As published in Toledo Business Journal - June 1, 2016
A rendering of the Overland Industrial Park spec building
Site locations that competed for a $70 million Dana Holding Corporation (Dana) manufacturing facility included communities in Indiana, Michigan, Kentucky, and Ohio. The large project involves a 300,000 square foot plant to produce front and rear axles for passenger vehicles.
A model development strategy approach by economic development officials in the Toledo area was key to winning this large project. The model approach brought a number of public and private sector entities together to form a collaborative partnership. A number of the entities include the Toledo-Lucas County Port Authority (Port Authority), Regional Growth Partnership (RGP), JobsOhio, Ohio Department of Transportation (ODOT), NAI Harmon Group, Toledo and Lucas County officials, and a number of other entities.
“This project involved a huge effort by our personnel at the Port Authority, staff at the RGP, ODOT, JobsOhio, the City of Toledo, Lucas County, and others. It was truly a team effort of a public/private partnership where both the private and public sector entities came together and shared the risk. A key to this project involved the Port Authority taking a 50% risk and sharing this with the private sector developer, NAI Harmon Group. The developer and the Port Authority worked to put a spec building in place at Overland Industrial Park, home of the former Jeep plant. An important part of the team effort included extensive marketing initiatives by RGP. This team effort involved a great deal of work as it took several years to complete,” stated Paul Toth, president and CEO of the Port Authority.
Since the Port Authority acquired the former Jeep property in 2010, approximately $15 million was invested to redevelop the site and to make it attractive to many potential end users. Upgrades to the site include remediation, site grading, installation of lighting, and the completion of a new roadway located off Central Avenue. This will serve as the main entrance into the site until ODOT completes phase two of the I-75 interchange project. The property is served by Class I rail, offers easy access to the interstate system, and is seen by as many as 125,000 passing motorists each day, according to Port Authority officials.
In early May, Jim Kamsickas, president and CEO, Dana Holding Corporation, delivered an address to the Rotary Club of Toledo. Toward the end of his address, he put a slide up for the audience to see that simply indicated − Breaking News. Kamsickas then announced to the large audience that his company has selected Toledo and the site at Overland Industrial Park for a new manufacturing plant to produce front and rear axles. He explained that the newer Jeep complex in north Toledo is in close proximity to Overland Industrial Park and it will be a major customer for the axles to be manufactured by Dana.
The large project has been a long time in developing. Dana put significant work into securing commitments for the business that the new plant will service. The agreement with Fiat Chrysler Automobiles (FCA) and its Toledo North complex was an important part of the need by Dana to significantly expand its production capabilities.
Further, Dana has secured new business from another automotive manufacturer for its axle products. While Kamsickas did not disclose the new customer, it is the combination of the business from Fiat Chrysler and the new customer that is at the base of the Dana facilities expansion.
The company is planning to produce enhanced versions of its Dana 30™ and Dana 44™ axles, which will deliver increased power density and performance in a smaller package, according to Kamsickas.
president and CEO,
Dana Holding Corporation
During the presentation to the Rotary Club of Toledo, Kamsickas shared comments about key factors that assisted the company’s selection of Toledo and the Overland Industrial Park site. Being in close proximity to the Fiat Chrysler Toledo North complex was an important part of the decision. In an interview with Toledo Business Journal, Kamsickas advised that the company is still negotiating the JIT (just-in-time) aspects of its supplier responsibilities that will determine how quickly orders from Jeep are filled. He highlighted that work and effort from both the Port Authority and RGP were very important in the selection process. At the Rotary meeting, Kamsickas recognized Paul Toth and Port board members William Carroll and James Tuschman. He also recognized Dean Monske and Gary Thompson from the RGP.
Kamsickas also highlighted the importance to the site selection of having an existing building in place. “We would not have been able to select this site if the 100,000 square foot building had not been put in place,” Kamsickas emphasized. During a site selection process, many companies today are under significant time pressures and finding an existing facility that can be converted to their use is highly advantageous to meeting these tight time requirements.
The inventory of available, high quality industrial buildings has become tight in many markets. In the past, this would have led to the construction of new spec buildings that would be in place to support such demand by manufacturers. However, following the recession of 2008/2009, many financial institutions have been reluctant to lend unless a firm contract is in place for the end user. Spec building projects have become quite limited.
Finding a private sector partner to invest and develop spec manufacturing facilities is very difficult. The Port Authority’s development role in transforming the former Jeep brownfield site into a new industrial park and then sharing the building construction risk with a major private sector developer was critical for the spec building project that NAI Harmon Group undertook. In an interview with Toledo Business Journal, Ed Harmon, owner and principal of NAI Harmon Group discussed the project. “The project was a team effort. It involved a level of risk and we were willing to undertake this and believed in it,” stated Harmon. NAI Harmon completed the construction of the 100,000 square foot spec building at the Overland Industrial Park site in 2015.
Dana Holding Corporation Headquarters in Maumee
During the first phase of operations at the new plant, production of prototype axles will occur. However, the plant will be expanded to approximately 300,000 square feet in order to accommodate Dana’s full production needs of close to 1 million axles a year at the plant. Dana estimates that new investment of an estimated $70 million will be put in place through 2020 as production continues to increase and construction and development of the facility and its equipment is completed.
A combination of efforts and support by members of the project development team contributed to the group’s success.
“Our community recognizes the historical, current and future significance of Dana for the Toledo region. Helping them was a priority that brought all local partners together in a collaborative effort to help move this project forward,” said Dean Monske, president of the Regional Growth Partnership. “And that teamwork extended down to Columbus where JobsOhio understood the importance of this project to northwest Ohio, placing this on fast track to meet the company’s timeline.”
The Lucas County Commissioners are providing an economic development loan to the Port Authority for upgrades to the current spec building to make it suitable for Dana’s manufacturing needs. In addition, the Commissioners are providing workforce development services and programming to help ensure that Lucas County residents are work-ready for the new jobs at Dana.
Support from the City of Toledo includes a six-year Toledo Expansion Incentive equivalent to 30% of the Toledo income tax withheld from employees at the site.
Another incentive from the City of Toledo involves property tax abatement. It is being offered through the Community Reinvestment Area program (CRA). In addition, Toledo is also providing engineering and planning support for water and sewer taps, permitting support, and approvals and assistance with project agreements, according to development professionals.
Dana is also working with officials in Columbus. The company has applied for JobsOhio and State of Ohio programs. Those applications and approval are pending at press time.
Dana’s Kamsickas indicated that an important factor in the selection of the Overland Industrial Park site has been the cooperation and support from local and State of Ohio economic development officials and community leaders in Toledo and Lucas County.