Five Methods to Maximize Support for Your Manufacturing Project

From 2020 until now, industrial site selection has experienced unprecedented activity in the United States, escalating to levels not seen since the Industrial Revolution. As manufacturing activity rose, so did the competition for resources such as workforce, real estate, utilities, transportation service providers, support services and economic incentives. The increased activity and constrained resources have impacted how manufacturers approach their site selection process to maximize support from state and local stakeholders.

Jobs created, capital invested and the legitimacy of a project will drive interest in economic development

It takes an array of state and local stakeholders to make an industrial site selection project successful. At a minimum, support from state and local economic development agencies, workforce development partners and utility providers is required to ensure success. 

Pre-2020, it was safe to assume stakeholder support would be provided if the project invested any capital / created any jobs. Given market activity, stakeholder support now depends not only on how much capital is invested / how many jobs are created but also on alignment with the region’s target industries and project legitimacy. 

Perceptions have changed among stakeholders as to what constitutes “a quality manufacturing project.” In an era where an unprecedented number of large mega projects in sectors such as electric vehicles, semiconductors, and green technology are investing billions in capital and creating thousands of high-paying jobs, the interest threshold from economic development is rising quickly. 

Stakeholders can be faced with tough choices to determine how to spend their scarce time and resources: Should it be working to attract the next brand-name EV plant or the next phantom technology company?

Positioning your company for state and local support

Site Selection Group, a full-service location advisory, economic incentives and corporate real estate services firm, strongly believes companies are better served knowing what will move the proverbial needle before commencing their site selection projects. Based on recent project experience, Site Selection Group recommends companies consider the following five methods to maximize support for their site selection projects.

1. Demonstrate the project’s legitimacy and sincere interest before discussing economic incentives

Site Selection Group firmly believes that location decisions should be based on a community’s ability to satisfy a project’s operational needs such as workforce, logistics efficiencies, business environment, regulatory climate and other factors. However, economic incentive packages for most manufacturing projects can be substantial enough to help companies draw distinctions from competitive semifinalist options. Therefore, Site Selection Group believes it is critical to navigate the site selection process in a manner that prioritizes operational factors yet maximizes leverage for economic incentives.

Unfortunately, stakeholders (and Site Selection Group for that matter) have been inundated in recent years with requests from projects with unbelievable job counts, impractical ramp-up periods, unrealistic utility requirements and other far-fetched numbers. 

Too often, these types of projects place economic incentives at the core of their initial or ongoing business plan and, as a result, let the prospect of incentives steer the project too early in the process.

Simply stated, stakeholders have become weary of confidential companies that start the conversation by asking for hefty economic incentive proposals. As a result, Site Selection Group recommends that manufacturing companies demonstrate the legitimacy of their project and showcase the prudent manner in which they’ve narrowed their geographic focus before seriously addressing economic incentive proposals.

2. Tell the company’s story in a way that resonates with the community

Stakeholders want to get as much public relations mileage out of project announcements as possible. Site Selection Group recommends companies position their project in a manner that gets stakeholders excited about the company’s story and products early in the process, even when a project is still strictly confidential to the broader public. If stakeholders believe the company’s story will generate positive publicity post-announcement, they will prioritize the project over one with similar specifications, but with a less compelling narrative. Site Selection Group suggests incorporating product demonstrations and videos, environmental, social and governance (ESG) policies, and diversity, equity and inclusion (DEI) programs into the courting process.

3. Express the desire to be a good corporate citizen

Stakeholders covet projects that will be an asset to the community. Specifically, they want companies that will ingrain themselves in the community through charitable causes, support for economic development, participation in industry organizations and involvement in community functions. Site Selection Group recommends companies showcase their corporate social responsibility to prospective communities through what they’ve done in their existing locations. Site Selection Group recommends that a company’s plans to be an active corporate citizen should be part of the overall site selection scoring criteria.

4. Ensure the project’s timing and utility requirements are realistic

Far too often, companies internally generate project timelines that are painfully unrealistic and generate utility assumptions without a thorough engineering assessment. An unfortunate truth of the manufacturing site selection process is that it typically takes longer than most companies expect, especially if done correctly. Additionally, many companies are surprised to learn how constrained the marketplace is for quality sites with adequate utility systems. In a hyper-competitive landscape where stakeholders must prioritize projects to which they’ll dedicate resources, projects with realistic timelines and accurate utility estimates will undoubtedly get preferential treatment. Site Selection Group recommends companies fully vet their project timelines and assumptions with the various service providers that can confirm the timing of each project stage.

5. Consider disclosing identity once the geographic focus is narrowed

Site Selection Group recommends companies consider confidentially disclosing the company’s identity once the geographic focus is narrowed to the semifinalist communities to demonstrate project legitimacy. In Site Selection Group’s experience, stakeholders will justify dedicating more resources to a known project than they will to a nameless project with only a codename. Of course, this requires a thorough approach to navigating the nondisclosure agreement process, but confidentiality is very serious to stakeholders.

Conclusion

Although each of these five methods for maximizing support for a project might not apply to every manufacturing site selection project, checking as many of these boxes as possible can go a long way toward generating the best result. In this competitive economic cycle, it is more important than ever for companies to have the proper advisors for the best position of their projects.