By Mike Eastering

Warehouse Needs Grow as More Businesses Move Into Huntsville

By Mike Easterling

Less than two years ago, as Huntsville’s population began to mushroom, the city didn’t have the structures to handle the business growth that came with it.

That’s changed, along with the number of residents that continues to rise, making Huntsville the largest city in the state. Recently, the city was named No. 1 as the best place to live in the country, according to U.S. News and World Report. That is sure to increase the city’s profile.

And warehouses are sprouting around the community along with the booming business industry.

“I would say 18 months ago, our warehouse inventory was non-existent,’’ said Shane Davis, Huntsville’s Director of Urban and Economic Development. “I mean, anything that gets built, we have someone come in and build a hundred thousand square feet, and before the building would get completed it would be leased, and ing but we’ve got about five projects where we’re working with groups that are going to put about a million square feet of speculative warehouse on the ground this year that will be available around the fourth quarter of 2023, which

we kept thinking , ‘Well, we still have the inventory.’

“We really kind of penciled it in and reached out to private equity investors to do spec warehousing. We had projects coming in because we were an ideal location and they didn’t have time to wait for something to be built. They wanted to get into the market now.

“I can say it’s still really a tight market for availability for warehousis good.’’

However, as the city expands with continued population and business growth, even more warehousing space will be needed moving forward.

“I don’t feel like (recent additional warehousing) is going to be enough,’’ Davis said. “I mean there’s so much opportunity here. There’s so much logistics and demand that I kind of feel what we have coming into the pipeline with our growth – it’s going to get leased and absorbed.

“I think in the next two-tofive years you’re going to see more warehouse demand and hopefully warehouse construction. Huntsville’s becoming that size market. Five years ago we weren’t that type of market.’’

While warehousing is becoming premium real estate in the area, an internet search for locations revealed numerous websites offering space to lease or purchase in Huntsville, Madison and other nearby Tennessee Valley locations.

Manufacturing has increased consistently in the city in the last decade and has helped create the need for more warehouses.

“We’re still doing what we’ve done since 2014, which is creating opportunities,’’ Davis said. “We’ve created right at just under 14,000 manufacturing jobs since 2014 and a lot of those businesses are are still ramping up their employment numbers.’’ w

A Look Into the Huntsville’s Ever-Growing Manufacturing Industry

By Mike Easterling / Photo courtesy of Mazda Toyota Manufacturing

Shane Davis, Director of Economic and Urban Development for the city, compares recruiting businesses to college basketball’s Big Dance.

The tournament stokes office and online pools and water cooler talk about busted brackets. Davis previously used the analogy to explain his job to his daughter, who played high school sports.

“Competing for industry, to me, it’s like NCAA basketball, it’s like March Madness,’’ Davis said. “A lot of these mega-projects you’ll have 23 states (competing). It could range from 10 and we’ve had projects where they looked at 30 states. They’ll start out with anywhere from 50-130 possible sites. So when you start that first initial response to showcase your community your odds are pretty low.

“Then it’s like getting to the next round and the next round and your odds start going up. Then when you get to what I call the final group there may be two two sites, there may be four. I tell our team, ‘Look, our site is a good site. Logistics work, utilities work, the site works. Now, what makes the difference between finishing second or finishing first and bringing these jobs to the community.’ ’’

While nothing is likely anytime soon to displace space and defense as the city’s major calling cards, manufacturing is making a push to be a hub in the state and southeast. Huntsville alone has added 14,000 manufacturing jobs since 2014.

One of the more celebrated additions to the local business landscape was the large $2.3 billion Mazda Toyota Manufacturing (MTM) plant that began operating in 2021 and keeps expanding.

The first-ever 2023 Toyota Corolla Cross Hybrid will be built at the site off Greenbriar Road. It was unveiled during a ceremony in early June. The first-ever Mazda CX-50 that was introduced in January and the gas powered Corolla Cross, which debuted in 2021, will also be assembled in Huntsville.

The car maker also announced it’s adding engines to MTM’s lineup.

“A lot of these projects that consider Huntsville and other parts of the U.S., they’re going to hire thousands for new jobs’’

According to Davis, Huntsville officials are in lockstep with new business, but stay in “constant contact’’ to make sure the startup needs are met and is perhaps one reason MTM is putting billions into the facility.

“I think you’ve seen that with expansions at Mazda-Toyota,’’ he said.

There are other reasons Huntsville is bringing in manufacturing business: • Job growth could mean higher wage opportunities for workers • A method to keep Huntsville job growth on an upward trend • City administrators continually identify key locations for possible expansion • High quality of healthcare • Yearly transportation upgrades with checks to make sure workers have corridors to travel in and out of a city drawing from 16 counties including Tennessee • Short drive to larger cities such as

Nashville and Atlanta • Lower cost of living than many metro areas • Quality of life, another focus of city leaders, with a vibrant entertainment scene and outdoor recreation

Those are just some of the highlights the city and area offers for a business to consider when making a large investment.

“A lot of these projects that consider Huntsville and other parts of the U.S., they’re going to hire thousands for new jobs,’’ Davis said. “Some will be local and regional with an opportunity to secure those jobs and have a better life for their family. But there’s also a section of that project in most cases where 10 or 15 percent of the current workforce is going to get transferred from somewhere else to get that project or facility up and running.

“Their most valuable asset is their employees. Quality of life is huge. If they’re told, ‘We’ve made a decision to expand and, by the way, I‘m going to need you to move to Huntsville, Alabama.’ They’ll say let me look at it and want to feel comfortable about coming. That’s a huge decision. It’s got to be somewhere they want to be. That’s critical for industrial development.’’

Huntsville was recently named the top place to live in the nation by U.S. News and World Report. If this were a basketball tournament the city would certainly be considered for a high seed.

“This is a good location today,’’ Davis said. “It’ll be a good community tomorrow and 10 years from now, 20 years from now.’’ w

Starting Your Small Business

By Dawn Suiter

This is the eighth and final part of a multi-part series that will help prospective entrepreneurs to develop the tools they need for a successful business venture. To read the full series, please visit the Huntsville Business Journal website.

As your dream business draws ever closer to becoming a reality, it’s time to put the last finishing touches on it and tie up a few loose ends. Only two steps remain in the process: applying for the necessary licenses and permits and opening your business bank account.

Licensing can be federal, state, and/or local and the kind of business activity you’ll be conducting and your location will determine the licenses and/or permits your business will need.

Federal licenses and permits are necessary for certain products and business activities, such as those dealing with weapons, energy, wildlife, transportation, agriculture, and broadcasting.

Let’s say you’re planning to open a microbrewery in Huntsville. You’ll need a Business Privilege License, which will be issued by the Madison County Probate Office. If you’re also planning to sell items relating to your business, such as T-shirts and glassware, you’ll also need a store license.

Since you’ll be producing and selling alcohol, you may have to register with the Alcohol and Tobacco Tax and Trade Bureau, depending on which products you produce. You’ll also need to apply for an Alcohol Beverage License with the State of Alabama ABC Office and fill out the City of Huntsville Alcohol Beverage License application, available in the licensing section of the City of Huntsville’s website.

If you’re planning to serve food to go with your beer, a permit will be required from the Madison County branch of the Alabama Department of Public Health.

Once you have your permits and licenses, business formation documents, Employer Identification Number or Social Security Number, and your ownership agreements in hand, the next step is to open a business bank account, which comes with significant perks over standard personal bank accounts.

A dedicated business bank account will include not only checking and savings, but also a credit card account and a merchant services account, which will allow you to accept credit and debit card transactions from your customers.

Business bank accounts are necessary because they help keep your business funds separate from your personal funds. Merchant services also provide purchase protection for your customers and ensure that their personal information is secure.

A business bank account will also provide your business with an extra layer of professionalism. Customers can pay with credit and debit and make checks payable to the business instead of directly to you. Also, you can authorize trusted employees to handle banking tasks on behalf of the business.

Business banking usually comes with a line of credit, which can be used in the event of an emergency or if large expenses come up. Lastly, business credit card accounts can help establish a credit history for your business, providing it with additional purchasing power.

While you may be tempted to use your own personal bank or credit union to open a business account, it’s necessary to do some research before taking that step. Rates, fees, and options vary from bank to bank, so shop around to ensure that you find the lowest fees and best benefits.

Things to consider include introductory offers, interest rates, transaction fees, early termination fees, and minimum account balance fees. Merchant services accounts charge a variety of fees as well, including daily batch fees for settling credit card transactions for the day and monthly minimum fees charged if your business doesn’t meet the minimum required transactions. Payment processing companies such as Square are becoming increasingly popular as an alternative to traditional merchant services accounts and sometimes provide extra features such as accessories that let you use your phone or iPad to accept credit card payments. The fee categories will be similar to those of merchant services accounts. Once it’s set up and connected to your business checking account, you’re ready to go.

There are a few more odds and ends to deal with, such as getting a business insurance policy and adding the last finishing touches, but congratulations are in order—it’s time to cut that ribbon and turn on the OPEN sign! The adventure is just beginning.

As always, you don’t have to go it alone as a new business owner either. The Catalyst Center for Business & Entrepreneurship and the UAH SBDC/PTAC are invaluable local sources of advice and guidance as your small business develops. In addition, the Huntsville-Madison County Chamber of Commerce provides resources and support to help your business grow and prosper.

Best of luck with your new business! w

Businesses Taking Steps to Smooth Transition Back to Physical Workspaces

By Dawn Suiter

As the pandemic wanes and most people are comfortably venturing out in public again, businesses are increasingly calling for employees to return to the office. While essential workers and those who solely relied on in-person interactions commuted to their jobs throughout the pandemic, many knowledge-based positions, particularly in the tech sector, shifted to strictly virtual work.

Despite some initial hiccups, white collar employees and managers quickly adjusted to the “new normal,” adapting and even thriving over time. Virtual meetings via Zoom or Teams, often featuring cameo appearances by house pets and small children, became a routine part of the workday as homes began to double as workplaces.

Working from home has been a mixed bag for many, however—while some employees struggled with social isolation and the loss of a healthy worklife balance, others relished the chance to leave the commute behind, as well as the feelings of autonomy and flexibility that came with working from home.

Closing the office doors brought significant cost savings to both employers and employees, but at the same time the freedom to work remotely and the realization that one’s physical location no longer mattered led many employees to seek better opportunities elsewhere, leading to the onset of the “Great Resignation.”

With the majority of Americans now vaccinated and infections on the decline, workplaces are now encouraging their employees to shift from virtual to in-person work, and in some cases demanding it. A recently leaked memo from Elon Musk demanded that Tesla employees go into the office for a minimum of 40 hours per week and that, “If you don’t show up, we will assume you have resigned.”

While Musk is using the stick approach, the majority of organizations are using the more appealing carrot approach to bring employees back into the physical workplace safely, productively, and willingly.

One common tactic being used by many companies is the creation of a hybrid workplace, in which employees come in several days a week while working from home the rest of the week.

David Salters and Taylor Fox of Warren Averett agree that the creation of a hybrid workplace is a valuable tool for businesses, not only to keep employees on staff, but also as a recruiting tool. With the cost of living and the price of gas continuing to rise, they noted that flexible work, in itself, is a form of wages when taking into account the cost of fuel, cleaners, childcare, and so on. “Companies who plan to offer it are absolutely using it as a recruiting tool against companies that are not,” Salters said.

Big corporations all over the world, including Siemens, Apple, and many others, are embracing this approach. Advantages include decreased cost for office space, increased collaboration between team members, and the ability to expand hiring scope by attracting quality professionals.

Small businesses are also making use of the leverage provided by offering flexible scheduling options. A local example can be found with technical services firm Cintel, located at 4100 Market St., Suite 115 in Redstone Gateway. According to Cintel President Will Irby, some team members choose to work on site on a daily basis, with others going into work three days a week and working remotely the other two. Some remain fully remote, only going in occasionally.

“Success with this approach centers on our customers and their specific requirements. We know that in the current labor market, flexibility is critical to stay competitive, so that is what we have focused on at Cintel – being as flexible as possible, but also being fully transparent in that not every position can be remote. I think it’s important to be upfront about position requirements with employees and candidates,” Irby explained.

It’s also important for organizations to let employees know why they’re being called back to the office, highlighting the positive benefits of doing so for both them and the company. There will be some hesitant employees, and it’s important to give them a voice as well. Whether it’s a group discussion, a private chat with a manager, or a meeting with HR and leadership, these employees need to feel heard and understood. Not doing so can foster resentment and may lead to multiple resignations.

At the same time, supporters of the return-to-work plan need to be able to express their views—in the best case scenario, they will be able to offer resistant employees support and encouragement to return.

Businesses can also reduce resistance to return to the office by providing assistance in areas such as transportation costs, child care, and scheduling flexibility. Another big incentive: food.

Emily (name changed for privacy), a young engineer who relocated across the country for work just prior to the shutdown, provided some input regarding her resistance to returning. “I struggle to motivate myself to go back to the office since I’d need to pack a lunch in the morning before going. It’s tough when I have meetings starting at 8 a.m. daily that would be virtual anyway,” she said.

Her suggestion: “Give us food. That’ll get me back in. I’ll totally come in if they have snacks at the office on a regular basis as well.”

“Engineers are food motivated. Like dogs,” Emily added.

In March of this year Mazda Toyota Manufacturing took concrete steps to provide child care assistance for its employees when it formed a partnership with TOOTRiS, an on-demand child care platform. TOOTRiS provides access to hundreds of licensed childcare options near employees’ homes or workplace. The platform also enables parents to find temporary care and drop-ins, as well as services accommodating nontraditional work schedules.

“We understand the struggles our working parents have finding affordable and quality Child Care. We want to help relieve that burden so our valuable team members know their children are well cared for,” Mark Brazeal, Vice President of Administration at MTM said in a statement. “The partnership with TOOTRiS helps us accomplish that goal and aligns with our commitment to diversity and inclusion in the workforce while creating career opportunities at our world-class automotive manufacturing facility.”

Cintel also focuses on fostering morale-boosting activities for its team members as a way of restoring a sense of community. Irby cited a successful “Cintel Gives Serving Saturday” event that supported a local charity, as well as other successful morale and networking events. “We believe connected teams deliver the most value and to that end we will always prioritize our teams being connected, both personally and professionally,” Irby stated.

Although he recognizes the necessity of scheduling flexibility, Irby places high value in the physical work environment: “Being present is critical for creativity, spontaneous meetings, conversations, and opportunities that arise from physically being around teammates, coworkers, and customers. To an extent, this can be overcome with networking and active connection through technology, but we have seen that when our teams are physically together, they are more active, creative, and happy – so we work hard to create opportunities for this to happen.”

“I don’t think we will really understand the impact these changes have had for many years, but the one thing that is certain is that companies must work hard to figure out how to meet the needs of their current employees and how to attract new employees. Continual internal evaluation and response to the labor market is critical going forward,” Irby explained. w