The first employer to land in Warren County’s Kentucky Transpark is continuing to pay dividends, as is the economic development strategy of building speculative buildings ready for industrial prospects to occupy.
Canada-based Nova Steel on Thursday announced plans to locate an automobile-parts manufacturing facility in the Transpark that could grow to 110 employees, and the company’s top executives said the presence of business client Bowling Green Metalforming and the ease of moving into an existing “spec” building made the decision much easier.
“We’ll have a very good customer next to us,” said Scott Jones, president and chief executive of Nova Steel. “We’ve worked with Magna (BG Metalforming parent Magna International) for many years.”
BG Metalforming, a supplier for the automotive industry that now occupies a 1 million-square-foot plant, was the first company to set up shop in the Transpark in 2012.
Nova Steel, which will be the industrial park’s 17th private-sector employer, will start much smaller. The company is moving into a 108,000-square-foot building on 17 acres it purchased from the Bowling Green Area Economic Development Authority and plans to invest $20 million in getting the plant ready for a summer 2021 opening.
For a company that was looking to start production quickly, having an existing building was a good selling point, Nova Steel Vice President Tom Stearns said.
“In this (coronavirus) pandemic environment, we’re aware that building projects can be delayed,” Stearns said. “Having that spec building in place was a very good fit for us.”
Ron Bunch, president and chief executive of the Bowling Green Area Chamber of Commerce, said having a building ready to be occupied is part of his economic development strategy.
“We always have products that are ready or nearly ready to be occupied,” Bunch said. “About 70 percent of clients are looking for an existing building. Very few are looking for a greenfield site.”
Nova has big plans for the building that will allow the company to better support customers throughout the South and central regions of the country.
A news release said the company is planning two expansions within the next three to five years that would grow the operation to 325,000 square feet, bringing the total investment to $70 million and total jobs to 110.
Another factor in the company’s decision was Warren Fiscal Court’s approval Oct. 13 of industrial revenue bonds up to $80 million as an inducement for Nova Steel to locate a plant in Warren County.
Founded in Montreal in 1979, Nova Steel has grown to include 20 locations in North America. The company manufactures products for automotive, construction, mining, agriculture, transportation and other related industries.
Needing to continue that expansion to meet the needs of automotive customers, Nova Steel looked at various sites before deciding that Bowling Green was the place to be.
“I’ve never worked with a group that tried so hard to get us,” Stearns said. “We’re really excited about the location. The state of Kentucky welcomed us with open arms. It became clear that the Bowling Green area had everything we were looking for.”
Incentives from the Kentucky Economic Development Finance Authority helped sway Nova.
KEDFA has approved a 10-year incentive agreement with the company under the Kentucky Business Investment program. The performance-based agreement can provide up to $2 million in tax incentives based on the company’s investment of $70 million and targets of creating 110 Kentucky-resident, full-time jobs across 10 years and paying an average hourly wage of $31, including benefits, across those jobs.
By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates.
KEDFA also approved Nova for up to $550,000 in tax incentives through the Kentucky Enterprise Initiative Act. KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.
– Follow business reporter Don Sergent on Twitter @BGDNbusiness or visit bgdaily news.com.