2009 Metro Rankings
For the past five years, Business Facilities has been publishing our annual Rankings Report. Each year, we have evaluated and upgraded the data and criteria we apply to each rankings category, in an effort to provide the most credible accounting of who’s on top, and who’s not.
These rankings usually have been skewed to a comparison of state economic development programs. For certain categories that lend themselves to readily available local statistics, such as data on education or green-building programs, we have included rankings for cities, towns and MSAs.
Because we want our annual rankings to reflect evolving trends in economic development and site selection, this year we have decided to address the reality that the intense competition for new facilities and relocations is taking place on the regional and local level, as well as between the states.
So we are unveiling our 2009 Metro Rankings Report. As with our state rankings, our metro rankings categories cover many of the essential benchmarks for any economic development program: quality of life, cost of living, green-building initiatives, etc. But with our Metro Report, we also have endeavored to broaden the scope of our evaluation to include emerging growth sectors like film production and food processing, and growth leaders like aerospace and the top wired metros. And we’ve created a special designation that we are confident will become a coveted metro ranking: economic growth potential.
As with our annual state rankings report, we welcome feedback from our readers as we continue to develop our metro rankings. Here are the highlights of our 2009 Metro Rankings Report:
Nashville Takes our Quality of Life Crown
When evaluating the standard of living in competing metropolitan areas, quality of life often is synonymous with “best place to live.” This is the rubric that many leading trade and financial publications apply to their annual tallies of the top metros; these lists often focus on accoutrements like parks and recreation, cultural programs, climate, etc.
While those attributes are significant when assessing a location’s lifestyle, we believe that a number of other factors, including cost of living, quality of healthcare, education, and, more recently, where a municipality stands in terms of its commitment to green building, also should be weighed. We have taken all of these factors into consideration in developing our 2009 Metro Ranking for Best Quality of Life.
The locations that came out on top in this category more than meet the criteria:
Our winner, Nashville, TN, combines a seasonally mild climate, rich landscape, a laid-back lifestyle and an affordable cost of living with a host of entertainment, recreational and cultural activities. This growing and dynamic city in the heart of Tennessee also offers top-quality health care to residents in more than 30 hospitals, medical centers, clinics and specialty centers, and has established itself as a regional hub for higher education.
Known for years as “Music City” —its music industry generates more than $6 billion in revenue—Nashville’s diverse entertainment scene offers lively choices for nighttime diversions, including more than 180 live-music venues featuring country, bluegrass, jazz, pop, rock and soul. Those who prefer daytime activities can enjoy abundant parks, waterways and recreational areas.
Nashville natives also have a cornucopia of retail and shopping choices, ranging from Opry Mills’ mega-outlet cluster to the downtown Farmer’s Market and eight regional shopping malls with more than 1 million square feet of retail space.
Tulsa, OK, which boasts a low cost of living and high rate of pay, finished a strong second in our Quality of Life ranking. MSNBC.com has perennially listed Tulsa as one of the lowest-cost cities to rent in the country, with spacious homes available for as low as $500 per month and low-cost apartments available to students flocking to this college town; average home sale prices also are among the lowest in the country.
Anyone tired of traffic congestion in their current location will be pleased to learn that the average one-way commute in this Oklahoma city is about 20 minutes, third fastest in a recent survey of 65 major metropolitan areas. Salary.com, meanwhile, ranks Tulsa as one of the most favorable cities to build personal wealth, which residents can hang onto thanks to state and local taxes that are among the lowest in the nation.
Our third-place finisher in the Quality of Life category, Austin, TX, has been making its mark on numerous “best places” lists for several years, including “Best Place for Business and Careers,” “Best City for Relocating Families,” and “Best Cities for Singles,” among other citations.
This affordable and highly cosmopolitan city in the heart of Texas also moves to a musical beat, proudly calling itself the “Live Music Capital of the World.” The diverse offerings in Austin—which is said to have more restaurants and clubs per capita than any other U.S. city—have made it a magnet for the emerging creative class, considered an essential demographic for 21st century urban growth. Year-round cultural festivals take place in a lush environment filled with parks, lakes and trails.
Chicago LEEDs the Way in Green Building
The Number of LEED (Leadership in Energy and Environmental Design)–certified buildings in a community remains the most credible benchmark for evaluating a city’s leadership in green building. The U.S. Green Building Council, a DC-based non-profit that administers the certification process, grades buildings on their performance in a number of different areas, including how much energy is consumed, how the water is used or re-used and the kinds of construction materials employed.
The greenest buildings earn a Platinum LEED rating, the next greenest a Gold rating, and the next a Silver rating; although still very good in environmental terms, the least green buildings receive a Certified designation.
Chicago, with more than 70 LEED-certified projects, has maintained its position as the country’s leading green-building city, finishing number one in our Top 10 Greenest Cities ranking. Portland, with 63 certified projects, and Seattle, with 55, finished second and third, with Washington, DC and San Francisco rounding out the top five.
New York City, which finished in the middle of the pack, is aggressively moving to position itself as a national leader in environmentally friendly development. In 2007, the nation’s largest city unveiled its PlaNYC program, an ambitious 127-point plan for a more sustainable New York. Earlier this year, Mayor Michael Bloomberg announced a new initiative, drawing on $16 million in federal stimulus funds, to retrofit the city’s older, energy-hogging buildings. Currently, New York has 41 LEED-certified buildings.
City officials note that New York fares better when measuring the overall square footage of LEED buildings, since a significant percentage of the certified projects in the city are tall residential and office towers. Most of the LEED-certified projects in New York are in Manhattan.
New York City currently has 455 other projects that have registered for LEED certification, an indication that the city’s total will increase significantly in the years ahead. However, many of these developments have yet to break ground, and in the present financial downturn may never see the light of day.
Wichita Rules the Sky
Wichita, KS is the clear winner in our metro ranking for Aerospace/Defense Manufacturing hubs.
Wichita hosts the world’s best-known aviation cluster, and is often referred to as the “Air Capital of the World.” Aircraft and aircraft components have been built with Wichita expertise and craftsmanship for nearly 90 years. Wichita offers one of the largest aerospace labor pools and supplier networks in the world. According to a Milken Institute study, Wichita has the highest concentration of aerospace manufacturing employment and skills in the nation. About 57 percent of Wichita metro area manufacturing employment is in aerospace products and parts.
The Wichita area hosts four aerospace OEMs (Boeing Integrated Defense Systems, Bombardier Learjet, Cessna Aircraft and Hawker Beechcraft). Wichita also is home to an Airbus Engineering Design Center. In 2008, Wichita companies delivered 59 percent of all general aviation aircraft built in the United States, and accounted for 46 percent of global general aviation deliveries. Located in Wichita is some of the most specialized equipment in the world for metal and composite material fabrication. Decades of aircraft production have built a network of more than 200 precision machine shops, tool and die shops, and other aerospace subcontract manufacturers.
There are more than 40 Boeing-certified gold and silver suppliers within a 200-mile radius of the Kansas city. These leading-edge suppliers include Spirit AeroSystems, the world’s largest independent producer of commercial aircraft structures. Wichita firms either directly manufacture, or provide critical components for, more than half of all general aviation, commercial and military aircraft. Industry-specific business advantages for aviation manufacturing include exemption of commercial aircraft and components from all sales taxes (including wet leases), liberal fly-away exemption and no excise tax on jet fuel and aviation gas.
Wichita is the global center of composites expertise. South Central Kansas hosts a rapidly developing industrial cluster of firms in the field of advanced composites, advanced polymers and elastomers.
National Institute for Aviation Research (NIAR) at Wichita State University was founded in 1985, and is the largest aerospace applied research and development academic institution in the nation. NIAR’s 120,000-square-foot facility houses 15 advanced research and testing labs, including several wind tunnels.
In order to assure a steady supply of qualified workers for the regional aerospace industry, Sedgwick County Technical Education and Training Authority (SCTETA) is developing the $54-million, 222,000-square-foot National Center for Aviation Training. NCAT will be a world-class aviation manufacturing training center on the grounds of Jabara Airport in northeast Wichita.
Our second-place finisher in the Aerospace/Defense Manufacturing category is Huntsville, AL, which has earned the moniker “Rocket City” as a primary hub for the nation’s missile defense, space and military aerospace programs. Huntsville has been rooted in research and technology development for the U.S. space program. Huntsville/Madison County is home to the NASA Marshall Space Flight Center and the U.S. Army’s Redstone Arsenal, both combining to drive a strong research and development economy and affecting spin-off and commercial activity of technology innovations.
Emerging Economic Growth Leaders
The economic upheaval of the past year has added a new sense of urgency to the need for MSAs to diversify their employment sectors and to speed up the migration from old-line manufacturing to high-tech initiatives. Therefore, we thought this would be an opportune time to measure the success of these efforts in a rankings category that assesses future growth potential rather than simply quantifies an existing industrial base. So in creating our new 2009 Metro Ranking for Economic Growth Potential, we gave special weight to the growth of high-tech and knowledged-based employment and business in a location, and also to how well the location’s infrastructure (physical and broadband) is supporting these emerging 21st century business sectors. Based on these criteria, it is not surprising that several of the cities that appear near the top of our Economic Growth Potential ranking also appear in our Top 10 Wired Cities list.
Because we anticipate that our Economic Growth Potential ranking soon will become one of the most coveted designations that we bestow in our annual Rankings Report, we took care to broaden the scope of the criteria for this ranking to include education, population growth and quality of life. We also took a look at some of the more comprehensive and data-rich surveys of the high-tech economy that appear annually, including those produced by the Milken Institute and Kiplinger’s.
We recognize that because the basis of this ranking relies significantly on statistics, it is not fair to lump smaller communities in with large cities; so we have divided our new Economic Growth Potential ranking into two sub-categories: Top 10 Metro Economic Growth Potential and Top 5 Metro (under 200,000 population) Economic Growth Potential. Each of the metros that were cited in the smaller-population ranking impressed us with the diversity of their economic development efforts. A good example of this diversity is our third-place finisher, Sioux City, IA, which is part the Siouxland Initiative, a tri-state effort which has established growth-driven hubs in food processing/food products, call centers, data centers and clean energy.
As we reported in our June cover story, “Bridging the Digital Divide,” despite a new focus at the federal level to gather data and promote the use of broadband, there is little empirical research to determine the full economic effects of this technology. However, a recent study from the Brookings Institution, a nonprofit research firm, supported the widespread view that “broadband is indeed essential infrastructure for job and output growth.” Sectors that appear to be benefiting the most are finance, education and healthcare, but even manufacturing employment rates appear to be related to broadband penetration, the firm found.
In some cases, the economic benefits of broadband are an afterthought of an investment designed to serve educational or healthcare needs. A good example of this is found in activities in the Chicago metro area, our fifth-place finisher in our Top 10 Wired Cities ranking.
In 2004, when Northern Illinois University began work on NIUNet, connecting new and existing fiber lines along highways in the region, the goal was to create a high-speed network linking the main campus and its remote facilities. Soon, area municipalities saw the potential benefits and began partnering with the university to expand the network and bring advanced digital communications to their communities. Suddenly, northern Illinois was more attractive to corporate executives and small business owners alike.
NIUNet now is a roughly 175-mile fiber optic loop running along several major interstates and connecting suburban cities like DeKalb and Rockford with Chicago at the ring’s eastern tip. The university partnered with local towns and private industry to build the infrastructure. It also helped to create a second fiber ring mirroring NIUNet called the Northern Illinois Technology Triangle (NITT), which is run mostly by cities and counties and handles connections to businesses. NIUNet already has given way to spinoffs such as a federally funded $25-million network connecting all rural health facilities in Illinois. The broadband services are being extended to residents, businesses and other institutions by both the local governments and private Internet service providers.
Rochelle, IL, a partner in the NITT, already has attracted two major offsite data centers: Northern Trust Corp. is building an 80,000-square-foot facility alongside Allstate’s 65,000-square-foot facility, which has opened at the 160-acre Rochelle Business and Technology Park. The two $50-million data centers represent a defining moment for the Chicago suburb, made possible by the fiber optic network.
“Hollywood” on the Bayou and in Motown
When we created a metro ranking category for film industry hubs, we didn’t have to think twice before including Los Angeles and New York, which for decades have been mainstays for film production. But you may find some of the emerging film industry players a bit surprising: directors are yelling “Cut!” now in Shreveport, LA, Albuquerque, NM and even Detroit, MI.
As we reported in Business Facilities, as of June 2007 the Shreveport/Bossier, LA area already had attracted 25 movie and television projects with budgets totaling $340 million. Much of this activity took place after the disaster of Hurricane Katrina, which devastated southern Louisiana in August 2005; after the hurricane hit, several movie and television projects taking place in New Orleans were left scrambling to relocate—many of them ended up in the Shreveport/Bossier area in order to salvage their productions.
Major film-industry companies like Paskal Lighting, Cinelease and Panavision all have taken up residence in the area thanks to this film boom. Nu Image/Millennium Films last year broke ground on a studio project on 6.7 acres, with the intention of eventually expanding to a 20-acre full-service studio, complete with three sound stages, production offices, a mill, and a prop house.
State incentives have played a major role in Shreveport’s emergence as a film-making hub. The state offers a 25-percent tax credit for an in-state production worth $300,000, plus 10 percent more for the use of local labor.
Thanks to Shreveport’s burgeoning film industry, the city is the recent recipient of the $3.7-million Robinson Film Center (RFC), a not-for-profit organization whose mission is to present the best international, independent, and classic film while serving as a resource for filmmaking and education. RFC’s facility in downtown Shreveport, opened in May 2008, includes two state-of-art theaters, a bistro and multi-purpose spaces ideal for business and non-profit use.
The Detroit, MI metro area also is getting into the movie business in a big way. Earlier this year, Governor Jennifer M. Granholm announced an aggressive film production initiative that will create 5,993 new jobs in Michigan, including 4,066 new film, animation and programming jobs. Three companies, Wonderstruck Studios, Motown Motion Pictures and Stardock Systems, plan to invest more than $156 million in Detroit, Pontiac and Plymouth locations. Here are some details regarding these impending investments:
• Wonderstruck Studios LLC— The new venture, to be known as Detroit Center Studios, will produce computer-generated (CG) visual effects and animated content. It plans to invest $85.9 million to create a digital pipeline, used to pull in numerous CG and digital animation projects, in downtown Detroit. The project is expected to create 700 new Michigan jobs, including 413 directly by the company.
• Motown Motion Pictures LLC—The new business venture, which will be both a film studio and a production services company, plans to invest approximately $70 million in a 600,000-square-foot development with nine sound stages in Pontiac. The project is expected to create 5,139 new jobs, including 3,600 directly by the company.
• Stardock Systems Inc.—The software developer and publisher will invest $900,000 to expand at their current location in Plymouth Township to allow for the implementation of a new PC game. The project will create 154 new jobs, including 53 directly by the company.
Albuquerque, NM has become a magnet for film and media projects, thanks to an aggressive incentive program and the natural assets of climate, landscape, architecture and a diverse population. A parallel development is Sandia National Laboratories’ long involvement in media for training, visualization and security.
New Mexico provides zero-interest loans of up to $15 million, which can be 100 percent of the budget, for films and television projects shot substantially in the state. The state also offers a tax credit of up to 20 percent on production expenditures, post-production expenditures and video- gaming expenditures. And the Workforce Training and Mentorship Program offers a 50-percent wage reimbursement to production companies that hire New Mexico trainees.
Albuquerque Studios in 2007 completed a $74-million, 50-acre complex of eight sound stages. Sony Pictures Imageworks’ studio opened in 2008, establishing high-end digital animation and post-production facilities in New Mexico. Lion’s Gate Films established a studio in Rio Rancho. And a California group is establishing New Mexico Film Studios, with four sound stages, between Albuquerque and Santa Fe.
Film-makers have found that Albuquerque is a hub for talent, crew, sound stages and equipment. With easy access to air, rail and two interstate highways, transportation is convenient. Within a small radius are backdrops ranging from cityscape to forest, Victorian to modern, mountains to desert.
Sandia National Laboratories has been a leader in visualization, virtual reality, and computer graphics. The media sector has broad applications in medicine, homeland security and gaming. A production complex is planned for Albuquerque. And the University of New Mexico’s Art, Research, Technology and Science (ARTS) Laboratory, created in 2005 with funding from the state’s Media Industries Strategy Project, is an interdisciplinary collaboration that supports the state’s media industry. It will include a black-box, new-media experimental studio and immersive dome theatre technology innovations.
Food Processing Hubs Keep Getting Bigger
We’ve designated Sioux City, IA as the leading growth center for food processing, food products and agribusiness because it is the epicenter of the Siouxland Initiative’s highly successful development of a huge food-oriented job-creating engine.
Among the major food-processing employers in Siouxland are Beef Products, Inc., Curly’s Foods, Gelita, Green Planet Farms (maker of organic and natural soybean protein isolate), Interbake Foods (producer of Girl Scout Cookies for North America), John Morrell & Company, Jolly Time Pop Corn, Palmer Candy Co., Sara Lee Bakery Group, Steck Wholesale Foods, Tyson Fresh Meats, Well’s Dairy, Inc., Pepsi, 21st Century Grain, Mars PetCare, Cargill, and Sioux Honey Association.
In our second-place location, Genesee County, NY, the Genesee County Economic Development Center (GCEDC) is developing what it says is the largest agribusiness park in the nation. The Genesee Valley Agri-Business Park will convert nearly 600 acres of former farmland into a business park devoted to food processing.
GCEDC received a $3-million grant from the state of New York in 2007, the largest single award received by the GCEDC. Components of the project include 1.3-million square feet of food processing, research and development and warehouse/distribution space. The site could yield more than 1,000 new jobs in the region when complete. Located near six million gallons (daily) of aquifer water, it is ideal for food production companies looking to locate in Genesee. The park also is located next to OATKA Milk Products, one of the largest food processing employers in the county. Genesee County has an employment concentration for food production that is nearly twice the national average.
Agribusiness, consisting of food production, food processing and packaging, and food product distribution, is the number one industry in Genesee County. Three of the top 10 largest vegetable farms in the U.S. are in Genesee County; it is one of the top 10 counties in New York state for onion, cabbage, sweet corn, milk, and wheat production; and the county is ranked second in the state for production of cattle, fourth in total sales of agricultural products, and has the fifth highest milk production. Perhaps that’s because Genesee County is part of the Great Lakes and Finger Lakes regions, which provide long-term fresh water availability that’s more reliable than anywhere else, making it one of the most logical choices for locating a food processing company.
In Livingston County, NY, our third-place finisher, Barilla’s 310,000-square-foot manufacturing and distribution facility in Avon, NY, which opened in October, 2007, is one of two Barilla plants that produce pasta products for distribution throughout North America. Barilla, was attracted to Avon because it is close to East Coast markets, expressways and rail lines. During the six-month site selection process, Barilla’s consulting firm, Deloitte, reviewed 54 sites in 13 states before choosing Avon. It was a great choice for Barilla, since nearly 50 percent of the company’s U.S. sales comes from its Northeastern customers.
Because time is of the essence—particularly with delivering food products–Livingston County is a great location for food processing. The richest market in the world is within a radius of 750 miles of New York State; this radius includes half of the total U.S. and Canadian populations and covers the 18 Northeast states and parts of two Canadian provinces. Half of the U.S. personal income, wholesale sales, and about 50 percent of its retail trade are accounted for within this radius.
More than 50 percent of the land area in Livingston County is used for agriculture, and the county is within the top five New York counties in grain, beet, bean and dairy production.
Nearly all food processors and commodity handlers have expanded into major regional and national production marketers. Livingston County is the sole manufacturing location for Kraft’s Cool Whip dessert topping and a major production site of Oscar Mayer Lunchables.
Cost of Living: Lower is Better
Housing prices undoubtedly have taken the biggest hit in an extended economic downturn that was set off in large part by the collapse of the real estate market. So in evaluating the locations with the best (meaning lowest) cost of living, we took special care to compare pre-recession statistics with current numbers to produce the most credible results. We divided this rankings into two categories, Best Cost of Living (population greater than 500,000) and Best Cost of Living (population less than 500,000).
Locations were compared based on how far below the national index average of 100 they ranked. In both of these categories, only a small percentage difference separated the top-ranked metros from those at the bottom of our top 10 lists, so all of the communities that earned a place in our Best Cost of Living ranking can lay claim to national leadership in this benchmark. For example, the different between top finisher in the smaller metro category, Fort Smith, AR, and the tenth-place location, Topeka, KS, is just five percentage points.
Locations in Texas were well-represented in both categories, with five Texas metros (McAllen-Mission, El Paso, Dallas, Brownsville, and Lubbock) appearing among the top 10.
Since cost of living was a factor in our Best Quality of Life ranking, it is not surprising that our top-ranked metros in that category, Nashville, TN and Tulsa, OK, also fared well in Best Cost of Living, with Tulsa taking the top spot in the larger metro category.
Topeka, KS recently was cited on an interesting Web site, called Frugal Zeitgei$t.com, which hunts for low-cost places to live for end-users who are devoted to “living in a frugal way.” The site posted a query from a visitor who was looking for a really nice place to live on a monthly budget of $840. The site surveyed Topeka and reported that beautiful studio apartments were available there for $315/month, including air conditioning, cable TV, a dishwasher and a refrigerator!