Tennessee Valley Megasites Attract Automakers

Plan by the nation's largest public utility to lure automakers to ready-to-go sites in the Southeast is paying off -- four sites have sold since 2005.

KNOXVILLE, Tenn. (AP) -- The Tennessee Valley Authority's "megasite" economic development program is proving to be a megahit with major manufacturers.

The plan hatched by the nation's largest public utility in 2004 to lure vehicle manufacturers to large consultant-certified, ready-to-go sites in the Southeast is paying off -- four sites have sold since 2005, including three in just over a year.

Volkswagen's decision Tuesday to build a $1 billion, 2,000-employee auto plant at the Enterprise South industrial site in Chattanooga is the latest.

Previously announced and lured by the same program:

  • Toyota is building a $1.3 billion, 2,000-employee Prius factory near Tupelo, Miss.
  • Washington-based Paccar Inc., maker of Peterbilt and Kenworth trucks, is constructing a $400 million diesel engine plant in Columbus, Miss.
  • Russia-owned SeverCorr LLC is finishing an $880 million steel mill, also in Columbus, Miss.

"This program has really gone beyond anyone's expectations," said John Bradley, TVA's senior vice president of economic development.

TVA, which budgets $17 million a year on economic development activities, estimates it generated a record $5.6 billion in new investment in the valley last year -- one third more than the year before -- due in large part to Toyota.

The broader economic development community has taken notice. CoreNet Global International named TVA's program a runner-up for innovative real estate development in 2007, and other utilities are working to duplicate it.

"TVA was certainly blazing new territory when they started this program," said Jeannette Goldsmith with TVA consultants McCallum Sweeney Consulting of Greenville, S.C. "Since then, there have been a lot of folks that are following in their footsteps."

Asked for examples, Goldsmith, who has worked with some of them, said, "Well, name any utility and they are probably doing it. Name any rail company and they are probably doing it."

TVA has four sites still on the table -- one each in Athens, Ala.; Hopkinsville, Ky.; Clarksville, Tenn., and Stanton, Tenn., about an hour east of Memphis. A ninth site in Crockett County, Tenn., has dropped out.

Bradley won't predict how soon they will be snapped up. But he said interest in the TVA megasite program is infectious and "we are always having activity on these sites" from potential buyers.

The Alabama megasite brought VW to the Athens-Huntsville area. The German automaker found another site five miles away from the TVA site that became its runner-up to Chattanooga -- just as Chattanooga was Toyota's runner-up the year before to Tupelo.

Each site has to meet a long list of criteria set by McCallum Sweeney Consulting, whose clients have included Nissan, Michelin and Mitsubishi Motors.

Each must have at least 700 acres of developable land, which typically means a total size of 1,000-3,000 acres. Each must be immediately available; have completed their environmental and geotechnical testing; be near interstate highways, railways and auto suppliers, and have plenty of labor.

The nine certified megasites were culled from 26 applications. Some like the Chattanooga site, a former Army installation, were ready in short order after years of searching for an industrial tenant. Others took months of hard work by local officials to pull the packages together.

Bradley said TVA is satisfied with the megasites it has found and has no plans to look for more in the utility's 80,000-square-mile territory, which includes most of Tennessee and parts of Mississippi, Georgia, Alabama, Kentucky, North Carolina and Virginia.

Goldsmith agreed with that approach. "I think the four (sites) they have left in the mix are their four best" in the valley, she said.

Despite a slowing economy, she believes "there are a lot of opportunities for the remaining sites. It might not be auto assembly, but there is certainly a lot of (potential) investment out there running around."

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