< Previous178 MAY 2021 S I T E SE L E C T I ON impact of proposed federal incentives for domestic semiconductor manufacturing. The report noted how 70 years ago, the U.S. made the entirety of the world’s semiconductors. But today, the U.S. share of the sector’s global fabrication hovers at only 12%, meaning 88% percent of the semiconductor chips used in America’s computers, phones, vehicles and appliances are made outside the country. In April, Biden’s $2 trillion infrastructure investment plan includes $50 billion to boost the country’s semiconductor manufacturing and innovation, called the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act. “The country that leads in advanced chip research, design, and manufacturing will have a big leg up in the global race to deploy new game- changing technologies, such as 5G, artificial intelligence and quantum computing,” said John Neuffer, SIA president and CEO. “Leaders in Washington should seize this opportunity, level the global playing field to attract chip production, and invest boldly in domestic manufacturing incentives and research initiatives that will strengthen U.S. tech leadership for decades to come.” According to the SIA report, federal incentives would reverse the country’s declining chip production trajectory and create as many as 19 major semiconductor manufacturing facilities (fabs) and 70,000 high-paying jobs in the U.S. over the next 10 years. The report notes some of the countries leading in the sector (including Taiwan, South Korea, Singapore and China) invest tens of billions of dollars annually into the industry. The SIA report notes, “The global semiconductor industry is expected to increase manufacturing capacity by 56% in the next decade. With a $50 billion federal investment, the U.S. is projected to capture nearly a quarter of new global capacity that is not yet in development, compared to only 6% with no government action.” S I T E S E L E C T I O N MAY 2021 179 Top 5 Projects by Capital Investment COMPANY CITY CAPEX $M Ultium Cells Lordstown 1,500 Ford Motor Co. Avon Lake 900 Facebook New Albany 875 Nestle Purina Petcare Co. Batavia 550 Amazon Data Services Plain City 455 Source: Conway Projects Database O H IO Higher Ed. R&D Expenditure in $000s: 2,249,451 Number of NCRCs: 214,589 | Percent Improvement 2019–2020: 16.83% Business Tax Climate Rank Change 2020–2021: -1 Industrial power cost per kWh: $5.79 Total Revenue as Share of Total Expenses, FY 2004-2019: 102.1% 2020 Workers’ Comp Index Rate: 1.4 S T A TE SPO TLIGHT OHIO Ohio native Grant Schneider ended up in the best of both worlds when he was tasked in with opening a second headquarters and R&D lab for his employer, San Mateo, California–based Upstart. Today, the online lending platform is rapidly occupying a new o ce building in Columbus’ Short North neighborhood and illustrating why an Ohio location is the perfect counterbalance to the FinTech player’s Bay Area base. How is Upstart di erent than other online lenders? How a FinTech’s HQ2 Search Ended in OHIO’S CAPITAL CITY by MARK AREND mark.arend@siteselection.com Columbus, Ohio Photo: Getty Images Source: Site Selection State of the States Report, January 2021 National Rankings (continued on page )180 MAY 2021 S I T E S EL E C T I O N The Ohio Development Services Agency and General Motors reached an agreement in January on the company’s $12 million community investment in the Mahoning Valley. The community investments are required as part of the settlement for GM’s repayment of its Job Creation and Retention Tax Credit incentives. In addition, GM will repay $28 million in tax credits. The state of Ohio required that GM refund the tax credits and make these investments following the company’s decision to close its Lordstown assembly facility. “This agreement provides investment in workforce, education, and infrastructure that will build on the Mahoning Valley’s strong manufacturing heritage,” said Governor Mike DeWine. “This investment will position the region for economic growth in the automotive industry and beyond.” GM has committed $5 million to Youngstown State University for workforce development in partnership with Eastern Gateway Community College, and funding for the YSU Energy Storage Innovation and Training Center. The Village of Lordstown will receive $3 million for the design and construction of a new water tower. Eastgate Regional Council of Governments will receive $2.5 million for local infrastructure improvements, and the Mahoning Valley Manufacturers Coalition will receive $1.5 million to support community workforce development. A Future EV and Battery Hub? “The partnerships with Youngstown State and the Mahoning Valley Manufacturers Coalition will help develop the workforce for the electric vehicle and battery markets,” said Lt. Governor Jon Husted. “The future of energy technology is being developed right here in Ohio, and our ongoing relationship with General Motors will accelerate this innovation while providing jobs in the Mahoning Valley.” “These projects were identifi ed locally, will leverage additional outside funding, and have a measurable impact on the community,” said Lydia Mihalik, Director of the Ohio Development Services Agency. “The investments will help attract new companies to the region and create an environment for business growth and success in the Mahoning Valley.” Youngstown State University and Eastern Gateway Community College will focus on talent recruitment, training, and retention. The partnership will help provide a skilled workforce to meet the needs of companies in the Mahoning Valley including Ultium Cells, Lordstown Motors, and TJX, among others. The funding will also support the creation of the YSU Energy Storage Innovation and Training Center. “We are certainly appreciative of the investment by General Motors and the confi dence placed in our Valley by Governor DeWine, Lt. Governor Husted and Lydia Mihalik of the Ohio Development Services Agency,” said Jim Tressel, President of Youngstown State University. “YSU and our many partners are committed to playing a major role in training, research, innovation, infrastructure, and workforce development services in order to help transform the economic engine of our region.” The Village of Lordstown water systems infrastructure enhancements OHIO & GENERAL MOTORS REACH AGREEMENT ON $12M COMMUNITY INVESTMENT182 MAY 2021 S I T E S EL E C T I O N will include a water tower to serve the Ultium Cells facility and provide additional capacity to serve the Village of Lordstown to support ongoing economic development investments. A Smart Transit Corridor Takes Shape In addition, Eastgate Regional Council of Governments will invest in local infrastructure improvements including the development of a proposed Lordstown Smart Transit Corridor. Working with the Ohio Turnpike Infrastructure Comission and DriveOhio, the corridor will enhance business sites surrounding Lordstown. The funding will also support battery, advanced energy, and electric vehicle charging technology, advancing the Voltage Valley strategic initiative, and expanding broadband in the region. “We are grateful for the investment in our region by General Motors and appreciative of the support by Governor DeWine and his administration,” said Jim Kinnick, Executive Director of the Eastgate Regional Council of Governments. “Serving as the region’s Metropolitan Planning Organization, Eastgate is well positioned to leverage this GM investment for the benefit of the entire region. We will be working closely with regional economic development entities, as well as with our state and federal partners, to aggressively pursue regional economic diversification. Our near-term focus will be on enhanced infrastructure to support job growth and workforce development in the Lordstown region.” How Mahoning Valley Benefits The investment in the Mahoning Valley Manufacturers Coalition (MVMC) will support community workforce development and promote and raise awareness of manufacturing – including additive manufacturing and energy technology in the Mahoning Valley. MVMC will partner with America Makes and BRITE Energy Innovators. ”MVMC is grateful for this opportunity. We look forward to working with our partners to create professional development opportunities for career counselors, teachers, and advisors throughout the Mahoning Valley to help young people and career switchers make informed decisions about their career pathway,” said Jessica Borza, MVMC Executive Director. General Motors will be required to complete the $12 million investment in the Mahoning Valley by the end of 2022, along with refunding $28 million in tax credits. In 2008, the company entered into Job Creation and Retention Tax Credit agreements which resulted in the issuance of $60.3 million in tax credits. General Motors has other state incentives for its operations in Toledo and Defiance. The company is currently compliant with those agreements. Greg Schnieder, Vice President, Machine Learning and Head of Upstart Columbus Upstart Columbus “You are more than your credit score,” says Schneider, who is Vice President, Machine Learning and Head of Upstart Columbus. “We crunch the data, taking advantage of modern computing advances and artificial intelligence to construct a forward-looking risk assessment of the applicant. We’re taking the full picture into account, combining that with some non-credit data, such as employment and education information the user provides. It helps us understand not just past behavior, which every financial institution can look at, but what the future looks like. We ask about income, but we’re also asking about employment type and job title. Nursing is a good example of where salaries aren’t off the chart, but there is such demand for nurses that they can find a job (continued from page 179)184 MAY 2021 S I T E S EL E C T I O N anywhere in the country. We are able to offer better rates because of the stability of the industry.” Upstart’s initial offering was a debt consolidation loan used mainly to pay off high-interest credit cards, says Schneider. “We recently launched an auto-refinance product where we can save the consumer a lot of money. It was about 90% built here in Columbus and served as a launch for us as an office, supporting the headquarters in California, but launching something new and sharing it with the world.” Back to the Buckeye State A native of southeast Ohio, Schneider spent 10 years at Ohio State University, where he earned a PhD and “lucked into finding this data science thing and lucked into finding Upstart as I was finishing up there,” he relates. “I went to Silicon Valley and loved it out there, but when it was time to buy a house, the Midwest looked pretty appealing. When the opportunity came up to open a second headquarters, I was really excited to go back to the Midwest. When we landed in Columbus, I couldn’t believe I still get to work for Upstart, and I get (continued on page 188) Online lender Upstart occupies a new office building in Columbus’ Short North neighborhood. Photo courtesy of Upstart186 MAY 2021 S I T E S EL E C T I O N GROCERY E-COMMERCE TAKES A GIANT STEP FORWARD The Kroger Co., America’s largest grocery retailer, is launching the country’s first Customer Fulfillment Center (CFC), combining vertical integration, machine learning, and robotics with fast delivery service for fresh food. Located in Monroe, north of Cincinnati — and powered by Ocado Group, a world leader in technology for grocery e-commerce — the CFC is the first to open, transforming and supporting the grocer’s thriving digital business. “2020 was a pivotal year for grocery e-commerce, with Kroger’s digital business scaling to over $10 billion — and achieving a record digital sales increase of 116%,” said Rodney McMullen, Kroger’s chairman and CEO. “The momentum we’re experiencing is well-timed with the evolution of Kroger Delivery, underpinning the permanent shift in grocery consumer behavior and need for enterprising and modern e-commerce and last-mile solutions — today’s true competitive horsepower.” In May 2018, Kroger and Ocado formed an exclusive partnership to introduce to the U.S. for the first time proprietary technology solutions focused on artificial intelligence, advanced robotics and automation, and creative solutions to create more seamless and efficient fulfillment, picking and delivery capabilities to provide customers anything, anytime, anywhere and expand Kroger’s reach and products to new geographies. “The introduction of the first Customer Fulfillment Center marks a historic milestone for grocery retail in the U.S.,” said Tim Steiner, Co-founder and CEO of Ocado Group. “Since signing our partnership in 2018, Ocado and Kroger teams have worked in tight-knit collaboration to lay the foundation to advance their state-of-the-art fulfillment ecosystem across the country, supporting Kroger to reach customers anywhere with anything, at any time. 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