Last month, supersonic company Boom Aerospace announced it picked the Piedmont Triad International Airport (KGSO) in Greensboro, North Carolina, to be the location for its first manufacturing facility.
The Overture Superfactory will comprise approximately 400,000 square feet and be constructed on a 65-acre campus at the Piedmont Triad airport. Boom proposes that the facility will bring more than 1,750 jobs to North Carolina by 2030 and more than 2,400 jobs in 2032.
The move answered some questions for those who might have been curious about where the Colorado-based startup would designate a suitable place to build its Overture aircraft. But the step left one question unanswered.
Why North Carolina?
All indications point to Boom being able to join a growing aerospace cluster of approximately 200 companies with ties to Greensboro and Piedmont Triad, including Honda Aircraft Company, Textron Aviation (NYSE: TXT), HAECO, FedEx Express (NYSE: FDX), and others. It will be strategically beneficial for Boom to leverage the talent and capabilities.
In a statement announcing the move, Blake Scholl, founder and CEO of Boom said, “With some of the country’s best and brightest aviation talent, key suppliers, and the state of North Carolina’s continued support, Boom is confident that Greensboro will emerge as the world’s supersonic manufacturing hub.”
North Carolina Gov. Roy Cooper called it “poetic and logical that Boom Supersonic would choose the state that’s first in flight,” harkening to the day of the Wright Brothers’ achievement at North Carolina’s Kill Devil Hills.
The Economic Development Partnership of North Carolina
For one, in conjunction with the Economic Development Partnership (EDP) of North Carolina, the North Carolina Department of Commerce coordinated Boom’s recruitment. For those curious about who is a crucial driver of what, whom, and how much innovation might occur in their state, part of the answer relates to that behind-the-scenes EDP group.
Every state has an economic development partnership that rigorously incentivizes companies to set up shop in their area. A cursory look at how other states attract other aviation companies will find that familiar player in the mix. So what is an EDP, and how did they get Boom to come to Piedmont Triad?
An EDP’s goal is to promote development within a defined area and typically complement the work of a local or regional chamber of commerce. A chamber of commerce’s primary focus is to be a spokesperson for the local businesses in its area, while the economic development corporation tries to attract new companies to the site.
To do this, a state-level economic development corporation taps into a cadre of incentives: low-interest loans, grants, tax credits, and other economic upsides that might be beneficial for that business.
In North Carolina’s case, its Economic Development Partnership of North Carolina’s (EDPNC), led by CEO Christopher Chung, went to work to win Boom’s business.
Shortly after the announcement, Chung spoke exclusively with FLYING to explain how his entity successfully met Boom’s need for its superfactory and offered insights about states that could partner with aerospace and aviation companies to keep manufacturing jobs in the U.S.
With a staff of more than 60 professionals and an annual operating budget of more than $24 million, the EDPNC focuses on advancing the economic interests of North Carolina’s 100 counties and more than 10 million residents. Chung has been a prolific operator. He says for 2022, the EDPNC is working on 200 other deals complementary to Boom’s operation.
Incentives for Boom
Chung told FLYING that some of the reasons they could attract Boom to the area were:
- The costs of doing business
- The strong aerospace industry
- Available talent in the area
The Research Triangle and Park area of North Carolina has gained the confidence of companies like Apple, Toyota, and Google, which announced plans to expand their corporate footprint to that area. Boom perhaps wants to tap into the dense talent pool that will come with that.
“I know that it is very important for Boom to pull this off and to have a market-ready aircraft that sells well. They’re going to depend on human capital—both engineering and manufacturing,” Chung explained.
“I think that’s always been one of our strongest, strongest cards here in North Carolina—the depth of our talent pool, the diversity of our talent pool, and the fact that it keeps growing because people keep moving here.”
According to the statement from the governor’s office, the project is supported by a high-yield job development investment grant (JDIG) that the state’s Economic Investment Committee approved. It was the first of its kind for North Carolina. The state estimates that Boom’s presence will grow the state’s economy by at least $32.3 billion over 20 years—the period when the grant could be active.
“The more attractive North Carolina is as a place to do business, that ultimately benefits any of the companies that are already here,” Chung said.
In exchange, Boom taps into more immediate incentives that allow them to scale its business faster. Chung explained that some of the incentives help with “real estate and facilities construction,” which allows Boom to put its direct funding to its aircraft.
Boom Must Create and Retain Jobs
The jobs incentive is also an important one. Using a formula that accounts for Boom’s $500 million investment and new tax revenues generated by the nearly 1,800 jobs, the JDIG agreement would reimburse Boom up to $87.2 million paid over 20 years.
“For every one of those 1,800 jobs they create, they’re essentially receiving a grant amount to spend those dollars however they want,” Chung explained, adding that “of course, it is tied to them creating those jobs. If they do that, they’re going to get this nice size annual grant every year from the state.”
Furthermore, the state would only have to pay once the Department of Commerce conducts a performance verification audit to see if Boom met the job creation goal and investment target.
On Boom’s end, the agreement requires that it contribute as much as $9.6 million into the state’s Industrial Development Fund-Utility Account. The utility account helps rural communities anywhere in the state finance necessary infrastructure upgrades to attract future business.
Salaries for the new jobs will vary by position but will average $68,792—better than the Guilford County average annual wage of $53,994. The state says this would increase the regional payroll by more than $120 million every year.
It won’t be so easy for Boom. The Bureau of Labor Statistics lists jobs in the aerostructure field as one of the fastest declining fields over the next decade, shrinking by nearly 16 percent and replacing highly automated factories. FLYING asked Chung how the EDPNC was accounting for this or if provisions were allowed if Boom fell short of its job target.
“We know companies will have to evolve to stay competitive,” Chung shared. “But if we’re going to offer incentives to a company, that’s an agreement between the state, the community, and the company. The state has to hold its end of the bargain–so does the company. That means Boom is agreeing that in exchange for receiving these incentives from the state, they are going to be creating a certain number of jobs.”
Chung explained that Boom will need to be flexible, balancing automation to speed things up while adding enough jobs every year to meet the target.
