The Effingham County Industrial Development Authority has been busy over the last few years bringing in new industries and developments into Effingham County – none bigger than the Savannah Gateway Industrial Hub, a new project that has been in the works for quite a while.
“The Savannah Gateway Industrial Hub is a dream come true for us,” Effingham County IDA CEO John Henry said. “It’s something we acquired in 2006 – 2,600 acres of land west of Rincon.”
Henry said that the IDA planned on it being a 30-year hold for them in hopes that the right industry or business would come along.
“We wanted to make sure as the county was developing that we had room to grow industries into the future,” Henry said. “We knew we wouldn’t be able to move into it immediately because of the high cost of the infrastructure provision that has to do with the roads, the water and sewer - the whole nine yards.”
Henry said the IDA had to make sure the land was sufficient for industrial purposes and that over the last decade, the project was put on hold.
“It was kind of sitting on the backburner,” Henry said. “We worked some very large projects and it got to the point where we had so many major manufacturing projects looking at that site that we really couldn’t afford to just let it sit there and not do something with it. Due to the cost of the infrastructure development, we decided we needed a partner to help leverage the private capital.”
With the need to find a partner in the project, Henry and the IDA Board set off looking for interested parties.
“I met and talked with a lot of development companies over the past several years about it – most of the private developers were in the warehousing distribution business and that’s just not something that the site is best suited for,” Henry said. “The site has dual-rail capabilities.”
The option of dual-rail capabilities would prove to be one of the most attractive qualities in the site.
“There are two other sites on the Eastern seaboard that are comparable in size with dual-rail capabilities,” Henry said. “One of those sites is down in Florida outside of Jacksonville – it has no infrastructure whatsoever near it. The other site is in Baltimore and on it is a former plant from the 40’s and 50’s, which requires a lot of cleaning. That made our site very attractive.”
The company that found the site the most attractive was Omnitracs.
“Omnitracs happened to be looking for a dual-rail site – they have the second or third-largest short time rail operation in the United States,” Henry said. “They were looking for a dual-rail serve sit along the Eastern seaboard and had identified the other two sites but were unaware of ours.”
After many talks with various interested parties, Henry finally found the match. The connection came via social media.
“I happened to make a contact on LinkedIn with a guy out of Atlanta that was new to Omnitracs,” Henry said. “He was doing a search and contacted me just as a networking link on LinkedIn. I went in and did research on the company and I found out what they were doing and what they were looking for and contacted him immediately.”
Henry said he told the contact that the two needed to talk and the ball got rolling.
“One thing led to another,” Henry said. “(Omnitracs) were really excited about the opportunity and we were excited too.”
Omnitracs proved to be the perfect partner for the deal to make it work, due in large part to their ability to invest capital in the project.
“The great thing about the partnership we have with those guys is they have deep pockets,” Henry said. “They have the where-with-all and capital to do something. They’re excited about the market and the ports here along with the dual-rail opportunities.”
Henry explained that rail typically lends itself better to the manufacturers and means that companies won’t have to use as many trucks.
“Rail is a premium amenity that a lot of industrial prospects look for,” Henry said. “Not all of them need it but it’s always good to have, especially in a turbulent fuel market.”
With rail, companies can generally access anywhere in the country. With the dual-rail opportunity, the company also has the luxury of creating leverage in price.
“The dual-rail nature of it allows CSX and Norfolk Southern to be more reasonable with their pricing,” Henry said. “The big manufacturers need that – they really look for that.”
Henry explained that companies that use rail to operate or move shipments need to be able to negotiate from a point of leverage.
“If you build on one of the mainline carriers, you don’t have the option of leverage,” Henry said. “They dictate what you pay. If you have dual-rail, you have leverage to negotiate – the big guys like that.”
The land that Omnitracs agreed to purchase has a 700-acre mega site on it that the IDA thought about portioning into smaller sites. Omnitracs persuaded the IDA not to do that.
“(Omnitracs) agreed with us in the fact that we need to leave the mega site alone for a large manufacturer instead of going in and trying to deduct it into smaller sites,” Henry said. “They had the same opinion we did – there were a lot of common beliefs about the development of that site.”
Henry continued and explained that there is a plan for the site.
“(Omnitracs) are looking at doing a ‘Class A’ industrial park – that’s top-of-the-line,” Henry said. “They want everything in there to look good. It’s going to be one-of-a-kind in this region and probably the Southeast.”
The big question that remains is what the economic impact on Effingham County will be.
“The economic impact is phenomenal,” Henry said. “It’s speculative right now. We do the fiscal impact analysis on all of our new projects and determine what we want to do with them from there. We’re in a position with that product – with the Savannah Gateway Industrial Hub – to be a little more picky about who we deal with. We should be able to raise the wage rates for the county at least several thousand dollars per cap with that project.”
Henry explained that the project has the capability of accommodating up to 2,000 jobs and potentially more.
“We should easily be able to accommodate 5,000 jobs on 2,600 acres of land,” Henry said. “One of the things that we look for here at the IDA is job density – the number of jobs per acre. We’ll be working with partners so we’ll limit our taxpayers’ cost on the development. We still want to get that high volume per acre of land in jobs.”
Henry said that the IDA has found that a few scenarios they ran were in the $330-500 million range.
“There is potential out there for us to put 7,000 jobs out there,” Henry said. “The development could represent well over a couple billion dollars in capital investment. Right now, we’re seeing a lot of projects in the $300-700 million range. I’ve worked no less than 10 projects in the past two years that were in excess of 1,000 jobs each and all of those were on less than 200 acres. I think this is going to be a real win-win for this community.”
The development of the project is ongoing.
Effingham County IDA CEO John Henry excited aboutongoing Omnitracs project