SOME OF THE HEAT IS GOING out of parts of the Sunbelt, as boomtowns like Houston become less attractive to companies that are on the move or expanding. Relocation experts say so-called second-tier cities, including some in the heartland, now top the site-selection list. "A new set of cities is in vogue," says Stephen Moss, of Arthur D. Little Inc. The prime beneficiaries are small, local companies that supply goods and services to arriving corporations.
Although few corporate headquarters pack their bags these days, many large companies continue to decentralize, opening new facilities across the country. Among their destinations are Charlotte, N.C.; Colorado Springs, Colo.; Indianapolis; and both Kansas Cities.
Fantus Co., a location-consulting firm, expects to assist in several hundred plant and office relocations this year. L. Clinton Hoch, executive vice-president, predicts that none of his clients will place a manufacturing facility in a major city. More than half of the newly located nonmanufacturing offices will end up in such second-tier locations as Kansas City, which has already landed General Motors, Burlington Northern, and first and only U.S. office of The Japan Chamber of Commerce and Industry.
Second-tier cities represent the fourth wave of corporate locations, after the big industrial cities, the suburbs, and the Sunbelt. Their attractions include lower living costs and cheaper labor, construction, and office space.
The winners will be companies such as printers and caterers. "The real opportunity is for entrepreneurial types who can service the larger companies," says Hoch.