Dennis J. Donovan is responsible for worldwide site-selection services at Wadley Donovan Gutshaw Consulting, which has advised companies on office and industrial facilities location for more than 30 years.

Q: What are the main qualities companies look for in a location?

A: First, there is logistics. This is huge, especially for manufacturing. Companies want to maximize efficiency and reduce costs. They want to minimize transportation costs and delivery times. So proximity to customers and suppliers is critical. Their customers don’t want to keep a lot of inventory, so they want to know the supplier can deliver the product the next day.

Second, human resources is important. Businesses want low-cost, high-quality production, and the biggest component of all that is labor. Businesses want to know there is a sufficiently large and qualified labor force to meet existing demand and, should the opportunity arise, to meet growing demand. They don’t want a lot of turnover, which can happen if there are too many competitors for a finite labor supply. Competition results in a high rate of turnover and in salaries that outstrip inflation.

Third, infrastructure is always important. Companies like an available building with full utilities. If they don’t have to erect their own buildings, there is less capital investment. Also, if the buildings already exist, companies save several months of time before they are up and running again. They can minimize business disruption.


Q: How will Obama administration policies affect site-selection decisions?

A: Energy policy will be important, and this White House obviously favors green energy. By all evidence, it is not going to oppose nuclear and natural gas. But if a company’s electricity is coal or oil generated, costs will go up. So sources of electric power become more important in decisions a company makes about its location.


Q: How important are state, county or municipal policies?

A: They are very important. There aren’t a lot of deal breakers when a company has narrowed its decision down to a manageable number of target sites, but there are some. These generally occur in the area of assurances made, supposedly in good faith. When a company is looking at a possible site, a utility might extend assurances of what it is willing to do, but when push comes to shove, the utility might back off. Changes in administration can kill a deal. A new administration takes over, for example, and says that an incentive package offered by its predecessor is outlandish, and they won’t honor it.

Here’s another deal breaker: The company has made it known that confidentiality is crucial, but then rumors about it end up being reported on in the newspapers. When that happens, the company suddenly has to go into crisis-communications mode, just to calm down its own employees. They start to worry about relocation and what it will mean for their jobs. Dealing with such issues becomes very costly.


Q: What makes Henrico an attractive business location?

A: Henrico has a deep labor force across a range of skill sets. It is a mid-size metropolitan area with reasonable costs. It has a good transportation system, with proximity to markets up and down the East Coast. Plus, it is within driving distance of Washington, D.C. All that makes Henrico very attractive.