Auto suppliers are springing up throughout north Alabama, many lured by the massive Mazda Toyota plant that begins production next year in Limestone County, but Morgan County has yet to land one.
It’s a drought that continues despite the existence of the multi-million-dollar Morgan Center Business Park, located off Interstate 65 in Hartselle and vacant since it was created almost a decade ago.
The Shoals area is adding a fourth automotive supplier with Michigan-based DURA Automotive Systems’ recent announcement that it will invest $59 million in a facility in Muscle Shoals that will make battery trays for electric vehicles.
The company joins what Gov. Kay Ivey called the state’s “dynamic auto industry.” That includes a growing list of automotive suppliers in the north Alabama area, including Toyota Boshoku AKI USA, an automotive seating supplier that’s now hiring at its Athens facility. The company is a supplier to Mazda Toyota Manufacturing USA, a joint venture between the two automakers that will build SUVs at its plant in the Greenbrier area.
There’s also a Bocar US facility on the north side of Bibb Garrett Road in Limestone County that specializes in aluminum high-pressure die-casting automotive structural and power train parts. And also in Limestone, on the south side of Bibb Garrett Road in SouthPoint Business Park is Woodbridge Alabama, which makes polyurethane seating.
Morgan County officials want to get a share of the automotive sector business as well, and believe they are well situated for it due to the county’s proximity to Mazda Toyota and its location within a three-hour drive of 10 auto assembly plants.
Morgan County Economic Development Association President and CEO Jeremy Nails said the organization continues to specifically target automotive suppliers through various efforts — its MoreinMorgan.com site aimed at automotive suppliers, targeted Google ads in select markets and updated marketing materials.
“Morgan County has strong wages, top-notch education systems and a quality of life that MCEDA is consistently proud to tout,” Nails said. But, “we still suffer from a lack of pad-ready sites, particularly large areas of undeveloped acreage with easy transportation access and existing utilities. We have limited rail sites and no river sites available.”
Nails said the 135-acre Morgan Center Business Park in Hartselle has had several visits from automotive-related companies, with some instead choosing to locate on the Mazda Toyota campus and others in communities that had companies closing or laying off employees.
“To date, those suppliers that have announced required an existing or speculative building or larger acreage that was ready to develop so that it could be in production prior to (Mazda Toyota) in order to have parts ready,” he said. “We are grateful for those projects that have announced in adjacent counties as it benefits the community as a whole and we will eagerly pursue additional automotive projects.”
Nails said that this summer, with assistance from the Tennessee Valley Authority, “we proactively cleared and grubbed the largest lot at Morgan Center Business Park in order to decrease time to market for any projects looking at the site.”
The park, complete with all utilities, opened in 2012. Officials believe it is a prime location for landing automotive-related and other tenants.
“It’s a great location; it’s right on the interstate,” said Brooks Kracke, the president and CEO of the North Alabama Industrial Development Association. “It has great interstate accessibility and visibility.
“It’s a matter of time until someone builds on it — it may or may not be automotive.”
Morgan County Commission Chairman Ray Long also expects auto suppliers to locate in the county, a goal the commission emphasized when it committed to $500,000 in incentives to help lure Mazda Toyota to an adjacent county.
“We’ve showed it to several suppliers,” Long said of the business park. “We’ve had a lot of lookers. When things turn around (from the COVID-19 pandemic) and other suppliers get serious, we’ll have somebody in there.”
Kracke said he believes that communities across north Alabama have “a good shot” at attracting more automotive suppliers.
“When (the pandemic) is behind us, you’ll see more people driving or flying here to see firsthand what our community has to offer,” Kracke said. “Once Mazda Toyota is up and running and product is going out the door, others will say, ‘We need to make our move.’”
In selecting a site, “all the pieces of the puzzle have to fit in place perfectly,” Kracke said. That ranges from site and logistics costs to an available workforce, he said. “Incentives are important but they’re just one piece of the puzzle.
“We’re getting improvements made to (Interstate) 565 and that is huge.”
Bethany Shockney, the president and CEO of the Limestone County Economic Development Association, said site selection is complex and varies depending on the prospect.
“There are so many factors that go into that (site selection) decision,” she said, sometimes even the terrain of the site, what’s adjacent to it, whether it’s owned by a public or private entity, how quickly a building can be up and operating. “Some are hoping for an existing building instead of a greenfield site.
“You have to have the desired property and a workforce that can make them successful.”
As for the Shoals’ latest automotive project, DURA will lease an existing building in the Shoals Research Airpark from the Shoals Economic Development Association. Last year, SEADA invested $3 million on the pad and shell for the speculative building as part of its long-term economic development strategy. The association has agreed to partner with DURA on an $11.5 million expansion and build-out of the structure’s interior.
“We are particularly excited to win this project, working through the pandemic,” said Kevin Jackson, the president of the Shoals Economic Development Association.
“We were competing against five sites in Tennessee and Georgia. If we hadn’t had the building, we wouldn’t have been considered. The building and having a good strong available workforce were the two driving factors” in the Shoals’ selection for the DURA project.
“Incentives are only part of the equation with a project like this,” Jackson said.
Nails said that before the COVID-19 pandemic, “our available workforce was a challenge in meeting large project needs with our close proximity to the (Mazda Toyota) facility.
In February, before the pandemic made itself felt, Morgan County’s 2.4% unemployment rate was one of the lowest rates in the state. The county’s unemployment peaked at 11.1% in April, and in July — the most recent month for which data is available — unemployment was at 6.3%.
“Low unemployment rates in our region sometimes make it difficult to assure a potential company that we will have the workforce they require,” Nails said. “We have continued to work closely with our K-12 systems and our colleges to improve the workforce training pipeline.”
With the pandemic and an upcoming election in November, “there has been a sharp decrease in project activity,” he said. “This is typical in an election year as many companies will wait to make large investment decisions based on the outcome of the national election.”
Nails said the Morgan County EDA is using this time to update aerials of current sites and plan strategies for the next wave of available investments that would require land or an existing building.
The original 2009 bond issue for the business park in Hartselle was for about $16 million, with the land purchase costing about $1.8 million, about $5.2 million for development costs for roads and utilities and about $1.3 million to extend water and sewer along Thompson Road and build a sewer lift station.
The annual cost of maintenance, insurance and utilities for the park is $28,800, according to Nails. The annual debt service is $1.2 million.
That debt service is being paid by the Morgan County Commission and the county’s municipalities, using TVA in-lieu-of-tax funds that would otherwise boost their budgets. The city of Decatur pays 48.56% of the debt service, or about $583,000, and the Morgan commission pays 35.66%, or about $428,000 per year. Hartselle pays 10.82%, or about $130,000. Smaller amounts are paid by Trinity, Priceville, Falkville, Eva and Somerville.
The county refinanced the remaining bond money in 2016, and Nails said that about $10.3 million remains after the clearing, grubbing and wetlands and stream mitigation projects this summer on the 39-acre Lot No. 1, to make the site more attractive and marketable to prospects.
“Other improvements are being considered such as a spec building,” he said. “Some improvements would be dependent on an interested project’s specific location requirements.”