Real
estate companies promote the region to businesses looking to
move or expand here.
By Liese Hutchison
Location, location, location is the decades-old real estate
adage used to describe the reason a company purchased or rented
space. Today, that adage may change to labor, labor, labor,
according to two real estate executives in the St. Louis region.
Rick Dames, senior vice president at Pace Corporate Services/CRESA
St. Louis, says when a company considers expanding or relocating
to a new market, it uses a two-phase approach to narrow the
list and make a final decision. “In the first phase the company
will look at the labor pool to see what universities are in
an area and to determine the quality of skilled and blue collar
workers available,” he notes.
“Labor is a big driving factor in relocation decisions,” concurs
Kathie Sammons, vice president of information services for Follman
Properties*ONCOR International. “Companies are looking for an
educated labor force from both a technical and collegiate level.
St. Louis has a strong education system that meets the needs
of companies that are coming here.” Sammons says that the region’s
strong work ethic, affordability of the labor pool and the caliber
of that pool is a major draw for companies.
Dames says that companies still in phase one of the review process
look to the geography of the city. With St. Louis’ central location,
central time zone, highway infrastructure and airport, it also
stands up to many other metropolitan areas. Sammons notes that
St. Louis is popular for call centers and distribution centers
for that reason. “St. Louis’ central location is also a critical
factor for distribution-oriented companies,” she notes. “It
also helps with time differences, because we’re right in the
middle of the time zones.”
Sammons cites an example of a company that recently chose to
relocate to St. Louis—Aesculap, Inc. The company, based in San
Francisco, was looking for a distribution and service center.
“Our business is growing,” says Bob Perrett, Aesculap president
and CEO. “Since we have customers across the U.S., it makes
sense for us to move our service and logistics/distribution
operations to a more central location. St. Louis offers many
advantages—a high-quality, well-educated work force, affordable
commercial space and a centralized location, which will allow
us to reduce shipping costs and improve response time to our
customers.” Follman worked with the RCGA to help secure Aesculap’s
move, which brought 80 new jobs to the region.
The final item that puts St. Louis on the short list, Dames
points out, is availability and variety of real estate. Once
the region makes the cut in phase one, phase two of the review
begins. In this second phase, a company will look at the specific
real estate availability of a market to fit its needs.
An example Dames shares is PeopleSupport.com. A Los Angeles-based
Internet customer service provider, the company was looking
for a space that had a good urban streetscape that would help
attract their employees, which are typically college graduates.
The company also wanted co-tenants that fit its own culture
and chose 555 Washington Ave. in downtown’s loft district. The
building is also home to The Zipatoni Co., an energized and
eclectic creative agency. “The space we found for PeopleSupport.com
gave them the image they were looking for,” Dames notes. The
company plans to hire 400 people this year to staff its St.
Louis operations.
PeopleSupport.com considered several other cities, including
Dallas, Cleveland, Phoenix, Salt Lake City, Denver and Boston
for its new “e-center.” Incentives helped bring the company
here as well as the labor pool and specific requirements for
a location, Dames states. “After specific real estate availability
and the competitive real estate rental rates we have here compared
to the coasts, companies then look at incentives being offered
by the state,” he says. “Several programs are available from
the Department of Economic Development. The Missouri Enterprise
Zone is one program that offers tax credits to companies that
invest in space in one of the zoned areas. The program also
includes job tax credits for new job creations,” Dames points
out. Job training programs are also an incentive offered by
the state.
During the incentive review phase of the relocation decision,
Dames says it’s then that other organizations are brought in
to help sell the region’s finer points. The RCGA, Downtown Now!
and other groups point out the cultural attractions, sporting
history, low cost of living and other amenities that help make
the region unique. According to Ronnie Bryant, RCGA senior vice
president of economic development, the RCGA aided in both the
Aesculap and PeopleSupport.com moves by providing demographic
and market research data, and by facilitating the assemblage
of competitive incentive packages.
Liese L. Hutchison is an assistant professor in the department
of communication at Saint Louis University and a free-lance
writer.
