The Industrial Certification Dilemma

You may have seen the recent article in the Wichita Eagle titled “Still some debate over industrial certification” dated August 29, 2013. In the article, it discusses the current debate over whether to begin an industrial site certification program at the Greater Wichita Economic Development Coalition (GWEDC).

I was invited to the table to be a part of this discussion last year and help develop what the program would look like. It was an exciting opportunity to help shape a new marketing program for industrial sites in the south central Kansas region. Typically, site certification programs are operated by state departments of commerce. The state of Kansas has yet to take on this venture for a variety of reasons but I’m assuming this is due to the internal costs to operate such a program. The reason GWEDC began looking into taking this on locally is to provide an additional marketing option for large industrial sites that could assist in attracting large job creating businesses to the south central Kansas area. Especially since there was no state program available. It was an opportunity to be a leader for the state of Kansas.

So over the course of 2012, we established a committee to look into this and develop the framework of a program. Sites deemed as certified through the GWEDC administered program would verify that the site was “shovel ready” and would include a packet of information showing every attribute about the site, from site plans to utility information to transportation modes to environmental information. The intent was to try and remove as much risk as possible from the site selection process for the site selectors. Further, it would bring the larger industrial sites in our region to a level playing field on the regional and national stages of competition (notice I said bring them to a level playing field, most sites that compete on this stage are already certified). As I have heard many in the economic development game say before, site selectors are looking for reasons to throw sites out of the evaluation process, not keep them in. Sites that aren’t certified are one of the first to go on the regional and national site selection stage.

Since our committee met in 2012, the process has stalled out due to the internal discussion at GWEDC on whether to go forward with administering such a program. I would like to take this opportunity to clarify a couple of things from the Eagle article:

1. The quoted cost of $20,000-$30,000 to develop the necessary information to certify a site is typically not an additional cost in developing the property. If a site is shovel ready, that means the streets and infrastructure is in. To do all of this work, the information included in the site certification documentation is already being performed as a part of the site development process. So that cost is not additional, it's already being incurred today.

2. The additional costs of the program lie in the third party review (typically less than $5,000), staff time to administer the program and additional marketing expenses.

3. The third party review is important for transparency purposes. It’s a check to make sure the applicant has covered all of the items on the certification checklist. By having GWEDC administer the program by hiring an independent firm to review not only gives the site credibility, but it gives the region as a whole added credibility that there has been a baseline standard established and that its backed by an organization that represents not only the business community, but the citizens and elected officials as well.

4. The certification program does not require anyone to be a part of it. Its meant to enhance the marketing of the region’s sites but it is 100% optional. My hunch is that once such a program is developed, it would push local developers and site owners to a more region wide competitive level and that only enhances the quality of the sites.

Here’s the bottom line, currently today there is no site certification program in this region but there is in nearly half the states. The economy in this region is flat at best with very few, high profile employment generators coming here from other regions. If the region is interested in making a change and jump-starting the local economy and trying a new program that has caught on in many areas in the country, areas this community is losing to consistently in the current jobs war, then why not give this program a try?

If you have any questions regarding site certification or industrial site consulting, feel free to contact me at jrlackey@transystems.com.