Shell buildings are an economic development marketing tool intended to attract prospects. Wilson County, NC lands 1-2 companies for every shell building PLUS the company that buys the shell. So, if your EDO leadership is on the fence about investing in product development, show them the success Wilson County has had and the ROI may entice them.
The 3:1 ratio (companies to building) is playing out with Wilson County’s current shell building. Neopac USA, Inc. decided to build on an adjoining site after looking at the shell building. Two more prospects who were originally interested in Wilson County because of the shell building are now looking at other sites or buildings in the county. Add to that, Wilson County has 4-5 serious prospects directly interested in purchasing the shell building. Now, that’s positive ROI.
The latest Wilson County shell building is 96,768 SF on 10 acres and expandable up to 400,000 SF on an adjoining 18.99 acres. They did research to know that square-footage is the best size for their market. They also researched ceiling heights and built this one with a 32’-36’ single slope roof. It has no floor to offer the most flexibility. Cindy Ingram, Assistant Director, says that if you build a floor, “you will inevitably have to tear it up.” The building has an asking price of $2.82 million. They sell shell buildings at cost, including soft costs and land. In the past Wilson County built precast tilt-up. Now that precast is more expensive, they used insulated sandwich panels for this building. They included lots of glass features on the front to dress it up.
The building was built by Wilson County Properties, a 501c6 nonprofit corporation formed in the 1950s to develop parks and shell buildings. The sale of property and buildings is used to fund future development. The fund had $2.3 million in it when this latest shell building was started. When the building sells, the funds will seed another building. Wilson County Properties will consider a lease-purchase. In the one case when a company did not want to purchase, they sold the shell to a developer who leased the building to the company. The average shell building in Wilson County stays on the market 18-24 months.
Cindy Ingram’s shell building advice to EDOs
1.Do market research. Don’t build based on how much money you have, build on the market. What companies have been looking at your market? Who have you turned away? What square-footage requests are you turning away?
2. Don’t put in a floor. Pouring a floor limits buyers, so keep it basic.
3. Be patient – it is a marketing benefit.
4. Be careful where you place it. Make decisions based on the marketplace, not where people (including politicians) want the shell.
Shell buildings are a marketing tool in economic development, used to attract prospects and site visits. Why? Around 83% of all prospects want or prefer a building. That 83% figure comes from years of researching state prospect activity. Creative EDC has found that approximately 65% of companies specifically say they want an existing building. Another 18% say they prefer an existing building. By adding the companies that say they specifically want a building to those that prefer a building, we reach the 83% number. That leaves about 17% of companies that say they specifically want a site. Share these stats with your board to explain why site development is so competitive and why buildings are so important.