What is a Megasite and Should You Locate Your Business Near One?

A Megasite is a large piece of land developed for significant industrial projects. State and local governments often partner with the private sector to strategically develop these sites. Their goal is to attract major corporations from sectors such as automotive, aerospace, electronics, and heavy manufacturing, leveraging the comprehensive infrastructure these industries require.

Specifications and funding for Megasite certifications can occur at the state or local level. For example: Governor JB Pritzker of Illinois announced the allocation of $23 million in grants from the Megasites Investment Program to support nine projects across Illinois. Funding like this is aimed at spurring economic development and job creation in industrial sectors.

State level investment in infrastructure and site certification is becoming more the norm these days. Oklahoma announced a $780 million dollar investment in infrastructure and site development by the state. 

Small Oklahoma cities below 10,000 population like Chelsea (1,914), Thomas (1,298), and Wellston (794) have been awarded dollars for improvements, and micropolitan cities (10k-50k population) like Ponca City (24,441), Sapulpa (22,030), and Shawnee (31,391) are getting an infusion as well.

Source: okcommerce.gov

Certifying a Megasite

This can be a lengthy and costly process. These rigorous evaluations ensure the site meets criteria necessary for major industrial development. Certifications shows potential investors the site is ready for development and has minimized risks. The process typically involves several assessments that may include but certainly not limited to:

1. Environmental Site Assessments (ESA): Phase I and II ESA. A Phase I ESA might involve reviewing historical land use documents to identify potential contamination risks, while Phase II could include soil and groundwater sampling to assess any identified contaminants.
2. Geotechnical Investigations: These include Standard Penetration Tests (SPT) to evaluate soil strength and suitability for foundations, and Cone Penetration Tests (CPT) for more detailed soil layer analysis.
3. Infrastructure Assessments: Traffic impact studies assess road and rail capacity, while utility surveys examine existing electrical grid connections, water supply volumes, and telecom bandwidths. For example, the assessment might reference American Association of State Highway and Transportation Officials (AASHTO) standards for road design.
4. Zoning Compliance Reviews: This involves analyzing local zoning ordinances against planned industrial use, potentially involving a Comparative Land Use Study to ensure alignment with municipal development plans.
5. Market Access and Feasibility Studies: Logistical analysis using Geographic Information System (GIS) mapping to evaluate proximity to key markets and suppliers, incorporating travel time, transportation cost analysis, and regional industry cluster benefits.
6. Workforce Availability Studies: Labor market analysis using Bureau of Labor Statistics (BLS) data to evaluate local employment trends, skill levels, and educational attainment in relevant sectors.
7. Utility Capacity and Expansion Planning: Detailed utility studies may include an Electrical Load Assessment for power needs, Water Supply and Quality Analysis for industrial processes, and Telecommunications Infrastructure Evaluation for digital connectivity requirements.
8. Site Control and Legal Due Diligence: Includes title searches, review of easements, and land acquisition feasibility studies to ensure unencumbered development rights and compliance with the Uniform Commercial Code (UCC) for real estate transactions.
9. Community Impact Assessments: Socio-economic impact studies examining potential effects on local housing, schools, and healthcare facilities, alongside Community Engagement Surveys to gauge public support and identify concerns.

Certification processes vary depending on the region and the certifying body. The goal is always to help large corporations and their suppliers mitigate investment risks and streamline the development process.

Advantages of Proximity to Megasites

• Infrastructure Benefits: If you locate near a megasite, it’s likely that major transport routes and utilities are dialed in. This can drastically slash logistical and operational expenses.
• Economic Incentives: Attractive financial incentives, including tax breaks and grants, are common for governments investing in megasite regions. The Texas Enterprise Fund is a prime example of big programs employed by state governments to lure in large companies and their suppliers. Federal incentives like the EDA's National Tech Hub program are gaining popularity as well. 
• Supply Chain Efficiency and Partnership Opportunities: Locating your business near a Megasite can position you as a desirable partner or supplier for whoever occupies it. Texas Instruments is building a $30B semiconductor campus in Sherman, TX. Locating your business in McKinney, Allen, or Decatur nearby can be a strategic advantage. 

Considerations Before Relocating

Whether you are starting a business, expanding one, or relocating to keep up with growth, locating near a megasite can be a great opportunity. Not only does it put you in the fast lane for logistics and networking, but it opens the door to collaborations and new markets. 

• Cost Analysis: You should weigh the initial investment against long-term financial implications.
• Labor Market and Competition: Assess the availability and cost of skilled labor, then gauge the competitive landscape.
• Community and Environmental Impact: Reflect on the socio-economic and environmental repercussions of setting up shop in a new locale.

Spotlight on National Megasites

Each megasite across the United States has a story crafted by local ambitions, geographic advantages, and the industries they aim to attract. Here’s a look at a few notable examples:

Kingsboro CSX Megasite: Tarboro, North Carolina 

Perfectly placed in the heart of eastern North Carolina, this site covers over 1,900 acres. The site contains direct access to the CSX Transportation rail line, facilitating efficient supply chain management and distribution across the East Coast and beyond. Its proximity to thriving economic development hub Greenville in Pitt County is another plus.

Source: EDPNC

The Gandy Megasite in Robstown, Texas

1,600 acres of prime industrial land located in Nueces County. This vast tract of vacant land is marked by its strategic proximity to 3 other megasites within a 30 minute drive of Corpus Christi, Texas.

Souce: Corpus Christi Regional Economic Development Corporation

England Megasite: Alexandria, Louisiana

This LED (Louisiana Economic Development) certified site spans 1,573 acres, offering prime industrial development space with close proximity to Alexandria International Airport. It has comprehensive utility support, with electricity from CLECO and fiber-optic services by AT&T.

Source: Louisiana Economic Development (LED)

Evaluating Business Compatibility with Megasites

If you’re deciding whether or not to locate your company near a megasite, try answering these 10 questions. 

1. Does the infrastructure align with my business's logistical and operational needs?
2. How will my access to skilled labor be affected by relocating near a megasite?
3. Can my business benefit as a purchaser or supplier to the occupant?
4. How does the site’s location enhance my market access and competitiveness?
5. Are there opportunities for collaboration or partnerships with other businesses nearby?
6. How does the environmental and regulatory landscape impact my business operations?
7. What are the potential risks and challenges of establishing my business near a megasite, and how can these be mitigated?
8. How does the community around the site perceive new businesses, and what is the level of local government support?
9. Can my business contribute to the economic development and job creation goals of the occupant?
10. How does the future development plan of the megasite align with my business's growth strategy?

Success Stories

In Chattanooga, Tennessee, Gestamp, an automotive supplier specializing in chassis and stamped parts opened a new facility directly adjacent to Volkswagen's plant in the Enterprise South industrial park. This move was cemented by the completion of a 1.4-mile road segment, known locally as the "Yellow Brick Road," which directly connects Highway 58 to Gestamp's factory, enhancing the supplier's access to Volkswagen and streamlining logistics. Gestamp's investment of $180 million and the addition of 510 jobs to support VW's SUV production and service other automakers shows how infrastructure developments and strategic location decisions can foster economic growth and operational efficiency. 

Source: Chattanooga Free Press

How to Proceed

Exploring megasite opportunities involves:

Comprehensive Research: Identify potential sites and understand their offerings. Ask yourself the questions outlined above and try to weigh them against the alternative of not being near a megasite.

Engagement with Economic Development Agencies: These entities can provide valuable insights on incentives, nearby suppliers/partners, and an overview of how your business could fit with the plans of the megasite.

Compatibility Assessment: Ensure the site supports your business's growth and operational strategies. Weigh these against any major community, infrastructure, or project risks. 

Conclusion

Choosing to locate your business near a megasite involves careful consideration. With strategic planning and thorough evaluation, the decision to move near one of these coveted spots can unlock substantial long-term advantages, setting a foundation for growth and success.

This article showcases just a few of the many megasites in the country. Scout is developing a megasite database and we’d be happy to share it with you. Just ask!