Wednesday, March 18, 2015
Courtney Dunbar,CEcD, EDFP, AICP, Industrial Site Consulting
This article also appeared in the March issue of Site Selection magazine. Please see page 191. (Site Selection also paid tribute to Olsson founder John E. Olsson on his passing and provided information on Olsson's new Lincoln headquarters on page 198).
Selecting the perfect locations for new corporate expansions is certainly no easy feat. Companies considering expanding or selecting new locations face a complicated set of tasks in determining the facility’s location to ensure optimal operational efficiency. Within recent years, the economic development community has worked toward making this process a little less cumbersome and, markedly, quicker through the site certification process. Site certification can provide significant benefits to bottom-line profitability through, potentially, expediting development and streamlining site selection processes.
Site certification benefits
In the primary development world, it is not uncommon for site selectors or corporate end-users to consider as many as 75 varied site selection criterion in determining an optimal location for investment. As a result, the trend toward seeking certified sites in the initial site selection search is real and growing. Many states have adopted statewide site certification programs and have incented economic development entities to pursue site certification through these programs. Site selector databases often allow for queried site searches that allow end-users and site selectors the ability to query certified sites as a selection criteria. Consulting firms, such as Olsson Associates, also find value in assessing site preparedness and have developed their own site certification programs based upon known development demands and expected needs.
While many of the benefits to site certification may be known or assumed by the site selection community, other considerations may not be as well-known and can critically impact time-to-completion for development projects.
Certified site selection factors
The following factors are considerations that lead to bottom-line efficiencies as a result of choosing certified sites:
Comprehensive diligence standards. Site certification programs typically require collecting and analyzing a variety of natural- and built-environment factors that impact the function of the subject property. A property’s assets and deficiencies are documented, and mitigating controllable deficiencies is typically required. This assessment allows corporate end-users an opportunity to gauge, with a comfortable level of certainty, whether or not the site’s capabilities will match the needed service.
While it could be assumed that sites positioned during the site selection process have undergone some level of diligence, the depth of information available is often not nearly enough for corporate end-users looking to plug capacities information into their internal processes to ensure operational stability. Site certification programs, such as the Olsson Associates Select Site Program, require an understanding of the existing infrastructure. These programs require knowledge of line sizes, capacities, volumes, pressures, and, if an attribute of infrastructure is lacking, what the timeline and permitting requirements are for mitigating deficiencies.
While the development process will eventually yield responses to these questions, the ability to have this information at the forefront of the site selection process saves considerable time and resources, leading to bottom-line savings for the companies involved in selecting from prospective development sites.
Targeting viability and master planning. The Olsson Associates Select Site Program requires aligning property diligence and function to tract optimization. Corporate end-users benefit greatly from clearly understanding, in initial site selection phases, how much land will be required for purchase to ensure optimum production and property protection.
Corporate end-users can meet multiple challenges in site selection that can be effectively mitigated through pre-assessment programs such as site certification. No longer is it plausible to maintain a “one-site-fits-all” mentality as it pertains to development property. Companies desire development sites that will fit their infrastructure and access needs so they may construct the most-efficient facilities tailored to their exact processes.
Properties that have undergone thorough diligence assessments as required in the site certification process allow site selectors and end-users the opportunity to functionally represent their specific facility pad sites for development. This form of planning in the early phases of selection allows corporate end-users to maximize land use to facility needs and avoid purchasing more property than necessary for current or expected future expansions.
As with the Olsson Associates Select Site Program, end-users and site selectors should identify enhanced sites that will provide specific industry certifications to ensure that primary infrastructure, service, capacities, access, and encumbrances compliment specific industry sector needs. For example, an optimal rail-served site will not also serve as an optimal technology or data center location. Hence, there is a real and valuable differentiator created in sites that have assessed, aligned, and planned for specific industry verticals.
The beauty of a diligence-assessed and master-planned site is that, when the user positions its pad site and development requirements, it is absolutely possible to optimally represent this pad site within the site under consideration. This allows the representative of the land to provide critical responses to exactly where the facilities can be located, how much land should be purchased, how long it will take to cure any infrastructure deficiencies, and what the permitting process for development will entail.
Entitlement processes. An often underestimated scenario in the site selection process is that of development entitlements, which is often one of the least understood obstacles that is not addressed when economic developers position sites for development opportunity. However, companies that cannot achieve a clear picture of development entitlement timelines and processes could be delayed for weeks—if not months—in gaining permitted access or beginning production if permitting delays are incurred.
Representatives who have undergone a site certification exercise are almost always required to anticipate the site’s required development permits, timelines, processes, and costs for achieving permits. Representatives can then use this information to work these factors into their own development cost structures to ensure that schedules will mesh with expected development timelines. Understanding development entitlement processes is critically important as some restrictions can be mitigated while others will remain deficient, causing potentially fatal operational constraints for some users.
Looking to the future
Future and expansion planning can also be better understood as a result of analyses completed during the site certification process. For example, the Olsson Associates Select Site Program requires analysis of air permitting attainment capacity in and around the sites Olsson certifies. As a result, the end-user is more adept at understanding if additional ground should be purchased to control air permitting rights to serve current and projected needs while maintaining and allowing ground leases or controlled sales to parties that agree to work within the confines of the original landholders’ needs. Through site certification, timelines to development are reduced, land is better apportioned for development, and cost savings are incurred.
The often-mentioned buzz word in the site selection process is the word “incentives.” However, no incentive can overcome sites that are found to be incapable of providing sufficient or skewed service capacities, significant development delays due to unknown infrastructure deficiencies, and stagnated permitting. Because time is money, corporate end-users and site selectors are wise to invest their resources searching sites that have undergone site preparedness and/or site certification processes.
For more information on industry site selection processes, please contact Courtney at 402.938.2432 or firstname.lastname@example.org.