A new year is here and there are some exciting things to pay attention to in real estate for 2018.
One item – and it’s a big one. Soon there will be an announcement about the new Toyota-Mazda plant. North Carolina is on the shortlist (one of two finalists) and an insider tells me we can expect to hear an announcement from Toyota Motor Corp. in about two weeks.
This $1.6 billion plant is expected to create about 4,000 direct jobs and thousands more indirect jobs by 2021.
Wages are above-average for NC, given the pay history of car assembly plants. And the spin-off jobs at suppliers and service companies should pay relatively well, too.
The N.C. location, a 1,870-square-foot spot in Randolph County, is in the Triad, a region that has not grown as fast as the State’s other metro areas, notably Charlotte and Raleigh-Durham. It would provide great opportunity in an area where it is needed. North Carolina is also new to the car plant game as we haven’t landed an auto-manufacturing plant yet and this would give us a new competitive edge in economic development. Our competitor, Alabama, already is home to a Toyota plant that manufacturers engines.
The Carolinas is rapidly becoming an auto powerhouse and this is pushing the demand for industrial assets to record levels.
The auto industry, along with the growth in e-commerce and housing gobbles-up warehouse space near Carolina ports and in last-mile locations like Charlotte’s Westinghouse area. It is surprising to many to learn the Triad is among the largest industrial areas on the East coast, and an auto manufacturing facility would result in developers speculating on class-A distribution buildings in this market.
N.C. economic developers are now able to offer more competitive economic incentive plans, thanks to changing attitudes among state lawmakers. In years past, we were hamstrung by weaker incentives because of lawmakers’ fears about taxpayers’ claims that they were a waste of money. I recently talked with an attorney involved in crafting some of the incentive package being offered to the automakers and it’s refreshing to see we can now put forth a strong, viable offer.
How the Toyota-Mazda CEO’s will make their decision may surprise you.
North Carolina has two more U.S. senators and 13 more congressional representatives than Alabama does, giving Toyota more lobbying power in Washington, D.C. Also, the recent U.S. Senatorial race in Alabama may give the executives pause. The sexual misconduct allegations against candidate Roy Moore could give North Carolina an advantage because even though Moore lost, just the idea of a Senator Roy Moore could mar Alabama’s image. North Carolinians remember all too well the backlash we experienced because of the H.B. 2 legislation involving bathroom use and the resulting claims of discrimination lobbied against us.
Also keep an eye on negotiations among the United States, Mexico and Canada to amend the North American Free Trade Agreement. If negotiations fail, and President Trump decides to exit the trade pact, that could disrupt Toyota and Mazda’s production plans (current plans are for automakers to manufacture 300,000 vehicles a year).
Spoiler Alert! POTUS to claim this as a big win!
Trump had threatened Toyota with big taxes when the carmaker was eyeing moving south of the border. Now, Trump has already Tweeted credit for the plant, claiming that his get tough policy on trade makes going to North Carolina a more attractive strategy than going to Mexico.
It is my prediction that NC wins this deal.
However, if we do not, I will not be the only real estate guy with a hair problem who got his facts wrong on the deal.