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Community Preparedness for Site Development
William Grunkemeyer, Myra Moss and Jerold R. Thomas
Ohio State University Extension

INTRODUCTION

When most people think of economic development, they think of attracting an industry to their community. They think that somehow, a company chooses a community and finds a place to build an establishment. But like most things in life, the site-selection process is not that simple. A great amount of time must be spent in preparing for development and meeting the requirements of prospective businesses. The following story provides a useful illustration:

A Scenario

Imagine you’re going to the annual Founder’s Day dance. It’s the biggest event each year in the community. All the right people will be at the event; people who can affect your career, people who can help you get access to the prestigious organizations and businesses of the community. Of course you will want to make your very best impression. So you go shopping and buy a new suit and a tie and a new shirt. When you get home and try on these new items you discover your shoes aren’t what you had hoped. They really look dingy next to all this new stuff. So you head out to the local shoe store to buy a pair of shoes. The sales clerk greets you kindly and offers assistance. You tell the clerk you’re looking for a burgundy loafer with tassels, size 11, priced in the neighborhood of $105.00. The sales clerk returns with a pair of shoes, slips one on your foot and tells you how great it looks. The problem is, it’s a size 10 1/2, brown with no tassels, but at least it is a loafer. "It’s the wrong size," you say to the sales clerk. "We can fix that" is the reply, "we got a stretching machine in the back." You offer a counter argument to the sales clerk: "but I asked for burgundy and this shoe is brown." "No problem" the sales clerk replies, "we got burgundy dye. We’ll fix it up for you, and I just noticed these shoes are on sale for $80.00." After that last remark you politely put your own shoe back on and walk out of the store.

The world is full of informed consumers. People know what they want before they go out to make a purchase. It is now the role of the business establishment to have what the buyer wants. Gone are the days when people had little choice and had to buy what the retailer wanted to sell. Even utility businesses are opening up to choices for the consumer. The change started with telephone providers and has spread to natural gas and electric providers. No one has to select a particular item anymore. Today if you wish to successfully market a product you need to understand the buyer's wants and desires.

This reality is of particular importance to an industrial or retail firm selecting a site. Firms complete a great deal of market analysis before searching for a suitable location. In addition, firms compile detailed information regarding the cost of product. They know whether electricity cost is more important then freight cost or labor price. Prepared with a list of "must haves" based on this information, the firm's site consultant or representative begins the quest for the firm's ideal location. You can be assured that, like the shopper looking for a pair of shoes, individuals seeking a site for their firms are not about to change the selection criteria because they had a great dinner at your local restaurant. That is why developing a site is so competitive and requires a great deal of preparation by community leaders. It didn’t work for our shoe clerk to offer to dye the shoes the right color, and it won’t work for a community when it offers to change the terrain of its local industrial site. Instead, a community needs to spend time long before that first visit by a firm’s site-selection team seeking answers to the details regarding the site the community wishes to promote. The more a community considers site-selection criteria before it selects or develops a particular site for promotion, the lower the likelihood becomes that local leaders will need to explain why they spent so many public dollars on a site that is drawing no interest.

Unfortunately, there seems to be an urge among community leaders to find a piece of land in or near town, find a realtor to list the property, place a sign on the land proclaiming "Industrial Site" and run an ad in a site-promotion magazine announcing the availability of land for development. Maybe good fortune will smile on these leaders and a Fortune 500 firm will chose to locate on the site. More often, though, the community goes through years of frustration trying to build interest in the site. At more than one service organization meeting these same leaders must explain why no one is locating a business in the community. Finally the happy day arrives when, in desperation, the community finds a firm to locate on the site. Once again, though, misfortune follows these community leaders because the firm locating on the site produces waste products that discourage any other firm from locating in the area.

A happier story can be told by community leaders who took the time and energy and expended the funds necessary to prepare a piece of property as a site that meets the needs of future tenants.

This module’s goal is to help communities prepare sites for business development. We will focus primarily on industrial and wholesale commercial sites. Our goal is not to go through a step-by-step physical development process that focuses on how to physically construct an industrial site. A separate module provides some of this information. It is our intention instead to focus on the tremendous effort required to lead up to physical site development, that is, the steps leading up to ground breaking. It is during this time period that many communities make expensive mistakes. Site development is an expensive and time-consuming endeavor. Proper planning is critical. Bessire (1981) provides a wonderful gem of wisdom: "Remember that in doing your planning, education is what you get from reading the small print and experience is what you get from not reading it."

Our focus is from a community perspective. Specifically, we discuss:

1. What is a site?
2. Is there a need for site development?
3. Some of the trends and data affecting site development.
4. Business/Industrial parks and sites.
5. What are some goals and objectives of site development, especially from the business’s perspective? What are the actual steps to site development, focusing on the steps leading up to the actual construction?

1. WHAT IS A SITE?

Most communities in the United States can claim to have sites available for business development. Under closer inspection, these sites are usually either undeveloped open spaces (often agricultural lands) at the edge of the community or former industrial lands within the community. Both of these share a common problem: Businesses cannot occupy them without substantial infrastructure improvements.

Sites that are undeveloped are often referred to as greenfield sites. They are open spaces that are currently (or were recently) utilized for agricultural purposes. Many do not have the infrastructure needed for business development. Infrastructure refers to physical improvements such as water, sewer, storm water, communication, and other utilities. These improvements are needed by most businesses, and they are usually among the criteria a potential business will consider in evaluating potential locations. Most sites will not be considered if they lack appropriate infrastructure (see Greenfields in Section 4).

Sites that have been previously used for industry or other activities are called brownfield sites. Most are in central city areas and are often surrounded by mixed land uses such as residential, commercial, or public (schools and hospitals, for example). Usually brownfield sites were occupied by industrial complexes. Since older industries used multistory facilities, these sites are often on small parcels of land. Modern factories are laid out horizontally (using one story) to facilitate assembly lines and flow of products. Older sites carry the risk of environmental contamination, especially since they were most likely operated during a period of less stringent environmental regulations. Environmental contamination can be costly to clean up. Finally, older sites may still contain the buildings or other structures from the previous land use. These will either need to be demolished or refurbished (this often includes such actions as bringing the structure up to current fire, building and disability codes as well as other standards). These factors add to the cost of using brownfield sites (see Brownfields in Section 4).

To minimize their costs and risks, businesses will usually locate on sites that require minimum investments in infrastructure and other improvements. This usually eliminates the unprepared sites. Hence, communities that want to have successful business sites must have developed a plan for creating a prepared site. Site development is utilized to create marketable, prepared business sites.

1.1 Requirements for a Prepared Site

It is important to realize that for a site to be effective, it must satisfy the needs of a particular business. The site is constructed to improve the quality of life of a community, but it still must be a viable site to attract business. As we stressed above, a site must be prepared with proper amenities before a business will consider locating there.

Even given that business-specific needs do exist, certain basic site requirements must be in place in order for a company to even begin to consider a specific site or park. Most often these basics are assumed to be in place by a site seeker. The community that is aware of and has already prepared to meet these requirements will place itself at the threshold of competitive industry attraction. These threshold requirements include the following:

Transportation and Accessibility: Industry and business are looking for proximity and availability of transportation networks for a variety of reasons, including to carry product to market, receive raw materials and inputs for production, transport employees to and from work, and to allow customers to reach the business's location conveniently. Businesses are, most often, looking for a site with interstate highway access. The type of industry and product produced may dictate additionally required modes of transportation. Heavy industry and those transporting bulk products may seek locations with rail and water access, because of its competitive cost, as well as highways. Call centers often choose locations with public transportation to accommodate employees’ needs. Industries producing smaller, higher value-added products such as electronics may desire easy access to air cargo services for transporting goods to markets. Corporate headquarters seek to be close to passenger air carriers for ease of executive and management travel.

Available Labor Force: Although required skill levels and cost of labor may vary from industry to industry, the vast majority of firms seek a location with an adequate labor force from which to draw. The identification of the labor market area is most often determined by commuting patterns. Commuting patterns are determined by the length of time it takes an employee to get to work. An average of 30 minutes one way for production workers, 20 minutes one way for clerical workers, and 43 minutes one way for technical and professional workers is a normal standard. Manufacturers generally prefer to see a job applicant to job ratio of 6 to 1 so that they have flexibility in the choice of whom to hire. Another common concern will be whether or not the labor market wage rates are at a level to enhance the industry’s competitive position in the world marketplace (Mullis 1998). In addition to wage rates and availability of labor, businesses will consider other crucial labor-force characteristics such as productivity levels, existing industry turnover rates and absenteeism, types and numbers of skilled workers in the area, management recruitment and retention potential, work stoppage or labor strife history, and usage of work-team concepts among existing local employers.

Utilities: Adequate water, sewer, power and telecommunication services must be available of the quantity and quality necessary to serve business and industry. Characteristics of these systems that are important to potential employers are reliability, excess capacity that will allow for growth, and the existence of redundant, backup systems. This is especially true for manufacturers, who may make certain quality demands of specific utilities above and beyond what would usually be available. For instance, computer chip producers require certain water-quality standards in order to meet process requirements, and call-center operations require state-of-the-art telecommunications networks in order to handle their volume of customer calls efficiently.

Appropriate Land Use and Zoning: Potential employers want to be assured that the site is zoned appropriately for the type of end use projected. For instance, they will want industrial zoning for manufacturing and warehousing, commercial for office space, and retail for outlet malls. Proper zoning should already be in place, not promised to be enacted once the company commits to locate on the site. Many a project has been delayed due to the length of the normal zoning implementation process. And if citizen opposition to the zoning process ensues, the project can be delayed to the point where the industry or business decides not to go forward with the investment.

Employers also want to be assured that the surrounding area is compatible with their own planned land use. A manufacturing firm will not want to be surrounded by or even adjacent to residential property. Gaining access to the site, especially by tractor-trailers in the case of manufacturing and large-scale retail, should not require going through residential areas. It is important for employers to know when going into a community that their neighbors will not impact negatively on their business operations, and that the surrounding property owners will find their land use to be acceptable.

Ownership: The lead economic development organization should have clear site control with a stated price per acre based on the fair market value of industrial, commercial or retail property in the area. This site control can be in the form of a legal option to purchase between the organization and the property owner, or as outright ownership by the organization. Specific conditions regarding the purchase should be noted, including who pays for closing costs, surveys and legal fees, and how crop loss will be covered.

Topography and Soil Conditions: Companies are looking for fairly level sites with good drainage to eliminate standing water. Some companies look for gently sloping sites for aesthetic purposes. Wetlands are generally to be avoided, although some business parks actually use wetlands and recreational amenities as selling points for the location if these items are designed as environmental assets to the site. The types of soils and load-bearing capacity should be analyzed through soil boring. With manufacturing, the equipment used actually requires a greater load-bearing capacity than the building itself. This information should be made available to companies looking at the site.

Incentives: Companies will want to know up front if incentives are available through the community, state, or both. In many circumstances a zone must be delineated and established by the local community in order to allow tax relief within certain geographic boundaries. Establishing these programs can take time, so they should be in place before a potential employer ever contacts the local community.

In general, incentives such as grants, loans and tax inducements will not make a bad location or site into a good one. Mullis (1998) tells his clients to let them do the analysis of the site first, and then plug in the inducements. In this way they have a clear picture of how competitive the site is on its own, and then inducements can be added to enhance the deal.

Additional Studies: A Phase I Environmental Assessment should be conducted by a qualified professional in order to identify any environmental conditions that warrant further study. This assessment will look at the historical and current usage of the site as well as other factors.

A wetland identification should also be conducted to avoid the violation of wetland standards. Floodplain maps must be obtained to ensure that the portion of the site that will be built upon is not on a floodplain.

A Phase I Archeological Survey may be undertaken to determine whether the site contains any areas or structures of historical or archeological significance. Identification of such assets may require further investigation. Some public funding sources may require the completion of an archeological survey.

These studies should be completed and reports made available to companies interested in the site. Identifying these site characteristics before making contact with a company will save time in the compliance process and avoid unanticipated delays and increased construction costs.

2. IS SITE DEVELOPMENT AN APPROPRIATE ECONOMIC DEVELOPMENT STRATEGY?

While this module focuses on site development, it is important to realize that not all communities will find site development to be a feasible economic development strategy. The authors recommend that each community invest resources into developing some type of an economic development plan that considers the strengths and weaknesses of the community and the residents' wishes, and that systematically develops feasible strategies. Site development can be a costly investment with no guarantees for a successful outcome. Section 5 discusses a systematic planning program that communities can use for site development. Following these steps can save time, money and controversy for a community.

It is important to realize that prospective businesses are searching for a profitable location, not just a profitable site. They consider factors other than the physical site. These include labor, education levels and proximity to suppliers/buyers. The community that best matches the business’s criteria AND has a prepared site has a distinct advantage over other communities. As we stress throughout this module, the site-development process should be viewed as meeting the prospective business’s needs as well as the community’s needs.

Economic-development planning should include a wide consensus and involve all aspects of the community. Many communities engage in strategic planning. In the United States, many use an Overall Economic Development Program (OEDP) – a planning process developed by the Economic Development Administration to help identify potential grant projects. Whatever planning process a community chooses, it should be thorough. By working through a planning process, a community may discover several possible economic development strategies. If site development is not one of these, the community may have saved time and grief by not pursing a strategy that is inconsistent with its needs, strengths and weaknesses. If site development is chosen as a strategy, the planning process should lead to more consensus for that decision.

A critical element of planning for any industrial site is determining the capacity levels and types of industrial parks in the community’s market area. There has been little research completed to determine the capacity level of all industrial sites. One estimate from the 1980s cited in Eisinger (1988, 179) notes that in the United States, 59 percent of the land in industrial parks does not have a tenant. Hence, communities should survey surrounding communities to determine the capacity level of each park, the size of the park, its location, and other pertinent factors. The community can then begin to determine if there is an overcapacity of industrial space. If there is an overcapacity, the community should determine why. Are the parks/sites prepared sites with appropriate infrastructure? Are the sites accessible? How long have they been vacant? Just because there may be excess capacity in the sites does not mean that there is no need for more sites. For example, a community may find a nearby town with several small acreage lot sites, another town with several sites and no infrastructure serving the sites, and yet another nearby town with a park designed for research and white collar firms. Even if all of these locations have excess capacity, there still may be a need for prepared, large sites targeted for manufacturing industries. After obtaining answers to these questions, the community can then deduce the appropriateness of site development.

Area universities, extension services and consultants often have resources to aid in community planning. In addition, a community’s regional planning agency has probably done land use and comprehensive planning that indicates geographic areas of the community for industrial and other types of development.

3. TRENDS AFFECTING SITE DEVELOPMENT

This section will cover some basic trends in the general economy, with discussion of some specific industries. Its purpose is to increase the awareness of readers and to lead them to investigate potential trends on their own. It is important to be aware of trends in the economy as a community considers site development. While the trends themselves should not dictate decisions, they should be considered in the decision-making process. Awareness of current and potential future needs in a particular industry may influence some local economic development strategies. For example, one recent trend is a move by industries toward searching for existing functional buildings versus bare sites. A community could use this trend to upgrade an existing building, develop a spec (speculation) building, or choose to develop a site without an existing building.

The choice is the community’s, but having the necessary data can help a community make an educated decision.

3.1 General Trends in the Economy

There is much talk about the United States and the world moving to an information economy, or a New Economy. These terms usually refer to a move away from industrial, blue-collar jobs to service and technology oriented white-color jobs. The effect of these trends varies from region to region throughout the world. The following table, from Atkinson and Court (1998), who work on the Progressive Policy Institute’s Technology, Innovation, and New Economy Project, provides some generic trends affecting business in general today, especially in the developed world. Additional information may also be found in R.D. Norton's module "The Geography of the New Economy."

These changes reflect some of the realities of business today. Synopses of some major trends are highlighted below.

Impact of Technology: New and improved technologies help to restructure and reorganize the way businesses operate. Computers, faxes, and other information technologies have provided new alternatives for business. For example, telecommunications technologies (both wired and broadcast) have changed the rules of business location. Telemarketing centers can be located away from major metropolitan areas and high rent and labor costs. Likewise, computer automation changes labor requirements. While technicians are needed to design and fix complex machinery, computer automation allows relatively unskilled workers to perform machining tasks that previously required skilled labor. Both of these trends help to make business less dependent on specific geographic locations. Technology also affects how communities position themselves to retain and attract businesses.

Speed: Much of life has seemed to speed up lately, and business practices are no exception. Product development schedules, delivery systems, and most decisions have tended to speed up. Site-location decisions are also made faster than they used to be. Businesses have shortened not only the search but also the project construction schedule. Communities that have no control over land and that have not planned out the development of land will be at a distinct competitive disadvantage.

In addition, businesses will need the proper infrastructure to move products quickly and reliably.

Changes in Industry Structure: While many critics have moaned about the loss of manufacturing jobs, a closer look reveals that while manufacturing employment is down, output of goods has increased. Manufacturing industries are doing more with less. Manufacturing is still an important target for industrial attraction, but it is important to realize that in general manufacturing has become:

• more capital intensive
• less labor intensive
• less unionized
• less dependent upon locating near natural resources

Service-related jobs have increased in numbers during the last 20 years. While many of these jobs are referred to as "burger flipping" jobs, many are not. Some of these jobs are high tech, but many are simply knowledge intensive or nonmanufacturing jobs. Some communities take advantage of this increase by offering research parks, cooperate office parks, or lower-paying service jobs like telemarketing.

Environmental Impacts: Communities and businesses will likely face increased environmental regulation in the future, especially in the areas of output (i.e., emissions, solid waste).

Inducements/Incentives: Most companies continue to ask for incentives. These may come in the forms of tax breaks, outright grants, deferred payments, training grants or assistance, or free land. Companies are interested in reducing both costs of a new facility and future operating costs. At the same time, many people in the United States are questioning the need for using incentives, or at least questioning what their scope should be. Communities should think through their policy on incentives before offering them to industry, and they should develop a process to conduct a cost-benefit analysis (many communities utilize spreadsheet packages for this).

Role of Government: Most of the world has moved closer to a market economy over the last several years. At the same time, most communities have entered into private-public partnerships in working with businesses. Government involvement is still needed for most projects, especially site development. Local government usually provides the necessary infrastructure, provides permits and can assist in securing permits and assistance from higher levels of government.

Labor: Different types of businesses require different types of labor. Communities need to consider labor types and availability as they plan their sites. Other workforce needs should also be considered. For example, what training needs do current and future workers have? In one community in Ohio, the local vocational school (which primarily serves high-school students) opened its doors to provide welding instruction to a new area business at 11:00 each evening.

Trends in labor indicate that in the developed countries, there will be fewer opportunities for unskilled labor and more opportunities for workers with some skills. As routinized industries continue to move to less developed countries, communities may be able to utilize unskilled workers.

It is important to remember that not all jobs created in high-technology fields require advanced degrees. Many can be performed by workers with some training (i.e. an associate, two-year degree in the United States or intense vocational training at the high-school level) or even with no advanced training.

This is only a brief summary of some trends affecting site development. Readers are encouraged to collect information on their own and deduce their own trends. Additional sources are provided in the Other Resources section at the end of this module.

3.2 What a Business/Industry Seeks in a Site

There are two primary challenges facing community decision-makers in site development. The first is for decision-makers to understand the criteria that site-seeking companies consider necessary for a site to be acceptable so decision-makers can address these needs when developing their site or park. The second is to be aware what motivates a company in its search for a new location so that the community can work with it in partnership to achieve both company and community goals. This understanding is complicated by the certainty that there is no universal list of site requirements guaranteed to meet the needs of all industries. Each industry and each company will have certain priorities that cause one site to be more acceptable than another. For instance, warehousing and distribution companies place a premium on close proximity to interstate highways while back-office operations value state-of-the-art telecommunications networks. In the world of business site development, one size does not fit all.

What Motivates a Site-Seeking Employer: Reduction of Risks

Companies seeking new sites are most often motivated by the need to minimize costs of operation and/or the need to access adequate labor markets. Once a community makes the determination that industry/business attraction is a strategy worth pursuing, and once it establishes goals regarding the types of companies that would benefit the community, it must clearly understand how to best develop a relationship with site-seeking companies. The role of a community and its economic development professional becomes, simply put, to reduce the risks encountered by a company when it decides to locate (or expand) in a given location. Companies are looking for communities that are willing to partner with them to reduce their risk of doing business. These risks can be organized into four areas: profit, workforce, infrastructure and timing:

Profit Risk: The substantial capital investment in structures and equipment that will be made by a company when it locates or expands must reach a break-even point and then begin to show a reasonable return within a certain period of time in order to justify the investment to the company’s financial institutions and its shareholders or owners. It generally takes from 6 to 10 years for a company to begin to show a return on its investment (ROI) and begin to show a positive income stream. Even an already profitable company that expands operations reduces or eliminates its existing profit until the investment is recouped. Anything a community can do to reduce the overall investment exposure of the company or reduce the cost of operations, especially in the first few years, will shorten the time to ROI, reducing the company’s profit risk. Some strategies might include offering incentives such as tax inducements tied to job creation or investments in real and personal property and low- or no-interest loans for capital investments. Tax inducements and loans would help reduce the company’s cost of operations.

Workforce Risk: A company must be assured that it will be able to access sufficient labor with the skills and qualities needed by its particular business. It also must be confident that it will be able to attract and retain technically skilled employees and management, positions that are often subject to a national or even international search. Communities can address these risks through long-term strategies of workforce preparation, skill development and lifelong learning opportunities through local educational institutions and schools, paying particular attention to the types of skills and competencies needed by the companies that they hope to attract or expand. Targeted programs, such as those designed to meet a particular company’s training needs, should be available through local schools and colleges. Spousal employment opportunities and community quality of life will figure prominently in skilled and management employee attraction and retention, so the community should be prepared to address these issues.

Infrastructure Risk: Companies are dependent upon local services and infrastructure when they locate or expand in a community. They will need to know not only that the existing infrastructure is reliable and adequate to meet their projected needs in the present, but also that sufficient excess capacity exists for their future growth without causing stress on the community. Public services such as fire, police, and waste management must also be adequate and reliable. The community can reduce these risks by demonstrating that there is willingness to tax themselves to support needed infrastructure improvements, public services and public education. The willingness of telephone providers to continually reinvest in advanced technology is increasingly important to companies.

Timing Risk: Companies expect to be under roof and producing products 90 to 120 days after commitment to locate. This fast time frame is important for a number of reasons: First, the cost of short-term construction financing and other start-up costs are incurred without any counterbalancing income stream until the company is able to produce and sell its product or service. Therefore, it is important to be in production as quickly as possible. Second, companies want to take advantage of market opportunities and timing as quickly as possible, giving their competition as little time as possible to react. Third, oftentimes a primary customer will dictate when it expects product delivery. The community can help the company meet this timetable by having a site that is ready for construction, with all environmental questions addressed and utilities in place (or planned and committed within the time frame needed by the company).

Verification of the importance of reducing risks and therefore costs of doing business, and information on how this impacts location decision-making, is offered by a survey of company CEOs conducted in 1994 by the Bureau of Business Research at American International College in Springfield, Massachusetts. Survey results indicated clearly that the top factors influencing the location decisions of companies were related first and foremost to rational considerations of the relative cost of doing business in a particular community, and secondarily to more emotional considerations involving quality of life issues. Although quality of life, most often defined as quality local schools, attractive housing, and recreational/cultural amenities, is becoming of increasing importance to site-seeking companies, the economic basics still prevail when the decision where to locate is made. According to this survey, of the 127 firms in 31 states who responded, the following were the top factors in order of importance for choosing a particular site and community:

• Availability and skill level of labor force
• Pro-business government
• Corporate income tax rates
• Good roads and transportation
• Real estate prices and property taxes
• Educational system
• Proximity to customers
• Personal income tax
• Colleges and universities
• Proximity to suppliers
• Healthy "downtown"
• Proximity to competition

The survey included 24 different business categories, indicating that the consideration of basic costs in location decisions is important to a wide range of industries. A good illustration of the importance placed on financial considerations is offered through the story of MasterCard’s relocation in the mid-1990's from New York City to nearby Westchester County. In 1993 MasterCard announced that it would relocate to a larger building to accommodate growth but stay in New York City after being offered a substantial financial package. One year later it announced that it would move to Westchester County after all, taking 550 jobs to the suburbs. "It was a financial decision," the company spokesperson explained. "We will save about $250 million in rents and other fees over the next 20 years by moving to the suburbs. It’s a buyer’s market for us in the suburbs" (Business Facilities, September 1994).

4. BUSINESS/INDUSTRIAL PARKS AND SITES

4.1 What are Industrial Parks and Sites?

Both business/industrial parks and sites are a component of the same local economic development strategy, that is, the attraction of new business and industry into the community. Without these assets in a community’s economic development portfolio, success in luring new industry or business to an area is not likely. A community cannot "sell from an empty wagon"--it must have something of value to market to potential customers. The community must also be aware of what constitutes a marketable, readily developed site or park from the company’s perspective within the needed time frame and strive to provide this if it wants to be competitive in attracting business/industry to its sites.

Business/industrial parks and sites are tracts of land specifically set aside for the potential location of more than one business or manufacturing firm. Business and industrial parks and sites provide an opportunity for a community to control and sell, on its own terms, a sizable tract of land to business and industry. They enable communities to prevent the use of industrial land in ways that are in conflict or are inconsistent with local community values and goals. Parks and sites also provide the opportunity for planned development in an organized and sequential manner.

Some parks and sites are for general business and industry use, while others may be targeted to a certain type of activity. To be successful, targeted parks or sites must have certain attributes or amenities that are necessary or desirable for the specific type of business activity to be targeted.

Industry/business parks and sites should help a community reach its economic development goals. Examples of potential community goals include:

• Creating more jobs and increasing local population
• Providing better jobs for people already in the community
• Replacing lost jobs
• Replacing lost sources of income
• Producing a greater variety of jobs and economic activity
• Building and diversifying the local economic base
  Source: Industrial Parks: A Step by Step Guide (U.S. Department of Commerce 1989)

Parks and sites should have, at a minimum, preliminary engineering plans for the location of utilities and infrastructure, a site plan showing the size and configuration of individual parcels within the property (which can be modified to suit an individual company’s needs), preliminary environmental and historical assessments, and stated general conditions related to the sale or lease and use of the property. This last item, the statement of general conditions, is known as a covenant. Covenants specify what a tenant can and cannot do in the park or on the site, including possibly the exclusion of certain types of businesses and not permitting certain types of structures to be constructed on the site. These covenants are attached to the deed and place legal restrictions on the property in perpetuity.

For communities without zoning, covenants can be used as an imperfect substitute, although they will not remove conflicts between the geographical park area and the surrounding area. For example, a park or site with covenants but no zoning and surrounded by residential homes may still have complaints from the surrounding residents. With no zoning, companies may be reluctant to locate in the park or on the site for fear of conflicts with residential neighbors over noise, dust or other perceived nuisances.

The primary difference between a park and a site is size. Parks are usually of greater acreage and can accommodate a number of businesses. Sites may be appropriate for only one user. A general rule of thumb of parks is that in order to be economically feasible a park should have at least 25 acres in size. The up-front costs of preliminary engineering and environmental assessments and, in some cases, the construction of utilities and other infrastructure are more justifiable if allocated over a larger site with potential for a greater number of end users. A private or public developer of a park will want to carefully analyze the development within a cost-benefit framework to determine whether the return on its investment is sufficient.

Both parks and sites can be privately or publicly owned or controlled. Collaborative agreements among private and public entities, in which each takes the lead on a particular aspect of the development and marketing of the property, have become more commonplace over the past few decades. Some parks have ongoing management and developer involvement, while others are independent once all of the properties have been sold.

Parks and sites can include a wide range of amenities such as access to a park-owned rail spur, on-site employee training centers, nearby airports, or even recreational opportunities. Or, they may simply entail contiguous sites where companies locate. In the latter case, although they are expected to follow whatever restrictions have been placed on occupants of the park or site, they are on their own once the property changes hands.

The type and extent of amenities are often determined by the kind of customer that is being recruited to the park or site. For instance, back-office operations and call centers will typically require an excellent telecommunications infrastructure while parks or sites devoted to heavy manufacturing may require access to a rail line. Parks or sites designed to attract corporate headquarters may include golf courses or health clubs, on-site services such as automatic teller machines and dry-cleaner drops, and adjacent executive housing. In the intensely competitive world of business/industry attraction, amenities can serve to position the park or site to specific targets once basic needs for infrastructure, available labor resources, transportation networks and location have been met.

The current trend in site selection is for businesses to look for communities having parks or sites with more stringent performance standards, which are the guidelines to which the residents of the site are expected to adhere. Higher standards help protect an individual business’s financial investment in buildings and site improvements by requiring that their neighbors in a park or on a site meet and maintain the same expected standards.

Levels of performance standards can range from "none" to "advanced." The final positioning of a park or site will still be determined by community goals, market determinations, and future trends for the area, and establishing standards will help to provide controls consistent with the anticipated quality of development. Communities in desirable locations and with parks or sites that are positioned to attract high-tech or corporate tenants can use higher performance standards to attract those tenants that will provide substantial benefits to the community. These benefits include higher assessed property values, lower depreciation, and employers paying higher wage rates.

The following provides examples of levels of performance standards:

No Performance Standards: Heavy industrial and contractor uses with no covenants or standards. Such parks often lack paved roads or one or more basic utilities. Unscreened outdoor storage is allowed; no on-site landscaping or paving standards exist.

Basic Performance Standards: Park accepts heavy and medium industry. Roads are paved; basic utilities are available. Truck and rail access is provided. Most buildings are metal.

Moderate Performance Standards: Medium to light industry allowed, no heavy industry. Mixed-use park with setback requirements, buffers or limited landscaping requirements, and sign controls. Outdoor storage must be screened. Parking lots and driveways are paved. All parking is off-street, and truck-loading space is provided. Rail service may be available. Metal buildings are permitted, but facades have architectural criteria. Permanent park entrance signs and ongoing management of the park are provided for.

Advanced Performance Standards: Strictest performance standards apply, with an emphasis on aesthetics. Zoning permits offices with light versions of manufacturing, warehousing, or distribution operations. Architectural standards are high. Landscaping is required for the entire site, and outdoor storage is not permitted. Utilities are underground and density is low; the grounds are parklike. Many newer parks are being developed as "business parks" rather than "industrial parks." A "business" or "corporate" park designation generally implies an environment sometimes called a "corporate campus" (Mooney 1997).

One of the major issues with sites and parks, especially those in more sparsely populated rural areas where fully served vacant land is often not available, is the property's marketability. In other words, from the business/industry’s perspective, how acceptable and ready for development is a particular site? Sometimes a community, in its desire to attract business or industry, identifies a local property that is available for sale as an industrial site and begins to promote it to potential customers. In the intensely competitive arena of industry/business attraction, the mere existence of a piece of land does not gain a community entree into the game of locating new investment. The community must first be aware of what industry’s needs and motivators are. In general, as mentioned above, manufacturers need to be in production within 90 to 120 days from the time that they commit to locate in a community. This is important for a number of reasons. It may be that the company’s major customer requires product shipment by a certain date. Also, the cost of interim financing during construction is typically more expensive than permanent financing, which begins once the project is completed. Finally, companies are financially stressed until they are finally in operation and cash flow becomes positive.

4.2 Greenfield and Brownfield Sites

Two additional terms used to identify general types of sites are useful to define. These two terms are "greenfields" and "brownfields."

Greenfields: Greenfield sites are vacant, undeveloped tracts of land that are available for business or industrial use. They are referred to as "greenfields" because often their former usage (or in some cases current usage) is agricultural production. Greenfield sites are most often located in the urban fringe of the path of development or in rural areas where undeveloped land is more likely to be present.

Greenfield sites present a number of development advantages to locating business and industry provided they meet basic needs such as access to utilities and close proximity to adequate transportation resources. Since they have never been used for business, industry or uses other than agriculture, there is little danger of prior contamination leading to potential environmental problems and expensive cleanup costs. The sites are vacant and, other than necessary site preparation and grading, are ready for construction, reducing the time needed until the company can be in operation. Greenfield sites provide flexibility, allowing a business either to be the sole tenant should it desire or to share the site with other users.

The disadvantages of greenfield development include:

• The promotion of urban sprawl and "uncontrolled" land development
• A possible lack of available infrastructure, requiring the raising of public funds to support site improvements and utility extensions
• The potential compromising of environmentally sensitive areas such as wetlands or floodplains

Some site selection consultants have predicted that the development of advanced telecommunications networks in many rural or "exurb" areas may actually accelerate the use of greenfield sites because they enable business to be conducted even in relatively remote locations. Add to this the considerably lower cost of operations often found in rural communities, and greenfields can become an even more desirable place to do business from a company’s perspective.

Brownfields: The term "brownfields" was coined as an antonym for "greenfields." Brownfield sites are "...unused, obsolete, and often abandoned industrial properties with known or suspected environmental contamination" (Bielen 1998). Many economic development professionals and environmentalists promote the development of brownfields as a logical, and environmentally/socially desirable alternative to greenfield development.

While they are most often an urban phenomenon, brownfields can be found in small towns where perhaps a major local manufacturer shut down years earlier. They are not few and far between. William V. Trefethen, Director of Environmental Transaction Services for Coopers & Lybrand in Los Angeles, states that "it is estimated one in eight non-residential properties in the U.S. is contaminated" (Business Facilities, June 1996).

There is an unmistakable logic to using brownfields for business/industry development. They help to counter urban sprawl by providing an alternative to development on the city and small-town fringe, they promote development in areas already serviced by utilities and well-developed transportation networks, and they eliminate the need to raise additional tax revenues to provide infrastructure. Since brownfields are oftentimes located in distressed inner cities or disadvantaged areas of small towns, they provide jobs for local residents and new capital investment in neighborhoods that have experienced physical deterioration over the years. Finally, brownfield development improves inner-city properties that are at best vacant and dilapidated and at worst environmentally at risk.

On the surface it would appear that brownfield site development provides the answer to a number of environmental, social, economic and land-use concerns. However, a number of uncertainties in the development of previously used sites can render them risky and unpredictable. Included are questions concerning potential liability for contamination, costs of remediation (cleanup), the remediation process to be followed, and the extent to which cleanup is required.

If the site and buildings are contaminated, nearby ground or surface water may be affected. An environmental assessment will need to be conducted to determine the required cleanup and related costs. Remediation can involve a variety of state and federal agencies, adding to the complexity of the development and uncertainty of the outcome. Sometimes the cost of remediation exceeds the value of the property and development of the property becomes financially infeasible. The extent of the contamination and resulting expense of cleanup might not be known until the environmental assessment is completed. These assessments can be expensive, and there is no guarantee that they will identify the full extent of the expense required.

Compounding the expense of brownfield development is the difficulty often encountered in obtaining financial assistance for site cleanup and development. According to Charles Bartsch, Senior Policy Analyst for Economic Development at the Northeast-Midwest Institute in Washington, D.C., "critical funding gaps are...the primary deterrent to site and facility re-use. The financing situation is especially gloomy for start-up firms or small companies" (Business Facilities, June 1996). Since current law holds current and previous owners and even lending institutions liable for site contamination, banks are reluctant to become involved with brownfield sites and developers are unwilling to purchase them.

Public and governmental agency involvement is necessary to spur the development of brownfields. As of 1996, over two dozen states had set up voluntary cleanup programs. Fifteen of these were enacted in 1993 or later, so the effort of states to address brownfields is growing. In the United States, these programs are available for any contaminated sites except for landfills, Environmental Protection Agency (EPA) Superfund sites, and other properties subject to other corrective action under other federal environmental programs. State oversight varies by type of site, private-sector involvement, or level of required cleanup. Cleanup standards vary according to intended use and are applied on a case-by-case basis. Assurances provided to property owners include a covenant not to sue, release of liability, certificates upon completion and commitment to no further action once the site complies. Five states provide financial assistance in the form of grants or loans, two states provide tax credits, and two states target existing incentive programs to brownfields.

The State of Ohio has a Voluntary Action Program that was operationalized in 1997. Under this program, a property owner who agrees to participate is released from liability from the Ohio EPA. However, the property owner still must meet the requirements of the Federal EPA, and while the release of liability guarantees that the owner will not be sued in civil court, it does not prevent criminal action.

Ohio provides financial relief in the form of a 10-year abatement of increases in property taxes due to increased property values. Minnesota’s Contaminated Site Cleanup Fund gives grants for brownfield priority uses. Illinois offers a 25% corporate tax credit applied against site cleanup costs. Connecticut is establishing an insurance fund to aid brownfield site reuse. Some cities are testing pilot brownfield programs in which they take control of abandoned, tax delinquent properties and develop them for a predetermined purpose.

One interesting trend with brownfields is that they are often being transformed from their original manufacturing use to commercial, retail or even residential use. This has taken place because inner city sites often do not offer adequate access to interstate highways for tractor-trailer traffic, and because it may be necessary to assemble a number of contiguous sites to provide the size needed to accommodate a manufacturing facility.

In terms of brownfield site development, the future is optimistic. Increased government involvement in financing and relaxed regulatory requirements, coupled with the growing willingness of developers to consider the potential value of these properties, is leading toward their productive reuse.

4.3 Types of Parks and Sites

Business/industry parks and sites can be divided into three major categories: commercial, industrial and retail. Commercial sites accommodate such uses as back-office operations, corporate headquarters, and research and development facilities; industrial sites accommodate manufacturing and warehousing and distribution; and retail sites include outlet malls. Each of these end users has its own priorities and standards for site characteristics and amenities above the "must have" basics identified above.

Commercial Parks and Sites

Since 1960 the number of American workers employed in the service sector has grown quickly, while the number of workers engaged in manufacturing has remained constant at about 20 million. A traditionally negative bias has existed toward service-sector jobs, primarily because they are perceived as low pay, low skill, and not bringing much benefit into the community. The 1990s has witnessed a reevaluation of service-sector employment in the recognition that it includes such high-paying and growing business sectors as the medical and insurance fields, providing good jobs plus a countercyclical balance to manufacturing sector swings. Now many communities have based their economic development goals on attracting these types of industries, and are developing sites and parks to meet the required criteria for these companies.

The following is a sampling of types of commercial ventures that have become especially sought after by communities over the past decade. Some of these represent opportunities that were unheard of even ten years ago, but due to changes and advances in the field of telecommunications, customer service, and due to the push to cut costs and manage business in a "leaner and meaner" style, these advances have become a way of life for corporate offices.

Call Centers and Back Office Operations: The term "call center" is generic for "operations which use the telephone to support marketing, sales and service functions, from reservation or order taking to providing in-depth technical assistance" (Tangeman 1995, 27). Call centers have become a $650 billion industry in the United States, employing over 4 million workers to meet consumer’s demands for immediate information and product ordering resulting in over 60 million calls per day to toll-free numbers (King 1996). Call centers are becoming an ever-growing industry also in Europe, where the top markets are Ireland, Denmark, Belgium and Holland. Ireland and Holland, in particular, have actively positioned themselves to attract call centers by implementing changes in their tax structures, investing in technology, reducing tariffs, and promoting a young, qualified workforce adept at customer service. In Europe, Ireland is the country of choice, with many world-class companies such as Gateway 2000, Dell Computers, Best Western International, and ITT Sheraton setting up operations for customer inquiries, technical support, product sales and order processing (Tangeman 1995).

Companies wishing to establish call centers look for the same site requirements whether that site is in Europe or North America. They look for a region with an available labor pool with the needed demographics, low-cost leaseable space, a reliable telecommunications network, and a favorable tax climate. Other criteria such as community receptivity and incentives for economic development are also included in site evaluation. Areas with a likelihood of severe weather conditions are avoided because of the danger of communications disruption and employee absenteeism. These weather conditions affect not only the far northern climates but also southern ones that are prone to freezing rain (freezing rain causes damage to suspended telecommunication lines and disrupts vital service).

Labor demographics weigh heavily in the decision-making process because of the number of employees a call center needs and the characteristics it desires. Since call centers are usually large employers, operate twenty-four hours per day and experience high employee turnover rates due to the nature of the work, larger companies look for communities that have a sizable, transient labor force such as that found through universities, a large retirement community, unemployed homemakers, or the military. Smaller companies often look for more rural communities where the turnover rates and wage competition are low. Both large and small companies prefer locations with few or no other telemarketing operations so that there will not be upward pressure on wages and competition for available labor. Amenities designed to meet employees' needs, such as secure parking lots, nearby restaurants, and public transportation, will also help sell a site.

Back offices are facilities that provide supportive services for a company’s main administrative and management functions. They are usually in a more remote (and lower cost) location and connected to the corporate headquarters through a state-of-the-art telecommunications network. Back offices are used frequently by insurance and financial services companies to support customer service and product promotion needs. Citibank, for example, established a credit-card back office in Las Vegas in 1993, beginning a boom in facilities of this type in that city. Las Vegas had the right mix of labor demographics, telecommunications infrastructure, affordable housing, and absence of state and corporate taxes, and it was located in the Pacific Time Zone. What finally paved the way for the Citibank development was legislation pushed by the governor of Nevada to change the usury rate. Citibank started with a 500-employee facility, and it grew to a 24-hour operation employing 1,900 people by 1997.

Very similar site and community requirements exist for back-office operations and call centers. Both call centers and back offices rely heavily on telephone and telecommunications networks in order to conduct business. Communities that decide to target these operations in their attraction efforts must first be sure that they have the state-of-the-art network capable of meeting these company’s needs, including fiber optics, all-digital switching, and system reliability and redundancy. The major concern for back offices and call centers is that the telecommunications network is reliable, and that there are sufficient back-up systems in place for the network to avoid disruption of service. Both call centers and back-office operations are increasingly moving toward renting and modifying existing space as opposed to buying or constructing their facilities. Sites that seek to attract call centers and back offices need to be able to have available buildings that will meet those companies’ needs.

Call-center and back-office attractions have been used by some rural areas as a strategy to counteract the loss of manufacturing and natural resource-based jobs such as those in coal mining and agriculture. The far western tip of Virginia provides an example of such an area. There, the coal industry had provided high-paying jobs for generations of residents. But after the steady decline of the mines that began in the 1980s, economic development leaders began to turn to other strategies to improve the employment base. The Virginia Coalfield Economic Authority, encompassing seven counties in the region, helped spur investment in a superior telecommunications infrastructure that rivals those found in metropolitan areas. Combined with the pool of available labor and customized training programs, this region has been successful in attracting a number of teleservice firms.

The State of Iowa’s concerted efforts to attract call centers and back-office operations is a direct result of two trends facing the state’s important agricultural industry. The first trend is the increasing mechanization of farm production, resulting in fewer jobs in agriculture. The second trend is the need for off-farm income opportunities so that farm families can survive economically. Iowa’s program has been a success; over 20,000 state residents have been employed in call-center and back-office operations since Iowa began its attraction efforts in 1990. Many of these employment opportunities involve part-time work, ideal for those farm families seeking supplemental income. One example is APAC, a large telemarketing company that employs over 4,000 Iowans in 30 offices throughout the state. These offices provide services to clients in the insurance and package-delivery industries and use a "hub and spokes" arrangement for statewide operations, characterized by central offices in sizeable cities, with supportive satellite operations spoking out in smaller towns. This type of arrangement provides both direct and indirect benefits to the smaller towns. The direct benefit is in the form of new jobs. The indirect benefit occurs because APAC's spoke operations are typically located in vacant downtown retail space where APAC’s telecommunications needs can be met. The presense of spoke operations helps to revitalize the central building district in the towns in which they locate. Iowa is unique in that there are 150 independent telephone companies in the state. These companies typically reinvest their profits into advanced telecommunications technology. The combination of a solid educational system and an educated labor force, and state of the art telecommunications infrastructure, has enabled Iowa to position itself to take advantage of the growth in these types of industries. Iowa was also proactive in establishing a tax structure attractive to the telecommunications industry. Data-storage computers are not subject to sales, use or property taxes; intrastate telephone calls are not taxed; and revenues from customers outside of Iowa are not subject to the state’s corporate income tax (Bastian 1997).

Corporate Headquarters: Few corporate relocations take place in any given year. Larger cities can benefit when relocations take place by making themselves aware of a company's reasons and criteria for relocation. The decision where to locate is one of the most strategic a company will make, impacting directly on its ability to be successful in the global marketplace. The most common reason given by companies for relocating their corporate offices, according to Gene DePrez, a partner with the site location firm Fluor Daniel, is to establish a facility from which they can operate internationally. "Today, companies considering a move usually do so to establish a more global presence," he says. "But in doing so they must think through the issue of identifying where those markets are that work for them." Cities such as New York, Chicago, Atlanta, San Francisco, Washington D.C. and Los Angeles have traditionally been sought as corporate headquarters locations because they offer high visibility and global presence. But these favored cities no longer have a lock on corporate headquarters; companies are finding that advances in telecommunications provide the ability to conduct business just as effectively from "second tier" cities. The smaller cities may provide a more strategic location for a company’s operations as well as offering lower costs of doing business.

Important site/park criteria include access to a quality, talented workforce, proximity to airports offering excellent domestic and international connections, cost of doing business, operating environment, and quality of life. Many corporations today conduct an international search for top management and professional positions. In attracting and retaining this talent, quality of life issues such as affordable housing, excellent schools and access to higher education, cultural and recreational amenities and shopping all play an important part.

Real estate is generally a corporation’s second largest cost (after labor), according to Arthur J. Mirante II, president and CEO of Cushman & Wakefield, Inc. Cities with lower real-estate purchase costs and office-space rental costs fare better in the corporate relocation arena. Real-estate costs in the United States are generally a bargain compared with those of international cities.

Access to airports with excellent domestic and international connections is necessary to save time and cost to transport employees from one company location or customer to another. Operating-environment considerations include the receptivity of municipal and other local governmental entities, a pro-business attitude, access to ancillary services such as banking, law firms and advertising, nearby research and development facilities (especially true for high-tech/biotech businesses) and, in the case of a corporate park, nearby or on-site amenities such as recreational centers and/or golf courses, day care, ATMs, nearby executive housing and restaurants. Ease of access to the park for employees and advanced data and communications technologies including high-speed data transmission systems such as ISDN (Integrated Services Digital Network, which is four times faster than analog modems), videoconferencing, and network integration are assumed.

High-Tech and Science Parks: High-tech and science parks are specialized parks that cater to businesses and enterprises involved in research and discovery. Many of these activities are traditionally centered near research universities and typically require large capital investments. Research parks are closely related to high-tech and science parks. According to Zimmerman (1995, 74):

Science parks ... physically bring together research organizations and entrepreneurial companies. They provide rental laboratory space, overhead functions such as secretarial support and conference rooms, information access such as technical journals and an Internet domain, all in an attractive campus setting. Thus small companies can save money by sharing these R&D functions.

Research parks began in California in the mid-1900s. They have spread throughout the United States and the world, now numbering over 400 worldwide with some 150 in the United States (Giunta 1998, 5). Many of these parks have taken decades to fully develop.

Research, high-tech, and science parks are highly specialized sites that are not feasible in many communities. Each community will have to assess its attributes to determine whether these types of sites are an appropriate option.

Industrial Parks and Sites

In general, industrial sites and parks are those targeted to meet the needs of manufacturers, ranging from basic to light industry or high tech, warehousing and distribution, and research and development. Beyond the "must haves" outlined in the introduction to this module, the site requirements of manufacturers will vary according to such factors as type of product, production process, worker skills needed, product delivery methods, and location of major customers and suppliers.

Warehousing and Distribution: Companies seeking to locate their distribution facilities begin by identifying the region that makes the most sense in terms of where their customers and suppliers are located. Once a region has been identified, other site factors will come into play, in particular available labor, tax structure favorable to shippers, and overall favorable business costs.

The importance of proximity to suppliers is particularly true for just-in-time manufacturing environments, where companies maintain minimal inventory and require suppliers to deliver frequently and quickly. In the auto industry when a manufacturer locates in a community, suppliers are not far behind. Witness the example of Honda Motor Company in Marysville, Ohio, with many suppliers locating on suitable sites in small towns within a two-to-three hour truck haul from the main plant.

The type of industry and how it chooses to move its product determine the type of transportation network that a company will need. The relative cost and speed of delivery of the different alternatives will be weighed against delivery-time needs and value of the product. The vast majority of manufacturers, no matter what they produce, will want access to the interstate system for tractor-trailer hauling of products. Beyond that, manufacturers who use bulky raw materials, such as refractory producers who use bulk minerals, or those who use containerized shipping for eventual export, may require rail service on site. Barge transportation is the least expensive form of transportation, and it is needed by some producers of bulky, low-value products such as coal and ores. Companies producing time-sensitive products that need to reach the market quickly or that produce smaller, highly value-added products, will seek excellent highway access and proximity to airports for air cargo transport services.

Retail Sites

Many communities are interested in commercial sites. These can be sites for individual users, like mass merchandisers (i.e. Wal-Mart) or strips of several shops with one or more anchor tenant. Some rural communities with highway access and nearby population centers are prime locations for retail outlet centers. If communities have the right location and amenities, they should consider the potential benefit of commercial development.

5. DEVELOPMENT OF GOALS FOR PARKS/SITES

It is imperative for a community to develop clear goals and objectives for industry/business parks and sites before it begins planning and implementation. To fail to come to agreement on expectations and desired outcomes of its investment is one of the most serious mistakes a community can make because it is likely to jeopardize the long-range success of the park or site venture.

As discussed before, parks and sites are frequently a cornerstone of a community’s economic development program. Therefore the goals for park/site development and economic development are often one and the same. In general, these goals are to increase wealth in the community through the attraction of new employers and to expand the number of existing employers. Beyond these basics, each community brings its own particular desired future and existing capabilities and assets into play when determining parameters within which to accomplish their goals. A variety of different strategies can be used that will be consistent with the values, priorities, and goals of a given community.

Each type of business or industry cluster brings with it certain identifiable benefits and certain known requirements. Some industries will help a community reach its goals while others, although perhaps "glitzy" or prestigious, may not. A community should determine, up front, whether or not a business is compatible and how much the community is willing to invest to design a site to attract certain kinds of businesses.

Some community’s goals may revolve around expanding and/or restructuring the local tax base, leading to a business attraction strategy. Such was the case in Fairfax County Virginia, where the community determined that it wanted to expand the local tax base, increase property values, and gradually shift the burden of taxes from residential to commercial and industrial properties. In 1979 the proportion of nonresidential tax base was 12%. The Fairfax County Economic Development Authority adopted the goal of increasing that proportion to 21% by 1985 through high-tech business attraction and appropriate site-development efforts. The program was highly successful; it led "Between 1979 and 1985 [to] ... a shift from 12 to 25% nonresidential tax base, a 10 percent reduction in the overall real-estate tax rate, an expansion in public services, fiscal stability, and an AAA bond rating" (Kotler, Haider, and Rein 1993, 234).

Other communities, perhaps those with high unemployment rates and low-skilled workers, may adopt a strategy of developing sites suitable for manufacturers that they know to be labor intensive but not in need of a highly skilled workforce, such as food-processing firms. The industry site requirements that the community would have to meet probably include large quantities of water for production, an available wage-competitive workforce, and access to the interstate highway system.

Still others may see benefit in offering sites that will attract outlet centers, with the goal of building a substantial sales-tax revenue stream for their county and providing a substantial number of retail jobs. Such was the case in the small Ohio town of Jeffersonville, which attracted two major outlet malls within a year. The Village’s strategic location on Interstate 71 halfway between, and an hours drive to, the major population centers of Columbus and Cincinnati set the stage. The community then enhanced the attraction by offering flat, large sites with all utilities and visibility from the highway.

Finally, some communities may seek a specific category of business to attract, such as those who are environmentally sensitive, high-tech, and supportive of travel and tourism efforts. There are as many different alternatives as there are communities and their goals.

It is important for each community to develop its own economic development strategies based on an honest analysis of its situation. If site development is deemed necessary, a community should begin the process of site development.

5.1 Developing a Site

The following process and criteria provide general guidelines to assist community officials and leaders in evaluating the ability of their communities to meet basic foundations required for the creation of an industrial site. This three-phase process begins with investing the time and energy of leaders and officials before expending financial resources necessary to complete the site development. Phase I requires the completion of a feasibility assessment. The second phase introduces consultants into the process through the completion of an engineering study. The final phase involves the development of a market strategy.

5.2 Community Feasibility Assessment

Knowing the Community

Previously we discussed the various types of sites that are available. Each type of site listed has not only physical requirements uniquely its own but also operational demands unique to each category. For example, the location factors for a retail outlet center are different from those for an industrial manufacturing firm. An outlet center will seek sites near major population centers within a region to increase the number of potential shoppers willing to travel to the center. To ease the travel for the desired shoppers and to increase visibility of the center for traffic passing by, outlet retail centers will seek locations adjacent to interstate highways. Industrial firms are also interested in interstate highway use but do not need to be adjacent to the interstate. Usually they will be content within a ten-mile radius of the interstate. In addition, industrial firms do not need to be near major population centers to attract customers. Their need is to be near the quality of life amenities demanded by the particular workforce necessary for the firm to produce a quality product. A rural community two hundred miles from a major population center with access only through winding narrow two-lane roads would not compete very well for an outlet retail center. Of course, the day may come when that same rural community is able to compete for an outlet retail center, but it may be many years before a four-lane highway is constructed near the community and even more before it is near a major population center. By the time all that happens the owner of the development site will have lost interest and given up on the idea. It is not in the best interest of a community to try and re-create the economic personality of a neighboring community, no matter how economically secure that community may be. Instead, it is much wiser for a community to access its own economic uniqueness and to capitalize on the corresponding potential.

To discover its economic uniqueness a community needs to begin by getting to know itself. Individual members of a community assume they know the community, but their awareness is usually tempered by their daily experiences and the awareness of limited community data necessary related to their particular activity. What is needed, however, is a composite picture, which can only be obtained through the involvement of numerous residents, agencies, businesses, organizations and political jurisdictions. Each community has a great deal of current data and public opinion the community needs to acknowledge to begin the process of site development. Each community will also need to seek additional information through new inquiries such as surveys and focus-group sessions. The list contained in Exhibit B (see Other Sources at the end of this module) is suggested as a minimum database for assessing a community’s economic personality.

The gathering, dissemination, review, and discussion of this information will help a community get to know itself and establish its unique economic personality. The difficult part is to accept what the information says. A community may not like what the information says about our community, but neutral site-selection representatives will use this same information to determine the appropriateness of a community for their projects. If local leaders wish to increase the potential for successfully developing a site, they too must listen to the information gathered and create a site which meets the needs of the particular firm ideally suited to succeed within the community. Both the ability to understand the potential of the community and finding access to information will be enhanced by including various partners in the review process.

Putting Together a Task Force: Who Should be Involved?

For many communities a quick and simple solution to determining who should be involved in assessing, planning and creating a development site is turning to the people who are going to cover the costs. Often communities retain a professional development organization to bring to community officials a plan for site development. When communities do this, community officials see their role as ensuring that the plan meets the various requirements of site development created by the community. These same officials have shifted the burden of financial risk away from the residents of the community to a knowledgeable professional organization. This is indeed a reasonable method to use for site development, but it may be premature at this stage of the process. Sometimes, like our example indicates, individuals interested in creating a development site (Site Initiators) may be the same persons who are going to finance the effort. In other circumstances these individuals may be community leaders who feel there is a need for the creation of development sites. Regardless of who the initiators are, a development strategy must involve the various organizations needed to make a long-term project successful because the community's decision will affect not only the community in general, but also each independent organization's future. After all, what is being developed is a project that will be part of the community for decades. Surely the community is not seeking companies that will exist on the site for a few years and leave. Likewise a business is not seeking a site within a community where it will only operate for a year or two. It is not unrealistic to imagine that firms locating on a site will operate there for fifty or more years. And even if there is turnover of firms on the site, the location will continue to be part of the community’s personality long beyond any individual firm’s absence.

Therefore, a task force should be created to manage the process of completing the feasibility study, moving through engineering the site and developing a marketing strategy. Numerous other actors need to participate in each stage of the process on a short-term basis dependent upon their particular expertise. The task force’s role is to manage the process by gathering information, bringing the information obtained to the organizations each member of the task force represents, communicating to the task force as a whole reactions obtained, making the final decisions necessary to move the project forward, and finally, physically completing site development.

Individual members of the task force should represent organizations whose acceptance of the site-development effort is crucial to the successful operation of the site. Of course the particular makeup of any community’s task force will be unique. As a start, however, the following organizations should be represented:

• An elected official from the affected political jurisdictions where the proposed site will be located
• The local economic development office
• Representatives from area utility companies actively promoting sites
• The local engineer (may be county, municipality or contracted firm)
• Planning organizations with jurisdiction over the project
• Local business organization such as chamber of commerce
• Local employment agency (may be public or private)
• Representatives from affected neighborhood groups

There will also be technical expertise required at various stages of the process. For example, while a particular utility organization that does not promote site development would not be a member of the task force, it will be involved for short periods in the process. A case in point may be a municipal water department that will be needed to generate ideas and review decisions regarding water usage.

A helpful approach that the task force could employ to complete the feasibility study is to encourage a collaborative technique. Basically, a collaborative technique is based on the belief that the persons or organizations who have authority to make the final decision, are affected by the final decision, or can block the implementation of a final decision should be included in the planning stage of a development project. Including people and organizations at the beginning of the process will help them recognize more quickly that they are involved in the design of the project. This early recognition should lead to an easier acceptance of the process. A collaborative technique involves gathering information, listening for reactions, seeking alternatives and performing evaluations so the task force can make a final decision.

Put into operation, the collaborative technique requires the task force to check with appropriate individuals and organizations before moving forward. This plan-and-check-for-reactions method begins when the initial task force designs the process for developing an industrial site. After the task force discusses some ideas, individual task-force members take these ideas to the organizations and groups they represent and other groups or individuals whose acceptance of the project is needed. Each task force member gathers reactions and brings this information to the next gathering of the entire task force so the process designed can be adjusted to meet the requirements for participation and acceptance by key individuals and groups. The task force may need to go out again and gather more reactions before finalizing the design process for the site project. Likewise, the task force uses the same method when it works though the educational, analysis, idea generation, evaluation of ideas and decision-making phases of the site-development project. The task force may also at times contact individuals and organizations for thoughts even before the task force designs a particular phase of the collaborative process. It is also appropriate to bring particular individuals into task-force meetings to actively participate with task-force members in the creation of each phase of the process.

Critics of a collaborative technique may raise the issue that going to so many individuals and groups throughout the development of a site will lengthen the time it takes to get to construction. Fortunately, the opposite is true. The collaborative technique actually leads to earlier implementation of a project than linear-planning processes. Linear-planning processes focus on the solution to a problem rather than agreement on the problem itself. Using the linear process, task forces move quickly through the planning phases of a project. A collaborative technique takes more time in the planning phase because of the inclusion of all appropriate people and groups. However, a collaborative technique makes up time because a demanding process is not needed to sell the ideas to those whose approval is required for adoption of the plan. Take, for example, a development corporation that purchases a piece of land as an industrial site recognizing that there is the need to obtain a zoning change. This corporation has spoken with the local development and zoning offices, plus a few municipal council members, and it feels fairly secure that the change will be granted. But the zoning change process requires opportunity for neighboring property owners to react in a public hearing process to the zoning change. Since no one has bothered to discuss the project with these neighbors, everyone is surprised when a few of these neighbors bitterly disagree with the need for the zoning change because they have discovered that the community does not have enough excess water capacity to meet the project's needs. They may even disagree bitterly enough to take a decision made by the zoning board and council to a courtroom setting, thereby lengthening the adoption of this project. This difficulty could have been avoided if someone had included the water department and adjacent landowners in the planning phase of this project. Including all affected parties in the design of this site development from the beginning would have increased the potential for ownership of the project. Even if the development corporation solves the water issue, it still has lengthened the time required to reach the implementation phase of this project. People must agree on the problem before they can agree on the solution. Collaborative techniques encourage such agreement because issues are problem-focused instead of solution-focused.

Setting Goals and Objectives: The Task Force at Work

"What this community needs is more industry so people have money to spend with the downtown merchants," says the owner of the local hardware store. "People are tired of driving to Center City to get new appliances," says the town mayor. "What we need is a shopping center so we can attract an appliance dealer." "I am concerned by the youth of this community," adds a minister. "Someone needs to open a recreation center for the youth of this community." " I agree," says the Parent Teacher Association (PTA) President, "and it wouldn’t hurt if we also had a theater that ran recent movies instead of those old ones we get in this town." "My father and I have been in this community providing jobs for nearly forty years now and we need better freight centers for shipping our product if we are going to be able to continue to operate in this town" says a local industrialist. "My son and daughter grew up in this town but had to leave because there are not enough jobs for college-educated youth; we need a commerce center so we can attract insurance and banking firms," volunteers a senior citizen. This may be the scenario at a the first task-force meeting on site development.

Each of these people is probably correct about the community needs. An industrial park, a commerce center, retail center and the supporting entertainment activities of a recreation center and theater would enhance the comfort of living in their town. But where does a community start? Which of these activities comes first, or do they all happen at the same time? Each goal seems to foster and depend on the other. Where does a community begin, particularly a community with limited resources that cannot afford to place these resources in an unsuccessful project? Solving such dilemmas is the reason for gathering information about a community and establishing a representative task force and inclusionary planning process.

As the community works towards setting goals and objects it must begin by analyzing the information gathered about the community and comparing this information to the requirements for each of the types of sites listed previously in this document. By matching the community’s economic personality to the type of site requirements listed, the question of where to begin will be resolved. The community wants to make sure it can meet the minimum requirements of a particular type of business before embarking on costly site-development investments. Very few communities in this world will be able to meet the needs of a particular type of site without further investment of valuable resources. It is most likely true that any community can establish an attractive industrial park. But will a community that must build a new water treatment plant, expand roads to interstate standards, add new educational programs in local schools, and provide millions in training incentives to a company ever recapture its investment? Or would this same community be better served by investing in the extension of a service road to a site attractive for retail development that can provide jobs for recent high-school graduates and pay additional sales-tax revenues to the county general fund? Then perhaps the county could dedicate those increased general fund dollars to improvements to the local water-treatment plant and highway expansion. Both of these actions lead to future attractiveness of the community as an industrial site. Communities may well need to make incremental changes that lead to long-range goals and objects. Increasing the potential for success of a site-development project, regardless of the type of development, will lead to long-range acceptance of development efforts because residents and leaders can see success coming from their efforts.

One final effort must be completed by the task force before setting the objective of which type of park to develop: It must discuss and set goals. The words "goal" and "objective" get confusing because people usually use the two interchangeably. A goal is simply the end to which an effort is directed. In our example, a goal would be to provide jobs for high-school graduates. Another goal would be to increase property-tax revenues. A third goal may be to create jobs that provide full-time employment with health benefits.

Once a task force has all its goals established, it can set an objective. The objective is what it will do to achieve its goal(s). If it uses the three goals listed above, the task force may determine that an industrial park targeted toward warehousing operations is the objective.

Let’s continue this discussion by walking through the steps of the community feasibility assessment as outlined thus far. The process begins with a few individuals wanting to create some type of development site for economic enhancement of the community. These individuals establish a development task force. This task force begins determining what type of site to develop by gathering information about the historic and existing community condition. Once compiled and distributed, this information is discussed to obtain an economic personality profile of the community and surrounding region.

From the economic personality profile the community can understand its present economic contribution to the area. Let us imagine a community with the following characteristics based on its economic personality profile:

• Seventy-five percent of high-school graduates do not go on to any post-secondary education
• The local secondary technical training institution has received national recognition for the quality of plastic molding machine operators it graduates. Eighty percent of these graduates leave the community to find employment within their areas of expertise
• The area wage/benefit cost within the manufacturing sector is 90 percent of the state average
• The community is served by freight haulers, which are operating at 82 percent of capacity
• Housing cost in the community is 26 percent below the average statewide cost of a home
• The community has four-lane access within 10 miles of the national interstate system
• Both the water and wastewater systems can increase their daily operations by 42 percent
• Electric service to the community has been interrupted in recent months, but the electric provider is willing to upgrade the system by improving substations if a large user is contracted for services
• The local property-tax base is 15 percent manufacturing, 40 percent retail, 20 percent agricultural and 25 percent residential

Based on this information a community, through the development task force, sets the following GOALS:

• Provide employment opportunities for the graduates of plastic molding training
• Support the efforts of the local technical training institution by establishing working partnerships with area employers
• Provide property-tax relief to the retail and agricultural sectors
• Increase wage level within the community

Now the decision remains to set an objective using the various site-development types: commercial, retail and industrial. Based on the goals established by the community, it makes sense to set the development of an industrial manufacturing site as the objective. Since the community has been involved throughout the entire process, these goals and the objective necessary to reach the goals should be much easier to sell to the decision-makers of the community. A side benefit of the decision makers' acceptance of the goals will be the long-term understanding of what the community is trying to accomplish by this industrial site project. This understanding will most likely mean a continued commitment by the community to the industrial site project, which will certainly impress firms that may want to locate on the site.