Corporate site location is a process whereby a company decides where to grow jobs and make a capital investment based upon the hope of retaining or creating jobs. Specific triggers exist that tell a company they should undertake a corporate site location process. These triggers may include the upcoming ending of a real estate lease, growth needs for people or equipment beyond their current facilities capabilities, the decay of their existing facility due to age or damage, the consolidation of existing facilities to develop a more efficient operation, a growth opportunity in a new region often tied to an existing customer, a merger of companies that creates a decision as to where that company should locate operations, or a company seeking to capitalize on an economic trend.
An amazing example of a company that understands the corporate site location trigger is Amazon. Amazon recognized the growth opportunities changes in the retail market where consumers where more and more relying on the Internet for purchases and they also recognized their strategic weakness to dominate that market as they lacked a national distribution network to deliver e-commerce based purchases in a timely fashion. Amazon also understood the development of this national distribution network could be done with the support of state and local tax incentives a 2017 report indicated that Amazon gained over $1.24 B in state and local tax incentives to build a sprawling network of more than 257 sorting and distribution centers, a 141 M-square-foot portfolio of facilities that house hundreds-of-thousands of workers in 33 states. This strategy lives on with Amazon’s high-profile process to select a second corporate headquarters outside the tax heavy environment of Seattle that is currently pitting one community against another with the promise of high-wage tech jobs.
Companies don’t have to be a big as Amazon to utilize the corporate site location process. These companies can be start-ups, corporate headquarters, manufacturing, distribution, fulfillment centers, developers or other high-wage job producers attractive to communities seeking jobs and the taxes that travel with those jobs.
- Root Insurance is only three years old but is disrupting the insurance market with growth plans to add nearly 500 jobs and it landed over $80 M in VC and $13 M in tax incentives through a recent corporate site location process.
- Pillar Technology is no start-up but it is capitalizing on disruptive technology in the IoT space, is a leader in the development of Autonomous Vehicle software, landed a major contract to building the operating system for the Smart Columbus program and a $2 M grant to build an AV R&D Center;
- NorthPoint Development is a booming commercial developer leading the growth of the distribution and fulfillment center that is changing the face of retail by developing distribution and fulfillment centers positioned with global retail companies need them through the use of Tax Increment Financing, Joint Economic Development Districts, tax abatements and land use entitlements that helped them develop the site, build the infrastructure and attract companies to their site; and
- Fortner Fine Living is Ohio’s largest reupholstering business headquartered in Columbus, Ohio and they not only are growing through a merger and market success but they are redeveloping a former industrial site in the South Side of Columbus through the support of state incentives and a local property tax abatement.
Companies big and small in a range of industries all benefit from a multi-state corporate site location process to locate in growing markets at prime sites with a competitive cost of doing business supported by local and state tax incentives.