Site selection experts high on Denver
About 500 business, real estate and political leaders this morning heard the perspectives and insights on economic growth from eight site selection experts.
Site selectors are crucial because they advise clients on everything from corporate headquarter relocations to where to build and expand giant call and data centers.
They crunch numbers, run numerous computer models in trying to identify the best fit for their clients, and ferret out information that can't be found with a simple Google serach. Their recommendations can translate into huge economic and job-creating boons for areas that are chosen.
The conference was titled “Making the Cut: Factors Driving Today’s Site Selection Decisions,” and was hosted by the Metro Denver Economic Development Corp.
The eight site selection experts, answered questions posed by Jim Mulligan, a partner of the Snell & Wilmer LLP law firm’s Denver office. Snell & Wilmer was the main sponsor of the event. The Colorado Real Estate Journal was the media sponsor.
The whirlwind tour began on Wednesday and included a meeting with Gov. John Hickenlooper, who impressed and was praised by each of the panel members.
Tom Clark, CEO of the metro Denver Economic Development Co., today and over the weekend will be taking the site selectors to the mountains.
Their tour so far has included a helicopter tour to places such as Lockheed Martin, Nobel Prize winner Tom Czech’s chemistry laboratory at the University of Colorado in Boulder, visits to companies with strong local operations such as Level 3, Siemens and Google. They also visited the Anschutz Medical Campus in Aurora and were briefed on the metro area’s FasTracks light rail and transportation developments.
The site selection panel members, who spoke in Seawall Grand Ballroom in the Denver Center for the Performing Arts, included:
- Jim Eskew, Jones Lang LaSalle.
- William Hearn, CH2M Hill.
- Daniel Kah, Greyhill Advisors.
- Jim Kemp, Hickey and Associates.
- Pat Lynch, CBRE.
- Kelly Rendziperis, Ernst & Young.
- Jim Trobaugh, CBRE.
- Steve Weitzner, Silverlode Consulting Co.
Weitzner, president of Silverlode, based in Cleveland, shared how a number of years he ago given an assignment from a client that was looking for a city to locate anyplace in the worlds, which led him to evaluate 165 possibilities around the globe.
“Denver finished the top three,” he said. “Denver can compete.”
Cities increasingly are competing worldwide with each other, said Will Hearn, who works in the Atlanta office of Douglas County-based CH2M Hill, the giant engineering firm.
“Denver is competing with Beijing and Berlin,” he said. Hearn also said that flying touring the Denver metro area by helicopter, it was clear that Denver had more regional cooperation and energy than Atlanta, which he admitted makes him a bit angry.
Kelley Rendziperis, of Ernst & Young, said she did not know Denver’s economy was so diversified. She said metro Denver reminded her of Austin, where she is from.
“My perception of Denver has completely changed,” she said.
Whether tax incentives work in wooing companies was a big part of the discussion.
Most said that they are needed for “psychological” or “ego” reasons, but they don’t factor into the bottom line much.
Still, when Ernst & Young surveyed 600 Fortune 1000 companies, she said that 42 percent of the respondents said that they are important.
However, it doesn’t have to be “cash or tax” breaks.
For example, a company that has a new facility up and running can generate $1 million or more a day in revenues, so a company that can fast-track the building permit and construct a building 30 days faster than in other cities, has saved the company $30 million upfront, one of the panelists noted.
Rendziperis said she was “shocked” to learn that only 2.9 percent of the companies in Colorado’s Enterprise Zones are using incentives, which she said is a sign that they need to be restructured in a way to actually help companies. For example, having tax credits count only against income taxes hurts entrepreneurial companies that aren’t profitable in their early years.
But the Denver-area’s much-touted quality of life also is a factor.
Lynch, of CBRE’s Critical Environment Practice Group, and based in Denver, was impressed when they met with Scott Green of Google in Boulder.
Google, Lynch noted, will often let people choose where they want to live and “this is my word, but Scott told us they were ‘oversubscribed’ with applicants.”
He said that was a clear signal that Denver can attract and retain the young, highly-educated workforce that is so crucial to growing companies.
Trobaugh, of CBRE’s Phoenix office, seldom attends events such as this one, but he said he came away so impressed that he is going to meet with his partners and encourage them to attend more events such as these.
Despite increases in technology, he said it is more important than ever to have quality face-to-face time with people.
“Suit up for every game,” was his advice to land more economic development opportunities in Colorado and the Denver area.
To keep the sports metaphor, Hearn said that economic development is a matter of “grounders and pop flies and not home runs,” meaning a lot of small victories are better than the time and expense of trying to land a giant deal.
Another panel member said especially in this age of cutbacks and contractions, more time and effort needs to be spent on growing existing companies, than recruiting outsiders. He noted it is better to have 1,000 companies each add one job, than to recruit a new company that creates 200 or 300 jobs.
Clark noted that 80 percent of the time at the Metro Denver EDC is spent on retention and helping companies already here expand.
However, it is still the big companies that garner the headlines and not the small expansions, he said
Clark left the stage to meet with the site selectors to review and dissect their impressions and insights.
“You gave us a lot of good news and a lot of good advice,” Clark said.
John Rebchook joined the editorial staff of the CREJ in late 2011 to cover Multifamily, Retail and Investment Real Estate. John was an award-winning writer and editor for the Real Estate Section of the Rocky Mountain News from 1983 through 2009. John also covered economic development, banking and other economic news for the paper.
In addition to his work at the Rocky Mountain News John was a founding freelance journalist for GlobeSt.com, covering commercial real estate, and continues to maintain his own real estate blog at insiderealestatenews.com. Rebchook graduated from Southern Illinois University with a degree in journalism.
When not keeping his readers up to date on the latest in commercial real estate news, John loves to spend time with his wife and daughter, and has run more than 40 marathons.