FARADAY FUTURE NORTH AMERICAN ASSEMBLY PLANT FOR ALL-ELECTRIC VEHICLE
4,500 Jobs | $1.0+ Billion | 2.9 Million SF
Strategic Consulting led the North American site selection and business incentive negotiations activities to locate Faraday Future’s (FF) first all-electric vehicle assembly plant. To meet FF’s aggressive timing objectives for production targets, C&W performed parallel activities to compress the time-frame to six months for property search, inspection/evaluation, labor market due diligence, financial comparisons, and incentives negotiations. The $1+ billion investment is expected to create 4,500 jobs by year 2020.
- C&W executed a property search across ten states throughout the U.S. and Northern Mexico for multiple facility-footprint scenarios (single plant vs. bifurcated production facilities).
- Over 200 properties were submitted for consideration and C&W coordinated the collection, analysis and presentation of available information on suitable greenfield and brownfield properties to identify and recommend those which best meet the project criteria.
- The property search involved state and local economic development officials, C&W brokerage teams and affiliates in the U.S. and Mexico, and various service providers (e.g., utility and rail) to obtain data on properties, incentive programs, infrastructure and communities; all while maintaining Client confidentiality.
- In addition to the physical evaluation, C&W compiled and compared desktop statistics on each candidate property’s regional labor market to further evaluate qualitative workforce attributes alongside expected market-representative annual costs for major operating expenses (labor, electric power, property taxes and outbound freight costs).
- Property inspections were organized and conducted jointly with FF personnel at selected candidate properties which included meetings with property, economic development, utility and railroad representatives.
- Four finalist locations were selected for parallel activities consisting of property and labor market due diligence, detailed operating cost comparisons, real estate and business incentives negotiations and documentation.
- C&W provided refined and updated estimates of FF’s expected human resources costs, along with 10-year site-specific financial comparisons of the preferred properties inclusive of:
- Negotiated incentives;
- Recurring costs pertaining to labor, property tax, real estate, outbound finished vehicle freight, utilities; and
- One-time investments costs for property acquisition and construction.
- North Las Vegas, Nevada was selected for the single plant location and construction of the facility is expected to be complete by 2017.
- The State of Nevada called the 29th special legislative session in its 151-year history in order to approve a $335 million incentive package which included the following:
- 100% abatement of sales & use tax (15 years);
- 75% abatement of real property tax, personal property tax and modified business (10 years);
- Transferable tax credit ($38 million);
- Economic development electricity rate rider program;
- Infrastructure improvements (water, rail and road); and,
- Workforce customized training grants.
THYSSENKRUPP AG STEEL MANUFACTURING AND PROCESSING FACILITY
2,700 Jobs | $4.6 Billion | 3,600 Acres | 6.5 Million SF
ThyssenKrupp AG (TK), headquartered in Düsseldorf, Germany, is considered among the world’s foremost producers of technically innovative, high-quality carbon and stainless steel products. TK’s immediate requirement was to identify, select, and acquire a new site of 3,600 acres for the manufacturing and distribution of carbon and stainless steel products in North America. The project’s total capital investment for real and personal property was nearly $5.0 billion, making it the largest, private industrial economic investment in North America at the time.
C&W analyzed location alternatives/cost mitigation opportunities in the Midwest, Southeast, and Eastern Regions of the United States. It was determined that a location in Mobile, Alabama fulfilled key operational and cost parameters, while providing significant savings in the form of economic incentives for the project. C&W led the overall incentives negotiation process, prepared RFP’s and economic and fiscal impact analysis to competitively position the project for success, secured competitive economic incentive proposals from Alabama, Arkansas and Louisiana, negotiated final commitments from state and local municipalities, conducted site visits and coordinated the documentation of all incentive agreements and requisite supporting corporate information.
The total economic incentives package negotiated by C&W was $811 Million, which was the highest incentives package award in the history of Alabama at the time. The incentive consisted of the acquisition of free land and mineral rights, $314 Million in cash, $350 Million in state and local tax abatements, and $150 Million in transportation and utility infrastructure improvements, workforce training, a new training facility, steel manufacturing technology program, fire station, permit expediting, and waiver of permit fees. Other state incentives included state corporate tax credits of $135 Million through special “mega-project” tax legislation and electric utility rate reduction valued at $67 Million.
METHOD PRODUCTS U.S. LEED PLATINUM MANUFACTURING FACILITY
57 Jobs | $18 Billion | 20 Acres | 165,000 SF
The client, Method Products, a leading provider of premium planet-friendly and design-driven home, fabric and personal care products, was seeking to find a location to build its first U.S. manufacturing facility under the ownership of its affiliated company, Ecover Inc. with the intent to transition from contract-manufacturing to in-house production, Method engaged C&W Global Business Consulting (GBC) to identify and recommend the best-fitting site for the company’s first U.S. production facility. The site selection included as many as 80 locations in 5 different states. Method’s goals of environmental sustainability, as represented by properties that would best facilitate LEED-Platinum facility certification, urban renewal and revitalization, and a competitive operating environment were significant drivers in the site selection process.
C&W Business Incentives Practice team (C&W-BIP) was engaged in the location analysis process to provide knowledge to GBC and the C&W Real Estate Transaction Team to identify incentive opportunities in the targeted locations. Method announced their plans to locate in Chicago’s historic Pullman Park neighborhood in July 2013. C&W-BIP provided knowledge to site selection consultants and brokers to devise location strategy to maximize business incentives available. C&W-BIP leveraged the substantial economic and fiscal benefits of the project to secure state and local support.
C&W-BIP negotiated an incentive package estimated at $18 million, including local financing grants, federal and state income tax credits, sales tax exemptions, training grants, and energy grants.
POLYSILICON MANUFACTURING FACILITY
300 Jobs | $500.0 Million | 225 Acres
In response to strong demand for polysilicon, C&W was retained to identify the optimal location for a new polysilicon facility. The site selection study spanned the U.S. and Canada in search of sites offering highly competitive electric power rates, robust wastewater treatment capacity, fence-to-fence supplies of gaseous chlorine and steam, rail service, and financial incentives. In addition to evaluating the feasibility of greenfield development, parallel incentives negotiation and conditions benchmarking was undertaken to weigh potential advantages of a pre-existing location.
- Ten U.S. states and Canadian provinces with the most attractive power rates were surveyed solicited for suitable sites parcels (+/- 225 acres, 50 MW power service, rail access, chemical-park setting).
- Advanced negotiations facilitated across two finalist locations (one in Canada and one in Southeast U.S.) to secure discretionary government incentives, electric rate stability and site infrastructure investment.
- Two finalist locations were selected based on their ability to provide robust utility and chemical-supply services, combined with highly competitive overall cost structures.
- Analysis facilitated well informed negotiations regarding incentives and electric-power service contracts, including the provision of long-term, defined electric power rates in one location.
- Incentives package valued at $20 million in cash.
PROLAMSA GROUP (AXIS PIPE AND TUBE) PIPE AND TUBULAR STEEL MANUFACTURING FACILITY
300 Jobs | $120.0 Million | 183 Acres | 600,000 SF
Prolamsa was founded in Mexico in 1954 and focuses on producing steel products. Company was seeking locations to grow its market share in the United States with a particular focus on supplying the shale oil and gas industry.
C&W led the site selection and incentives negotiation process in the southern U.S.A. with the objective of finding an optimal location with the lowest capital and operating cost environment for a manufacturing operation. The analysis included:
- Rail and Water Access
- Environmental Regulation
- Business Friendly Environment/Tax Structure
- Business Incentives
- Real Estate
Analysis resulted in Company selecting Bryan, Texas for its new pant. Project represents the largest manufacturing project in the history of the City Bryan and Brazos County.
- C&W lead the negotiations at state and local level and ultimately secured a total incentives package valued at $20.0 million.
- Incentives package included: (1) Development credits (road, rail, site, utilities); (2) permitting waivers; (3) tax abatements (city, county, school); (4) freeport exemptions; (5) non-annexation provisions; (6) sales tax exemptions; (7) free trade zone designation; (8) special electricity rate rider.