National Site Location Consultants Recognize the Pittsburgh Region’s Strategic Advantages

SiteLocationConsultants1010The Pittsburgh Regional Alliance recently hosted a group of leading site locations consultants to learn how national trends, opportunities and challenges could benefit or impact the Pittsburgh region. Meanwhile, the PRA showcased the region’s latest assets – including the fact that our diverse economy continues to outperform our 14 benchmark cities across the U.S. The site selectors emphasized the region’s strategic location to be another standout asset.

While on the ground in Pittsburgh, six of these experts shared their perspectives at the National Association of Industrial and Office Properties (NAIOP) Developers’ Showcase. The Developers’ Showcase was held at the East End’s Bakery Square – the former Nabisco bakery recently recreated as a highly innovative, sustainable, mixed-use development. Panelists included: Charlotte-based Mark Beattie of Hickey & Associates, LLC; New Jersey-based Brian Corde of Atlas Insight, LLC; Cleveland-based Jonathan Gemmen of Austin Consulting; Jonathan L. Sangster of CBRE Consulting, based in Atlanta; Steve Vierck of Austin-based AngelouEconomics; and Joseph Vranich of The Business Relocation Coach, based in California.

Kansas trumps Louisiana on Forbes list

Wichita Business Journal – by Emily Behlmann

Thanks to Forbes magazine, we got an unexpected comparison on Thursday between Hawker Beechcraft Corp.’s home state of Kansas and the state the company has considered moving to, Louisiana.

And if Forbes’ Best States for Business list is to be believed, Kansas should win by a landslide in a competition for jobs.

The Forbes list puts Kansas as No. 10 on the list, with especially high marks for its regulatory environment and economic climate.

Louisiana, meanwhile, sits at a dismal 44th place.

The Sunflower State especially exceeded its Hawker jobs competitor on rankings for labor supply — Kansas ranked 18th and Louisiana 50th.

It suggests Wichita Mayor Carl Brewer might have been right when he recently told the Wichita Eagle that Louisiana doesn’t have the skilled aviation work force that Kansas does.

But if so, what’s up with Hawker’s consideration of Louisiana?

It could, of course, have something to do with the hefty incentives the state has offered if Hawker moves its operations to Baton Rouge.

But Jason Hickey, president of national site selection firm Hickey & Associates LLC, told the Wichita Business Journal that long-term benefits, rather than short-term incentives, are the real factors companies consider when deciding where to do business.

Those long-term factors could include availability of a qualified work force and the cost of that labor.

The Forbes list suggests Kansas has a qualified work force in the bag.

Labor costs are factored into Forbes’ overall business costs ranking, and on that count, Kansas trumps Louisiana, but not by much. Kansas ranks 23rd for business costs, while Louisiana ranks 25th.

So is Hawker’s threatened move really only about labor costs?

That could be, some analysts have suggested to the Wichita Business Journal, especially because of the strength of the aviation machinists unions.

Phil Wilson, president of the Labor Relations Institute, says it’s more than just the higher wages union workers typically earn that cost businesses. It’s the cumulative effect of higher wages, larger pension and benefit plans, strikes and contracts that can protect problem workers from being let go.

“”Unions, when they’re in there, can create a lot of problems for a company,”” he says.

But now the pressure’s on the local union to vote in such a way that a majority of Hawker jobs stay here. And they’re likely to take a pay cut in the process, reducing Hawker’s overall labor costs.

 

http://www.bizjournals.com/wichita/blog/2010/10/kansas_trumps_louisiana_on_forbes_list.html?s=print

2010 Business Facilities LiveXchange program

Executive Conference

Business Facilities magazine will present a comprehensive, practical, and strategic conference program that helps corporate delegates better plan and manage their companies’ relocation or expansion projects. This unique experience will be supplemented by an all-star list of guest speakers, who will be making presentations and leading discussions on a number of hot-button issues.

The 2010 Business Facilities LiveXchange program included the following sessions — visit often for updates on the 2011 Conference Program!

Opening Keynote

Selling Out a Superpower:
Where the U.S. Economy Went Wrong
and How We Can Turn It Around
Ronald R. Pollina, PH.D.
President, Geoeconomist
Pollina Corporate Real Estate, Inc.

Think Tank

Site Selection Case Study
Jason Hickey
President
Hickey & Associates

Seminars

Logistics and Supply Chain
David Atkins
Chairman and CEO
Atkins International, LLC

Keys to Successful Back Office Location
Dennis Donovan
Principal
Wadley-Donovan-Gutshaw Consulting

The Art of the Deal
Don Holbrook
Partner
The Vercitas Group

Renewable Energy and Green Incentives
George Tobjy
Tax Director
KPMG Global Location and Expansion Services (GLES)

Workshops

Incentives
Mark Sweeney
Senior Principal
McCallum Sweeney Consulting

Issues in Facility Consolidation Analysis
Jerry Szatan
Principal
Szatan and Associates

Closing Session

KPMG Competitive Alternatives Report/Q&A
Glenn Mair
Director
MMK Consulting, Inc.

States bring incentives to bear in courting Hawker Beechcraft

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Premium content from Wichita Business Journal – by Daniel McCoy

Date: Sunday, August 1, 2010, 11:00pm CDT

Louisiana and Mississippi bring plenty of incentives and motivation to the table as Hawker Beechcraft Corp. considers them for a possible relocation of some of its operations out of Wichita, according to one national site selection consultant.

“”Louisiana and Mississippi are both very aggressive in the way they are attracting business,”” says Jason Hickey, president of site selection firm Hickey & Associates LLC.

But it appears Kansas doesn’t have much to counter with.

Joe Monaco, a spokesman with the Kansas Department of Commerce, says incentives written into the state tax code are tied to job growth, not retention. That means states courting companies such as Hawker can offer the company more to relocate than Kansas can offer to keep it in place.

“”We don’t have incentives to throw at a company that is threatening to leave,”” Monaco says. “”It really is that simple.””

Louisiana and Mississippi have a slew of tax credit programs, property tax exemptions and training initiatives to lure new companies. For instance, Louisiana is offering companies $2,500 tax credits for each new job they create. Mississippi offers credits to manufacturers who make major capital investments in that state.

The state of Kansas announced earlier this week it had reached a deal to help another aircraft company, Bombardier Inc., expand its Learjet facility in Wichita. The state deal will help the company add several buildings for work on the Learjet 85.

An expensive move

In a letter to employees last week, Hawker CEO Bill Boisture said the company continued to evaluate locations “”both within and outside the U.S. that might be suitable for parts of our business.””

Boisture’s letter, which said that no decisions on relocation had been made, came on the heels of a letter from the International Association of Machinists and Aerospace Workers that warned members that Hawker could reduce its Wichita work force by as much as 75 percent during the next two years.

Hickey says if Hawker were to move that much work out of Wichita, it would buck the trend.

“”We actually see a lot more consolidation of manufacturing mainly because of supply chain savings,”” he says.

Rolland Vincent, an aviation analyst and president of Rolland Vincent Associates, says other states could be home to parts of Hawker’s business.

But, he says, moving the amount of work the union is talking about would mean relocating existing production lines for older models of aircraft. Vincent says that’s a much costlier prospect than finding a new site for a new product.

Moving older product lines means not just moving all the existing equipment, he says, it also means a drop in productivity as the company builds up its work force in a new location.

It makes Vincent skeptical that such a large-scale move is good for Hawker.

“”Frankly, I’d be very surprised if this was the development,”” he says.

He also says moving large portions of work to Mexico, where the company already has a facility, creates the same problems as moving to other states.

A look at incentives Mississippi and Louisiana have to offer manufacturers:

Louisiana

  • A 100 percent property tax abatement for up to 10 years on materials used in new manufacturing.
  • A $2,500 tax credit for each certified net new job created and either a 4 percent sales/use tax rebate on capital expenditures or income and franchise tax credits up to 1.5 percent of investment.
  • A 5 percent refundable state tax credit for manufacturers modernizing or upgrading existing facilities in Louisiana.
  • Louisiana FastStart program provides training and employment sourcing services at no cost to the company.

Mississippi

  • National or regional headquarters tax credits that equal between $500 and $2,000 per position and can be applied to state income tax to reduce corporate income tax liability.
  • An up to 10-year exemption from property taxes may be granted by local governing authorities on real and tangible personal property being used in the state. The exemption may be granted for all local property taxes except school district taxes on any property, but may not be granted on finished goods or rolling stock. The exemption usually includes land, buildings, machinery, equipment, furniture, fixtures, raw materials and work in process.
  • Income tax credits for existing manufacturers that have operated in Mississippi for at least two years are available if an existing manufacturer invests at least $1 million in additional buildings and/or equipment. The credit is calculated as 5 percent of the eligible project investment and is allowed for the year that the investment occurs. The credit allowed on any project cannot exceed $1 million.
  • A rebate of a percentage of Mississippi payroll to qualified employers for a period of up to 10 years is available to businesses that promise significant expansion of the economy through job creation.

Sources: Louisiana Economic Development and Mississippi Development Authority.
http://www.bizjournals.com/wichita/stories/2010/08/02/story1.html?s=print