Andy Greiner, Area Development:
Welcome to Area Development's Site
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:Selection and Facility Planning podcast.
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:I'm Andy Greiner, editor of Area
Development magazine, and we've got
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:a strong one today, four sections,
all coming out of the field.
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:First, I sat down with Mississippi
Governor Tate Reeves at Select USA.
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:His state just won a Gold Shovel
for the second year running in
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:our annual State Shovel Awards.
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:Then, a conversation with
Josh Wright from Lightcast.
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:We collaborated on creating the Area
Development Skilled Trades Pipeline
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:Ranking last quarter, and Josh walks
us through what the data actually shows
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:and who should be paying attention.
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:After that, a quick roundup.
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:We asked a handful of site selectors and
developers the same question: What's the
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:biggest reason projects stall right now?
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:You'll hear five different answers,
and they tell a pretty coherent story.
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:And we close with a conversation
I had with Sydney Chun from
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:Cushman & Wakefield's Korea Desk.
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:Korean investment in the US
is accelerating, and fast,
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:and Sydney explains why.
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:And she explains what states need
to do to capture that business.
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:So let's get into it.
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:We're here at SelectUSA in Maryland,
and we're sitting down with
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:Mississippi Governor Tate Reeves.
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:Governor, Mississippi doesn't always
top national lists, but you've been on
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:a streak for the second year in a row.
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:Your state won a Gold Shovel from Area
Development's State Shovel Awards.
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:What does a recognition like
that mean for the state?
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:How are you all punching above
your weight, so to speak?
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:Tate Reeves, Governor of Mississippi:
Well, we're, we're obviously, um,
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:excited about, uh, the opportunity
to win, uh, a Gold Shovel.
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:Um, Area, Area Development
Magazine is really speaking to,
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:uh, our customers, if you will.
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:The people that we're going after
and encouraging more and more, um,
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:economic development and more and
more capital investment in our state.
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:And so, um, we, we, we work very
hard every year to ensure, uh,
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:that we are bringing more and
better-paying jobs to our state.
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:And to be recognized by, um,
this organization is, is yet
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:another feather, uh, in our cap.
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:Andy Greiner, Area Development: Yeah.
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:As we looked at the projects that
won you the Gold Shovel, port
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:infrastructure, transformers, refining,
these are really capital-heavy.
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:What is it about Mississippi that's
attracting that kind of investment?
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:Tate Reeves, Governor of Mississippi:
We've announced $85 billion in new
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:capital investment in the state of
Mississippi since I've been governor.
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:Um, my predecessor announced 7.2
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:billion in eight years.
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:The reasons that we have been
successful are because, um, we
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:have readily available power.
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:These large industrial projects
require a lot of power.
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:Uh, we've announced, uh, not only were
we long power, uh, when we started,
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:uh, winning five years ago, uh,
we've announced, uh, 4,000 megawatts
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:of additional new power generation
just over the last couple of years.
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:We also have workforce development program
through Accelerate Mississippi, uh,
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:which is ensuring that we have, um, the,
the quality people that companies need.
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:And we started investing in
site development five years ago.
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:We've spent hundreds of millions of
dollars to ensure that we have 30 readily
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:available sites where the infrastructure
has already been put in place.
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:Water, the sewer, the
power, um, ready to go.
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:And the combination of all of
those things leads to what is our
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:biggest competitive advantage in
Mississippi, and that is speed.
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:And w- we, we pride ourselves on being the
place in America, and therefore the, the
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:best place in the world, to get a company
from spending money to making money.
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:Andy Greiner, Area Development: Is that
something that's changed in recent years?
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:Tate Reeves, Governor of Mississippi:
Uh, well, no question.
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:It's, it's changed because we've
started the process of significantly
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:investing in sites on the front end.
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:Uh, you know, if you're gonna put a wa-
if you're gonna make sure that you have,
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:uh, access to the land, that you're
gonna have water, that you're gonna
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:have sewer, that you're gonna have other
infrastructure, roads, bridges, et cetera.
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:And on some, many of our sites, we
even have started the permitting
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:process with the US Army Corps of
Engineers and other, uh, entities.
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:Uh, we have a, a state-run permit
organization called the Mississippi
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:Department of Environmental Quality.
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:Uh, that reports directly to me.
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:And our entire mentality is we can
protect the environment and secure
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:large capital investments that help grow
our economy and help protect America's
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:interest, and that's the formula
w- that we have been utilizing, uh,
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:that have, that has been incredible.
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:And I'll just sum, sum up that speed to
market advantage that we have, uh, by
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:quoting someone that most people have
heard of, uh, and that's Elon Musk.
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:He said, and I quote, "Insane execution
speed by the state of Mississippi."
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:He knows a little something about
executing business, and he knows
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:that Mississippi, and he has seen
it because they announced a $20
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:billion CapEx project in Southaven,
uh, literally just a few months ago.
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:Andy Greiner, Area Development: Has
anything changed recently with your
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:workforce program that you think
is attracting more business to you?
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:Tate Reeves, Governor of Mississippi:
We passed legislation creating what
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:we call Accelerate Mississippi.
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:Our workforce development and
workforce training, uh, entity.
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:Uh, it is, it is unique in some
ways in that it is literally
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:run by the private sector.
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:Uh, I appoint, I appoint the board
members from the private sector.
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:Uh, they then hire the team and the
staff because I believe that the
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:private sector knows better what
jobs and what training is needed than
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:anybody in the government ever will.
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:And so we, we, we have
taken that approach.
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:Um, we found that we were spending
hundreds of millions of dollars
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:a year on workforce development
and workforce training, but there
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:was no coordinated approach and no
collaboration between the different
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:entities and the different pots of money.
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:Now we have a one-stop shop, and that
one-stop shop is Accelerate Mississippi,
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:and they are ensuring that we are
training people not for the jobs of
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:the last 50 years, but for the jobs
of the next 50 years, and I think it's
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:given us a real competitive advantage.
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:Andy Greiner, Area Development: Now,
you've got, uh, gotten a lot of attention
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:for early literacy gains in K through 12.
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:How do you think that's affecting
how companies look at your workforce?
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:Tate Reeves, Governor of Mississippi:
What you've seen from a K through
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:12 educational standpoint is that
today Mississippi has the smartest
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:fourth graders in the southeastern
United States, which means in 10
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:years we're gonna have the smartest
workforce in the southeastern United
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:States, and employers recognize that.
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:We've gone from 50th best in
fourth grade math to number 16
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:in American fourth grade math.
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:Our high school graduation rates have gone
from 72 and a half percent to over 90% of
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:our kids graduated high school last year.
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:The, the New York Times called it
the Mississippi Miracle and I use
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:that terminology a lot because
it gets people's attention.
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:But what I want everyone to know is
it really wasn't a miracle at all.
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:It was really, uh, a result of
good, strong public policy with an
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:implementation phase that ensured
accountability and a buy-in by teachers
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:and administrators and parents, and
most of all, a buy-in by the kids.
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:Andy Greiner, Area Development: If a
CEO or a site selector is looking at
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:Mississippi five years from now, what
would you like them to see in five years
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:that maybe they don't fully see today?
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:Tate Reeves, Governor of Mississippi:
Well, I, w- what I hope that they have
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:the ability to see five years from today
is five years of continued momentum
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:by the state of Mississippi to land
multi-billion dollar projects, and not
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:just to land them, but to deliver on them.
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:And so that's the thing that I
think that, that really will set us
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:apart over the next five years is
a lot of states talk a good game.
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:Mississippi actually delivers
because we see those investments as
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:a partnership because we know that
our people will not be successful
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:unless companies are successful.
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:And so five years from now I am hopeful
that the potential, the CEOs that are
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:looking at potential sites will be able
to not only look at AWS and XAI and
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:Nissan and Toyota and Siemens, and all
of these projects that we've announced
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:in the last couple of years, but also
five more years of successes and see
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:not only that the, that we've made the
announcement, but that the f- companies
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:are operating and they're growing and
they're expanding because their workforce
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:has met their expectations and hopefully
even e- exceeded those expectations.
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:Sounds like the focus on execution and
accountability makes it a place to go
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:Tate Reeves, Governor of Mississippi:
Place to go.
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:And look, a lot of
people talk a good game.
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:Very few people execute.
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:Yeah.
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:Andy Greiner, Area Development:
Governor, thank you very much
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:Tate Reeves, Governor of Mississippi:
Thank you.
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:Appreciate it.
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:Andy Greiner, Area Development: Next
up, we just released our new Skilled
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:Trade Pipeline Ranking last month,
and Josh Wright from Lightcast said
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:that the LinkedIn post might have
been one of his most engaging ever.
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:Uh, the ranking is a collaboration
between Area Development and Lightcast,
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:and it looks beyond current employment
numbers to ask which states are actually
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:building the workforce that manufacturers
will need five or 10 years from now.
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:Speaker 18: I asked Josh what surprised
him most about the pipeline ranking.
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:Josh Wright: How strong some of
the southeast states are in this.
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:That's not crazy shocking, but
I mean, they, they do so well.
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:And then how some of, some of the
kind of traditional Rust Belt, um,
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:Midwest states have adapted, um, states
like Indiana, Wisconsin, others who
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:are, you know, do-- Kansas is, um,
in the Midwest doing really well.
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:On the flip side, what surprised us
when we looked at the data is where
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:Texas and Florida, I thought they
would do better, especially Texas.
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:They're not you know, super low
in the rankings, but they're
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:not in the top fifteen, twenty,
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:Andy Greiner, Area Development: So
at, at a high level what does a,
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:a strong skilled trades pipeline
actually mean in twenty twenty-six?
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:What, what are we actually measuring that,
maybe some people tend to misunderstand?
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:Josh Wright: Yeah.
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:For this analysis, we really tried to get
to the density of not just workers who are
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:in the skilled trades and engineering tech
roles, but also those that are wh-where
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:that pipeline's going and wh-wh-what
is the educational system doing today
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:or in the last few years about that.
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:One measure that we really
focused in on here is what we call
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:location quotient or the dens--
you know, to measure the density.
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:How much more per capita uh, is e-each
state producing compared to others.
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:And so states that have a higher
percentage of trades, you know, trade
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:school kinda graduates, ones who are
coming out of, you know, whether it's a
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:two-year program, a certificate program
focused on electricians, welders, um,
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:all of these kinda maintenance tech kinda
roles are gonna do better than states who
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:have maybe more of a ro-- uh, a kind of,
you know, could have a higher density of,
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:of liberal arts or four-year or, or kind
of more internationally focused programs.
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:Andy Greiner, Area Development:
H-how much of it how much of this
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:is gonna be, you know, forecasting
winners and losers in manufacturing,
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:uh, location strategy in the future?
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:Josh Wright: I think it's
definitely an indicator.
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:You know, the…
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:It's not a…
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:It-- But like anything, one index
doesn't give you the full story.
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:There's a lot, and I think we'll
get to that here a bit too, of
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:like what, you know, what it
includes, what it doesn't include.
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:Um, but it, it definitely gives you
a sense for, I think, which states
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:are best poised to have to take on
more from a capacity perspective.
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:You know, from you all, um, Area
Development's done a great job of,
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:you know, surveying site selectors
for, I think, what is it now?
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:Forty years- Sixty.
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:-of like-
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:So it's, you know, for a long time,
the availability of skilled labor has
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:been number one, if not number one,
right in the top three of, of The most
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:impa-important factors for site decisions.
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:And I think it's moving from just,
not just the availability of the
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:labor, but how the, you know, what
kind of capacity are you, are you
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:developing in-- with your labor force?
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:What, what kind of
pipeline is, is coming out?
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:Is it really aligned to specific
blue-collar tech, industrial tech
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:kind of roles that are needed in this,
in this new era of manufacturing?
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:And that's where this pipeline
ranking, I think, looks at.
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:Andy Greiner, Area Development:
What do you think is, like, the,
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:the biggest disconnect right now
between where talent is being trained
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:and where jobs actually exist?
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:Josh Wright: Yeah, this is a big question
because it kinda hits on the broader
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:higher education or even K-twelve
education system in America and the world.
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:But specifically, you know, there's been
a lot of, um, you know, if you think of,
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:you know, talk to older folks back in the
day trades were taught in high schools.
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:There was shop class.
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:There was more focus on these types of
things, even requirements to do, um, do
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:a, you know, a, a CAD drafting class or a,
or some kind of, uh, something like that.
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:I think over time, you know, we have
taught in the last couple of decades to
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:really, like, coding software jobs are
where it's at, and kids just need to get
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:you know, get, go to a four-year degree.
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:It doesn't-- Go to a four-year college.
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:It doesn't matter the
type of degree you get.
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:I think it's sho- we're seeing, and
you can see it in the earnings data,
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:you can see it in unemployment rates
by education level, that just getting a
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:general college degree, whether that's
psychology or wherever else, is not
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:enough, is, is, is not gonna cut it.
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:It doesn't give you a, an
individual competitive advantage.
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:And so I think this still, this, what
this shows is, is that it's There's
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:real job opportunity for people who,
who are thinking, um, how to blend
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:maybe some of those liberal arts
skills or, or degrees with a technical
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:skill or just saying, "You know what?
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:There's an opportunity to go to a trade
school or go to a t-- a community college,
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:a technical school, and really get a
degree, uh, get, get a skill that's
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:super marketable and super in demand."
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:And so we're seeing this shift, I think,
from, um, now, especially with the raise--
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:rise of AI, where there is concerns about
what does the white-collar job market look
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:like over time and how are we gonna meet
the demands of the blue-collar job market.
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:Andy Greiner, Area Development: You
know, in your experience h-how long
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:does it realistically take for a
strong pipeline to translate into a
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:workforce that can, operate at scale?
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:Josh Wright: Yeah.
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:I think generally it takes at least
several years or, or, like, a decade,
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:you know, depending on the years of
focus These aren't overnight decisions
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:to, like, shift people's focus on…
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:Especially if you're thinking about how
do we get kids that coming through high
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:school and their parents, importantly, to
think about, "Hey, there's opportunities
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:here," versus, "Hey, just go to college.
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:Just get any kind of degree.
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:More, like, kind of like tactically,
some of these jobs, um, you know, the
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:training programs aren't all that long.
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:You can, you know, whether it's an
apprenticeship program, so you can earn,
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:you know, you're lear-- you're working,
you're earning while you're learning or
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:whether it's, you know, a, a, a three,
six-month certificate program, there are
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:opportunities here to pivot if with the
right to get, like, you know, whe-whether
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:you need ten people or twenty-five people.
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:In the short term, it can,
it can pivot pretty quickly.
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:Longer term for a region, you know, this
is, this takes years of intentionality
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:to say, "Hey, we need to make sure that
we're not just meeting the needs of our
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:tech companies, our finance and insurance
companies, but we're meeting the needs of
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:manufacturers, and we're being competitive
for this new era of manufacturing."
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:Andy Greiner, Area Development:
Let me ask you this, like, what
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:sort of cautions do you have?
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:Is there, is there any way that somebody
could misuse or misread this data
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:that you would wanna caution against?
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:Josh Wright: Yeah, absolutely.
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:I mean, data can-- data or a-any kind
of ranking can get misused pretty
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:quickly, and that is one to think about
it as being like a, a be-all, end-all.
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:Um, it's obviously it's,
it's one indicator.
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:It's one, it's one ranking.
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:It's one scoring.
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:It doesn't include…
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:You know, we, we've tried to keep this
and, in our great partnership with you
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:all and Andy to talk about how do we
create something that's defensible,
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:that's clear, that's actionable, but also
isn't super complicated or convoluted.
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:It's gonna be misused if it's not rounded
out with other indicators, other data.
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:Um, and I think you all did a nice
job in the article kind of, um, even
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:having a little call-out to say how
e- how executives could use this and
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:what kind of deeper due diligence
needs to happen, whether that's looking
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:at wages, whether that's looking at
demographic compositions and other kind
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:of commuting patterns, labor flows,
all of these things that go into this.
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:There's a lot of detail.
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:And we purposely also did this
at the state level, and I think
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:that was the right call from
a, like, a broader perspective.
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:But all local labor mark-- all labor
markets are local, um, at some level.
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:There's regional dynamics here, and
those can, those can cross state
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:boundaries, of course, as well.
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:Andy Greiner, Area Development:
Okay, one more thing worth flagging
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:from our conversation with Josh.
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:In the same issue that the college
pipeline ranking appeared, Area
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:Development's annual site selector
survey also came out, and workforce
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:availability leapfrogged energy
cost and availability to become the
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:single most important factor in site
selection, and that's saying something.
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:Okay, so next up for this cover story,
we asked developers, consultants,
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:and states, "What's the biggest
reason projects stall right now?"
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:And here's how five consultants
answered that question at Area
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:Development's 2026 workshop in Charlotte.
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:Alicia Janesko-Hutchings: Hi, my
name is Alicia Janesko Hutchings.
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:I am with Cresa.
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:I'm based out of the Dallas office.
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:I work on the site selection
and incentives team.
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:And primarily, the type of
industries that we work with and
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:partner with are manufacturing,
warehouse distribution, office, both
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:regional and work, um, headquarters.
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:And then we also work with some
animal and life science companies
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:and within the lab space as well.
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:So pretty much a little bit of everything.
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:Right now, a lot of our projects
for, for our team, they're,
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:they're moving very, very quickly.
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:So where we're seeing the delays happen is
actually on maybe this more the state and
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:local side rather than the client side.
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:And those could be, you know,
related to permitting delays.
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:Um, when we say permitting, it
could be also, um, you know,
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:rezoning delays for land.
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:Um, but the permitting process
often slows down the process.
315
:Um, sometimes nimbyism at the local
level, um, is also delaying the project.
316
:There needs to be more prep work
done on that side of things.
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:Um, the incentive process not really
aligning with the, um, the way projects
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:are making decisions so quickly nowadays.
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:There is definitely a disconnect there.
320
:Um, the inability to respond quickly
for-- on projects in terms of an incentive
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:proposal or the process- That goes
along with that, whether it's approvals
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:or application process, those need
to start aligning a little bit better
323
:because I think the world is-- you know,
the world of economic development has
324
:changed significantly and just continues
to speed up more and more and more.
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:Chris Urchell, Baker Tilly: Hey.
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:Hi.
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:This is Chris Urchell.
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:I'm with Baker Tilly.
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:Uh, I sit within our real
estate advisory group.
330
:One of the biggest reasons that we
are seeing projects stall today is
331
:often related to, uh, project budget.
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:So a lot of times clients come in
with preconceived notions around what
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:a project could cost or should cost.
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:They're using old benchmark data around
a previous facility, um, and they don't
335
:really have a good understanding of
how much construction cost has risen in
336
:the last couple years or even months.
337
:So with inflation on wages and materials,
uh, sometimes their lack of understanding
338
:or they're not consulting with a
engineering group or a construction
339
:group ahead of time, uh, they find
well into the project that they don't
340
:have the funds necessary to construct
what it-- they want to construct.
341
:Anything that can be done to help that
company understand what the construction
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:costs might be, um, for a facility of
their size And even better to help support
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:the capital stack, uh, for projects of
this size can help, uh, move through that
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:challenging piece of board approval at
the company level, uh, to get the new
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:expansion or the new, uh, project going.
346
:Courtland Robinson, Brasfield and Gorrie:
I'm Courtland Robinson
347
:with Brasfield & Gorrie.
348
:I am based in Atlanta.
349
:Brasfield & Gorrie is a national
privately held construction company.
350
:We are very much in this exponential age.
351
:Um, there are faster innovation cycles,
um, shorter times to obsolence, and,
352
:uh, we've got a surging industry demand,
um, and a lot of different markets
353
:and decisions have to be made faster.
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:Yet, uh, there's an incredible
amount of uncertainty in almost
355
:every facet of making these
capital project planning decisions.
356
:And so I think with that, with those
faster life cycles, um, innovations
357
:in technology and everything in
between, it's just, uh, it's really
358
:difficult to execute in the early
stages of, um, project feasibility.
359
:Then you get into execution,
project execution.
360
:Um, feels like we are very
much dealing with larger and
361
:larger projects these days.
362
:Maybe, maybe the, um, not as many, um,
projects, but they're the ones, you know,
363
:that we see are certainly larger, and
with that comes a lot more complexity.
364
:Um, I'll, I'll use, you know, the hot
topic of data centers today as an example.
365
:Many of the campuses that are being,
um, sited across the country are going
366
:into fairly rural areas, and those
rural areas don't inherently have the
367
:infrastructure to support, um, everything
that, that, um, that campus is gonna
368
:need at full build-out from simple
things like road and sewer to, um, fire
369
:and police, um, you know, to, to bigger
regional infrastructure considerations.
370
:And, um, importing all of those
things or building them over time
371
:and at scale is really challenging.
372
:Uh, and so that I think, you know,
one of the, one of the bi-biggest
373
:reasons that projects stall is because
it's very difficult to plan across
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:the life cycle of a project today.
375
:David MacNamara, Womble Bond and Dickensen:
David McNamara with Womble Bond
376
:Dickinson, uh, an economic development,
uh, attorney with the firm.
377
:Uh, so question: What's the biggest
reason projects stall today?
378
:Uh, I think, I think what we're seeing a
lot is, uh, financing is, is a big piece.
379
:Okay.
380
:Is, um, companies being able to support
the business case for the project, either
381
:kind of the economics penciling out
or actually just borrowing at a number
382
:that they're comfortable with, uh, int--
whether it's an interest rate, whether
383
:it's, uh, private equity, whatever
the, the deal financing structure is.
384
:Uh, often a lot of folks are--
or a lot of lenders are very
385
:interested in teeing those up.
386
:But ultimately, when you get down to
price tags, th-those numbers don't end up
387
:penciling out the way clients are, uh, are
willing to, to sign on the dotted line.
388
:So I've, I've seen a lot of,
"Uh, we're gonna wait six months.
389
:We're gonna see how
market conditions evolve.
390
:We're gonna see the, the general
stock market as well," uh, especially
391
:companies that are collateralizing
these loans with treasury stock.
392
:And you've got to, uh-- y-you've got a
direct impact on their price sh- their
393
:share per price, price per share, excuse
me, uh, to, to how much they can borrow
394
:and, and what that cost of capital is.
395
:So, uh, all of, all of the-- all that
comes down to getting the money in the
396
:door to be able to, to do the project.
397
:JC Renshaw: Hi, uh, I'm J.C.
398
:Renshaw.
399
:I'm with Savills, uh, in North America,
and my role is as the lead of supply chain
400
:consulting platform for North America.
401
:One of the main ones is related to power.
402
:So it may be power availability,
which we are seeing in our network,
403
:increasingly becoming a filter.
404
:Even a location that is optimal from
a logistics perspective, from a labor
405
:perspective, if the power cannot be
supplied in sufficient quantity for a
406
:particular operation, then That facility
or that location is filtered out.
407
:The switching equipment, the, the
transformers, and all of the ancillary
408
:equipment associated with the power
supply, uh, especially in the day
409
:and age of AI and in facilities that
are increasingly looking to auto-
410
:automation as well as, uh, uh, applying
AI within their, their facility systems
411
:infrastructure, those are big delays.
412
:Used to be that steel was a big delay.
413
:That's not-- I'm not seeing
that nearly as much anymore.
414
:. Uh, i-if the power isn't there, our
clients are gonna look elsewhere
415
:Sven Gerzer: okay.
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:My name is Sven Gerzer.
417
:I'm with Parker Poe Consulting,
and I focus on manufacturing
418
:projects that come from abroad, so
foreign direct investment projects.
419
:The biggest uncertain-- The biggest
reason I see for projects stalling
420
:today is the uncertainty when it
comes to tariffs and immigration.
421
:Andy Greiner, Area Development:
That's five answers.
422
:Permitting, construction costs,
infrastructure at scale, power, tariffs.
423
:When you line them up, the through line
is pretty clear, speed and certainty.
424
:Companies know what they want to
build, but what's slowing them down
425
:is everything that has to be in place
before the first shovel goes in.
426
:All right, I want to close this
episode with a conversation that
427
:I think deserves more attention.
428
:Korean investment in the United States is
accelerating, not trickling, accelerating.
429
:Sydney Chun, who leads the Global Korea
Desk at Cushman & Wakefield, uh, out of
430
:Seoul, was at SelectUSA this year, and she
says it was the largest Korean contingent
431
:at the conference has ever seen.
432
:Uh, maybe not the busiest but
the, uh, the Korean contingent was
433
:large and in a deal-making mood.
434
:I asked her to explain what's driving
this activity and how Korean companies
435
:actually make site decisions and maybe
most importantly, what states need
436
:to do to compete for that capital.
437
:Sydney Chun: Name is Sydney Chun.
438
:I head the Global Korea Desk at Cushman
& Wakefield in Seoul office, and my goal
439
:is to guide through and help Korean
capital and users expand in multi markets.
440
:Uh, we're heavily focused in North America
because, uh, that is where Korean capital
441
:is expanding in a extraordinary speed
442
:site selection is increasingly
an integrated business decision
443
:because, uh, purchasing a land or
buying a warehouse is one thing,
444
:um, but it's cheaper compared to the
electricity that you need to procure,
445
:the water line you need to procure.
446
:And for Koreans specifically it works
from the beginning stage of developing
447
:a business case, um, when the working
levels report to the C-levels to…
448
:for an expansion case,
um, in North America.
449
:So-- And this is specifically
because what I see common, um,
450
:amongst the Korean conglomerates,
the common theme is cost discipline.
451
:Um, so because we are heavily…
452
:the Koreans are heavily invested,
and it's got even more expensive,
453
:uh, for labor, uh, for infrastructure
and for core businesses.
454
:And the cost discipline has even been
much heavier on the, uh, investment
455
:side, w- including the real estate.
456
:Um, so it's built in, uh, one business
case, uh, reporting to the C-level,
457
:uh, where they need access, how
this will play out, what they need
458
:to pay, and how that will work into
their future revenue trajectory.
459
:Context is interconnected.
460
:So the business needs, business
case needs to work through,
461
:um, it needs to make sense.
462
:And if the cost is not in line with
their, um, for example, their, uh, rate
463
:of return that they're expecting, then
the deals may break within the boardroom.
464
:Um, and then, um, once it's past
that threshold, it's really the site
465
:selection will, um, surprisingly may
happen within the few several months.
466
:So, um, when Korean conglomerates,
um, I'm not sure if it's the same
467
:with the other international players,
um, when they do site select, they
468
:site select with the negotiation and
incentives package that they, um,
469
:promised with each of the states.
470
:And that comes with building
completion timeline and milestone.
471
:Um, but the factory needs, when
it's run, it needs to have a full
472
:house with the labor, and labor is
connected to the incentives promised.
473
:Um, but if they cannot procure the
time, uh, procure the power, um, by
474
:the time that the factory needs to
run, then they don't have, they will
475
:not have that labor by that time,
and which would mean that they may
476
:not be able to meet the milestone,
um, to apply for the incentives.
477
:And that can, uh, impact, uh, in reverse,
uh, for incentives callback, which
478
:is a big risk to the Korean clients.
479
:You know, in the field communicating with
my-- with the client, Korean clients.
480
:Um, we see that, uh, the anchors
have already been placed, um,
481
:in famous states like Ohio,
Tennessee, Kentucky, and Georgia.
482
:And the next wave I would see are the
suppliers, and they're, of course,
483
:their big concern is the cost as to
they don't have that much of a manpower
484
:that the conglomerates have in-house.
485
:Um, so they need a lot of our
help, such as us as an advisors.
486
:Um, and I'd see that would be
the second or the third wave, um,
487
:in coming in, uh, smaller scale,
but definitely in many numbers.
488
:Um, and that's how I see that
the Southeast is keep winning.
489
:Definitely because of the cost and the
infrastructure and environments and how
490
:friendly and agile the governors and the
state is willing to work with the players.
491
:And our anchor client has already been
placed there, um, majorly in Georgia,
492
:Kentucky, Tennessee, and Texas.
493
:Um, and with the anchor players as I said,
uh, they, the suppliers also want to be as
494
:interested, uh, and i-is in big interest
to be nearby in proximit-in proximity, uh,
495
:to the anchor players because obviously
due to the logistical reas-reasons.
496
:Um, and that's how I see that
the Southeast is keep winning.
497
:What I'm hearing from the state offices
is if the Korean conglomerates want to
498
:expand and want to get into the s-market
entry- they should also be thinking about
499
:bringing their own energy, um, and I
think that's connected to collaborating
500
:with, uh, entities that they…
501
:that can provide and create synergy.
502
:For example, if you are a big, uh,
manufacturer, like Hyundai, um, the, the
503
:ideal, uh, s-synergy scenario would be
bringing in your arm name- you know, a
504
:developer, uh, that can also pro-produce
nuclear energy to provide that power
505
:source in that state, and which would
make it much more easier and makes
506
:what's, what's make sense for you to
procure energy within the timeline,
507
:the milestone, um, that you want to get
your manufacturing plant up and running.
508
:The supply chain globally has
increasingly, been proven to
509
:be more fragile because of the
current geopolitical landscape.
510
:Um, and to provide to your clients, um,
and to provide with that competitiveness
511
:is whether you have that nearshoring,
whether you have that plant locally.
512
:Um, and I think the Koreans are
the ones who've made that have
513
:studied it, internalized it, and
found that decision is a must.
514
:So how I take it, how I view it,
is because of the unsure certainty,
515
:to make your supply chain certain
and sturdy, is to be able to be in
516
:proximity to your customer, so that
you don't have- Yeah … you don't
517
:experience that supply chain fragil- uh,
fragility or, uh, supply chain break.
518
:Um, uh, you don't have
that concern anymore.
519
:And the next discussion, uh, topic that
I hear most often from the clients that
520
:I've been on meetings, um, the n- the last
two days, I guess is the two, two topics.
521
:One is they've already been doing
business for many years in the US,
522
:um, but because of the cost issue, uh,
they're unsure how to get most out of
523
:the discussions with the state officers.
524
:Uh, they do want to build a friendly,
uh, business, um, of course asking
525
:for, uh, tax abatements and how
to make that even more, you know,
526
:leverage with their existing business.
527
:That's the one concern.
528
:And the second concern for you know,
new market entrants are having a, an
529
:objective comparison multi-state ma-
matrix because, um, you know, we have,
530
:um, all of the state representatives,
and the clients need to navigate
531
:where is the best choice where you can
not only have, um, a cost-effective
532
:site, but also have that sustainable
labor, have that sustainable power,
533
:have that sustainable infrastructure.
534
:And that's where we come in in the
role as an advisor to make that
535
:objective multi-state comparison.
536
:Andy Greiner, Area Development:
I'll add a note here.
537
:A lot of the conversations at Select USA
this year centered on uncertainty, tariffs
538
:policy, the wait and see kind of mood.
539
:What Sydney is describing
is almost the inverse.
540
:Korean companies aren't waiting.
541
:The uncertainty in the global supply
chain is itself the reason they're moving.
542
:The hedge against fragility is proximity,
and right now the US Southeast is
543
:where they're building that hedge.
544
:That's it, uh, for this episode
of the Site Selection and
545
:Facility Planning podcast.
546
:Thanks for listening.
547
:I'm Andy Greiner, editor of Area
Development Magazine, and if you're not
548
:already getting Area Development Magazine,
you can find us at areadevelopment.com,
549
:uh, and you can subscribe to this
podcast where you get your podcasts.
550
:See you next time.