Top Five Out-of-Site Trends in Site Selection

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Whenever anyone asks me about my job, their first question is usually "what are the big trends in your industry?" Just kidding. Their first question is "you do what now?" But once we get past that they want to know what factors are driving our clients' decisions.

For decades the focus in the site selection process has been on affordability and the cost of doing business. Ultimately, every project comes down to a math problem. We can help a client's real estate and executive team come up with some of the coolest site options imaginable, but if a project becomes cost-prohibitive, that site is off the table.

As a result, cities, states, and countries are laser-focused on how to make the cost of doing business in their jurisdictions the most affordable. This doesn’t change the fact some cities and states are still really expensive places to do projects. But no doubt this focus on business costs often leads to lower business taxes, infrastructure costs, and other site development costs.

However, the prevailing wisdom in site selection today is that managing site costs is no longer enough. In fact, some companies are willing to pay a premium for a location if it means checking other important boxes on their wish list.

It’s not easy to whittle the literally hundreds of factors that go into a site selection decision down to a bite-size few, but, as discussed on last week’s (i) on Economic Development, below are some recurring areas our clients are focusing on as they decide where to grow their businesses.

1.  Labor availability. With unemployment at historic lows, it’s hard to find workers in certain industries regardless of the location. As a result, states and communities are battling it out to develop and implement talent strategies that distinguish themselves from one another. The jurisdictions that are able to deploy successful solutions quickly and effectively will have a huge leg up on their competition.

2.  Social issues. Historically, companies have been interested in the “politics” of a city or state as they are considering site selection options. But now, in the era of social media, companies are keenly aware of social trends that could be hot-button issues for prospective clients and employees, or even that are important to the values of the owners themselves. And this is not a trend that will subside anytime soon. If anything, the impact of social issues on site selection will likely become more closely considered over time.

3.  Public transportation and airport accessibility. With the economy becoming more mobile every day, it’s important (and in some instances required) that executives be able to quickly fly to and from their clients and investors. This requirement has pushed cities to provide direct flights to major markets throughout the U.S. and sometimes internationally.

A different travel issue concerns the ease with which employees are able to go to and from work. Whether that means walking, biking, or public transit, millennials in particular favor cities and employees where ease and time of commute are the most accommodating.

4.  Quality of life. Even though it often makes a site more expensive, quality of life has become a bigger factor in recent site selection decisions. With labor such a focus in today’s economy, employers have found that a venue’s ability to appeal to its prospective workforce is often more important than the financial impacts of tax rates and user fees.

5.  Site availability. Finally, site selection ultimately comes down to the availability of viable sites. This factor has and will always play an indispensable role in site searches, but jurisdictions – cities, in particular – are trying to come up with more creative options for prospective companies. It’s often not enough to have just one site, especially if a company’s chosen location falls through. Communities that provide multiple options to a company often have a huge advantage.

As site selection trends evolve and issues become more sophisticated over time, it is important for communities to take note. The decision-making equation is no longer simple, and the spotlight on these issues is brighter than ever before.

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