Twin Crises Make Us More Appealing to Companies

Covid-19 hasn't provided much good news to anyone anywhere, but as America comes out of the pandemic, there is a thick silver lining for Flyover Country: Our cities and suburbs are going to be more popular than ever as companies decide their strategies for locating facilities and jobs from here on out.

This makes sense intuitively because the worst combination of news emerging from the pandemic -- and then from the urban unrest of the last couple of months -- comes from big cities on the coasts including Seattle and New York. While major Midwestern outposts including Minneapolis and Chicago have experienced more than their share of distress and unrest, the writhing essence of these twin crises clearly has taken root elsewhere and is demonstrably endemic to them, not to the heartland.

So it's little surprise to hear that corporate CEOs and boards have become more than a little spooked about some areas and more inclined toward others as they make site decisions coming out of today's economic and social morass. As they look for places to invest their companies' hard-earned -- and abruptly endangered -- capital in whatever turns out to be the "new normal," business leaders have become naturally more inclined toward the kinds of places that are most of the landscape in the middle of America.

Indeed, suburban and mid-size cities, as well as rural areas, will be the "biggest winners of corporate expansions and relocations, with large urban areas falling to the bottom of the list," according to a new survey on the impact of Covid-19 on corporate location preferences by the Site Selectors Guild.​

Strong potential candidates in Flyover County that emerged in the late-June survey were Columbus; Huntsville, Alabama; Indianapolis; Kansas City, Missouri; and Colorado Springs, Colorado. They comprised five of the top 11 choices of mid-size cities that will be favored by site selectors in the next year, with the other six candidates notably including only two cities on the coasts, both in the Carolinas: Columbia, South Carolina, and Raleigh-Durham, North Carolina.

"Everything from physical distancing to changing transit preferences has affected the way corporations view location decisions," said Rick Weddle, president and CEO of the Site Selectors Guild, which represents professional site-selection consultants.​

When consultants were asked about locations that are "likely" or "very likely" to be considered by corporations seeking to expand, relocate or open new facilities in the next 12 months, 64 percent chose suburban areas, 57 percent chose mid-size cities, 31 percent chose rural areas, and just 10 percent chose large urban areas.

In fact, 100 percent of respondents said that New York City would be among the least likely locations to be considered for future projects in the next 12 months, followed by Los Angeles and Chicago at 63 percent and 42 percent respectively. (Note that many site consultants, CEOs and company owners long have been down on the Windy City anyway, given that it is at the center of the overall fiscal difficulties of the state of Illinois and a huge contributor to them.)​

And as we in Flyover Country hope to comprise the vanguard of economic recovery from the pandemic, there was another hopeful signal in the Site Selectors Guild survey: three of our main industries were among the busiest for project activity in June compared with April. They were food processing, advanced manufacturing and transportation and logistics.​

Many fundamentals in corporate location-making already were shifting in favor of Flyover Country before the pandemic. The crisis may be accelerating those favorables.​

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