Entergy Teamwork Arkansas Annual Luncheon February 9, 2005 Automotive Site Selection Process
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Entergy Teamwork ArkansasAnnualLuncheonFebruary 9, 2005
Automotive Site Selection Process
Entergy Teamwork ArkansasAnnualLuncheonFebruary 9, 2005
Automotive Site Selection ProcessPresented by Dr. Buzz Canup
Canup & Associates, Inc.
Presented by Dr. Buzz Canup
Canup & Associates, Inc.
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PHASE I: MACRO ANALYSIS
PHASE 0: PRE-PROJECT
ANALYSIS
PHASE II: MICRO ANALYSIS
PHASE III: FINALNEGOTIATIONS
Location and Site Selection A SYSTEMATIC AND PROVEN PROCESS
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EVERY ECONOMIC
DEVELOPMENT PROJECT IS
DRIVEN BY A “NEED!”
THE “NEED” ESTABLISHES
PROJECT CRITERIA
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TWO TYPES OF PROJECT CRITERIA
“MUSTS”
AND
“WANTS”
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“Must” Criteria
Criteria
1. Property Size
2. Rail Available
3. Airport - 1 hour
4. Water Available
5. Gas Available
Yes
Yes
No
No
Yes
• Are absolute for success• Can not be compromised
Go/No Go
Screen
Alternative
Eliminated
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“WANT” CRITERIA•IMPORTANT!!! BUT NOT ABSOLUTE
•Willing to concede in one area to gain in another
Criteria
1. Labor Size
2. Operating Cost
3. Logistics Cost
4. Incentives
5. Competitor
Locations10 9 8 7 6 5 4 3 2 1
Most LeastImportant Important
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Typical “Musts” for Assembly Plants
• Labor
• Competitor Location Avoidance
• Transportation
• Site & Infrastructure
• Air Quality Status
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Typical “Wants” for Assembly Plants
• Recruitment & Training
• Acceptable Recurring Costs
• Acceptable Investment Costs
• Risk Minimization
• Competitive Incentives
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The Cold Hard FactsAbout Site Location
Searches• DEFINE
• DELINEATE
•DISCRIMINATE
• Eliminate
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Evaluating MEGA Project Sites
What Is the Objective?
Eliminate?
Define How to Make it Work?
Spend Whatever It Takes?
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SITE CONSULTANT’S JOB:
FIGURE OUT WHY A SITE WILL NOT WORK
ECONOMIC DEVELOPER’S JOB:
FIGURE OUT HOW TO MAKE THE SITE WORK
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Typical Site Factors
• Size, Configuration & Control
• Environmental & Geotechnical Conditions
• Utilities, Zoning & Neighboring Land Use
• Ingress & Egress
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NISSAN & MISSISSIPPI
AN EXAMPLE
OF A
MEGA PROJECT SUCCESS STORY
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NISSANNISSAN
$930 M Investment$930 M Investment
4,000 Jobs4,000 Jobs
1.5 M Sqft Facility1.5 M Sqft Facility
250,000 Vehicles/Year250,000 Vehicles/Year
MISSISSIPPIMISSISSIPPI
$295 M Investment$295 M Investment
InfrastructureInfrastructure
Pad Ready SitePad Ready Site
Custom IncentivesCustom Incentives
The CommitmentsThe CommitmentsPhase I Announcement Phase I Announcement November 9, 2000November 9, 2000
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The CommitmentsThe CommitmentsPhase II-A AnnouncementPhase II-A AnnouncementJune 24, 2002June 24, 2002
NISSANNISSAN
$500 M Investment$500 M Investment
1,300 Jobs1,300 Jobs
1.0 M Sqft Addition1.0 M Sqft Addition
150,000 Vehicles/Year150,000 Vehicles/Year
MISSISSIPPIMISSISSIPPI
$68.5 M Investment$68.5 M Investment
Infrastructure UpgradesInfrastructure Upgrades
Site Development GrantSite Development Grant
Extended IncentivesExtended Incentives
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Total CommitmentsTotal CommitmentsPhase I & II-APhase I & II-A
NISSANNISSAN$1.43 Billion Investment$1.43 Billion Investment
5,300 Jobs5,300 Jobs
2.5 M Sqft Facilities2.5 M Sqft Facilities
400,000 Vehicles/Year400,000 Vehicles/Year
MISSISSIPPIMISSISSIPPI$363.5 M State Investment$363.5 M State Investment
$ 24.6 M Federal Highway Funds$ 24.6 M Federal Highway Funds
$ 17.0 M Federal Highway Funds$ 17.0 M Federal Highway Funds
$ 20.0$ 20.0 M County Investment M County Investment
$415.1 M Total$415.1 M Total
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Mississippi Investments by CategoryMississippi Investments by Category
Category Phase I Phase II-B TotalsCategory Phase I Phase II-B Totals
Site & R-O-W AcquisitionSite & R-O-W Acquisition $40.0 $40.0 $0.0 $0.0 $40.0$40.0
Site DevelopmentSite Development $40.0 $40.0 $15.0 $15.0 $55.0$55.0
Roads & HighwaysRoads & Highways $30.0 $30.0 $2.0 $2.0 $32.0$32.0
Water, Sewer, Gas Pre-treatment Water, Sewer, Gas Pre-treatment $42.0 $42.0 $18.0 $18.0 $60.0$60.0
Transportation Cost Off-setTransportation Cost Off-set $28.0 $28.0 $10.0 $10.0 $38.0$38.0
Recruit & TrainingRecruit & Training $80.0 $80.0 $23.5 $23.5 $103.5$103.5
University – CAVSUniversity – CAVS $28.0 $28.0 $0.0 $0.0 $28.0$28.0
Advertising & MarketingAdvertising & Marketing $5.0$5.0 $0.0 $0.0 $5.0$5.0
Administration & MiscellaneousAdministration & Miscellaneous $2.0 $2.0 $0.0 $0.0 $2.0$2.0
TotalsTotals $295.0 $295.0 $68.5 $68.5 $363.5$363.5
Federal Highway FundsFederal Highway Funds $24.6 $24.6 $17.0 $17.0 $41.6$41.6
County BondsCounty Bonds $20.0 $20.0 $0.0 $0.0 $20.0$20.0 Grand TotalsGrand Totals $339.6 $339.6 $85.5 $85.5 $415.1$415.1
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IMPACT OF NISSAN ON MISSISSIPPI2001 - 2025
C umul ati ve A dj us ted (Futur e V al ue) P ayout vs . T ax C ol l ec ti ons
$ -
$ 200, 000, 000
$ 400, 000, 000
$ 600, 000, 000
$ 800, 000, 000
$ 1 , 000, 000, 000
$ 1 , 200, 000, 000
2001 2004 2007 201 0 201 3 201 6 201 9 2022 2025
ADJ USTED ACCUMUL. PAYOUT COLLECTED TAXES
Break-Even Point
2007
NISSAN PHASE IBREAK EVEN
A break-even point during 2007…when revenues of the projectexceed cost to the State
A break-even point during 2007…when revenues of the projectexceed cost to the State
$$
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TOTAL TAXES TO MISSISSIPPI
2005 $ 63,390,040
2010 $258,971,506
2020 $727,629,412
By 2025, a total of nearly $1 billion in quantifiable taxes will have been contributed to the state treasury by Nissan Phase I.
NISSAN PHASE IREVENUES
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Questions&
Answers
Questions&
Answers
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