By Don Moss, CCIM, SIOR – Senior Director, and Grant Miller, SIOR – Senior Director, Colliers International, Charlotte
As the fundamentals of the corporate real estate landscape continue to change almost in real time, it is imperative that all the factors associated with a site selection project should continue to keep pace. As we enter a new decade and build upon the momentum of efficiency and speed to market communities, developers, landowners and seller should take notice and understnad what is expected of them to win a site selection project. The days of providing of a topographical map and saying “don’t worry it will be fine” will not pass muster in the new decision-making environment. Even the existing “shovel ready” state programs do not go far enough for the speed in which projects need to move after a decision is made to invest in a new facility.
In this article the authors look at what should truly classify as a “shovel ready” site now and (possibly) years to come.
Just like the phrase “location, location, location” applies to all real estate. For a site certification the phrase “maps, maps, maps” is applicable. For a site to be even considered or a site selection project, there are a few bare bones basics:
- Introductory Map – To introduce the property, a good map showing the general location in relationship to transportation access (major interstates and arteries, rail service, airports (commercial and general aviation), major cities nearby and location of ports in which to import and/or export their products.
- Detailed Maps – Aerial maps with an outline of the property, flood plain if applicable, and tax parcels all in digital format with corresponding latitude and longitude coordinates.
- Topographic Maps – Topography needs to be in CAD format with a minimum of two-foot contours. This is especially important for engineers to be able to do a cut and fill analysis.
- Wetland, Streams, Protected Species and Archaeological Maps – It is paramount to understand if any portions of the site are impacted by jurisdictional wetlands or streams, protected species (animal or plant) or any graves, historical archaeological.
- Zoning Maps – It is important to understand the zoning of the property and the surrounding zoning. Also included needs to be any future land use plans that are being adopted by local government.
- Utility Maps – It is paramount to understand the location of all utilities that serve the site with line sizes for water, sewer and natural gas; electrical service size and telecommunication service.
- Community Information – A detailed overview of the community should include a good snapshot of the county, city and location to larger metropolitan cities.
- Asking Price – A good suggestion would be that the property is placed under a listing agreement with the community or a real estate broker so there is a specified asking price and it is officially on the market. A better strategy is to have the property under option with a guaranteed price.
- Tax Information – often overlooked within a shovel ready site package is information pertaining to local, state and corporate taxes. From the local perspective, it is very helpful to include any information on any future tax increases being contemplated by the county and/or city.
- Target Audience – When considering qualifying a potential site as shovel ready, it is imperative to know what uses would be best for the site.
While a “one size fits all” strategy is useful in seeing all the prospective projects considering the area, it is probably not the best strategy. It would be suggested that a more strategic approach be used knowing the site’s strengths and weaknesses. A heavy manufacturing use is not practical adjacent to a residential neighborhood. A data center project will need access more intensive infrastructure for their operation considering they are a large electricity user. An ecommerce project is very labor-intensive as employment in excess of 1,000 is very common. Furthermore, it will need access to interstate quality highways and population centers.
Taking it to the Next Level
- A community or landowner who wants to be prepared and is ready to invest the money in the due diligence expenses that will ensure they make the finalist lists need to consider the following details.
Proactive Due Diligence – It certainly helps to assemble a team of professionals to assist in putting together the following items:
- Geotech Borings and Study – Understanding the makeup of the soils and load bearing of the soils is key to understanding costs. Does the land have bad soils that will have to be removed; is there rock that must be removed; will good soil have to be brought in with specific compactable fill specifications are important to understand.
- Wetland Delineation – Not only does the owner need to understand the location of the wetlands but they should go one step further and have the boundaries surveyed and approved by the U.S. Corp of Engineers so there is no question where structures and pavement can be placed.
- ESA Phase 1 – One of the more common requests site selectors are asking, if available, when reviewing potential sites.
- Zoning – It is important to have the property zoned with the proper designation for its intended use. Also, if the owner or community wants covenants and restrictions on the property with specific architectural guidelines those need to be recorded and readily available.
- Utilities – This is the most overlooked item. Water and sewer lines have capacities along with electric and gas services. A key to getting ahead of the game is to understand the excess capacity of all utilities and match those up to the type of users in which the site is being marketed.
- Civil Engineer Drawings – A great drawing of the site with proposed building(s) situated along with utility locations and stormwater ponds certainly gets attention and showcases how the site can really look. Furthermore, 3D renderings and videos are very helpful in realizing the potential of the site.
- Permitting – We would strongly suggest that the site is pre-permitted for a building that matches the land. Having a grading permit in hand can save a few months in planning so that part of the construction can begin while the building is being finalized. Also, we would suggest a Gantt chart, detailing the permitting process, be included so a prospect can understand how long all aspects on construction will take.
- Railroad Access (if applicable) – It is very helpful to help some detailed drawing of how rail can be accessed to a proposed building on the site along with cost estimates to get rail to the building pad.
- Title Survey – Title can be one of those items that sneaks up at the end and would be prudent to have a clear understanding of any issues that could affect a clear title to the property.
- Incentives – The community should have an appendix in their “shovel ready” information that includes information on incentives available from local, regional and state levels and outline those thresholds that need to be met in order to qualify for any incentives that are available.
Beyond the Next Level
In the new decade of site selection and site consideration, information on labor and workforce is the number one request companies are asking for help with. While highway accessibility, available buildings, energy availability and costs, aggressive economic development incentives consistently topped the list, it is all about labor and workforce availability now. If the labor and talent is not there, the project really does not stand a chance.
- Therefore, to compliment the above referenced information to be included in a site package, it will pay dividends to include the following:
Labor Availability Study – In the days of big data, labor information is much easier to obtain as there are many avenues in which to look for both micro and macro labor information. Some of the information to include should be underemployment, wages, hours worked, education/vocational trades, potential labor force, commute distance/time, employment categories, etc. It should be noted that this information could pertain to not just a specific site within a community but others, as well. When discussing a site with a potential project, this should be available at the first meeting not something to be completed as a follow up task.
- Workforce Training – In years prior, information from prospective companies looking for a new site in which to locate a new facility or locate were only interested in the basic unemployment numbers and corresponding information. A general warehouse employee was not considered to be skilled labor; however, that is not the case today. As robots begin to take over the responsibilities of the general warehouse employee, more autonomous trucks enter the highway and 3D printing becomes more common there will need to be a skilled employee behind the scene overseeing these operations. Therefore, comprehensive information on workforce training and training initiatives catering to these skills should be readily available and included in the shovel ready site package.
States and communities started “shovel ready” programs in the late 1990s and early 2000s. Most of the programs have not progressed to keep up with the rapid pace of development that is required by many of the companies looking to site and construct a new a facility. The “build it and they will come” model of communities putting a road into a site and calling it an industrial park are long gone.
Companies in this new decade of the new 20s expect sophisticated and robust information so they can quickly decide on a location or move on. Community Leadership and Private Owners need to understand that if they have sites, they want to sell in a timely manner, it takes a rather significant five figure investment just to submit for a prospect that is considering multiple states and communities. Therefore, all parties need to carefully consider how they want to invest their resources whether it be public, private or grant dollars so as not to waste that money.
Even with the investment and a great community with the best interstate access and a phenomenal location it will take several years to recoup the investment in site certification and to sell the property.