Third Annual CiCi Awards 2008: Community Impact Top 15
29 Feb, 2008By: Trade & Industry Development
The Community Impact portion of the CiCi awards highlights projects that have profound implications for local communities. In many cases, award winners in this category are already (or soon will be) the largest source of employment where they are located. However, the ability to offer a job – any job –is not the whole story. Many award winners also have the potential to help people climb career ladders by stimulating workforce development. And some even offer communities a kind of economic development ladder, helping them to build industry clusters.
The importance of workforce development and skills upgrades are especially notable in the Eastman Chemical and Ford projects. High-skilled and high-paying jobs are also notable in the EFACEC and Rockwell Collins projects. Finally, several projects anticipate growth in alternative energy, a potential key source of jobs as innovations and investments in this sector accumulate.
Eastman Chemical Company – Kingsport, Tennessee
In Kingsport, Tennessee, a battle is raging, a battle against industrial obsolescence. Allies in this struggle include a chemical manufacturer and state authorities. In fact, they are staging a pincer movement.
The manufacturer, Eastman Chemical Company, is investing more than $1.3 billion dollars over the next five years to upgrade its technology, infrastructure and production capabilities. At the same time, state authorities are implementing training programs to upgrade the skills of an aging workforce. In addition, the state is working with Eastman Chemical and a local community college to develop a unique training curriculum. If these maneuvers seem coordinated, that is no accident. They are meant to develop a close alignment between higher education and industry. It could become a model statewide.
The coordinated effort is called Project Reinvest. On the capital side, the company will spend an average of $265 million dollars annually, an expenditure that may lay the groundwork for future capital investments. On the workforce development side, not only will the state stimulate the training of veteran workers, but Eastman Chemical will also partner with Northeast State Technical Community College to implement training programs for a new generation of mechanics, lab analysts and chemical operators.
Project Reinvest represents a total investment of $1.3 billion dollars. The immediate impact is the retention of 7,500 existing jobs. But it could also stimulate the creation of many new jobs because it will enhance the quality of the state’s workforce. According to Tennessee Governor Phil Bredesen, workers trained by the program will be available to other companies in the region. And the “best practices” from the partnership, in which the state has already invested 1 million dollars, will be shared with other higher education institutions across Tennessee.
TransCarbon/Faustina – Convent, Louisiana
One project, multiple impacts – jobs created, waste recycled, domestic fertilizer production revitalized, carbon dioxide sequestered, and recovery of oil reserves improved in Gulf Coast oil fields. How can one project deliver so many (and such varied) benefits?
The project is a new, $1.6 billion petrochemical plant. To be built by Faustina Hydrogen Products, a subsidiary of TransCarbon, the plant will produce anhydrous ammonia, which is used to manufacture fertilizer. Ordinarily, anhydrous ammonia is produced from natural gas feedstock. But the Faustina plant will use petroleum coke and high-sulfur coal. These are much cheaper alternatives. In fact, petroleum coke is usually considered waste, a useless by-product of the refining industry.
Prices for natural gas in the United States have been skyrocketing. In fact, prices have been so high that domestic producers of anhydrous ammonia have been undersold by foreign producers that have access to cheap natural gas. For domestic producers, less-expensive alternatives to natural gas represent a welcome development.
But will it be possible to be clean while using petroleum coke and high-sulfur coal? What about carbon dioxide emissions? Well, the carbon dioxide emitted will be industrial-grade. When it is used, it will be effectively sequestered and pumped into underground oil reservoirs to enhance the recovery of “stranded” oil.
The project will create about 1,400 construction jobs and once operations commence, the plant will provide 200 permanent positions. They will pay an average of $75,000 annually along with benefits.
Madras Integrated (Google) – Lenoir, North Carolina
Enter these keywords: Google + North Carolina. Too many results? Then narrow your search by entering additional keywords. Try these: Jobs + Development + Investment. Maybe then your search would yield “hits” about Google’s recent investment in Lenoir, North Carolina. It represents the single largest investment in the state by a company awarded a Job Development Investment Grant.
According to development authorities in the state, the investment will reinvigorate an area hard hit by the loss of furniture and textile jobs. What’s more, the investment will create knowledge-based jobs, as coveted as they are high paying.
Google, famous for its Internet search engine, plans to invest up to $600 million to build a data center in Lenoir to support the company’s online operations. The move will create as many as 210 jobs during the next four years. Wages at the facility will vary by job function, but the average wage is expected to be more than $48,300 not including benefits, which is substantially more than the county average of $27,300 without benefits.
“The data center we’re planning to build in Lenoir, North Carolina will help support continued growth in our online services,” said Lloyd Taylor, director of global operations, Google, Inc. “We look forward to joining the local community and are grateful for the support from the state and local governments throughout our evaluation process.”
For each year that the company meets the required performance targets, the state will provide a grant equal to 75 percent of the state personal income withholding taxes derived from the creation of new jobs. If the company creates all of the jobs called for under the agreement and sustains them for 12 years, Google could receive a maximum benefit of $4.8 million.
During the life of the grant, state authorities estimate that the project will generate a cumulative gross state product value of approximately $1.06 billion. In addition, it will produce a positive, cumulative net state revenue impact of $37.145 million.
Allegheny Technologies – Rowley, Utah
Allegheny Technologies is building a greenfield titanium sponge facility in Rowley, Utah. Originally, the new facility was intended to have an annual capacity of 24 million pounds. But Allegheny decided to modify the plant’s design, positioning it for further expansion. As a result of this and other design improvements, the investment in this facility is now estimated to be between $425 and $450 million.
Significantly, the Allegheny’s Rowley operations will obtain magnesium from a nearby magnesium plant. Magnesium is an important raw material in the manufacture of titanium sponge. The titanium plant will bring the operational level of the magnesium plant, which is owned by U.S. Magnesium, near 90 percent. This level has been hovering near 60 percent for years.
Not only will Allegheny’s new titanium plant account for about 150 new jobs, it will, through its demand for magnesium, help retain about 460 jobs at the existing magnesium plant. These jobs are especially welcome in Tooele County, where 46 percent of the residents commute to Salt Lake, Utah for work.
To encourage Allegheny to invest in the titanium plant, economic development authorities in Tooele County are redoubling their efforts to institute an economic development zone in the North Rowley area. In addition, they are working with state officials to develop tax incentives for the company, as well as other companies that may locate in the zone.
“The opportunities to grow our titanium mill product shipments are significant, and continue to increase,” said Patrick Hassey, Allegheny’s chairman, president and CEO. Allegheny has signed a contract with Boeing to supply material for the new 787 aircraft. In addition, demand for titanium mill products is growing from the chemical process and oil and gas markets. For example, demand is expected to remain strong for titanium products used in the manufacture of fertilizers. Demand is also expected to remain strong for titanium products needed for heat exchangers used in liquefied natural gas and other oil and gas applications.
Sewon Precision – LaGrange, Georgia
Automobile assembly plants established by transplants in the southeastern United States continue to stimulate employment beyond the assembly plants themselves. A case in point is the Kia plant in West Georgia. By itself, the Kia plant accounts for 2,800 jobs. But suppliers that deliver components to the Kia plant are expected to account for upwards of 2,000 more.
Perhaps the most significant investment by a supplier in this area is the $170 million plant announced by Sewon Precision. To be located in LaGrange, Georgia, the Sewon plant is expected to create 700 jobs over a three-year period. It is, to date, the largest of all Kia suppliers to announce projects in West Georgia.
Sewon Precision, based in Daegu, Korea, will produce stamped chassis and body components as well as some decorative trim pieces for Kia Motors Manufacturing Georgia. The company has selected a 65-acre site at the Callaway South Industrial Park in Troup County.
“We are proud to welcome Sewon to LaGrange,” said Diethard Lindner, chairman of the Development Authority of LaGrange. “Sewon is the perfect anchor company for our new 1,200-acre Callaway South Industrial Park in LaGrange. Strong teamwork from the state, the Callaway Foundation, Troup County officials, City of LaGrange officials, the Chamber of Commerce and the Development Authority helped us attract Sewon Precision, and we will all benefit from having such a high-quality company in our community.”
Construction will begin in spring 2008 on the 420,000-square-foot building. The facility is scheduled to go into production in fall 2009.
Really Cool Foods – Cambridge City, Indiana
Really Cool Foods, one of the nation’s leading natural and organic prepared foods company, has decided that Cambridge City, Indiana is a “Really Cool” location – centrally located and served by motivated economic development officials. As a result, Really Cool Foods intends to locate its national production and distribution center there.
The company plans to invest $100 million to build and equip the complex in a number of stages. Really Cool Foods estimates it will create more than 1,000 new jobs for the area over the course of the project.
The development marks the second phase of Really Cool Foods’ nationwide expansion plan. The centralized Indiana site will serve as the primary national manufacturing and distribution center, which will supply the company's growing network of food retailers across North America.
“Properly servicing retail clients nationwide with our unique products requires central proximity and a dedicated workforce,” said Bob Clamp, CEO, Really Cool Foods. “East Central Indiana provides the ideal strategic foothold and complement to our Northeast facility. The Indiana Economic Development Corporation and the Economic Development Corporation of Wayne County have been instrumental in providing us with exactly what we need.”
The Indiana Economic Development Corporation offered Really Cool Foods up to $3.05 million in performance-based tax credits and up to $165,000 in training grants. In addition, it will provide Cambridge City officials with a $200,000 grant to assist in off-site infrastructure improvements needed for the project. Wayne County officials offered the company 50 acres of land, $165,000 in grants and a 10-year property tax abatement.
Federated Department Stores – Goodyear, Arizona
The Fortune 100 company that owns Macy’s department stores, Federated Department Stores, announced a capital investment of $93.65 million for the construction of a new 600,000-square-foot distribution center in Goodyear, Arizona. The new facility will serve primarily as the West Coast shipping point for macys.com.
The facility is expected to employ about 505 full-time workers who will account for a payroll base of $13 million. In addition, the facility is expected to employ about 370 seasonal workers. When full-time and seasonal workers are combined, the total reaches 875 workers.
Economic partners involved in construction of the new distribution center include the Arizona Department of Commerce, the City of Goodyear, the Greater Phoenix Economic Council and the Arizona Public Service.
More than 10 cities in several states were considered for the project. But Goodyear’s advantages, which included a strategic location, about 20 minutes west of Phoenix, and an attractive bundle of incentives, were decisive. Goodyear will provide about $920,000 in reimbursed construction sales tax. And it will waive about $250,000 worth of plan and permit review fees. If the distribution center enters an expected expansion phase, the value of the incentives on offer may exceed $2 million.
Respironics – Harrisburg, Pennsylvania
In southwestern Pennsylvania, people can breathe a little easier, now that it is the site of an expansion by Respironics, a leading manufacturer of respiratory devices. The expansion, which will result in a new 165,000-square-foot facility, represents an investment of $120 million, as well as 330 new jobs and 1,492 saved jobs.
According to Governor Edward G. Rendell, Respironics was encouraged to expand in Pennsylvania because of the commonwealth’s economic incentives for manufacturing companies. This sentiment was seconded by Allen Kukovich, director of the Governor’s Southwest Regional Office. When Kukovich participated in the company’s ground-breaking ceremony, he presented a ceremonial check representing a $1.79 million financial package from the Department of Community and Economic Development. The package includes an $800,000 opportunity grant and $990,000 in job creation tax credits.
The company worked with the Economic Growth Connection of Westmoreland County and the Westmoreland County Industrial Development Corporation to secure the funding offer. And the project was coordinated through the Governor’s Action Team, a group of economic development professionals who serve as a single point-of-contact for businesses considering locating or expanding in Pennsylvania.
“Respironics is thankful to the Commonwealth of Pennsylvania for its generous economic package,” said John L. Miclot, the company’s president and CEO. “We’re proud of our company’s history here in western Pennsylvania and we’re pleased to continue to bring jobs, growth and opportunity to the region.”
“Respironics is a ‘home grown’ Pennsylvania business that became a worldwide leader in its industry,” Governor Rendell said. “Its expansion sends a clear message that Pennsylvania has the tools and resources to help established and new companies compete successfully in the global marketplace.”
Molded Fiber Glass – Aberdeen, South Dakota
The people in and near Aberdeen, South Dakota are feeling the wind at their backs. That’s because Molded Fiber Glass Companies (MFG) has announced it will open a manufacturing plant to build wind turbine blades. The blades will be used in GE’s 1.5-megawatt machine, one of the most widely used wind turbines in the world.
The new facility represents a $40 million investment and the creation of up to 750 new jobs. It will be owned by the Aberdeen Development Corporation (ADC), which designs, builds and leases industrial and office facilities with the help of state and local incentives. MFG will lease and operate the plant.
“Today’s groundbreaking represents a new milestone in the commercial relationship between MFG and GE Energy,” said Richard Morrison, CEO of MFG. “We are pleased to continue supporting GE’s efforts in the wind energy industry, which is experiencing unprecedented growth around the world. We are also grateful to the team in the Governor’s Office of Economic Development and their hard work to make this happen in South Dakota.”
“We applaud MFG and GE for bringing new jobs to our region,” said South Dakota Governor Mike Rounds. “It makes good business sense for a leader in the wind industry like GE to have its wind blades manufactured in the heart of North America’s best wind energy resource.”
If growth of the wind energy market translates into job security, the Aberdeen plant will be busy for some time to come. With a 500 percent increase in wind turbine production since 2004, GE expects its wind business revenues to exceed $4 billion this year.
Advance Auto Parts – Remington, Indiana
Advance Auto Parts announced that it plans to operate a new distribution facility in Remington, Indiana. Advance anticipates creating over 600 new jobs to support the facility’s operations at full capacity. These new positions will include drivers, dispatchers, material handlers, supervisors and managers who Advance will actively recruit from the town of Remington and surrounding areas.
“We are very excited about welcoming Advance Auto Parts to the Hoosier state,” Indiana Governor Mitch Daniels said. “We have worked hard to create a competitive environment for businesses like Advance to succeed in, and I believe Advance will be pleased with the work ethic and productivity of our Indiana culture.”
The state of Indiana, through the Indiana Economic Development Corporation (IEDC), offered an incentive package that included up to $250,000 in training grants, up to $250,000 in infrastructure assistance to the local community and approximately $4.7 million in tax credits based on commitments for job creation and capital investment.
The new distribution facility is adjacent to Interstate 65, providing convenient access to Indianapolis and Chicago and points beyond. The facility is also situated near Interstates 74 and 80, providing for eastbound and westbound travel. “This new, strategically-located facility provides us with opportunities to enhance our service to our stores in the Midwest,” said Roy Martin, Advance’s senior vice president of logistics and replenishment.
“Besides location, there are several strategic reasons we chose Remington as the site for this new facility,” Martin said. “Studies show a core of skilled and high work-ethic job candidates from the Remington and surrounding area. Indiana Governor Mitch Daniels has been a very cooperative and proactive partner in helping us. And last, but far from least, we had strong local support from Jasper County and the Remington Town Council Members.”
EFACEC Group – Rincon, Georgia
EFACEC Group, a Portuguese manufacturer of power substations, plans to build its first U.S. plant in Effingham County, Georgia, creating 600 jobs. The project represents an investment of $100 million.
“EFACEC is Portugal’s leader in electronics and electro mechanics, and we’re proud that they have chosen Effingham County and the state of Georgia as the site of their first U.S. plant,” said Governor Sonny Perdue. “These jobs are high-skilled, high-pay positions. And I know that EFACEC will be thrilled with the talented workforce they will employ.”
EFACEC Group’s new facility will make core form, shell form and mobile substations for the U.S. market. The building will be located at the Effingham County Industrial Park near Rincon, which is close to the Port of Savannah.
“This investment is a landmark for EFACEC and an essential step in our growth strategy in the key United States market,” said Luís Filipe Pereira, EFACEC CEO. “It also bolsters EFACEC’s plans for expansion and globalization. With this investment, EFACEC hopes to strengthen its connection with current customers, including major U.S. utility companies, and to reach new clients as well.”
“We are extremely excited to have been chosen as the best location by such a distinguished company,” said Martin Wilkins, chairman of the Effingham County Industrial Development Authority. “A project of this magnitude will have long-lasting positive implications for our community and the entire region for years to come. Having EFACEC’s base of U.S. operations here is certainly a testament to the viability and allure of our industrial market.”
TPI Composites – Newton, Iowa
TPI Composites plans to build a new 316,000-square-foot facility in Newton, Iowa. The facility, which will create approximately 500 new jobs, represents an investment of $38 million.
Local development authorities are issuing nearly $5 million in bonds to help finance building construction and buy the site as part of an aggressive local and state incentive package. The new manufacturing employer offsets the loss of the Maytag Corporation jobs.
This new plant reflects Iowa’s commitment to wind energy. The state ranks third in wind energy production, with more than 1,000 wind turbines capable of producing nearly 1,000 MW of electricity annually. In addition to TPI, Iowa is home to some of the biggest names in wind energy production, including Acciona Energia, Clipper Wind Power and Siemens Wind.
The Newton plant will expand TPI’s capacity to produce blades for GE’s 1.5-megawatt wind turbines, which are among the most widely used wind turbines in the world, with more than 6,500 installed. “As the wind industry continues to grow, we face an ever-increasing demand for reliable and efficient wind turbines,” said Victor Abate, vice president-renewables for GE Energy. “Our commercial relationships with valued suppliers such as TPI are critical to the continuing growth and success of our business.”
“Wind is now one of the largest sources adding new electricity generation in the country,” said American Wind Energy Association Executive Director Randall Swisher. “As today's announcement demonstrates, wind power is also a large source of investment, creating good jobs and building economic opportunity here in Iowa and across the country.”
Avon Products – Zanesville, Ohio
Avon Products has selected Zanesville, Ohio as the location for a new distribution center. The facility, representing a capital expenditure of $117 million, will be built on land located at Eastpointe Business Park in Zanesville, approximately 50 miles east of Columbus, Ohio.
The new facility will employ approximately 500 people. When fully operational, it will have the capacity to ship 50 percent of Avon’s U.S. sales volume.
“The central location with proximity to major highways and many of our suppliers will allow us to most effectively service our representatives in a timely, efficient manner,” said Elizabeth A. Smith, executive vice president, Avon Products, Inc., and president, Avon North America & Global Marketing. “We are grateful to the State of Ohio, local Zanesville officials and the Zanesville-Muskingum County Port Authority for their support in our site selection process.”
In January 2007, Avon announced plans to restructure its U.S. Distribution Operations to improve operating efficiencies and achieve other cost savings. In line with this, Avon has said that current distribution facilities in Newark, Delaware and Glenview, Illinois will be phased out in mid-2009 and mid-2010, respectively.
“Avon’s new distribution center will make Zanesville a major link in Avon’s supply chain,” said Lt. Governor Lee Fisher, who also serves as director of the Ohio Department of Development. “Through collaboration on the state and local level, we were able to secure another investment byan excellent company by highlighting Ohio’s strengths for business investment, including our very capable workforce and expertise in the transportation and logistics and distribution industries.”
Ford Motor Company – Louisville, Kentucky
Encouraged by a generous package of incentives, Ford Motor Company has decided to modernize its truck plant in Louisville, Kentucky. The modernization will help support the retention of 5,117 jobs and a payroll of direct and indirect jobs of more than $4 billion in the state.
The plant’s upgrade represents an investment of $105 million. It will include funds for equipment and facility upgrades, technology upgrades and the purchase of new machinery and equipment.
According to Governor Ernie Fletcher and Economic Development Cabinet Secretary John Hindman, the modernization was facilitated by the approval of tax incentives for Ford Motor Company under the Kentucky Jobs Retention Act (KJRA). The Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved the project for up to $66 million over a 10-year period.
The KEDFA provides financial support through an array of financial assistance and tax credit programs. KEDFA approval is required for participation in the loan and tax incentive programs, except the Skills Training Investment credits, which are approved by the Bluegrass State Skills Corporation.
“Action by the KEDFA Board shows Kentucky’s commitment to keeping Ford Motor Company in Kentucky, as well as protecting its employees,” said Governor Fletcher. “Ford Motor Company is a driving force of our state’s economy and we intend to ensure its viability and continuity in Louisville.”
“Ford is facing unprecedented competitive challenges and this type of partnership support enhances our ability to work together closely to set the stage for additional opportunities in the future,” said Curt Magleby, director of State and Local Government and Community Relations.
Rockwell Collins – Cedar Rapids, Iowa
Rockwell Collins, a manufacturer of aerospace equipment, is flying higher than ever, anticipating growth spurred by its continued success in winning government programs and commercial aviation contracts. As part of its effort to accommodate this growth, the company announced that it plans two expansions near its existing Iowa-based locations. In fact, both sites are near its Cedar Rapids campus.
In total, the two expansions represent a $37 million investment and will create as many as 585 jobs. In most cases, the hourly wage for these jobs will exceed $30 per hour.
One of the sites will be at a former store, K’s Merchandise, which has stood empty for more than a year. Once this site has been renovated in a project costing about $13.7 million, it will house 310 employees. The other site, which represents a $23 million investment, will involve the construction of a facility covering about 150,000 square feet. Although this building will be able to accommodate 600 employees, immediate plans allow for only 275.
Instrumental in these expansions are tax benefits through Iowa’s High Quality Job Creation program. The total of the incentives for the two sites totals about $17.5 million. Additional incentives are also being contributed by the city.
One of Iowa’s exemplary corporate citizens, Rockwell Collins promotes the improvement of science and mathematics education in elementary and high schools, advancing the engineering programs of Iowa State University and the University of Iowa and advanced manufacturing programs at Kirkwood Community College. It’s Green Communities program funds environmental programs in the communities where it operates.