Pulling up the stakes Featured

9:43am EDT July 22, 2002

Tom Rocks feared the consequences of moving his company, Wood Dimensions Inc., to the suburbs from its Cleveland home. As a business that created high-end, custom cabinetry, losing skilled workers was a worry, but an exhaustive search of the city for existing sites had brought few results.

Then Rocks found a 45,000-square-foot facility on West 150th Street for sale. With the help of the Greater Cleveland Growth Association, he landed an Ohio Regional 166 loan to help defray the investment cost of nearly $700,000. He also received a 4 percent interest rate on the loan because the property was in one of the federal government’s designated “empowerment zones.”

Rock turned the new location into a financial advantage, a move that business owners should consider when entertaining thoughts of whether to buy an existing facility or build one from scratch. Bill Ragaller, an architect with Cleveland-based KA Inc. Architecture says there are also other vital factors to consider.

Here are six issues that can make or break relocation.

Physical location

When buying a new home, finding the right neighborhood is crucial. The same holds true when finding a new home for your business. Consider whether the road system can adequately handle traffic in the area. Research whether projects now in the planning phase will help or hinder that situation.

“Consider what’s there now and if there’s anything in the works planned that is perhaps going to widen the road or add (traffic signals) or if it’s going to set up future limitations for that site,” says Ragaller.

Utilities

If you plan to build on a vacant parcel of land and have heavy-duty utility needs, ask whether the local government will help with those costs in exchange for your business.

“You want to get an idea of what the availability is for utilities if you need to bring in major utilities,” says Ragaller. “That’s something you’re either going to end up picking up or perhaps end up negotiating with the city involved.”

Local government

Research whether there are local regulations governing the preservation of green space. In some instances, the allowable size of a company’s parking lot is based on how many acres of land are bought to leave undeveloped.

“Depending on the community, you could find you’re dealing with having to purchase acreage over what you’d have to purchase in another community just to satisfy the governmental agencies involved,” says Ragaller.

Also consider whether city leaders will offer you tax abatements on equipment or property in exchange for the employment you will bring to their city. Most city leaders have realized that granting tax abatements is a necessary evil of luring new industry to their communities.

However, tax deals can vary widely and local leaders will many times sweeten the pot to provide a better deal than their neighbors have offered.

Employees

In today’s tight labor market, you cannot ignore what a move will mean for the health of your work force. A drastic move could eventually weed out employees tired of a long commute. If you must make a big move, make sure there is a strong enough labor base in the area. For example, if you own a manufacturing company, it is important to find a location with a good base of blue-collar workers who can get to your facility without excessive travel time.

“That issue works both ways,” says Ragaller. “Somebody who has a really high-tech white collar labor force is going to want to look for those areas that are going to bring those type to the building quickly.

“You need to look at where your labor force is coming from.”

How to reach: KA Inc., Architecture, (216) 781-9144; Wood Dimensions Inc., (216) 251-5509

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.