Economic Developers & Site Selection

Goals

Provide both key motivations and key barriers for site selection managers to work with economic developers when making a decision on where to relocate or expand a business

Early Findings

One of the key reasons site selection managers work with economic developers is to capitalize on state or local government incentives. Typical incentives include rewarding companies that select sites that lead to job creation, employee training, consolidation of operations, or relocation.

Other incentives that are less common but still may lead to a site selection manager cooperating with an economic developer include incentives for building acquisition, infrastructure improvements, research and development, commercialization, energy efficiency, and water and air quality programs.
One of the pain points for a site selection manager who may not work with an economic developer is related to public relations- companies may want to have control over when their project or development is announced, and working with an economic developer may include submitting information to a state or local government that makes it public record.

Thus, site selection managers may determine whether working with the economic developer is worth the risk of exposing their information to the public, and the impact on their ability to promote or strategize around that project’s public exposure.
Site selection managers are more likely to work with economic developers if the city or state takes an initiative to contact the company that is seeking a site.

One source for example notes that the city of Greensboro reached out to Toyota with an offer for a mega site, which led the company to select this location and work with the economic development on incentives.

Timeliness may also be a factor- a site selection manager may need the ability to mobilize quickly and on the time frame of the company, which may discourage them from working with economic development in areas where the process may take longer than selecting and mobilizing independently.

It was noted that the city of Chicago is an example of a city that has economic developers who help site selection via rapid mobilization, which has supported site selection by large companies like ConAgra who were able to relocate within 18 months.

For larger sites, collaborative infrastructure development may encourage site selection managers to work with economic developers, especially if they can partner with a municipality to consolidate ownership and development of utilities such as transport, power, and sewer, adding value to less developed land.
It was also noted that the desire of site selection managers to work with economic developers varies by industry; for example, retail site selection is often one industry that doesn’t work with economic developers, as operations tend to be more independent of state assistance and need for incentives.

Proposed next steps:

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