< Previous38 JULY 2025 SITE SELECTION megawatts to our system. Even though they’re a direct customer of MLGW [Memphis Light, Gas & Water], we have to study the sizable loads coming on our system. They publicly announced their intent to continue to invest in their facility in Shelby County. As such, they’re asking TVA and MLGW to prepare the studies for some of the additional energy and capacity for their project in the future. So we’re going to continue to work with our customer MLGW and xAI to make sure we can address the needs for the project. We’ve also been at the table with xAI on a recycled water facility in Memphis. This not only helps us to decrease our need to buy water from MLGW for our combined cycle gas plant that’s right by there, the Allen Plant, but it also helps to take load off the water system for the Greater Memphis area and really helps to recycle that water so it can be used for cooling purposes and saves the potable water for the citizens in the area. It’s a partnership opportunity ... It helps to meet their needs and it also helps the region. As we work to continue meeting the load growth we’re seeing in this area, it’s important we recognize that everything we do we do in partnership, whether it’s working together with state and local partners, customers, economic developers and community leaders to help serve the region or whether it’s working together with those customers on taking themselves off the peak and being part of our demand-response program and really helping us solve the problem and shorten their timeline to connection. In the end, we are all stronger if we work together on this. For customers coming into the area, if they have a desire to move to the Tennessee Valley, it’s worth their time to speak with John and his team and really understand what those opportunities are. Where do you see the need to go next with TVA workforce, site and community programs to help boost regional prosperity? Moul: We’ve had some great success with megasites in the past. The Golden Triangle in Mississippi is a perfect example of the impact megasites can have in some of the smaller, rural communities. We recently joined the Link team in Lowndes County to celebrate their fifth megasite. Continuing down the path of TVA certified megasites is something we’ll continue to work on. Invest Prep is also an integral part of our mission to promote economic development in the TVA service area. TVA provides financial assistance to help bring to the market new and improved sites and facilities within our service area. It really helps position some of those communities to compete successfully for new jobs and capital investment. Bradley: It always starts with the site. Then our approach to workforce development was not a standardized approach. It has always been “Let’s go to the community and let them tell us what they need.” We will work with them. We will match funding. They’re building their own workforce development programs. Workforce is local. We wanted that input. It’s helped us build that program off of their ideas. We’ve been able to leverage what the states are doing and what some of the local communities are doing and all of a sudden, put funding together and we’re talking about some real money where you can actually move the needle. We’re seeing some really cool ideas come out of these communities because they know their workforce better than anybody. It’s kind of a novel idea: “Hey, let’s see what the people need and then build something around it.” On the operations side, Don would tell you, 95% of the work is way before you hit a switch on a plant. There’s a direct correlation to that in economic development: Ninety-five percent of the work is in the preparation — getting ready and getting prepared so when that deal does come, you’re ready. We spend a lot of time and effort on that area to make sure we’re positioning ourselves to be the most successful for our communities we serve. It’s refreshing having someone like Don in there who understands preparation is everything. John Bradley, Senior Vice President, TVA Economic Development This Investment Profile was prepared under the auspices of TVA. For more information, visit www.tva.com/economic-development. SITE SELECTION JULY 2025 39 State Legislation Seeks to Capitalize on Data Center Boom F rom navigation to investing to shopping, data centers are now the backbone of nearly every transaction in the modern economy. The recent explosion in AI capabilities and the coming data needs of autonomous vehicles and other new information- driven frontiers mean that the need for more data centers will only continue to escalate. Data center facilities represent incredible economic development opportunities for communities large and small. Not only do they support high-wage jobs but, of particular importance to cash-starved governments with citizens upset about higher property valuations, they generate significant new tax revenue to support education, public safety, parks and other essential government services. Beginning in 2008 with Virginia’s pioneering sales and use tax exemption for data center equipment, dozens of states now afford similar savings to encourage the development of these facilities. With the world moving toward more IT utilization, these exemptions nearly mimic the long-standing exemption that most states already afforded for by CHRISTOPHER D. LLOYD, M c G uire W oods c onsultinG editor@siteselection.com DATA CENTERS Map courtesy of National Renewable Energy Laboratory40 JULY 2025 SITE SELECTION manufacturing equipment used to make fi nal products which are then subject to the sales tax. Despite calls by some to slow down the growth of the data center industry during the past several months by rolling back incentives or putting various permitting barriers in the way of their development, several additional states have added or enhanced their data center incentives to capture this growing market. Michigan In January, Michigan Governor Gretchen Whitmer signed legislation extending that state’s sales and use tax exemption until , sending a strong signal to the marketplace of the Great Lakes State’s support for this burgeoning industry. For data centers developed on brownfi eld or former power plant sites, the exemption can extend to . Michigan’s extended benefi t is tied to these facilities meeting energy effi ciency and water conservation targets. In order to qualify, the data center must commit to invest at least $ million and create at least jobs which pay % of the median wage for the region where the facility will be located. With the extended sales tax exemption, however, data center operators could forgo local property tax abatements unless approved by the adoption of a specifi c resolution by the local governing body. Further, data center operators cannot tap long-term industrial load rates or economic development tariff rates approved by the state utility regulator. Kansas Kansas had long been one of the few states with no data center sales and use tax exemption but joined the club in April with the adoption of a wide-ranging program. e new law provides the exemption for data centers representing a total capital investment of more than $ million and that will create at least new full-time jobs — both to be achieved within a -year period. Such thresholds refl ect the increasing investment in technology to drive these facilities and may aff ord the state a competitive advantage over others. Once approved, a data center is eligible for the exemption for years — a time frame that should carry a facility through several equipment refresh cycles. Where the Kansas law plows new ground is by creating a policy framework to address some of the most common public concerns about data centers. Specifi cally, the law expresses a commitment that power to serve a data center facility should come from a public utility (which discourages behind-the-meter power solutions), and the data center operator should be looking at water-saving technologies such as reuse and other conservation technologies. Given growing concerns about the role of identifi ed foreign adversaries and access to sensitive data, the law also requires that the Secretary of Commerce seek the approval of the state’s fusion center task force, a group that oversees cybersecurity and other anti-terrorism activities, prior to granting a tax exemption. West Virginia West Virginia’s newly enacted “Power Generation and Consumption Act” builds upon the state’s already favorable tax climate for data centers by removing potential barriers to development of designated high-impact data centers. Such facilities are defi ned as those coming online after July , , and requiring more than megawatts of power. Once the state’s commerce secretary makes such a designation, the data center is freed from many potential land use restrictions at the local level that have slowed data center development in other states. e designation also allows the center to be eligible to receive favorable valuation for property tax purposes. In a new take to highlight to a public sometimes skeptical about the fi scal benefi ts from data center development, the property tax revenues generated by high-impact data centers are then set aside for a Personal Income Tax Reduction Fund administered by the state. (For more on West Virginia’s new policy, see Ron Starner’s West Virginia Spotlight on p. of this issue.) Despite some opposition to the growth of the data center industry, it is an emerging sector which can benefi t communities both large and small. Data centers essential to the functioning of the global economy. By reducing the operating costs and making it easier to develop such facilities, the benefi ts of these projects can be accelerated and more widespread. Christopher D. Lloyd is director of Infrastructure & Economic Development at McGuireWoods Consulting LLC.42 JULY 2025 SITE SELECTION I nfl ation has become household dinner table talk over the last few years, but its impact is both cumulative and real. A shrinking dollar makes everything more expensive. Whether you are the CEO or the frontline worker, you feel the pinch in your wallet every day. But do you have to? Enter the data. Number crunching is what we do, and for this exercise, we turned to the experts. Drawing upon the numerical analysis skills of the people who conduct major site selection projects for a living, Site Selection presents a detailed report on the most cost-eff ective locations in the U.S. for manufacturing projects and for corporate headquarters. Lowest-Cost Manufacturing Locations If you want to know how much it costs to build and operate a manufacturing plant, it pays to seek out the expertise of those who conduct large-scale industrial site selection. One such fi rm is Global Location Strategies in Greenville, South Carolina. Locating billion-dollar-plus factories is what they do. “Every project is unique, even those within the same industry sector, and it is important to base location decisions on project-specifi c cost considerations,” they write in exclusive analysis for Site Selection. For the purposes of this exercise, GLS assigned the following percentages of overall costs to each category: labor — %; utilities — %; and lease costs — %. eir spring ranking of metro areas in the U.S. also refl ects project-specifi c analysis inputs. “ e operation is assumed to run seven days a week with two eight-hour shifts per day,” GLS states. “In addition to the total number of employees, a labor profi le has been developed that includes a mix of industry-specifi c white- and blue-collar occupations to measure labor quality, availability and cost. is analysis is designed to allow for a customization of inputs, which would result in a modifi ed ranking according to the unique needs of a specifi c project.” Assumptions are a ,-sq.-ft. facility; full- time employees; MW electric load factor of .; by RON STARNER ron.starner@siteselection.com e locations where companies and workers can stretch their dollars the furthest. Would You Put Your HQ HERE? SPECIAL REPORT INFLATION BUSTERS Boca Raton is the No. 1 lowest- cost HQ market in the U.S., per a BizCosts ranking by The Boyd Company Inc. Photo by NPI Productions/Courtesy of Visit Florida44 JULY 2025 SITE SELECTION 15 MCFPH natural gas; 200K GPD water; and 50K GPD wastewater. Based upon those criteria, GLS ranked the following metros as having the lowest annual operating costs: Florence-Muscle Shoals, Alabama, came in at No. 1 with annual operating costs of $9.14 million, followed by Brownsville- Harlingen, Texas, at $9.18 million and Gadsden, Alabama, at $9.24 million. Thirteen of the 25 lowest-cost metros are in Texas. The remainder are in the Southeast or South Central region. This is not an anomaly, says Tess Fay, principal and vice president of location intelligence at GLS. “The biggest drivers of expenses are the labor costs,” says Fay. “That favors the Southeast and the Midwest. Utilities on average make up 26% of the overall operating costs of a manufacturing plant, and people are trying to navigate rising electric costs.” The GLS team knows location cost profiles better than anyone. That’s a big reason why they have recently located massive aluminum plants in Alabama and Oklahoma. On May 16, Emirates Global Aluminium, the world’s largest producer of premium aluminum, selected a 350-acre site at the Port of Inola in Rogers County in northeast Oklahoma for a $4 billion aluminum factory that will create 1,000 new jobs in the area. GLS found and recommended that site for the company. Located 30 minutes east of Tulsa, Inola is indicative of the types of smaller, rural communities that are winning the biggest-budget factories of the future. Analysis of the ranking data shows that the 42 lowest-cost locations in the country are all small to mid-sized metros. The first large MSA does not show up until No. 43: Memphis. “Our projects are usually on the periphery of these medium-sized metros,” says Fay. “We are often prioritizing infrastructure as well as the utilities and the costs. The workforce is a challenge for smaller communities. So are water and wastewater capacity.” One smaller community that is excelling at overcoming its size is Gadsden in northeast Alabama — ranked No. 3 for lowest costs in the nation on the GLS index. David Hooks, executive director of the Gadsden-Etowah County Industrial Development Authority, says Gadsden has 35,000 people. The county has 103,000. “While all companies look at overall costs of production, from our side, the quality of our workforce and the availability of our utility services are paramount,” says Hooks. “Gadsden has been TOP 25 LOWEST-COST MANUFACTURING LOCATIONS IN U.S. Operating Cost Ranking Metro Operating Cost 1 Florence-Muscle Shoals, AL $ 9,137,639 2 Brownsville-Harlingen, TX $ 9,181,380 3 Gadsden, AL $ 9,242,257 4 El Paso, TX $ 9,324,591 5 Monroe, LA $ 9,348,247 6 Wichita Falls, TX $ 9,445,699 7 Abilene, TX $ 9,460,293 8 Fort Smith, AR-OK $ 9,539,185 9 McAllen-Edinburg-Mission, TX $ 9,540,210 10 Texarkana, TX-AR $ 9,545,787 11 Laredo, TX $ 9,620,906 12 Dalton, GA $ 9,632,634 13 Lubbock, TX $ 9,698,040 14 Albany, GA $ 9,706,045 15 Morristown, TN $ 9,722,701 16 Valdosta, GA $ 9,729,270 17 Paducah, KY-IL $ 9,730,910 18 Waco, TX $ 9,753,048 19 Longview, TX $ 9,778,394 20 Jackson, TN $ 9,801,262 21 Dothan, AL $ 9,816,661 22 Tyler, TX $ 9,849,359 23 Johnson City, TN $ 9,859,313 24 Killeen-Temple, TX $ 9,883,984 25 Amarillo, TX $ 9,891,620 Scan this QR code to access an expanded edition of this story with a map showing highest- and lowest-cost manufacturing locations across the United States and bonus analysis of Bankrate's best states for households seeking to save money. SPECIAL REPORT Source: Global Location Strategies SITE SELECTION JULY 2025 45 an industrial town since the late 1980s. It was developed as a railroad town, and it has continued to be known as a manufacturing community for metals.” Located on Interstate 59 two hours northwest of Atlanta, 60 miles north of Birmingham and 80 miles south of Chattanooga, Gadsden sits in the sweet spot of the Mid-South automotive manufacturing corridor. Recently, Fehrer Automotive grew its Gadsden plant by investing more than $6 million into a 200,000-sq.-ft. expansion, giving Fehrer a total of 500,000 sq. ft. of space — quadruple the company’s footprint when it first opened 10 years ago. “Fehrer employs about 500 people, making it the second-largest foam plant in the Fehrer Group worldwide and one of the largest employers in Etowah County,” says Hooks. National Headquarters Locations BizCosts is the proprietary data bank of corporate site consultancy The Boyd Company Inc. For this report, BizCosts calculated the annual operating costs of a 60,000-sq.-ft. corporate headquarters office employing 300 workers in the 20 major head office markets in the country. BizCosts found that Midtown New York City is the most expensive market today at a total annual operating cost of $33.42 million for 2025, followed by the San Francisco CBD and Sunnyvale, California, both also over $33 million. The least expensive head office market is Boca Raton Northwest, Florida, at $25.89 million. The second cheapest is Midtown Atlanta at $27.36 million; and third lowest is Miami CBD at $28.65 million. Austin CBD and Chicago Central Loop round out the five lowest-cost markets. “There is a dominant common thread among the 46 JULY 2025 SITE SELECTION lower-cost headquarters locations,” says John Boyd Jr., principal of The Boyd Company Inc. “This dominant theme is the presence of relative bargains today for leasing high-end, Class-A office space consistent with the needs of a corporate head office.” Asked why Boca Raton stacks up as such a bargain compared to the most expensive markets, Boyd says, “Like the Philly suburban markets, it [Boca Raton] houses an affordable office market at $44.42 per square foot, which is in stark contrast to the hyper-hot Miami market where Class-A office lease rates in the popular Brickell submarket at $107.86 per square foot rival those of New York City. Rates in Miami’s CBD submarket are also pricey at $81.38 per square foot. I suspect that Boca Raton cost structures are often mistakenly assumed to mirror the sky-high rates now associated with Miami, but that is not the case. Also, like in most of Florida, real estate property tax rates and electric power rates are low in Boca Raton by national standards — not to mention the lack of a personal income tax, which is a major driver in corporate headquarters relocation decisions.” Total Annual National Headquarters Location Operating Costs New York, NY (Midtown) $33,422,196 San Francisco, CA (CBD) $33,398,471 Silicon Valley, CA (Sunnyvale) $33,200,211 Boston, MA (Cambridge) $32,054,375 New York, NY (Financial District) $31,921,129 Boston, MA (CBD) $31,589,269 Miami, FL (Brickell) $30,970,282 Washington, DC (CBD) $30,946,847 Los Angeles, CA (West) $30,814,823 Los Angeles, CA (CBD) $30,552,362 Seattle, WA (CBD) $30,007,917 Oakland, CA (CBD) $29,804,959 Jersey City, NJ (Hudson Waterfront) $29,748,216 San Diego, CA (CBD) $29,715,733 Stamford, CT (CBD) $29,521,120 Chicago, IL (Central Loop) $29,126,581 Austin, TX (CBD) $28,783,930 Miami, FL (CBD) $28,645,381 Atlanta, GA (Midtown) $27,361,960 Boca Raton , FL (Northwest) $25,889,283 TOTAL GEOGRAPHICALLY VARIABLE OPERATING COST RANKING SPECIAL REPORT Source: The Boyd Company, Inc. SITE SELECTION JULY 2025 47 by MARK AREND mark.arend@siteselection.com Where Aviation’s Next Generation Is Taking Shape A irlines are placing orders today for the passenger aircraft of tomorrow. Prototypes of the all-wing Z4 from Long Beach, California-based JetZero and the hybrid-electric ES-30 from Heart Aerospace have left the drawing boards and are in testing. Production of the 250-seat Z4 will take place in a new facility on a site at Piedmont Triad International (PTI) Airport in Greensboro, North Carolina, JetZero announced on June 12. The more than $4 billion, 14,000-jobs project will get under way in 2026, and the company anticipates producing 20 aircraft per month when fully operational. AEROSPACE Heart Aerospace is relocating its headquarters from Gothenburg, Sweden, to Los Angeles, where it established an R&D hub in 2024. Photo courtesy of Heart AerospaceNext >