By Taylor Brittan Dietz, CEcD, Consultant, Quest Site Solutions
Shovel-ready. Development-ready. Certified. Investment-ready. These are all terms utilized to indicate a property has undergone a site readiness effort to proactively prepare for development. Site readiness efforts entail documenting a property’s characteristics and then developing and executing plans to better position the property for development. The value of site readiness programs for companies seeking to locate facilities are properties with accelerated development timelines and reduced risk – which are essential in the deadline-driven world of site selection.
Across the country, 27 states have state-led site readiness programs either in place or actively under development. In addition to state-led programs, there are numerous site readiness initiatives that are sponsored by other entities such as utility companies, rail providers, and regional or local economic development organizations. The proliferation of site readiness initiatives is indicative of the benefits that they bring to both companies and communities. However, one significant challenge in the marketplace remains: site readiness programs look different across the United States. Site selectors and corporate end users need to be aware of the substantial differences in programs and look closely to understand how truly “ready” a site is – regardless of the designation used in marketing the property.
Three key elements that differ among site readiness initiatives include the type of program, the administration of the program, and the specific criteria/standards that are used in property evaluation. This article focuses on state-led site readiness programs, but these elements apply irrespective of the entity that is sponsoring the program.
Type of Program
Site readiness programs range from site identification in the early stages to physical site preparation in later stages, and everything in between. One of the most popular types of site readiness programs is site certification, which is a designation that a property meets or exceeds specific criteria for development. Examples of some of the longest running state-led site certification programs in the nation include the North Carolina Certified Sites Program, Georgia Ready for Accelerated Development (GRAD), the Iowa Economic Development Authority (IEDA) Certified Site Program, and the Select Tennessee Certified Sites Program. While site certification programs have become extremely popular, not all site readiness programs are solely focused on achieving certification. The Virginia Business Ready Sites Program (VBRSP) is comprised of two components, Site Characterization and Site Development, which allows for an incremental approach to improving site readiness. Following an initial assessment of readiness in the Site Characterization phase, properties in Virginia are able to progress through a series of tiers as readiness is enhanced. While Tennessee has a long-standing certification program, the State has added two supplemental programs, the Property Evaluation Program (PEP) and the Site Development Grant Program (SDG), to expand their scope of site readiness efforts and have a continual pipeline of properties being prepared for development.
Another key difference in program type is in the size of properties that are eligible to participate, as many site readiness programs have a minimum acreage requirement. In some states properties of 10+ acres are eligible to participate, whereas other states have higher thresholds such as 100 acres or 250 acres. Programs geared at preparing Mega Sites have the most stringent acreage requirements and the threshold to qualify for these initiatives can be 1,000 acres.
Program Administration
There are a variety of different ways that the programs are structured from a review standpoint. In many cases, the granting or reviewing entity is associated with the sponsoring organization, most commonly the state economic development departments or a review committee comprised of department representatives. Another option utilized by numerous programs is to employ a third-party consulting firm. A third option is a hybrid model, relying on public and private collaboration. We have seen an increase in programs opting for evaluations by a third-party or a committee of public and private members as these groups provide external validation and impartial evaluations. This gives parties that are considering the property an additional level of confidence.
Validity
For the programs where a designation is issued, such as a certification program, the length of time the designation is considered active varies from requiring annual updates to not having any stated expiration date – with the average designation validity period being three years. In recent years, we have seen programs adapt to rapidly evolving market conditions by shortening the period of validity or adding annual updates to ensure the relevancy of the data for prospects. After expiration, the process for maintaining the designation varies greatly between programs from a thorough update to the materials and due diligence, to just a review or minor update to the initial materials.
Program Criteria/Standards
Available
For a project to move forward on a site, the property must be available for sale or lease. Site readiness programs vary in the requirements for demonstrating availability and property control (for example, real estate listing, option, or public ownership) as well as for the duration of control. Site consultants and companies should be mindful of these differences and verify early on in a project that each property is available with established terms and conditions.
Developable
Zoning and land use have received increased media exposure in recent years due to some local opposition to development. While some state-led programs require that zoning for industrial use already be in place, other programs will allow participation by properties that will need to go through a rezoning process. In these cases, attention is necessary to understand the length of the rezoning process and associated risks.
While most programs require some level of due diligence to be completed, there are significant differences in both the types of studies and the level of detail for each study. Using wetlands as an example, some programs only require a National Wetlands Inventory map to be submitted while others require a Wetlands Delineation to be completed. The most thorough programs take it a step further and require a Jurisdictional Determination from the U.S. Army Corps of Engineers. Therefore, it’s important for prospects to understand the level of due diligence that has been completed for each property under consideration, how long ago the due diligence was conducted (as conditions and regulations change over time), and what additional studies or approvals will be needed in order to move forward with their development plans.
Servable
Greater utility demands have increasingly become a priority for recent projects, forcing utility capacities to become one of the most dominant search criteria. The most stringent site readiness programs require documentation that a property can be served by a specific capacity and that infrastructure improvements are achievable within a specified period – which help to provide assurances that project demands can be satisfied. However, many programs only collect basic utility information. While all utility information gathered during a site readiness process can be valuable, project representatives need to evaluate properties on a case-by-case basis to ensure that the service can meet their specific needs.
The Value of Strong Programs
The landscape of state-led site readiness programs is complex and diverse. Programs that are well-designed and well-executed can provide significant advantages to a company seeking to locate a facility. However, the work to proactively prepare these properties for development is not a substitute for a company’s own review process. Each property under consideration still needs to be reviewed under the lens of the specific project at hand. The upfront work to accelerate development timelines and reduced risk can be beneficial – but only if the location and property are a fit.
About the Author: Taylor Brittan Dietz is a Consultant at Quest Site Solutions where she works to advance economic growth opportunities for site selection and economic development clients. Her involvement spans all project phases, ranging from in-depth site and infrastructure assessments to capturing incentives. Prior to her consulting role, she served as a local economic developer, tackling a broad range of issues to facilitate capital investment and job creation. Past major projects include manufacturing, distribution, and headquarters operations. She is passionate about economic, community, and workforce development and how they coincide to make a difference within communities. She holds three degrees from Georgia College & State University and is a Certified Economic Developer (CEcD) through IEDC.
