SW Buzzing Over $3.7B, 7M-SF Deal

MOUNT VERNON, AL-ThyssenKrupp AG's decision to build a seven-million-sf plant in Alabama has spurred discussion about the number of direct and indirect jobs that the project will create. Also, chief on market watchers' minds is the secondary development that most likely will take place in the wake of the $3.7-billion industrial project.

The development site is 3,500 acres near the Tombigbee River off State Hwy. 43. Right now, the seven-million-sf, carbon steel-and-stainless steel manufacturing plant is little more than a plan on a drawing board. But area experts tell GlobeSt.com that the development impact will be substantial. But, there's a long way to go before the plant and ancillary development come to fruition.

"The area's virgin land right now, except for timberland," says Neal Wade, director of the Alabama Development Office in Montgomery, AL, who helped to lure ThyssenKrupp to the state. He says state officials are working with a number of local owners to make the land available and ready for the Dusseldorf, Germany-based company to start construction on what has been touted as the largest private industrial development in the nation.

Wade says infrastructure work includes the Tombigbee River, which needs to be able to accommodate product and slabs coming from Brazil. Also, upgrades to SH 43 must be made. "We've been working with the company for about a year. They've given us a lot of direction as to how they'll proceed with construction and timeframes," he explains. "The next step is to secure the site, get it cleared and get it permitted."

Local brokers John D Peebles, principal with Grubb & Ellis Co., and Adam Metcalfe, an industrial broker with Metcalfe & Co., aren't involved in the land deal or had a hand in bringing ThyssenKrupp to Alabama, but both says that since Alabama became a finalist state that they've received inquiries about the availability of raw land in and around the city and to the north. Peebles anticipates an explosion in residential housing in the beginning stages of the ThyssenKrupp project.

"They're predicting 30,000 construction jobs with this over the next three years," Peebles says. "You have to have someplace to put all those people." Residential development is likely to run the gamut from mobile home parks to subdivisions, with some multifamily product thrown in for good measure, he adds.

Metcalfe points out the support industry also will need somewhere to go, which will change the complexion of northern Mobile County and southern Washington County. "You can't bring that many people in and have that kind of construction without huge change," he remarks. "But, it won't happen overnight. There isn't a magic pill where we'll suddenly see 30 new buildings sprouting up in that area."

The locals point out that while change is inevitable, it's difficult to pinpoint what, exactly, that change will be or how it will impact what's currently there. "Until we start looking at applications and seeing where the workers are coming from, we won't know what commuting patterns are," Wade says. "We don't have much of a history in the north part of the county for commuting."

But the brokers point to the development that occurred following Mercedes-Benz's plant, which was built in Tuscaloosa during the early 1990s. "We likely won't have the same level of spin-off, but there will be contractors, service providers and others providing goods and services who will relocate here," Peebles says.