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How an Autoworker's Pitch Led Intel To Choose Ohio for Multibillion-Dollar Computer Chip Factories

'Let's Make This Happen,' Wrote Mary Springowski

Mary Springowski's letter to Intel led to Ohio winning the largest private investment in the state's history. (Courtesy of Mary Springowski; CoStar)
Mary Springowski's letter to Intel led to Ohio winning the largest private investment in the state's history. (Courtesy of Mary Springowski; CoStar)

Little did Ohio autoworker Mary Springowski know that emails she sent last year to multiple chiefs of global computer chipmakers would lead to her home state winning the largest private investment in its history.

"Let's make this happen," she wrote.

Only one chipmaker took the bait. But it was a big fish: Santa Clara, California-based Intel Corp. The Fortune 500 company wanted more information about why Springowski's small Northeast Ohio town of Lorain should be in the running for its proposed massive chip factory investment.

Click to read the full email Mary sent to the CEOs of major chip makers about why Ohio is great for the plant.

"I would be happy to discuss,” Intel's senior director of state government relations wrote back.

Two days later, Springowski, who builds engines at a Ford Motor factory in a job she’s had for more than three decades, found herself on a Zoom call with Intel's senior director on behalf of CEO Pat Gelsinger. Northeast Ohio economic development officials were clued in after the call.

“They really were so positive,” she said.

And just like that, Ohio was inserted into the middle of Intel's search for a new U.S. site to invest at least $20 billion in two chip factories — and ended up being the ultimate winner.

Intel announced its plans in January to create at least 3,000 jobs in Ohio paying an average of $135,000 a year after production begins in 2025. The announcement became a crown jewel in President Biden's quest to boost domestic computer chip production and give fresh impetus to legislation, called the CHIPS Act, that is slowly working its way through Congress. Biden hailed Intel's decision in his State of the Union address March 1 — with Gelsinger in attendance as a guest in the first lady's box — and urged Congress to move faster.

Pat Gelsinger, CEO of Intel Corp., at the State of the Union address March 1. (Getty Images)

Intel's $20 billion investment could accelerate to $100 billion in additional factories in Ohio if the legislation passes. The bill would provide $52 billion in incentives for chipmaking production in the United States. Other chipmakers such as Texas Instruments, Samsung and Taiwan Semiconductor Manufacturing Co. are also starting construction and spending billions of dollars on new U.S. chip plants. Intel is also building chip plants in Arizona.

Intel’s Ohio campus could “either be small or it could be big and fast,” Gelsinger told analysts on the company’s earnings call in January. “And with the passage of the CHIPS Act, it's going to be bigger, and we're going to build it out faster as a result.”

Springowski, a first-generation Irish and Scottish autoworker, directly reaching out to corporate titans is not how economic recruitment typically begins. Government agencies and chambers of commerce have legions of people devoted to that task. Sending the letter was the “most offhand thing,” said Springowski, who is also a six-year councilwoman in Lorain, and she credits a combination of "Irish luck and Scottish brave" for the results.

But her letter got Ohio a spot at a site-selection party it wasn't initially invited to, and it led to winning a deal in which probably wouldn't have been successful if it weren't for years of improving communication between the state’s regional economic development agencies that helped speed the processes.

The Zoom Where It Happened

After the initial Zoom call, Intel gave Northeast Ohio officials three days to come up with at least 1,500 acres for its proposed factories.

“After looking around, we didn’t have the confidence that we had enough time” on pulling together a site, said Bill Koehler, CEO of Team Northeast Ohio, about the area that includes Lorain, a city of about 65,000 along the shores of Lake Erie about 29 miles west of Cleveland.

With the clock ticking to deliver, a statewide search ensued through JobsOhio, which was created in 2012 by former Ohio Gov. John Kasich to improve the state's speed in responding to economic development opportunities.

The solution arrived in the form of a large plot of farmland in Central Ohio, about 15 miles outside Columbus in New Albany, an area dotted with distribution centers, office buildings and data centers being built by Google, Amazon Web Services and Meta, the parent of Facebook. New Albany annexed land from a neighboring township through a quirk in Ohio law that allows a township to still get property tax revenue, and the Intel deal had its potential acreage.

Meta, the parent company of Facebook, owns hundreds of acres in New Albany where it brought one data center online this year and has room to build more. (CoStar)

“New Albany acquired a reputation as an easy place to deal with,” Kasich said in an interview with CoStar News. “And they moved quickly.”

With the acreage secured, Ohio officially entered the game. State leaders then had to convince Intel that Ohio had the necessary technology talent pool and was a good place to do business. It worked.

“I was working Christmas Eve and Christmas morning” last year to get the deal done, said J.P. Nauseef, CEO of JobsOhio, the state's private nonprofit economic development group.

With the land locked up, economic development officials had to show Intel how the Buckeye State's Rust Belt image of industrial decline in the heartland was a thing of the past and that Ohio wasn’t simply a flyover state.

“The more they saw, it wasn’t the Ohio they expected,” said Nauseef.

By Christmas morning, Ohio’s leaders nailed down the Intel deal for the Columbus area, which had landed on the finalist list for Seattle-based online retailer Amazon’s HQ2 in 2018, beating 40 other locations, but wasn’t selected. Intel was offered state and local incentives totaling $2 billion. New Albany’s contribution is a 100% property tax abatement over 30 years.

Nauseef noted that the state has a long history of innovation. After all, the Wright brothers started developing air flight in Dayton. The state had been racking up wins last year. According to industry trade magazine Site Selection, Ohio had 507 confirmed projects announced in 2021, second only to Texas, which had 1,123.

What Intel was shown was a state that is within a day’s drive of more than 60% of the U.S. and Canadian populations. And the company would have a technology talent pool to feed its chipmaking operations.

Ohio State University in Columbus, the University of Cincinnati and Case Western Reserve University in Cleveland could be feeders along with Purdue University, 240 miles west of Columbus in Indiana, and Carnegie Mellon University in Pittsburgh, roughly 190 miles east of Columbus.

Last year, Columbus topped the list of North American small markets for tech talent in a study by commercial real estate firm CBRE. Cincinnati ranked sixth, followed by Cleveland. Dayton, about midway between Columbus and Cincinnati, was atop the “next 25 markets” to watch for tech talent.

Columbus, Cincinnati and Cleveland, however, were in the column for “brain drain,” meaning more college graduates with tech degrees were leaving than staying. Intel’s plans have the potential for reversing that trend.

Privatizing Economic Development

A decade ago, Ohio's chances of winning the Intel deal after that initial Zoom call probably would have ended there.

The different economic organizations around the state weren’t collaborating well, said Kasich, so he created JobsOhio in 2012 by leasing the state’s liquor business to the organization for $1.4 billion. JobsOhio runs the business and profits go toward recruiting. Then, Kasich hired Silicon Valley venture capitalist Mark Kvamme, who helped lead Sequoia Capital's early investment in LinkedIn, to run JobsOhio.

“I knew nothing about economic development,” Kvamme said.

But the operation was like a startup with an infusion of venture capital and a mission to recruit jobs. One of the first steps was to put everyone on the same sales force.

One hurdle the state discovered came after losing out on an Apple data center. Kvamme asked why and was told that other states didn’t have sales taxes on equipment used in data centers. So Ohio officials pushed a sales tax abatement program through the state legislature that would pay dividends later with Ohio data centers such as ones that now exist for Google, Facebook, Amazon Web Services and others.

Former Ohio Gov. John Kasich, pictured in 2019, helped Ohio change its economic development recruiting methods. (Getty Images)

Kasich said it was about creating a hub-and-spoke system that fostered more collaboration among the six regional economic development organizations within the state so Ohio could quickly respond when companies came poking around for deals.

“We were too slow, and we have to move at the speed of business,” Kasich said in an interview from his office at Otterbein University in Westerville, outside Columbus.

He compared government-run economic development to a stretch of road from one part of town to another that has many stoplights. “We took all of the lights out,” Kasich said.

It Took a Village

New Albany had a population of about 1,600 people in 1990, up from 414 residents in 1980, and was technically still a village, according to U.S. Census data. Today, the population is roughly 11,000 and the place is a full-fledged city, in part because of native Ohio billionaire Les Wexner, who made his fortune through shopping mall staples Victoria’s Secret and The Limited and bought roughly 10,000 acres to begin building out the town.

Wexner built a vast estate in the area for himself. Through his real estate company’s planning, neighborhoods of high-dollar homes followed.

Bath & Body Works is one of several companies with a distribution center in New Albany. (CoStar)

Corporate office buildings were also built there, along with industrial distribution buildings including those for L Brands, which Wexner ran until 2020.

Abercrombie & Fitch, a retailer L Brands bought in 1988 and sold in 1996, has a headquarters there and a distribution center. Bath & Body Works, which L Brands became last year after spinning off Victoria’s Secret, also has a large distribution center near the new data centers in the city.

Other headquarters include fast-casual restaurant chain Chipotle, restaurant chain Bob Evans and online mortgage company Lower.com, which has the naming rights for the home field for Major League Soccer’s Columbus Crew.

A visitor driving through the area will notice that the distribution buildings aren’t run-of-the-mill distribution buildings. Many of the exteriors are dark gray or some variation. The corner entrances to office space reflect more thought in design, including wood features.

Abercrombie & Fitch's headquarters designed by New York City-based Anderson Architects opened in a 300-acre wooded area in 2002. (CoStar)

“They did well with the cool factor,” said Brice Harrison, director of development for Kansas City, Missouri-based VanTrust, which has developed roughly 2 million square feet of distribution space there with two more speculative buildings on the way.

Jennifer Chrysler, New Albany’s community development director, said the design standards have a certain color palette the buildings must follow. But the companies themselves sought to make their buildings more aesthetically pleasing, which created a trend, Chrysler said.

While Intel was being recruited last year, Thousand Oaks, California-based biotechnology company AmGen, known mostly for cancer-treatment drugs, announced it selected New Albany for a $1 billion manufacturing plant.

So even though Springowski's hometown of Lorain, which is about 2 hours and 15 minutes northeast of New Albany, wasn't ultimately chosen for Intel's major Ohio investment, she hasn't ruled out trying to lure some of Intel's future expansions or another technology manufacturing company.

Northeast Ohio is focusing now on recruiting Intel's suppliers as well as retaining and expanding existing ones. There are 140 Intel suppliers in Ohio already, 55 of which are in Northeast Ohio, said Koehler with Team Northeast Ohio.

In the meantime, Springowski might write more corporate recruiting letters.

“It was the weirdest thing,” she said. “I’d do it again.”