Ease of building, location important, leaders told

A representative of Tennessee Valley Authority told city and Chamber of Commerce officials that a public-owned industrial park was a key to attracting industry, but must be carefully planned and designed in order to be of any use.

Ensuring that utilities are available or can be made available quickly, and doing environmental studies in advance, are among the steps that differentiate between open farm land and a true industrial park, said Deborah Cameron, an economic development specialist with TVA.

She spoke to local leaders Wednesday at the Tennessee Technology Center at Shelbyville. Mayor Wallace Cartwright and four city council members were among those in attendance, as was State Sen. Jim Tracy. She recommended a park somewhere between 50 and 200 acres in size for Shelbyville given its size and distance from the Interstate.

Fewer jobs

Cameron said that the trend in future industrial developments will be fewer jobs even in developments with large capital investment, due to automation.

"We're not seeing projects with a lot of jobs," said Cameron, "but we are seeing projects with large investments."

The jobs that will be created by future industrial projects will require higher skills than in the past. She said industries are making inquiries about new plant sites, even in a bad economy, so that they will be ready to grow as the economy starts to improve.

Right now, the push to attract new industries is highly competitive, and communities are offering up-front incentive packages that go beyond simply an in-lieu-of-tax agreement to lower the industry's property tax bills.

"We are not competitive today with our neighbors," said Walt Wood, executive director of Shelbyville & Bedford County Chamber of Commerce and the community's chief industrial recruiter.

Public ownership

Cameron said a public-owned industrial park is a key to recruiting industries because of price issues. A private landowner may tell local economic development officials he is willing to sell a site for a specific price, but then, faced with the prospect of a big industrial buyer, may go up on that price, scaring off the buyer. If the land is under the control of a city or county, the city or county can set a price and can even sell the land at a loss if it believes the benefits of attracting a new industry justify that.

Cameron said local governments don't have to acquire the site right away if they can ensure control of it by purchasing an option to buy. She said to be careful when choosing the term for such an option. The options for the land which Toyota ended up choosing for a plant in Tupelo, Miss., expired during an election year, and whether or not to renew them became a political issue.

Spec building

A ready-to-go industrial site reduces risk, time and cost for the potential employer, said Cameron, and helps make a community's proposal stand out. A speculative building may be even more of an advantage.

"I'm a big believer in spec buildings," said Tommy Burns of Tennessee Department of Economic and Community Development, who was also in attendance for the presentation. He admitted that the cost of a building was a risk for the community, but said if a community doesn't have one available, a potential industry may end up looking elsewhere.

Among the keys to a successful industrial park, she said, are location, availability, utilities and development issues. A good location is near highways and rail lines. Industries look at speed limits and school zones, Cameron said; the more different speed limits or school zones a truck is faced with when traveling to or from the factory, the greater the chance for accidents and liability. The industrial site should be compatible with its surroundings, and not too close to a school or residential area that might cause conflict.

Utilities

Cameron said that the ideal situation of every utility being in place and ready to go is a rare one, but specific costs and timetables should be available for running all of the necessary utilities.

If wastewater is an issue, the community's sewer plant must have enough capacity to handle the new customer. At least 12 kilovolts of three-phase power should be available, and high-speed Internet access is increasingly important to companies.

Cameron said if a new industrial park is being developed, it's cheaper to go ahead and lay large-diameter water and sewer pipes to begin with than to have to replace them later.

The distance to the nearest fire and police station may also be an issue. Proximity to the nearest fire station has an impact on an industry's insurance rates, Cameron noted.

Presentation is also important Lawrence County had an idle industrial park, but decided to try to boost interest by landscaping the entrance to the park, adding a dramatic obelisk-like sign.

"Spec" buildings are generally built without a concrete pad, so that the buyer can determine what thickness or layout of concrete is appropriate. Cameron said the community should be prepared to tell a potential buyer how much it will cost to pour concrete at the site.

A community developing an industrial park should plan for stormwater runoff and conduct environmental studies in advance. Having those issues already managed makes a site more attractive to potential buyers, she said.

TVA's helping hand

Ed Cooper, a civil engineer in TVA's technical services group, said this is currently a good time to do that type of planning. Because of the slow economy, many consultants and engineers are looking for work, he said.

Cameron said TVA can help with topographical maps, renderings and site evaluations. She said that if the community can identify 3-6 possible sites for an industrial park, TVA can evaluate them. She said it wouldn't even be necessary to notify the current landowners unless TVA decided a site visit was necessary.

"We need to decide if we're going to bite the bullet," said council member Jo Ann Holland. She said she did not support a property tax increase to fund an industrial park but that other revenue sources should be considered.

Cameron said the cost of an industrial park should be viewed not as an operating expense but as an investment. She circulated copies of a newspaper article from Decatur, Ala., which analyzed the benefits of an industrial park developed in the early 1980s for $9.8 million. Today, the industries in that par have an annual payroll of $195 million and pay $6.6 million in taxes each year.