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Site Selection in the Tri-State Area

  Winter 2017

Site Selection in the Tri-State Area
By: Bryce Custer, President, Ohio River Corridor, LLC

 

Site Selection in the Tri-State (Ohio, West Virginia and Pennsylvania), Ohio River Corridor is becoming more complex than ever. In the past, we would receive a request for a certain size facility on a certain size site close to the following infrastructure needs. Site selectors, local and state economic developers would then search for a specific site either through local real estate on-line services or send out a cryptic list of needs with a cryptic project name. People were tasked with finding the appropriate site with little or no information. How can you meet the clients needs without ever speaking with them? How can you find them the “perfect” site? Is there a “perfect” site?

I have had the privilege to work with companies nationally and globally on their site selection process. Never has a client asked if I had a site certified location. As a matter of fact, the actual site is the last thing that is discussed throughout the client discovery process. I have placed natural gas power plants, hotels and manufacturing facilities at locations that were not on the market. The key is understanding the client’s critical success factors, then, finding the appropriate facility/location. I have also learned over the years that there is no perfect site and most every property is for sale. The question is do you want it more than the current owner?

Pitching sites that I have on my sign on, or pitching sites that my public/quasi public organization controls, will begin to influence the site selection process. As the saying goes “If I have a hammer, everything looks like a nail”. This does not serve our clients.

At the time that I write this, Amazon is looking for a site for another headquarters.  States, counties and municipalities are bending over backwards to attract Amazon. Do you think that Amazon cares about what property is site certified? Does Amazon care if the property is listed with a local or national brokerage? The answer is no. Look at one of the top criteria for Amazon; livability and is the appropriate infrastructure in place for our employees (quality of life/work balance). The point is that every company has their unique set of criteria and each priority is different.  The actual site is typically towards the bottom. All things being equal, If Amazon wanted to move into your city would you be able to find the appropriate site? Odds are the answer is a profound YES!

Over the years I have found the role has evolved from being a real estate professional to be your client’s team member or consultant. No longer can we just provide a list of buildings and acreage for sale. Do you understand your clients mission and critical success factors? Do you understand your clients process? Do you understand all the tangible and intangible factors that your client demands in order to find the “best” location regardless of which state, county or municipality location?

What are general critical success factors that clients are looking for? This is a complex question and every client is different. Over the years six common themes seem to surface. There has been no specific order. Each client will then prioritize the six into the order that best suits their site selection needs:

• Abundant / Low Cost Feedstock
• Infrastructure
• Workforce / Workforce education and development
• Suitable Site
• Proximity to Customers
• Incentives (national, state and local)

 

Abundant (low cost) Feedstock:

What does my client require to produce their product? Low cost natural gas? Butane, propane, ethane? Does the project require a large supply of electricity? If the company requires steel, plastic, chemicals or resins, is there an appropriate supply? Process and cooling water are a major factor with some projects. Proximity to the Ohio River could be key.

In the Tri-State area we have some regulated and unregulated utilities. This may be a major factor in your site selection criteria.

Infrastructure/Logistics:

Is the site near four lane interstates or state routes? Can raw materials and finished product be easily transported? Do you need on site barge cells? Intermodal? Rail? (one or two sources of rail service?) Close to airports? How critical is access both domestically and globally?

The Ohio River Corridor allows access to the gulf coast to import and export materials throughout the Midwest. The Ohio River designated as M-70 by the Ohio Department of Transportation, provides access from Pittsburgh, PA to Kansas City Missouri. The Shell petrochemical facility in Monaca PA will be utilizing the Ohio River to offload pieces and components of the facility resulting in savings of millions of dollars versus rail or truck.

Barge traffic is beginning to increase along the Ohio River. A typical barge “tow” is 15 barges fleeted 3×5 for a total size of 105’ x 1,185’. This is equivalent to 216 rail cars with six locomotives or 1,050 semi-trailer/truck. Utilizing the Ohio River can result in a significant savings moving raw materials and product. Many are also calling barge the “green” alternative due to the fact less fuel/ton of product is needed to ship.

Workforce / Workforce education

One of the first questions that Bidell Gas Compression from Calgary Canada asked prior to locating to Weirton was regarding workforce. Does the area have the workforce and a community school that we can work with to train our employees? Throughout the Ohio River Corridor, we have hard working employees that have the “muscle memory” from working in the mills and facilities located up and down the river. Our community schools have stepped up and created programs specific to the needs of companies locating in the area.

Proximity to Customers:

Who are your customers? We have helped many clients map out their existing and potential customer base to find the best location in the tri-state area. Your customer may be a utility that you will sell power to, your customer may be transient guests at a hotel. Whatever and wherever your customer is, logistics and location play a key role.

We have found that distance is less important than drive time. A client may be twenty minutes down the road, but it could take an hour to get there due to single lane roads and traffic. This is a key consideration when determining the delivery of product and the number of turns it will take to make to your client.

Incentives:

We are fortunate to have very strong economic development programs from the state and local levels available to support companies bringing jobs to the area.  The State of West Virginia and the Northern Panhandle of West Virginia Business Development Corporation played in key role in locating Bidell Gas Compression and Pietro Fiorentini, a manufacturer of valves and pressure regulators to the Weirton West Virginia area.

The Pittsburgh Regional Alliance and the Pennsylvania Department of Community and Economic Development played a key in the Shell Petrochemical facility in Monaca, PA.

Team NEO, APEG and OMEGA along with local economic development offices and county port authorities are available to work with clients to put together incentive packages throughout the Ohio River Corridor.

Connecting the Dots:

Successful site selection involves all the above factors plus cooperation from the community and community leaders. Determine the most important aspects for a successful operation, then work with an expert that can cross boundaries to find the best site and facility for your client.

 

www.OhioRiverCorridor.com
Twitter: @OhioRiverCRE
Bryce@OhioRiverCorridor.com

 

 

 

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