How do you prepare for the next ‘mega project’? Spend millions on a hope

“We’re preparing for significant growth, and all the things that it takes to build a city need to be enhanced. It’s a very complex set of requirements in order to prepare for a company of that size,” said David Stewart, CEO of the sprawling industrial park.

MidAmerica Industrial Park (MAIP), located about 45 miles east of downtown Tulsa, comprises 9,000 acres in Mayes County.

Officials have spent at least $60 million on water, sewer, electricity and roads on about 2,000 acres for a “mega project.”

In addition, MAIP will build a 275,000-square-foot warehouse building for potential companies, a new terminal for its airport and runway expansion, and has spent about $20 million for expansion of its wastewater treatment plant, the third-largest in the state behind Tulsa and Oklahoma City.

A newly-built, four-lane, east-west highway called Williams Street that will bisect the park is set to open in February or March.

Officials also held a ribbon-cutting recently for Phase II of The District, a 162-acre development that incorporates retail, residential, parks and trails at MAIP.

Phase I opened in July 2021 and includes 32,000 square feet of retail space.

Phase II is the construction and opening of West 530 luxury apartments; Phase III of The District development includes 100 residential homes, 10 acres of parks and outdoor spaces, which will all connect via walking and biking trail systems.

Panasonic, which picked Kansas over Oklahoma for a $4 billion battery factory last year, continued to consider MidAmerica as a second site, Stewart said.

MAIP also was one of two finalists for a reported $5 billion investment for a Volkswagen electric vehicle plant, but the auto maker chose to build next to its existing, adjacent plant in Canada.

Now, Stewart said, all electric vehicle “mega projects,” including Panasonic’s reported plans to build a second facility at MAIP, are on hold.

“Panasonic was the mega project,” he said. “Their current facility is in Kansas. They were going to build another facility, but they put that on hold or postponed due to the market. Demand is low, technology is changing. Costs are going up,” Stewart said.

“Now we’re marketing the (MAIP) site to other companies.”

Stewart said MAIP officials are “agnostic” on which company might be interested in a mega project, “but the market right now for mega sites is in the EV space. That’s why we’re getting all of this activity,” he said.

“The EV market goes haywire. Interest rates are high. Nobody is buying (electric) cars. And inflation is hitting,” Stewart said.

“Everybody who wants one — they’ve already bought it. So now they are trying to push the market and provide a product that people are going to voluntarily buy in this difficult market,” he said.

“And so they’re not buying, bottom line. They are waiting until the batteries last longer; they’re waiting until interest rates are going to go down. The prices are still high. We need better (electric-vehicle charging) infrastructure.

“All of these things that everyone knew were going to be complicating factors finally culminated in the market. The consumer will ultimately dictate the market,” Stewart said.

The combined challenges have “forced the makers to look at mega sites in a different way,” he said.

“Now everybody (companies) is sorting out all of these issues and determining their strategy going forward. So all of these big companies are now hesitating.

“We took all that (potential mega site) property and accelerated the timeline on having it shovel-ready. There’s still some dirt work that has to be done but the infrastructure to that … environmental studies, and those take years … and we’ve done all that.”

MAIP has a financial trust and mainly uses earnings from it, along with water sold from its water distribution network to fund the improvements, and no taxpayer dollars — with exceptions — depending on the state legislature, he said.

In response to a request from Panasonic, state lawmakers earlier this year appropriated $145 million for the Oklahoma Department of Commerce to fund site improvements and facility upgrades at the industrial park.

But it remains unclear whether that funding, in addition to $698 million in state incentives being offered to Panasonic for its initial proposal, would have any influence in a future economic development deal.

Other political hurdles for a “mega project” may yet remain.

Mayes County commissioners voted 2-1 in April 2022 to approve a resolution establishing a $300 million tax increment financing district within MAIP. The 12-year TIF would have covered 588 acres inside the industrial park, reportedly for Panasonic.

State and Mayes County officials hoped the incentive will help land what they had said then would be the largest economic development project in Oklahoma history.

But the TIF failed via an initiative petition with Mayes County voters by a more than 60% margin on Nov. 8, 2022.

Originally a munitions plant during World War II, MAIP has a history of re-invention and transformation.

More than 60 years ago, the Oklahoma Legislature formed a public trust authority to purchase the land and capitalize on the state’s resources to attract jobs and investment.

Today, MAIP is the eighth-largest industrial park in the world, the third-largest in the U.S. and has the biggest potential for a “mega site” available in Oklahoma, officials said.

“What (company) site selectors do is they have sites all over the U.S. Their job is to pick the right one,” Stewart said. “The way we look at it is, we like to check all of the boxes in anticipation so when they get here, we have it all done … so pretty soon, we make the final cut many times.”

With more than 80 companies and an employment base of more than 4,500 people, MAIP generates more than $732 million in wages and salaries per year.

It is home to five Fortune 500 companies, including the second-largest Google Data Center in the world, established there in 2007.

The property taxes from that mega project have resulted in “the Google effect“ for Pryor Public Schools, which no longer needs nor receives state education funding and continues to grow.

“Have you seen some of the schools in Pryor?” said Sherry Alexander, MAIP director of business development and corporate governance. “They look like community colleges.”

Alexander and Stewart said Chouteau-Maize schools may also eventually benefit from such an infusion of property-tax revenue, depending on additional companies and expansions of existing ones.

The Pryor School District boundary is north of the new, four-lane highway that will bisect the park; the Chouteau-Maize School District boundary is to the south of the new highway, Alexander said.

The “mega site” and most new proposed development is on the south side of the new highway and in the Chouteau-Maize district, she said.

“They have a chance for huge growth just like Pryor,” Alexander said.

Also, if Google were to expand its existing sprawling facility, it would be to the south in the Chouteau-Maize school district, officials said.

MAIP is within 300 miles of 10 major metropolitan cities and has a next-day service capability to 23% of the U.S. population, Stewart said.

MidAmerica’s transportation, distribution and logistics has access to four interstates, on-site Union Pacific rail and switchyard, the nation’s most inland water port, and two international airports.

“Like any business, an organization must continuously evolve, not only to remain relevant, but also to surpass the competition,” Stewart said.

“For the last 10 years, we have methodically positioned MidAmerica as a mega site for a mega employer.”