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· Utilities. · Property and income taxes. $$ Exit costs The total cost of doing business in each location not only provides information to be balanced against other operational factors, but also informs the incentive negotiation process with the local government or economic development agency. Availability and cost of suitable facilities Companies will consider a great Companies will consider a great property at a good price, but only property at a good price, but if the site satisfies other key strategic criteria. For example, the only if the site satisfies other availability of well-planned warehouse space at a regional airport key strategic criteria. might allow for a faster decision if that airport also has good highway and rail access and is at a location that allows unimpeded service to consumption areas. Conversely, the lack of suitable facilities on land zoned for industrial or commercial uses near key infrastructure access points can impede progress or remove a community from consideration. It is common for carriers siting city terminals to limit their search to existing industrial facilities because of the cost of new construction and fear of community resistance (which can result in delay costs). Properties of this sort may be handed from operator to operator as leases expire and lessors grow, consolidate, or fail. The availability of suitable facilities can be a yes/no screening issue for some companies. As previously noted, because of their experience owning and operating many facilities, Murphy Warehouses has specific criteria for potential facilities to acquire, including a minimum size requirement of 150,000 square feet of warehousing. The freight user will investigate the availability of buildings of a particular size envelope, layout, ceiling height, number of loading docks, floor loading limits, utility feeds, refrigerated space, purchase, rent and operating costs, and other attributes depending upon their specific requirements (e.g., warehouses with modern, automated material handling equipment are able to get more throughput from leases by adding capacity vertically toward the ceiling instead of horizontally, which adds to square footage and lease 50 Freight Facility Location Selection: A Guide for Public Officials
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costs). Alternatively, companies may search for land near specific transportation points or other partners. They will determine plot size, possible layouts, price, geology, soils, hydrology, and other requirements and seek parcels meeting these needs. Integrated logistics centers Companies will also investigate the availability of nearby operations allow communities to provide to support their own freight activities. Operations such as bulk and adequate land and facilities at transload facilities allow for consolidation and access to modes of a point which also concentrates transportation such as rail and port where the single users' activities freight movement away from are not sufficient to support service. other community activity. Connection points to the transportation network, rail terminals, intermodal facilities, ports, etc., are valuable as they provide choice as to how to move goods. Integrated logistics centers allow communities to provide adequate land and facilities at a point which also concentrates freight movement away from other community activity. Initial data on regional costs may be obtained through reports from national real estate service providers. The company can then seek market and building specifics either from their own real estate service firm or through the local economic development agency. Case Study In addition to facilities, the availability of low-cost land and large parcels impacts location decisions, particularly for large intermodal facilities such as the Rickenbacker facility (mentioned earlier) and Alliance Global Logistics, an 11,600-acre integrated logistics center in north Fort Worth, Texas. The logistics center features an industrial airport, an intermodal terminal, access to two Class I railroads, highway access, a foreign trade zone, and logistics and industrial companies. In the case of Alliance, much of the area surrounding Fort Worth had been developed and the tract of land purchased for the logistics center was relatively inexpensive and not yet developed because the area was prone to unpleasant odors from prevailing winds and a long-defunct nearby livestock market. While the stockyards had long been gone, the stigma remained. This allowed for large parcels of inexpensive land to be purchased and utilized for industrial development. Freight Facility Location Selection: A Guide for Public Officials 51