Last week’s announcement that Precor Inc., one of the world’s leading makers of fitness equipment, had selected Greensboro for the manufacturing base and headquarters of a relatively new division attracted little notice. Perhaps we’re too conditioned for bad news these days.
But the decision ought to be seen as a coup for the region, nearly in the same league as Mack Trucks moving here from Allentown, Pa., and FedEx Ground selecting Kernersville for a regional hub operation.
Look at the Precor numbers: a $26.2 million investment; a build-to-suit, 236,000-square-foot, LEED-certified building in Rock Creek Center; 142 new jobs paying an average salary of $38,400; and total employment topping 160 by 2011. That’s a sizable impact in any economy.
If anything, Precor’s decision is a reminder that while traditional manufacturing remains in steep decline, the Triad is still recognized as a top location for niche manufacturing — in this case, putting together the steel frames, metal plates, pulleys and upholstered benches that make high-quality strength-training equipment for fitness centers worldwide.
“What really set Greensboro apart was the people that we met and the long-term commitment we sensed from working with them,” says Chris Torggler, a Precor senior vice president who will manage the Greensboro operation. “Initially, everybody is willing to wine and dine you, but making you feel welcome over the long haul is important. From the recruiters to the developers to the community college, that’s what we felt in Greensboro.”
While there is a general sense that the entire U.S. economy has screeched to a halt, Precor, based outside Seattle, Wash., continues to grow as it rides the wave of personal fitness popularity and expanding fitness center chains. It is best known for its elliptical training machines, which it has been making for more than 20 years. Revenue last year was $410 million, more than twice what it was in 2000.
In 2004, Precor bought Fitness Products International, which made the Icarian brand of strength machines in Valenica, Calif. Because most of that division’s sales are east of the Mississippi and in Europe, Precor began looking for a manufacturing location outside of California about 18 months ago. It was a national search at first, but was soon narrowed to the Southeast with locations in Guilford County, Tennessee and South Carolina given serious consideration.
Dan Lynch, Greensboro’s lead economic developer, says Greensboro made the list initially because the Precor site location consultant remembered the city from pitching an industrial project here several years ago (which went elsewhere). He pointed Precor to Greensboro on something of a whim, but the city soon rose to the top of the short list.
Among Precor’s priorities — build a factory from the ground up in less than a year, secure an attractive lease rate, have proximity to interstates and ports (given international sales) and above all, have access to an available workforce for skilled manufacturing jobs.
“I can’t say enough about (President) Don Cameron and his team at GTCC,” Lynch says. “I think they are a large part of why the company is here.”
Torggler says Precor was impressed not only with the training facilities the community college officials showed at their Jamestown and Greensboro campuses, but also the fact that job training could be tailored to Precor’s precise needs in welding, machining and upholstery. (A Precor human resources manager was in town this week to meet further with school officials.)
While GTCC was presenting a coordinated front, so was the development team for Rock Creek Center — Simpson Schulman & Beard. Precor looked hard at six sites all over Guilford County, but was ultimately wooed by Richard Beard’s presentation, which included input from Landmark Builders and Lindsey Architecture, who filled out the Rock Creek team.
Critical to the deal was Beard’s ability to put together an LLC of local investors willing to finance and build the tilt-up concrete-wall factory building, which will cost about $12 million. Beard declined to say which bank is backing the project because the loan won’t close until next month. But he says he was turned down by a variety of banks large and small, and feels fortunate to get financing from a bank asking “only” 20 percent equity. Most were asking 30 percent or more.
“I would say this is a mega deal in today’s environment,” says Beard, whose Prefit LLC will lease the building to Precor. “We’re glad to get it.”
Jimmy Hoots, who handles pre-construction services for Landmark of Winston-Salem, says he’s received more than 20 calls from subs and suppliers in the past week wanting a piece of the work. Normally, he says, he would have received just a few calls by now.
Hoots says the grading-permit request has already been submitted and ground should be broken by late January. Precor intends to be operational by late November 2009. Over the course of the project, Hoots says construction should provide work for between 250 and 300 workers, and that’s prior to equipment installation.
“This is a fantastic project that has come along at a good time,” Hoots says. “Everyone is looking for work these days.”
Incentives helped close the deal, too. Guilford County commissioners approved nearly $300,000 in tax breaks over three years and the Governor’s Opportunity Fund contributed $142,000 toward job training.
“If you don’t get any incentives, you tend to say, ‘Well, there are a lot of competitors out there,'” says Torggler with Precor. “Greensboro didn’t offer the most incentives, but when you put everything together, it was the best package.”
He adds that Precor’s plant in Valencia, Calif., which now makes the strength-training equipment, will be gradually closed with work shifting to Greensboro a year from now. As many as 20 or 30 employees will move east with the division, but Precor is committed to 142 new jobs locally within three years.
Another win soon?
Dan Lynch, the lead economic developer in Greensboro, is normally circumspect, if not silent, about prospects his office is working. But in the afterglow of the Precor decision, Lynch told us earlier this week:
“Today and tomorrow we have a huge client visit. It’s a wonderful project. It’s manufacturing, but I can’t say anything else about it. If we can get this, it would be a great way to kick off 2009.”
Other sources say they heard the project is aviation-related and eying land in the airport area. A decision, or announcement, could come by year’s end.