Dean Barber

Site Certification: Saddle Up Old Kate

In Uncategorized on September 30, 2012 at 1:32 pm

The Business Roundtable’s CEO Economic Outlook Survey for the third quarter of 2012 came out last week showing that CEOs are once again decreasing their expectations for sales, capital spending and hiring over the next six months.

It is the lowest reading since the third quarter of 2009, and marks the third largest drop from one quarter to the next in the survey’s history.

The prevailing view is that if our economy grows by 2 percent in 2013, we’ll be fortunate. Uncertainty over the approaching fiscal cliff and accompanying debates about the tax code, sequestration and the debt ceiling does nothing to give corporate decision makers confidence toward the future. And who can blame them?

And yet corporate expansions are happening, albeit at a slower pace. My word of advice to economic developers is to use this slow period to be prepared. You can never be too prepared, especially if and when we come out of this prolonged funk that we have been wallowing in.

And while I am giving out advice, here are a few more truisms to ponder, some of which are probably so obvious that I shouldn’t even mention them, but I will because I have little pride.

If and when a company is ready to a pull the trigger on a site search for future operations, it will almost invariably go through a process of elimination. (At least it should.)  That’s pretty much a prerequisite of the site selection process. It’s true whether the company hires an all-knowing, sage-like site selection consultant, such as me, or attempts to do this winnowing process on its own.

Naturally, I would recommend that a company concentrate on its core business, which does not include the intricacies of a proper and effective site search. My suggestion: Leave the driving to us. A site selection consultant can save a company millions of dollars over the life of a business operation. That’s my story and I’m sticking to it.

The second truism is that when a company needs a building or site, it probably needed it six months ago. Jim Bruce, a site selection consultant in Georgia, came up with that gem, and I think he’s not far from the mark. While CEOs may remain reluctant to pull the trigger, when they do, they want results in a much more compressed  time frame than compared to just a few years ago. Things can get fast and furious.

And here is my third pearl of wisdom for your consideration, and I won’t charge you for this. It is foundational to all business, big and small, and certainly to the site selection process. It’s a four letter word that gut punches some and leaves other exhilarated. That word is “risk.”

In terms of location for a business operation, there are no and will never will be the perfect site or place minus risk. Trust me, there is no nirvana. In heaven, there is no beer. (Which is really kind of sad.)

But there are better places where the risks can be minimized, and where the chances of success can be optimized. As a site selection consultant, my primary duty is to find that better place, where risks are reduced in terms of time and money.

Most experienced economic developers get this. Thankfully, most corporate clients, when they can get past the idea of “get me the most incentives humanly possible,” will also come to this understand this. Solid and fundamental business reasons (with the underlying factor of risk) should prevail and drive the decision on where to invest capital assets.

Now invariably the site selection process will come down to real estate, although the site selection process goes far beyond real estate considerations alone, a fact that escapes some real estate brokers.

Here’s the deal and it took me many years to figure this out: Land does not equate to a site. You may want to read that that again. Equating land to a site is like calling your mule, Old Kate, a racehorse. They are simply not the same.

In my world, a site is a place where a business operation can be up and running, sooner rather than later. Land is, well, just land, minus the attributes of a site. Mind you, land can become a site, but it takes work and planning and investing dollars to make that happen. And guess what? Most corporate clients are not going to wait around for that to happen.

You have heard the old saying that you got to spend money to make money. That is so true when it comes to this animal that we are going to call, for a lack of a better phrase, a certified site. Certified for whom, by whom, and for what purpose? Well, those are good questions.

Confession time (it does the soul good): I certify industrial sites for economic development organizations. What that means is that I work with economic development groups to fast track property for future development by essentially building a file, a dossier, on that site encompassing all sorts of information that another site selection consultant or a company would want answered in their pursuit of reducing risk.

It means providing documentation answering very important questions on the physical nature of the site (as well as its surroundings), in an attempt to assure a corporate client that A). The site is available. B) The site is fully served in terms of infrastructure and utilities and C) the site is, in fact, developable.

On the face of it, these factors might sound quite obvious but the documentary requirements to get there are no small task. That’s partly because there are no national standards to what this thing we call site certification even is. What a certified site is in Oklahoma can be and probably will be appreciably different than in New York.

But I will tell you one thing, when you do it, you will have accumulated a mountain of data on your site and organized in such a manner that it should answer nearly all questions that could ever be raised about your site. And you will come to have a better understanding of your product.

For a corporate client, it’s peace of mind and a fast track to getting off the ground with no hitches or delays. Time really is money and site certification paves the way for quick decision making and starting the construction phase almost immediately.

Last week, I attended the annual conference of the Texas Economic Development Council, and there was a session on this whole notion of site certification and what it means and does. Some economic developers questioned its value, and I understand that. There are no guarantees in life.

But site certification is not a pig in a poke, not a sham, but rather real tangible, meaty stuff that can make a big difference. I truly believe that it can give a community a competitive advantage because it is predicated on preparation beforehand rather than attempting catch-up after the fact.

Me: “So the property still has not yet been rezoned for light industrial?”

Economic developer: “Well, that’s right, but I’m sure we can take this to the zoning board and get it changed without too much fuss in 30 days, 60 days max.”

Me: “No sewer line serving the site?”

Economic developer: “That won’t be a problem. Our mayor is in your corner and will push for this to be done.”

Me: “Really?”

Consider this. I would much rather advise a client to pay $50,000 an acre on a site where all the documentation has been prepared, than a free cornfield where unknown land mines may be lurking. In short, we don’t have the time or the inclination to wait for Old Kate to be transformed into a racehorse.

Can a community self-certify a site? Of course.  I’m sure you could develop a stringent set of guidelines on what documentation is required for your site. But will you do it? And then if you do the required work involved, how do you convince others that your efforts should not be suspect?

It’s one thing when a economic developer characterizes his or her workforce as being exceptionally willing and most suitably able. But it’s another thing when I take a corporate client behind closed doors to get the low down from major employers in the community. We trust but verify.

Same goes with a self-certified site. I’m not saying that you didn’t do the proper documentation, but you have no third party verification stating as much. So yes, you can self-certify. Should you? Well, that’s for you to decide.

Keep in mind, an experienced site selection consultant and/or company will want to do their own due diligence on a site whether it was self-certified by an economic development group or by another consultant. That just stands to reason. But I submit that third-party verification does lend credence to the documentation process,and that third party, serving as another set of eyes, might hold your feet closer to the fire to get things done.

As someone who certifies industrial sites, I feel compelled to tell communities up front that there will be some heavy lifting involved in what can be a lengthy process. And it is also important that they know that I cannot be a rubber stamp.

I have a proprietary list of documents that I require, and that getting 90 percent of them is not enough. For me to put my name on it, we need 100 percent of the documents and answer a set of questions that I think are appropriate and meets the needs of the corporate end user.

So my role is that of coach, advisor, but also ultimately judge and jury. I want to help the economic developer get to the promised land, but it will entail work.

So let’s saddle up Old Kate.

Dean Barber is the principal of Barber Business Advisors, LLC., a site selection and economic development consulting firm based in Plano, Texas. He can be reached at 972-767-9518 or at dbarber@barberadvisors.com Please visit our website at www.barberadvisors.com

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  1. I currently live in rural Western North Carolina, where any hint of a politician favoring adoption of a zoning code results in political suicide.

    A good number of elected officials understand that the absence of a zoning code is considered an obstacle — perhaps insurmountable, according to some consultants — in the site selection process. Nonetheless, it is widely accepted that “you can’t get there from here.”

    What approach do you take to try to qualify a site in the absence of a zoning code? Or is the site simply eliminated from consideration?

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