What Do Site Selectors Think?

Sun Corridor Inc. Leadership Forum

By Jay Gonzales

Sun Corridor Inc. hosted a panel discussion Apr. 18 with six prominent site selectors to provide the business community with some of their insight into how decisions are made and what they look for in selecting sites for companies. The following are the highlights of the question-and-answer period before attendees at the Fox Tucson Theatre. The comments are lightly edited and condensed.

Joe Snell, president and CEO of Sun Corridor Inc., moderated the panel and asked the questions. The panel members were:

• Brian Corde, Owner and Managing Partner, Atlas Insight
• Laura DeFouw, U.S. Tax Partner, KNAV Advisory
• Jeffrey Garza Walker, Executive Vice President, NAI Horizon
• Amy Gerber, Executive Managing Director, Cushman & Wakefield
• Joe Gioino, Senior Managing Director, Global Corporate Services, Newmark
• Bhargava Kotapalli, Workforce Analytics Consultant, Newmark

Q: After the last couple of days, I was surprised to learn that Tucson and Southern Arizona fill in the blank.

Gerber: I was really surprised by the industry diversity that I saw, I didn’t realize you had your fingers in so many different types of industries.

Walker: I was just really surprised at how ready Tucson is to step into the next whatever-you’re-going-to-be, and I think, with that said, you’re still going to keep who you are.

DeFouw: What I was genuinely surprised about is the genuine sense of community from everybody. Everybody who’s here for the long haul genuinely loves this place, leans into the culture, and has the long-term best interests for everybody and is working as a community.

Q: How has site selection changed since COVID, and do you think those changes are here to stay?

Gerber: We still have companies that don’t know how they want to run their facility. I would have thought by now we would have our arms around that a little bit better. There are definitely some companies that have, but you’re still seeing some messaging coming out about getting people back to the office. What’s really surprising is how long that hangover has lingered from COVID.

Corde: Developing a little bit more of a cushion with inventory and then developing your supply chain to be a little bit more resilient and not so reliant on one source are the primary industrial trends that I’ve seen coming out of COVID.

Walker: As we started to look at our supply chain, we needed to have closer intermodal ports. We needed to have more resiliency in that supply chain because what we learned is, when these issues happen, we want to be able to rely on ourselves. Companies are looking for supply chains that are more resilient, where they can be able to pivot and place themselves.

Q: How are the upcoming national elections impacting decisions by companies on whether to relocate or expand?

Corde: I think that whenever you’re in an election year where the outcome is somewhat undetermined, there’s a certain element of risk there, and companies would rather just sit still for a little bit. From Atlas Insight’s perspective, what we’ve seen slow down is decisions. Companies are taking a little bit more time.

Q: As global manufacturing shifts from being so concentrated in China, how would you describe the opportunity for Southern Arizona to become part of that supply chain of the rapidly growing manufacturing base in Mexico?

Walker: Opportunity is on your doorstep. What you need to be ready for is how you’re going to respond to it. Developers on the Baja (California) side want to build a port, and they see Nogales as the direct line to be able to come up through that port. You are going to be the beneficiary of what’s happened. I would also point out that Mexico has now overtaken China for manufacturing.

Corde: Having potential border issues, and not just closures but even slowdowns, is really making companies think twice about do I want to be across the border or do I want to be close to the border, but be on still on this side? There are a lot of advantages that you have in this market right out of the gate just for that reason alone.

Q: What are your impressions of Southern Arizona’s ability to meet talent workforce needs for current and prospective employers?

Kotapalli: I was happy to see what the community college is doing, how the university is developing programs, and how the connection between industry and all the institutions is coming along. The problem essentially comes back to a very base issue − population and labor force. At some point, you will have to attract more people here to be more competitive.

Gioino: The most important thing is recognizing that you have a problem and you’re addressing it. You recognize there are individuals that are in the community that need additional skills, and you’re working towards bringing them into the market and getting them the skills they need.

Q: When it comes to incentives for advanced manufacturing, what types of state and local incentives have helped communities position themselves to win?

DeFouw: Where I’ve seen the most success is communities that have the ability to be flexible with their incentives because every company is different. Having just a formula is helpful to understand exactly what’s going to happen, what cash flows are going to be, but that can sometimes be restrictive, especially if you’re trying to do something different. For a community like this, having flexibility provides the most benefit. 

Gioino: I have a project that is going to build a daycare facility on site. Everywhere we went, when we did interviews, people at every single company said, if you offer daycare, you’ll be one of the premier employers in the community. It’s a huge issue.

Corde: Part of the issue with childcare is the barriers that we’ve put up to establishing a childcare facility. I’m certainly not recommending that we just erase all the controls and laws and things like that, because it is extremely important to make sure that these facilities are well maintained and well run. However, there are a lot of barriers that do seem to be overly challenging.

Q: We know from experience that winning new investments requires really strong regional collaboration among our public, private, academic and economic development partners. Can you provide some examples of some of the most successful regional economic development efforts that have seen really great returns?

Gioino: You look at the big ones – the Amazon HQ.  Every community got together, did the applications and really realized that you can’t be an island. You really have to work together to attract companies because it sends a message to the client, to our clients. They don’t want to see a community that’s not together.

Gerber: I think regionalism is key to any success. Looking at it from a whole of winning as a region first, and then figuring out where in that region is that building going to go, we’ve just beat out all the other regions, that’s a big win. And that includes utility providers, that includes the cities, the counties, the state, it really takes everybody these days to get a deal done, because they are so complex today.

Corde: Playing the regional game, not only from a community perspective, but also from an organizational perspective and economic development organizational perspective, has been the best thing that I’ve seen in all the years that I’ve been doing economic development.

Q: What should we stop doing? What should we improve on?

Gioino: I think you need to follow a plan. Everyone needs to be rowing in the same direction. I always ask every community, what’s the plan? Is there consensus on a plan? If there’s not, that says something.

Gerber: Our RFPs right now are going directly to the utility with one question: How much power can I get at this existing building? It’s having some of that product out there, even if it’s not big enough, but allows the company to come in, it really helps them move quickly and at a lower cost. So there are some projects out there that you could win by just having that asset in place.

Corde: The number of incentive dollars that are not being adequately spread around the rest of the state is a major issue. It just seems to me that this area of the state is so economically important.

Pictured above – The forum panel from left Moderator Joe Snell, president and CEO, Sun Corridor Inc. Site selectors: Bhargava Kotapalli, Newmark; Amy Gerber, Cushman & Wakefield; Brian Corde, Atlas Insight; Jeffrey Garza Walker, NAI Horizon; Laura DeFouw, KNAV Advisory; Joe Gioino, Newmark.