Ohio has many assets that are critical to the automotive industry

Ohio is actively investing in the automotive industry, both in the traditional automotive supply chain and in the connected and autonomous vehicle space. The state continues to show its value to the industry as a place for new investment. It has unique assets for testing, a government that’s friendly toward the smart mobility sector, a large and capable workforce, low overhead costs and an advantageous proximity to suppliers.

Smart Business spoke with Kristi Tanner, senior managing director at JobsOhio, about the state of and outlook for Ohio’s automotive industry.

How would you characterize the state of Ohio’s automotive industry at the moment?

Ohio’s automotive industry is very active, especially in the automotive supply chain and in R&D. A number of recent announcements have bolstered the industry, including some international investment. Japan’s Topre Corp. expanded in the Ohio market one year ago and is expanding again, and Canada-based Hematite recently opened its first U.S. manufacturing operation in the Dayton region.

What can Ohio offer automotive companies?

Ohio gives automotive companies a strategic position to reach customers and suppliers within a single-day’s truck drive. The state offers low-cost operations, and a large, capable automotive workforce. There’s also a growing segment of the industry that comprises up-and-coming companies that are focused on smart mobility and connected and autonomous vehicles. Those companies are doing their R&D and testing in Ohio because the state has a mix of resources that is unparalleled in the U.S.

How is Ohio positioned to support automotive innovations?

Ohio is a living lab for both controlled and open-road testing and has resources and partners to help companies complete that testing. The Transportation Research Center in East Liberty is the largest automotive proving ground in the U.S. Its 4,500-acre campus has testing facilities that more than 800 customers can use 24/7.

The TRC broke ground on its Smart Mobility Advanced Research and Test Center — 540 acres within the existing property that will include custom facilities for R&D and testing for smart mobility. It includes a real-world environment with an urban area cityscape that features many potential roadway conditions. Currently there is no other facility that large and built out that is housed within an existing proving ground that’s open for all companies to use.

Right outside TRC’s gate is a 35-mile stretch of four-lane divided highway, the Route 33 Smart Mobility Corridor. It’s designated for open-road testing and was supported by an investment from Ohio and the federal government. It boasts a fiber optic network and dedicated short-range communications units that stretch the length of the highway and enable testing of connected vehicle technology. That corridor dumps into Dublin and Columbus, the latter of which was designated by the U.S. Department of Transportation as the first and only winner of the Smart City Challenge. That earned the city $40 million from the U.S. DOT. Columbus parlayed that into $510 million from other sources, which it will use to turn itself into a leader in smart city technologies.

How are Ohio and its partners working to address the challenges automotive companies in the state face?

One of the most significant challenges companies across the country face is a shortage of manufacturing workers. In Ohio, stakeholders are working to address that issue. For instance, JobsOhio’s talent acquisition program works with companies to recruit and train workers. These are in-demand skills that are required for up-and-coming connected and autonomous vehicle manufacturing and testing. Fortunately for Ohio, the state produces more than 12,000 engineering and engineering technician graduates each year, many of whom have the needed skills to be successful in the smart mobility space. The state is also open to new technology. Gov. John Kasich signed an executive order in May to authorize autonomous vehicle testing in Ohio and to lay out a road map for how the industry can test their technologies in the state. That will go a long way to support continued testing of autonomous vehicles in the state.

Insights Economic Development is brought to you by JobsOhio

Ohio supports food and agribusinesses working to meet consumer demands

The entire food industry is in a period of disruption, caused largely by consumer demand for healthier, more convenient food delivered in ways it hasn’t been in the past.

“The industry is scrambling to keep up with the changes,” says Joe Needham, director of Food and Agribusiness at JobsOhio.

To that end, he says Ohio has created a system that marries local economic development efforts with regional- and state-level programs to support this industry.

“It’s all about helping the state’s food and agribusiness sectors grow,” he says.

Smart Business spoke with Needham about the opportunities Ohio’s food and agribusiness industry offers to businesses big and small.

What does the food and agribusiness industry look like in Ohio?

Ohio has 70,000 defined farms that employ some 78,000 people and generate a gross state product of approximately $3.5 billion.

Though it has a modest commodity processing industry that comprises about 50 plants that make basic food and feed ingredients, its food manufacturing industry is a powerhouse. This sector comprises some 1,100 facilities, employing 69,000 people and generates $12 billion toward the gross state product from the production of finished consumer food products. It is also the industry where much of the opportunity for growth is projected.

Ohio’s food industry accounts for 5 percent of total production in the U.S., and some of the world’s biggest food companies have facilities in the state. Its combination of farm production, commercial processing, and storage and distribution, adds up to a $107 billion annual economic impact in the state, making it among the top industries.

What trends are shaping the industry?

Consumers are demanding functional foods that are high in nutrients. They’re looking at labels and scrutinizing the ingredients.

Consumers also want ready-to-eat foods that are available when and where they want them. That’s impacted packaging and distribution, and is driving the popularity of home delivery services.

Another area of the industry that’s having a significant economic impact is pet food and snacks. That segment is experiencing 4 percent annual growth in grocery stores — twice as much as any other category. And it’s a significant category for feed manufacturers that are in the pet food business.

With all this disruption comes opportunity for startups. Large companies are buying up smaller, trusted brands because consumers are suspicious of the bigger brands. This has led to lots of startups looking to break through and get bought out.

How is Ohio supporting the food and agribusiness industry?

Ohio understands the impact this industry has on its economy and has programs to support companies in this sector. For instance, it has a research and development program to support companies that are building or expanding their R&D, of which a lot is happening in the state. For instance, the Swiss-based Nestlé has 31 global research centers, three of which are in Ohio. Similarly, The Smucker Co. recently purchased Big Heart Pet brands and moved it from San Francisco to Orville, where it built new offices and R&D facilities.

There’s also the use of revitalization to turn properties into useful facilities. There are programs that offer grants to help with building, machinery and equipment purchases; loan programs to jumpstart capital expenses; and job creation tax credits tied to the number of jobs created and payroll generated.

What advantages could businesses in this industry realize by working in Ohio?

Ohio is a powerhouse in food manufacturing, and with good reason. The state has a large population, a large workforce, terrific geographic location for distribution with quality roadways and railways, and barges and other vessels traveling through the Great Lakes. The state is also fortunate to have an abundant energy supply, most of which comes from the oil and gas that can be extracted from its shale formations.

All of the state’s strengths make Ohio an attractive place for companies of all sizes and stages to set up shop.

Insights Economic Development is brought to you by JobsOhio

Ohio is becoming an attractive location for IT companies

While California’s Bay Area is the birthplace of many technological innovations, Ohio is home to considerable innovation as well, just without as much of the fanfare.

Ted Griffith, managing director of information technology at JobsOhio, says with lower overall operating costs — as much as 70 percent lower than Silicon Valley — Ohio offers growing startups a sustainable operating environment. It’s also home to incredible tech talent, and its software engineers tend to command less pay. In that regard, the state’s low cost of living gives it a competitive advantage.

He says being close to customers is a real advantage, even for companies that operate digitally. Ohio’s proximity to customers is remarkable, with 55 Fortune 1000 companies headquartered in the state.

And because of its proximity to servers — Amazon Web Services has data centers in Ohio and are expanding them dramatically — which translates to reduced latency and greater speed of data.

Smart Business spoke with Griffith about the advantages Ohio offers tech companies.

Why should technology companies expect to find the talent they need in Ohio?

Ohio has over 200 institutions of higher education that graduate some 170,000 students each year. And there are many unique programs in Cincinnati, Cleveland and Columbus that bring together high schools, companies and universities to create internship programs and STEM development programs.

It’s often overlooked just how much tech talent exists in Ohio because they’re embedded inside businesses that aren’t recognized as tech companies. For instance, The Kroger Co. has hundreds of people working in its IT innovation because the company understands that digital is key to its strategic success. P&G has hundreds of tech employees, as does JPMorgan Chase and Progressive Insurance Co. IT is critical to these companies’ cultures. And the concentration of cybersecurity professionals by metro area in Columbus is larger than Boston.

In what ways is Ohio a tech-friendly state?

Many years ago, Ohio had the vision at the state level to invest $1.6 billion in Ohio Third Frontier, which spawned an ecosystem for entrepreneurs and startups to thrive. As a result, today the state has over 25 incubators and accelerators in its startup ecosystem. This is a strong community of people across disciplines who get together, talk and collaborate. It’s created a thriving culture of support for the tech community.

The state is strong in analytics and data science, areas that have become critically necessary for digital companies because they’re a foundational skill in cybersecurity, artificial intelligence and machine learning. The state’s universities have many analytics programs and the companies devoted to analytics are growing across Ohio, which adds to the talent level in the state and leads to spinoffs that grow and develop on their own.

Columbus has a massive retail analytics presence, and The Ohio State University has invested significantly in its data analytics programs while creating links between students and area companies.

Cleveland is growing in data science in the area of health care and has had some recent successes. For example Explorys, a Cleveland Clinic spinoff, has generated new insights into health care. The company proved its model, and became so successful that IBM bought it and opened up a division of IBM Watson Health in Cleveland. Companies like OverDrive and Hyland Software started in Cleveland and have become global leaders in digital business.

What else does Ohio offer tech companies?

Ohio’s centricity gives companies located in the state access to 60 percent of North America’s population in a one-day drive or a short flight. It’s one of only a few states with the lowest risk of natural disasters, which is important for companies that value stability and continuity of operations, such as data centers and cybersecurity operational centers.

Ohio is seeing more companies choosing to invest in the state in recent years. That’s led to clusters of IT companies, which in turn is helping to attract others. As that industry continues to build out in the state, more companies are interested in making Ohio home.

Insights Economic Development is brought to you by JobsOhio

Ohio’s health care industry benefits from the state’s many strengths

Ohio’s health care industry is fortunate to have excellent research arms associated with its nationally accredited medical centers — Cleveland Clinic, Nationwide Children’s Hospital and Cincinnati Children’s Hospital Medical Center being chief among them.

“No other state has the top adult hospital health system and the top children’s medical centers,” says Aaron Pitts, senior managing director at JobsOhio.

He says these organizations recruit some of the best doctors in the world, their hospitals treat some of the most acute patients and they attract a lot of research dollars.

“They test new devices, pharmaceuticals and surgical techniques, and they capture intellectual property, which companies get formed around, which creates wealth and jobs — it’s a virtuous cycle of innovation emanating from these three centers of health care excellence,” he says.

Smart Business spoke with Pitts about the advantages of Ohio’s strong health care and bioscience industry.

How does Ohio’s health care industry compare to those based in other states?

Where systems are ranked — US News & World Report being among the more popular, for example — Ohio regularly has the best hospital systems in the world. It’s been home to the best-ranked heart hospital for 21 years, a hospital people go to from all over the world that sets a path for others to follow.

The inventions and innovations that spring from these health care systems become licensed products that are used to save lives. For example, Assurex Health, a spinoff that got its start in part from patented technology licensed from Cincinnati Children’s Hospital, has developed its GeneSight test, a genetic test that helps health care providers personalize medicine for patients. AveXis, Abeona Therapeutics and Myonexus Therapeutics are all companies that got their start because of Nationwide Children’s gene therapy research capabilities. And Cleveland HeartLab Inc. and IBM Explorys are both companies that were born from innovations of the Cleveland Clinic.

Each of these companies are accelerating Ohio’s growth in the health care and technology industries, and each owe their start to Ohio IP. They have either become public companies or been acquired by strategic global powerhouses.

How are Ohio’s academic and medical research centers contributing to the state’s health care industry?

Students graduating from Case Western Reserve University become some of the best health care professionals in the country, and The Ohio State University and the University of Cincinnati have great STEM programs. Each of the state’s health care systems is working with institutions of higher education to provide internships and residencies that build up the next generation workforce.

What does Ohio offer to companies in the health care space?

Ohio is fortunate to have Ohio Third Frontier, an incubator matched with local dollars that turns ideas into companies and attracts capital. The organization has a commitment to early-stage companies and works with shareholders across the state to create a support network to foster the creation and development of companies. BioEnterprise in Cleveland does much the same work.

Beyond the science realm, there’s a supply chain that supports the drugs and devices companies in the health care space create. The state’s manufacturing knowhow is an advantage because companies that want to make a device can find manufacturers nearby who have that capability.

Astute buyers understand that Ohio is among the safest places in the U.S. to operate. The state isn’t subject to major floods, wildfires or hurricanes, which reduces operational risks.

In addition to being a great place to manufacture, Ohio has a geographic advantage. Its centrality makes it a natural place to distribute products. Ohio also has a balanced economy and political makeup, which makes it an attractive place to do business.

Ohio is a fantastic place to live and work. It has many strong institutions moving medical research forward. People who look closely at what the state has to offer are often blown away by what they see.

Insights Economic Development is brought to you by JobsOhio

Shale formations generate billions in investment with much still untapped

The first Ohio shale well in the Utica and Marcellus Shale formations was drilled in February 2011. In the short time since, the formations have attracted some $64 billion in private sector investment.

“Those looking to invest in Ohio’s shale opportunity have confidence in the state and the business environment it fosters,” says Dana A. Saucier Jr., Senior Managing Director for Energy and Chemicals and Food & Agribusiness at JobsOhio. “The prevailing sentiment is that it’s an attractive place to deploy capital.”

Smart Business spoke with Saucier about the opportunities that exist in Ohio because of the Utica and Marcellus Shale formations.

What is the state of Ohio’s shale business?
As of mid-2017, the shale industry has invested $63.9 billion dollars in investment in upstream, midstream and downstream activities since 2011.

The rig count peaked in 2015 before prices started to decline in the global oil market, causing the drill count to go down. However, in Utica and Marcellus, the volume of output continued to increase, which speaks to the productivity of those shale wells.

In the past year, as prices have rebounded, drilling activity has picked up again, and so have the rig counts. There also have been new natural gas pipelines that enable more capacity to be extracted and taken to market. It’s brought an uptick in additional investment in the past 12 months of around $10 billion dollars.

Utica and Marcellus as a region represents 85 percent of shale gas growth in the U.S. since 2012. This region has been extremely impactful in leading the U.S. in shale production, and less than 10 percent of all the available acreage has been drilled. Its future is bright as downstream opportunities continue to manifest.

What has been the economic impact of Ohio’s shale business to the state?
The gross state product to Ohio because of these investments is approaching $100 billion. The industry has also directly added as many as 12,000 jobs in the state — jobs that tend to pay above-average salaries. When indirect jobs are added in, such as welders and fabricators, maintenance and logistics, that figure exceeds 100,000.

The state is also benefiting from the taxes paid. For example, the tax revenue from a large, newly constructed power plant in Eastern Ohio that’s using shale natural gas and turning it into clean power funded a K-12 school system, so the benefits are felt across the board.

What types of business investments have come from those looking to capitalize on Ohio’s shale resources?
The most obvious investments have come from the industry itself, beginning with the oil and gas exploration, pipelines, refineries, and natural gas power plants leading downstream to the petrochemical industry that use these feedstocks. What is less obvious to many is that Ohio’s shale resources have made the state attractive to other industries where energy costs are very important to the cost of manufacturing.

It’s not just important that Ohio develops its shale resources, but that we use these feedstocks here in Ohio because job creation expands drastically as value is added to the commodity. Ohio’s shale growth offers enormous potential to expand its tremendous existing ecosystem in the chemical, plastics, resin, adhesive, polymer and coatings industries.

What does Ohio offer to those businesses investing here?
With a time-tested manufacturing and high-tech legacy, Ohio possesses a highly trained, cost competitive and productive construction workforce ready and capable of building the necessary facilities. Post construction, the talent will be available to operate once they’re up and running. Ohio’s university feeder system connects many industries to the well-trained and talented workforce. And the state has an attractive tax environment.

Ohio offers access to the most productive and low-cost shale formations in the world, and has one of the nation’s largest concentration of chemical manufacturers. The state’s central geographical location puts businesses within a day’s reach of 60 percent of the North American market. As amazing as it’s been so far, the best days are ahead.

Insights Economic Development is brought to you by JobsOhio

Ohio’s financial sector is the state’s quiet giant

From an outside perspective, there is little awareness of the size and strength of Ohio’s financial sector. However, once a conversation begins regarding the organizations that have chosen to headquarter here, people are surprised.

Terry Gore, director of financial services at JobsOhio, says Ohio’s financial sector is the second-largest sector in the state and the sixth-largest financial sector in the U.S., providing a home for a blend of insurance, payments, asset management and banking companies that include Progressive Corp., Nationwide Mutual Insurance Co., Fifth Third Bank, KeyBank, Huntington Bank and Worldpay.

“With the growing focus on financial technology, to take advantage of a pipeline of well-educated tech-savvy talent and an advantageous cost of doing business, Ohio’s financial sector is sure to generate more conversations,” he says.

Smart Business spoke with Gore about Ohio’s financial sector and the impact it has on other Ohio businesses and industries.

Why is Ohio’s financial sector succeeding?

Ohio’s financial sector is benefiting from the advantageous business climate, East Coast time zone and its ability to tap into the readily available stream of talent — over 200 higher educational institutions across the state. Ohio has more than 170,000 students graduating annually, providing a pipeline of increasingly tech-savvy talent.

Ohio also has a very reasonable cost of doing business compared to other top financial centers. Ohio’s talented, loyal workforce provides a great deal of value to employers when compared to a workforce in New York City or other higher-cost locations.

Another key factor is the level of collaboration in the state. Regulators are collaborating with businesses on solving sector challenges, and everyone is partnering with education. That creates a welcoming and business-friendly environment.

The sector is also being strengthened by fintech activity, which is, in part, a recognition that the ways in which business is done today requires reassessment. Ohio is ahead of the curve in terms of the innovation value proposition. Recently, a number of Ohio stakeholders have come together to support fintech innovation through the nonprofit accelerator, Fintech71. With its mission to attract the most-innovative fintech startups and connect them with the top financial services companies in the world, it has the potential to grow Ohio’s talent and innovation pipeline.

What opportunities does a stronger financial services sector offer to the state?

The companies that comprise Ohio’s financial sector — representing some of the strongest brands in the country — and their success highlight the strength of the state’s economy and its level of sophistication. The sector’s health and vitality create a spillover effect of greater investment in Ohio communities and increased job creation.

A well-functioning, robust financial services sector provides the glue that holds the economy together and helps it grow. When done right, financial products and services enable both individuals and businesses to protect and grow their prosperity, and are impacting communities by helping advance the mission of each individual, entrepreneur, and small and large business.

The sector is also a pipeline of well-educated talent — be it in accounting, marketing or technology — to the other sectors of the local economy.

How does a strong financial services sector benefit other Ohio businesses?

Proximity to customers and markets affects the custom value proposition. Having financial institutions here and partnering with them directly provides a feedback loop between them and other businesses, enabling them to work together to capitalize on opportunities and overcome challenges.

Ohio is an excellent representation of what America is about, what regular people want, need and care for. This creates the possibility for banks, insurance companies and other financial services providers to customize their products and services without going far, to know that it would create value to individuals, communities and businesses. Ohio and its people are the primary beneficiary of such collaboration.

Insights Economic Development is brought to you by JobsOhio

Advanced manufacturing creates growth for people, the economy

Advanced manufacturing techniques are making their presence felt in the industry with better machines, materials and methods to produce existing and new products.

“These forces are pushing manufacturers from an economic perspective, leveling the playing fields across countries,” says Glenn Richardson, managing director of Advanced Manufacturing, Aerospace & Aviation at JobsOhio. “The sector has been successful at growing jobs in advanced manufacturing — good paying jobs with good career potential. Continuing that momentum requires cross-sectional skill sets that marry both the mechanical and electrical aptitude as well as the information technology that connects it all together.”

Smart Business spoke with Richardson about the state of manufacturing and how the sector can create the opportunities of the future.

What are the factors in Ohio’s market that enable companies that embrace advanced manufacturing to be successful?

Ohio offers a lot. It is the seventh largest state with the third largest manufacturing workforce. It’s the country’s second largest producer of automobiles, and the top supplier state to Airbus and The Boeing Co.

Ohio is also well positioned to grow and attract businesses because of its business-friendly environment. It’s a low-tax state. When businesses look to relocate, chief among their considerations is the cost of operation. Businesses need a workforce that’s capable and a good value. They need knowledgeable workers who are capable of being developed.

Beyond a business-friendly climate and good workforce, manufacturers need excellent innovation infrastructure. Ohio’s education network and 80 college campuses offer curriculum in engineering and technology that is generating great talent at the undergraduate level. They’re also an engine for innovation, driving research through its graduate students who are on the leading edge of new technologies in advanced manufacturing, processes, and information and data analytics. After they graduate, they’re going to work for Ohio companies. That provides a continual replenishment of knowledge workers and that’s important for sustainability.

What is the state of Ohio’s current manufacturing workforce?

There is some concern in the manufacturing sector about filling the jobs that are necessary to grow businesses and the economy. The demographics of the state’s manufacturing workforce comprise a significant portion of baby boomers, many of whom are poised to retire. Those workers will need to be replaced if the sector is to expand. However, Ohio is a manufacturing state, so the sector gets a lot of attention, which has made the workforce issues something many entities are working hard to address.

Companies in this sector are finding success as they leave the old methods of recruiting behind and instead use more digital methods. It’s a smarter way to find candidates that also helps present manufacturing not as a job, but as a career.

Along with outreach to schools and better networking practices, manufacturers are addressing their workforce needs for today and into the future.

What can manufacturers do to increase their chances of success?

Manufacturers will do well to develop good talent acquisition networks to fill jobs and lead the successful transition from traditional to new methods and materials to create in-demand products.

Businesses in this sector should couple the constant development of their workforce with continuous improvement in production and how they design and ideate. They should plug into Ohio’s strong innovation infrastructure and educational system to support both their technology and workforce development initiatives.

Advanced materials, additive manufacturing and automation are three trends that will continue to shape the manufacturing sector. Industry 4.0 is not about replacing the human element in the industry, but instead about bringing higher-level capabilities to the machines that work alongside humans to make them more productive. It’s leaving the more cognitive functions to the humans and reserving the repetitive work for the machines.

Insights Economic Development is brought to you by JobsOhio

How an Irving, Texas, business makes the most of its location, city resources

Ryan K. Robinson, President and co-owner, Signal Metal Industries Inc.

Ryan K. Robinson, President and co-owner, Signal Metal Industries Inc.

In 2012, Chief Executive rated Texas as the No. 1 state for business, while California was the worst. Both states have held their titles for eight years in a row. In the survey, based on 650 CEO responses, Texas earned high marks in business-friendly tax, regulatory environment and workforce quality.

Ryan K. Robinson, president and co-owner of Signal Metal Industries Inc., couldn’t imagine his manufacturing business anywhere else. A second-generation company in the area for 40 years, Signal specializes in building heavy equipment and machinery designed to specification.

“Texas is surely one of the most business-friendly states in the union,” Robinson says. “I think within Texas, the city of Irving is somewhat unique in that 70 percent of Irving’s tax base comes from businesses. So the city of Irving and the Greater Irving-Las Colinas Chamber understand that business is the driver of this community.”

Smart Business spoke with Robinson about why Irving is the best location for them, and how to create a good working relationship with municipal organizations.

Why is Irving, Texas, a good location for your business and others?

First and foremost, Irving is centrally located. My company builds large, heavy products that ship coast-to-coast and out of the deep-water port of Houston. Another factor is our plant is located within 10 minutes of the Dallas/Fort Worth International Airport.

Also, the workforce in Irving is great. North Irving is a bit glitzier and where Las Colinas is located. This, along with our new Orange Line light rail service, gives Irving sophistication, while South Irving residents are the blue collar, hard-working folks. Therefore, a manufacturing company has a tremendous pool of qualified workers to draw from.

Finally, the city and Greater Irving-Las Colinas Chamber of Commerce have a lot to offer. In Irving, there are headquarters of Fortune 500 companies, medium-sized companies like Signal Metal and a whole host of the mom-and-pop types. The city and chamber realize the value in all of them and tailor programs for the big guys, the medium guys and the small guys.

What makes a good relationship between a manufacturing company like yours and the city or chamber of commerce?

I became a member of the Greater Irving-Las Colinas Chamber three years ago, but my relationship is somewhat unique — as with all of us in Irving — because the chamber is the economic development wing of the city of Irving. Most cities have their own economic development department, but the city of Irving does not. As a member who sits on the chamber’s board, it gives me the ability to directly network with city managers and the mayor of Irving.

Why is this relationship important?

Once you have a relationship with the city, you understand how the city works. A lot of Irving chamber members are retail companies that sell locally, but I don’t have a single customer in Irving. However, you always have to deal with the bureaucracy of the city when you grow — as Signal has in the past five years — and buy property, construct buildings or expand existing facilities.

Since I’ve been involved in the chamber, it’s easier because I know who does what and I have a chance to visit with them. I think that gives me an advantage when getting through the red tape in a timely fashion.

Signal hasn’t grown because of its membership with the chamber, but the relationship with the chamber has facilitated that growth because the chamber has helped make sure everything is in line, whether it be with the fire department, building permits or code enforcement.

Do you have any advice about creating a smooth working relationship with city officials or a chamber of commerce?

My advice is to join and get involved. Your local chamber will welcome you with open arms to serve on a committee or to just take advantage of all the mixers and networking opportunities you get as a member.

Once you get involved in the chamber, you learn more about how the city operates because city officials sit on the board. You’re right there in the middle of it. Getting involved gets you plugged in, and then you can take it from there.

Ryan K. Robinson is president and co-owner at Signal Metal Industries Inc. Reach him at (972) 438-1022 or [email protected]

Insights Economic Development is brought to you by the Greater Irving-Las Colinas Chamber of Commerce

 

How Allen beat out competition to attract PFSweb

PFSweb, a growing business providing e-commerce solutions to many major retailers, was courted by several communities when it was looking for a new location for its professional staff of more than 400 employees.

The company ended up opening its new facility in April 2012 in Allen because the city and the Allen Economic Development Corporation best understood its needs.

“The entire economic development group listened well in terms of what our needs and requirements were. The city’s been great,” says Mark Layton, founder and former CEO of PFSweb. “One year in, I don’t have anything negative to say about our experience in Allen.”

Smart Business spoke with Layton, who recently left PFSweb to pursue other business opportunities, about the factors that led to the move and a 10-year lease in Allen.

Why was PFSweb looking to leave its Plano, Texas facility?

We had been there about 20 years and there were growth issues, as well as a parking problem. Our real estate professionals encouraged us to take a broader look at the market and it became apparent that there was an opportunity to create competition.

The challenge was that we had two distinct uses — a worldwide data center and a call center operation — that potentially required different types of facility solutions. Vacancy rates had been so high in downtown Dallas that it was cost effective to relocate to a space that also gives us significant ability to expand and contract to meet our needs.

The city of Allen didn’t have a suitable site for the call center, but obviously played a part in relocation of our headquarters and technology development lab.

What separated Allen from the competition?

The building our commercial real estate representatives and the economic development corporation brought to us had some great amenities and potential. The owner offered flexibility in configuring the space correctly for us, building out a corporate park with a running track, basketball courts, horseshoe pits, etc. He also allowed us to be single tenant even though the space was bigger than what we needed — he delayed a requirement for us to lease the space for several years, giving us room to grow.

What role did the city and Allen Economic Development Corporation play?

Their help regarding financial supplements was very important. Dallas, Richardson and Frisco were also aggressive in trying to lure us, particularly when the call center piece was separated and we had about 400 relatively high-paying jobs that were very attractive.

The city of Allen and its economic development group showed a lot of awareness and understanding of our challenges relating to accounting regulations and how the incentives could be shown on our books to help reduce overall expense. Accounting regulations want you to take incentives in a lump sum; our profit and loss statement would have shown a higher rental through the entire 10-year term and a big financial windfall in the final quarter.

Other economic development corporations handed us a standard contract and didn’t show a desire to change the terms and conditions. With Allen, they had dealt with these issues with other public companies, and their familiarity was a breath of fresh air. We didn’t have to do a lot of education as we did with the other groups. Language needed to be structured correctly and it required flexibility as their legal group worked with our accountants. That was a differentiator for us.

Would you recommend the city to other companies looking to relocate?

Certainly, from my standpoint it has been a great experience. The only drawback is that Allen doesn’t have a large inventory of buildings, although the city is addressing that situation and there is land that can be developed if companies want to build to suit.

It’s been a great relationship and the economic development corporation did a wonderful job for us. We would absolutely recommend Allen to other companies looking for this type of office space.

Mark Layton is the founder and former CEO of PFSweb. Reach him at (972) 881-2900 or [email protected]

Reach the Allen Economic Development Corporation at www.allentx.com or call (972) 727-0250.

How to relocate your business by considering what’s important to you

Carter Holston, general manager, Real Estate, NEC Corporation of America

When a business owner wants to relocate, the task can seem daunting. However, by exploring some key considerations, you can prioritize the move and find a location that works well for your present company and your future growth.

One such location — Irving, Texas — is in the Dallas-Fort Worth Metroplex. Irving has more than 8,500 businesses already operating in the region.

“You need a value-driven proposition,” says Carter Holston, general manager of Real Estate NEC Corporation of America. “You have to have a good location. You have to have a great office space. You have to have access to your employees and pay the right amount of tax, both school and other. All that goes into the mix when you make the decision.”

Smart Business spoke with Holston about what employers need to consider for relocation and why the Greater Irving-Las Colinas area fits that bill.

If you’re thinking of relocating to a new city, what needs to be considered? How does that relate to the Irving area? 

There are three components any company needs to weigh:

• Workforce.

• How you access the workforce, the accessibility within the region, and how you move about via the roadways and mass transit.

• The business-friendly environment.

Irving is in the center of the Dallas-Fort Worth Metroplex, so access to an available work force is not a problem. The area also is adjacent to a major airport — the Dallas/Fort Worth International Airport.

The Irving area has accessibility from the standpoint of mass transit, which is a game changer in business today. The new work force prefers living, working and playing in the same area.

Then there’s the business-friendly environment, one of the most important factors. Companies need to be in cities that believe in business, that understand the revenue derived from taxes and what it means to have citizens employed.

What’s the current state of Irving’s commercial real estate market?

Commercial real estate in Irving is firming up. Generally Texas and specifically Irving represent good market value to corporations considering relocating.

Irving has more than 30 million square feet of commercial office space and is the third-largest submarket in the Dallas-Fort Worth Metroplex. Typically, there is about a 20 percent vacancy rate, which has been as high as 25 percent, so Irving is a value-driven market. Most companies seem to be taken aback at the leasing rates in Dallas compared to other regions.

Irving also has a new light rail system running through the central urban center, which should positively affect commercial real estate.

What else makes the North Texas region so attractive?

Texas and Dallas, in particular, are ‘can do’ regions. There’s no geographic reason for Dallas to exist, no great river system or other natural resources. In spite of its lack of natural resources, the people who settled here on the prairie a long time ago made it work, and that theme and attitude have carried through the years. Even when the oil business was in decline, Dallas found a way to diversify and sought other industries to attract such as banking and insurance, real estate and huge service industry providers.

This ‘can do’ attitude holds true for the area’s longevity and its future, which is based on finding a way to get things done.

How can an employer find tax breaks and incentives when moving into a new area?

You should be represented well and ask your representative what types of incentives have been granted previously.  However, don’t let incentives be the only factor that you consider when relocating your company.

The Greater Irving-Las Colinas area is certainly very affordable with available space and incentives. It’s clearly a value driven proposition for business owners in a business-friendly environment.

Holston oversees all domestic commercial real estate functions at Real Estate NEC Corporation of America and is responsible for more than 1 million square feet of leased and owned facilities. He also serves as a consultant to the Irving Economic Development Partnership at the Greater Irving-Las Colinas Chamber of Commerce.

Carter Holston is general manager of Real Estate at NEC Corporation of America. Reach him at (214) 262-2190 or [email protected]

Insights Economic Development is brought to you by the Greater Irving-Las Colinas Chamber of Commerce