Putting an industrial automotive operation in the Detroit area has obvious advantages. General Motors, Ford and FCA US provide a critical mass of automaker customers, while major suppliers and tech centers carpet the landscape.
But finding a site poses a problem.
Available industrial space is tighter than ever in southeast Michigan, according to market monitor CBRE. The Detroit area's industrial vacancy rates have been around 2 percent this year, and fell to an all-time low in the third quarter, CBRE reported.
That opportunity — or challenge — is the idea behind the Detroit Region Aerotropolis, a multicommunity partnership to market 6,000 acres surrounding two Detroit airports as an auto industry hub for manufacturing projects and spec industrial buildings.
The sprawling real estate, 30 minutes west of Detroit, offers land that is zoned and development-ready for industrial use, Robert Luce, executive director of the Detroit Region Aerotropolis Development Corp., told Automotive News.
"As the auto industry expands, companies are running out of available options in southeast Michigan," said Luce, who will step down from his post at year end. "The aerotropolis is that one unique location within the broader Detroit area that has a large swath of land available for industrial development. There's very limited land availability anywhere else in southeast Michigan."
Most of the acreage — the equivalent of three or four auto plant megasites rolled into one — consists of privately owned land, Luce said. The aerotropolis group works with two Michigan counties and four communities, among others, all helping to develop the land and recruit companies to the region.
The Detroit Region Aerotropolis Development Corp. can also offer tax abatements and capture companies' tax revenue to maintain local infrastructure.
Anchoring the location are Detroit Metropolitan Airport and Willow Run Airport, three interstate highways and five Class A rail lines. An equally vital draw there is the American Center for Mobility, a 500-acre test site for autonomous- and connected-vehicle research.
The partnership believes the mobility center will stir growing interest in the acreage, even as the year-old center struggles to get off the ground as a site for simulated highway and urban street driving of autonomous and connected vehicles.
"The center has world-class assets that aren't available anywhere else in the world right now," Luce said. "Companies are using that facility and will want to be near it. We're already seeing investments as a result of companies wanting to be in close proximity to ACM."
Proximity to the mobility center helped attract Subaru Corp. to the area. In August, Subaru said it will invest $48.2 million to build a 60,000-square-foot North American technical center there. The new operation will focus on powertrain and connected- and autonomous-vehicle r&d at Subaru.
In the past year, the aerotropolis also has attracted investments from Piston Group, Mopar and Brose North America Inc.
Fiat Chrysler Automobiles' Mopar invested $10.4 million to open a 500,000-square-foot warehouse and distribution center and add 100 jobs.
Brose, a German mechatronic door and systems supplier with its North American headquarters in Auburn Hills, Mich., is investing $105 million to expand a plant in New Boston, Mich., in the aerotropolis. Brose wanted to increase its presence in the area to draw talent from near Toledo, Ohio, according to Luce. The commute from Toledo to the aerotropolis is about 45 minutes.
Brose's investment will include a 235,000-square-foot expansion and the addition of 300 jobs, making it Brose's largest North American manufacturing site when it's completed, Luce said.
In September, vehicle module assembler Piston Group, headquartered in suburban Detroit, said it will spend $16.7 million to lease a 125,000-square-foot site on the acreage for advanced battery manufacturing. The supplier plans to hire more than 100 people.