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Assembling the Right Site Selection Team

Populating your site selection team with the experts critical to your particular project will lead to a successful location decision.

Q2 2020
Your company has just decided to invest in a new facility expansion, and you have been chosen to lead the effort. Perhaps you have specific knowledge about a certain manufacturing process or maybe you are the most trusted individual to the CEO. Whatever landed you the assignment is irrelevant; now you must understand the CEO and the entire company are putting their collective faith in you to succeed at finding the best location for the planned expansion.

Everyone at your company has high hopes for the expansion as it is envisioned to take the company to the next level. While that may sound exciting and challenging, you quickly realize the thousands of variables that go into a decision of this magnitude and find yourself overwhelmed. After all, you have specific knowledge of one area of the business and have never overseen a new site selection project, construction project, real estate acquisition, or land development project — perhaps you’ve never even built a fence at your own house! By this time, you may be thinking, what do I do now that my career is potentially on the line? Our advice is focus on your strengths and build a team of the absolute best people around you to mitigate your weaknesses.

Design your strategies, build a draft board, and populate your team.
As the site selection “head coach” for the company, you are ultimately responsible for the success or failure of the team achieving its goal, which in this case is finding the best site for your planned facility. Like a head coach, you are responsible for identifying which strategies to employ. Key players in skilled positions are needed to win. Similar to sports, site selection requires an understanding of the key variables required for success. The easiest way to achieve this is by building a team of subject matter experts (SMEs) to exploit and maximize those key variables, ensuring the new site will bring home a win for your business. Identifying, classifying, and quantifying the key project drivers are the first steps in understanding which experts are needed on the team.

Every project type is different and has unique drivers that are critical to the success of the project. Identifying, classifying, and quantifying the key project drivers are the first steps in understanding which experts are needed on the team. Key drivers vary widely according to industry and project type. Below are a few examples of key project drivers in different industry sectors:

  • Auto Manufacturing
    • Proximity to a population center with access to an abundant supply of skilled labor with competitive wages
    • Access to customers via site connection to interstate system or rail
    • Site readiness or speed to market and incentives
    • Reasonable distance from other assembly plants
  • Petrochemical Manufacturing
    • Access to massive amounts of process water depending on process
    • Access to large bodies of water capable of assimilation of industrial wastewater
    • Access to product pipelines (Y-grade, NGLs, purity products, etc.) required for raw material intake
    • Access to interstate, deep-draft shipping, barge shipping, and rail shipping for receiving and sending product domestically and internationally
    • Skilled and specialized workforce
  • Warehousing and Distribution
    • Spec buildings with interstate or rail access and ready for occupancy
    • Development-ready pad site
    • Quick access to shipping hubs: UPS, Fed-Ex, DHL, etc.
    • Proximity to Amazon, Walmart, or other e-commerce giants’ distribution systems
  • Data Centers
    • Massive amounts of clean power and redundant power feeds
    • High-speed data and lots of bandwidth
    • Multiple telecom carriers
    • Favorable site geotechnical to minimize required foundation sizes
Presumably you have been at your company for a long time; after all, someone trusts you enough to identify the new site. You likely have a good idea of the success drivers for your business and the new project. But you are struggling to figure out how that correlates into a site search? At this point, you may be best served engaging a professional location consultant to help you identify, prioritize, and assign weights to the key variables crucial to the success of your project. Once this is complete, you can identify which key SMEs are needed and execute the site selection game plan.

Determine which SMEs are required.
For most sites searches, state or local economic development organizations (EDOs) can supply most, but not all, of the key data used in location decisions. That approach works when the site selection team is skilled in a wide range of technical areas and can call the EDOs’ bluff when bad or questionable data is submitted. That said, the more technically complex the project gets, the higher the need for key SMEs on the site selection team. Let’s look at the industry or project types mentioned above to determine the key SMEs those project may require:

  • Auto Manufacturing
    • Labor/work force SME who can assess the labor pool availability, skill levels, and local wage rates, and can determine relative labor pool competitiveness between sites
    • Logistics or supply chain SME who can determine the available modes of logistics and the cost-competitiveness for the logistics related to each site
    • Site development SME who can accurately quantify the capital expenditure (CAPEX) required for the development of each site
    • Supply chain SME to determine need/availability of preferred suppliers within the prescribed area
  • Petrochemical Manufacturing
    • Site development SME who can determine if the required water, wastewater, and product pipeline assets are available in sufficient quantities
    • Logistics SME who can assess the modes of logistics and the cost-competitiveness related to each site
    • Environmental SMEs and permitting SMEs, if not the same person
  • Warehousing and Distribution
    • Logistics SME who can assess the modes of logistics and the cost-competitiveness related to each site
    • Site development SME who can accurately quantify and compare the true site development costs of competing sites
  • Data Centers
    • Electrical SME who can assess the electrical supply and assess cost-competitiveness and reliability factors for electrical supply to competing sites
    • Site development SME who can accurately quantify and compare the true site development costs of competing sites
The above team requirements can somewhat be captured by SMEs fitting the following general labor categories:
  • Process and logistical engineering expertise — water, power, rail, road, and other resource requirements
  • Civil engineering — land use and site planning, transportation, drainage, utilities, land survey, geotechnical
  • Environmental engineering — permitting, emissions estimates, wetlands, cultural resources, site assessment, solid waste/hazwaste disposal
  • Legal counsel — land acquisition, as well as construction law and standards
  • Human resources — assessment of workforce at targeted sites
  • Real estate expertise — land acquisition, zoning, easements, site development agreements
  • Financial analysis of incentive packages including tax-credits, tax-credit bonds, tax-exempt bonds, ITC, loan guarantees, accelerated depreciation
  • Public relations/community outreach — gauge and shape public sentiment
Remember, every EDO you are engaging is putting their best foot forward to gain your favor and win your project for their community. Unfortunately, some may mask or downplay a site’s weaknesses, which may be detrimental to your project. It is incumbent upon you to collect the right site data and properly analyze it before key decisions are made. This requires having the right team and the right experience on your team, i.e., SMEs who can identify potential site shortcomings quickly and efficiently.

As the variables for your site selection project get more complex, the need for a diverse team of SMEs to properly assess each site becomes critical. Without the right team at your side and proper and timely identification of critical site selection variables, costly site development mistakes will occur resulting in a higher project CAPEX. Ultimately, it could lead to substantial increases in long-term operational costs. If CAPEX overruns become too great, you may learn the site was not the most competitive after all. If long-term operational costs go up due to analyzing the wrong key inputs, the project and the products it produces may lose their competitive advantage long before the planned project lifespan. If either becomes too great, it could lead to the ultimate failure of the project or, worse, threaten the viability of your company.

As the variables for your site selection project get more complex, the need for a diverse team of SMEs to properly assess each site becomes critical. Once you have the right team in place, you can quickly identify and vet the dozens (or hundreds) of sites you may be initially considering, reducing the effort to a handful of sites that deserve detailed consideration.

In our next article in this series, we will take a deeper dive into executing the site selection “game plan” now that your site selection team is in place.

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