Background Research Material for Freight Facility Location Selection: A Guide for Public Officials (NCFRP Report 13) (2011)

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19 Survey of Public and Private Perspectives 3.1 Overview and Key Findings The research team developed and executed two structured data collection instruments (DCI) to gauge public and private sector perspectives on issues associated with the siting of freight facilities. This chapter summarizes the information collected through the use of DCIs. This information helps to identify the gaps in knowledge and understanding that are addressed in subsequent chapters of the report and companion guide. This chapter establishes:  A baseline of knowledge on what the public and private sectors each do and do not understand about each other’s key issues regarding site freight facilities; and  Identifies the most important factors and challenges regarding siting freight facilities from public and private sector perspectives. This baseline understanding is required as while freight facilities are typically privately owned, the public sector is often involved in helping to attract/develop facilities. Likewise there are inherent challenges to locating large-scale freight facilities that can result in public/private “conflict” in terms of finding sites, environmental considerations, local truck traffic, nearby land use conflicts, etc. The public sector is a key partner in the freight network as a result, whether it is actively aware of its role or not. Major findings from the information collection task include:  Public sector officials see great importance in the ability of their municipalities to attract and retain intermodal freight facilities and in the ability of their municipalities to help determine where these facilities will be located.  While public sector respondents generally said their municipalities provide some forms of guidance and consider freight logistics issues in certain planning activities, very few believe that public officials are adequately concerned or knowledgeable about these issues.  Few respondents believe that public officials in their municipalities have an adequate understanding of either freight operations or the business drivers associated with warehouse/distribution facility operators’ development needs.  Most private respondents noted they have dropped communities from consideration for siting of freight facilities because the communities did not adequately plan for or invest in related transportation infrastructure, or their policies did not adequately accommodate freight facilities.  While three-quarters of the public sector respondents said their communities consider the needs of freight logistics in the planning process, fewer than half were aware whether their municipalities had received/pursued freight facility development applications. In addition, public officials do not know whether their municipalities’ planning and zoning regulations included provisions specifically related to freight facility development and siting. 3.2 Methodology The research team developed structured questions for both public and private stakeholders in the form of a survey instrument. The questions were designed to gauge these sectors’ current understanding of the site selection process for freight facilities. Appendix A contains a full list of the questions used in the information collection effort.

20 The research team used a variety of means to identify a set of potential respondents from the public and private sectors. The organizations and channels providing contacts are listed below: Public Sector:  Association of Metropolitan Planning Organizations (AMPO) – An association of the nation’s metropolitan planning organizations (MPO) that provided access to local and regional planning staff.  International Economic Development Council (IEDC) – An association of economic development and business attraction professionals who identified state and regional economic development executives. Private Sector:  CoreNet – An industry group for corporate real estate executives and service providers who identified both public and private respondents.  Industrial Asset Management Council (IAMC) – Another industry group for corporate real estate executives who identified private companies that are heavy users of multiple transportation modes.  Council of Supply Chain Management Professionals (CSCMP) – Provided officers from regional roundtables on supply chain management from across the nation.  We also included selected Class 1 Railroad contacts to enhance the amount of private sector information we could obtain. Based on the recommendations of these groups, sixty-six (66) individuals representing these types of organizations received personalized emails from the consultant team explaining the purpose of the study and the related DCI. Each email included a hyperlink to a secure website at which the respondent would complete the DCI. Each respondent was assigned a unique code to enable the tracking of responses and organize the collected data by respondent type. Twenty-four (24) individuals completed the DCIs from the public (13) and private (11) sectors. The response rate (36%) was adequate to analyze the collected data for the purpose of this task. The statistical package SPSS (v. 15) was used to analyze those data. 3.3 Public Sector Responses Even while allowing that the survey population may not be a fully representative sample, all of the public sector respondents believed that it is very important (81%) or important (19%) for their municipalities to attract and retain intermodal freight facilities. Furthermore, the majority of the public sector respondents noted that his/her municipality considered the needs and growth of freight facilities in the planning processes, land use regulation, and/or development regulatory processes to either a great extent (44%) or to some extent (31%). However, 19% of public sector respondents said that their municipalities’ planning and regulatory processes do not account for the needs and growth of these facilities. Only 25% of public sector respondents believed that public officials in their community or jurisdiction have an adequate understanding of freight operators or warehouse/distribution facility operators’ business dynamics and development needs. Thirty-eight percent (38%) of respondents believed that public officials generally do not have an adequate understanding and another 38% were uncertain whether the public had an adequate understanding. Respondents who did not think there is a good public understanding of these issues said that: (1) the average person does not make a connection between freight and global economic competitiveness; and (2) public officials do not appear to understand the reasons behind site selection decisions.

21 The DCI asked respondents to rate what they thought intermodal freight facility owners considered to be important factors in site-selection decision-making. Table 3-1 below provides a summary of these responses. Overall, public sector respondents believed that facility owners are most concerned about “taxation and business environment” and “proximity to major highways.” Table 3-1: Summary of Public Sector Respondents’ Perceptions of Facility Owner Concerns Regarding Site Selection Decision-making Site Selection Decision-making Percent of Public Sector Respondents Believing Factor is: Important Unimportant Neither Important or Unimportant Taxation and business environment 81% 19% -- Proximity to major highways (Interstates, freeways, etc.) 81% 19% -- The proximity of customers, shippers and/or receivers of goods 75% 25% -- Connectivity to other modes 75% 19% 6% Labor skills and costs 75% 19% 6% Permitting and regulation 69% 25% 6% Shovel-ready building sites 63% 25% 12% Other operating costs 62% 19% 19% The ability to operate on a 365/24/7 basis 56% 31% 13% -- = No Response The DCI asked public sector respondents to rate the importance of certain issues to groups of key stakeholders in relation to the siting of a proposed freight facility. The public sector respondents regard themselves as the group most concerned about the environment and community and quality of life issues, while they see the business community as being relatively uninterested in the environment and quality of life relative to siting proposed freight facilities. Public sector respondents regard residents as the group most concerned with quality of life issues, while these respondents view the business community as most concerned with economic development and jobs and highway congestion. Some public sector respondents (38%) noted that their municipalities’ planning and zoning regulations do not include provisions specifically related to freight facility development and siting. Half (50%) of the public sector respondents were not certain whether their own municipalities included such provisions in their planning and zoning rules. Only 13% said their municipalities had specific provisions for developing and siting freight facilities, including city zoning requirements for new air cargo facilities at airports and regulations for siting new intermodal facilities. The DCI asked public sector respondents to identify the type of site selection guidance or support they offered to those seeking to develop freight facilities. Table 3-2 below provides a summary of all responses from the public sector. The most common site selection guidance was helping to inventory industrial sites. “Other” responses included the identification of desired facility expansions in long range plans.

22 Table 3-2: Public Sector Responses Regarding the Type of Site Selection Guidance or Support Provided to Facility Developers Percentage Type of Site Selection Guidance 59% Inventory of industrial sites 40% State/local tax incentives for freight distribution businesses (e.g., property tax 32% Industrial rail access program 32% Technical development guidance/one-stop shopping 23% Expedited permitting processes 14% Other financing mechanisms 5% Other The majority of public respondents (69%) said that their municipalities have encountered compatibility issues in siting freight logistics facilities near other land uses (commercial, residential, recreation, etc.). Several reasons were provided for the compatibility issues. These include concerns about the impact on other kinds of development (residential and commercial), the impact of increased truck traffic, increased noise and truck storage on local roads. One public sector respondent noted that “resolving the conflict between freight facilities and other land uses has been an issue the entire region has been unsuccessfully dealing with over the years.” Only 19% of public respondents claimed that compatibility issues did not occur when siting new freight logistic facilities. Table 3-3: Summary of Public Sector Respondents’ Perceptions of the Importance of Key Issues to Stakeholder Groups in Relation to Siting Freight Facilities Key Issues (Percentage important to each stakeholder group) Stakeholder Group Maintaining Community Safety Highway Congestion Economic Development & Jobs Environmental Impacts Community Quality of Life (e.g., noise, light, etc.) Residents 36% 36% 27% 9% 41% Elected Officials 27% 23% 64% 18% 32% Planning and Regulatory Officials 23% 32% 22% 41% 59% Business Community 18% 55% 64% 9% 5% The majority of public sector respondents (69%) were aware of “clusters” of related freight facilities in their municipality, where related businesses have located near each other to facilitate manufacturing, provide access to suppliers and/or market, and assembly or packaging processes. This is often influenced by zoning and the location of industrial parks and related infrastructure. Cluster descriptions provided by respondents include:  Fruit/meat packing with refrigeration  Rail with cocoa/sugar  Industrial parks

23  Marine industry - barge and rail access  Airport cargo, rail intermodal facility, direct rail, highway, and warehousing all in one development  Industrial Complex - includes many different warehouse-type tenants, has excellent rail and highway access, and can be considered a true “freight village”  Intermodal facilities organized around the automobile industry The majority (62%) of public respondents noted that their municipalities have pursued or received interest in development applications for new or expanded freight facilities within the last five years. Only 6% said that they had not pursued or received interest in development applications and 32% said they were uncertain if they had. Respondents also noted the competitive advantages and disadvantages of their municipalities. Perceived advantages include access to a Class I railroad; access to Interstate highways; “pro-business” environment; access to urban population and consumer markets; low shipping costs; robust intermodal transportation infrastructure; and availability of publicly-endorsed industrial lands. Public sector respondents noted that the factors that have limited their municipality’s participation in these development applications include the poor economy (at the time of the survey) and local concerns about congestion and noise. 3.4 Private Sector Responses Overwhelmingly, private sector respondents believe that access to freight facilities was very important (63%) or important (25%) for successful business operations. Three-quarters (75%) of private respondents said they have removed municipalities from consideration for site selection because the municipalities did not adequately plan for or invest in facilities of this type, or their policies were not accommodating to freight facilities. Respondents noted the following specific reasons for removing communities from consideration when siting facilities: a municipality’s demonstrated lack of vision; lack of reasonably priced storage; lack of compatible zoning; lack of rail access; and perceived difficulty in obtaining required permits. The DCI asked private sector respondents what type of site selection guidance or support they would recommend that municipalities offer to those seeking to develop freight facilities. Table 3-4 displays the types of guidance/support suggested by respondents and the percent of respondents that would recommend each type. Three-quarters of private respondents said they would recommend guidance in the form of inventories of industrial sites; tax incentives for freight distribution businesses; industrial rail access programs; and expedited permitting processes. “Other” guidance included assistance coordinating with rail providers; helping to establish freight compatible zoning; and tax incentives to convert from truck-only freight facilities to intermodal facilities with two or more connecting modes. Table 3-4: Summary of Private Sector Respondents’ Perceptions of the Type of Site Selection Guidance Municipalities Should Offer Percentage Type of Site Selection Guidance 75% Inventory of industrial sites 75% State/local tax incentives for freight distribution businesses (e.g., property tax 75% Industrial rail access program 75% Expedited permitting processes 50% Technical development guidance/one-stop shopping 50% Other financing mechanisms 38% Other

24 The DCI also asked private sector respondents to rate the importance of various factors in freight facility users’ site selection decision-making process. Whereas Table 2-4 lists those tools available to the public sector, Table 3-5 provides a summary of the perceived importance of all factors involved in the location decision. Respondents believed the most important factors in site selection are permitting and regulations; taxation and business environment; the ability to operate on a 365/24/7 basis; and the proximity to major highways. Table 3-5: Summary of Private Sector Respondents’ Perceptions of the Importance of Key Factors in the Site Selection Decision-Making Process Percent of Private Sector Respondents Believing Factor is: Site Selection Decision-making Factors Important Unimportant Neither Important or Unimportant Permitting and regulation 63% 37% -- Taxation and business environment 63% 37% -- The ability to operate on a 365/24/7 basis 62% 38% -- Proximity to major highways (Interstates, freeways, etc.) 62% 38% -- The proximity of customers, shippers and/or receivers of goods 50% 37% 13% Other operating costs 50% 37% 13% Connectivity to other modes 50% 37% 13% Workforce availability and labor 50% 38% 12% Shovel-ready building sites 37% 50% 13% Quality of labor skills 37% 38% 25% -- = No Response Almost all private sector respondents (88%) believe that a municipality’s planning and zoning regulations should include provisions specifically related to freight facility development and siting. These respondents noted that provisions should include: comprehensive freight plans and the inclusion of freight in long range plans and travel forecasts; a clear understanding of the connection between freight movement and economic prosperity; specific zoning that allows for designated intermodal and container storage areas; and specific conditions for rail access. The DCI also asked private sector respondents to rate their perceived importance of key issues to stakeholder groups regarding the siting of freight facilities. Table 3-6 summarizes these private sector perceptions for the following stakeholder groups: residents, elected officials, planning and regulatory officials, and the business community. Private sector respondents regard residents as being most concerned with safety and highway congestion issues; elected officials most concerned with economic development; planning and regulatory officials most concerned with highway congestion; and the business community most concerned with economic development.

25 Table 3-6: Summary of Private Sector Respondents’ Perceptions of the Importance of Key Issues to Various Stakeholder Groups in Relation to Siting Freight Facilities Private Sector Perception of Importance of Key Issues to Stakeholder Groups (percent of respondents indicating issue is important to particular stakeholder group) Stakeholder Group Maintaining Community Safety Highway Congestion Economic Development & Jobs Environmental Impacts Community Quality of Life (e.g., noise, light, etc.) Residents 63% 63% 50% 50% 38% Elected Officials 50% 50% 100% 25% 13% Planning and Regulatory Officials 38% 75% 38% 38% 25% Business Community 38% 63% 100% 13% 0% Private sector respondents provided suggestions and recommendations directed at municipalities that they believe should be considered in updates of land use and transportation plans/zoning:  Sites offering flexibility for sales, leasing, and storage  Full consultation well in advance for all parties  Corridors for heavy container transport  Industry representation on public decision-making bodies  Ability to “think long-term” and insulate the process from local land developers with short term financial interests  Traffic impact studies to determine the potential roadway congestion impacts on local communities  Designated development sites with adequate space for parking and storage Thirty-seven percent of private sector respondents were aware of “clusters” of related freight facilities in their municipality, where related businesses have located near each other to facilitate manufacturing, provide access to suppliers and/or markets, and assembly or packaging processes. Examples of emerging clusters include the Global One and Global Two projects by the Union Pacific Railroad; a Burlington Northern Santa Fe rail facility outside of Chicago; a CSX facility in Selkirk (Albany), NY; and the Norfolk Southern/Pan Am Railways’ facilities in the Mechanicville (Albany), NY area. 3.5 Conclusion Generally, the public and private sectors are aware of key issues associated with the siting of freight facilities. Importantly, however, public sector officials are less aware of specific facility-siting activities and issues. Respondents from both sectors acknowledge that more action needs to be taken by the public sector to better coordinate and support these processes, including:  Increasing the extent to which freight is considered in the local planning process;  Developing additional guidance for and coordination with the private sector;

26  Creating enhanced awareness by public officials; and  Writing specific public policies and regulations that support the development and siting of freight facilities. While the DCI questions differed slightly between the public and private respondents, some comparison can be made between the two sectors. Both the private and public sector respondents rated similar factors as being important for the site selection process. The most important factors for each group were taxation/ business environment; permitting and regulations; and proximity to highways. However, public sector respondents underestimated the importance of facility operators’ ability to have 365/24/7 operations. Public sector respondents also rated the importance of connectivity to other modes higher than the private sector did. Likewise, the public sector placed more importance on late-stage criteria such as the availability of “shovel-ready” sites than the private sector did. Furthermore, the respondents from the two sectors differed in how they perceived the importance of issues to key stakeholder groups (residents, elected officials, planners, and the business community). Key differences between sector responses are that the public sector believes residents are most concerned with quality of life, whereas the private sector thought that residents were least concerned with quality of life. Public sector respondents also believe that planners regard quality of life as the most import issue while the private respondents believe that planners regard traffic congestion as most important.