Across Canada, we are observing an alarming and disturbing trend relating to the lack of shovel-ready employment/industrial lands. How have we arrived at this situation?
In “earlier times”, economic developers across Canada were actively and competitively engaged in ensuring the provision of sufficient lands to accommodate business growth and investment. Somehow, this craft seems to have faded in prominence. The lack of attention to this economic development foundation has resulted in too many communities being unable to compete for investment (while the price of land skyrockets).
Those that have dedicated time and resources have had sweet benefits. One client’s total land and infrastructure investment in one industrial park was $1 M, with sales to date of $3 M (20 acres remaining) generating annual taxes of $1.6 M, and creating 686 jobs to date. The experience of another recent client:
- Over 11 years, an annual average of 351,000 square feet of industrial building space was constructed, consuming an average of 54 acres annually;
- Developments on municipally developed lands over a period of 16 years now annually generate in excess of $12 M in taxes, retaining 1,836 jobs, and creating 3,659 new jobs.
Follow my blog series - which I hope will help rekindle some of the lost craft of developing municipal industrial land as we address topics such as:
- Where do I start? How do I even begin the discussion of the need with Council? Why do I as an economic developer have to do it anyways? Why isn’t the private sector doing it?
- Do I have the skills? Can I do this? Trepidations of an economic developer getting engaged in land development.
- What is my market demand?
- What’s my supply? How much supply is enough? Break it down, what do we really have? What if we build it and nobody comes?
- Some options for public-private cooperation
- Industrial subdivision planning - what are you trying to achieve?
- Do all industrial parks need to be fully serviced?
In addition to his international and Canadian economic development certifications, Eric McSweeney is an Accredited Land Consultant (ALC) and a Commercial Investment Member (CCIM). He has completed land development related projects for more than two dozen communities, and has developed and sold more than $20M of business park lands. One of his innovative public-private land development projects has been published in the International Economic Development Council Journal.
"McSweeney & Associates demonstrated a considerable flexibility and adaptability to ever-changing circumstances while undertaking a complex industrial land business case analysis, and was able to make strong recommendations tailored to our environment."
Jean-Marc Lacasse, Manager of Economic Development, City of Chestermere
|Ian Duff, Director of Economic Development Consulting
Below, Ian discusses the meaning of Economic Development and why the timing is right to have the discussion in your community about where you are in the Economic Development process.
After reviewing the results from this past Monday’s Ontario 2014 Municipal Election, it would seem that there are going to be several new faces around Ontario municipal and county council tables starting this December 1st. As many of the candidates in Ontario appeared to have campaigned on "economic development” as a top priority, this is an opportune time to put together some thoughts that can be shared and discussed with your elected officials. Whether your community is in Ontario or elsewhere and whether your Council members are returning or new to the political arena, I hope you find these ideas useful.
One of the most fascinating aspects of economic development is the mere definition of the term. I am not talking about the economic development definitions that can be found in a text book, but instead I am referring to what economic development professionals, elected officials and community members think they mean when they talk about "economic development”.
I've had the privilege of working with many different communities throughout Ontario and Nova Scotia and I have observed when people speak about economic development they are actually talking about the side-effects of a prosperous business community: namely an increase in jobs and a stronger commercial/industrial tax base. In the end, a business exists to make money. Contrary to some beliefs, a business is rarely in the business solely to create local jobs (although there are some establishments that choose to grow locally). I can also say with confidence that a business is never in business just to pay taxes! Yet often "economic development” is used as a term describing the attraction of jobs and the expansion of a community’s tax base.
Economic development should not be considered an outcome, but instead needs to be viewed as a process. Simply put, economic development is the process of undertaking a specific set of actions with an end goal of creating the conditions for businesses to prosper. Whether this is about investment retention, expansion or attraction, the basic economic development process is the same. Different communities are at different stages in this process and all have unique economic development priorities.
Now is an excellent time to educate new and old elected officials on how your community’s economic development process is defined, where you are in that process and what you and your elected officials can do together to help create that investment friendly environment that will entice businesses to thrive. Finally, remember that economic development is a continuous process (not a project) and a long-term investment into your community’s future well-being. It is not a silver bullet that will immediately transform your economy. It will take a committed, coordinated, and concerted long-term effort to ensure that your economic development process is well-defined and implemented so that in the end businesses locate, stay and expand in your community to make profits. Jobs and assessment will follow that success.
Remember what the economy looked like on May 13, 2006? That was the date of the last Canadian census for which we have published results... before a very significant decline in North American and Canadian manufacturing... before the auto manufacturing crisis, bailout, restructuring and subsequent recovery... before the collapse of the forestry sector... when gold hitting $700/ounce had pundits predicting a collapse in gold prices - ha!
So what relevance does 2006 data have as a descriptor of your current local economy? Not much, but yet the majority of economic development websites and profiles provide 2006 data!
Small wonder site selectors listed stale data as their top frustration when you think about the magnitude of changes in every economy since 2006!
But wait, the 2011 census data is coming - yes, it will slowly dribble out in 2012, and already a year old and in the "stale" category in terms of site selector needs for current year data.
So what is the solution? Reliable data estimates from reputable data mining companies. And how do you pick a reputable data mining company? Look for:
- Data specialists: their only business is data, and their reputation and repeat business depends on it;
- Depth of data mining: how many sources of data are utilized in the preparation of data values - How they mine the "gold" trends, correlations, nonlinearities in data to improve accuracy?
- Scope of data variables: Are you getting all the data you need for economic development and site selection purposes, or a small sub-set?
- Qualifications of the "data master": What are the educational and experience qualifications of the person(s) behind the data modelling? What is the sophistication and cross-reliability of data modelling? Whether their methodologies are related to your business objectives?
Fortunately, in our quest to offer only the highest quality services and recommendations to you, we have completed this research and are pleased to share our conclusions with you. Yes, current year data estimates requires an investment - but it pales in comparison to the cost of one site selector taking a pass because of frustrating stale data, circa 2006.
- The need for up to date and complete data and information related to location and investment decision-making.
- The need for a comprehensive asset inventory - a documentation of a community's "resources and product offering" to support business investment.
The Community Profile is the embodiment of these two foundational elements of investment readiness. It is your "go-to" document for responding to all investment inquiries and responses. It is also the first point of reference in the decision maker or influencer's due diligence process of investment/site location decisions. It needs to be available in hard copy, as well as PDF format on your website and for emailing.
A good community profile is fact-packed, and should contain the following at minimum, as well as contact information for verification and follow up purposes:
- An attractive cover: the cover should convey a great first impression of your community - but the fluff ends here - after the cover, just the facts please.
- Contact information on the inside cover/second page and/or last or back page of community profile.
- Introduction: a concise introduction to your community's economic history, key competitive advantages, and other general information such as climate data.
- Maps: a location map displaying your community's location in relation to major markets, a transportation map indicating transportation links to/from your community, and a labour shed map.
- Demographics: current year demographic, education, and income data. Site selectors consider data older than one year to be useless - we can help you source this data.
- Labour force: current year labour force indicators, including labour force by occupation and industry, as well as labour force commuting patterns and the most recent wage rates by occupation.
- Key industries: top 10 private and public sector employers and number of employees.
- Transportation: a list of all major transportation assets and linkages.
- Taxes and utilities: current tax rates (personal, payroll, municipal, provincial, federal), current utility rates and connection fees.
- Building, planning, and development related processes, process times, and fees.
- Availability of business accommodations and property, with a link to where the most current information may be found.
- Business support programs and services such as employment and hiring services, labour force development institutions, government assistance, financial services, and incentives. Include other key assets (ie. research facilities).
- Quality of life: housing, health and social services, educational institutions, protective services, local media, and recreation, tourism, and cultural facilities/events.
If you would like to review examples of a well-designed community profile, please contact McSweeney & Associates.
What is investment readiness and why is there so much "buzz" around it?
Part of the reason is that there are many perceptions (and in some cases, misconceptions) as to what being investment ready means. Let's take a brief look at investment readiness (sometimes referred to as community competitiveness), and in future blogs, we will probe the various aspects of becoming more investment ready.
In a nutshell, "investment readiness" is the state of community preparedness and competitiveness to retain, grow, and attract business investment. Simple, right? What is difficult, however, is actually being investment ready. Having assessed dozens of communities, it is safe to say that all communities could be more investment ready. This was also the conclusion of a landmark report on Ontario's Local Economies in Transition Initiative.
So what are the 7 elements that contribute to investment readiness?
- Up to date, and complete data and information related to location and investment decision-making.
- A comprehensive asset inventory - a documentation of a community's "resources and product offering" (in the broadest of terms) that supports business relocations and expansions. Items could include natural resources, post-secondary institutions and research establishments.
- An understanding of the community's strengths, weaknesses, competitive advantages and disadvantages - generally, as well as for specific target sectors.
- Continued community improvements to increase overall quality of life and strengthen your community's "resources and product offering".
- Communication tools, such as an economic development website, that make it easy to find data and information on your community and its assets - and that is easily accessible in different formats.
- The ability to understand, interpret and to respond comprehensively to investment inquiries (almost instantly!).
- The ability and willingness to orchestrate site visits, to "read" the client, to follow through on commitments, and to move the deal to a close.
Becoming investment ready is not a one-time effort - it requires constant and consistent time and attention, although there are tools available to save you time and effort. Maintaining your community's investment readiness supports strategy development and implementation, and is a foundation for any form of investment attraction program or activities. And, hence, that is why there is a "buzz" around investment readiness.