By Michael D. White, author and freelance writer
It is almost axiomatic to say that companies in every industry enterprise imaginable look to build new facilities on sites that are suitable for risk-free development.
According to business consultancy Deloitte, “Few corporate decisions have as many immediate and long-term implications on tax structure, cost of goods sold, supply chain, labor force, and overall operating success as the choice of location.”
Now, says the business consultancy, “Several factors have emerged to make site selection increasingly complex. These include: fast-track expectations, globalization, strict environmental legislation, tightening labor availability, scarcity of certain labor skills, and utility consolidation.”
With each degree of complexity “comes a new set of considerations requiring a higher degree of analysis to avoid risk and make the right location decision,” it says.
“Leading a site selection process requires a unique set of capabilities,” Deloitte concludes. “The team must have the ability to logically analyze myriad factors, the savvy to negotiate and build consensus with management, and the judgment to remain unbiased throughout the process.”
Key are a “knowledge of logistics, human resources, real estate, tax, financing, infrastructure, construction, incentives, and environmental considerations that have become more important as the complexity of corporate location strategy increases.”
Most, if not all, of that “unique set of capabilities” lies well beyond the internal resources of many companies looking to increase their productivity, and market share, by locating all or part of their operations to a more centralized and adaptable location.
Enter, Stage Right…Certified Sites, or, as they are most often known Shovel Ready Sites—parcels of land that have met some or all of the specified criteria for immediate development usually defined by a state or regional economic development agency. As such, the “specified criteria” that define a project serve as an umbrella and can vary based on the specific needs of the company looking to develop in the appropriate site.
Those criteria do, however, fall into a set of basic standard areas with parcels of land typically evaluated on the basis of availability, zoning, utility infrastructure, required permits, access to transportation networks, availability of qualified workers, environmental concerns and other characteristics such as wetlands and floodplains.
“Simply put, Certified and Shovel Ready are really one and the same thing. They are sites that’s ready to go,” says Dennis Donovan, president of WDG Consulting, a New Jersey-based site selection consultancy.
“Many sites,” he says, “are what we call ‘pad ready’ and are ready for immediate construction. Everything has been vetted and, as the name implies, everything has been certified with the appropriate agencies. A company can save a lot of time by looking to locate on a site that’s been certified because everything has been pre-approved.”
“Often,” he says, “that vetting may include certification for a specific industry that might require enhanced access to electrical power or some other operational necessity.”
Years ago, New York was one of the first states in the country to certify what were called “shovel-ready’ sites. The concept of pre-certifying industrial sites spread across the country and today, the terms “Shovel Ready” and “Certified” are, in effect, interchangeable. “The only real difference between the two,” says Donovan, “is that sites of the shovel-ready variety were certified by the state, while today’s Certified Sites are generally vetted by third-parties such as regional economic development agencies.”
“Time to market is very important and what we see are businesses that want to get to work quickly,” says Donovan. “Ready-to-go sites are what industries want these days. They want the site selection process to be less costly and time-consuming than it would ordinarily be if all the work hadn’t been done.”
One such example of a company looking to “get to work quickly” is Audentes Therapeutics, a subsidiary of Tokyo-headquartered Astellas Pharma, which, earlier this year, decided to cross the country and expand its operations to include development at a Certified Site in North Carolina.
In February, the San Francisco-based manufacturer of genetic pharmaceuticals announced that it will invest $109 million over the next five years in a new 135,000-square-feet facility at the Central Carolina Enterprise Park, near Sanford, North Carolina.
According to Natalie Holles, president and chief executive officer of Audentes, that “time to market” necessity expressed by Dennis Donovan of WDG played a key part in the decision to position the new facility in the Central Carolina Enterprise site.
“Our investment in large-scale manufacturing has always been a cornerstone of our strategy to develop and ultimately deliver our important genetic medicines to patients as rapidly as possible,” said Natalie Holles. “This new facility in Sanford will support the next phase of our growth as we establish a robust, global supply chain and expand our therapeutic and geographic scope.”
Construction on the facility has already started with an official opening slated for sometime in 2021.
The Central Carolina Enterprise Park (CCEP) is sited in Lee County, North Carolina, one of the 12 countries that comprise the state’s Research Triangle Regional Partnership.
The CCEP is the fourth largest of North Carolina’s 11 Certified Sites, and serves as a home to the manufacturing operations of a number of major manufacturers including Pfizer, Coty LLC, Pentair, GKN Driveline, and heavy equipment maker Caterpillar, which, in 2019, celebrated 20 years of operations there producing skid steer loaders, compact track loaders and multi terrain loaders.
According to North Carolina Certified Sites Program Coordinator, Austin Rouse, the state created its certified sites program in 2001. “From 2001 to 2009, there were minimal requirements for the program until we decided to better define the criteria for communities wanting to obtain a Certified Site designation and develop a rigorous review process.”
That review process addresses between 25 and 30 prerequisites that include business/industrial use designation; Phase I environment audits and wetlands determination; geo-technical studies; topographical analysis and maps; aerial photography; the availability of public utilities; industrial power quality; engineered site development plans; a detailed analysis of development cost; and complete information on pricing.
The process, says Rouse, is structured so a site “is ready-to-go” when opportunities arise so that a company can accommodate its strategic timeline and locate operations on the Certified Site within 18 to 24 months.
Dove-tailing with North Carolina’s Certified Sites program is the state’s Smart Site program, which teams ElectriCities—a not-for-profit membership organization of municipally-owned utilities—with member communities to prepare Shovel Ready Sites for economic development by small- and medium-sized companies.
Begun in 2014 and known as ‘S2,’ the criteria for communities to qualify for Smart Site certification are similar in scope to those of the state’s qualification process for designation as a Certified Site.
Communities seeking certification go through a ‘Six Step’ process that takes them from site submission and an extensive review to site qualification. Sites that successfully navigate the process are subject to annual updates and recertification every three years.
Currently, there are 17 Smart Sites scattered across the state. In February 2020, a 26-acre parcel of land in the community of Landis in North Carolina’s Rowan County was qualified as an S2 Smart Site.
According to local media, due diligence is being done, including a Phase I Environmental Assessment, Wetlands Identification and Delineation, Subsurface Exploration, and Historical/Archeological Studies.
“It is becoming increasingly rare for companies to select an undeveloped, unimproved property on which to locate or expand their business,” said Rowan EDC Vice President Scott Shelton at the time of the announcement. “If these companies cannot find an existing building to suit their needs, they strongly prefer shovel-ready sites with a substantial amount of due diligence already completed. The information that will be gathered by the S2 program will be extremely valuable in helping the Rowan EDC market the Wallace Site to prospective companies, site selection consultants and real estate brokers.”
First introduced in 2012, Iowa’s Certified Site program saw its first certifications two years later and has, since then, ballooned to include some 27 development-ready locations with several additional sites working toward designation throughout the state.
Unlike some states that certify shovel-ready sites by their own criteria, Iowa’s certification program uses nationally-recognized standards and the services of Quest Site Solutions, an independent, third-party site selection firm which serves as the certifying agent.
“We do a five-year certification as long as we have the option to the land during that period, so our first inaugural group is just now going through the re-certification process,” says Iowa Certified Site Program Manager, Amy Kuhlers.
“In terms of certification criteria, the program has two general categories,” she says, “industrial sites, which would occupy an entire site, and parks, which are comprised of several parcels of land that can be owned or leased by different companies.” Each of those has different criteria depending on the intended use and the needs of the business.
A General Industrial Site, for example, among other requirements, could range from 50 to 249 acres in size with 2.5 MW of electrical power, no rail access, and 15-mile access to the nearest interstate; while a Mega Site could cover 1,000 or more acres with 30 MW of electrical power, rail access and an interstate no more than five miles away. A General Industrial Park offers 100 acres for development with up to 20 acres developed by a single company, no rail access, an interstate highway no more than 15 miles away, and 5 MW of electrical power with a Super Park could cover 500 or more acres with a single business occupying no more than 100 acres, access to a rail line, an interstate no more than five miles distant and 15 MW of electrical power available.
Among the companies that have positioned operations in Iowa’s Certified Sites are Amazon, Kraft Heinz, Craftsman Trailer, Michael Foods, Legacy Manufacturing, Sterilite, Windsor Windows & Doors, and Electrical Specialty Manufacturing.
“We’re using the most robust certification program in the country,” said Amy Kuhlers, Manager, IEDA’s Certified Site Program. “Our focus on quality, not quantity, drives the program’s success.”
Union Pacific – BNSF – CSX
The nation’s “Big Three” rail carriers have thrown their hats into the ring by developing their own Certified Site programs, by coupling standard certified site selection criteria with the key, ramped-up element of any company with foresight and a long-term strategic growth plan—access to established, dependable logistics networks.
While operating, perhaps, under a different moniker, the Union Pacific Railroad’s “Focus Site” program matches companies with any one of the 25 Shovel Ready Sites located along its network with “increasing speed to market” at the core of the program.
Started in August 2019, the UP’s Focus Sites offer firms looking to hit the ground running the benefit of access to the rail carriers 32,200-mile rail arteries that criss-crosses the Western two-thirds of the U.S., large-scale development, ready access to utilities and roads, local economic development support, and a single controlling land owner for shovel-ready sites ranging anywhere from 125 to more than 6,500 developable acres.
Currently, the UP has sites positioned in Arizona, California, Colorado, Iowa, Idaho, Illinois, Montana, Nevada, New Mexico, Oklahoma, Texas and Wisconsin.
Another rail carrier motivated by the need to provide manufacturers and other businesses with improved “time to market” is the Fort Worth, Texas-headquartered Burlington Northern-Santa Fe Railway.
One of the largest freight transportation providers in the U.S., the BNSF operates a network of 32,500 miles of track linking 28 states and three Canadian provinces.
In 2016, the rail carrier unveiled its own Certified Sites program, which, according to company materials, “identifies optimal rail-served sites and conducts in-depth reviews of ten economic development criteria to determine if the site meets BNSF’s stringent readiness standards, which are intended to minimize development risks that customers may face.”
The program, the carrier says, not only reduces the “upfront development risk of rail-served industrial sites,” most importantly, it “reduces development time, increases speed to market, shortens the facility construction process by six to nine months.”
The program currently boasts 23 Certified Sites in the U.S. and one in Canada. In October 2019, the BNSF awarded Certified Site designation to six new industrial locations. Four of the new sites in Arizona, Minnesota, Mississippi, and Missouri were the first for their respective states, while two in Illinois brought that state’s total of BNSF Certified Sites to four.
Another rail carrier with strategically located Certified Sites situated along its network is CSX Transportation, which operates about 20,000 route miles of track in 23 states, the District of Columbia and the Canadian provinces of Ontario and Quebec.
CSX currently maintains 23 Certified Sites available in ten of the states it serves: Alabama, Florida, Georgia, Kentucky, Illinois, Indiana, North Carolina, Ohio, South Carolina and Tennessee. Three sites have been sold—a 100 acre parcel at the Kentucky Transpark, an 83-acre site at Florida’s Ocal/Marion Park Commerce Park, and the 38-acre Washburn Switch Business Park in Shelby, North Carolina.
The carrier’s rail-served sites range in size from 100 to 1,000 acres and are certified for occupancy by The Austin Corp., which evaluates potential sites based on access to the CSX rail network; proximity to other transportation modes such as highways, airports and seaports; workforce availability; access to utilities such as natural gas, water, and electricity; and environmental compliance and geo-technical standards.
All in, there are close to 25 states that offer assistance to companies that require assistance when looking for a streamlined and efficient way to locate a new operation.
Call them what you will—Certified Sites, Shovel Ready Sites, or Focus Sites—any company considering partnering with a public- or private-sector when setting up a certification or shovel-ready program must think over the criteria of the program under consideration, the capabilities of the agency or entity in question and the its internal capacity to work with that agency or entity to lay the foundation to achieve fast and sure operational efficiencies.
Bio: Michael D. White is a published author with four non-fiction books and well more than 1,700 by-lined articles on international transportation and trade to his credit.
During his 35 year career as a journalist, White has served in positions from contributor and reporter to managing editor for a number of publications including Global Trade Magazine, the Los Angeles Daily Commercial News, Pacific Shipper, the Los Angeles Business Journal, International Business Magazine, the Long Beach Press-Telegram, Los Angeles Daily News, Pacific Traffic Magazine, and World Trade Magazine.
He has also served as editor of the CalTrade Report and Pacific Coast Trade websites, North America Public and Media Relations Manager for Mitsui O.S.K. Lines, and as a consultant to Pace University’s World Trade Institute and the Austrian Trade Commission.
A veteran of the United States Coast Guard, White has traveled in both Japan and China, and earned a degree in journalism from California State University and a Certificate in International Business from the Japanese Ministry of Trade & Industry’s International Institute for Studies & Training in Tokyo.