Monday, January 25, 2016

The impact of luring companies to a community can have a significant economic impact on a region via job creation, increased tax revenue, infrastructure upgrades, supplier clustering and many other positive effects. As a result, the economic development business has become extremely competitive as communities seek to attract companies. To identify where the most impactful projects landed in 2015, Site Selection Group reviewed more than 4,400 projects announced in the United States to identify the top 20 announced projects that may have the greatest potential impact on the local and regional economies where the project located. This filtering took into consideration the size of the community, capital investment, job creation and other economic impact factors.

 

Site selection factors evaluated by companies

Companies implement a rigorous site selection process to determine the optimal location for a variety of operation types such as their headquarters, manufacturing plants, distribution centers, call centers, data centers and shared service centers. The following location factors are primary variables evaluated by companies when making the decision on where to locate: 

  1. Labor availability
  2. Labor cost
  3. Accessibility/logistics
  4. Business climate
  5. Economic incentives
  6. Real estate conditions
  7. Regulatory environment
  8. Utilities and infrastructure
  9. Economic incentives

The weighting of importance of these criteria will vary depending on the type of project. As a result, it is critical to understand that what is most important to a data center may be completely different than what is crucial to a distribution center. 

 

The difficulty of measuring economic impact

These projects can impact a community in different ways. There are the immediate benefits such as the creation of construction jobs as well as long term impacts such as an increased tax base and the attraction of suppliers. To help understand the potential impact, Site Selection Group has identified some of the ways that a community may be impacted as follows:

  • Job creation – creation of new jobs by the company, construction firms and vendors
  • Property tax revenue – creation of taxable real and personal property
  • Sales tax revenue – creation of tax revenue for new equipment and construction material purchases
  • Wage base – increase in overall wage base in the region
  • Infrastructure improvements – addition or upgrades of highways, roads, utilities, fiber, etc.
  • Attraction of other companies – expansion of suppliers and vendors
  • Consumer expenditure – increase of consumer expenditures around the site
  • Commercial real estate development – construction of retail, office and industrial development around the site
  • Residential development – construction of single-family and multifamily housing
  • Increased property values – residential and commercial property values may increase
  • Positive economic development perception – winning communities are able to leverage their success to attract more companies

Who were the winners in 2015?

The following projects ranked by number of jobs created were identified by Site Selection Group as some of the most impactful announcements of 2015.

 

Company Project Type Location New
Jobs
Capital
Investment
($M)
Faraday Future Manufacturing Las Vegas, NV 4,500 $1,000.0
Liberty Mutual Insurance Operations Center Plano, TX 4,000 $325.0
SolarCity Headquarters Salt Lake City, UT 4,000 $94.0
Sierra Nevada Corp. Manufacturing Colorado Springs, CO 2,100 $88.0
Polaris Industries Manufacturing Huntsville, AL 2,000 $172.0
Volvo Cars Manufacturing Ridgeville, SC 2,000 $500.0
Giti Tire Holdings Manufacturing Richburg, SC 1,700 $560.0
Barclays Call Center Cincinnati, OH 1,500 $9.3
American Specialty Alloys Manufacturing Pineville, LA 1,450 $1,200.0
Mercedes-Benz Vans Manufacturing North Charleston, SC 1,300 $500.0
Formosa Petrochemical Manufacturing St James Parish, LA 1,200 $9,400.0
Seaboard Foods Manufacturing Sioux City, IA 1,100 $264.0
Sanderson Farms Manufacturing St Pauls, NC 1,100 $139.0
Northern Trust Business Services Tempe, AZ 1,000 $95.0
Amazon Distribution Center San Marcos, TX 1,000 N/A
Mercedes-Benz Headquarters Atlanta, GA 800 $74.0
Procter & Gamble Manufacturing Martinsburg, WV 700 $500.0
SMP Automotive Systems Manufacturing Tuscaloosa, AL 650 $150.0
Google Data Center Stevenson, AL 100 $600.0
Google Data Center Clarksville, TN 70 $600.0
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