SEA ISLAND — Chris Cummiskey, the state’s economic development chief, opened the Georgia Foreign Trade Conference Monday with a list of reasons why Georgia is a great state for business.
On Tuesday, a panel of industry heavy hitters — representing both big retail and development interests — closed the conference by seconding his remarks.
“When trade publications list the best states to do business in, we’re always in the top five or six,” said Cummiskey, commissioner of the Georgia Department of Economic Development. “But I learned early on that isn’t good enough for our governor.”
Shortly after Gov. Nathan Deal took office in 2011, he issued a challenge to Cummiskey and his staff to make Georgia the No. 1 state for business.
“The governor asked if I thought we could achieve that and — after looking at all the possibilities — I had to say yes.”
Cummiskey has three main reasons for believing.
“Georgia is home to the westernmost major port on the East Coast,” he said. “From here, most cargo can reach 80 percent of the country’s population within two days. That’s a huge logistics advantage.
“We also have QuickStart, the job training program that is second to none. Whether you are starting up a distribution center or doing advanced manufacturing, if you are creating 25 jobs or more, Quick Start will train your work force. That is easily the biggest factor for many companies.
Finally, Cummiskey said, the state has one of the most advanced technical college systems in the country.
“At its heart and soul, Georgia is a logistics and advanced manufacturing state,” he said.
And logistics is at the heart and soul of business location decisions, according to Tuesday’s round table discussion on what top executives consider when making strategic location decisions.
The panel, moderated by Pedro Cherry, Georgia Power’s vice president of community and economic development, included John Carver, global director for Jones Lang LaSalle’s port infrastructure desk; Tony Davis, senior vice president for distribution and logistics for Academy Sports + Outdoors; Brian McKiernan, senior vice president for development for Centerpoint Properties, and Greg Rake, senior vice president of international logistics and transportation for Pier 1 Imports.
“While real estate, incentives and labor issues are important in locating a business, transportation is the key component, the deciding factor,” said Carver, whose company represents industrial development clients.
“Trip times, the ability to get to and from the port, the ability to get from an intermodal component to a warehouse, these are the factors that come most into play.
“In working with states around the country, we’ve found the Georgia economic development groups are, far and above, the industry leaders in understanding and working with our customers.”
Change in the wind
Location decisions are evolving, Davis said.
“It used to be that free land was something we’d automatically jump on and figure the rest out from there,” he said. “Today, for most of us, incentives aren’t No. 1. They aren’t even No. 2.
“Logistics is No. 1, labor is No. 2 and incentives are a distant third,” he said. “Think about it — 20 years later, incentives are mostly gone, but you’re still dealing with logistics and labor issues.”
As for location, both Pier 1 and Academy Sports have major distribution centers in Georgia, although their philosophies are somewhat different.
“At Pier 1, we import 100 percent of our merchandise, so our strategy is to locate as close to a port as we can,” Rake said. “While it’s important to have an adequate labor pool and real estate and utility costs, our major concern is going to be minimizing outbound moves and an inventory flow that keeps total supply chain costs as low as possible.”
Pier 1 was one of the first importers to bring a distribution center to Savannah’s port more than two decades ago.
Academy Sports only imports about 25 percent of its merchandise, Davis said.
“So port proximity is not as essential as store location and planned growth,” he said. Academy’s Eastern distribution center is located off Interstate 16 just south of Macon.
Georgia on their minds
All four participants had high praise for the state’s business climate.
“I’d say the outlook for future investment in Georgia is very good,” said McKiernan, whose CenterPoint Properties has approximately $3 billion invested in industrial real estate, including 250 acres near the Port of Savannah.
“As we implement our Southeast growth strategy, this is a focal area for us,” he said. “We see business continuing to come to this port.”
Rake agreed.
“When you talk about the Port of Savannah, you’re talking about innovation and investment. This port is very important to us as a pro-active business partner.”
McKiernan also cited the options offered at Georgia Ports, such as two on-terminal railroads.
“To attract the tenants we want, we need a port with a robust supply chain — one with diverse options,” he said. “Retailers don’t want to be tied and beholding to one mode of transportation because rates can change.”
Davis said he has been most impressed with the state’s QuickStart program.
“They are the real deal,” he said, adding his company met with them when they were deciding where to put their distribution center.
“They said, ‘We aren’t going to help you train your workforce, we are going to train them for you.’ And they delivered.”
Later, when Academy decided to put an e-commerce fulfillment center in the new distribution center, QuickStart came back.
“They said these were new jobs and new skills and they jumped right in,” he said. “This is not a ‘one-and-done’ approach.”
Davis said Academy found in Georgia a business friendly environment, both on the state and local levels, excellent infrastructure and easy access to a progressive and leading port.
“At the end of the day, if you have a regional distribution need in the Southeast, for my money, Georgia is the state to beat out of the gate.”