Update on Statewide Search Projects

The following information is provided by DCEO, and provides an update on various companies that have considered our region over the past months. Our thanks to Dave Pierson

Regional Managers and Account Managers:

Below is an update on the status of statewide site search projects. Please share with your local contacts.

Food Production Facility (request sent out 8/25/09): The consultant is reviewing the sites submitted.

Electric Machinery Factory (request sent out 6/25/09 to regions with communities having rail service within approximately 30 miles of a port/barge terminal. The port/barge terminal must be able to accommodate an 800,000 pound lifting requirement.) Illinois sites have been eliminated from consideration. The sites they have short listed are by major port districts on the eastern seaboard in fairly large metro areas. The company marketing manager said the Illinois sites (as well as sites in other states) met their logistics requirements. Since they had many sites that satisfied the logistics requirements they recently added the criteria of close proximity to a major port and in a mid major metro area.

Project Jazz (request sent out 6/12/09): A search for a call center location. No Illinois communities made the short list. David Kranjcevic gave the following explanation for the elimination of Illinois communities,
" Our client is working on a very tight timeline and required a "plug-and-play" facility solution. Very few facility submissions met those requirements, many were basic office buildings which did not have the necessary IT capacity and would have to be built out. Some that did meet the "plug-and-play" nature were too small for the clients business requirement. As well from our research some communities were deemed to have a labor pool that was too small, poor accessibility, near Chicago and too expensive, as our client is searching for a low cost labor market or the facility was in close proximity to a call center competitor."

Project Image (request sent out 5/13/09): A search for a location to manufacture electric vehicles. The company representative has not provided feedback on the sites submitted. Three weeks ago the company contact stated an interest in discussing the project, but he has not been reached for a conversation. Initially the company was unable to review the site submissions for 2-3 weeks because time was spent on completing an application to the Department of Energy. Still no feedback as of 9/2/09 despite requests made. The US Department of Energy on 6/23/09 announced conditional loan commitments through the Advanced Technology Vehicles Manufacturing program and the Project Image company was among the awardees. Possibly that has slowed down their project. $8 billion out of $25 billion in conditional loans were awarded to Ford, Nissan and Tesla Motors.

Project Apex (request sent out 5/5/09): A search for a manufacturing facility for the solar industry. Illinois facilities were eliminated because Deloitte Consulting with its client determined the locations would not be able to support the volume of specialized technical and engineering skills required. It was stated that Project Apex operations are unique and represent a very advanced technological process.
Alternative Power Generation Sites (request sent out 4/3/09): Michael Svoboda, CB Richard Ellis, said on 7/29/09 that interest and activity had dropped off substantially among his clients and potential clients. He gave the following reasons:
"Besides the financial meltdown, first in residential, soon in commercial lending, demand factors and the stimulus action is having dampening effects on funding.
Conventional fuels have taken a dramatic drop in price, particularly natural gas. This dulls the rush to alternative fuels and coal gasification.
Demand had been growing at 1% or so per year. That is projected to drop off in the near term. 4300MWe today to 5000MWe in 2030…less than 1% simple per years…about .8% per year.
Expectations that the "stimulus" package will feed alternative energy projects causes a pause till the funding is in sight or confirmed that conventional funding will have to be employed.
Nuclear power is emerging once again as a viable source of electrical power.
While the talk about alternative energy continues, few projects are "dirt ready" and the issues recited above, in my view, will continue to put a damper on activity for the near term."

Project Neptune (request sent out 3/11/09): A search for an existing free standing industrial building between 250k SF to 500k SF. The company continues to consider its options, but the focus in Illinois is the downstate Metro East Region. There was contact with the company the week of 8/24/09 and they continue to develop their project and consider real estate options.

Project Traverse (request sent out 2/10/09): A search for an existing 50k -100k SF industrial facility meeting American Institute of Baking standards. No Illinois facilities submitted met the requirements. However, the company has not selected a site because they had to reevaluate their location strategy. They lost a potentially significant customer account in Wisconsin. Status unchanged as of 9/2/09.

Project RO (request sent out 12/2/08): A search for an existing fermentation facility. No facilities were submitted that met the project requirements. As of Spring '09 the project was on hold due to general economic conditions and the overall US credit market.

Israeli Skin Care Manufacturer (request sent out on 4/30/08): On 10/23/08 the DCEO Mideast Rep. stated the project is on hold while the business owner is involved in other business activities. In May 2009 the DCEO Mideast Rep. indicated that the business owner no longer feels that establishing a US location is a priority.

3rd Party Call Center (request sent out on 4/18/08): In early July the company contact stated their project has taken on a "new direction, and we are targeting our new call centre to support Spanish-language work (voice and data)." I followed-up with 2006 Hispanic/Latino population estimates using U.S. Census Bureau data for each of the counties in which a site was submitted. For counties with a small Hispanic/Latino population, if they were next to county with a more significant Hispanic/Latino population that was noted. There were likely several other states under consideration. The company was seeking a call center in the central to western time zone.

On 10/9/08 the company contact said the project is on hold pending the completion of other expansion projects. Follow-up has been attempted since that date without response. At the beginning of the year the company contact stated the project was on indefinite hold. On 7/23/09 the company contact stated they had restarted their search, but had engaged a 3rd party partner to conduct the search. She said if their new search requirements identify Illinois as a promising option, we will be contacted. She added that their needs had changed substantially since last year.

Project Brown (request sent out 3/6/08): This was a search for an existing food processing facility. This was an active search through the early part of this year. But, the consultant this week stated the site selection project has been delayed until the first quarter of 2010. Finding the right facility was difficult because of the requirement for an onsite wastewater treatment facility.

Project Shepherd (request sent out 2/27/08): This was a search for a steel fabrication facility. Early this year the company suspended its search due to economic uncertainty. On 7/22/09 the consultant stated the project status had not changed.

Dave Pierson
Economic Development Representative
IL Dept. of Commerce and Economic Opportunity
100 W. Randolph St., Suite 3-400
Chicago, IL 60601
Phone: 312-814-1346
Fax: 312-814-5247