Economic Development Organization Conference

Page 1

ENERGY, ENVIRONMENTAL

AND ECONOMIC STRATEGIES

FOR BUSINESS



FOR BUSINESS

Economic Development Organization Conference

April 6, 2016 Hilton Garden Inn, Erie, PA

Page 2



FOR BUSINESS

Agenda

• Appalachian oil and gas development

– Production, prices and performance

• Midstream and downstream development

• Impacts of resource development on regionaleconomic prospects

In other words …

1. What are we producing and

2. What are we going to do with it

Page 3



FOR BUSINESS

Geographic Context

Page 4



FOR BUSINESS

Value Proposition for our Region

Extraction of gas and

other products

Gas gathering

and processing

Ethane processing

Manufacturing of products

from methane and

petrochemical products

Cumulative regional

economic benefit

Lower energy costs for

homes and businesses

Page 5



FOR BUSINESS

Dynamic Oil and Gas Rig Count

Data Source: Energy Information Administration

According to Baker Hughes, lowest U.S. natural gas rig count

on record in late March 2016!

Page 6



FOR BUSINESS

Despite fewer new wells, production surges, especially in OH, PA

Source: EIA, Drilling Productivity Report, March 2016

Page 7



FOR BUSINESS

Increases in Productivity per Well

Source: EIA, Drilling Productivity Report, March 2016

Page 8



FOR BUSINESS

Natural Gas Price Declining - to a New Normal?

Page 9



FOR BUSINESS

Natural Gas Prices Over Time

Page 10



FOR BUSINESS

Natural Gas Cash Prices Regional Variability

Source: Wall Street Journal, 10.30.15

Page 11



FOR BUSINESS

Performance varies by Company

October 28, 2015

Financial performance: - One energy company excelled - Many in dead last - Most working to make it through

price trough

Page 12



FOR BUSINESS

Pipeline Development

Page 13



FOR BUSINESS

Barbour

Brooke

Doddridge

Hancock

Harrison

Marion

Marshall

Monongalia

Ohio

Pleasants

Preston

Ritchie

Taylor

Tyler

Wetzel

Wood

Belmont

Carroll

Columbiana

Coshocton

Guernsey

Harrison

Holmes

Mahoning

Medina

Monroe

Morgan

Muskingum

Noble

Portage

Stark

Summit

Trumbull

Tuscarawas

Washington

Wayne

Allegheny

Armstrong

Beaver

Butler

Clarion

Crawford

Fayette

Greene

Lawrence

Mercer

Venango

Washington

Westmoreland

West Virginia

Ohio

MWE Utica Counties MWE Marcellus Counties MWE Plants ATEX Express Pipeline TEPPCO Product Pipeline

Jefferson

Marcellus and Utica Expansion Projects

Mariner Projects

Rich Utica

Rich Marcellus

MWE Gathering Area

MWE NGL Pipelines

MarkWest alone had 22 Major projects under construction in 2013

MOBLEY COMPLEX Mobley I & II – 320 MMcf/d – Complete

Mobley III – 200 MMcf/d – 4Q13 Mobley IV – 200 MMcf/d – 1Q15

HOUSTON COMPLEX Houston I, II & III – 355 MMcf/d – Complete

Houston IV – 200 MMcf/d – 2015 C3+ Fractionation – 60,000 Bbl/d – Complete De-ethanization – 38,000 Bbl/d – Complete

SHERWOOD COMPLEX Sherwood I & II – 400 MMcf/d – Complete

Sherwood III – 200 MMcf/d – 4Q13 Sherwood IV – 200 MMcf/d – 2Q14

De-ethanization – 38,000 Bbl/d – 1Q15

HOPEDALE FRACTIONATOR C3+ Fractionation – 60,000 Bbl/d – 1Q14

KEYSTONE COMPLEX Bluestone I & Sarsen I – 90 MMcf/d – Complete

Bluestone II – 120 MMcf/d – 2Q14 Bluestone III – 200 MMcf/d – TBD

De-ethanization – 10,000 Bbl/d – 1Q14 C3+ Fractionation – 10,000 Bbl/d –1Q14

SENECA COMPLEX Seneca I – 200 MMcf/d – 4Q13 Seneca II – 200 MMcf/d – 4Q13 Seneca III – 200 MMcf/d – 2Q14

De-ethanization – 38,000 Bbl/d – 4Q14

MAJORSVILLE COMPLEX Majorsville I - III – 470 MMcf/d – Complete

Majorsville IV – 200 MMcf/d – 1Q14 Majorsville V – 200 MMcf/d – 4Q13 Majorsville VI – 200 MMcf/d – 2016

De-ethanization I – 38,000 Bbl/d – 4Q13 De-ethanization II – 38,000 Bbl/d – TBD

CADIZ COMPLEX Cadiz I & Refrig – 185 MMcf/d – Complete

Cadiz II – 200 MMcf/d – 3Q14 De-ethanization – 40,000 Bbl/d – 1Q14

Page 14



FOR BUSINESS



other products

Gas gathering

and processing

Ethane processing


from methane and


Cumulative regional

economic benefit



Page 15



FOR BUSINESS

U.S. Natural Gas Use

Page 16



FOR BUSINESS

We can continue to provide for our regional electricity needs

Source: U.S. Energy Information Administration, Electric Power Monthly, Short-Term Energy Outlook

Page 17



FOR BUSINESS

Cost Savings to Manufacturers

Source: EIA, PWC Analysis

Page 18



FOR BUSINESS

Industrial sector energy consumption

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (AEO2015) Reference case

Industrial sector energy consumption

is expected to grow faster than all other sectors

Page 19



FOR BUSINESS

Shale Development = Manufacturing

Page 20



FOR BUSINESS

Balancing benefits of high and low natural gas prices for manufacturers

$0

$10+

Optimal range for both industry suppliers and downstream users

Manufacturer’s profit

Very low Very high

Page 21



FOR BUSINESS

Regional Ethane Story

Source: www.rangeresources.com

Page 22



FOR BUSINESS

Ethane => Ethylene Production (C2H4)

Product categories Adhesives

Alkyd resins

Solvents

Corrosion inhibitors

Textiles

Inks

Shampoos, detergents, soaps

Paints and paint remover

Coatings

Pipes, hoses, wire coating

Coolant, antifreeze

Films, packaging, bottles

Plastics

Tire and rubber

Lubricant additives

Solvent, industrial cleaners

22

Manufacturing Sectors Apparel and accessories

Beverage and tobacco products

Chemicals

Computers and electronics

Fabricated metal products

Food and kindred products

Leather and allied products

Nonmetalic mineral products

Paper

Petroleum and coal products

Pharmaceutical

Plastics and rubber products

Primary metal manufacturing

Printed matter

Textiles, fabrics and mill products

Transportation equipment Source: PWC, Shale Gas: Reshaping the US Chemicals Industry, October 2012

Page 23



FOR BUSINESS

Shale gas through ethane chain into manufactured products

Source: PWC and Top Line Analytics

Page 24



FOR BUSINESS

Manufacturing Jobs in PA (2014)

Source: Bureau of Labor Statistics and ACC

Page 25



FOR BUSINESS

Announced Plastics Processor Projects by State

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FOR BUSINESS

Population Dynamics Will Bring Challenges and Opportunities

Data Source: US Census

Of the 169 Combined Statistical Areas

nationwide,

more than 30% of the regions with the

largest population losses are from the tri-state region

Population

Loss RankSize Rank

Combined

Statistical Area

2013

Estimate

2010

CensusChange

29

7

18

19

22

13

17

4

6

20

Pittsburgh-

New Castle-

Weirton, PA-

OH-WV

2,659,937 2,660,727 −0.03%

75Toledo-Port

Clinton, OH649,298 651,429 −0.33%

145

Parkersburg-

Marietta-

Vienna, WV-

OH

153,780 154,451 −0.43%

15

Cleveland-

Akron-Canton,

OH

3,501,538 3,515,646 −0.40%

102Erie-

Meadville, PA367,670 369,331 −0.45%

67

Charleston-

Huntington-

Ashland, WV-

OH-KY

702,984 708,228 −0.74%

74Youngstown-

Warren, OH-PA661,399 673,614 −1.81%

130

Mansfield-

Ashland-

Bucyrus, OH

217,624 221,398 −1.70%

131Johnstown-

Somerset, PA217,019 221,421 −1.99%

Page 27



FOR BUSINESS

Manufacturing Revolution? Critical Elements for Success

Infrastructure Ready Sites

Customer Base Workforce

Competitive Business Climate

Page 28



FOR BUSINESS

Where should we focus?

Skills in which manufacturing employees are most deficient

Skills shortage in different workforce categories

Source: The Skills Gap in US Manufacturing: 2015 and Beyond, Deloitte, The Manufacturing Institute, 2015

Page 29



FOR BUSINESS

Techniques to Mitigate Effects of Skill Shortages for Production Workforce


Page 30



FOR BUSINESS

Techniques to Mitigate Effects of Skill Shortages for Engineers, Scientists


Page 31



FOR BUSINESS

University Research

• University of Pittsburgh, – Energy-Intensive manufacturing – Utilization for New Products – Applications of Additive and Advanced Manufacturing

• West Virginia University – Gas to liquids – Direct-use natural gas fuel cells – Natural gas combustion – Gas to chemicals

• Alkanes • Aromatics

Source: Tri-State SHALE Summit, Research and Innovation Panel, October 13, 2015

Page 32



FOR BUSINESS



other products

Gas gathering

and processing

Ethane processing


from methane and


Cumulative regional

economic benefit



Page 33



FOR BUSINESS



FOR BUSINESS

Questions and Answers

W.E.

UPJOHN INSTITUTEFOR EMPLOYMENT RESEARCH

Northwest Pennsylvania and the National Economy

with Thoughts on the Shale Play

Jim Robey, PhDW.E. Upjohn Institute for Employment Research

April 6th, 2016

1W.E.


W.E.


W.E. Upjohn Institute for Employment Research

• The Institute is an activity of the W.E. Upjohn Unemployment Trustee Corporation, which was established in 1932 to administer a fund set aside by Dr. W.E. Upjohn, founder of the Upjohn Company.

• MISSION:– The W.E. Upjohn Institute for Employment Research is a private,

nonprofit, nonpartisan, independent research organization devoted to investigating the causes and effects of unemployment, to identifying feasible methods of insuring against unemployment, and to devising ways and means of alleviating the distress and hardship caused by unemployment.

2

W.E.


Regional and Economic Planning Services

• Data Dissemination & Analysis• Economic Impact Studies• Economic & Workforce Development Strategy• Talent Assessment• Urban & Regional Planning

3

W.E.


Defining the Region

4

W.E.


University of Michigan RSQE Forecast

2015( A c t u a l )

2016( F o r e ca s t )

2017( F o r e ca s t )

GDP(Percent) 2.4 2.3 2.8

Light Vehicle Sales ($Millions) 17.3 17.8 18.0

Unemployment Rate(Percent) 5.3 4.7 4.5

Housing Starts (Millions) 1.106 1.218 1.388

CPI/Inflation(Percent) 0.1 1.1 2.2

5

W.E.


Northwest PA hasn’t recovered from the recession, at least based on employment

90

92

94

96

98

100

102

104

106

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Inde

xed

Labo

r For

ce

Labor Force Index (2006 = 100)

NW Pennsylvania Pennsylvania United States

Source: Bureau of Labor Statistics, Current Population Survey, and Local Area Unemployment Statistics6

W.E.


But from an value-added perspective, Northwest PA has recovered

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.04.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GRP

(201

5 M

$)

Perc

ent C

hang

e

Gross Domestic, State, and Regional Product

NW Pennsylvania Pennsylvania United States Real GRP

Source: Moody’s Analytics, and Upjohn Institute7

W.E.


The labor market here is “tight”

0

2

4

6

8

10

12

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Perc

ent o

f Lab

or F

orce

Unemployment Rate


Source: Bureau of Labor Statistics, Current Population Survey, and Local Area Unemployment Statistics8

W.E.


Unemployment Rate

9Source: Bureau of Labor Statistics Local Area Unemployment Statistics

W.E.


Lower labor force participation limits growth potential

52

54

56

58

60

62

64

66

68

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Perc

ent o

f Pop

ulat

ion

16 a

nd O

ver

Labor Force Participation


Source: Bureau of Labor Statistics, Current Population Survey, Local Area Unemployment Statistics, Moody’s Analytics

10

W.E.


Labor Force Participation Rate

11Source: Bureau of Labor Statistics Local Area Unemployment Statistics, and Census Population Estimates

W.E.


Relatively low weekly wages: good on one hand and not so good on another

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Aver

age

Wee

kly

Wag

e, 2

015$

Average Weekly Wage


Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages, Consumer Price Index12

W.E.


Average Weekly Wage

13Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages

W.E.


Basic Demographics

Population Total

2000 734,274

2010 721,580

2016 (estimated) 705,081

2021 (projected) 696,358

Change Percent

2000–2010 −1.7

2010–2016 −2.3

2016–2021 −1.2

14Source: Claritas

W.E.


Household Income NW PennsylvaniaHH INCOME HOUSEHOLDS SHARE

<$15,000 38,705 13.6

$15,000 - $24,999 36,801 12.9

$25,000 - $34,999 34,402 12.1

$35,000 - $49,999 45,048 15.8

$50,000 - $74,999 54,465 19.1

$75,000 - $99,999 32,772 11.5

$100,000 - $124,999 19,892 7.0

$125,000 - $149,999 9,635 3.4

$150,000 - $199,999 7,066 2.5

$200,000 - $249,999 2,666 0.9

$250,000 - $499,999 2,746 1.0

$500,000+ 814 0.3

15Source: Claritas

W.E.


Shares of household income: skew to the lower levels

0

5

10

15

20

25

<15 15 - 24 25 - 34 35 - 49 50 - 74 75 - 99 100 -124

125 -149

150 -199

200 -249

250 -499

500+

Perc

ent o

f Hou

seho

lds

Income ($000s)

NWPA PA NY OH U.S.

16Source: Claritas

W.E.


Age CohortAge Number Percent

Age 0–4 37,444 5.3

Age 5–9 38,742 5.5

Age 10–14 41,244 5.9

Age 15–17 27,131 3.9

Age 18–20 33,404 4.7

Age 21–24 38,773 5.5

Age 25–34 81,324 11.5

Age 35–44 77,114 10.9

Age 45–54 93,353 13.2

Age 55–64 104,172 14.8

Age 65–74 72,872 10.3

Age 75–84 39,629 5.6

Over 85 19,879 2.8

17Source: Claritas

W.E.


Age cohort: skewed to be a little older

0

2

4

6

8

10

12

14

16

Age 0-4

Age 5-9

Age 10–14

Age 15–17

Age 18–20

Age 21–24

Age 25–34

Age 35–44

Age 45–54

Age 55–64

Age 65–74

Age 75–84

Perc

ent o

f Per

sons

NWPA PA NY OH U.S.

18Source: Claritas

W.E.


Downstream Industries

• Based on NAICS codes• 3241 Petroleum and Coal: Refineries, paving

and shingle products, lubricating and grease• 3251 Basic Chemicals: Petrochemicals,

industrial gas, dye and pigments, and inorganics

• 3252 Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments

19

W.E.


Downstream Industries

• 3253 Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing

• 3255 Paint, Coating, and Adhesive Manufacturing• 3259 Other Chemical Product and Preparation:

Ink, explosives, and other miscellaneous chemicals

• 3261 Plastics Product Manufacturing: Packaging, pipe, sheeting, urethane and foam, polystyrene, and formed products

20

W.E.


National Downstream, 2011–2016

-10

-5

0

5

10

15

-10 0 10 20 30 40

Empl

oym

ent C

hang

e (%

)

Gross Product Change (%)

Plastics product manufacturing(3261)

Petroleum and coal productsmanufacturing (3241)

Basic chemical manufacturing(3251)

Resin; synthetic rubber; andartificial synthetic fibers andfilaments manufacturing (3252)

Pesticide; fertilizer; and otheragricultural chemicalmanufacturing (3253)

Paint; coating; and adhesivemanufacturing (3255)

Other chemical product andpreparation manufacturing(3259)

21Source: Moody’s Analytics

W.E.


National Downstream, 2016–2021

-16

-14

-12

-10

-8

-6

-4

-2

0

2

-5 5 15 25 35

Empl

oym

ent C

hang

e (%

)










W.E.


Regional Downstream, 2011–2016

-60

-40

-20

0

20

40

60

80

-50 0 50 100 150 200

Empl

oym

ent C

hang

e (%

)










W.E.


Regional Downstream, 2016–2021

-15

-10

-5

0

5

10

-10 0 10 20 30 40

Empl

oym

ent C

hang

e (%

)










W.E.


Petroleum and Coal Products Manufacturing

25Source: Avention and Juniper CRE

W.E.


Basic Chemical Manufacturing


W.E.


Resin, Synthetic Rubber, and Artificial Synthetic Fibers & Filaments Manufacturing


W.E.


Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing


W.E.


Paint, Coating, and Adhesive Manufacturing


W.E.


Other Chemical Products and Preparation Manufacturing


W.E.


Plastics Product Manufacturing


W.E.


Total Downstream Employment


W.E.


Estimating Impacts from Investment

• Use Input/Output (I/O) model• The following are done using REMI

– Regional Economic Models, Inc.– www.remi.com

• Output effects for Employment– Direct: the direct jobs or capital investment– Indirect: regional/local suppliers– Induced: households supplying goods and services– Government

33

http://www.remi.com/

W.E.


REMI: Adding 100 jobs in petroleum and coal products• Employment Outcomes

– Direct: 100– Indirect: 94– Induced: 231– Government: 3

• Value added: 93 Million• Personal income: $29 Million• Disposable personal income: $24 Million• Average wage/comp: $62,160/112,220

34

W.E.


REMI: Adding 100 jobs in chemical manufacturing• Employment Outcomes


• Value added: $45 Million• Personal income: $18 Million• Disposable personal income: $15 Million • Average wage/comp: $30,295/42,954

35

W.E.


REMI: Adding 100 jobs in plastics and rubber manufacturing• Employment Outcomes


• Value added: $20 Million • Personal income: $10 Million• Disposable personal income: $9 Million• Average wage/comp: $15,920/20,355

36

W.E.


Questions/Comments?

• Jim Robey, Ph.D., – W.E. Upjohn Institute for Employment Research

– 269.343.5541– [email protected]

37

A Cedarwood Company

National and Northwest Pennsylvania

INDUSTRIAL MARKET OVERVIEW

Dennis Burnside | Jun ipe r CRE Solu tions

April 6, 2016

Sponsored by

AGEN DA

1. Nationa l Industria l Marke t

2. Northwest Pennsylvania Marke t

3. Site Se lection Process

1 National Industrial Market

National Industrial Snapshot Year End 2015

U.S. ove ra ll va ca n cy ra t e to 6.4%

• Warehouse – 8.6%

• Flex space – 6.1%

U.S. ove ra ll n e t a bsorp t ion was positive 97,177,108 square fee t

• Warehouse – positive 82,712,512 sq ft

• Flex space – positive 14,464,596 sq ft

4

5

U.S. VACANCY RATES 2 0 0 0 -2 0 1 5

F LEX W AR EH O U S E TO TAL M AR KET

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

VA

CA

NC

Y R

AT

ES

2015 U.S. Industrial Space Average Quoted Renta l Rates

• Industria l quoted ren ta l ra te 1.2% (Q3 to Q4)– Q3 : $5.69 /sq ft

– Q4 : $5.76 /sq ft

• Flex sector quoted ra te 0.5% (Q3 to Q4)– Q3: $11.43 /sq ft

– Q4: $11.49 /sq ft

• Warehouse quoted ra te 1.4% (Q3 to Q4)– Q3: $4.97 /sq ft

– Q4: $5.04 /sq ft

6

7

INDUSTRIAL LEASES SELECT TO P 1 5

B U I L D I N G M A RK ET SF TEN A N T L A N D L O RD

1 Am a zon Boston 1,000,000 Am azon.com NAI Hunnem anCom m ercia l Com pany

2 Un ion Sta t ion Bu sin e ss Ce n te r Atlanta 987,840 Exe l Logistics Collie rs In te rna tiona l

3 ProLogis Pa rk I-210 – Bldg 1 Inland Em pire (Californ ia ) 882,230 Am azon Lee & Associa te s

4 Du ke Pe rr is Logis t ics Ce n te r –Bldg II

In land Em pire (Californ ia ) 783,407 Wayfa ir.com Duke Realty Corp .;

Collie rs In t.

5 5635 NE 14th St DesMoines 600,000 Monsanto The Graham Group Inc.

6 Mon sa n to Expa n sion - Ph a se 1 St. Louis 590,000 Monsanto Monsanto Com pany

7 75 Mill Rd Northe rn New Je rsey 571,000 List Logistics JLL

8

8 5220 Robe rt J Ma th e ws Pkwy Sacramento 555,219 DST Output N/A

9 Wh ir lpool Bldg Nashville 505,000 Sinom ax NorthStar Real Esta te Advisors

10 He rm osa II In land Em pire (Californ ia ) 468,682 Am axi Nutrition JLL

11 Bu ford Logis t ics Ce n te r II -Bu ild in g B Atlanta 461,700 Best Buy CBRE

12 Boice Pon d Rd Orlando 451,823 Freem an Expositions, Inc. Cite Partne rs, LLC

13 8369 Millike n Ave Inland Em pire (Californ ia ) 441,970 Custom Goods LLC Prologis

14 301 Broa dwa y Northe rn New Je rsey 439,015 Nationa l Re ta il

System sHartz Mounta in Industrie s, Inc.

15 Tra m m e ll Crow a t 35 Ea gle -Bu ild in g D Dallas/Ft Worth 391,744 Exe l CBRE

2 Northwest Pennsylvania Industrial Market

Overview | Northwest Pennsylvania Industria l Rea l Esta te Marke t

10

Er ie

War ren

Crawford

For restVenango

Mercer

LawrenceClar ion

Age of Existing Industrial Product

• Tota l existing square footage : 28,619,000

• Built since 1990: 5,670,000

• Built be fore 1990:22,949,000

• Built since 2000: 1,826,000

Industrial Shifts

C A T E G O R Y A G R A R I A N R E VO L U T I O N

I N D U S T R I A LR E VO L U T I O N

L O G I S T I C S R E VO L U T I O N

Typica l Bu ild in g Size 100,000-300,000 SF 500,000-750,000 SF >1,000,000 SF

Docks Single Dock Cross Dock Cross Dock/U-Shape

Bu ild in g/La n d Ra t ios 50%-52% 48%-50% 40%-45%

Le a se s >15 Years 10-15 Years <10 Years

Typ ica l Ce ilin g He igh t 22 Fee t 32-36 Fee t 36-60 Fee t

SF/Dock Ra t ion s 1/10,000 1/5,000 1/3,000

Tra ile r Stora ge N/A 1/10,000 1/5,000

Sta ckin g Manual Forklifts Robotics

Bu ild in g Own e rs Local/Regiona l Regional/Nationa l Nationa l/Global

De sign Outside -In Deve loper-Driven

→→

Inside -OutTenant-Driven

13

VACANCY RATE N O RTH WEST P EN N SYLVAN IA IN DUSTRIAL

B U I LT AF TER 1 9 9 0 (cu rre n t su rvey) B U I LT B EF O R E 1 9 9 0

Source : CoSta r Group , Inc.

VA

CA

NC

Y R

AT

ES

14

ASKING RENTAL RATES N O RTH WEST P EN N SYLVAN IA IN DUSTRIAL

B U I LT B EF O R E 1 9 9 0

Source : CoSta r Group , Inc.

B U I LT AF TER 1 9 9 0 (cu rre n t su rvey)R

EN

TAL

RA

TE

S P

ER

SF

15

ABSORPTION CUMULATIVE N ET

Ligh t Ma n u fa ctu ring

AS OF 12/31/2015

LIND - < 1990 & 25k + SF

LIND - 25k + SF

LIND – 1990+ & 25k + SF

TOTAL

16

ASKING RENT LEVELS AN D AN N UAL GRO WTH

AS OF 12/31/2015

Na t iona l Askin g Re n t

Askin g Re n t

Re n t Growth Y/Y

RE

NT

PE

R S

F

AN

NU

AL

RE

NT

GR

OW

TH

17

SALES VOLUM E AN D MEDIAN P RICE

AS OF 12/31/2015

Na t iona l Price pe r SF

Price pe r SF

Volum e

ME

DIA

N P

RIC

E P

ER

SF

SA

LE

S V

OL

UM

E IN

MIL

LIO

NS

3 Site Selection Process

HOW CAN CO MMUNITIES BE READY WHEN O P P O RTUNITY KNO CKS?

Can somebody get that please?

SITE LO CATIO N D ECISIO N P RO CESS

A systematic, tim e-tested

approach to he lp ing

com panies resolve business

loca tion cha llenges

Has the Site Se lection Process/Industry Changed?21

• Preparation of baseline information questionnaire

• Client completes questionnaire– Profile of any existing

locations– Operational needs of the new

facility

• Location criteria defined/ weighted

• Finalization of information/ criteria

• Establish expectations

22

Site Selection Process

PHASE Define the Objectives – Founda tions of Search

• De sktop re se a rch a n d ou t re a ch to EDO a ge n cie s

• Systematic elimination of areas within the defined search region

• Basic criteria (e.g., minimum population size) introduced early on

• Longlist (7-8) of promising contenders emerges

• Additional research conducted on each area’s operational fit

• Longlist ranked/scored• Shortlist (often three areas)

recommended

23

Site Selection Process

PHASE Location Filtering

24

• Fie ld -based eva lua tion , includ ing:– Em ployer in te rviews, site /bu ild ing

tours, GIS m apping, and o the r em pirica l re sea rch

– Seeking a m atch , then ranked /scored , am ong:

– Dem and/supp ly

– Quality/ stab ility

– Cost

– Union iza tion

• Best subm arke ts ta rge ted

• Severa l site s/bu ild ings shortlisted

• Recom m endations tende red– Best loca tion

– Shortlist site s/bu ild ings

– Most viab le a lte rna tives

Locations

Site s/bu ild ings

Site Se lection Process

PHASE Loca tion Se lection

25

• Assist clien t’s rea l e sta te team to assess shortlisted site s on :

– Access

– Taxes

– Utilitie s

• Under fina l incen tives negotia tions

– Working close ly with clien t’s rea l e sta te team and othe r in te rna l p laye rs (e .g., tax, lega l, corpora te a ffa irs)

– Best/fina l offe rs rece ived

– Multi-year savings re fined

– Fina liza tion and docum enta tion of de ta ils

• Recom m end and support

Site Se lection Process

PHASE Site Se lection

SITE SELECTIO NTHE PROCESS

IN ACTION

• Access to accurate data

• Clarity

• Efficiency and timeliness

• Updated website that is ED leaning

• Single point of contact, who has the answers or can get them quickly

• Facts vs. sa les p itch

“All Hands on Deck”

– Schools

– Fire and sa fe ty

– Parks and recrea tion

– Finance

– Hum an re sources from othe r com pan ies

– Labor (if on board )

– Elected officia ls

– Real e sta te deve lope rs and owners

27

What’s Im portan t to Site Se lectors (and , the re fore , the ir clien ts)?

“Just the facts, ma’am.”

Everyone on the Same Page

• Share da ta

• Com m unica te with each othe r

• Rehearse story

Exam ples of where th ings went wrong …

28

Economic Development Committee

• Exam ple : Highland He ights, Ohio

– Citizens

– Business leaders

– Finance

– Eight to 10 m em bers

29

Features and BenefitsFea ture

– Workforce

– Em ployer base

– Location

– Train ing program

– Bricks and m ortar/site s

– Transporta tion

– Quality of life

30

Bene fit

– ?

– ?

– ?

– ?

– ?

– ?

– ?

31

Curren t Challenges Facing Com panies

How can you he lp?

– Attracting workforce

– Bricks and m orta r

– Reduce costs

– Speed to m arke t

Learn from Other Communities

• Observe

• Visit

• Engage

• Collabora te

• Regiona l pe rspective

32

Q U ESTIO N S Thank you.

Regional PartnershipsElectricity 101

Lisa NentwickManager, Economic Development

Economic Development Conference April 6, 2016

Transmission Service

FirstEnergy Overview 2

Cost to Serve Requests for Large Loads

General (minimum)In-Service DateLocationInitial peak loadEstimated peak load in 5

yearsEstimated peak load in 10

years– Also need non-conforming

loads that impact our system (large motors, arc furnaces)

Why we Need It? Determine Available Capacity

Measure Impact on System

Load Study includes other

projects in area

Planning for Growth

MOST OF ALL …

TIME ! !SW PA Economic Development Conference November 10, 2015 3

Transmission Line Extension Example

SW PA Economic Development Conference November 10, 2015 4

Transmission Line Extension Example

November 10, 2015SW PA Economic Development Conference 5

Pennsylvania Shale Projects

■ Pipeline Projects– multiple compressor stations in three PA operating companies to support the Mariner East 1 & 2 pipeline project to deliver propane and ethane from the liquid-rich Marcellus Shale areas in Western Pennsylvania to the Marcus Hook facility, where it will be processed, stored, and distributed to various domestic and waterborne markets.

■ Midstream Projects– new and expansion projects– Cyrogenic processing plants – Fractionation Plants– Compressor stations

200 MW of new load is expected in Pennsylvania within the next three years with more prospective projects in the pipeline.


Economic Development Tools - Location One (LOIS)


Introduction to LOIS


Economic Development Tools

■ IMPACTfactor+ – computer simulation program for economic development

■ Identifies measurable effects associated with a specific activity in a specific location

■ Typical economic development activities include:– New business attraction– Retention or expansion– Value of existing business base– Creation of a new business– An increase in “export” activity will result in spin-off spending in the

local economy


ImpactFactor+■ Provides data on the economic base of each county in the model

including jobs, wages and output by industry (this determines in part what purchases can occur locally)

■ Provides data on inter-industry purchasing patterns nationally and within the local area (this determines supplier impacts)

■ Provides data on household purchasing patterns at different income levels

■ This data is used to create the multipliers– Impact Components

– Economic– Real Estate– Revenue


Promotion to Site Selectors


Moody’s Analytics – Available for your Region


Moody’s Analytics (Continued)



Documents

Economic Development Organization Conference