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Aerospace Industry Reports on Area Development Online are sponsored by:Economic Development Commission of Florida's Space CoastFlorida´s Space Coast is home to America´s space program and the world´s onlyQuadramodal Hub (land, air, sea, and space). Our hightech workforce fuelsinnovation, attracting 13 patents for every 10,000 workers ? more than double thenational average. Florida´s Space Coast is America´s hightech titan with astronghold in aerospace, communications, electronics, security and emergingtechnologies. We have the most concentrated hightech economy in Florida andthe 15th most concentrated nationwide. We boast numerous innovation leadersincluding the world headquarters of Harris Corporation. Contact: Gregory J. Weiner CEcD Senior Director, Business Development

Aerospace Industry SiteSelection Shouldn’t Be TopSecret

Specific labor force and infrastructure requirementsoften drive the aerospace company’s locationdecision, with incentives helping the firm to keep itscosts in check.

John Schuetz, Principal, The RHS Group (2013 Auto/Aero SiteGuide)

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EDITORS  PICKSA Community HelpsAerospace Firm Satisfy ItsWork Force Needs

Advanced Training forToday’s Auto and AerospaceWorkers

Canadian Aerospace FirmNearshores Its Supply Chainto Wichita

New Spaces on Old Bases

The MQ1 Predator unmanned aircraft system (UAS) is manufactured byGeneral Atomics in San Diego, California.

The site selection process for aerospacecompanies can prove to be a greatchallenge or offer great benefits,depending on how well prepared acompany is when it initiates the processand exactly what expectations it has.Companies really have to examine theiroperation and figure out what is themost important driver of the locationsearch.

A Skilled Labor ForceOne of the major challenges faced byaerospace companies is the availability

of precision skills among a potential labor force. A skilled labor force isparamount to the success of aerospace companies. These companies areoften looking for people possessing deep skills and certifications thatmatch the demands of world-class aircraft manufacturing and aerospacetechnology needs. If a potential location does not meet this requirement,its consideration by an aerospace company may be doomed before itever really gets off the ground.

Another key consideration is a location’s ability to establish a cooperativerelationship with a nearby university or other institute of highereducation with a strong aerospace department and research capability. Asophisticated training and education infrastructure can provideimportant industry support that, of course, is beneficial to theprospective company. Online aerospace training is advancing, and whenhosted by a top-tier data center makes systems performance a non-issue.This type of arrangement also relieves customers of managing the back-end hardware and infrastructure issues that often require additionalresources.

There also has been a recent trend toward creation of military and non-military applications of unmanned aircraft vehicles (UAVs). The MQ-1Predator unmanned aircraft system (UAS) is manufactured by GeneralAtomics in San Diego, California. The Predator and similar aircraft canserve in either a reconnaissance role or actively as a military platformfiring missiles at qualified targets. UAVs and systems require muchmore software and control systems engineering than earlier generationaircraft. In these industries, computer hardware and software, electricalengineering, and other information technology skill sets are essential.Educational systems that strongly support these disciplines will helpattract this emerging industry.

Use of Former Military BasesCost is less important, but still a factor in the site selection process foraerospace companies. Often, site-seeking aerospace companies can beattracted by free or low-cost available land, as well as by reuse projectsand ample-sized buildings and hangars that are readily available.Former military sites, or those in the process of decommissioning, aresought after locations, as they often provide an aerospace company witheverything it needs at a rock-bottom price.

Because military bases generally have adequate infrastructure tosupport aerospace manufacturing operations, they can commenceoperations quickly and cost-effectively. Any location that already has anaerospace infrastructure in place has a good advantage over otherpotential locations being considered.

For example, Kelly Air Force Base in San Antonio converted from a fullyfunctioning air base in to a center of aviation maintenance and overhaul

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9/20/13 Aerospace Industry Site Selection Shouldn’t Be Top Secret | Area Development Online

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functioning air base in to a center of aviation maintenance and overhaulactivity, employing approximately 550 people. Similarly, Williams AirForce Base in Mesa, Arizona, is now known as the Williams GatewayAirport. Williams Gateway quickly established itself as an internationalaviation and aerospace center, with more than 30 companies currentlyengaged on-site in aircraft maintenance and modification, avionics,flight training, and air cargo operations. Key aerospace tenants includeCessna Aircraft Co. and Hawker Beechcraft Services, Inc.

Another recent example of utilizing closed military facilities to establishan aerospace hub is Elmendorf Air Force Base in Anchorage, Alaska.With the unique asset of a space vehicle launch site on Kodiak Island,Alaska has formed the Alaska Aerospace Corp. to take advantage of theworldwide, centralized logistics provided by the Anchorage location. InMarch of 2012, Lockheed Martin Space Systems announced it wouldlocate its Athena space program to the Kodiak site.

Aircraft maintenance for the domestic aviation industry is a skill in highdemand. Fortunately there are many people coming out of the militarywho have these skills. This is another good reason for aerospacecompanies to locate near military bases. Northwest Florida has takenadvantage of its geographic proximity to seven military bases and theunrestricted airspace of the Gulf of Mexico. Between 32,000 and 37,000private-sector and non-military government employees work in morethan 1,900 aerospace and defense establishments, including companiesin the following industries:

Aerospace and transportation equipment manufacturing

Air transportation and support activities

Aviation machinery and equipment distribution

Chemicals and fuel manufacturing and distribution

Computers, electronics, and electrical equipment manufacturing

Engineering, testing, R&D, and industrial design

Fabricated metals and machinery

Flight training

IT, systems integration, network solutions, andtelecommunications

Plants dealing with electronics and parts do not necessarily have to be onan airfield, although they do need to be in locations where they can servea customer base. Nonetheless, if an aerospace company like Boeing ismanufacturing wing assemblies for planes, logistics is important.Manufacturing large parts like wing assemblies sometimes requires alocation near a port for easy access and transportation needs. WhenEuropean Aeronautic Defence and Space (EADS) selected Mobile,Alabama, over three rival bids from other locations in the South,Chairman Ralph Crosby said Mobile was chosen because it is“strategically located” on the Gulf of Mexico, and offers a skilled workforce, airport runways, and a deepwater port.

Incentives Attract InterestThe reuse of former military facilities has been encouraged with the useof federal and state tax abatements. An aerospace company should lookfor any specially designated federal or state zones that give hiring credits(such as a state enterprise zone or a federal empowerment zone). Incertain areas, aerospace companies can also get accelerated depreciationon their real estate.

Many municipalities will offer a discount on land or buildings. There arealso the possibilities of local, state, and federal tax incentives. In manyareas, if an aerospace company were to locate into a tax-exempt zone, itcould pick up some impressive tax incentives. There is also what isknown as Defense Economic Readjustment Zones program. This was

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John Schuetz, Principal, The RHS Group John Schuetz brings over 30 years of negotiating, economic development,and marketing expertise to The RSH Group. Formerly, as the EVP of LocationManagement Services — an international leader in tax incentives andnegotiations, compliance, site selection, and energy for the commercial realestate market — he managed corporate tax, incentive, energy, and siteselection relationships with companies such as GE, Toyota, Home Depot,NBC Universal, and Mitsubishi International. His expertise resulted in arequest for him to be a consultant to the White House CommunityReinvestment Fund Program. Schuetz’s analysis of current market trends ineconomic development are published regularly in numerous industry tradejournals.

   More articles by John Schuetz

Automotive Site Guide: The Automotive Industry Flies South

ABOUT THE AUTHOR

known as Defense Economic Readjustment Zones program. This wasestablished as a tool for business recruitment and job creation inadversely impacted defense-dependent communities. It is designed toprovide assistance to communities, businesses, and workers impactedby, or vulnerable to, the closure or realignment of military installationsand the reduction in federal defense contracting expenditures.

The incentives offered through a Defense Economic Readjustment Zoneare similar to those offered through an enterprise zone program. Anenterprise zone is an economic development tool that allows acommunity to partner with the state to offer a package of local and statetax and regulatory benefits to assist businesses seeking to locate, expand,or retain jobs in economically distressed areas. By locating in anenterprise zone, a company could receive state sales tax refunds forbuilding materials, machinery, and equipment for up to five years.

Aerospace companies can also save on state franchise taxes, and in somestates, like California, can take advantage of what are known asLAMBRAs (Local Agency Military Base Recovery Areas). The LAMBRAAct promotes economic development and employment opportunities in

designated military base areas by offering bidding preferences of 1 to 9percent on specified state contracts. The LAMBRA Act provides for twobidding preferences: work site and work force.

In the site selection process, aerospace companies must find a way tobalance their search for incentives with locations that will support thecore operations of the business effectively. In sum, the finalist locationshould satisfy the company’s work force requirements; provide atransportation infrastructure with good access via rail, road, and sea;and may need to include a runway and tarmac with plenty of length, aswell as ample area to accommodate production, hangar, and office space.

 

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FLORIDAFLORIDA'S SPACE COASTFrom NASA to commercial space, Florida's SpaceCoast has been  and remains  America's hightechtitan. And we go beyond space, to communications,electronics, security, and hightech manufacturing  allboosted by our skilled work force, attractive tax code,competitive wages, and probusiness government.

CONNECTGregory J. Weiner, CEcD Senior Director, Business Development3216382000 Fax: 3216334200 

     

MISSISSIPPIMISSISSIPPI DEVELOPMENT AUTHORITYMississippi has a long history of excellence in theaerospace industry. The state is home to globalaerospace leaders who have found a highly skilledwork force propelling them to success. Mississippiansproudly produces everything from helicopters tounmanned aerial systems. To find out more aboutMississippi?s growing aerospace sector, visit ourwebsite.

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SOUTH CAROLINASANTEE COOPERFlip a switch and the light comes on. Turn on thewater and it flows. Santee Cooper, your stateownedelectric and water utility, delivers every day.Leadership…Vision…An economic environmententicing to new business…We deliver a brightertomorrow, today.

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SOUTH CAROLINAREADYSC™South Carolina provides comprehensive work forcesolutions from entrylevel training through advancedskill levels. Our internationally recognized readySC™and Apprenticeship Carolina™ programs cometogether to successfully meet each organization'swork force needs. ReadySC™ delivers customizedrecruitment and training solutions for companiescreating new jobs in the state. ApprenticeshipCarolina™ helps client organizations create demanddriven registered apprenticeship programs.

CONNECTSusan PretulakVice President of Economic Development9188253500 or8886273500 

 

NEW HAMPSHIREROCHESTER, NEW HAMPSHIRE,ECONOMIC DEVELOPMENTBe the center of the action in the Seacoast'sComposite Material and Advanced ManufacturingRegion. More than 300 firms enjoy a business climateranked 7th in the nation, 2nd lowest business taxes,and 7,000+ STEM graduates adding to a work force of130,350. Confidential assistance with site selection,incentives, financing, and permits is available.

CONNECTKaren Pollard, Deputy City Manager/Director ofCommunity Development 6033357522Fax: 6033357597 

       

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