If you were going to build a 70,000 square-foot headquarters for 325 workers, where would you construct it? New York or Sioux Falls, South Dakota? San Francisco or Little Rock? Minneapolis or Oklahoma City?

What factors would you consider in your decision? The availability and educational level of potential workers might be an issue. Quality of life could be important. Access to global markets, major transportation systems, research universities, large customer groups, or diverse employee candidates may be valuable.

Another factor is cost. For those narrow-minded organizations that think cost is all that matters—or that cheaper trumps everything—Boyd Co. Inc. has a list for you. According to Boyd, the most expensive U.S. cities to put 325 employees into a 70,000 square-foot headquarters are New York, San Francisco, Stamford (CT), San Jose, and Newark. The cheapest are Sioux Falls, Little Rock, Virginia Beach, Oklahoma City, and Columbus, South Carolina. The difference between New York, the most expensive at $30.7 million a year, and Sioux Falls, the cheapest at $21.1 million, is significant. And yet more companies choose New York than Sioux Falls because, as noted, cost is just one factor in the equation.

By the way, Minneapolis ranked fifteenth on the list of 50 cities at $26.2 million. Sure, you have to pay about $5 million more than you would in Sioux Falls, but you’ll save $4.5 million over New York while enjoying a metropolitan area with several universities, professional sports, theater and art, an entrepreneurial spirit, and headquarters for several global leaders including 3M, General Mills, Target, Cargill, Medtronic, and Best Buy.

As with most decisions an organization faces, cost is a critical factor in choosing where to put your headquarters, especially in hard economic times. But it’s not the only factor, and it’s usually not the most important one.

(6 votes, average: 4.33 out of 5)

 Loading ...