Real Deals

Real Deals: NC hopes to lure automaker with Chatham County 'megasite'

dbracken@newsobserver.comJune 25, 2014 

Last week, officials in Chatham County gathered for what they hope is the first step in the county’s economic transformation.

A 1,818-acre-site a few miles west of Siler City has been designated a “megasite,” which in economic development parlance means it will be used by local and state officials to try and lure a single, very large industrial user to the region.

While officials expect to market the property to a variety of industries, they are focusing their efforts squarely on automakers. An auto assembly plant would be historic both for the number of jobs it would create and for the amount of incentives that would be required to close such a deal.

“North Carolina is in virgin territory here; we’ve never done anything like this so we’re kind of learning as we go along,” said Tim Booras, who runs a Greensboro-based beer distribution company and owns 1,275 acres of the megasite in western Chatham County.

The property sits along the Chatham-Randolph County line, with about 20 acres of Booras’ land located in Randolph. The other 543 acres, including land along a rail spur, are owned by D.H. Griffin Sr.

“I learned about what a megasite was about three years ago and saw an opportunity to actually create one,” said Booras, who has been using the land as a hunting preserve for wild quail.

Booras and Griffin have signed an agreement to keep their properties as a megasite for two years. It is currently the only site with that certification in North Carolina. The certification means the land can be ready for construction to begin within 12 months once a user commits.

Multiplier effect

There are several reasons for focusing on automakers, said Dianne Reid, president of the Chatham County Economic Development Corp. While North Carolina has a large number of auto parts manufacturers, it does not have an assembly plant while many neighboring states do.

Auto plants also create many more jobs than just the employees who work at the plant.

“More jobs are created for each direct job. In an automaker there are six to seven additional jobs that come along,” Reid said. “That multiplier is very high relative to other industries.”

Booras noted that the rapid recovery of the U.S. auto industry has many existing U.S. plants operating at or near full capacity, meaning some automakers may be looking to expand in the next few years.

Still, as Booras acknowledges, just the decision to target automakers means the state must be willing to entertain much larger incentives packages than it has previously. Automakers typically invest more than $1 billion in such facilities, and in return they expect lots of financial assistance.

When Volkswagen announced plans to open a plant in Chattanooga, Tenn., in 2008, it received $577.4 million in incentives. By comparison, Dell received $242 million in incentives from North Carolina when it agreed to open a manufacturing facility in Winston-Salem in 2005. Production halted at the Dell facility five years later.

Booras said that while landing an automaker would require a big investment, the return on such an investment has proved to be well worth it for states such as Alabama, Tennessee and Georgia.

Jobs needed

Both Chatham and Randolph counties certainly could use the jobs. Siler City lost more than 1,000 jobs when the Townsend chicken plant in town closed in 2011. And last month medical device maker Teleflex announced plans to shut down its manufacturing operations in Asheboro and lay off most of the company’s more than 600 workers.

Reid estimated that an assembly plant would probably create close to 2,000 jobs initially with the possibility for more in the future. “That would go a long way to replacing those jobs at considerably higher pay,” she said.

The megasite is about 20 miles from Chatham Park, the massive residential and commercial development that was approved by Pittsboro officials earlier this month. Reid said she thinks the two projects could potentially be complementary.

As for next steps, Reid said that’s fairly straight forward.

“I consider the next steps to be market, market, market,” she said. “Get the word out to as many consultants and make them aware that this site is available.”

Bracken: 919-829-4548 or dbracken@newsobserver.com; Twitter: @brackendavid

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