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Read comments (4)Walt Wood, of Shelbyville & Bedford County Chamber of Commerce, said that some industries, if they've gotten a new customer or contract, need to be up and running in a very short period of time and don't have time to build a new factory from the ground up.
That's why communities use speculative or "spec" buildings as a tool to attract industry -- but there are risks in putting up a building before you have someone to buy or lease it.
 Deborah Cameron (T-G Photo by John I. Carney) [Click to enlarge] [Order this photo] |
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DREMC will contribute $60,000 in matching funds toward the grant. The total grant money will be loaned to whatever group or coalition is involved in putting up a spec building. When it is paid back, DREMC will manage it as a revolving loan fund for economic development. In order to keep the grant funds, there has to be a definite plan in place for a spec building within 120 days.
The Chamber of Commerce's Economic Development and Tourism (EDT) division hosted Wednesday's luncheon meeting so that Cameron could advise local leaders on the ins and outs of a spec building project.
Cameron said that TVA has been involved in spec building projects for many years -- some wise, some which turned out to be unwise. She said TVA wasn't trying to tell the community to build a spec building but was willing to inform it about the project.
Cameron discussed communities which have had success with spec buildings -- like Cullman, Ala., which has built about 10 of them over the years and has one of the most successful spec building programs in the TVA region. She also discussed mistakes -- like the community which put its spec building four miles from the nearest sewer line, or communities which have put spec buildings on cramped sites with no room for expansion.
Cameron said businesses like to have room for expansion and said any spec building should be on a lot large enough to allow the building to be doubled or tripled in size at a future date.
Wood noted that CalsonicKansei North America, one of Shelbyville's largest employers, first came to town as the result of a spec building on Stanley Boulevard.
The hope, of course, is that the spec building will be sold or leased soon -- within a year or two after completion. But there are no guarantees, said Cameron. Communities must budget and be prepared to aggressively market the spec building. If it doesn't sell right away, the local governments, banks or utilities which have partnered to finance the project may end up having to make payments on it.
TVA has a program to finance spec buildings. Short-term construction financing must be obtained locally, but once the building is built TVA will finance up to 50 percent of the project for up to $750,000 for 10 years. The community only has to pay interest for the first two years of the loan.
There are some options for communities that aren't ready to make the leap to building spec buildings. A "virtual" spec building means that the local community has a building site and plans and has locked in bids and commitments to put up a building. TVA can then generate computerized renderings of what the building would look like, and those can be shown to industrial prospects.
Coleman said communities that don't have good access to the interstate system may be better off with virtual spec buildings than real ones.
There's no research data on the effectiveness of virtual spec buildings versus real ones. But Wood said that sometimes businesses which have just gotten a new contract must start operations quickly and their only option is an already-built building. He said there are three industrial prospects in the past three years which he could have brought to Shelbyville if he'd had a spec building to show them.
"We're at a competitive disadvantage because we don't have a building," said Wood.
Wood passed out a preliminary site plan, prepared by TVA, for a 50,000 square foot building which would be located in Airport Industrial Park. The site plan would be located to that the building could be expanded to 100,000 square feet in the future.
The Director of Government Affairs (lobbyist) for the Tennessee Electric Cooperative Association made some Fun statements this issue. The TECA publishes Tennessee Magazine. According to this months issue quoting David Callis "Tennessee Electric Cooperatives ARE NOT PUBLIC UTILITIES.(yeah we know dave, www.eia.com) He said this in response to Senate Bill 3118/House Bill 3800. Sen..Charlotte Burks and Rep. Charles Curtiss. Also Senate Bill 3325/House Bill 3291. This bill is offered by Sen. Charlotte Burks and Rep Mike Turner. These Bills require that Tennessee's Electric Cooperatives must comply with governmental orientated open meetings and public records laws. UH-OH sounds like dremc's little drop it in the general fund monopoly party is coming to an end. Thank you Sen. Burks, Rep. Curtiss, and Rep.Turner..
A 2006 Kentucky Supreme Court 4 / 6 Ruling says Ky Electric Cooperatives Can Not sell Propane Gas. These e_coops are having to give up their propane customers by the 1000's. The court said that the Rural Electrification Act of 1936 only allowed electric cooperatives to formed for one purpose. The e_coop's were to provide lower cost electricity to Rural America.. The Kentucky Supreme Court said No you electric cooperatives can't sell propane, gasoline, real estate, "SPEC BUILDINGS", Broad Band Access, Computers, Telephones, Autos, Nothing But Electricity and low cost like u promised. That's why not for profit electric's inside the Great Wall of TVA get subsidies from American Tax Payers that are forced to pay income tax.
According to the Times, TVA employee Deborah Cameron said (IF it doesn't sell right away, the local governments, banks or utilities which have partnered to finance the project may end up having to make payments on it). NO, NO, NO, NO, Deborah! it's the ratepayer, taxpayer who will pick up the tab. Unfortunately there could be some hard working electric employees loose their job's as well.
The Tennessee Electric Utilities Companies CAN-NOT! predict long term energy cost.
The Tennessee Electric Utilities Companies view long term dept as Job Security. Stop taking on RUS loans.
The Tennessee Electric Utilities Companies are not regulated by the Federal Energy Regulatory Commission or FERC..
The Tennessee Electric Utilities Companies are not regulated by the Tennessee Regulatory Association
few exceptions Kingsport Electric is a private electric inside the TVA wall. Good thing or the Tennessee Regulatory Association wouldn't have any electrics to PICK ON.
This means no mandatory quality assurance testing which very expensive for private electrics. They Don't have to do FERC's tons, and tons, of paper(don't have to pay income tax, No IRS Forms "boy bet that's nice around April 15).
It's not a petty sight watching a monopoly electric cooperative have to make the change to a deregulated competitive market. It's pretty much cut right down the middle. 50% Half the real property gone. Half the personal Tangible Gone, and last but certainly not least Half the work Force Gone. It's the only way they can maybe survive in a competitive electric market.
On my electric Bill it reads Kilowatt Usage. This is only part correct. It should read Kilowatt Usage plus Service Charge. They hide the service charge in with the kW usage so they can raise your electric bill and without raising their rates. Then they can sing their favorite song our rates are below the national average. Totally Meaningless
Texas Electrics are located in a Deregulate state. When you sign up for electric service in Texas the utilities are required by Law, ERCOT,, Energy Regulatory Commission of Texas to provide the customer with 4 other electrics they can choose to use at any time. "Choice Is Good"
Kilowatt
building a spec building is doing "something", so that no one can say you are doing "nothing".
unfortunately, motion is not always progress.
i thought we were going to get an article on the ultimate fate of shelbyville's last spec building.
instead we get a repeat of the CLAIM that it brought in calsonic.
what actually became of that building?
maybe we could see some figures on how successful spec buildings really are, rather than a CLAIM that we could have had 3 new industries, if only we had a spec building. what are the real odds on ever benefitting from a spec building?
i thought this project was going to be paid for with some federal govt pork. how come there is now talk of a loan? (altho it was nice of them to admit someone would eventually have to pay off the loan)
didnt we get a big enough slice of pork?
i see a lot of enthusiasm from people in the spec building business, but not a lot of real information.
huntingdon, tenn built a spec building a few years back, i believe they ought to be just about at the point where they have to start paying off principal, as well as interest.
why not call huntingdon and see how that project is working out for them?
i also like quantumcat's idea. how about turning one of our empty buildings into a spec building? at least then we stand to lose only the money we invest.
As for using an existing building, it's always possible to try to market vacant existing buildings to industries -- and I think they have been trying to do that all along. But supposedly, some industries prefer new buildings so that they can set them up the way they like. A spec building, in fact, would be built with a gravel floor, so that the potential tenant could pour concrete exactly the way they want it, considering the layout of heavy machinery within the plant.
I agree with quantumcat. There are several empty facilities in our community that could be reclaimed for use by some industry.
We should do as much as possible to preserve open spaces and preserve our natural resources. As we saw last summer and may again see this year, we have only a finite supply of water which will support only a limited level of development. In reviewing any new developments whether they are residential, industrial or commercial, we must ensure that there is enough water to support them.
That sounds great but let's not forget to look for residents for the empty places we have.
If they can't be used as-is,let's restore or retro-fit them whenver that is cost-effective.
Replacing unfit structures should take precedent over building on arable land,wilderness or razing buildings that are still functional and attractive.
Maintaining our historic places,having decent,affordable dwellings for the people living here and having a local,independent business base would do a lot to lure employers here,too and these strategies would provide immediate and certain benefit to those already here.
It would be wonderful to bring in fresh blood and new opportunities but let's not forget that some of the people courted might not come or they might leave after causing us to work up a lot of expense on their behalf.
Let's maximise the good in who and what we have so there will be something for the folks who stay here and so they won't be remaining because they can't flee to somewhere else.