In 2015, Business Facilities, the magazine for corporate site selectors, released their results of the best upcoming and ongoing economic development projects in the United States. The projects range in size, value and location but all will have or already have a significant impact on their surrounding communities due to the breadth and scope of the projects.
According to the report, Tesla's Gigafactory in the Nevada desert won top honors; the new Boeing 777 factory in Washington state came in second; and the Comcast Innovation & Technology Center in downtown Philadelphia rounded out the top three. Honorable mentions were given to projects in Tennessee, South Carolina, Florida, and Texas.
In each of the best economic development projects around the country, there were three important takeaways from the list: bigger is better, brand names go a long way, and government leaders and private owners need to play nicely together.
First, the size, scope, and scale of each of these top award-winning economic development projects are large. Quite large. The top three projects will contribute a combined $17 billion annually in economic development to their respective areas. (Imagine what most cities in the U.S. could do with an influx of development even a quarter of that size!) It is significantly easier to develop areas that are already in development than completely undeveloped areas. Bringing in companies and projects to support the current, on-going development only helps to increase everyone's bottom line.
On top of the direct financial contributions development projects have on a particular location, job creation is another highly coveted prize when courting a significant development project. With the top three projects projecting to produce over 54,000 new jobs in total - either via direct or indirect employment - a massive influx of employees increases nearly every economic indicator from property values to school ratings. According to the National Association of Realtors, for every one home purchased, 3 jobs are supported. Inversely, that could lead to approximately $1.2 billion in property value on county and city tax records. (Imagine what small and rural communities could do with an influx of nearly 6,000 new property owners.)
Brand Names are Key
Secondly, the top three projects all have highly coveted owners or developers leading the charge. In Nevada, Tesla - the electric car company headed by billionaire entrepreneur Elon Musk - could be the most highly anticipated car company of all time. With as much buzz and hype surrounding Tesla, surely several suitors will follow in the footsteps of the company in order to gleam a piece of the development prize. In Washington, no company might be more closely associated with a particular state than Boeing is with Washington. This deal ensures that the state will continue to have a long relationship with one of its most important benefactors. Similarly, the city of Philadelphia has been the corporate home of Comcast - the mass media goliath - for the past several decades. As the company outgrew its existing space, new space was needed quickly. While the company shopped around the country for possible sites, it ultimately wanted to renew its relationship with the City of Brotherly Love.
While plenty of cities are home to large and important corporations and education hubs, crafting a long term relationship with a Fortune 500 company or top-tier university could draw outside attention to second- and third-tier cities. Companies and universities that have a significant gravitas tend to pull others toward them, wherever they may be located. Sometimes being known for one (or multiple) corporate headquarters or colleges may be just the thing to elevate the class of your city.
Private & Public Partnerships
Finally, with any large economic development project, the backing of city, county, and state lawmakers as well as the cooperation of private owners means that all interested parties can stand to benefit significantly. Obviously, local governments - acting through their development boards - look to increase income through taxation and increase attention through notoriety by landing lucrative development projects. Conversely, owners and developers want to find locations where the local municipalities will best support their companies and their workforce. As such, the common ground where lawmakers are willing to forego initial income in the hopes of a long term benefit and where owners can bypass as much of the initial startup costs to generate lasting and sustainable business is the area where deals can be made. While both sides of the transaction have the difficulty of overcoming certain obstacles in the negotiation phases, both parties have an obligation to have the other's interests in mind.
As development projects progress, several moving parts need to come together at once to be completely successful and to have the intended positive economic impact. While the size and name of the developers involved certainly play an important role in getting these development projects underway, ultimately it is the responsibility of all parties to cooperate to the best of their abilities to achieve the best outcome for all those directly and indirectly involved with these projects.
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Nico Hohman, the Founder of Eaactive Leadership, is an award-winning leadership, real estate, and construction consultant with an extensive background in business development, sales training, and change management roles throughout the United States. Nico serves business executives and aspiring leaders on how to sustainably grow their organizations through better use of their physical and knowledge-based assets. Nico's focus is to help others be leaders in their communities, guide their followers, and make better decisions using the findings of their personalized Eaactive Leadership Style Assessment (ELSA). You can connect with Nico on LinkedIn and get the latest daily updates on the Assorted Questions & Such blog.