For almost two decades, the art of attracting a major auto plant has revolved around certified megasites — large tracts of build-ready land that have been approved by a third party as having no problems that could hinder an automaker's construction project.
An early proponent, seven-state power provider TVA, has had repeated luck creating and marketing megasites. Toyota's most recent plant project, a joint venture with Mazda in Huntsville, Ala., is going onto a TVA megasite. The Volkswagen plant in Chattanooga was built on a TVA megasite. So was Toyota's plant in Tupelo, Miss., as was a Paccar Inc. engine plant and a SeverCorr — now Steel Dynamics — steel plant, which occupies two TVA sites in Columbus, Miss.
Lately, TVA has been promoting a new twist: certified small sites suitable for auto suppliers. TVA is marketing the approach as InvestPrep.
Instead of designating auto plant-sized tracts of 1,500 or 2,500 acres, TVA has zeroed in on more than 40 sites in Tennessee, Alabama, Georgia, Kentucky, Mississippi and Virginia, each of about 100 acres — just large enough for a parts plant that needs to get up and running fast.
"It's the same concept and same criteria as a megasite, but on a smaller scale," said Chris Berryman, TVA's senior target market specialist for transportation-related industries. "We provide the same degree of site readiness. It's to help a company who tells us they need a start of production in 12 to 14 months."
Once a piece of land is identified for industrial use, TVA has a geotechnical study performed to make sure the site is stable. An environmental assessment clears it of any contamination concerns. The investigation also ensures there are no problems with wetlands, endangered species or archaeological issues.
The utility relies on KPMG to provide the third-party assurance that a site is ready to be used.
Site readiness has become a critical issue in plant construction because it allows a manufacturer to get up and running more quickly. A traditional site search might end up with a surprise during the plant's planning stage, such as a legal challenge or an environmental problem that could delay the supplier's construction by as much as a year.
The due diligence conducted by the utility company lets a supplier "start putting footings into the ground in 30 days," Berryman said.
TVA began putting together its InvestPrep program when towns in the seven-state region had trouble freeing up industrial development funding after the 2009-10 economic crisis.
The utility covered the costs of preparing plant sites to help stimulate economic development and support the growing auto industry interest in the area.
Berryman estimates that more than 1,000 auto suppliers now operate in the TVA region, and more are on the way. So far, the small sites have landed about $750 million worth of new plant investment and about 4,000 jobs.
"Companies are coming in that need to move fast," he said. "Our endgame is to help them do that. An unprepared site represents a lot of unknowns."