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VOL. 11 | NO. 4 | Saturday, January 27, 2018

MEGA HYPE

West Tennessee is still waiting to reap the benefits of the Memphis Regional Megasite

By Patrick Lantrip

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In physics the larger an atom is, the more polarizing it can become. The same can be said of real estate development. So it’s not surprising that something referred to as a megasite can incite a range of opinions that are as vast as the site itself.

And vast it is. Clocking in at 4,100 acres, the Memphis Regional Megasite, which is actually located to the east in Haywood County, has seen its fair share of equally vast ups and downs over the past decade.

Though the megasite has been billed by economic development officials as a transformative project that could enhance the livelihoods of more than a million people in the region, many members of the community are split on whether the megasite is actually a good thing.

On one side of the argument, the state hopes to land a new multibillion dollar project that could employ thousands of West Tennesseans, while on the other hand many people argue that the environmental impacts on the communities near the Mississippi River outweighs the possible economic impacts.

Tennessee Department of Economic and Community Development commissioner Bob Rolfe said the ideal use for the megasite would most likely be another original parts manufacturer (OEM), much like the Volkswagen and Nissan plants that moved into two of the state’s other megasites.

“It would complement our automotive industry that has become such a large part of the Tennessee economy,” Rolfe said. “Thanks to Nissan, General Motors and Volkswagen today our state is home to 900 automotive related companies that are supportive of the OEMs.”

Rolfe said that since the OEM assembly plants tend to attract a number of support industries and suppliers, the sheer size of the Haywood County site is major selling point.

“That’s why this 4,100 acres gives a potential OEM non only the bandwidth to stand up an enormous plant, but also the extra acres to have park that wraps around the manufacturing facility,” he said.

Businessman Bill Lee, standing, and other candidates for Tennessee governor pledged to make the regional megasite and West Tennessee priorities for economic development if elected.   (Memphis News/Houston Cofield)

If the megasite envisioned by state is realized, it would most likely result in thousands of jobs, more than a billion dollars in investment and be considered a grand slam for West Tennessee.

But since the site is located more than 50 miles from Shelby County, what if any benefit will it have on its eponymous city.

“The type of facility we are looking to bring there will have thousands of employees, they will probably invest billions of dollars, and I would predict over 80 percent of the workforce will come out of Memphis,” Mark Herbison, senior vice president of economic development with the Greater Memphis Chamber said. “You will also see a lot of the businesses located in Memphis from a vendor perspective and raw material supplier perspective.”

Herbison said that if you look at Shelby County in general, there are few sites with more than 250 acres that are available for industry, so having such a large tract of land not too far from the county border helps to land a large-scale OEM.

“If you look at the Memphis area, one of the things that we are struggling with right now is we don’t have as much land or as many industrial buildings available as we use to have,” he said. “We’ve been very successful over the last decade in putting manufacturing plants, new distribution facilities and things like that in the community.”

To sell the land to perspective clients, Herbison and the chamber work with a coalition of other regional economic development officials.

“When a company comes and looks at the site, what you are primarily doing is selling Memphis, because any company that goes there understands they are probably going to live in Memphis, their families are going to live in Memphis, and their employees are going to live in Memphis for the most part,” he said.

Herbison said they spend a significant amount of time selling the city’s amenities to the prospects that look at that site.

“We do a lot of touring of the community, we’ll take out the executives and consultants in cars and drive them through the suburbs, drive them through Memphis, show them various things that we have talked about,” he said. “They also want data on our workforce, our neighborhoods, our taxes, cost of housing, cost of living, so we are providing a lot of analysis and data to these perspective companies looking at our community.”

Over the past decade the state has committed $145 million to the Memphis Regional Megasite, with $88 million of that having already being spent to prepare the site for a future tenant.

But despite the investment, the megasite was recently passed over by a Toyota-Mazda joint venture because it was not deemed “shovel-ready.”

Instead, the Japanese automakers took their $1.6 billion auto plant that will employ 4,000 people to Huntsville, Alabama.

The news that Memphis was out of the running for the Toyota-Mazda plant became a huge talking point for gubernatorial candidates who all pledged to finally make the long-awaited project a reality, including State Rep. Craig Fitzhugh, who said has been working on the mega site almost since its inception.

“It’s frustrating,” Fitzhugh said at a legislative luncheon in Jackson, Tennessee on Tuesday, Jan. 9. “I’d say that the biggest moral failure in the Legislature since I’ve been there is the failure to expand Medicaid – the biggest frustration has been the West Tennessee Megasite. Because it is a good site, there are still automotive and other manufacturers who will come here, we’ve just got to finish it.”

But for the site to become shovel ready, the logistics of the site’s sewage facility needs to be resolved.

“The one pacing item is developing a wastewater treatment plant on the campus, and that is basically to treat the discharge wastewater on campus before it is pumped to the Mississippi,” Rolfe said.

Since Haywood is a landlocked county, the wastewater will have to be shipped nearly 40 miles west to the Mississippi River via an 18-inch pipe that would run three feet underground. But before any water can be discharged, the state has to have the necessary permitting from the Tennessee Department of Environment and Conservation.

“We want to be as neighborhood friendly as we can possibly be,” Rolfe said. “Knowing that we have to adhere to the water quality standards that TDEC imposes, and knowing that TDEC is the agency that has to issue the permit, we think of them as a partner in this process.”

The state’s original plan to discharge the water near the town of Randolph, Tennessee, did not go over as well as planned.

There were more than 400 letters of opposition, many signed by residents in Tipton County opposed to the idea of discharging millions gallons of industrial wastewater near their town.

“In the past TDEC has always required fairly specific information about what chemical compounds might be run though the facility,” Scott Banbury, conservation program coordinator with the Tennessee Chapter of the Sierra Club said. “And in this case they just don’t know so we’re being asked to give out a permit for something that is just unknown as to what its impacts will be.”

Banbury said this plan asked the Tipton residents to pay the price without receiving very much benefit.

“Where they decided to put that outfall is a spot that anybody from the area knows does not connect directly to the Mississippi River for much of the summer,” he said. “It actually becomes separated from the Mississippi from a sandbar that emerges at lower river stage.”

Banbury said that when the river is low, the pipe would have been most likely exposed and discharging directly onto a mud flap.

Nick Crafton, a local chemical engineer whose family has farmed land around the area for years, shares Banbuy’s sentiments.

“My preference would be that the state incentive be spread out to the Port of Memphis, the old Firestone plant or the International Harvester plant,” he said. “You redevelop areas, not go out to big expansive greenfields to sprawl out further.”

Crafton also said that developing a site with a high population density is beneficial to the wastewater treatment process.

“You want your wastewater to be mixed and blended, you actually need some of the domestic wastewater for the treatment process,” Crafton said. “It will actually help clean up some components of industrial discharge, which is stouter, stronger and harder to treat with the primary and secondary treatment systems.”

In addition to his environmental concerns, Crafton is also concerned about the economic feasibility of the project going forward.

“Everybody has been pitched this site, and there is nobody to take it,” he said. “The consensus among a lot of folks is that the reason the incentives ran so high between Randolph County, North Carolina, and Huntsville was that the Toyota-Mazda project was probably going to be the last one for a while.”

After the news of Toyota-Mazda was announced, North Carolina’s commerce secretary announced that the state was prepared to offer a $1.6 billion incentives package, which was turned down in favor of the Huntsville deal.

On Jan. 22 Rolfe appeared at the Memphis Regional Megasite Authority board’s quarterly meeting in Jackson to announce the state was going to withdraw and amend the plans for the megasite’s pipeline.

While the exact details of the new plans have not been released, Rolfe said that plans would extend the pipeline an additional four miles to a nearly 100-foot deep portion of the Mississippi River where the currents are stronger.

Once the new application is submitted, TDEC will reopen the public hearing process before making a decision on the permit.

To fully bring the megasite up to speed, Rolfe told the authority board that he has been in discussions with the governor to secure additional funding to ensure that the site is shovel ready.

“We communicated to the Senate Commerce Committee approximately $80 million is our funding gap to totally build out the megasite from an infrastructure perspective,” he said.

Rolfe said Haslam has indicated that there will be additional funding included in his upcoming presentation to the General Assembly.

“What he has not communicated with us, which I think we all want to know, is what is the ‘it’ number,” Rolfe said. “We don’t know, but I can just simply say with confidence that he continues to be very supportive, this is one of his major initiatives and priorities.”

Meanwhile, Rolfe and his department will continue to market the megasite to as many possible clients as possible.

“Projects of this size do not come around every day, and though it is about timing, I can promise you that there is so much going on in the manufacturing world and our economy is moving fairly aggressively, we continue to see some good interest in the megasite,” Rolfe said.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 133 1,342
MORTGAGES 0 131 1,047
FORECLOSURE NOTICES 20 39 190
BUILDING PERMITS 0 305 3,056
BANKRUPTCIES 17 135 753
BUSINESS LICENSES 0 53 329
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0