A TIF program uses increased, future real estate tax revenues to fund new improvements designed to attract additional industrial investment and job creation.
The recession of 2008 paired with increased energy code requirements (IECC Regulations) and tightening environmental regulations created a perfect storm hitting industrial development. Typically, industrial developers build “speculative” buildings in anticipation of future tenant demand. These buildings are a financial risk to the developer, but a benefit to the local community as it allows for quick occupancy to potential manufacturing and distribution companies.
As the recession hit, manufacturers became cautious with expansion plans. In the same time period, the federal government increased energy and environmental regulations driving up construction costs 15%-18% and essentially erasing the potential profit for speculative builders. The market of potential manufacturing or distribution users were not willing to pay the additional costs; and, as a result, very little speculative industrial space was being built.
This widening gap for new industrial space rent versus used industrial space rent resulted in a continuing reduction in the supply of existing industrial space. Ready industrial space for manufacturing, distribution, and warehousing is a critical element needed by expanding businesses. Manufacturers need to capitalize on market opportunities in months not years; so, if ready industrial space is not available, then businesses cannot capture the opportunity and fail to grow.
To stimulate the expansion of speculative industrial space, and in turn industrial employment growth, governments can turn to incentive plans to offset rising costs. While this may seem short sighted to some from a tax standpoint, the reality is quite the opposite. Communities with immediately available industrial space have a much higher opportunity to attract new prospects, nor is it risky for the community granting the TIF. The TIF loan is paid back by the increase in property taxes and is guaranteed by the developer receiving the TIF.
The community leaders of Anderson County, TN saw the opportunity to restart speculative industrial development in their community with a TIF. Working with The Hollingsworth Companies, the Anderson County Commissioners and Industrial Development Board of Anderson County have approved a TIF for two industrial buildings and site infrastructure to be developed by The Hollingsworth Companies.
“This TIF will result in 2 speculative industrial structures of 126,000 SF each that include 13,100 SF of commercial office space”, said Bear Stephenson, Chairman of the Anderson County Industrial Board. “It is anticipated these buildings will attract automotive, plastics, nonwovens, and various other manufacturing and distribution companies and the resulting jobs to Anderson County.”
The Hollingsworth Companies’ In-house Attorney (Jamie Huskins) and SVP of Architecture and Business Development (Tom Wortham) worked with the county commissioners and industrial development board to develop the documentation and gain approval for the Tax Incentive Funding.
HDT, a current tenant at the SouthPoint Park in Alabama, has signed a lease for the 206,500 SF facility at 5951 Endeavor Way. HDT Expeditionary Systems will create more than 120 jobs when it transfers manufacturing operations from Buena Vista, Va., to the facility in Huntsville-annexed Limestone County. HDT, which recently welcomed Sean Bond as its new CEO and President, acquired the business and assets of DHS Technologies last year. Bond said the new Huntsville facility will increase production capacity, cut overhead costs and streamline related production processes into one geographic area.
“The decision to move our shelter manufacturing facility was thoughtfully made,” Bond said. “Ultimately, this transition is best for the benefit of the warfighter and the benefit of our organization. The impact will be increased competitiveness and value in our operations, and the opportunity for HDT to grow in a highly competitive global market. We expect HDT Huntsville to become the premier military production facility across all of Northern Alabama.”
Alabama Department of Commerce Secretary Greg Canfield said the state has offered AIDT recruitment and training valued at $1,042,350 and a Jobs Credit at 3 percent on the new employment payroll at a value of $1,557,130 over 10 years. HDT also will receive an estimated abatement of $30,000 for state, county and city sales and use tax to equip the project, as well as an abatement of $179,000 over 10 years for state, county and city property taxes.
The SouthPoint Business Park, Alabama has one existing building available of 108,960 SF. Eight pad ready sites are available for Build to Suit facilities ranging 87,360 FT to 530,160 SF. Construction time for these Build to Suit facilities are as quick as 150 days.
Earlier this year, British tire manufacturer Dunlop Aircraft Tyres was on a tight timetable for identifying the site of its first U.S. retreading facility. The facility would need to serve major customers such as Compass Airlines and Republic Airlines as well military clients.
These informative articles collectively provide a significant amount of information about development opportunities in the Southeastern United States – as well as unbiased reports on The Hollingsworth Companies’ approach. If you would like to have the complete set of articles in hardcopy rather than downloading them on-line, please contact us here and we will be happy to provide them to you.
Local entrepreneur Joe Hollingsworth has accomplished a lot in his varied and impressive career, but his adventuristic nature expands beyond taking risks with start-ups, stocks and investments. Between hang gliding in Rio de Janeiro, racing Formula 1™ cars and deep sea fishing off the Great Barrier Reef, it’s amazing he even has time for his next big venture —one that’s truly out of this world.
Joe Hollingsworth, Jr., CEO of Hollingsworth Companies, has been chosen as one of the nation’s top site consultants by Southern Business & Development magazine. Hollingsworth’s entrepreneurial spirit and commitment to business growth in the South have fostered exceptional growth and resulted in a dramatic impact within the economic development industry as well as his home state of Tennessee.
Hollingsworth has 41 years of successful entrepreneurial experience, which includes building single-family homes, design/build and management of multi-family homes, the growth of a thriving convenience store chain and sports club chain, as well as the revitalization of a shopping center. In 2005, his company concentrated its energies on expanding the industrial real estate side of its business. Hollingsworth Capital Partners was formed with Joe’s son, Trey, as managing partner and majority owner. The company now has business park developments in Tennessee, Alabama, Virginia and North Carolina. Hollingsworth also authored The Southern Advantage, a literary work highlighting the significant progress in the South that has laid the cornerstone for its tremendous economic destiny.
In researching for the award, SB&D extensively surveyed economic developers located in the South to identify site consultants who provide exemplary services to companies involved in a location search. The resulting list was published in SB&D’s latest issue, released earlier this month. SB&D is the leading publication promoting corporate investment and job creation in the American South, the world’s fourth largest economy.
The Hollingsworth Companies has been featured in an article in the Knoxville News Sentinel and other major Southeastern newspapers titled, “Industrial developer favors rural South”. The article discusses the market leadership position of The Hollingsworth Companies and its success garnered through partnerships with communities.
According to the latest research, The Hollingsworth Companies is now one of the largest industrial developers/investors headquartered and doing business in the region.
The Hollingsworth Companies has been featured in two editions of Expansion Management Magazine. In the 1999 Atlas and Guide issue, editor Bill King asks, “Wouldn’t it be great if you could find an industrial real estate developer who thought like a corporate site selector?” in his editorial “Proactive Industrial Development.”
Lance Yoder, managing editor of the magazine advises to “take the headache out of expansion with step-by-step assistance from the Hollingsworth Companies” in Expansion Magazine–Incentives 2000.
"I fully recommend working with The Hollingsworth Companies if cost or time driven schedules play a part in your company's opportunity because they do deliver within budget and on time with no change orders or surprises."
-- David B. Sutherland, CMS Companies
"Southern states are home to 50 million more residents than the Northeast. In corporate growth, only the South has shown a positive net migration in the early 21st Century."
-- Plano Star Courier
"We invited The Hollingsworth Companies to our Atlanta Offices. Within two weeks all negotiations were completed and the lease was executed. From beginning to end, it only took 45 days to complete our requested up fits."
-- David B. Sutherland, CMS Companies
"The bottom line is that we could not be more pleased with our Hollingsworth Companies experience."
-- Karl F. Hielscher, President and CEO, Metl Span
“From greenfield startup to becoming a national industry leader 10 years later, Hollingsworth continues to play an invaluable role in Service Center Metals growth and success.”
-- Scott Kelley, President and CEO, Service Center Metals
"Hollingsworth entered an agreement to ensure quick delivery of the pre-approved standard building sizes . We are committed to deliver the structural steel, ready for erection, in just 6 weeks from receipt of a final building order."
-- Jeff Carmean, General Manager, Nucor Building Systems
"Joe Hollingsworth participated as one of our first equity investors. In addition, Joe Hollingsworth has served as a board member and leading advisor for strategic planning and direction."
-- Scott Kelley, President and CEO, Service Center Metals