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Mark Sweeney: Prepared Communities Win

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Mark Sweeney: Prepared Communities Win

  1. 1. Prepared Communities Win2012 Economic SummitNorman Economic Development CommissionNorman, OKTuesday, April 3, 2012Mark M. Sweeney
  2. 2. The Main ThingAttracting Investment and Jobs is More Competitive than Ever, and … 2
  3. 3. Being Prepared CreatesCompetitive Advantage 3
  4. 4. Introduction toMcCallum Sweeney Consulting 4
  5. 5. MSC Clients SGL Automotive CarbonBoy Scouts of America Fibers LLC joint venture Kasle SteelAmerican Titanium Works 5
  6. 6. Understanding the Business of Economic Development 7
  7. 7. Business of Economic Development Overview• Product Development • Organization – Leadership – Vision & Strategic Plan – Sites – Organization Design – • Staffing / HR Infrastructure • Programs – Human Resources – Funding • Education • Training • Sales & Marketing – Taxes – Market Segmentation – QOL – Product Knowledge – Community Assets – Customer Knowledge – Communication 8
  8. 8. Being Prepared – Product Leadership• Knowledgeable about economic development (trained!)• Long-term vision and commitment• Passion for your community• Persuasive communicator – Internal and external• Be prepared – identify and develop community leaders 9
  9. 9. Leadership• Dollar General Marion, IN• Site and schedule driven project• Very competitive (incentives)• Mayor took lead – Site issues (state and fed agencies) – Legislation 10
  10. 10. Being Prepared – Product Sites and Infrastructure• Basic need for growing companies• “Dirt Won’t Do” – “Property” does NOT equal “Site”• Location decision demands speed – Site selection and facility start-up• Be prepared – maintain a portfolio of ready, available sites 11
  11. 11. Sites and Infrastructure• Severcorr Steel Columbus, MS• Rural community• Demanding site specs• Community proactively prepared – Site certification• $800 million• 450 jobs 12
  12. 12. Being Prepared – Product Human Resources• Education – Recognize ties that bind economic development and education together• Training – Critical component (start-up and on-going)• Be prepared – show improvement in education and continue to invest in training resources 13
  13. 13. Human Resources• Nissan Assembly Canton, MS• Large complex project• Over 4,000 jobs• Recruit, screen and training was critical – Upgrade Employ. offices – On-site center – High dollar value – Train for turnover 14
  14. 14. Being Prepared – Product Taxes• Major Site-Variable Factor – Bottom line distinction among locations – Balance need for services and revenue with impact on investment decision – Minimize as much as possible• Be prepared – have creative tools in place to encourage investment 15
  15. 15. Tax and Incentives• Nissan Warehouse Greenville, SC• Small project, 3rd party building investor• Limited “Nissan” investment – DNQ Fee-in-Lieu• Creative solution – Utilized two other programs to create similar value 16
  16. 16. Being Prepared – Product Community Assets• Quality of community life is a factor in almost every project• Critical for relocation of key personnel• Becoming a fundamental factor with growing emphasis on knowledge-worker opportunities• Be prepared – never stop investing in the quality of life of your community 17
  17. 17. Community and Regionalism• Trex Manufacturing Olive Branch, MS• Dynamic growth co.• Concern re: south• Comfort w “Memphis Region”• Concern w Small Town – Rejected small finalist during windshield tour 18
  18. 18. Being Prepared - Organization• Product Development • Organization – Leadership – Vision & Strategic Plan – Sites – Organization Design – Infrastructure • Staffing / HR – Human Resources • Programs • Education • Training • Sales & Marketing – Market Segmentation – Taxes – Sales for Econ. Dev. – Community Assets – Customer Knowledge – Phase II – Field / Community 19
  19. 19. Organization Design• Commit to the regional approach – Aligns with decision making of investors – Leverages scarce resources• Commit to staff development – Adequate staff / professional development• Align organization with strategy!• Be prepared – design, direct, and invest in your organization 20
  20. 20. Funding• Funding – Secure – Reliable – Adequate – Long term – Broad participation / broadly supported – Flexible and discretionary • Avoid too much “earmarking” 21
  21. 21. Being Prepared – Sales and Marketing• Product Development • Organization – Leadership – Vision & Strategic Plan – Sites – Organization Design – Infrastructure • Staffing / HR – Human Resources • Programs • Education • Training • Sales & Marketing – Taxes – Market Segmentation – Community Assets – Sales for Econ. Dev. – Customer Knowledge – Phase II – Field / Community 22
  22. 22. Market Segmentation• Market segmentation – Dividing total market into segments that share common properties – Segments will vary in attractiveness to your organization – Product development strategies will differ for each segment – Marketing and communication strategies will differ for each segment 23
  23. 23. Market Segmentation• Investment and Jobs from Outside – Recruitment• Addtional Investment and Jobs from Inside – Expansion / retention• New Investment and Jobs from Inside – Entrepreneurial development• Be prepared – position for all segments 24
  24. 24. Sales for Economic Development• Product knowledge - Know your community - Strengths and weaknesses• Customer knowledge - Know your customer (industry, company) - Opportunities and threats• Sales skills - Communication skills (listening!) 25
  25. 25. Customer Knowledge: Fundamental Characteristics • Profit driven – Investment for purpose of return • Deadline driven – Both the site selection and the project • Competitive – Multiple location options • Comprehensive – Complex decision involving most functional areas • Risk averse 26
  26. 26. Competitive Site Selection Screening Process Define Search Region - Center-of-Market Analysis Regional Screening based on Project Criteria RFP & Proposal Screening Property Visits / Comparative Assessment Negotiations / Financial Modeling Risk Analysis Location Selection 27
  27. 27. Comprehensive Analysis q Work Ethic/Labor Climate Assessments q Competitive Wage Surveys q Strategic Planning - Growth/Location q Productivity Assessments q Center of Market Analyses q Qualitative Evaluations q Regional Definition q Training Resources q Competition Analysis q Demographic Survey q Legal Environmentq Pro-Forma Analysisq Breakeven Analysisq Recurring and Nonrecurring q Product Distribution Evaluation Cost Comparisons q Raw Material Identificationq Optimization Studies q Comparative Transportationq Sensitivity Analysis Cost Analysisq Project Financing q Multi-Model Scenario Studiesq Alternativesq Risk Analysis q Topographic Surveys q Environmental Conditions q Real Estate Negotiations q Boundary Surveys q Incentive Negotiations q Zoning Status/Modification q Site Acquisition q Access and Site Planning q Purchase Options q Permitting q Infrastructure Suitability q Livability, Quality of Life Assessment q Project Scheduling Sensitivity q Factor Weighting and Ranking q Support Services Assessment q Market Assessment q Expandability/Flexibility Determinations q Engineering/Construction/Cost Comparisons 28
  28. 28. Site Selection ProcessPlanning Phase Phase I Phase 2 Phase 3 Phase 4• Conception • Alignment/ • Community Visits • Negotiations • Prepare MOU• Feasibility Criteria • Property • Evaluation • Real estate• Investment • Regional Analysis Evaluation • Site Due Diligence transaction Decision • Areas of Interest • Physical Factors • Location • Public • Request for • Operating Announcement Selection Proposal and/or Factors • Incentive Capture • Living Factor web research Support • Candidate • Comparative Locations Analysis • Finalist Locations 29
  29. 29. Phase II – Field Competition• Physical Conditions – Sites, infrastructure• Operating Conditions – Labor, education/training, utilities, taxes• Living Conditions (QOL) – Housing, medical, education, leadership – Appearance, congestion, culture & rec. 30
  30. 30. Phase II – Community Visits• Industry and Community Leaders – Existing industry and businesses • Private interviews • Most important source of information – Community leaders • Elected and private leaders • Represent community and government • Subject to “managed access” to prospect 31
  31. 31. Site Selection Process – Phase III• Incentives / Real Estate • Public announcement Negotiations (MSC and Client team) (MSC and Client team) – Align company and community – Property objectives – Site preparation – Press releases, events, etc. – Infrastructure – Utilities • Incentive capture support – Transportation – Training (MSC) – Taxes – On an as-needed basis – Permitting – Low cost financing 32
  32. 32. Communication• Public Relations – Establishing overall image in marketplace – Long-term effort – Important given advanced stage of decision making before you are contacted• Advertising – Image building – Specific targets• Events – Trade shows, prospect visits – “FAM” events 33
  33. 33. Communication• Face to Face – Get prospects to your place – You go to prospect’s place• Print Media – Still viable medium with place in overall communication strategy • Trade publications • Target industry publications • General business publications• Web 34
  34. 34. Comments on Rural Economic Development 35
  35. 35. Rural Economic Development• Competitive Environment – Competing with other rural and probably non-rural locations• Risk Perspective – Site selection is a risk mitigation effort – Rural locations present greater risk – Key location attribute is diversity • Diversity of choices • Especially true with quality of life issues 36
  36. 36. Rural Economic Development• Risk Perspective – Rural locations present greater risk • Real estate • Labor availability • Labor quality • Recruit and retain concerns • Sustainable / growth capacity of infrastructure • Quality of life issues  Housing, education, medical  Commercial assets, hotel/meeting space 37
  37. 37. Rural Economic Development• Compete! – Sites – Infrastructure (planning) – Labor information / success stories – Charm as an economic development asset 38
  38. 38. MSC Contact Information Mark M. Sweeney Senior Principal msweeney@mccallumsweeney.com McCallum Sweeney Consulting 550 South Main Street, Suite 550 Greenville, SC 29601 864-672-1600 (main) 864-672-1610 (fax) www.mccallumsweeney.com 39

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