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Megasites Equal Megabusiness: Certification Requirements and Processes for Megasites and Supersites
Certified megasites are quickly becoming the new standard for large expansions and relocations. What factors qualify a location as a megasite?
Mark Crawford (Aug/Sep 08)
(page 2 of 2)
 
The Certification Process
The process begins with a site visit and meetings with key participants. "The documentation for the site information is gathered in conjunction with the owner, the local economic development organization, and local and state governments to insure that each question is not only completed, but documented," says Mallot. "The net result is a book that provides a complete understanding of the site and a third-party certification that it is ready for development at a reasonable cost and risk."

There is no standard in the industry that defines a certified site. "The process is based on verification of data and industry-specific requirements that are commonly known and understood in the industry, and applying the discipline to make sure that information is gathered, verified and based on a plan - not conjecture, promises, or chance circumstances," says McCallum.

If the region is acceptable, the client requests sites that have all the necessary attributes that will make the site work from a technical perspective. Part of the evaluation process is looking at the status of the site with respect to these attributes and assessing the amount of time needed to complete due diligence regarding environmental, wetlands, permits, infrastructure connects, etc. "If the information is not known and the time period required simply to acquire the information is outside the project schedule requirements, the site is usually eliminated without further investigation," says McCallum.

The process is basically a standard checklist of "site readiness" criteria that is unique to the needs of a particular industry. "For example," says McCallum, "the needs of an auto assembly plant would be much different than the needs of a titanium melting and rolling operation or an aircraft assembly facility. The first requirement is a commitment on the part of the economic development agency that it will put in the time and effort to complete the process - it is not cake walk. The second requirement is making sure all the stakeholders understand - and actually believe - and internalize the concept that site certification is a critical element of their eligibility as a candidate that is only the first step in winning a project."

Cost for the certification process varies according to the size, complexity, and preparedness of a site, but ranges from about $50,000 to $250,000 or more. "Costs can easily exceed $1 million when the client starts adding engineering studies and other extras," says Colson.


Where to Find Megasites

Megasites are located across the United States, from New England to the Pacific Northwest. They are especially abundant in regions with a strong manufacturing history and supporting infrastructure, such as the Southeast. States, cities, and regions in this part of the country are in tough competition for the billions of dollars that big firms want to invest in automotive assembly, engine manufacturing and assembly, metal processing, aircraft assembly, and renewable energy facilities.

Portions of the Cecil Commerce Center in Jacksonville, Florida, were recently certified as megasite by McCallum Sweeney. Owned by the Jacksonville Economic Development Commission (JEDC), the property is attracting the attention of industrial companies who are interested in investing hundreds of millions of dollars in a new facility and adding hundreds of high-paying jobs to the community. "Recognition as a megasite validates Cecil Commerce Center's status in the major league of industrial parks and will further elevate Jacksonville within the site selection community," says Ron Barton, JEDC's executive director.

The Tennessee Valley Authority (TVA) has an extensive megasite program in its multi-state service area, and Entergy has a supersite program in Arkansas, Louisiana, Mississippi, and Texas. "The [TVA] program is designed to make it easier for automotive manufacturers or other large industries to quickly find an optimal location that is ready for development and offers time savings and reduced risks to a new industry," says John Bradley, TVA's senior vice president of economic development. "During three rounds of site reviews in 26 communities from 2004 through 2007, nine sites in our seven-state, 80,000 square-mile service area met the stringent requirements for the program."

As of July 2008, four megasites have been sold - to SeverCorr, PACCAR, Toyota, and, most recently, Volkswagen Group of America, which plans to build a $1 billion automotive production facility at the 1,350-acre Enterprise South Industrial Park in Chattanooga, the first certified megasite in Tennessee. Volkswagen plans to produce a car designed specifically for the North American consumer. Production capacity for the facility is expected to be 150,000 vehicles per year, with startup expected in early 2011.

Volkswagen began the site selection process in January and quickly narrowed the choices down to three sites in Tennessee, Alabama, and Michigan. "Key factors were site readiness, infrastructure, and logistics," says Jill Bratina, director of corporate communications for Volkswagen Group of America. "Site readiness was very important because of our very aggressive timeline. Because production is targeted for 2011, the property basically had to be ready to go."

While the exact definition of a megasite may still be somewhat flexible, the importance megasites play in the site selection process is certain.

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