TVA says Toyota decision bolsters ‘megasite’ program

Published 7:19 pm Thursday, March 1, 2007

Of 25 industrial sites considered by Toyota Motor Corp. for a new assembly plant, two of the three finalists were certified “megasites” by the Tennessee Valley Authority’s economic development program.

One of them — a 1,700-acre site near Tupelo, Miss. — was the winner announced by Toyota on Tuesday for the $1.3 billion, 2,000-employee sport utility vehicle plant.

“I think it just gives credibility to the program,” said John Bradley, TVA’s senior vice president for economic development.

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Knoxville-based TVA, the nation’s largest public utility, began the megasite program in 2004 using site-selection experts McCallum, Sweeney Consulting of Greenville, S.C., to identify large tracts in the Tennessee Valley suitable for automotive manufacturers and related industries.

“It is all about doing due diligence on the sites,” Bradley said. “You are saving (prospective tenants) six to nine months in the site selection process. So you are six to nine months ahead of your competition.”

A 1,400-acre site in Columbus, Miss., was snapped up by international steel company SeverCorr for an $800 million, 450-employee mill barely a month after the megasite program began. Now comes Toyota in Tupelo.

TVA has six more megasites on inventory in Clarksville, Tenn.; Haywood County, Tenn.; Crockett County, Tenn; Columbus, Miss.; Hopkinsville, Ky.; and a Toyota finalist in Chattanooga, Tenn.

Bradley has high hopes for all of them, but particularly Chattanooga, which he said wouldn’t have made it into Toyota’s final round — with Marion, Ark. — if it wasn’t desirable.

First, he said, “Look at Toyota and their locations over the past couple of years. They don’t eliminate sites, they bank sites for future growth.”

Toyota scouted a site in Jackson, Tenn., some years ago for a manufacturing plant, rejected it, then came back and built an engine plant there.

It won’t be the last time. “There is going to be more, and there’s going to be others,” Bradley said. “We think for the Southeast, you are going to continue to see growth.”

TVA also brings to the bargaining table a power system that supplies 8.6 million consumers and several large industries in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia. It also provides infrastructure incentives, though Bradley said TVA’s piece of the Toyota-Tupelo package will be less than 1 percent of the total.

“From an industrial standpoint, we are competitive” on industrial electric rates in the region, Bradley said, a factor for both the Tupelo and Chattanooga sites.

Price is only part of the equation for increasingly high-tech industries that need dependable power to drive their factories.

“Really, the critical issue with electricity is reliability,” he said. “It is becoming more and more apparent, you will save them more money on reliability than you will with rates. And our reliability record is second to none.”

Bradley said TVA should have no problem meeting the power requirements of the Toyota plant in Tupelo, which will need about 25 megawatts of capacity, enough to supply about 15,000 homes in the Tennessee Valley.

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