From the northernmost tip of Maine to the Florida Keys, the East Coast of the United States contains myriad geographic features and cultural nuances. It also offers a diverse and wide-ranging group of factors for expanding and relocating companies to contemplate.

Each region on the East Coast, also known as the Eastern Seaboard, has certain elements that can contribute to a successful site location decision, says Tim Feemster, senior vice president and director of global logistics for Grubb & Ellis Co.

The Northeast has a huge population base, including the metro areas of New York City, Philadelphia, and Boston. Market conditions will force companies that need to be within one day’s transit of a substantial consumer market to locate in the Northeast, despite its higher costs of doing business, Feemster says. There is significant industrial development in New York, New Jersey, and Pennsylvania, as well as numerous ports, to support a decision to locate a facility in the Northeast. From the Northeast, companies can also service the Upper Midwest region.

The Southeast, on the other hand, tends to have a union-free labor pool, a critical factor for many growing manufacturing companies. The region has a lower cost of doing business, and state and local governments tend to be more generous with incentives, including workforce training programs.

Also, many companies importing product and raw materials from Asia can bypass the West Coast ports of Los Angeles and Long Beach and dock at Southeast ports on the Gulf of Mexico and Atlantic Ocean. This puts companies that much closer to their customers and markets. “An all-water route helps from a cost perspective,” Feemster points out.

However, each company needs to determine its own criteria as to what will make a successful relocation project.

“Every company is unique,” Feemster says. “Each will have different location elements that it will weigh differently than other companies might. Companies have to have a strategy to support their location decision.”

Central Florida's economic engine

The Tampa-Orlando, Florida region is a growing consumer market, with 8 million people within 100 miles. Central Florida is the 10th largest economy in the country with a gross domestic product of more than $272 billion.

As a result, the region has developed into a major distribution hub, with numerous companies having recently constructed and/or expanded distribution and warehouse facilities. The Port of Tampa, the largest port in the state of Florida, is expanding to take full advantage of this growth.

“We are the largest economic engine in Central Florida,” says Wade Elliott, senior director of marketing for the Tampa Port Authority. “We’ve seen a great deal of momentum [during the past decade] in expansions and relocations. Our geographic location allows us to be a very effective distribution gateway for the entire state.”

In 2009, the Tampa Port Authority continued an aggressive capital investment program to prepare for future growth and to help stimulate the regional economy.

The latest phase includes the expansion of the port’s container terminal from 25 to 40 acres, with additional phases planned during the next several years that will result in a full build-out of more than 160 acres on adjacent property owned by the Tampa Port Authority. The property is ready for development, Elliott emphasizes.

The container expansion project is crucial to the cost of importing product, then shipping it out by truck throughout the region. A local truck delivery from the Port of Tampa would cost about $150, compared with the approximate $1,000 per container if a company utilized a more distant port.

Work is currently underway to extend the container gantry rails, increasing the berth length from the current 1,800 feet to more than 2,900 feet, with 43-foot depth in the channel and alongside the berth.

Upgrades are also underway to facilitate cargo once it hits land. For starters, ground was broken earlier this year on a new dedicated truck ramp connecting the port to Interstate 4, which connects Tampa and Orlando. The link is part of the $600 million Interstate 4-Crosstown Expressway Connector project, which is scheduled to be finished in 2014, coinciding with the completion of the Panama Canal expansion.

The upgrades to the logistical infrastructure around the port, as well as in the Tampa metro area, is critical for the region’s continued growth, Elliott points out.

“Site selection decisions are driven by proximity to market and how efficiently a company can serve that market in reducing logistics costs,” he says. “Companies recognize there are huge cost savings and convenience advantages to have their products move through a port that gives them proximity and access.”

A rich environment

On the Atlantic side of Florida, the Jacksonville metro area has an intermodal infrastructure that makes it an attractive site for expansion or relocation projects.

The metro has a deepwater port, JAXPORT, with three marine terminals handling bulk and container shipments, that is at the intersection of three major interstates (interstates 95, 75, and 10); four airports, including Jacksonville International Airport, and a vast network of railways. This infrastructure puts the metro area at the epicenter of a 50-million population region that covers Florida, Georgia, and parts of Tennessee, North Carolina, South Carolina, and Alabama.

“We sit in a rich environment,” says Jerry Mallot, executive vice president of the Jacksonville Regional Chamber of Commerce. “Companies look for an integrated intermodal system that brings goods in on a ship and efficiently puts them on a truck or rail at the port. They want as little extra handling as possible.”

Cargo activity coming into JAXPORT generates nearly $19 billion in total economic activity. The port has been deepened to 41 feet and will be deepened by an additional 8 feet starting in 2015.

The port established its first connection to Asia last year when Tokyo-based Mitsui O.S.K. Lines Ltd. opened a $300 million terminal. JAXPORT was selected for the new facility because of its fully developed railway and road networks. Many major logistics and warehouse facilities are located in the surrounding area, and the port can expect further growth as a logistics center for the East Coast, according to the company.

The port is also seeing expanded service to Europe and South America.

The metro area has greatly benefited by the transformation of Cecil Commerce Center from a military base to commercial enterprise during the past decade.

It is one of the most sought-after locations in the Southeast for manufacturing, supply chain and logistics, and industrial end-users, Mallot says. Cecil’s industrial and commercial-zoned property offers mid- to large-size parcels for development, and it has its own transportation and utility infrastructure, with access to Interstate 10 and the third-longest runway in Florida.

About 1,500 acres in the northern-most section of Cecil is certified as a “mega site,” a large industrial property qualified to support a major automotive manufacturing plant or similar, large-scale facility.

“Cecil gives us more options than ever before for location opportunities,” Mallot says.

Charlotte looks to rebound

If you combine the states of North Carolina and South Carolina, you would have a market of 14 million consumers and the 18th largest economy, by GDP, in the world. In the middle of that market is the Charlotte metro area, which is trying to win as many consolidation relocation projects as possible to make up for the loss of jobs in the financial sector.

“We want to win every consolidation project,” says Kenny McDonald, executive vice president of the Charlotte Regional Partnership. “When the economy rebounds, the cities with the most companies will have the most jobs created more rapidly.”

The metro area has suffered as a result of the downturn in the U.S. financial industry. It was the site of the corporate headquarters of Wachovia, which is now the East Coast headquarters of Wells Fargo. Bank of America has also downsized in the region, as did many manufacturing and logistics operations.

The result has been a huge loss in payroll for the Charlotte metro, McDonald says. But, he emphasizes that the infrastructure is in place to help Charlotte overcome these losses.

CSX and Norfolk Southern have direct rail links to the Port of Charleston (S.C.), less than 200 miles away. And, Norfolk Southern is planning to launch a major modal expansion in the metro area, which is expected to increase connections to the port, McDonald says.

The metro area benefits from being located along the North Carolina-South Carolina state line. (The metro area comprises 12 counties in North Carolina and four counties in South Carolina). The benefit to expanding companies is that locating on either side of the state line could bring numerous incentives to lower the cost of a relocation or expansion, including access to two of the leading state workforce training programs in the country.

“Both states go after expansion projects in a very aggressive manner,” McDonald says. “They are creative in working with existing companies looking to consolidate and recruiting [new] companies by offering incentives to help reduce costs and minimize risk.”

Logistically, the metro area has an infrastructure in place to serve markets up and down the East Coast. McDonald says the metro is an ideal place for a Midwest-based company looking to site a second facility. “The infrastructure has kept up with the growth of the region, which is not an easy thing to do,” he stresses.

Poised for more growth

Perhaps no other metro area on the East Coast, if not the country, is a more attractive site for an expansion or relocation project than the Atlanta metro area. The metro area is an international business hub and a center of logistics and supply chain innovation, thanks in part to Georgia Tech University and the corporate headquarters of UPS.

Many large U.S. cities talk about taking a “regional approach” to economic development. Atlanta does more than talk about it; its approach to economic development is completely regional. Metro Atlanta, comprised of 28 counties, is home to more than 5.3 million people and more than 145,000 private sector firms. That regional approach has helped the metro area attract numerous corporate headquarters and other projects that bring high-paying jobs.

Atlanta is able to draw a diverse, highly skilled workforce. It leads the nation in attracting highly educated young adults, aged 25 to 34—the most coveted demographic in the country, according to Portland, Oregon-based Impresa Consulting.

The work force understands the global economy, says Bob Pertierra, vice president of supply chain development for Metro Atlanta Chamber of Commerce. That understanding is one reason why NCR relocated its corporate headquarters to the Atlanta metro from its longtime Dayton, Ohio, location in 2009, bringing more than 2,000 jobs.

“NCR was not able to recruit a good, diverse workforce that understood the global economy to grow its company from Ohio,” Pertierra points out.

Atlanta is actively recruiting companies from Latin America, Asia and Europe, as well as North America.

Logistically, the metro boasts Hartsfield-Jackson Atlanta International Airport, the No. 1 passenger airport in the world, where nine of the top 10 air cargo carriers in the world have operations. The airport opened a fifth runway last year. BMW ships automobiles to a testing facility in Germany from its South Carolina assembly plant, about 160 miles away, through Hartsfield-Jackson.

While the Port of Savannah is nearby, companies in the metro area also ship product through other southern ports, including Houston; New Orleans; Jacksonville; Norfolk, Virginia; and Charleston, S.C.

The metro area can boast of a substantial amount of industrial space—more than 610,000 million square feet, Pertierra says. And, there is more on the way.

One company is redeveloping the 150-acre former Ford assembly plant, located next to Hartsfield-Jackson. Meanwhile, the U.S. Army installation Fort Gillem is slated to close in 2011. The 1,400-acre, rail-served site already has warehouses on its property, and plans call for creating an industrial development complete with an intermodal facility after its closure.

Strategically located

The state of New Jersey is right in the middle of the nation’s largest business corridor, situated between New York City and Philadelphia. If it were its own country, New Jersey would be the 18th largest economy in the world.

The state caters to business startups, a growing company considering an expansion, a large corporation considering an expansion or relocation, or an international firm seeking to increase distribution in the U.S. There are more than 1,100 multinational firms from more than 40 nations with a presence in the state.

Key advantages to locating a company in New Jersey include a highly skilled workforce, strategic location, quality of life, and innovative businesses, according to the New Jersey Economic Development Authority.

New Jersey is home to five Foreign Trade Zones—Mount Olive, Port Newark/Port Elizabeth Marine Terminal, South Jersey Port (Camden), Mercer County Airport (Trenton), and Lakewood—that offer companies the ability to defer, reduce, or eliminate U.S. Customs duties on products. Foreign Trade Zones allow firms to bring foreign goods or raw materials for manufacturing and/or assembling into the U.S. without formal customs entry or payment of customs duties and government excise taxes until product leaves the zone. If the final product is exported from the U.S., then no U.S. customs duty or excise tax is levied. If the final product is imported into the U.S., fees are only due at the time of transfer on the product or its parts, whichever is lower.  wt



Ken Krizner is a freelance writer based in Cleveland, Ohio, where he writes often on economic development and technology issues.