By Business Facilities Editorial Staff
From the January/February 2018 Issue
Our 2017 Economic Development Deal of the Year competition drew more than 30 nominated projects from across the country, a record for our annual contest. The competition was unmatched in quality as well as quantity, so we’ve selected nearly a third of them for our Honorable Mention Awards.
Here they are:
Virginia Economic Development Partnership and Arlington (VA) Economic Development for Nestlé’s U.S. headquarters.
After an arduous selection process that spanned 20 cities, in February 2017, Nestlé USA announced plans to invest $39.8 million to relocate its U.S. headquarters from Glendale, CA to the Rosslyn neighborhood of Arlington County, VA, creating 748 new jobs at an average salary of $127,719. Adding a global brand like Nestlé USA to Virginia’s corporate roster is a major win for the Commonwealth, and is a testament to Virginia’s world-class workforce, education system and infrastructure.
Winning the Nestle HQ also was a big shot in the arm for the Northern Virginia region, which has grappled with defense cuts and sequestration in recent years. From 2010 to 2012, Virginia experienced $9.8 billion in defense cuts, mainly impacting Northern Virginia.
Alabama Department of Commerce and Birmingham Business Alliance for the Mercedes-Benz Global Logistics Center.
After an exhaustive search that spanned two states—Alabama and Georgia—and full cooperation from state, county and regional partners, Mercedes-Benz chose 278 acres in the Scott G. Davis Industrial Park and began work on its $248.2 million investment, which will create 691 jobs in Bibb County, AL.
An 800,000-square-foot Global Logistics Center will support worldwide operations connected with the vehicles the German automaker manufactures in Tuscaloosa. Scheduled to open in 2019, the center will supply overseas assembly plants with car kits. Mercedes’ 1.3 million-square-foot after-sales North American hub, co-located with the Global Logistics Center, will provide overseas markets with spare parts, meeting rising demands for the company’s growing variety of models. This will consolidate three existing after-sales warehouses in Alabama.
AMAZON-SIZED HUB IN NORTHERN KY
Kentucky Cabinet for Economic Development and Northern Kentucky Tri-ED for the Amazon Prime Air project, a $1.49-billion air freight shipping hub at Cincinnati/Northern Kentucky International Airport in Hebron, KY.
The Prime Air hub will create 2,700 new (full- and part-time jobs), expanding Amazon’s longstanding presence in Kentucky, where it already employs 12,000 full-time team members at several fulfillment center locations in Central and Northern KY.
Arizona Commerce Authority and Salt River Pima-Maricopa Indian Community for McKesson’s Scottsdale Campus, a project that will directly create 2,500 jobs and have a direct economic impact of $1.8 billion over the next 10 years.
Land development in tribal communities can be particularly complex, but that unique situation is at the heart of the success behind the McKesson Scottsdale Operations Center, the company’s newest large corporate office facility in the Greater Phoenix area. Tribal land generally cannot be sold; instead, deals rely on ground leases executed by members of the Native American group who are entitled to control the ground and the community itself.
These unusual circumstances necessitated a strong relationship between McKesson and the Salt River Pima-Maricopa Indian Community (represented by their real estate holdings corporation, Salt River Development Co.). A high degree of communication and cooperation amongst the parties was critical to success amongst a variety of unique deal terms—the result was a very favorable situation both for McKesson and the local community.
The Tennessee Department of Economic and Community Development and Blount County, TN for DENSO’s expansion, a $1-billion investment in its Marysville, TN facility, which will become a primary manufacturing center in North America for electrification and safety systems.
With its global headquarters in Japan, DENSO has had a presence in Tennessee for nearly three decades in Maryville and Athens and employs roughly 4,500 people. The Maryville campus, which is DENSO’s largest U.S. manufacturing facility, consists of four manufacturing plants on 194 acres and is Blount County’s largest employer.
“We want to thank DENSO for choosing to expand in Maryville, creating 1,000 new jobs and investing $1 billion in Blount County,” Gov. Bill Haslam said at the project announcement.
“Tennessee is No. 1 for growth in automotive employment in the Southeast since 2011, adding over 22,000 jobs, and it is because of companies like DENSO that the automotive sector continues to have momentum in our state,” TCED Commissioner Bob Rolfe said. “I want to thank DENSO for choosing to expand in Maryville, creating over 1,000 new jobs and investing $1 billion. DENSO is a great partner to Tennessee and I look forward to seeing its continued success in our state.”
Missouri Partnership for American Outdoor Brands’ national distribution center, a project that will directly create 328 new jobs and have a direct economic impact for the region estimated at $386 million over the next 10 years.
In March 2017, Gov. Eric Greitens announced that American Outdoor Brands Corp., a company that represents a broad portfolio of entities in the hunting and outdoor enthusiast market, including Smith & Wesson, intends to establish a national distribution center in the Columbia area of Boone County.
Austin (TX) Chamber of Commerce and Round Rock (TX) Chamber of Commerce for the United Parcel Service distribution center, which will create 575 direct new jobs and have an estimated direct economic impact on the region of more than $89 million over the next 10 years.
UPS is currently building the new $80-million facility on approximately 50 acres near S.H. 45 and A.W. Grimes Boulevard in Round Rock. The building is expected to open at the end of 2018.
Virginia Beach Economic Development for the GTS Battery Manufacturing Center, a project that will directly create 1,100 new jobs in the next three years.
Global Technical Systems (GTS), a premier provider of advanced engineering solutions for defense, homeland security and related U.S. Government and international customers, will invest $54.7 million on a new electro-mechanical energy storage system (EMB) manufacturing operation in Virginia Beach. The company will construct a 500,000-square-foot advanced manufacturing center to produce and distribute 100% green energy storage systems using advanced composites and engineering technologies. The new facility will be located on approximately 30 acres of land currently owned by the City of Virginia Beach, at the site of the former Owl’s Creek Golf Course.
Virginia Beach successfully competed against Florida, Mississippi, Oklahoma and Washington, DC for the project, which will create 1,100 new jobs with an average annual salary of $74,000. Construction will begin in the first quarter 2018, and the facility will be operational in 2019. As this is new technology, Global Technical Systems will work with local and regional workforce partners to develop customized training programs for new employees.
“This is the type of project that every community in America wants,” said Virginia Beach Mayor William D. Sessoms, Jr. “A local, homegrown company develops a truly transformational new technology and makes the strategic decision to build it at home. With these new energy storage systems, that are 100% environmentally friendly, GTS has created the opportunity to change how the world manages our energy resources. This is an exciting day.”
The process developed by Global Technical Systems to store energy uses advanced carbon fiber technology to create a clean electro-mechanical device that stores energy without using any hazardous chemicals. Energy can come from any source such as solar, power grid, wind or water and release upon demand when needed. This scalable technology can be extremely impactful around the world for developing countries in a variety of institutional, commercial and residential applications.
ROCKET CITY READY FOR LIFTOFF
Alabama Department of Commerce and Huntsville, AL for the Blue Origin rocket engine factory. Blue Origin, the spaceflight company started by Amazon founder Jeff Bezos, announced in June that it will manufacture its BE-4 rocket engine in a production facility to be built in Alabama’s Rocket City, the place where the Saturn V was built for the Apollo moon landing program.
Blue Origin says the production of this engine in Huntsville will end the nation’s dependence on Russia for access to space for critical national security space systems. Blue Origin will employ up to 342 people in the new Alabama facility. The company’s capital investment will be approximately $200 million, and the hub is expected to begin operations by the end of 2020.
South Carolina Department of Commerce and Berkeley County, SC for the Volvo expansion, a project expected to have an estimated direct economic impact for the region of more than $2.4 billion over the next 15 years.
Volvo Cars is investing an additional $520 million in its Berkeley County operations and creating 1,910 new jobs, a commitment that brings the company’s total investment in SC to more than $1 billion (creating a total of 3,900 jobs).
Now under construction, Volvo Cars’ Berkeley County manufacturing plant will be the global production home of the company’s all-new S60 sedan, which is expected to roll off the assembly line next year. With this new investment, the company is planning to add an additional product line—the next generation XC90—to its South Carolina operations in 2021.
Volvo also will expand operations at the Berkeley County site with a new 88,000-square-foot office facility that also will serve as a training center and house research and development and operations management activities.
PICKING THE WINNER
The 2017 Economic Development Deal of the Year recognizes the locations and economic development agencies that landed the highest-impact projects announced between July 1, 2016 and the entry deadline of December 1, 2017.
For the purposes of this award, an “economic development deal” is defined as:
- A project or effort that resulted in the relocation/expansion of a company to a location served by the entering organization;
- A project resulting in the expansion of a company already within the territory served by the entering organization;
- A project or effort that resulted in the demonstrable retention of a company that would have otherwise left, in whole or in part, the territory served by the entering organization;
- Any combination of the above.
Nominees were required to provide official economic impact numbers produced by the RIMS II, IMPLAN or REMI certified analysis methods, including direct, indirect and induced figures for economic output, job creation and capital investment when available, as well as anticipated new wages; and a narrative explaining how the deal came together, including details on regional cooperation, innovative incentives and training programs in partnership with higher education resources, where applicable.
Judges evaluated the narrative and the economic impact numbers and gave each project a score ranging from zero to 100. The highest-rated entry is our Gold winner and is considered our official Economic Development Deal of the Year; the second, third and fourth place entries win the Silver, Bronze and Honorable Mention awards, respectively. The awards were announced on our website in January.