HIGHWAYS, LABOR AND ENERGY AMONG INDUSTRIAL SITE FACTORS; CONSTRUCTION COSTS, QUALITY OF LIFE ALSO HIGH ON THE LIST

CAPE GIRARDEAU -- Localities trying to woo industries looking for new plant sites play against one another other in a mutual game of high stakes poker.

As site selection executives narrow the process down to the finalists, the players remaining around the table play their best cards - advantages their communities have that others do not.

No written rules say in black and white which cards furnish the winning hand. Community `A' may wear a poker face as it smugly holds what it believes to be a winning combination of site selection factors. But community `B,' holding a different combination, may become the surprise underdog winner when the new company selects community `B' due to an unconventional reason.

The player that wins this jackpot pumps millions of dollars into its local economy and allows economic opportunities for hundreds of potential workers.

While some of the criteria that companies use as a yardstick to measure new sites can be nebulous (One company decided on a site with a nearby school for the handicapped because an executive had a handicapped child.), most companies generally agree on several determining factors.

A recent survey by "Area Development" magazine on site selection factors yielded several significant findings:

-The top five site selection factors in the poll are, in order, highway accessibility, labor costs, state and local incentives, occupancy and construction costs, and energy availability and costs.

-The leading quality of life factors are low crime rate, public school ratings, health facilities, housing availability and costs.

-Half of the companies expect to expand current facilities within two years.

-Just over half expect to relocate in the next four years.

-Three-fourths expect to open new facilities in the next four years.

The national magazine, which focuses on site and facility development, surveyed its subscribers late last year.

Local response to the survey is generally favorable from people involved in industrial development. Since this region has many of the benefits of criteria cited, developers and promoters are not arguing with the survey findings.

"Cape Girardeau meets all the criteria companies are looking for," said Judy Moss, economic development director with the Chamber of Commerce. "Our area is doing fine and is not experiencing the difficulties others are." Moss spoke during a break in the Missouri Industrial Development Council conference she is attending in Jefferson City.

She listed the region's notable benefits - labor availability, central location in the U.S., and transportation availability - which give it and edge in competition. Facets that would make the package better, in her opinion, include better east-west transportation from the Interstate 66 project or Rte. 60 improvement, duty free status at the regional port, and more tax incentive finance (TIF) availability. While several enterprise zones are in place, she said the only TIF site available now is at the land where the M & W Packaging plant is located in northern Cape Girardeau County.

TIF and enterprise zones attract industries but also attract controversy. They are used as lures for companies fishing for new locations by offering reduced tax burdens. But schools and other government entities relying on tax-based income do not appreciate the loss of potential revenue. For ten years, qualifying companies are exempted from half of state income taxes due and are rebated half the local city and school district property taxes. All of Cape's industrial areas are locate in enterprise zones.

Ernie Beussink, who with other developers are promoting the Six-Thirty Industrial Park along Highway 74, acknowledges the controversy associated with these programs, but says they are a necessary spoke in the wheel that attracts new industries. He contrasts the short term tax abatement with the long term benefits of increased future tax revenues.

He said the total real estate tax revenue on the 200 acres in the industrial park before it was developed totaled $500 annually. According to county tax records, two of the companies there, Mid-America Distributors and Dana Corporation generate $5,200 and $26,700 each in real estate taxes annually.

The crown jewel in the Six-Thirty project is the Dana Corporation manufacturing plant. Beussink cites at least $1.5 million in financial incentives from Six-Thirty Inc., Union Electric, the state Department of Economic Development, and others as factors in Dana's decision to locate here. About 200 employees will be working there when it reaches full capacity.

Another high-ranking component in site selection process, a low union profile, has a corresponding controversial nature. In the survey, 78 percent of the respondents ranked it as an important factor, outranking others such as nearness to major markets. Beussink said he has been in contact with several companies citing a low local union profile as a requirement for potential site consideration.

Bill Thompson, plant manager of the Briggs and Stratton engine plant at Poplar Bluff, said emphatically it is the highest priority factor in the company's recent site selection process. "We like to deal directly with our employees, not through a third party," he said. "That can be difficult through union representatives."

The company provides employees with a economic package of wages around $6.50 per hour, plant productivity profit sharing and a medical insurance plan that Thompson says "no one can touch."

B & S inspected and passed over several sites in the Midwest before deciding on the Poplar Bluff site. The two-year-old plant now boasts an annual payroll in excess of $10 million for the local economy as its 600 employees produce 8,500 engines daily.

Walt Wildman of the Regional Commerce and Growth Association agrees with the national survey results and goes on to say communities should realize an inconspicuous factor in the fight to attract new business. He explained, "A community has to offer something extra. Most all tend to offer the same incentives - tax deferments, speculation buildings and free or cheap land."

Regional cooperation, such as the RCGA is promoting in Southeast Missouri and the Southern Illinois Coalition in Southern Illinois, can be an important benefit, he said. The 135-member RCGA works to support economic development groups and projects that would benefit the area.

Wildman and Alan Maki of the Southeast Missouri Regional Port Authority both promote the inter-modal transportation concept when talking with prospective businesses. The holistic approach to various transportation networks available in the region is a high card in their game.

"Transportation is a major selling point these days," Maki said. "And it's not just highway transportation. Companies need more than one transportation option now." The port, located on the river east of Scott City, expects to have rail service by the end of the year and is anticipating direct access to Interstate 55 and the airport when Nash Road is extended.

He said companies that have bypassed the region are searching for existing speculation buildings, competitive utility costs and availability, and a large, well-trained labor force. He also said the area needs an economically viable commercial air service that is reasonably priced and reliable.