How to Know the Right Megasite When You See It
In 2022, North Carolina’s General Assembly created the Megasite Readiness Program to quantify existing and potential sites that are suitable for large projects in such industries as EV assembly and batteries and semiconductor fabrication. Demand for such sites around the country was booming at the time, and state officials did not want North Carolina to miss out.
The Legislature also directed the Economic Development Partnership of North Carolina (EDPNC) to task a site selection firm with identifying megasites in the state appropriate for advanced manufacturing operations. JLL got the nod and worked with two additional firms to produce the NC Megasite Readiness Program Report, completed in May 2023.
The report says local developers submitted proposals for 30 sites around the state looking to be deemed megasite ready. Eleven were selected by the JLL-led team for in-person visits to inspect the sites. Of those, the report identified one competitive, shovel-ready megasite, the Kingsboro Business Park in Edgecombe County. Sites in six additional counties — Brunswick, Wilson, Nash, Pitt, Cumberland and Rowan — were named the state’s best potential megasites.
The Edgecombe County edge convinced Natron Energy to announce in August a nearly $1.4 billion sodium-ion battery gigafactory in the Kingsboro Business Park, the first of its kind in the United States. It will occupy 1.2 million sq. ft. and will create more than 1,000 jobs. The project is forecast to boost the state’s economy by $3.4 billion over the next 12 years. It’s no wonder North Carolina and states across the country are eager to grow their inventories of megasites.
Following is an email interview with JLL Executive Managing Director, Brokerage, Meredith O’Connor, who explains how megasites are evaluated, eliminated from consideration or chosen by companies like Natron Energy.
Were you involved in preparing the NC Megasite Readiness Report?
O’Connor: Yes, we were an enthusiastic contributor, with our local partners at Timmons and Maynard Nexsen, to the NC Megasite Readiness report. As with all our economic development counterparts, EDPNC is an invaluable partner. We were eager to assist them in strengthening their megasite inventory, especially as we face a dwindling supply of qualified megasites across the U.S.
We believe our participation was mutually beneficial, helping North Carolina leverage our expertise to attract new mega projects while creating new real estate opportunities for our site selection clientele.
Meredith O’Connor, Executive Managing Director, Brokerage, JLL
Megaproject requirements will vary depending on the industry. What are some megasite attributes that must already be in place to be considered by companies in any sector?
O’Connor: When considering megasite attributes for industrial development across various sectors, several key factors are typically required to be in place for a site to be considered viable. These attributes are universal, regardless of the specific industry, and include:
Large contiguous land area: Typically, a minimum of 500+ acres or more of developable land is required to accommodate large-scale facilities and future expansion.
Connectivity and transportation infrastructure: This includes proximity to major highways, rail access and potentially access to seaports or airports, depending on the industry’s needs.
Reliable and abundant utilities, which encompasses:
- Sufficient electrical power capacity and redundancy
- Ample water supply and wastewater treatment capabilities
- Natural gas availability
- High-speed fiber optic networks and telecommunications infrastructure
Environmental and geotechnical suitability: The site should have minimal environmental concerns and be geotechnically sound for large-scale construction.
Zoning and permitting: The site should be zoned for industrial use or have a clear path to rezoning, with a streamlined permitting process.
People and place:
- Availability: A broad and proven talent pool in the area. Sufficient local workforce supply without risk of depletion. Competitive local wages and benefits. Manageable commute times for recruitment and retention.
- Sustainability: Established pipelines for future talent through vocational programs and secondary education institutions. Favorable migration patterns that support workforce growth. Alignment of local educational offerings with industry needs for a sustainable talent supply.
- Retainability: Balanced competition for key skillsets among local employers. Attractive quality-of-life factors for employees. Adequate availability and quality of local amenities. Strong performance of public schools. Competitive housing market with sufficient supply to support the workforce.
- Partnerships: Quality collaboration between public institutions and the private sector. Collaborative local business community. Opportunities for strategic partnerships and community engagement beneficial to the organization.
Due diligence:
- Completed preliminary due diligence.
- Existing plans to address potential development barriers.
- Awareness and engagement of key stakeholders (public officials, utility providers, landowners).
- Strong support for the project from local authorities and the community at large.
These attributes collectively contribute to making a megasite attractive across various industrial sectors, providing the foundation for efficient, cost-effective and scalable development projects.
What are the development challenges that tend to eliminate megasites from consideration?
O’Connor: Several development challenges can eliminate megasites from consideration. These challenges often stem from complex issues that are difficult, expensive or time-consuming to resolve. Here are some of the most common:
Environmental concerns:
- Presence of protected species or habitats
- Contamination from previous industrial use
- Wetlands or other sensitive ecosystems requiring mitigation
Infrastructure limitations:
- Insufficient electrical power capacity or lack of redundancy
- Inadequate water supply or wastewater treatment capabilities
- Poor or nonexistent road and rail access
Topographical issues:
- Steep grades or unstable soil conditions
- Flood plain locations
- Extensive rock formations requiring blasting
Land assembly complications:
- Multiple property owners unwilling to sell
- Unclear titles or property disputes
- Presence of easements or rights-of-way that fragment the site
Zoning and permitting hurdles:
- Incompatible current zoning with a difficult path to rezoning
- Complex or lengthy permitting processes
- Local regulations that restrict development
Lack of neighborhood stakeholders’ engagement:
- Limited or no awareness among nearby stakeholders about the site’s proposed large-scale redevelopment
- Absence of community approval for potential changes resulting from the development
- Potential for controversy leading to negative publicity or legal challenges related to the project
Limited understanding of site attributes or lack of transparency:
- Withheld or restricted access to previously completed due diligence reports
- Unverified assumptions about infrastructure viability, zoning and other critical criteria without written confirmation or sign-off from respective stakeholder
- Disclosure of potential challenges or red flags without basic mitigation plans.
At the end of the day, we are acutely aware that no site is perfect. We often favor candidates which have been passed over for other projects as they are much better informed than fresh unvetted sites. Identifying the potential barriers to development up front and having even a rough outline of how they might be resolved speaks volumes.
Is there an ideal way to distribute site development costs among the state, county and investor?
O’Connor: There is not a universally ideal way to distribute site development costs, as the approach can vary significantly based on local economic conditions, policy priorities and the specific project requirements. However, a balanced approach that distributes costs and risks among the state, county and investor is often considered most effective.
The key is to create a partnership where all parties have a vested interest in the project’s success while ensuring that public investments generate significant community benefits. It is also important to involve economic development professionals, legal experts and financial advisors in structuring these agreements to ensure they are equitable and compliant with relevant laws and regulations.
What’s your take on how aggressively states are building inventories of megasites? What are the successful ones doing right?
O’Connor: Several states have been building inventories of megasites to attract large-scale industrial development. The successful ones are employing a range of strategies to differentiate themselves and increase their attractiveness to potential investors.
States that are particularly successful in this arena — such as Tennessee, South Carolina and Ohio — often combine many different strategies. They tend to take a holistic and proactive approach that goes beyond just offering land, focusing on creating a comprehensive ecosystem conducive to industrial development.
The key to success appears to be a combination of significant upfront investment, strategic planning and a commitment to making the development process as smooth and attractive as possible for potential investors. This approach not only helps attract initial investments but also builds a reputation that can lead to further development opportunities in the future.
Think of a project you worked on where it came down to two or three megasites, and one ultimately was chosen by the client — what were the factors that put the winning site over the top?
O’Connor: While cost, timing and site quality are paramount to any site selection decision-maker, one often overlooked factor boils down to first impressions. Beyond potential ROI, cost efficiencies and other quantifiable decision criteria, the “nearly impossible” to measure factor of community-cultural fit is exceedingly important to many companies considering a decades-long capital investment. No client is eager to invest in a community in which they do not feel welcome. Our clients want to be good neighbors, partners and contributors. Therefore, a great deal of our clients prioritize areas they find favorably aligned with their company values. Communities where there is an evident strong partnership/collaboration between the public and private sector carry significant weight. The experience, introductions and engagement from an initial tour can often prove just as valuable as the real estate itself.
Communities Shouldn’t Overlook
‘Bread & Butter’
If a megasite search is likely in 2025, the following observations and considerations should add depth to your location analysis. Site Selection thanks Dennis Donovan, principal, and Linda Burns, incentives practice leader, at Wadley, Donovan, Gutshaw Consulting, based in Bridgewater, New Jersey, for sharing their insights.
At least 36 states have certified site programs. Most include megasites.
The generally accepted minimum size for a megasite is 1,000 acres. However, we believe that 500 acres, if the preponderance is contiguous, qualifies as a megasite.
Megasites should have all the infrastructure in place or funding/pre-permitting to expeditiously install requisite infrastructure.
Megasites should be rail served and ideally have highway access.
Developmental challenges that would drop a potential megasite from being considered as a location include electric power transmission congestion, absence of electric power resiliency, a site that does not have large tracts of contiguous usable land, citizen opposition to site development, height restrictions and natural disaster risk such as flooding.
Megasite development costs should include a combination of state funding, possible federal funding, local foundation, private developer funding participation and local community funding such as tax increment financing/tax increment reinvestment zone.
States are being overly aggressive in creating megasites. In many states, the inventory of developable land with utilities within close enough proximity to realistically tap into is in short supply.
One overlooked dynamic to megasites is ensuring that there will be an adequate supply of both construction and a pipeline of ongoing labor with technical training resources.
On a recent project we worked on in the Mid-Atlantic, our client selected a megasite for several reasons:
- At some 1,500 acres the size and configuration were attractive.
- The state and community agreed to provide funding for upgrading electric power, including another substation.
- On-site solar power could be generated.
- There was a nearby available building to allow for test production.
- An ample supply of qualified labor was available. This was a major selling point vis-à-vis other potential sites.
A host of megasites have been directed at the EV assembly, battery and supply chain network. This is risky as there will likely be failures and consolidation within the EV-related sector based on sales projections and the renewed focus on fossil fuels to reduce logistics costs.
Mega projects do not constitute a significant proportion of overall industrial location activity. The overwhelming majority of projects tend to be small to mid-size (often fewer than 50 acres and fewer than 250 employees). Communities would be well advised not to overlook the “bread and butter” site selection projects. Plus, these projects will not break the bank on consuming often scarce resources such as labor, electric power and water.
A current electric arc furnace steel mill project of ours qualifies as an example of a workable-scale project for fewer acres at 400 acres but still a very significant project scope: capex of over $500 million and 150 jobs at average wages of $70,000.
Dennis Donovan
Linda Burns
