SB&D's Ten Top 10s 2006

The South's Ten Top Headquarters Relocation Markets

In search of lower business costs and a place where your employees will love living (and can afford to live)? Take a closer look at these 10 southern markets where major corporations are already headed to.

By Trisha Ostrowski

In 1975, Exxon Corporation made the bold decision to move its corporate headquarters from New Jersey to Dallas/Fort Worth. Choosing the South, Exxon went so far out on a limb that no other Fortune 500 company followed its lead for well over a decade. It wasn't until 1991 that UPS moved to the South from outside the region, relocating its corporate headquarters from Connecticut to Atlanta.

But finally in the last five years, the tide has started to turn. Today by sharp contrast, the South is becoming home to some of the world's leading companies—and many of them have moved to the South from another region. Household names such as International Paper, Fidelity National, Philip Morris, DHL, and Asurion (along with scores of other not-so-well-known names) are now headquartered in southern states. Nissan and MeadWestvaco are also in the process of moving their headquarters to the South.

In virtually every case, companies are leaving their long-time homes in other regions to save big bucks on operating costs. Companies are weighing the one-time cost of making the move against the major annual savings they can realize in southern markets.

Take Nissan's 2005 decision to move from Los Angeles to Nashville. At the time of the announcement, Nissan President and CEO Carlos Ghosn explained that the move was “inspired by costs and efficiencies that can be gained by moving your headquarters to a lower-cost area of the country that is closer to the company's primary operations.” The move puts the headquarters closer to Nissan's manufacturing operations in Tennessee and Mississippi, which makes good business sense.

Lower costs are definitely drawing corporate headquarters to the South, but so are talent-pool and quality-of-life concerns. Companies are realizing that when they can offer a location where workers can afford to live the good life, they can attract and retain top talent. They are also realizing the benefits of going “where the people are.” The South's tremendous population boom means that it's increasingly home to more suppliers, customers, and future workers when compared to other parts of the country.

Particularly in the last decade, several southern markets have matured into outstanding locations for corporate headquarters. What these markets have in common is a skilled workforce, a high quality of life, low corporate and personal taxes, an excellent information and communications infrastructure, and well-developed business-support services. They are also rich in competitive advantages such as strong transportation infrastructure and access including international airports, quality educational systems, and progressive incentives.

If you're looking for the right location for your corporate headquarters, a location that will positively impact your corporate culture and your bottom line, consider one of SB&D's 10 best.

Richmond, Virginia
A well-developed professional services sector

Richmond has proven itself as one of the nation's top headquarter locations with ten Fortune 1000 headquarters and a total of 40 regional, national, and international headquarters. With a reputation as a “Corporate Town” that goes back more than 100 years, Richmond also has an extremely well developed professional services sector to support headquarter locations. All of the major banks have a regional presence, each of the large CPAs have offices along with regional accounting firms, and the city has the largest concentration of advertising and public relations firms between New York City and Atlanta.

In addition, Richmond offers a mid-Atlantic geographic location 500 miles from Boston and 500 miles from Miami, giving easy access to a majority of the U.S. population. Also, having 10 colleges and universities with more than 60,000 college students and 7,600 graduates per year provides a steady stream of “knowledge workers” ideal for 21 st Century companies.

Richmond's outstanding quality of life features four moderate seasons, a reasonable cost of living, many lifestyle and housing options. The “two hour rule” also applies to living in Richmond—within two hours you can travel to Washington, D.C, the mountains, or the beach. Transportation options in the Richmond area are also first rate putting companies in easy reach to vendors/suppliers and customers. Richmond has its own international airport and Dulles Airport, is just two hours to the north near Washington, D.C. Interstates 95, 64, 85, and 295 also crisscross the region.

The latest corporate headquarters success for Richmond, packaging giant MeadWestvaco Corp. recently announced that it would move its corporate headquarters from Connecticut to the Richmond area, creating 400 jobs.

Jacksonville, Florida
A ready-to-go workforce

Two-thirds of the 50 million consumers in the Southeast are located within 600 miles of Jacksonville and the two deep-water ports in the area give access to global markets. Jacksonville also offers low construction costs, broadband connectivity, a consolidated city/county government, and a streamlined permitting process.

With all of the employment growth in Jacksonville and Northeast Florida over the past few years, the area's most remarkable asset is its constantly growing workforce. A steady stream of college graduates come from five nearby colleges and companies in the area have access to a wide variety of recruiting, employment, and customized training programs that ensure quick staffing. Jacksonville also offers 60 miles of beaches, a warm climate, world-class golf, boating, professional football, and a below-average cost of living.

Memphis, Tennessee
Centrally located with a vibrant downtown

Memphis is home to three Fortune 500 companies' global headquarters including FedEx, AutoZone, and International Paper.

The city's prime location has been a major draw for these companies. Adjacent to the Mississippi River and crossed by seven federal and two interstate highways, Memphis also has the world's busiest cargo airport. More major metro areas can be reached overnight from Memphis than any other city in the central U.S.

Memphis also offers reasonable operating costs including some of the least expensive rates in the country and aggressive incentives to bring home corporate headquarters. In addition, the community offers a strong educational system including excellent higher education facilities. Making the city an even better place to live has been a priority in Memphis. The city has invested over $2.3 billion in downtown redevelopment, triggering the 10 th fastest city center population growth in the nation.

Houston, Texas
A well-developed technology infrastructure

Houston offers a workforce of more than 2.6 million and a well-deserved reputation as a fast-growing technology center. The area also offers much more: real estate priced below the national average, a solid transportation infrastructure and appealing business incentives. Twenty-one companies on the 2005 Fortune 500 list are headquartered in Houston, giving opportunities for executives to collaborate. And, Houston offers the lowest median age among the nation's 10 largest metro areas, making it less susceptible to a shortage of entry-level workers both now and for the future.

Houston's freeway system includes 575 miles of freeways and expressways in the 10-county metro area and the Houston Ship Channel, a 52-mile inland waterway, connects the Houston area with markets worldwide. The Port of Houston is the sixth largest and the city is one of the nation's busiest rail centers. Houston also offers an extensive professional services infrastructure including accounting and legal firms along with finance and venture capital companies, management consultants and media/public relations firms. This market also offers ample, low-cost property and office space and its cost of doing business ranks among nation's lowest for a mega market.

Nashville, Tennessee
Strong growth and momentum

Nashville has been on a roll when it comes to attracting corporate headquarters. HCA, Bridgestone/Firestone, Dollar General, Caremark, Caterpillar Financial, and Nissan are just a few of the national and international headquarters that have landed in this market.

Centrality and excellent access to markets are major advantages of Nashville. The community is located within 650 miles of half of the nation's population and the well-developed rail, highway, and air transportation network means fast and easy connections.

Nashville also has a low cost of doing business and the State of Tennessee has no personal income taxes, a strong incentive for relocating employees and attracting new talent. In addition, Nashville is a growing city with a strong quality and availability of buildings and rich quality-of-life amenities. The higher education environment in Nashville provides an educated workforce strengthened by 20 colleges and universities with a collective student enrollment of nearly 100,000 students.

Tampa Bay, Florida
Diversity at its best

The communities that make up the Tampa Bay region have the quality of life to attract the diverse talent needed by corporate headquarter operations. More than 60,000 new residents a year, including many with multi-lingual capabilities, are moving into the area and keeping the workforce pipeline fresh. Add to that one of the top 20 largest universities (the University of South Florida) and you find a continual “cranking out” of job recruits.

The upstream and downstream support of headquarter facilities is also in place in Tampa Bay, providing a variety of goods and services to help companies remain competitive. The region's strength is in the diversity of industries located there with strong resources in IT, medical/healthcare and business/financial operations to serve the needs of a headquarter location. Besides being able to offer beaches, warm weather, and an international airport, Tampa Bay offers low costs for real estate, labor, utilities, and taxes.

Tampa Bay offers a variety of options in available ready-to-go sites or open green-fields for campus settings. In addition, this market offers a variety of lifestyle choices too. If one executive wants to live on the water, one on the golf course, and one on a ranch with horses, they can all make it to the office within 20 minutes.

Atlanta, Georgia
A Fortune 500 Mecca

Three major attributes combine to form a knockout combination that makes 28-county metro Atlanta extremely attractive to corporate headquarter relocations.

First, Atlanta's international airport and the city's status as a major business center in the South assure companies that they will have access to their customers and the world. In addition, an educated workforce dramatically adds to the appeal. The region's 45 universities educate 200,000 students per year. Georgia Tech alone turns out the largest number of engineers of any university in the country, and Atlanta residents hold the sixth highest number of advanced degrees in the nation. Finally, the cost of doing business in Atlanta is among the nation's most competitive.

Austin, Texas
Educated workers in abundance

Austin has talent pool that runs deep. More than 38 percent of people living in Austin over 25 years old have a bachelor's degree or higher. The area also has a constant pipeline of talent coming from the area's higher education institutions such as the University of Texas at Austin and others. Quality education in Austin starts at the K-12 level and the area boasts some of the best-rated public school systems in the country.

With mild weather year round and a distinct culture, Austin holds appeal to singles and families alike. In fact, the Worldwide Employee Relocation Council named Austin as the number one city for relocating families in 2004. Also, Austin's reputation as a music and cultural center makes it a strong draw for creative talent. Internationally known music festivals in this Texas market include Austin City Limits, South by Southwest, and SXSW digital media.

Austin offers a competitive cost of doing business with Class A real estate less than the national average. Also, nonstop flights go from Austin to 29 cities around the country.

Dallas/Fort Worth
The largest concentration of corporate headquarters in the U.S.

Home to more than 10,000 corporate headquarters, Dallas/Fort Worth offers all of the fundamentals that few other markets in the world can match. This southern market offers a location in the Central Time Zone with superior air transportation, a favorable year-round climate, a critical mass of existing corporate headquarters and offices, competitive operating and living costs, and a major metro quality of life with the arts, professional sports and entertainment.

One of DFW's most recent and most impressive “wins” in the corporate headquarters arena came when it attracted the attention of Fortune 500 company Fluor, which announced in 2005 that it would move its corporate headquarters from Southern California to the Dallas/Fort Worth Metropolitan area. The company recognized that a move to DFW fit its strategy to enhance operating efficiency and become more customer focused, providing optimal travel connections to customers in all global locations.

Raleigh-Durham, North Carolina
An unparalleled blending of business and education

Locating in Raleigh-Durham will put your company in the heart of world-class academic institutions and pioneering research. The area, home to Research Triangle Park, boasts well-established clusters of innovation and a deeply rooted partnership between government, business, and educational sectors to develop knowledge-based workers.

Surrounded by an extensive system of highways and home to an international airport, Raleigh-Durham is easily accessible to customers and employees. The area's transportation advantages combine with attractive business costs and abundant well-educated workforce to make it a good fit for companies with explosive growth. This market also offers amenities and a creative atmosphere that will help companies attract the best and brightest employees.