Team NEO seeks better data for site selectors
Thursday, March 21, 2019
It's not that companies aren't interested in the grants and low-interest loans that state and local governments offer them as they decide where to expand. It's just that financial incentives are not as important a factor as they once may have been in attracting new businesses and helping existing operations expand here and elsewhere.
Available, skilled talent has become much more important, and Northeast Ohio workforce and economic development organizations are working hard to fill the talent pipeline.
Now, Team Northeast Ohio, the regional economic development nonprofit, is focusing on another important factor, one the region needs to improve upon: ensuring companies that are looking to expand, and their site consultants, have available to them a deeper and better-documented inventory of available development sites and existing, available commercial and industrial space.
This has become increasingly important as the inventory of certain categories of properties has tightened up. The vacancy rate for industrial space, for example, which for many years was above 10%, is now below 6% in parts of the Northeast Ohio market.
"We need to be more ready to act when someone wants to bring jobs to the area," said Rico Pietro, a principal with Cleveland's Cushman & Wakefield/CRESCO Real Estate. "The brokerage community, the development community, the economic development community all know that if they were given something to sell, they could sell it."
Christine Nelson, Team NEO's vice president for projects, sites and talent, said it's difficult to identify all of the properties that are available for sale or lease, evaluate them and then put complete information for each property on the website database of JobsOhio, the statewide development nonprofit. That's where site selectors look first for available properties in Ohio.
The JobsOhio database, also available through Team NEO, currently lists 624 sites and 1,332 buildings. But no one believes that all of the potential developable land or leasable commercial and industrial space in Northeast Ohio is in the database.
Bethany Dentler, executive director of the Medina County Economic Development Corp., said the only chance the region may have to get on an expanding company's radar is when the company's site consultant scans the website.
"Site selectors can access and understand your property even before you know they're looking. We may be getting eliminated even before we know it," she said. "So I think it's critical to have as much detailed information as possible on there. If we don't have that detailed information out there, we may be missing a shot at some fairly significant projects."
To a site selector, missing information can be a red flag, a warning sign of a hidden expensive problem. The database may not indicate that an abandoned building has already had an expensive environmental cleanup with asbestos removal and more. Or a listing might not indicate whether a building has updated utility service.
Companies ready to move or expand are likely being wooed by several states or communities, which means they can afford to take the path of least resistance. An otherwise similar listing on another state's database can win over a site selector with accurate, detailed information.
Of course, even if a community gets lucky and hears from a company directly, those numbers are still important.
"You're immediately being down- selected because you don't have the data quickly at your fingertips," said Bill Koehler, CEO of Team NEO. "If you don't have the data, you're spending all your time capturing the data as opposed to positioning the sale."
Nelson cited the redevelopment of the former Goodyear headquarters in East Akron. Babcock & Wilcox is taking a portion of the old headquarters complex, but Team NEO wanted to do what it could to make the rest of the property more leasable.
"We know a lot about this property, but what else did we need to know?" she said. "One of the things we found was that there's great bike trails in Summit County, but the bike trail just goes along the top of the Goodyear property, it doesn't come down into it. So if you wanted to bike to work, you had these great trails that you could use, but that last mile in was going to be really rough."
"Part of the strategy in Akron, it's about bringing millennials downtown," added Koehler. "The bike path matters. But a lot of people will just forget about it if you don't start connecting those dots."
So the bike trail is being extended.
More rural, greenfield sites have different issues. "Where's the workforce? How are they going to get here?" Nelson said. "Companies have been burned by finding a great site out in the middle of nowhere and then they can't get workers."
Team NEO is working to get more and better information on more sites.
Koehler said he's looking at giving sites a letter grade, so site selectors, brokers and others can have a better idea of what is appropriate. "A" sites would be the largest sites that can quickly be put to use. "B" sites may need a little cleanup, but the cost is identifiable. "C" and "D" properties would need more work and take a longer time to be readied for construction or occupancy.
He said 30 sites have been classified so far, but couldn't say how fast the process will move.
"I have a goal of getting this process to a point where it moves at a better pace," Koehler said. "I want to have a process in every one of our counties."
Lake County is taking up the challenge.
"I think we're all working toward better site information as a means of being more responsive to site selectors," said Mark Rantala, executive director of the Lake County Port and Economic Development Authority. "As specific sites get more interest, we get more data."
Rantala said a developer might look at a site and find marshland in a corner.
"Then we learn there is an acre of wetlands, so that additional data gets added, so over time you accumulate more information," he said.