BusinessTN

Last December, Hemlock Semiconductor Corp. announced it would establish a massive solar technology manufacturing operation on the Tennessee Valley Authority's Clarksville megasite. With the announcement, TVA's megasite program--well established as a frontrunner for this specialized form of large-scale industrial land usage--was no longer perceived as being auto industry-focused.

When asked if the Hemlock deal could, more than anything else, expand or modify TVA's scope for potential tenants of three remaining megasites, David Blanchard, editor-in-chief of Cleveland-based land use magazine IndustryWeek, answers "absolutely."

"The key is the availability of a skilled workforce in the region," Blanchard says. "If a region can diversify beyond just one type of manufacturing--adding, for instance, the capability to produce chemicals and high-tech electronics--then that can only help lure a wider range of companies to the area."

The brainchild of Bill Adams, TVA's megasite program has garnered national attention since its unveiling in 2004. Since then, five sites have been sold. These announced projects are expected to eventually create, according to TVA, more than 5,500 direct jobs and represent $5 billion in capital investment. And this does not include ancillary jobs and investments from related suppliers and service businesses.

The nation-wide recognition includes a changing perception of the program, which TVA officials originally thought would focus on the automobile manufacturing sector.

"The megasites program was designed to make it easier for automotive manufacturers or other large auto-related industries to quickly find the optimal location to save time and money while developing an automotive assembly plant," says John Bradley, TVA senior vice president of economic development. "We quickly found, though, that many of the same specifications needed for automotive were also important to other large industrials."

The megasite program's natural transition from "industry specific" to "industry flexible" is understandable, according to Mark Sweeney, senior principal with South Carolina-based megasite consultation and certification company McCallum Sweeney Consulting. MSC, using a 240-plus-point site analysis checklist, has certified all the TVA megasites.

"You may note that the TVA-certified properties are called 'megasites' and not auto sites," Sweeney says. "Although the certification criteria were designed for an automotive plant, meeting these criteria makes a site attractive and ready for almost any major industrial prospect." 

Take, for instance, the first of two megasites sold in Columbus, Miss., to a steel processing facility, SeverCorr, which is now known as Severstal Columbus. Within two years (in late 2007), Severstal Columbus finished its massive Phase I plant construction in Mississippi's Golden Triangle megasite and is now producing 1.7 million tons of steel annually. The site's access to various transportation forms and local economic and community development assistance helped facilitate the efficient Phase I completion, according to company spokesman John Dudzinsky.

"We're now looking ahead toward Phase II, which will bring our capacity to 3.4 million tons of steel per year," says Dudzinsky of Taylor-Rafferty (which handles public relations for Severstal Columbus). "Our aim is to complete this by the end of 2010."   

According to industry officials, the TVA megasite program serves as a national model of sorts, Sweeney says.

"To our knowledge, there was nothing like TVA's program at the time we helped them design and implement it," he says. "The principals at our firm had worked on the at-the-time nascent concept of 'ready' sites/certified sites for New York and Pennsylvania in the late '90s, but there was no 'mega component' to these programs. Other states have programs, but most do not concentrate on megasites or have an independent third-party verification component." 

Adam Bruns, managing editor of Norcross, Ga.-based Site Selection magazine, says there are no rankings that compare and contrast megasite programs based on specific metrics such as efficient acreage usage, revenues generated relative to project scope or success rate in securing prospective site users.

"However, due to the larger-scope economic development efforts that TVA has pursued for many decades--including the megasite program--TVA consistently appears among our 'Top Utilities in Economic Development,' a ranking we issue in each year's September issue," Bruns says.

As to the TVA and McCallum Sweeney effort, Bruns says the entities "pioneered the certification and marketing" of what has become the nation's growing megasite industry.

Of note, that industry in general, has faced minimal criticism, despite taxpayer dollars sometimes funding megasite programs that, because of their structure, handle the due diligence (including key preliminary infrastructure work and environmental studies) for the eventual industrial users. Lawsuits have been infrequent due, in part, to the extensive pre-certification process. "Consternation" from owners of properties adjacent to sites has been "rare," Sweeney says.

Meanwhile, with three sites left to sell, TVA continues its marketing efforts.

"Because of client confidentiality, we cannot name prospects," TVA's Bradley says. "However, we will say that the program has world-wide recognition."