Reducing Risk for Site Selection Consultants, Corporate Executives and Developers
By Courtney Zaugg, CEcD, Plaka Associates
Published: April 8, 2019 by The Veridus Group and Verisite
In light of the recent Amazon HQ2 contest taking place across the country, people are actively seeking to better understand the deciding factors involved in a major organization’s process for selecting a site. When a company needs to expand or relocate its operations, it is primarily looking to find a place where its business operations can perform efficiently and effectively. But with so many communities shouting about their assets, high-ranking quality of life and available sites and buildings, how do site selection consultants, corporate executives, developers or even the communities themselves know which site could be the best fit to help them achieve their goals? The answer is to engage experts to conduct comprehensive reconnaissance of each potential site and/or building. As part of an exhaustive site evaluation process, some property owners, brokers, developers, and communities are turning to the confidence and credibility of site certification programs to help determine the viability for investment in a property and to increase marketability to prospective end users, such as Amazon.
What is Site Certification
Site certification is a comprehensive investigation and evaluation of sites and buildings and their existing conditions to be used as a marketing tool for property owners, brokers, developers, and communities, certifying - with confidence and evidence - that the site is ready for economic development, according to specific pre-defined standards. Site certifications can be led by states or by consulting firms and calibrated for the end user and its industry. Fundamentally, site certification is:
A national marketing tool
A means to ensure that both buyer and seller have consistent and transparent information leading into a transaction
A strategy for greater exposure with site location consultants and corporate executives
A way to increase value and/or move property to the top of the selection list
A comprehensive assessment of property location, condition, assets, and economics
While there are many positive results of a site being “certified”, it is also important to understand that site certification is not:
An excuse to skip internal due diligent
A magic pill
Across the nation there are more than 20 states with shovel-ready site certification programs in place. However, not one of these programs uses the same criteria or standards for determining a site’s condition or readiness for development. What is judged as “shovel-ready” in one state might not meet another’s criteria. Further complicating matters, there has been no national certification process or standards nor any national database of certified sites that interested parties can refer to during a site selection process.
Why is Site Certification Important?
Certification, without doubt, mitigates risk and allows both buyers and sellers to enter into discussions with a common understanding of all facets of a site’s condition. Site certification, like the Verisite program, provides a comprehensive analysis of the site and building’s features, assets, and deficiencies, including the infrastructure, ownership, accessibility, topography, and more. While some site certification programs evaluate the minimum site service requirements in their due diligence process, the Versite certification program offers a comprehensive and accurate account of all available data, outlined in a marketing tool that is targeted for the end user. At the end of the day, corporate executives and developers are thirsty for speed to market in their relocation endeavors. Not only will a comprehensive and certified due diligence report help fill in the “unknowns” and associated costs, the marketing tools and support also help otherwise unknown sites become recognized. This enables them to be placed on a priority list for corporate site selection consultants as they now know that the site is prime and ready for development.
Current challenges to existing site certification programs include the lack of common definitions. For example, some programs label sites “shovel ready” or “development ready”. But what does that really mean to the end user? Additionally, industry-specific certifications often evaluate site readiness based upon different criteria. Industrial, food processing, and data centers sites all have varied and specific needs to ensure a viable site selection/relocation project. What might be a utility asset for one industry sector could be a deficiency for another.
Read the next post in this series here