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1999 America's 50 Hottest Cities

When it comes to attracting business expansions and relocations, these cities are in a league of their own, according to some of the most prominent site location specialists in the country.

  [ 1/1/1999 ]  By: Lance Yoder, Senior Writer   Print This Article  Reprint/License This Article  E-mail This Article To A Friend  
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If you look atop the standings of the American Football Conference's Central Division, you'll find the Jacksonville Jaguars.

And football isn't the only area where you'll find Jacksonville, Fla., ranked No. 1. It is also the destination of choice among many of the top professional site location consultants, whose clients make up a veritable who's who among corporate America.

Several months ago we asked 60 of the most prominent site location specialists to rank the nation's up-and-coming cities in terms of business climate, quality and availability of workers, taxes, incentives, quality of life, as well as the willingness of local political and economic development officials to "go the extra mile" in order to land their clients' business.

We didn't include the mega metro areas, such as Chicago, New York, Los Angeles or Houston, because those cities are truly in their own category.

That's not to say that the mega-cities don't get involved in the economic development game, because they do.

For example, Chicago is actively working to attract businesses through redevelopment and tax increment financing. Last year, it was named a "Brownfield Showcase Community" by Vice President Al Gore for the city's innovative approach to redevelopment -- also known as brownfield -- projects.

Chicago's initiative includes worker training, transportation and housing improvements, environmental cleanup and loans for job creating businesses. Use of tax increment financing districts has also greatly boosted the city's economy. As a result, private investment has topped $2 billion, with 28,000 jobs either created or retained.

But, what we were most interested in was the emerging second tier of cities, like Jacksonville, Raleigh-Durham, N.C., and Richmond, Va., that are getting the lion's share of facility relocations from companies just like those of our readers.

The results weren't too surprising, with the vast majority of the cities making the list in the Southeast, South and West. Jacksonville topped the list, followed by Raleigh-Durham, Richmond, Salt Lake City, Utah and San Antonio, Texas.

So what are these cities doing to set themselves apart from others across the country?

Aside from various strategic advantages, such as proximity to foreign markets or an abundant labor force, these cities all try to foster a pro-business climate. That pro-business atmosphere can range from fostering favorable tax climates to responding quickly to requests for information.

"Timeliness is almost as important as the quality of the information," said Gregory Wingfield, president of the Greater Richmond (No. 3) Partnership. "And now, we can use e-mail and faxes to give it to them in a fast manner."

One of the cities with a lot to talk about is San Antonio (No. 5). Mario Hernandez, president of the San Antonio Economic Development Foundation, said the city's work force is one of its strongest assets.

"Almost 33 percent of our population is 17 years of age and younger," said Hernandez. "That means that we have a large number of new workers available each year. We have an unemployment rate of just 3.3 percent, but still have an available labor pool."

One of San Antonio's biggest prizes last year was Boeing's relocation of its aircraft maintenance facility to the city. The Boeing Aerospace Port Center is located in the former Kelly Air Force Base, and will employ 2,000 people when fully staffed within two years.

Number One
JACKSONVILLE, FLA.
"They (Boeing) do work for both commercial airlines and the defense department," said Hernandez. "The Air Force base is really an asset in our marketing."

Boeing cites the city's labor pool as a key reason for the decision.

"One of the big factors for us was a work force that was already in place and that was skilled," said Boeing Spokesman Paul Guse. "San Antonio has a great aerospace work force. Sometimes you have a huge search where it's difficult to make a decision. This wasn't difficult."

"Timeliness is almost as important as the quality of the information. And now, we can use e-mail and faxes to give it to them in a fast manner."

-- Gregory Wingfield, president, Greater Richmond Partnership

The university connection
Education plays a major role in the success of cities close to nationally known universities.

Another Texas city that turned its potential labor force into a drawing card is Austin (No 8). In the last 15 years, Austin has transformed itself into one of the leading centers for high-technology companies, with job growth at 5 percent or above each year in the 1990s.

"The presence of a large, regional educational institution in the University of Texas has certainly helped," said Glenn West, president and CEO of the Greater Austin Chamber of Commerce. "This is a big college town, with over 1.1 million people, and of those, 105,000 are college students, so there's a young, educated work force."

Austin got its big break in 1984, when the 3M Corp. located its divisions of administration and research and development in the city, along with 2,000 new jobs.

Since that time, huge companies like Motorola, Sematch and others have moved in. Dell Computers is located in Round Rock, just north of Austin.

"There's a perception that Austin has a high quality of life," said West. "In a survey, 82 percent of Austin residents said they were very satisfied with their life here. That says a lot."

Raleigh (No. 2) is located just a few miles from Durham and Chapel Hill, N.C., and the whole area is referred to as the Triangle.

Ted Conner, vice president of economic development for the Durham Chamber of Commerce, said the support for businesses from the whole community is a key.

Top 50 Hottest Cities
1 Jacksonville, Fla.

2 Raleigh-Durham, N.C.

3 Richmond, Va.

4 Salt Lake City, Utah

5 San Antonio, Texas

6 Phoenix, Ariz.

7 Charlotte, N.C.

8 Austin, Texas

9 Hampton Roads, Va.

10 Nashville, Tenn.

11 Winston-Salem, N.C.

12 Tampa, Fla.

13 Albuquerque, N.M.

14 Kansas City, Mo.

15 Spartanburg, S.C.

16 Charleston, S.C.

17 Sacramento, Calif.

18 Denver, Colo.

19 Cincinnati, Ohio

20 Columbus, Ohio

21 Indianapolis, Ind.

22 Oklahoma City, Okla.

23 Cleveland, Ohio

24 Louisville, Ky.

25 Las Vegas, Nev.

26 Tucson, Ariz.

27 Pittsburgh, Pa.

28 Northern Virginia Area

29 Knoxville, Tenn.

30 Madison, Wis.
Omaha, Neb.
Tulsa, Okla.

33 Charleston, W.Va.

34 Spokane, Wash.

35 Springfield, Mo.
Ft. Lauderdale, Fla.

37 Asheville, N.C.
Portland, Ore.
Reno, Nev.
Savannah, Ga.
Wilkes-Barre, Pa.

42 Colorado Springs, Colo.
Hattiesburg, Miss.

44 Des Moines, Iowa
Longview, Texas

46 Baltimore, Md.
Pensacola, Fla.

48 Birmingham, Ala.
Montgomery, Ala.

50 Syracuse, N.Y.
Tuscaloosa, Ala.

"Everything from the Employment Security Commission to the world-class universities and the community colleges, everything works together to make it a good place to do business," said Conner.

Winston-Salem (No. 11), also in North Carolina, is playing up its relationship with Wake Forest University. A research park in downtown Winston-Salem has helped the city experience growth in the medical and biotechnology fields.

"It's great to have that resource right here," said Robert Leak, Jr., executive director of Winston-Salem Business Inc. "It makes us that much more attractive."

Vocational schools and community colleges can also play a key role in providing skilled employees.

In Charlotte, N.C. (No. 7), Carroll Gray, president of the Charlotte Chamber of Commerce, gave the area's educational and training programs much of the credit for the community's success.

"Central Piedmont Community College does a great job, as do our universities and technical schools," said Gray. "That willingness to work with a company and make them happy separates us from a lot of places."

Phoenix, Ariz. (No. 6), is also hanging its hat on its work force.

Jim Colson, executive director of the Greater Phoenix Economic Council, said the quality of life in the area makes it easy for companies to convince employees transfer to the city, where a strong work force is already in place.

"There's more than just sunshine," said Colson. "Our occupancy rates are very attractive for businesses. Plus, we have proximity to California and New Mexico. Companies here are able to attract the best of the best."

In Florida, Tampa (No. 12) has formed a strong relationship with the area's educational system to attract technology companies.

"We look to market all of central Florida as a high-tech area," said Stuart Rogel, executive director of the Tampa Bay Partnership.

"Companies want to know an area can deliver a quality work force. You have to be able to answer that question positively."

Salt Lake City (No. 4) has also seen technology activity, with Gateway launching two huge expansions in the last 18 months.

A big-league attitude
While Austin targeted high-tech to make it into the big leagues, other cities brought in professional sports teams to raise their cities' profiles. In 1995, the Carolina Panthers of the National Football League played their first game in Charlotte.

"The professional sports teams have absolutely helped the city's image," said Gray. "It showed that state and local governments are business friendly and can work together to get projects done."

In Nashville (No. 10), the Tennessee Oilers of the NFL, formerly in Houston, Texas, set up shop in 1997.

"Just last week we had a company in from the Northeast and they saw the New York Islanders were in town and wanted to go to the game," said Fred Harris, vice president of economic development for the Nashville Chamber of Commerce.

"We were able to accommodate them and they got a chance to meet the owner of the team and to see what a first-class operation we have here. It's a great opportunity for us."

In Jacksonville, the NFL's Jaguars began play in 1995. The Jaguars are now a perennial playoff team.

Recruiting sports has also paid off in Salt Lake City. The city's greatest feat was landing the 2002 Winter Olympics.

"It has given us some name recognition," said Sharon Young, director of national business development for the State of Utah. "We're hoping to leverage the name recognition from the Olympics and take that to the business community following the Olympics."

Advantages of the heartland
Attention to detail has also paid off for Tulsa, Okla. (tied for No. 30). Micky Thompson, vice president of the Tulsa Chamber of Commerce, said the city works to serve all its businesses.

"We work hard for the small employer with 20 workers and for the larger company," Thompson said. "We also pay special attention to the companies that are already here. We've had exceptional growth in existing businesses and that is exciting."

"San Antonio has a great aerospace work force. Sometimes you have a huge search where it's difficult to make a decision. This wasn't difficult."

-- Paul Guse, Boeing spokesman

Tulsa is part of a group of cities in the Midwest that ranked favorably with consultants. Located in the middle of the country, these cities are taking advantage of their locations and quality of life.

"We think this is the size city that is large enough to offer a number of services, yet we still have that feeling that we care about the community," said Rod Moseman, vice president of economic development for the Omaha Chamber of Commerce. "Results speak louder than words, and we think we are doing a good job in that area."

The results in Omaha (tied for No. 30) are certainly impressive. In the last five years, the city has averaged net job growth of 1,000 per month. Just down Interstate 29, another heartland city, Kansas City, (No. 14) ranked favorably.

"We think we have a great product, meaning our metro area," said Robert Marcusse, president of the Kansas City Area Development Council. "Combine that with what we think is a good response process we have in place and that's a reason for some of our success."

Oklahoma City has seen dramatic growth in the last five years. Diverse businesses are locating in the city, and it has become a favorite spot for customer service operations and distribution facilities.

"We have a great location right in the middle of the country," said Andy Burke, economic development manager for the Oklahoma City Chamber of Commerce. "We have a viable location, and once we got ourselves on the radar screen, we have seen some results."

Oklahoma City appeared on the screen of consultants and relocating companies through aggressive marketing. In the last few years, companies including America Online, Williams-Sonoma, and Hartford Insurance have each opened facilities employing over 800 people.

Reworking and reviving an image
Some industrial cities have seen their business fortunes change in the last decade. Cleveland (No. 23) is a good example.

The city, now home to the Rock and Roll Hall of Fame and a rejuvenated baseball franchise, the Cleveland Indians, is also home to major league business activity.

Austin, Texas, is home to some of the world's leading high-tech companies. Over 1,200 high-tech businesses operate in the city. A strong labor force has been key to the economic resurgence in San Antonio, Texas.
"Ten years ago, we probably would have been ranked in the lower area of this type of ranking," said James Kroeger, director of business development for the Greater Cleveland Growth Association. "The state of Ohio has helped by making changes to the tax structure, but we've also done a lot of work in making Cleveland a place people want to be. Things like the Hall of Fame and Jacobs Field (home of the Indians) get you a second look from businesses."

In southern Ohio, Cincinnati (No. 19) is a hotbed of activity. John Fonner, director of the Greater Cincinnati Chamber of Commerce, said the city's airport has made a huge difference in business growth.

"We're the second-largest hub for Delta Airlines, and nearly all the relocating or expanding companies have cited the accessibility of the airport as a major factor," said Fonner. "We also feel our quality of life is improving with two new stadiums that are being built for the Bengals (football) and Reds (baseball)."

In Pittsburgh (No. 27), the city has moved to revitalize the downtown area, complete with a new baseball stadium and added shopping areas. That has translated into success in business expansions.

"It's an exciting transformation," said Karen Baker, spokeswoman for the Pittsburgh Regional Alliance. "The technology industry is coming on strong. We still rank No. 8 in the number of corporate headquarters, and at the same time the city is becoming a better place to build a business."

In Las Vegas (No. 25), manufacturers can find ample labor to fill second and third shifts as the city is set up as a 24-hour, seven-day-a-week operation.

"The infrastructure is here," said Doug Lien, manager of business development for the city of Las Vegas. "Stores, banks and other outlets are open 24 hours a day. A light manufacturer can significantly reduce their overhead on second and third shifts, and the labor force is here to do that."

Spartanburg, S.C., which ranked No. 15, is the home of BMW's U.S. automobile assembly plant. It is also the home to a large number of other international companies.

Charleston, S.C. (No. 16), has the advantage of a seaport.

"The base closure (Charleston Naval Shipyard) was a real wake-up call, but it's great to work in a community that works together and not as competitors with each other," said Ben Cole, president of the Charleston Regional Development Alliance. "The port is a huge asset, and we have market access second to none."

A pro-business environment
One of the ways cities maintain success is by creating a climate that encourages business development. A noticeable barometer of a city and state's commitment to business is the tax system on businesses.

Nearly all of the cities on the list are in areas that aren't considered to have high taxes.

Harris said Tennessee and Nashville do a good job of staying competitive in the area of taxation.

"It's one of those things where, if we can just have a similar playing field as the next guy, I feel like our city can sell itself," said Harris.

In Richmond, Wingfield said he tries to get the city's message out to as many people and groups as possible.

"We spend time in major cities like New York, Chicago, Los Angeles, meeting with site location people one-on-one," said Wingfield. "We also participated in a seminar on meeting data communication needs where a lot of site consultants were present.

"We have a viable location, and once we got ourselves on the radar screen, we have seen some results."

-- Andy Burke, economic development manager, Oklahoma City Chamber of Commerce

"You have to have a quality product (city) to sell, but you also have to be willing to get the word out to people."

That willingness to meet with prospective companies is a key, said one of the consultants surveyed.

"The cities where the politicians and leaders aren't so big that they will meet with someone from a company, those are the cities that attract businesses," said the consultant. "Business people are important, and the cities that treat them that way are the successful ones. In those cities, the politicians are business leaders and not just politicians."

A place to call home
No city would prosper as a place to do business if people didn't want to live there.

The cities on this list are good places to live, as well as to do business.

The Hampton Roads area (No. 9), which includes Hampton, Norfolk, Chesapeake, Portsmouth, Suffolk, Newport News and Virginia Beach, has long been recognized as an area with a high quality of living, with proximity to the Atlantic Ocean and outstanding schools.

"This is an attractive area to live, which is important to businesses trying to attract quality workers," said Hans Gant, president of the Hampton Roads Economic Development Alliance. "We've also got easy access to a lot of markets."

"Without a doubt, the key to our growth continues to be the quality of life here," said Atkins, of the Raleigh-Durham area. "People want a good place to work, live, raise their kids and send them to school."

Companies like Raleigh's Nine Rivers Technology end up staying for just that reason.

"We considered some other places each time we've expanded, but there are no plans for us to move," said Joe Pirozzi, vice president for sales and business development. "We've grown quite a bit here. It's been very good to us."

Lance Yoder is a senior writer for Expansion Management Magazine.

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