Building the economy of the future
The preliminary findings of the TNECD Property Evaluation Program were announced at the Newport Community Center.
Members of the community heard from Don Schjeldahl of Austin Consulting and Leanne Cox, TN Site Development Director.
Schjeldahl gave a detailed look at what industries are hoping to find when searching for a new location.
He called this basic tutorial Site Selection 101.
“Everything starts with strategy development through data resources and looking at your website,” Schjeldahl said. “Once that is done we will screen the communities in favorable areas and visit them. We do a deep dive on employees, employers and utilities in the area, and the list is usually narrowed down to three.
“At that point it’s whose going to offer more to get that project. You really have to have your ducks in a row in order to compete, but the way to build recognition is to have them come visit your area,” Schjeldah said.
Schjeldahl said that operating costs sent nearly 500 companies from the north to the south in the 80s, but the game has changed in terms of cost differentials.
“Cost differentials are gone. What’s growing is risk. Most of the country is right at full employment. People who are out of work don’t really have the skillset that these industries are looking for.”
He said Cocke County and others should target industries and market the specific things that make them an attractive target. Things such as labor force, utilities, taxes and incentives are a driving force in luring a new industry.
New labor, which Schjeldahl refers to as the millennials in the workforce, has become a new focus for industries.
“Labor is the driving factor in site selections,” he said. Millennials have completely changed the demographic of the workforce. Companies want to try to attract and retain these individuals.
“Attractive downtowns is one way to do this. I am a big believer in a healthy downtown. It’s something that brings tourists into the community. Having more restaurants and shops in your downtown is huge.”
The broadband fiber project that is currently underway in Newport is also a huge plus in Schjeldahl’s eyes.
He noted that recently companies have moved their headquarters in order to be in an area that can provide better connectivity.
“Utility services are important. Water, waste, electric and the 1GB internet service you will offer is huge. These are all things that you need to play up to industries.”
Schjeldahl said that many areas can basically seal the deal based on their presentation. He noted that there are several elements of success.
“Presentation really matters and Lucas (Graham) and Jennifer (Brown) have done a great job with this. They rolled out everyone yesterday including members from the utilities who were very knowledgeable.
“That is one of the elements of success along with targeting industries, strong business retention, knowing your community, strong public and private leadership and a sustainability plan.”
Schjeldahl said that nearly 50 percent of the competition is eliminated from the search for a new site due to lack of land and spec buildings. He noted that Cocke County has had some bad luck with spec buildings, but that they are necessary for growth.
Leanne Cox, TN Site Development Director, said that help is available through a TVA grant program to help create new spec buildings.
“You have to have a structure that can be easily changed. Your target market here may be something small. A 10,000 to 30,000 square foot building may be what industries are looking for,” Cox said. “Many of the people we talk with say it is important to leave some things like the floor unfinished, that way they can come in and finish it themselves or have you build it to spec.”
The five sites discussed by Schjeldahl included the former ACE property, the Stokely property, the current Newport/Cocke County industrial site, the new proposed industrial site and the Unaka property that is behind the ConAgra distribution center.
Schjeldahl called this a site with a lot of possibilities.
“There are water and sewer connections in adequate quantities on this site. The rail switch is still in place and Phoenix Closures across the highway from this site is using the rail system for their plastics and doing very well.
“This is a relatively flat site that offers a lot of possibilities.”
With the good comes the bad, but Schjeldahl said that most of the issues with this property could be fixed for minimal investment.
“You will need to decide what to do with the building pad. Also the sump pumps that are filled with diesel need to be cleaned up. The old tire landfill that was left also limits the use of the property. The investment required to make this an excellent industrial site is minimal. Of the five sites, I would say that this one is low hanging fruit.”
Schjeldahl referred to this as a good site overall, but the development should be done in stages.
“Norfolk Southern has laid out a rail line through this site, which is in a good location. Having access to the rail is important.
“This site would be better for a master plan that is done in stages. It would be better to use this property as multiple sites for smaller buildings.
Newport/Cocke County Industrial Site
Schjeldahl’s greatest issue with this site was the limited amount of land, and issues with the flood plain.
“There is about 30 something acres in there that is flat. Some of the land will be taken by the bypass project, which will change a lot of dynamics for the better.”
“Most of the land is above the 100 year flood plain, but with the increasing frequency of floods, 500 year flood plains have become the new 100 year plain. This is otherwise a decent site if you could find someone who didn’t mind the risk of flooding.”
New Proposed Industrial Site
Schjeldahl said that this site could be the development of the future with its 800 plus acres of usable land.
“This site is a very energetic and forward thinking idea. It is a potential community game changing opportunity. I don’t think this site needs a rail service. You already have three good properties that have that access.
“This property could be used to envision a new economy for the county. You need a master plan for this site that is centered around non-rail service, small distribution and light manufacturing. Tech and electronics repair could also be an idea for this site.
“These jobs would pay more and live up to millennials talents. This site also ties into the bypass project and will play into the long term vision for that whole side of town and how it will develop.”
Schjeldahl noted that this site is similar to the one that was used for the Colgate-Palmolive manufacturing facility in Morristown.
“This site is very attractive and very workable. It is similar in scale to the Colgate property in Morristown. There are two disadvantages to the site.
“One is the access road that runs over the rail way. That is a big risk that is like toying with disaster. The other negative is the access to the highway.
“Trucks would need to go back through downtown, or use Highway 73. That creates a lot of truck traffic and Highway 73 wouldn’t be acceptable from a risk standpoint. Anything that lowered truck traffic would be better for the community.”
Schjeldahl was impressed with the resources of Cocke County as a whole saying that building a brand around the natural beauty will go a long way towards the development of the economy.
He said that while we may have a gold mine, it is more refined than some larger communities.
“The lack of flat land and good sites is what keeps large distribution centers from locating here. Your gold mine is more refined and specialized. Things like smaller manufacturing and smaller ecommerce should be a focus.
“The key is to have a plan and tap into all of your shareholders. Volunteers are great and any local company participation goes a long way.”
Both Schjeldahl and Cox were impressed with the turnout for the meeting. Cox said that she sees far less community participation from areas larger that Cocke County.
Partnership President Lucas Graham was pleased with the evaluation and looks forwards to getting the written report in the coming months.
He hopes to move forward with several projects by targeting specific industries and using the reports suggestions moving forward.
“This was a great way to see what suggestions they have and what we need are focus to be,” Graham said.
“When we get the report back hopefully we can take these ideas and go to the City Council and CLB with them. We can look at what we all agree with and start moving forward.
“We need to start targeting projects and setting new goals,” Graham said. “This was a lot of valuable information from the people that we need to impress. We want to do everything we can to check off all the boxes that are on these industries’ lists. Hopefully we can improve on the things that are keeping us from moving past the first round of the process.”
Schjeldahl said that it would take between 60 and 90 days for the report to be filed and returned to the Partnership. The information will also go into a database that will be available for all industries to access.
Source: Citizen Tribune, by Matt Winter
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published February 8, 2018