Location, Location ... or a Relocation
August 5, 2013

Philadelphia lost 25 percent of its jobs since 1970, as others cities such as Washington, D.C., New York and Boston saw job gains. Local economic development experts, those in commercial real estate and other business groups often point to Philadelphia’s tax burden as the leading deterrent for companies to either locate in the city or to leave for the suburbs where wage and business privilege taxes aren’t an issue.

Getting a company to relocate to Philadelphia is hard work. When it comes to a business evaluating where to set up shop, taxes are just one of a litany of issues that play into a company’s decision ...

“It’s what we call the red carpet tour,” said Les Cranmer at Studley Inc., who along with colleague Art Wegfahrt, have done site location consulting for more than 30 years. “At least 15 percent of a company’s decision is based on subjective stuff and whether they determine it’s a good fit or not. Whether we feel welcomed or not.”

The remaining 85 percent of the site location decision is driven by the data.

Philadelphia’s so-called red carpet treatment could use a little help, according to people in the site location business. It’s not, they say, a “welcoming town” or a “warm place.”

Each top city is then compared to one another and some are re-ranked depending on the red carpet treatment and hard statistics. Incentives from state and local governments come into play but aren’t always the deal breakers politicians and others lead them on to be.

“People don’t make decisions on incentives,” Cranmer said. “It can be a tie breaker, but it’s 50 percent emotion by the end.”

In many cases, a company may go through an analysis, which takes several months, costs a lot of money and decide to do nothing. That happens a lot and for a good reason.

“It costs a lot to relocate a company,” Wegfahrt said.

Location, Location ... or a Relocation

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