

  16. Process vs. Reality Planning Phase Phase I Phase II Phase III

  17. Affecting the Decision Planning Phase I Phase II Phase III Phase Influencing Positioning Where your advantages are perceived as important Where your assets are recognized as relevant

  18. Critical Factors in Site Selection

  19. Non-Recurring Costs $8,000,000 $7,000,000 $6,000,000 $5,000,000 Series1 $7,500,000 $4,000,000 $3,000,000 $5,150,000 $2,000,000 $1,000,000 $540,000 $0 Alternative 1 Alternative 2 Alternative 3 Critical Factors in Site SelectionRecurring and Non-Recurring Costs

  20. 10 Yr. NPV at 10.0% $72,000,000 $71,500,000 $71,000,000 Series1 $71,784,910 $70,500,000 $71,241,385 $70,000,000 $70,123,839 $69,500,000 $69,000,000 Alternative 1 Alternative 2 Alternative 3 Critical Factors in Site SelectionCombined NPV

  21. Fundamentals of Facility Siting • Profit Driven • Part of an overall capital investment decision • Deadline Driven • Market opportunities must be seized quickly • Comprehensive • Impacts and is impacted by many aspects of a company • Risk Averse • Favors location that are less risky

  22. Fundamentals of Facility Siting Profit Driven • Think of the siting process as part of the overall capital investment decision • Models for evaluating capital investment • NPV • Payback Period • IRR • Bottom line: Timing is Critical!

  23. Fundamentals of Facility Siting Deadline Driven • Increasing speed / shorter time frame is dominant theme in recent years • Market opportunities must be seized quickly • Once decision made to move forward, want minimum time spent on location decision and start-up • Strongly favors prepared locations with project-ready sites

  24. Fundamentals of Facility Siting Competitive • Most investment activity has choices with regard to location • Industrial: contiguous region or regions • Office: selected metropolitan areas • Not just competing with neighboring counties – competing with locations all over the world

  25. Fundamentals of Facility Siting Risk Averse • Siting decisions must account for risk • Identify risks • Assess probability • Estimate impact • Favors locations that are project-ready because they are less risky

  26. The Competitive Environment • Speed • Siting decision and project development • Confidentiality • Critical for a variety of reasons • Professionalism • Integrity, reliability • Determination and persistence

  27. Managing Your Site Inventory Buckeye Power Economic Development Site Selection Seminar November 7, 2006 Kimberly Williams, Consultant

  28. Overview: Facility Sting Process Preparing for Site Visits Managing Your Site Inventory Responding to RFP

  29. Why Establish a Site Inventory? • Company decision-making timeframes are getting shorter • Communities need to be prepared to respond quickly with sites that are ready for development

  30. Why Establish a Site Inventory? • Fundamentals • Deadline driven • Risk averse • “Land” and “site” are not synonymous

  31. Why Establish a Site Inventory? • It is a logical step to creating “shovel-ready” sites • Available: it really is for sale, preferably with established terms and conditions • Fully-served: if all utilities are not already at the site, then at least plans and price tags have been developed • Developable: wetlands delineated and mitigated, environmental assessments (and mitigation, if necessary) are complete

  32. Fundamentals of Site Inventory • Create both a hard copy and electronic file for each site • Maintain all information in both hard copy and electronic format

  33. Fundamentals of Site Inventory • Visuals are extremely important • Identify the site boundaries on maps!!! • Include a north arrow, scale, data source, and date

  34. Components of a Site Inventory • Site Characteristics • Zoning • Transportation • Utilities • Environmental • Emergency Protective Services* • Workforce* • Education* • Labor Management Relations* *Data on these items is most often maintained at the community or county level, but certain site-specific items should be included in the site inventory.

  35. Site Characteristics • Data • Size • Configuration / shape • Number of parcels • Property ownership / control • Easements and right-of-ways • Topography • Bodies of water • Soil types

  36. Site Characteristics • Visuals / attachments • General location map • Aerial photograph • Topographic map • FEMA floodplain map • Ownership map / tax map • Documentation of property availability • Easements / right-of-ways map • Soils map

  37. Zoning • Data • Zoning designation(s) of the site • Surrounding zoning / land use • Process for rezoning (if applicable) • Visuals / attachments • Zoning map • Letter of willingness to considering rezoning (if applicable)

  38. Transportation • Data • Roads • Rail • Airports • Ports • Visuals / attachments • Transportation infrastructure maps • Letter from rail service provider

  39. Utilities • Data • Electric • Natural gas • Water • Sewer • Visuals / attachments • Utility infrastructure maps • If utilities are not at the site, a letter from the service providers regarding utility extension

  40. Environmental • Data • Studies: Phase I Environmental, Geotechnical Assessment, Wetlands Delineation, Archaeological • Permitting process • Mineral rights ownership (if applicable) • Any past mining / drilling (if applicable) • Sink holes, natural springs, caves (if applicable) • Visuals / attachments • Copies of studies • Map of mining / drilling locations • Map of sink holes, natural springs, cave locations

  41. Emergency Protective Services • Data • Ambulance / EMT • Provider, distance from site, personnel • Fire • Provider, resources, distance from site, personnel, insurance rating • Police • Provider, resources, personnel

  42. Workforce • Data • Largest employers • Largest manufacturers • Recent new or expanding projects • Recent closings or layoffs • Employment statistics

  43. Education • Data • Public School Districts (K-12) • Enrollment, spending, student / teacher ratio • Community colleges, technical schools • Enrollment, distance from site, programs • Universities • Enrollment, distance from site, programs

  44. Labor Management Relations • Data • Largest unionized companies • Union(s), number of employees, % unionized

  45. Economic Development Site Selection Seminar: Is your Community Ready? Site Selectors 101 Boot Camp – Part 2 Buckeye Power Economic Development Site Selection Seminar November 7, 2006 September 7th, 2011 Ed McCallum, Senior Principal

  46. Responding to RFPs Buckeye Power Economic Development Site Selection Seminar November 7, 2006 Kimberly Williams, Consultant

  47. Overview: Facility Sting Process • Planning Phase • Conception • Feasibility • Investment Decision • Phase II • Community Visits • Site Evaluation • Comparative Analyses • Finalist Communities • Phase I • Alignment/Criteria • Regional Analysis • Areas of Interest • RFP • Candidate Communities • Phase III • Negotiations • Evaluation • Site Due Diligence • Selection • Announcement Preparing for Site Visits Managing Your Site Inventory Responding to RFP

  48. Context of the RFP Process • Through advances in technology and the increased availability of data, the initial steps of the site selection process can be conducted in-house, without contacting the state or local economic development officials • When you are contacted, you are already an “Area of Interest”

  49. Fundamentals of Responding • Strive to be • Accurate • Timely • Complete • Use communication to distinguish your community • Acknowledge receipt of RFP • Follow-up after sending proposal

  50. Fundamentals of Responding • Focus on providing the information that is requested • Supplement the submission with other information you would like to provide

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