With Competition Heating Up, Southeastern States Grapple With Challenges in Providing Shovel Ready Sites for Prospective Projects
Entering 2025, industrial project activity across multiple industries remains strong in the southeastern region of the United States. Significant Congressional enactments, including the Inflation Reduction Act and the CHIPS Act, have resulted in a 20-year high for United States manufacturing construction. The southeast has become a hotbed for industrial activity and site selection projects for large-scale manufacturing facilities.
A business-friendly operating environment, sufficient power supply, impactful incentive tools, and access to a major population center with a proven skilled workforce pipeline are top drivers in the site selection process. Over the past couple of years, many of the southern states possessed most or a majority of these top drivers. As a result, the region has seen an influx of activity. With these successes, new challenges have emerged in maintaining a steady stream of quality sites.
For example, over the past two years, North Carolina has announced that Vinfast will invest $4 billion for an automobile manufacturing facility in Chatham County, Toyota will invest $8 billion for a battery facility in Randolph County, and Wolfspeed will invest $5 billion for a silicon carbide wafer manufacturing facility in Chatham County. And, in the fall of 2024, Natron Energy announced its plans to invest $1.4 billion to establish a sodium-ion battery giga-factory at the Kingsboro CSX Megasite in Edgecombe County.
Following these announcements, North Carolina found itself in an interesting predicament—with no qualified mega-sites for prospective companies looking to locate in the state. Many southeastern states are facing similar supply issues for large-scale sites, which remain in high demand but in low supply. In response to this, many state legislatures are beginning to appropriate public funds earmarked for the development of large-scale sites.
Three years ago, North Carolina leaders had the foresight to do something about the potential shortage of development-ready land and, since then, have put two critical programs in place. In 2022, the North Carolina General Assembly appropriated $1 million to establish the Megasite Readiness Program.[1] As part of the Megasite Readiness Program, the legislation directed the Economic Development Partnership of North Carolina (“EDPNC”) to engage a national site selection firm to identify up to five megasites best positioned to successfully serve major advanced manufacturing projects.[2] In May of 2023, the Megasite Readiness Program Report identified six potential sites for development in Brunswick, Wilson, Pitt, Nash, Cumberland, and Rowan counties (the “Megasite Report”). All are close to major highway systems with access to railroads and ports. Following the issuance of the Megasite Report, the North Carolina General Assembly then appropriated additional funds for megasite development in an effort to enhance the sites identified in the Megasite Report ($10 million for use in the 2023-24 fiscal year and $97.8 million for use in the 2024-25 fiscal year).[3]
In addition to funding megasite development, the General Assembly allocated $10 million during its 2024-25 fiscal year to fund a new “NC Selectsite Readiness Program” and directed EDPNC to identify 15 other smaller locations with development potential.[4] The NC Selectsite Readiness Program Report was issued on July 1, 2024, identifying the State’s top fifteen “select sites”, which is statutorily defined as “a parcel of contiguous property consisting of less than 1,000 acres that is viable for industrial development…”
As part of North Carolina’s incentive package offered to Natron Energy, certain infrastructure improvement funding was promised from the North Carolina Megasite Readiness Program. Following Natron’s announcement, the Board of Directors of EDPNC approved the allocation of roughly $30 million in support of Natron’s facility at the Kingsboro CSX Megasite.
Christopher Chung, EDPNC CEO, readily acknowledges the impact these proactive measures taken by the NC General Assembly are having on economic development in North Carolina. “In recent years, North Carolina has had considerable success in attracting large economic development projects, and the Economic Development Partnership of North Carolina (EDPNC) was tasked to oversee the Megasite Readiness Program to better prepare our state to welcome more of that success. With the [Megasite Readiness] fund, the state can support the recruitment of large announcements like Natron, which will positively impact Edgecombe County. We look forward to welcoming more projects to our current and future megasites.”[5]
While incentives can play a role in luring companies to specific states, having a robust pipeline of available shovel-ready sites is critical for states to remain competitive. Though megasites certainly can’t be built in a day, the planning efforts undertaken by EDPNC at the direction of the North Carolina General Assembly are certainly a great start. States with a broad and deep range of quality sites, from 30-acre sites to full-scale megasites, will prove critical for future economic development wins. As we move into 2025, it will be important that current and future state and federal leaders continue to support infrastructure growth through planning and funding support to ensure opportunities will continue to exist.
[1] See Section 11.11 of S.L. 2022-74.
[2] Disclaimer: Following a public competitive bid process, EDPNC engaged Jones Lang LaSalle (JLL) and its partner firms, Timmons Group and Maynard Nexsen PC.
[4] See Section 11.12 of S.L. 2023-134.
[5] https://edpnc.com/news/natron-energy-kingsboro-megasite-announcement/#:~:text=%E2%80%9CIn%20recent%20years%2C%20North%20Carolina,success%2C%E2%80%9D%20said%20Christopher%20Chung%2C
About Maynard Nexsen
Maynard Nexsen is a full-service law firm with more than 550 attorneys in 24 offices from coast to coast across the United States. Maynard Nexsen formed in 2023 when two successful, client-centered firms combined to form a powerful national team. Maynard Nexsen’s list of clients spans a wide range of industry sectors and includes both public and private companies.