In previous posts, we’ve noted the significant benefits a manufacturer can take advantage of by relocating into an existing manufacturing space. Three recent news stories provide good examples of manufacturers proving this point.
In our March 2011 post, we covered Evergreen Solar’s move out of the Fort Devens manufacturing space and the opportunities the facility would provide to companies operating in heavy industry. The benefits of moving into a space with existing equipment and infrastructure can usually save a company, sometimes significant, design and construction costs. We have worked with a number of clients relocating to existing facilities for this reason.
Now, a little over a year later, Saint Gobain has announced that they will be one of the companies taking advantage of the unique space.
“The company plans to invest $31 million at the facility and add 90 jobs to manufacture a component of light-emitting diodes (LEDs). In return, the company is getting an assist from the state in the form of $1.7 million in tax breaks, plus tax increment financing (TIF) from Devens.”[i]
This move will allow St. Gobain to greatly increase their growth, with a new business unit: High Performance Substrates, while maintaining proximity to their other manufacturing locations in Central Massachusetts. “The building was a perfect fit” according to William Manley, president of Calare Properties[ii] acknowledging the benefit of the existing infrastructure and utilities.
Linuo also chose to take advantage of an attractive but empty location. Earlier this year, they bought the former IBM site in East Fishkill, NY. They plan to invest $100M in the 900,000 sqft site to redevelop it in a multiphase project. The site was attractive because they were a foreign company looking for a “campus-like setting which would also be their US Headquarters”[iii] according to Vincent Cozzolino, president and CEO of the Solar Energy Consortium, who helped convince Linuo choose the IBM location.
Perhaps the best example is Edac Technologies, who originally planned to relocate to an old GE Industrial Solutions facility where they would have to invest $3.8M above the purchase price. Instead, Edac seized an opportunity to move into an existing state-of-the-art location, Pratt & Whitney’s manufacturing facility in Cheshire. Although they had already purchased the first facility, Edac could not ignore the benefits of the P&W facility and decided to change course.
Edac’s president and CEO, Dominick A. Pagano summarized the benefits of the new facility. "Sited on 50-acre campus, the significantly larger Cheshire facility is already equipped with the advanced manufacturing infrastructure to support our type of operations and projected future growth. As a result, the total cost of the Cheshire facility will be well below the combined purchase price and capital improvement/expansion budget for Plainville."[iv]
Their decision to move into a different, new facility, while initially more expensive, will actually save Edac money thanks to the existing infrastructure and equipment in the Cheshire facility.
To fully calculate the potential costs of relocating to a new facility or purchasing an existing facility, it is important to work with an engineering firm. An experience engineer can help the client understand how factors like existing utility infrastructure and equipment can greatly impact the bottom