As the recruitment of new businesses, and therefore jobs and tax base becomes more and more competitive, states are searching for ways to stand out. One of the ways they can do this is through the creation of “shovel ready” sites. Oregon was one of the first states to implement a program in 2003. The idea behind “shovel ready” sites is to identify sites that have potential as industrial sites and prepare the infrastructure, permitting, environmental research and other things that need to be done before construction can begin.
Inevitably these do come with a cost. The personnel hours that go into permitting and research and the construction costs of infrastructure like water and electricity can be very high. These are sometimes recouped at the point of sale to the new company through impact fees, but there is still the issue of funding them beforehand. This is where grants come in. Oregon currently does not have a dedicated fund for these projects and so a lot of the money winds up coming in the form of grants. Getting money from grants allows the Oregon Business Development Department (Sometimes known as the Oregon Economic and Community Development Department) to be creative about where they get funding. If they are remediating brownfields there are grants for that. If they are ensuring wetlands are protected as a part of the site, there are grants for that. These are on top of the typical economic and community development grants that are routinely used by the OBDD in creating shovel ready sites.
By identifying and preparing sites, economic development departments have another tool for recruiting new companies. If they can offer a site that will be ready to break ground and requires significantly less research and time, they are offering a valuable incentive. This has become a part of the incentive packages that Oregon has been using to lure companies to the state.
One of the biggest successes was the Lowe’s Distribution Center that serves the Western United States and brings about 500 jobs to Lebanon, Oregon. Lowe’s appreciated the work the OECDD had put in and it showed in their choice of sites. As the Lowe’s Real Estate Manager said,
You cannot put a dollar value on having that work done in advance. Don’t let anyone ever tell you that it was not money well spent … the work you provided gave our engineers a big head start on evaluating the site and really helped move this site forward in our process.
Now that you are reaching the end of this reading, you are probably going to Facebook so I will include the link for that here brought to you by another shovel ready site.