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2015 Gold & Silver Shovel Awards: Investment Projects of the Year

Q2 2015

SolarCity - Buffalo, New York

If any Rust Belt city could use an economic development jolt, it’s Buffalo. So landing the next-biggest outpost of the new “green” economy offered by Elon Musk — after the Tesla battery “gigafactory” — was a huge score for the city and for western New York. SolarCity chose a former brownfield site in South Buffalo, at the RiverBend industrial site, for a $750 million factory that the state is building for the company, bringing 3,000 jobs. SolarCity will invest $5 billion in the whole project. Owned by the State University of New York, the site is part of the Start-Up NY program launched by Gov. Cuomo that offers companies significant incentives to locate on New York college and university campuses and tap into the technology and talent there.

“We have to change the mentality of Buffalo, [and] one of the leading solar companies in the world is coming on board and making this the largest advancement in Buffalo’s economy in a generation,” Gov. Cuomo said in September. In April, the state negotiated a four-month window with SolarCity to locate an even bigger factory at the site if the company gets to the point of further expansion.

General Electric - Cincinnati, Ohio

The location of the General Electric North American shared-services center became even more important early this year when one of the world’s biggest conglomerates decided to shed its financial-services arm — thus betting even more heavily on the varied industrial operations that would center around the new shared-services center. Ohio won the competition when GE decided to place the center at The Banks on the Ohio River in downtown Cincinnati, offering incentives that could total more than $51 million in job-creation tax credits if the company exceeds its current pledge of 1,400 new jobs. The 85 percent for each job covers 15 years.

“We chose The Banks because we had the opportunity to be an economic catalyst for the exciting development activities already under way along the riverfront and in downtown Cincinnati,” General Electric CEO Jeffrey Immelt told the Cincinnati Enquirer. “The Banks is the new front door to Cincinnati and a centerpiece of the city’s revitalization efforts. It provides many of the amenities that help us attract and retain top talent [and is] a very attractive site for employees that will also have a big impact on Cincinnati’s downtown development.”

Volkswagen of America - Chattanooga, Tennessee

Just three years after seeing Volkswagen open its first U.S. manufacturing plant in a generation with a sprawling operation in Chattanooga, the state last year secured a new commitment from the German automaker to expand the plant to begin building a new sport-utility vehicle there by late 2016. Volkswagen plans to add 2,000 jobs in auto assembly and another 200 in research and development to the 1,500 people there who already make the Volkswagen Passat sedan. The company plans to spend $600 million in Tennessee and $900 million overall in the effort.

Tennessee provided a $166 million grant for costs associated with development and preparation, infrastructure, production equipment acquisition and installation, and facility construction, as well as a $12 million grant for employee training. The victory for Tennessee came against the controversial backdrop of unionization prospects for the plant and even as Volkswagen was mired in the first year of lower U.S. sales after a strong three-year run. But among those happy about VW’s decision was Ron Harr, president and CEO of the Chattanooga Chamber of Commerce, who said the city “will have a much easier time recruiting additional automotive suppliers to help [VW] build out [its] supply chain.”

Giti Tire - Chester County, South Carolina

The 10th-largest tire company in the world finally decided to establish a North American manufacturing facility, and Giti Tire selected Chester County, South Carolina, for a $560 million plant that it expects to create 1,700 new jobs over the next decade in order to satisfy burgeoning demand in the continental market. Singapore-based Giti makes both passenger and light-truck tires for the original-equipment and replacement markets. Its first U.S. plant will sprawl to about 1.8 million square feet on a 1,100-acre site near Richburg, South Carolina, and is expected to fabricate about 30,000 tires daily when it opens by the end of 2016.

South Carolina won the Giti plant for the rural, economically stressed area for a number of reasons. It already is the largest tire-production state, with three other major brands manufacturing there. Giti Tire heard Governor Nikki Haley speak at a Wal-Mart conference in 2013, and Giti is a major supplier to Wal-Mart. The state helped by awarding Chester County a $38 million grant to help lure Giti, as well as job-development tax credits that it also has extended to Giti’s competitors in the state. South Carolina’s broad advantages — including technical-college and transportation and export infrastructure, as well as a growing reputation for business-friendliness — sealed the deal with Giti.

Tesla - Reno, Nevada

In what was arguably the biggest economic development coup since Tennessee landed the original General Motors Saturn plant a generation ago, Nevada nabbed the much-sought Tesla battery-making “gigafactory” for a site 25 miles east of Reno. The five-million-square-foot mega-operation is to cost Tesla up to $10 billion in construction and purchases over the next 13 years ($5 billion near-term investment), promises up to 6,500 jobs eventually, and already has put Nevada on the map as a major new industrial power after it beat out Arizona, New Mexico, Texas, and California for the project.

In exchange, Nevada doled out $1.1 billion in sales tax and real and personal property tax abatements and $195 million in transferable tax credits as well as one last sweetener: a measure making it legal for Tesla to sell directly to Nevada residents, without having to go through a traditional dealer of the type that all existing automakers use. Nevada Governor Brian Sandoval noted, “The gigafactory will mean nearly $100 billion in economic impact over the next 20 years.”

2015 Gold Shovel Awards: The Winning States

  • Texas
  • Georgia
  • Tennessee
  • South Carolina
  • Nevada
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MethodologyArea Development’s annual Gold and Silver Shovel Awards recognize states for their achievements in attracting high value investment projects that will create a significant number of new jobs in their communities. We collected information from all 50 states about their top-10 job-creation and investment projects initiated in 2014 (only those projects that actually had monies invested, “broke ground,” began an expansion, started new hiring, etc. were considered). Based on a combination of weighted factors — including the number of new jobs to be created in relation to the state’s population, the combined dollar amount of the investments, the number of new facilities, the diversity of industry represented — five states achieving the highest weighted overall scores are awarded Area Development’s 2015 Gold Shovels in five population categories: 12+ million, 8+ to 12 million, 5+ to 8 million, 3+ to 5 million, and fewer than 3 million. Runners up in each of these population categories are awarded 2015 Silver Shovels.

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