< Previous164 NOVEMBER 2018 SI T E S E L E C T IO N“Relationships over the last years paid dividends,” he says. “ e city has a favorable tax structure. Virginia adopted the Semiconductor Equipment Tax back in the early s in part for this company. It allows us to set a unique tax rate for them. We can adopt this separate tax classifi cation for semiconductors.”Other arrangements made the deal favorable for Micron, Small adds. “We can adjust the semiconductor rate each year so that they will have gradual increases to their bill. We agreed to a rate schedule to that eff ect,” he says. “As they put this equipment in and ramp up, the tax rate will be adjusted downward.”‘It Was Virginia Versus the World’ e city also agreed that Micron would pay for capital improvements for infrastructure rather than pay tapping fees. “ is allows them to more closely control the time frame of the approval process,” says Small. “ e tax adjustments, the utility improvements and the permit fees were all is is the biggest project that the state has worked on since VEDP was created, and one of the biggest manufacturing projects in state history.”— Stephen Moret, President & CEO, Virginia Economic Development Partnership is is the biggest project that is is the biggest project that the state has worked on since is is the biggest project that S I T E S E L E C T I O N NOVEMBER 2018 165pivotal parts of this custom package deal.”Also, by locating the plant in the U.S., Micron avoids having to pay tariffs for sales to U.S. customers.Small says the project smashes previous records. “This is the largest capital investment project in modern Virginia history,” he says. “It is the largest export project in state history, and this company is currently the state’s single largest exporter.”Moret says the Micron investment signals that Virginia “will be a leader in unmanned systems and autonomous vehicles on roads and in space. Driving this new facility in Manassas is the future of autonomous systems and all the computing power they involve. This is very high-wage and clean manufacturing, and increases our total exports 3 to 5 percent.”Phase one of the project will see the construction of just under 200,000 sq. ft. (18,580 sq. m.) on the former IBM campus near the Manassas Regional Airport. The campus is also home to BAE’s space division and Lockheed Martin’s underseas division.Todd Haymore, managing director of global economic development, commerce and government relations for Hunton Andrews Kurth, the law firm that represented Micron, says, “I knew that it was Virginia versus the world. It was competitive, particularly given the overseas market. It really became Virginia versus Southeast Asia. This was not only a huge victory for Virginia. This sector could continue to flourish and grow in the United States.”Haymore, who served as commerce and trade secretary under previous Virginia Gov. Terry McAuliffe, said that a “decisive factor” was the fact that Virginia was already home to a major Micron manufacturing facility. “They [Micron] recognized that Virginia is always ranked as one of the best states in America for doing business. We had a home field advantage. Everyone at every level in the state stepped up to the plate.”Micron said that the initial expansion will be finished by the fall of 2019, with production slated to begin sometime in the first half of 2020. Micron added that it intends to spend about $8 billion on capital outlays in 2018, meaning that more than a third of its spending will be at a single site in the U.S.Manassas is a big winner in this deal too. A city of just 10 square miles and 43,000 people, Manassas now has the fourth-highest professional and technical wage in Virginia and 166 NOVEMBER 2018 SI T E S E L E C T IO Nthe 10th-highest weekly overall wage in the state. Unemployment in the city is under 3 percent.“We are a regional employment center,” notes Small. “More than 20,000 workers commute into the city every day. That is a direct testament to the corporate base that we have. We are a hidden gem within the Northern Virginia market.”Moret: Virginia May Not Be Done YetThe Micron announcement comes at a time when Virginia is working hard to land Amazon HQ2, a $5-billion project that could bring 50,000 high-paying jobs to the region.Gov. Northam says Virginia remains on the short list for Amazon, and adds that a location near Micron in Northern Virginia would be a highly competitive option for the Seattle-based e-commerce giant. Major data centers for Amazon, Google, Apple, Microsoft and other large tech companies already call the region home.Perhaps alluding to things to come, Moret offered this closing thought: “This is not the last billion-dollar-plus deal that we will announce in Virginia this year.” Ballast Point Brewing Company opened its first East Coast brewing operation and restaurant in June 2017 in the Botetourt Center at Greenfield business park in Daleville, north of Roanoke.Photo courtesy of Roanoke Regional Partnership S I T E S E L E C T I O N NOVEMBER 2018 167As more people shop for products online, more companies will be looking to open fulfi llment centers in the best locations. According to a Statista report on global e-commerce, nearly half of Americans prefer to shop online rather than visit brick-and-mortar stores. As technologies continue to evolve and make shopping easier and companies adapt to the changing market, that proportion is likely to grow larger. By , worldwide e-commerce sales are expected to grow threefold — from $. trillion in to $. trillion, according to Shopify Plus, an e-commerce platform for high-growth merchants. Increasingly, e-commerce companies looking for logistic hubs have found the Kansas side of the bi-state Kansas City region to be ideal. For years, companies such as Amazon, J.C. Penney, Home Depot, Foot Locker, Target and Walmart have used the Sunfl ower State’s logistical advantages to ship goods quickly.by S AVANNAH K INGs avannah.king @ site s ele c tion.c omST A TE SPO TLIGHTKansasPhoto: Getty Images168 NOVEMBER 2018 SI T E S E L E C T IO NHardwired for Movement e state’s road system earned Readers Digest’s No. ranking for the best roads in the country back in — and as a major trucking hub in the heartland of America the state’s more than , miles of roads are well traveled. Easy access to the east and west coasts on I-, and links from the heartland to Mexico and Canada on I- and I- make moving goods via ground expedient. e state’s more than miles of Missouri River waterfront and eight commercial terminals also provide aff ordable transportation of goods, as do the state’s four Class I and Class III rail carriers. Several air cargo carriers including Airborne Express, Air Cargo Carriers, Baron Aviation, BAX Global, DHL Airways, Federal Express, UPS and the USPS serve the state. Kansas City International Airport, on the Missouri side, is the primary passenger and cargo service provider for the state and neighboring states of Missouri, Iowa and Nebraska. e Wichita Mid-Continent Airport is another key cargo airport. “ e region’s central location and infrastructure mean percent of the U.S. population can be reached from Kansas City within two days or less. at equals huge value for e-commerce fulfi llment,” says Tim Cowden, president and CEO of the Kansas City Area Development Council. According to a Transportation Outlook study produced by KC SmartPort, the Kansas City region has witnessed increased manufacturing growth and an improved intermodal market. In fact, National Real Estate Investor ranked Kansas City the No. mid-country intermodal market. Since opening in , Port KC has also witnessed record growth with a -percent increase in tonnage. e terminals in the Kansas City region are predicted to increased annually by to percent. KC SmartPort is a non-profi t economic development organization that works to attract freight-based businesses such as manufacturing, distribution and warehouses to the -county, bi-state Kansas City region.Customers in MindIn September one of the largest online home goods and furniture retailers in the world, Overstock.com, Inc., chose to locate its newest distribution center in the heart of the country. e Utah-based e-commerce company announced it would create over jobs at the ,-sq.-ft. (,-sq.-m.) facility in Kansas City, Kansas, over the next two years.“Selecting Kansas City as the home of Overstock’s newest fulfi llment center allows us to off er over percent of our U.S. customers two-day shipping options, improving shopping experiences by getting orders into the customer’s hands as soon as possible,” said Overstock.com Vice President of Supply Chain Carroll Morale. “We’re extremely thankful for all of the support and collaboration we’ve received from state and local Our presence in Kansas will help us expand our ful llment operation and create better customer experiences.” — Steve Voudouris, CEO and Founding Partner, Turn5Our presence in Kansas will 170 NOVEMBER 2018 SI T E S E L E C T IO Noffi cials and the Kansas City Area Development Council during this expansion process.”Not one to waste any time, Overstock began operations from the leased facility in October and plans to expand the facility’s operations to include returns processing in the future. “Kansas off ers a great central location and the best workers in the country for any company looking to relocate here. We are thrilled that a successful company such as Overstock has selected Kansas City for its latest distribution center,” said Governor Jeff Colyer. “Opening for business in Kansas will provide Overstock.com with an excellent strategic location and creates hundreds of well-paying job opportunities for Kansans.”Another e-commerce retailer also selected the Kansas City region for its newest distribution center. Turn, which sells aftermarket performance products for the auto retail industry, is based in Pennsylvania and is the operating company for AmericanMuscle.com, ExtremeTerrain.com and AmericanTrucks.com. In , the company won EY Entrepreneur of the Year and has earned recognition from magazines such as Inc., Entrepreneur Magazine, SBA and Bizrate. e new operation, located in a ,-sq.-ft. (,-sq.-m.) space, offi cially opened its Lenexa location this fall and expects to add jobs over the next three years.“We are very pleased that Turn has chosen Lenexa for their new facility,” said Mike Boehm, mayor of Lenexa. “We have a growing number of high-profi le e-commerce and logistics centers in our community, and More and more companies recognize KCK as a leading logistical destination. We have a ready workforce, a great location both in the KC metro area and regionally, and a business-friendly community.” — Kansas Governor Jeff Colyer on the economic development momentum in the city of Kansas City, Kansas172 NOVEMBER 2018 SI T E S E L E C T IO Nwith their focus on customer service, employee engagement and community involvement, they will be a perfect fi t. We appreciate their commitment to our city.”“We value our long-term relationships with customers, and connecting with like-minded people from all over the country who share a passion for customizing their vehicles and making them genuinely unique,” said Steve Voudouris, CEO and founding partner of Turn. “ rough excellent web design, rapidly growing video content, and award-winning customer service, we tap into our customers’ enthusiasm and join them on every step of their journey. Our presence in Kansas will help us expand our fulfi llment operation and create better customer experiences.”Healthy RootsCompanies that decide to make a home in the region often fi nd that growth is inevitable. Take Shamrock Trading Corporation, for example. e company and its affi liated companies provide services for the transportation industry, with offi ces in Chicago, Dallas and Nashville. But headquarters has been in the Kansas City suburb of Overland Park, Kansas, for years. In July, Shamrock announced a major expansion to its operation in Overland Park that will create more than , jobs with an average wage of $,. e company’s employee base has skyrocketed by percent over the past three years.Since Shamrock has offi ces across the U.S., it considered locating the expansion in other states, but Selecting Kansas City as the home of Overstock’s newest ful llment center allows us to o er over 99 percent of our U.S. customers two-day shipping options, improving shopping experiences by getting orders into the customer’s hands as soon as possible.”— Carroll Morale, Overstock.com Vice President of Supply Chain S I T E S E L E C T I O N NOVEMBER 2018 173ultimately decided on Kansas due to the state’s overall business climate and workforce. The expansion is awaiting approval from the city council to build three multi-story office buildings on 30 acres (12 hectares) across from the company’s existing headquarters, which will be demolished.“This location could be ideal for the expansion of our current campus,” said Shamrock COO Tom Sullivan. “Shamrock has its roots here in this community. For three straight years, we’ve been named one of the Best Places to Work in Kansas City because we genuinely care about our people. If they’re happy, we’re happy.” Employing more than 5,400 and using nearly 4,770 miles of track, the 13 railroads in Kansas include 4 Class Is, led by BNSF and UP.Next >