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Entergy Teamwork Arkansas Annual Luncheon February 9, 2005 Automotive Site Selection Process

Entergy Teamwork Arkansas Annual Luncheon February 9, 2005 Automotive Site Selection Process. Presented by Dr. Buzz Canup Canup & Associates, Inc. Location and Site Selection A SYSTEMATIC AND PROVEN PROCESS. PHASE 0: PRE- PROJECT ANALYSIS. PHASE I: MACRO ANALYSIS. PHASE II: MICRO

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Entergy Teamwork Arkansas Annual Luncheon February 9, 2005 Automotive Site Selection Process

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  1. Entergy Teamwork ArkansasAnnualLuncheonFebruary 9, 2005Automotive Site Selection Process Presented by Dr. Buzz Canup Canup & Associates, Inc.

  2. Location and Site SelectionA SYSTEMATIC AND PROVEN PROCESS PHASE 0: PRE- PROJECT ANALYSIS PHASE I: MACRO ANALYSIS PHASE II: MICRO ANALYSIS PHASE III: FINAL NEGOTIATIONS

  3. EVERY ECONOMIC DEVELOPMENT PROJECT IS DRIVEN BY A “NEED!” THE “NEED” ESTABLISHES PROJECT CRITERIA

  4. TWO TYPES OF PROJECT CRITERIA “MUSTS” AND “WANTS”

  5. “Must” Criteria • Are absolute for success • Can not be compromised Go/No Go Screen Criteria 1. Property Size 2. Rail Available 3. Airport - 1 hour 4. Water Available 5. Gas Available Yes Yes No No Yes Alternative Eliminated

  6. “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 Locations 10 9 8 7 6 5 4 3 2 1 Most Least Important Important

  7. Typical “Musts” for Assembly Plants • Labor • Competitor Location Avoidance • Transportation • Site & Infrastructure • Air Quality Status

  8. Typical “Wants” for Assembly Plants • Recruitment & Training • Acceptable Recurring Costs • Acceptable Investment Costs • Risk Minimization • Competitive Incentives

  9. The Cold Hard FactsAbout Site Location Searches • DEFINE • DELINEATE • DISCRIMINATE • Eliminate

  10. Evaluating MEGA Project Sites What Is the Objective?Eliminate? Define How to Make it Work?Spend Whatever It Takes?

  11. SITE CONSULTANT’S JOB: FIGURE OUT WHY A SITE WILL NOT WORK ECONOMIC DEVELOPER’S JOB: FIGURE OUT HOW TO MAKE THE SITE WORK

  12. Typical Site Factors • Size, Configuration & Control • Environmental & Geotechnical Conditions • Utilities, Zoning & Neighboring Land Use • Ingress & Egress

  13. NISSAN & MISSISSIPPI AN EXAMPLE OF A MEGA PROJECT SUCCESS STORY

  14. The Commitments Phase I Announcement November 9, 2000 NISSAN $930 M Investment 4,000 Jobs 1.5 M Sqft Facility 250,000 Vehicles/Year MISSISSIPPI $295 M Investment Infrastructure Pad Ready Site Custom Incentives

  15. The Commitments Phase II-A Announcement June 24, 2002 NISSAN $500 M Investment 1,300 Jobs 1.0 M Sqft Addition 150,000 Vehicles/Year MISSISSIPPI $68.5 M Investment Infrastructure Upgrades Site Development Grant Extended Incentives

  16. Total Commitments Phase I & II-A NISSAN $1.43 Billion Investment 5,300 Jobs 2.5 M Sqft Facilities 400,000 Vehicles/Year MISSISSIPPI $363.5 M State Investment $ 24.6 M Federal Highway Funds $ 17.0 M Federal Highway Funds $ 20.0 M County Investment $415.1 M Total

  17. Mississippi Investments by Category Category Phase I Phase II-B Totals Site & R-O-W Acquisition $40.0 $0.0 $40.0 Site Development $40.0 $15.0 $55.0 Roads & Highways $30.0 $2.0 $32.0 Water, Sewer, Gas Pre-treatment $42.0 $18.0 $60.0 Transportation Cost Off-set $28.0 $10.0 $38.0 Recruit & Training $80.0 $23.5 $103.5 University – CAVS $28.0 $0.0 $28.0 Advertising & Marketing $5.0 $0.0 $5.0 Administration & Miscellaneous $2.0 $0.0 $2.0 Totals $295.0 $68.5 $363.5 Federal Highway Funds $24.6 $17.0 $41.6 County Bonds $20.0 $0.0 $20.0 Grand Totals $339.6 $85.5 $415.1

  18. NISSAN PHASE I BREAK EVEN A break-even point during 2007…when revenues of the project exceed cost to the State $

  19. NISSAN PHASE I REVENUES 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.

  20. Questions& Answers

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