Competing on a national and global scale for large economic development projects — and winning — is a sure sign of a community’s vitality. A community’s ability to position large-scale, shovel-ready land tracts for investment consideration exponentially increases its ability to secure desired jobs and capital investment at the local level.

For years, there has been a traditional understanding of megasite requirements. Originally created to meet the demands of the automotive OEM and allied industries, these sites were assumed to have consistent demands. Important factors have included fully contiguous land space; multimodal transportation, including access to rail; large-scale and redundant utility capacities; and the ability to accommodate massive square footage.

{{RELATEDLINKS}} In fact, so much priority was placed on factors such as rail access, minimum infrastructure capacity expectations, and contiguousness that benchmarks for the certification of sites mimicked similar factors across the U.S. for several decades. The fortunate communities with established megasites poured a significant amount of both financial and planning resources into the sites’ preparedness and protection, carefully considering only potential users aligned with the long-term vision for the given area.

Megasites have traditionally been coveted by local, state, and utility economic developers, due to the sites’ ability to attract industrial and allied end-users. The presence of employers of this magnitude often leads to subsequent investment, multiplying growth opportunities within the commercial and retail sectors at the local level.

While some economic development organizations have undertaken many aspects of megasite development and management, history proves that the most successful endeavors involved positioning land tracts near first-rate multimodal transportation assets, including commercial airports. Other important features have included high-capacity utility attributes with expandability, rapid local permitting, risk-free environmental conditions, and population centers capable of supplying a robust and skilled workforce.

How Megasites Are Evolving
Recently, there has been a noticeable shift in the size and phasing of these potential megasites, as well as the types of industries that call these sites home. Today’s end-users are requiring anywhere from 1,000 to 4,000 acres. This is a total game-changer in how communities, economic developers, and state legislators need to plan for identifying suitable land tracts free of extensive environmental hazards and other impediments. It is no surprise that project owners looking for large tracts of land are finding it challenging. There is plenty of land available, but these sizable tracts are often too far from large population centers, which are needed to help meet the employment demands of their facilities.

In addition to the increase in land size, there has been a major shift in the investment threshold. Within the last year alone, end-users representing upward of $60 billion in investment and the creation of thousands of jobs have been approaching economic developers across the U.S. These unfathomably high capital-expense projects are challenging states and communities to develop unprecedented economic incentive packages to help close these deals.

Those tasked with bringing much-needed development to their given communities need to broaden the way they look at these economic drivers. Those tasked with bringing much-needed development to their given communities need to broaden the way they look at the identification, preparedness, planning, design and construction of these economic drivers before a multibillion-dollar project developer expresses interest in their region.

The most prevalent development as of late appears to predominantly consist of high-tech manufacturers in the aerospace industry, semiconductor manufacturers, and electric vehicle-related industries. As technology continues to evolve, the cost for launching rockets and other aerospace-related items (satellites, etc.) has significantly decreased, allowing more private companies to pursue creative, niche aerospace offerings that weren’t an option 20 years ago. Similarly, semiconductor producers are interested in expanding operations in the U.S. due to global supply chain disruptions, which have crippled some industries during the pandemic. Semiconductors play an important role in the production of everything from tech hardware to electric vehicles — both markets that are experiencing a significant uptick.

Megasite Identification and Preparedness
For a state or community to be competitive in the megasite arena, legislators and economic developers must be willing to invest now to secure these end-users in the future. While there isn’t a one-size-fits-all approach to megasite identification, some key characteristics are listed below.

• • Utilities — It is paramount that end-users have appropriate utility capacity. Most existing municipal systems, especially for smaller communities, lack the capacity and infrastructure to support such large developments. While it’s not usually economically viable to invest in upgrades prior to identifying an end-user, it is crucial that state and local communities understand how utilities — such as those for water, gas, and power — can be expanded to meet demand within a 24-month window or less. For smaller municipal water systems, hiring an engineering firm to study and assess creative solutions for expansion (i.e., withdrawing from a nearby river, obtaining additional groundwater aquifer rights, etc.) is a great first step to understanding the viability for accommodating significantly larger flows resulting from megasite development.

For example, manufacturers can require large amounts of water for production, and they discharge vast amounts of water that can either be released back into the environment or reused in the production process. Alternatively, depending on the location, it may be feasible for the end-user to build its own on-site water and wastewater treatment plants. Since these treatment plants likely need to tie back into the existing municipal systems, understanding at the outset financing options, treatment plant costs, and potential future water/sewer improvements is extremely beneficial in the incentives negotiation process.

Solar farms adjacent to megasites are an example of how manufacturers are building more environmentally conscious and socially responsible facilities. Electric load is also a major consideration. Companies often demand more capacity than is currently available. Economic developers can’t expect to snap their fingers and be able to have maximum power capacity from day one. Coordination and strategic partnerships with power providers are essential in megasite master planning and identification. A focus on sustainability is even more crucial for new development projects. As companies work toward incorporating green solutions in their developments, one challenge that users face is the availability of alternative energy, clean energy sourcing, and meeting carbon-neutral goals with offset credits. The development of large on-site solar farms adjacent to megasites is just one example of how manufacturers are building more environmentally conscious and socially responsible facilities.

• • Transportation — Transportation infrastructure near these sites typically includes rail, four-lane highway access, and air service nearby. A clear understanding of easements, access, and impediments can help make transportation buildout on sites less cumbersome. One transportation consideration that should be examined fully is rail. For users where equipment must be totally flat or the tiniest of vibrations can halt production, being near railways can be a deterrent. The threat of shaking caused by trains and other earth movement can lead to additional costs, such as pier drilling, a foundation solution used to support structures by placing cylindrical shafts deep underground into bedrock.

Where it makes sense, industrial targets should be directed toward rail-serviceable land because there are usually more advantages than disadvantages. The key is to see that while rail may service the site, it will not be a hindrance. Vibration analysis surveys and other studies should be commissioned to back this assertion. In highly sensitive cases, it just makes good business sense to have geotechnical engineers investigate and evaluate soil, rock, groundwater, and human-made materials and their interaction with ground movements, earth retention systems, structures and foundations.

• • Incentives — Large industrial users face a complicated decision-making process when trying to determine where to locate a facility. The capital cost is high, often landing in the high millions or low billions of dollars, and the return on investment is slow to materialize. For these reasons, it pays to locate in areas where legislative bodies have a favorable view of megasites and the corresponding community growth they help fuel. Incentives such as abatements, tax credits, and tax increment financing (TIF) can impact a site’s development long term.

Consider the scenario in Kansas, where lawmakers expect to bring in thousands of jobs with the $4 billion Attracting Powerful Economic Expansion (APEX) Act. The act is aimed at helping Kansas compete on a national and global scale for one company’s large economic development projects. The act creates a new incentives program so that the state’s Department of Commerce can offer the company hundreds of millions of dollars in incentives over the course of two years. Securing legislative support and buy-in like this can help make or break a project. That is why having economic development and site selection partners who can help identify and navigate these types of opportunities is critical.

• • Labor — One site preparedness factor that must be considered is whether a megasite can be effectively accommodated at the community level. Rarely are companies immediately flush with the amount of labor required to successfully operate once the new development is built. Successfully managing this fact is key. What needs to happen is a massive rallying of community support, led by economic development professionals across the state. To help make sure an adequate workforce is available to pull from, communities must already have — or have the potential to build — assets surrounding the site. In particular, solid connectivity to community colleges and workforce training outlets must be fostered to make sure that large numbers of highly skilled workers can be hired quickly.

Rarely are megasites immediately flush with the amount of labor required to successfully operate once the new development is built. The Way to Success
For commercial enterprises considering a megasite and the economic development professionals working with them, knowing the answers to key questions early in the process will help decision-making run more smoothly. Conducting the proper upfront due diligence and feasibility planning enables potential users to establish the exact capacities needed at a site, such as utilities, transportation, and labor, as well as determine what type of infrastructure expansion and capital improvements may be required.

Understanding land costs, purchase availability, impediments to development, and permitting timelines is important, as is developing a plan for how to phase any potential infrastructure builds. An end-user must also have a good handle on what programs, tax advantages, abatements, and incentives can be used to offset expenditures.

Questions to consider include:
What are the infrastructure costs? What environmental work has to be done? What might a tiered infrastructure build look like? Are there enough employees located within an hour’s drive? How well does the transportation infrastructure serve the area? What programs can be used to counter costs? Are TIFs, abatements, and other incentives available? What support is being offered by local development groups?

Studies and documentation that thoroughly indicate a site’s characteristics help decision-makers judge how it can be developed most cost-effectively. The trick is to make sure the end-user isn’t caught off guard at any time during the selection and development process, since the company has the potential to inject millions of dollars into a given economy. When it comes to luring the next surge of megasite users, developments that offer ample utility and transportation capacity with space for expansion, reasonable land costs, enticing incentives, and access to a well-trained workforce will rise to the top.