Winter 2006

Mike Randle, Editor

Today's Site Consultants Losing Knowledge of Intangibles

I don't know if it's the threat of lawsuits or what, but site consultants you may employ for your next expansion or relocation have either dismissed the fact that intangibles are important in a corporate or industrial site search, or they simply have lost their edge in the skills of building relationships, knowing political climates and reading people. Of course, those are just a few of the critical intangibles you will deal with when you're looking for a profitable location to further your company's growth or consolidation.

It clearly appears to me that many consultants these days see site searches as right or wrong, true or false, black or white or complete or incomplete. Nothing could be further from the truth. You know it, I know it, but most site search companies and most of the people who work for them have apparently forgotten it.

Research and RFPs continue to be the site consultant's biggest leverage tools. They should be, as facts are truth and truth remains the elusive object of the consultant and the company they represent. Site consultants do a great job at assembling the numbers. But there are other facts that a RFP doesn't reveal and no proposal or software program can expose the intangibles that can make a difference in whether your company will be embraced, shunned or treated indifferently by the people of the community you choose.

Let's look at the Kia site search that has led all searches in Southern media coverage over the past year. Site consultants working Project Pinetree (Kia) obviously pointed out to Kia that a West Georgia location is cost-effective and is close to Hyundai's Korean suppliers, all of which are in neighboring Alabama. Or did they reveal that? One source in Georgia told us that the site consultant who handled the project early on gave state officials such vague information about the deal that the Pooler site near Savannah was wrongly offered up by Georgia officials to the Korean automaker about 18 months ago. An Asian automaker has no use for an East Coast port town and Georgia wouldn't have suggested Pooler if they had more information about the project. The poor job done by consultants early on scratched the Peach State off the Kia site list in the beginning.

But consultants should also be able to "read the intangibles" and report to Kia that Georgia's political climate was ripe for the deal, even 18 months ago. Why is Georgia such a great fit for Kia in the ever-important intangible category? It's timing. Timing is not something you will find on a RFP.

First of all GM and Ford are closing their assembly plants in the Atlanta metro. Georgia political officials, through no fault of their own, have gotten hammered in the media for letting the two domestic automakers leave the state. By landing Kia, Georgia had a once-in-a-lifetime chance to rebuild its automotive industry within 120 days of the GM and Ford closure announcements. That is a huge intangible.

Furthermore, Georgia Gov. Sonny Perdue needed a visible economic development win in a huge way. It's an election year. The natives in the Peach State are restless and tired of losing to Alabama and other Southern states in the loftiest of project announcements -- automotive assembly plants. In other words, no state in the Southern Automotive Corridor is better suited in an intangible way than Georgia is for this, the latest assembly plant deal in South.

What's interesting about the Kia decision is that the site consultant didn't pick the site and the chosen site was far from "certified." The West Point, Ga. greenfield site had been discovered by Hyundai officials as they drove past it from the Atlanta airport to their plant in Montgomery, Ala. It should be noted in these days of site certification that every foreign automaker that has announced a new plant in the South since 1992 has chosen a greenfield site. Let's be specific: a cowfield site.

Intangible factors have played a large role in virtually every major announcement made in the South, especially those from the automotive industry. Executives with BMW scouted restaurants, malls and the streets of Greenville, Spartanburg and Greer to "read the people's faces" before choosing the Upstate in South Carolina in 1992 as the site for the German automaker's first U.S. assembly plant. Would Alabama have landed Mercedes-Benz in 1993 if the New York media hadn't written "there is no way Mercedes will choose a backwater state like Alabama?" Reports of that type at the time made the challenge of turning the Mercedes deal an ultimate, even obsessive goal for economic development officials in the Heart of Dixie.

Would the ongoing Scripps Research Institute project still be a working project in Palm Beach County, Fla., if that county wasn't so affluent or if Jeb Bush wasn't George W. Bush's brother? Would a $1 billion incentive package at the 11th hour to locate Kia in Columbus, Miss., have gone public if it wasn't an intangible? The state of Mississippi didn't approve that figure and get it in the papers. Columbus officials and U.S. Senator Trent Lott's office offered up that giant inducement, which we will never know was real or not.

Site consultants in the days pre-World Wide Web knew that intangible factors make or break a deal. You know why? There was more face-to-face contact between those consultants and the client back in the day than there is today. These days, most consultants wouldn't know an intangible angle if it jumped up and bit them on the knee. It's just not their nature. It's not the way they are trained, which is to gather the data, no matter how obtuse, rank it and spit it out.

One thing that will never change about expanding your business to another place is that you have to feel good about that place. You have to connect with it, with the people, with the landscape and with the leaders. Unfortunately, site consultants are losing their abilities to convey the intangibles to you that will make you feel 100 percent comfortable with a multi-million dollar decision. Remember, it's not the consultants that have to pay for your decision. You do. Let's hope this column will loosen up at least one consultant's collar so he or she will consider giving you more information regarding the intangibles involved in site selection.