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OCR for page 50
· 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
OCR for page 51
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
