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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?

Aug/Sep 08
Megasites, also called supersites, are large contiguous tracts of land that are choice locations for big industrial operations. These properties are usually owned by or optioned to state or local economic development authorities. Megasite is a loosely used term and has variable meanings for different economic development groups and agencies. For example, some communities might view a 500-acre site that lands a $50 million manufacturing plant and 500 jobs as a megasite. Other cities that want larger-scale manufacturing operations, such as auto plants, view megasites as properties that exceed 1,000 acres in size and can attract at least a $500 million facility and over 1,000 jobs.

 "The problem with this lack of definition is that the communities use a shotgun approach for marketing a particular site for any industry by calling it a megasite," says Ed McCallum, senior principal with McCallum Sweeney Consulting, a site location firm in Greenville, South Carolina, that also specializes in certifying megasites. "This is not the most effective way to use either the megasite or certified site concept. The first step is to identify the target industry the state/community wants to recruit, and then develop the criteria around that."

Key Features
A major mistake developers often make is picking the property first and then trying to determine what industries will be interested in the property. "Instead," says McCallum, "they should understand fully the criteria that are required for the site - infrastructure, transportation, topography, wetlands, environmental, etc. - and use these as the discriminating criteria for selecting a site, for a particular company or industry."

In general, megasites are served by modern utilities and have easy access to high-volume road, rail, and port infrastructure. Other important features include being as close to "shovel-ready" as possible and having a large enough supply of high-quality workers to serve the new facility and the key suppliers who will also likely move in.

Equally important is having "the commitment of the owner and local government to move quickly on a very large project," says Jerry Mallot, executive vice president of the Jacksonville Regional Chamber of Commerce, which recently went through the megasite certification process.

Perhaps the key standard for qualifying as a megasite is being certified - which means an expert third party, usually an experienced site selection firm, has carefully evaluated the site for a number of critical features. These features generally include "clear ownership title, size and configuration of the site, utility availability, transportation availability, favorable environmental assessment, engineering studies, delineation of wetlands, topography data and maps, and quoted price," says William A. Fredrick, president of GrowthTech LLC, a site location firm in Springfield, New Jersey.

"The time frame in which today's large-scale manufacturers have to make location decisions is extremely compressed," says Mallot. "Megasite certification gives companies peace of mind that a site is, in essence, pre-qualified for immediate development. This knowledge reduces of the risk of unanticipated holdups and lawsuits, assures quick acquisition, and can fast-track a project, keeping development costs down."

This advance knowledge lessens the time it takes for due diligence, which makes it easier to stay on schedule and reduces project startup time, risks, and costs. "One example is in Oregon, where a large big box retailer chose a certified site that was miles away from the preferred location for a regional distribution center in Washington state," says Fredrick. "The company chose the Oregon site because of the time and cost savings available through its certified program. Certification programs also speed the sale of sites - since Oregon started its certified site program, 56 sites have been certified, totaling over 3,300 acres. Of these, 19 have been sold and over 2,500 jobs created."

Certified megasites are not necessarily always shovel-ready, because the cost of extending utilities and transportation systems to a megasite for a single large user is very expensive. This kind of site development and related permits are usually undertaken once the site is sold. Smaller sites are more likely to be shovel-ready because their sale is typically faster and utility extensions are economically more feasible.

"There are two key features a client looks for - risk management and velocity," says Jim Colson, president of site selection for Angelou Economics in Austin, Texas. "The certification process is an excellent tool a community can use to assess its own competitiveness. If a site proves not to be competitive, the process helps the community identify what the primary drawbacks are, and then a plan can be developed to fix those problems. Once certified, the site has a very significant marketing advantage."

Depending on the site features and the needs of the company, a varying amount of due diligence is included in the certification process. Ideally, the certification process mitigates as much risk as possible and significantly speeds up the permitting process.

Regardless of how detailed and thorough the certification process appears to be, the company must still conduct its own due diligence. "However, if the site certifier is highly experienced and well-known for its thoroughness, the company's own due diligence will be much easier because the certifier will have much of that information already pulled together," says Colson.

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