#96 – Inside Our Industry – The Evolution of the Megasite
Posted on | Inside Our Industry
Over the past few years, and especially the past 12 months, there have been numerous announcements of “megasite” projects, from semiconductors to electric vehicles. The following post on AreaDevelopment.com takes a look at how economic developers and communities may have to look at this growth tool in the future. Click on the link at the bottom for the complete story that includes some key characteristics for developing megasites for the future.
The Evolution of the Megasite
Area Development | Courtney Dunbar and Corey Kingsland (Burns & McDonnell) | Q2 2022
Competing on a national and global scale for large economic development projects — and winning — is a sure sign of a community’s vitality. A community’s ability to position large-scale, shovel-ready land tracts for investment consideration exponentially increases its ability to secure desired jobs and capital investment at the local level.
For years, there has been a traditional understanding of megasite requirements. Originally created to meet the demands of the automotive OEM and allied industries, these sites were assumed to have consistent demands. Important factors have included fully contiguous land space; multimodal transportation, including access to rail; large-scale and redundant utility capacities; and the ability to accommodate massive square footage.
In fact, so much priority was placed on factors such as rail access, minimum infrastructure capacity expectations, and contiguousness that benchmarks for the certification of sites mimicked similar factors across the U.S. for several decades.
While some economic development organizations have undertaken many aspects of megasite development and management, history proves that the most successful endeavors involved positioning land tracts near first-rate multimodal transportation assets, including commercial airports. Other important features have included high-capacity utility attributes with expandability, rapid local permitting, risk-free environmental conditions, and population centers capable of supplying a robust and skilled workforce.
How Megasites Are Evolving
Recently, there has been a noticeable shift in the size and phasing of these potential megasites, as well as the types of industries that call these sites home. Today’s end-users are requiring anywhere from 1,000 to 4,000 acres. This is a total game-changer in how communities, economic developers, and state legislators need to plan for identifying suitable land tracts free of extensive environmental hazards and other impediments. It is no surprise that project owners looking for large tracts of land are finding it challenging. There is plenty of land available, but these sizable tracts are often too far from large population centers, which are needed to help meet the employment demands of their facilities.
In addition to the increase in land size, there has been a major shift in the investment threshold. Within the last year alone, end-users representing upward of $60 billion in investment and the creation of thousands of jobs have been approaching economic developers across the U.S. These unfathomably high capital-expense projects are challenging states and communities to develop unprecedented economic incentive packages to help close these deals.
Those tasked with bringing much-needed development to their given communities need to broaden the way they look at the identification, preparedness, planning, design and construction of these economic drivers before a multibillion-dollar project developer expresses interest in their region.