Trade Deficits Not Automation Causing Job Loss

IndustryWeek reports that a new study out by the Information Technology and Innovation Foundation (ITIF) shows that the bulk of those 5.7 million U.S. jobs lost between 2000 and 2010 were a result of trade pressure and faltering U.S. competitiveness, not the adoption of automation.

The reason for the new findings?  First, productivity growth in the 2000s was actually comparable to that of the 1990s, but the latter decade resulted in significantly more job loss (as much as 10 times more).

Second, government statistics likely overstate actual productivity growth.  In one example, the report points out that the data shows a greater than 170% increase in computer manufacturing output from 2000 to 2010 when there were actually fewer computers made.  The massive growth actually represents computer processing speed, leading to incorrect measurement.

The recommended solution from ITIF?  That U.S. policy makers should close the country’s trade deficit by producing a national competitiveness agenda and curbing foreign mercantilism to boost manufacturing productivity rates in the U.S.

They also estimate that doing so would create 1.3 million new U.S. manufacturing jobs.

Check out the report here.

Is Site Certification Worth It?

The gold rush is on.  Site certification is the new “shovel ready” and more and more economic development organizations and utilities are scrambling to “certify” their site(s).

But is site certification worth it?  Maybe.

The value of site certification depends on two critical factors.

First, what is being certified?  Because there is no national standard for site certification, site certification has no quality control.  Therefore some certifications are mere labels stamped on a site, while others represent a significant effort that was completed to verify that development of the site as intended can be achieved under defined conditions.  As you can imagine, the latter is a higher standard than the former.

Second, what will you do once you have the certification?  In other words, what is your marketing plan for getting out the word that you have something that very few others do?  If you spend tens of thousands of dollars on truly studying and certifying a site, you need to consider in advance establishing a commensurate budget for marketing and promoting what you have.

Want an example of a great site certification program?  Look at the State of Iowa

In Development The Sixth P is the Most Important

Regardless of what type of business you’re in, we bet you’ve heard of the five Ps before.

Unfortunately, this great example of alliteration leaves out the sixth and most important P that often has the greatest impact on real estate development: Public.

Whether you like it or not land use dictates that the ‘public’ has a say and what they say about your project will greatly impact your project’s success.  Handling communications on your project in a manner that properly engages the public (e.g. adjacent property owners, environmental groups, community services, etc.) has never been more critical.

Want to know how well this works?  Ask Hillary Clinton.  In politics this is called the drip, drip, drip. . . Your urgency to fight ‘fires’ will lead to inconsistent responses, multiple spokespeople and more negative attention as mistakes in your message are made.

Changing technology and faster ways to communicate are not making more people aware of business transactions and pending developments than ever before, but they given them great power to be heard by large numbers of others.

We recommend that our clients spend time during their project planning to identify a communications strategy that helps ensure their projects aren’t subject to being taken over by things like social media activism.

First, let’s talk about 3 mistakes real estate companies often make when dealing with the public:

  1. They get too dependent on labeling their work with “Confidential” and “Proprietary.” The fear of information getting out about a project (impacting the price, terms, closing, etc.) is often the biggest reason why a company is ill prepared when the public becomes aware of their project.  The results are even worse if the project generates any controversy.    Regardless of what steps you think you’ve taken to keep your project secret, it won’t stay secret.  Information inevitably gets out as your employees talk about work, your vendors brag about getting the bid or your project submits the first application seeking a public approval (e.g. zoning, permitting).  Just remember, you’re only one tweet away from a crisis unless you’re prepared in advance.
  2. They respond to speculation/public comment on a case-by-case basis because they don’t want to draw unnecessary attention to themselves.  Want to know how well this works?  Ask Hillary Clinton.  In politics this is called the drip, drip, drip.  If your company lacks even a basic communications strategy or a plan for public comments (e.g. letters to the editor, open letters via Facebook, etc.), things will only get worse when you try to individually respond to each rumor, tweet or news inquiry.  Avoid the desire to have a communications strategy that mirrors how you use email.  Your urgency to fight ‘fires’ will lead to inconsistent responses, multiple spokespeople and more negative attention as mistakes in your message are made.
  3. They avoid diplomacy and prepare for war.  More so in land use projects than any other endeavor, the tendency of companies is to prepare for combat with the public and the neighbors.  However, in many cases the minor issues that cause major headaches can be worked out in advance of public processes by having a plan to meet with and listen to these public ‘fuses’ that can represent the start of your troubles.  I’ve seen too many projects where a conversation about planting a few perimeter trees, building a fence or donating to the fire department could have saved the project from public critique and time consuming delays.

Now, here are four tips to help your next real estate project:

  1. Have a plan.  Develop a proactive company communications plan or at least craft a project communications strategy that anticipates likely public objections and identifies who on the project is responsible for all public comments.
  2. Involve and train your employees. Make sure they clearly understand their responsibilities and who you have designated as your spokesperson.  Moreover, don’t be afraid to ask what challenges they think you will encounter and see if they’ve heard or overhead the early reactions of adjacent landowners, the grocery store clerk or anyone else. As they say, listen with many ears and speak with one voice.  Lastly, make sure that whoever is speaking on behalf of your company has some formal training (e.g. NAHB spokesperson training, etc.).
  3. Think less like a business and speak more like the girl/guy next door.  A project’s neighbor doesn’t care about how your project will help the local economy, how affordable your housing will be or how what you’ve proposed is consistent with the comprehensive plan.  To them, it’s much more personal.  So, you need to brainstorm how someone outside your company will react to what you’re proposing.  Then put together a strategy that identifies their likely concerns and effectively communicates on a level they will listen and engage.  And whatever you do, don’t let a project engineer be the spokesperson – engineer speak is a foreign language when spoken in a public meeting concerning a project.
  4. Don’t be afraid to hire a professional. A professional can not only help you create an effective plan or train a spokesperson within your company, but they can also help you determine if certain projects or initiatives require more intense upfront planning, such as polling, focus groups or message development.

Court Decision Brings Chaos to New Year

As most people were stocking up on party favors and champagne, the Supreme Court of the State of Washington issued a decision on December 29, 2016 in the case of Snohomish County, et al v. Pollution Control Hearings Bd., et al, 92805-3  with huge ramifications for the vested rights of those seeking to build new projects of any kind.

The Decision

In short, the Supreme Court found that the State’s vested rights doctrine does not apply in the case of municipal storm water permits (a/k/a NPDES permits) and the application of storm water regulations for developments because they are not “land use control ordinances.”  All development applications submitted after July 1, 2015 and projects approved prior to that that date but not under construction by June 30, 2020 are now subject to being impacted by changing storm water regulations.

About Vesting

For those less familiar with vesting, the vested rights doctrine in Washington generally entitles developers to have a land development proposal processed and considered under the regulations in effect at the time a complete application is filed.  This protects the application against subsequent changes to zoning and land use regulations.

And, in Washington’s complex Growth Management Act regulatory system, vested rights have been critical to countering local regulatory efforts to stop or alter growth via development (e.g. moratoria, design standards, zoning overlays, etc.).

What’s Next?

All projects, whether they be residential, commercial or industrial, are going to need to review how the new standards may impact them on a project by project and jurisdiction by jurisdiction basis given that the regulations have been phased in starting with the most populous counties.

It may be possible to work individually at the local levels of permitting to limit the impacts of the decision on your project based on how those jurisdictions interpret things such as what constitute local development approval and/or what constitutes a complete application.  However, this should be done with caution as there is already been public records requests filed in at least one jurisdiction to identify what projects may be subject to the new rules – a signal that individual appeals of projects may be forthcoming.

Regardless to what approach you might take for your project(s), the strength of your design, engineering and project management team will be critical.  And it won’t hurt to be ready to play some politics.

Can This Be Fixed?

Perhaps.  For example, the legislature might be able to modify the definition for what are land use regulations, but it will be an uphill battle against likely political headwinds, which is more often than not the case when it comes to business concerns in Washington State.

The End is Not Near

For those looking for relief in the form of a period of certainty and predictability – the end is not near.  In fact, appeals to things like Snohomish County’s critical areas regulations (CAR) are soon to be heard in the courts.  And, if recent history is an indicator, more challenges lay just ahead in the bumpy road of development.

 

Disclaimer: we are not attorneys and the information contained herein is not a legal opinion, but a professional opinion based on our experience working on land use projects in Washington State.  Before making decisions, you’ll want to consult with you project team (including your legal counsel, engineers and etc.).  If you’d like some recommendations on good land use attorneys and consultants, we’re happy to help.

 

 

Economic Development Marketing Tips

Does attracting a new industry to your community top your list of resolutions for 2017?  If so, here are 5 must-haves for marketing your available industrial sites:

  1. Know the price.  We look at a lot of sites and potential sites.  And while many sites have a sales price, the price is often nothing more than a guess based on a recent transactions in the area that can be a couple years old.  We advise our community clients to create certainty and identify the real price by either purchasing or optioning the land.  Why? Land often has a current price (what someone is willing to sell it for today) and a prospect price (what someone thinks they should sell if for now that there is a prospective buyer).  A third less enforceable method is to get a commitment letter from the land owner.  Our cautionary tale:  do not list sites as negotiable.  Businesses know everything is negotiable.  However, sites that say this upfront typically fall into a ‘current price’ versus ‘prospective price’ scenario and site selectors and corporate real estate professionals know this and will stay away.
  2. Know the infrastructure.  Many communities tout that they have ample water and/or sewer capacity, but often don’t have all of the information to qualify their statements. For instance, capacity at a water plant is meaningless if you don’t have a delivery system that can get the water to the site in question.  We’ve seen it happen when a community markets 2 million gallons per day in water capacity.  Only to later learn the capacity is ‘permitted’ capacity (how much water they can take in).  The actual design capacity left the plant without a big enough pipe out of the plant to get the water to the site in question.
  3. Do your homework.  You’ve got a 100 acre site located along a rail line.  It’s a rail served site right?  Maybe.  Class I railroads will tell you that many of their main lines are operating at very high capacities. Even assuming they have the capacity in their system to slow down at your site, you may not have the site attributes to support development of enough lineal foot of track to get a unit or manifest train fully clear of the main line (think 100+ cars).  So before you market a site as rail served, get with the economic development and engineering teams at the railroad in question to confirm your assumptions before you market rail access.
  4. Mapping matters.  If you’re still using markers to highlight a map to scan it in as a pdf – STOP! Either hire someone to produce you maps (marketing firm, local planning department, county gis or regional council of governments) or create them yourself using some of the great programs now available.  We advise that for each site, you should have three maps at the ready:
    • Site map – a closer up map that shows the site, its boundaries and the proximity and sizing of the utilities (water, sewer, fiber, natural gas and electricity) that serve the site
    • Transportation map – a zoomed out map that shows access points from the site to highways, rail (if really available – see #3 above), river terminals (if available) and airports
    • Topography map – a map that shows the topography for the site and any wetlands, rivers, steam or etc. in or near the site
  5. Upload and unleash.  Having the right information on your sites isn’t very valuable unless you’re doing something with it.  Start by getting your information on your website, on major property databases (LocationOne, CoStar, etc.).  From there, contract with a professional that can help you develop a strategy for getting you information in front of your targeted industries.

Got questions?  We can help – contact us today