< Previous116 JULY 2019 SI T E S E L E C T IO N Biomass will pledge proceeds from expanded shipments as a match for state and port funding of the future chambering yard. Small U.S. Commerce Grant Just One Piece of the Picture in Houma More funds headed to another mode of transportation in another region of Louisiana in June. Assistant Secretary John Fleming of the U.S. Economic Development Administration came to Houma-Terrebonne Airport to announce a $. million airport infrastructure grant from the EDA, part of the U.S. Department of Commerce, to fund taxiway, access road, ramp and utility improvements for an undeveloped -acre parcel that will become a Gulf of Mexico Center of Excellence for Large- Unmanned Aircraft Systems, or L-UAS. e grant will also help fund the installation of high-performance data lines connected to LONI, the Louisiana Optical Network Initiative for supercomputing applications. Gov. Edwards signed an executive order at the event designating the airport as Louisiana’s L-UAS site with the Federal Aviation Administration, or FAA. Future improvements will include a new ,-square-foot hangar that will house automated navigation systems for unmanned aircraft fl ying the Gulf of Mexico for oil and gas, hurricane reconnaissance, coastal protection, homeland security, research and military missions. At full development, the L-UAS Center of Excellence will create new jobs, retain jobs and generate $ million in new private investment, according to EDA estimates. e announcement took place at the “super-base” hangar of helicopter transport company ERA Group Inc., which will additionally provide nearby temporary space for the new unmanned aircraft center. Fueled by the energy sector, the Houma-Terrebonne Airport ranks No. in the world for the total number of helicopter fl ights per year. Biomass will pledge proceeds from expanded shipments as a match for state and port funding of the future chambering yard. Small U.S. Commerce Grant Just One Piece of the Picture in Houma of transportation in another region of Louisiana in June. Assistant Secretary John Fleming of the U.S. Economic Development Administration came to Houma-Terrebonne Airport to announce a $. The Louisiana Offshore Oil Port (LOOP) now is out tted for export too. Image courtesy of LOOP S I T E S E L E C T I O N JULY 2019 117 e project has other dimensions too: Louisiana Tech University’s Dr. Sumeet Dua, who oversees research and partnerships, signed a Memorandum of Understanding with airport commission Secretary-Treasurer Joshua Alford to establish Louisiana Tech’s Department of Professional Aviation as a formal fl ight training and operations partner at the L-UAS Center of Excellence. Similar MOUs are in place with Fletcher Technical Community College to train avionics, sensor and logistics technicians, along with airframe, powerplant and ground equipment mechanics; and with Nicholls State University to provide big data analytics, integration of high- speed, real-time sensors, and development of automated platforms for unmanned aircraft. Project Snapshots Among other Louisiana projects in recent weeks and months: • Veolia North America announced in late June it will make a $ million capital investment to expand its regeneration plant in Darrow, Louisiana, in Ascension Parish. Known as the Burnside facility, the Veolia plant converts spent sulfuric acid into fresh commercial-quality sulfuric acid, and produces sulfur-based products for the refi ning industry and others. Veolia will retain all employees with an average annual salary of $,, plus benefi ts. • Coast Professional , which specializes in outbound calls to resolve debt for federal customers and colleges, announced it will retain jobs and create new jobs in expanding its West Monroe contact center, in operation since . e new jobs will pay an average annual salary of $,, plus benefi ts. e expansion involves the conversion of a former Sears Hometown store. Among other June it will make a $ million capital investment to expand its regeneration employees with an average annual Veolia’s Burnside facility in Darrow, Louisiana Photo courtesy of Veolia118 JULY 2019 SI T E S E L E C T IO N incentives, the company is expected to utilize Louisiana’s Enterprise Zone Program, which includes a tax credit of up to $3,500 for each net new job created. • Viemed Healthcare , a respiratory care company for in-home patients, in June announced it will expand its HQ and create 220 new jobs in Lafayette. Viemed operates in 27 states, with plans to expand to most of the United States. In addition to retaining 114 jobs, Viemed estimates it will add 70 professional headquarters jobs at a new company complex and add 150 healthcare service jobs over the next five years. • Full Armor Films , a motion picture production company operating in New Orleans and New York, is expanding its Louisiana operation under the state’s Entertainment Job Creation Program, signed into law in 2017 to cultivate sustainable jobs for motion picture, digital, music and theatrical industries in Louisiana. Under the program, also known as the Qualified Entertainment Company incentive, for jobs paying $45,000 or more annually, the employer may claim a 15% payroll tax credit. That credit increases to 20% for new jobs paying more than $66,000 a year. A similar credit was established for music-related companies. • Cyanide maker Cornerstone Chemical Co. intends to invest $100 million in an expansion of its sole plant in Waggaman, Louisiana, in Jefferson Parish. But a project approval by the parish council was revoked in April after concerns were raised about safety and environmental controls. The company within days sued the parish. The Fortier manufacturing complex was first established in 1953, where the company makes a number of products essential to such products as carbon fiber, headlights and cellphone cases, for on-site tenant Evonik Industries. • Ruston-based Hunt Forest Products LLC and Tolko Industries Ltd. of Canada in May dedicated the new $115 million LaSalle Lumber Company LLC sawmill in the Central Louisiana community of Urania. S I T E S E L E C T I O N JULY 2019 119 LaSalle Parish played a significant historical role in establishing the Louisiana forest products industry in the 19th century. The new LaSalle Lumber project led to construction of the mill during 2018 and to the creation of 115 new direct jobs. LaSalle Lumber Company also is supplying residual wood waste to LaSalle BioEnergy, a renewable energy manufacturing plant operated by Drax Biomass and located next door to the sawmill. That biomass site produces wood pellets that are shipped to the Port of Greater Baton Rouge (see above), then to export markets in the UK, where they fuel electric power generation. LaSalle Lumber and Drax are both located on the former site of a Louisiana Pacific sawmill. • Ernst & Young in May announced a new executive support center, part of the firm’s growing National Executive Assistance Team (NEAT), that will create 175 new jobs in New Orleans. The center, located at EY’s remodeled office, supports EY executives across the country. The firm plans to hire an additional 25 employees to support the firm’s risk services function. “I’m proud to see a global powerhouse like EY investing in New Orleans this way,” said Mayor LaToya Cantrell. “They are not just standing up a new professional service center, they are standing with the people of New Orleans by creating jobs and deepening their commitment to the city.” Over the past five years, the New Orleans EY office has grown nearly 30% to more than 180 professionals. “The opening of our NEAT center as well as the renovation of our office space underscores our firm’s commitment to this market and to our people,” said Brian Rotolo, Louisiana Managing Partner, Ernst & Young LLP. “We are dedicated to advancing the firm’s purpose of building a better working world.” 120 JULY 2019 SI T E S E L E C T IO N The Sooner the Better ST A TE SPO TLIGHT Oklahoma Oklahoma Governor J. Kevin Stitt intends to boost his state into the top 10 of virtually any ranking that matters. Reminding his cabinet secretaries that all roads lead to the Commerce Department is the first step. Following are highlights of a discussion between the governor and Site Selection Editor Mark Arend in early June. SS: What do you see as your role as governor in the context of recruiting capital investment to the state? Stitt: My role is similar to what I did in the private sector, which is to set the tone and the vision for the state — the overall direction. My vision is for us to be a top 10 state, so I’m cascading that vision through every single state agency, and seeing how they could provide better services, and that goes to commerce and tourism for example, and in the case of commerce, go out and recruit businesses, because we can win against other states. So that’s kind of the big picture. I want to tell the businesses that we’ll make sure that regulation is always clear, that we’ll never played gotcha with a business. Businesspeople want a level playing field — they don’t want the government to pick winners and losers. We want to create a climate to let them go compete and win. I want to make sure that we cut through the red tape, that we have speed to permitting and those kinds of things. From a governor standpoint, I got $19 million into our governor’s closing fund this year. I want to make sure that we can compete and that we can win. That is at my discretion. When Commerce tells me a project is a game changer for our state, we want to go and make that deal happen. I see my job as the main cheerleader, the visionary, the CEO that sets the culture and the tone, and hires the right people. I just can’t say enough good things about my team and how good a job they’re doing. Our Secretary of Commerce is Sean Copeland. He’s a friend of mine from the business world and he’s helping me, and I tell all my Cabinet secretaries — every one of them, whether its Energy or Environment or Agriculture — that there is a dotted line back to Commerce, because everything is about growing our state. SS: What misperceptions about Oklahoma are you eager to address and correct? Stitt: People don’t realize this about Oklahoma: We’re the 28th largest state population-wise, right in the middle, but we’re the 19th largest land- wise. When you think about natural resources we have, we’re number five in oil production. Number three in natural gas. But what people don’t realize is we’re number two in wind energy, we’ve got some of the cleanest water, cleanest air in the country. Utility prices are some of the lowest in the country for manufacturing. We’ve got the workforce and the work ethic, so we just have to tell our story and make sure people know. We’re the right location for shipping being located in the middle of the U.S., just a thousand nautical miles from anywhere. So all those things are playing in our favor. SS: Executives at companies that have invested in Oklahoma tell us it can be challenging sometimes to get people to relocate from other states, but once they do, they wouldn’t go anywhere else. Has that been your experience? Stitt: We hear that too. The quality of life is something we’ve really focused on in Tulsa and Oklahoma City. Oklahoma City is the 27th largest city in the country. We have an NBA franchise, a fantastic downtown revitalization. In Tulsa, thanks to the George Kaiser Family Foundation, we just built a $500 million park, and USA Today just ranked it the top attraction to visit in 2019. We’ve got the Arkansas River that runs right through Tulsa. So we’re much more than just the oil capital of the world. by MARK AREND mar k .ar end@ site s ele c tion.c om S I T E S E L E C T I O N JULY 2019 121 SS: Which other industries are you focused on midway into your first year as governor? Stitt: We’re very proud of our oil and gas industry. Aerospace is a huge cluster for us, and we have some incentives now around automobile parts manufacturing, so we’re really going to go after that cluster. But unmanned vehicles is also something we’re really focused on in Oklahoma because of our airspace. We’ve got some unique arrangements that we’ve negotiated with the FAA over some tribal lands, waivers on airspace and we’re really testing unmanned vehicles, drone technology. Bell Helicopters is moving in to build some of their drones there. We think the future is unmanned aerial systems. Kratos is already building some products in Oklahoma City. They’re building their Valkyrie, which is going to be an unmanned fighter. Basically you’ll have one fighter, but then you’ll have three or four unmanned vehicles on the squadrons that go out in future conflicts. That’s built in Oklahoma City. Aerospace is huge. SS: The engineer workforce tax credit program looks pretty aggressive. Even the hired engineer gets a tax credit. Is that catching the attention yet of automotive industry investors? Stitt: I believe it is. We wanted to go after the engineering workforce, because we think it’s like the chicken or the egg. We go after the workforce, we incentivize those engineers that want to be located here. We think that’s a natural thing for these companies, because it’s all about getting the right workforce. Oklahoma City and Tulsa were ranked in the top 20 new places to start a business. Oakland city was number two — it was number one last year. We’ve had some automobile manufacturers looking because of that. It’s the only incentive where both the employee and the company benefit. We’ve done this one other time with an aerospace engineering incentive. Boeing started with about 700 jobs, and they are now at over 3,500, and they’re growing at the rate of about 50 new jobs per month, because we have the same type of credit there that we have on the on the manufacturing engineering credit. SS: How do you see cybersecurity being a successful industry sector in Oklahoma? Stitt: The University of Tulsa has been a leader in cybersecurity. We have more graduates from the University of Tulsa at NSA than any other university. A distant second is MIT — we have three times more cybersecurity graduates from University of Tulsa than MIT at the NSA. Tulsa has some of the earliest high-speed fiber around. We’ve developed this cybersecurity niche, and we’ve been a hotbed for that. Getting our research universities focused on artificial intelligence, drone technology, and so forth is important to Oklahoma, and it’s something we’re a leader in. I tell all my Cabinet secretaries there is a dotted line back to Commerce, because everything is about growing our state. — Governor J. Kevin Stitt122 JULY 2019 SI T E S E L E C T IO N Missile Plant to Launch Expansion Springtime in Paris means an aero- defense industry project back home. Lockheed Martin announced at the Paris Air Show on June 17 that it is investing $142 million in its Camden, Arkansas, facility and adding more than 300 new jobs by 2024. Governor Asa Hutchinson joined company executives for the announcement, noting, “Lockheed Martin is a leading technology firm with facilities and clients around the world. Lockheed’s investment illustrates the fact that Arkansas continues to be a global player in the aero- defense industry.” The newly created jobs are growing the Camden facility workforce from approximately 700 employees to more than 900 employees in the next few years. The $142 million capital investment supports new construction and improves on existing facilities for products, new machinery and equipment important to the defense of the United States and allies. Camden is Lockheed Martin’s Precision Fires operations center of excellence. “We are very excited about what we have going on here in Camden,” noted Justin Routon, site manager, on a call with members of the media following the Paris announcement. “Lockheed’s facility is a highly efficient, high-quality center of excellence that contributes components and performs final assembly for several of our key integrated Air and Missile Defense and Precision Fires products, such as the Patriot Advanced Capability-3, Terminal High Altitude Area Defense and others.” Why Camden Got the Nod Routon says it’s Lockheed Martin’s policy to look at other existing sites and new location options when planning a new capital investment project. But growing the Camden operation made the most sense in this case. “This facility has a long record of precision manufacturing and on-time delivery,” he explains. “That’s the reason that we continue to invest in our Camden operations and consider them as a potential location for manufacturing whenever Lockheed Martin has a new product here in missiles and fire control. And the governor’s announcement today is about jobs here in Arkansas. So the expansion supports the affordability, quality and on-time delivery of systems for many different programs, which by MARK AREND mar k .ar end@ site s ele c tion.c om ST A TE SPO TLIGHT Arkansas Launch of a PAC-3 missile assembled in Camden Photo courtesy of Lockheed Martin124 JULY 2019 SI T E S E L E C T IO N is great news for all of our customers, which include most branches of the U.S. Defense Department, and also our allies around the world. It strengthens their programs and helps ensure we can continue to deliver the excellent value and reliability that Lockheed Martin is known for.” Project specifics, noted Routon, include the commitment to creating 326 new jobs by 2024. “That’s taking us from a baseline back in January of about 650 employees up to around 976 by about 2024. We’re also investing $142 million in capital to support new construction of two new production facilities, as well as improving some existing facilities for the products that we mentioned earlier.” The Math Also on the call was James Lee Silliman, executive director of the Ouachita Partnership for Economic Development, who discussed the $501,480 in local, performance-based incentives that were part of the expansion decision. “It’s broken out into two categories,” he explained, “$293,400 in job creation incentives to the 326 jobs that Lockheed has committed to creating at the Camden facility, and $208,080 in workforce training incentives. Both of those are the total incentive packages structured over a six- year drawdown per the company’s request. We will coordinate with our local two- year college in Highland Park, Southern Arkansas University Tech. They will be providing any needed workforce training for new Lockheed employees to support.” Silliman says his office also is working on a future incentives component — a PILOT (payment in lieu of taxes) agreement or property tax reduction and abatement for new facilities and equipment related to Lockheed Martin’s investment. The approximate value of that incentive would be $9.9 million, he added. On the state side, the Arkansas Economic Development Commission has qualified Lockheed Martin for two incentives. One is ArkPlus, which is a discretionary state income tax credit based on investment and minimum payroll typically used for highly competitive or targeted projects. The other is Create Rebate, which is also discretionary and is a cash payment based on a company’s annual payroll for new, full-time, permanent employees. “These are performance-based incentives, and companies need to report and meet certain thresholds before getting any money back from the state,” says Brandi Hinkle, AEDC’s director of communications. ACCELERATOR WILL BURNISH REGION’S SUPPLY CHAIN CREDENTIALS Plug and Play is opening a supply chain and logistics accelerator program this summer in Northwest Arkansas that will bring innovative startups from around the world to the region and build upon the fast- growing area’s robust innovation ecosystem. The effort, supported by the Walton Family Foundation, the Arkansas Economic Development Commission and founding corporate partners J.B. Hunt, Tyson Foods and Walmart, will be coordinated locally by the Northwest Arkansas Council. Plug and Play will work collaboratively with participants from the region to identify key industry challenges in supply chain and logistics. Once identified, Plug and Play will seek out the best startups to help develop solutions to these key challenges. The program will include two cohorts of 10 companies each year and will feature workshops, mentorship sessions and summits that will bring innovation, business development and investment opportunities to Northwest Arkansas. The accelerator will focus on supply chain optimization, blockchain, last-mile delivery, warehouse automation, IoT sensors, predictive analytics, machine learning and more. A grant from the Walton Family Foundation will support the entrepreneurial education and training curriculum for accelerator participants, as well as support community events and mentoring workshops. “Innovation that increases efficiency in our supply chain will help our team continue to be a competitive advantage for the company and ensure we can maintain everyday low prices for our customers however they want to shop,” said Greg Smith, executive vice president, supply chain, Walmart U.S. “By combining the strength of Walmart and the speed of startups, this partnership with Plug and Play will accelerate innovation and support our efforts to maintain a best-in-class supply chain.” S I T E S E L E C T I O N JULY 2019 125 ST A TE SPO TLIGHT Wisconsin Komatsu plans transformational HQ campus in lagging Harbor District. One of the world’s largest mining equipment manufacturers has struck gold in Wisconsin, but this time the mother lode isn’t underground. It’s on the streets of Milwaukee, a city known more for its famous beers and its beloved Major League Baseball team, the Brewers. A transformational investment by the Komatsu Mining Corp. will add to Milwaukee’s global reputation when the construction dust settles in 2022. Work is underway on a 2.5-million-sq.-ft. (232,250-sq.-m.) campus that will serve as the new corporate headquarters of Komatsu in the Milwaukee Harbor District. The $285 million project will provide a permanent home for more than 1,000 employees and become the anchor of a waterfront revitalization effort that will radically change the former Solvay Coke site on Greenfield Avenue. “This is a win for the city, the state, our employees, customers and the community. Together we are investing in Milwaukee’s future as a manufacturing stronghold and valued employer,” said John Koetz, president of surface mining at Komatsu, at the project announcement ceremony last fall. “We are preserving existing jobs, laying the groundwork for new employment opportunities, investing in the workforce of by RON S TARNER r on. s t ar ner @ site s ele c tion.c om Mining TalenT Milwaukee in Rendering of planned new headquarters campus of Komatsu Mining Corp. in Milwaukee’s Harbor District. Courtesy of KomatsuNext >