Gene Goddard, Senior Business Development Specialist

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SHOVEL READY CERTIFIED SITES THE SITE LOCATION
PROCESS

• Gene Goddard, Senior Business Development
  Specialist
• High Value Projects

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Why are you talking about growth when the economy
is so bad?
Source Office of the Speaker, U.S. House of
Representatives
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Major MSAs Employment Gains and Loses
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Announced Layoffs In Minnesotaby
IndustryCurrent Calendar Year
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Whats the Projection for Growth?
Select Industries Short Term Growth (2010) Long Term Growth (2016)
Professional Services -4.2 22.7
Education/Health Svcs 2.7 21.6
Financial Activities -.06 19.3
Mgmt of Companies -2.3 18.7
Leisure Hospitality -2.2 13.8
Construction -20.8 7.4
Wholesale Trade -1.5 4.4
Information -3.5 3
Retail Trade -1.8 2.1
Manufacturing -5.5 -5.6
Source DEED LMI Projections
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DEED Business Expansion Leads By Industry(2009
- Q1 Q2)
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Business Development Trends(Industrial)

• We are Seeing
• Reduced prospect activity
• Companies in survival mode
• Consolidation/portfolio review of existing
  manufacturing sites and leases
• Incentives playing a bigger role
• More entrepreneurs
• Affordable rents and great investment
  opportunities

• Clients are seeking
• Existing Facilities 100,000 sqr. ft to 150,000
  sqr. ft.
• Greenfield rapid development site (20 - 50 acre
  sites)
• Data Centers (150-350 acre sites)
• Existing Workforce
• Supply Chains/Supplier Networks
• Considering Alternative Energy Options
• University/Product Development Support
• Business Partnerships
• Strong push for incentives

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The Economic Developers Serenity Prayer

• God, grant me the Serenity to accept the things I
  cannot change, Courage to change the things I
  can, And Tax Incentives to cover the difference.
• What is your Sphere of Influence
• to Attract and Secure a
• Major Manufacturing Project

Source Gregg Wassmansdorf, Colliers
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The Site Location Process
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The Survey Says!
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Area Development Magazines 2008 Consultants
Survey
Top 15 Site Selection Factors

• State and local incentives
• Highway accessibility
• Availability of skilled labor
• Energy availability and costs
• Tax exemptions
• Occupancy and Construction Costs
• Corporate Tax Rate
• Proximity to major markets

• Available land
• Labor costs
• Expedited or fast-track permitting
• Available Buildings
• Accessibility to major airport
• Availability of advanced IT services
• Proximity to supplier (tie)
• Low union profile (Tie)

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Area Development Magazines 2008 Corporate Survey
Top 15 Site Selection Factors

• Highway accessibility
• Labor costs
• Occupancy and Construction Costs
• Tax exemptions
• Energy availability and costs
• Availability of skilled labor
• State and local incentives
• Corporate Tax Rate

1. Low union profile
2. Available land
3. Available Buildings
4. Proximity to major markets
5. Right-to-work state
6. Environmental regulation
7. Expedited or fast-track permitting

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Site Location Evaluation Process

• Phase I
• Initial Discussion With Search Team to Define Key
  Selection Criteria
• Screen Locations and Identify Top Sites
• Geographic Preferences
• (Driven by logistics or other business
  considerations)
• Industry Presence
• (Indicator for determining the presence of
  certain skills or industry cluster)
• Resource Availability
• Demographic profile (population, growth rates,
  education levels, etc.)
• Transportation access (air, interstate, rail and
  port depending on operation)
• Workforce (quantity/quality of available skills)
• Education and training resources
• Overall costs (real estate, labor, construction,
  taxes, power, insurance, etc.)
• Availability of water, sewer, gas, telecom and
  electric power
• Ability to recruit staff to an area (quality of
  life/cost of housing)
• The presence of certain suppliers, competitors
  and/or industry partners
• Gather examples of available real estate options
  and lease/purchase costs/terms
• Develop Comprehensive Profiles of Top Location
  Sites
• Present Screening/Profiling Information to Client
  

Source MSB Consulting
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RESOURCE REQUIREMENTS BY FACILITY TYPE
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Evaluation of Specific Site

• Level 1 Proximity (30-45 minutes)
• Labor resources (education/demographics)
• Quality of life/housing costs
• Business/RD partners
• Airport access
• Level 2 Local Access
• Distance to limited access highway
• Public transportation access
• Restaurants/shopping/services
• Business services
• Sensitive areas for trucks
• Level 3 Site Conditions
• Overall size of site/lot sizes
• Options for future expansion
• Wetlands/flood plains/soil
• Utility capacity, cost, backup
• Zoning/adjacent site use

• Level 4 Facility Situation
• Size/age/condition of structure
• Layout/types of space/flexibility
• Cost and buy vs. lease options
• Level of Readiness

Source MSB Consulting
8
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Site Location Evaluation Process Continued

• Phase II
• On-Site Field Visits
• Review available real estate and related
  lease/purchase options (buildings and sites)
• Evaluate labor and other resources critical to
  the companys operation
• Incentives Negotiation (where available)
• Review available incentives that are applicable 
  to the companys situation
• Feasibility Analysis
• Develop Net Present Value (NPV) of costs and
  incentives (10 or 20-year pro forma)
• Final Presentation and Decision

Source MSB Consulting
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Site Readiness Options

• Level 1 - Developed site, new building needing
  finish and minor modifications.
• Level 2 - Developed site, building shell in place
  or existing building needing modest renovation.
• Level 3 - Developed site with virtual permitted
  building.
• Level 4 - Developed site ready for building
  construction.
• Level 5 - Undeveloped Shovel Ready site.
• Level 6 Properly zoned but in hands of original
  owner.
• Level 7 - Land zoned agriculture but is to be
  zoned industrial or O/I.

Building in Place
LOW . . . . . . HIGH
Developed Site
Undeveloped Site
Source MSB Consulting
9
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What is a Shovel Ready Site

• Definitions may vary but Shovel-Ready refers to
  commercial and industrial site that has
• All of the planning, zoning, surveys, title work,
  environmental studies, soils analysis and public
  infrastructure engineering completed prior to
  putting the site up for sale.
• And is under the legal control of a community or
  other willing third party partner.

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Why are Shovel Ready Sites Important?

• Companies are deadline driven.
• Nobody likes surprises.
• With fewer unknowns it is easier to control
  budget.
• Shovel Ready has become a brand giving the
  seller a competitive advantage.

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Why are Shovel Ready Sites Important? Cont.

• You have time to work on the deal rather than
  looking for information (while your prospect
  talks to someone else).
• You are better prepared to offer development
  assistance without guessing cost.
• Your competition is doing it!
• It builds confidence in your client. Your are
  Business Friendly and Business Ready. Your
  client will know they can depend on you to get
  the job done.

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The Prospects Perspective

• In every site search there are representations
  regarding the site(s) made that are
  incorrect.
• Everything has to be verified.
• When site information is incomplete, that gives
  me or the client time to look elsewhere.
• I cant risk discovering something bad after we
  are committed.

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What Information do I need to Gather?

• General Site Information
• Site selectors need a wide variety of information
  to determine whether a location is suitable.
  General site information must include
• A legal description of all parcels that make up
  the site
• A site map and schedule for site plan approvals
  and permits
• A zoning description of the site plus current and
  future planned zoning of adjacent sites. Land use
  maps must be provided.
• Information about whether the site or adjacent
  sites fall within the boundaries of special
  Economic Development Zones
• Aerial photos noting site boundaries
• The current price offering for land
• Current real estate taxes and special assessments
  on all parcels that make up the site
• Identification of current and former land use of
  the site and adjacent sites

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What Information do I need to Gather?(cont.)

• Specific Tests and Assessments
• Site selectors need to know whether the ground on
  a particular site is suitable for specific
  structures or uses. Certain tests and site
  assessments must be completed and documented,
  including
• Geotechnical soil tests
• Phase I Environmental Assessment and Phase II (if
  required)

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What Information do I need to Gather?(cont.)

• Utility Services
• The availability of utilities is an extremely
  important factor that site selectors consider. 
  The types of services available at the site and
  the names of the providers must be documented,
  including
• Electric power
• Sanitary sewer
• Natural gas
• Telecommunications
• Water and wastewater treatment
• Municipal storm sewer

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What Information do I need to Gather?(cont.)

• Transportation Access
• The ability to receive raw materials and
  components and move finished products to market
  is crucial to manufacturers. Transportation
  access documentation includes
• Distances to major state highways and Interstates
  
• Access to navigable river, inland or sea ports
• Rail access to site

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WHAT IS THE PROCESS OF CERTIFYING A SITE?

• Step 1 Download Shovel Ready Site Application
  and support documents from the Positively
  Minnesota Web Site.
• Step 2 Gather required information and complete
  tests/assessments.
• Step 3 Submit documentation in electronic and
  hard copy to MN DEED along with 2,950 fee.
• Step 4 Submit documentation to DEED and Moran,
  Stahl Boyer (MSB) for review.
• Step 5 MSB to review application and have
  discussions with applicant.
• Step 6 MSB conduct on-site review
• Step 7 DEED issues letter of certification or
  actions required for certification (6 weeks)

Source MSB Consulting
3
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Shovel Ready Concerns

• But it costs too much! - You have to pay to
  play.
• Did you really want that? (code for - Looks like
  too much work or I dont have the time!)
• Why do you need that? Because the client asked
  for it.

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FREQUENTLY ASKED QUESTIONS

• Can a community or site owner submit more that
  one site?
• Yes, but each site will be considered separately
  a require its own application and fee. Note that
  a site consists of parcels that are contiguous to
  one another.
• 2. Can we contact MSB during the review process?
• Yes, the MSB project team will be interfacing
  with the site contact during the review phase.
• 3. Is there a minimum or maximum size limitation
  to a site?
• No, as long as the sites consists of contiguous
  parcels.
• 4. If a site is certified, what actions are
  required to maintain certification?
• Site contact confirms accuracy of site
  information every 120 days
• Notify DEED of any information/ownership changes

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Summary

• Companies are deadline driven.
• Nobody likes surprises or risk.
• You get more control of the site selection
  process.
• While the economy is down right now, it will
  bounce back and you want to be ready when it
  does.

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Thank You
www.positivelyminnesota.com
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