The Ellis County Press

Lancaster Airport Set for Expansion

April 28, 2006

As the southern Dallas County area continues to boom with commercial growth, the Lancaster airport is trying to keep up.

Assistant City Manager Jan Belcher said an expansion would allow the airport to accommodate larger corporate jets, which needed longer runways to land and take-off.

“We can take some of the largest business jets,” Belcher said noting the airport would be able to accommodate dual-wheel Gulf Stream 5 planes when the development was complete.

Two small corporate jets were already flying executives into the airport. According to a recent study conducted by city officials, executives driving from the Lancaster Airport could arrive at the Central Dallas Business District quicker than if they had driven from Love Field due to the light flow of traffic in the southern Dallas County region.

“They come here because we have easy transportation to wherever they want to go,” Belcher said.

The 306-acre municipal airport would use a $ 8.8 million grant from the Texas Department of Transportation Aviation Division to expand the runway to 6,500 feet from its current 5,000 feet and overlay the existing runway to accept heavier planes.

Environmental assessments, engineering studies and at least 100 more acres must be purchased on the south-end before any groundbreaking could actually begin, as 90 percent of the project would be paid using federal funds.

The city would be required to match 10 percent of the grant using local money.

Regional leaders were also interested in the airport’s growth as the River of Trade Corridor Coalition and the Dallas NAFTA Trade Corridor were looking to develop another cargo airport on eastern edge of the metroplex.

Fort Worth’s Alliance Airport, developed by Ross Perot Jr. in the early 1990s, was the only cargo airport currently serving the Dallas-Fort Worth region. Mesquite’s Metro Airport was another facility being considered as a cargo airport.

Dallas Councilman Bill Blaydes, who serves as chairman of the Dallas NAFTA Trade Corridor, said Lancaster would be an ideal location for another cargo airport due to its close proximity to Interstates 45, 20, 35 and the Union Pacific Intermodal Rail port in Wilmer-Hutchins.

“It is definitely sitting there in first place because it is so close to major intermodals,” Blaydes said. Both airports have the opportunity to eventually expand their runways up to 10,000 feet since they are surrounded by farming land, Blaydes said.

As a waiting list was filling up there was additional space surrounding the airport to allow more hangers to be constructed.

New water and sewer lines were expected to be installed to serve the south end of the airport during the next few months using $107,425 divided equally among the Lancaster Economic Development Board and the city’s water/sewer fund, Belcher said.

Dallas Business Journal

Next Big Thing

April 28, 2006

In the mid-1980s, Ross Perot headed north of Dallas and began developing what has since evolved into one of the area’s premier office parks.

The 2,665-acre Legacy, in Plano, is a major corporate hub for companies such as Frito Lay Corp., JC Penney, Dr Pepper/Seven Up and AT&T Wireless. It also boasts a bustling retail and residential component called Legacy Town Center. All in all, more than 36,000 people live and work in Legacy.

Also in the mid-1980s, Perot’s son, Ross Perot Jr., began work on AllianceTexas in north Fort Worth. What started as a 2,000-acre commercial park surrounding the world’s first industrial airport has blossomed into a massive 17,000-acre mixed-use development that sprawls across four cities. Its 65 square miles contain 24.4 million square feet of commercial space and 5,200 single-family homes.

Three new projects are under way that will add more than 5 million square feet of retail space.

As commercial development begins to pick up in North Texas again, the Dallas Business Journal decided to take a look at two emerging projects following in the footsteps of Legacy and AllianceTexas and poised to become the next big thing.

Mercer Crossing

Mercer Crossing is sitting pretty. Nestled in the triangle created by Interstates 35-E and 635 and the President George Bush Turnpike, the 1,100- acre development offers two vital benefits, access and visibility.
With plenty of trees, a lake and the Elm Fork of the Trinity River meandering through it, it also provides a lush, green environment.

Dallas real estate investor Gene Phillips began assembling land for Mercer Crossing in the mid-1990s, starting with a 275-acre parcel and ultimately pulling together 40 additional tracts.

R.L. Lemke oversees the project for Phillips’ company, Prime Asset Management.

“It will be very similar to Legacy but located in the middle of town,” Lemke said. “We’re five miles from Dallas/Fort Worth International Airport and five miles from Love Field.”

The initial focus has been office, with Hickory Centre, a three-building, 425,000-square-foot complex. Work is under way on the first residential component, Laguna Vista, a 208-unit apartment complex on the south side of Interstate 635. At full build out, Mercer Crossing will contain 7,000 housing units, millions of square feet of office space, schools and retail stores.

Because of its key location, and because so much time was spent assembling the tracts, Prime Asset is being very picky about who gets to build what on the land, Lemke said.

“We have turned down a significant number of buyers,” he said. “We have a vision for this property and we’re not going to deviate from it. We’re not in a hurry.”

Mercer Crossing will have two major components– a corporate campus perimeter surrounding a mixed-use town center. The development extends into parts of Dallas, Carrollton and Irving, but the bulk of it falls within Farmers Branch, which has agreed to use form-based zoning, a New Urbanism alternative to conventional zoning.

“It falls back on the type of zoning from the mid- 1800s that brought us urban landscapes in our major cities that we so cherish today,” Lemke said. “The beauty of it is the city gets the very best for its citizens and the developer gets to react instantly to market conditions. Form-based zoning provides protection for residents by dictating what the streets will look like, as well as the pedestrian and public areas, but what use we put to the property beyond the front door is of our own choosing.”

What Prime Asset is going for is a combination of for-rent and for-sale residential, office, retail and hotel space.

The city of Farmers Branch has created a $160 million Tax Increment Finance district to help support the development of Mercer Crossing. It covers the majority of the undeveloped land on the property and includes $60 million of infrastructure work, said Norma Nichols, the city’s director of economic development.

“It’s a true public-private partnership,” she said. “Over time, Mercer Crossing could generate $1 billion worth of value for the city of Farmers Branch. We’re very excited about the potential. We think it represents a large percentage of our future tax base.”

Dallas Logistics Hub

The Allen Group is a month away from unveiling site plans for Dallas Logistics Hub. But the massive southern Dallas County project is already acting as a magnet, drawing interest to that area.

Several developers, including Duke Realty Corp, are moving to control acreage there for new facilities.

And “The Hub,” as the San Diego-based The Allen Group calls it, is growing as well. The company has already closed on 4,500 acres for the project and is close to acquiring land that will push the total to 6,000 acres, said Jon Cross, company spokesman. It could easily top 6,500 acres, he added.

The development surrounds a $100 million Union Pacific Railroad Co. (NYSE: UNP) intermodal facility, located in Wilmer and Hutchins in southern Dallas County. The 360-acre truck and rail yard, called the Dallas Intermodal Terminal, opened in September 2005.

The Dallas Logistics Hub will include an industrial park and about 500 acres of land for residential development. It’s just two miles south of Interstate 20, a key trucking corridor, and is also close to Interstate 35 and Interstate 45, which links the development with the Port of Houston.

Air access will be provided by the nearby Lancaster Municipal Airport, which plans improvements to better handle increased business.

The Dallas Logistics Hub has a lot in common with AllianceTexas. Both include highway and airport access, a railroad intermodal yard and room for major distribution centers, warehouses and other commercial uses.

No doubt the Dallas Logistics Hub is “the biggest thing in the Dallas industrial market,” said Dan Cook, senior director of global supply chain solutions for Cushman & Wakefield of Texas Inc.

“It’s huge. The only thing that you can compare it to is Alliance.”

The development has a lot going for it, Cook said.

It adds a major intermodal location to South Dallas, one that will help companies trim transportation costs. The long-term scope of the project will also have a ripple effect, as other services follow the industry and jobs there.

Today Newspaper: Lancaster

That’s $2.4 Billion, With a ‘B’

April 20, 2006

“Huge tracts of land.”

The city of Lancaster is not in some Monty Python skit, offering “the biggest tracts of open land in Britain,” but it does have plenty of open land. And it’s getting “married off” to two sets of developers, one being the Argent Property company in conjunction with ProLogis, and the other being The Allen Group.

The Argent-ProLogis group has started work on a 204-acre, $100 million business park at the northeast corner of Danieldale and Houston School roads. Lancaster drivers who see 30 or more pieces of earthmoving equipment kicking up dust are seeing the groundwork for that site underway.

The Allen Group has bought 4,500 acres of land in Lancaster, Dallas, Hutchins and Wilmer for a planned 6,000-acre, $2.4 billion – billion with a “b” – business park which will generally be north and northeast of Lancaster airport.

“Grooms” from the three companies were the guests of the Lancaster Chamber of Commerce at its April membership luncheon April 13.

All three were visionary at times in their comments about how they thought this would affect Lancaster in particular and the southern part of the Dallas side of the Metroplex in general.

Dan McAuliffe of The Allen Group spoke first, and immediately struck that visionary tone.

“We’re glad to be here in the community with such a great project that will change southern Dallas forever,” he said.

“Richard Allen saw the Union Pacific intermodal facility and saw enough that he decided a 2,500-acre investment would be good.”

Well, that 2,500-acre investment has now expanded to 4,500 acres of land being bought, with plans for nearly 1,500 acres more by the time the company is done.

McAuliffe cautioned that the company’s buildings wouldn’t spring up immediately.

“We’ve got four cities, four transportation master plans, four master land use plans and four zonings to try to manage. It’s not going to be built out overnight,” he said.

In addition to the UP facility, McAuliffe said The Allen Group was excited about the possibilities of how the Lancaster Airport might boost its business. Gary Anderson, managing director of ProLogis, spoke next.

ProLogis is a leading provider of distribution facilities and services, with more than 1,990 facilities owned, managed and under development in 72 markets throughout North America, Europe and Asia. It is partnering with Argent Property in the development of its “small” 200-acre business park.

He, too, hit the vision note to start.

“In all my travels, I’ve seen very few opportunities as good as this one. This is going to be the jewel of all our property in Dallas,” he said. “Over the past 20 years, there’s been a lot of talk about this section of Dallas. It’s time for action.”

And, speaking of action, that crown jewel is already starting to be formed and faceted.

Last month ProLogis and Argent started earthwork n their site; a casual eye can count more than 30 pieces of earthmoving equipment there. Anderson provided more details of the companies’ timetable.

“Over the next 60 days, we will start our first inventory building, a 650,000-square-foot spec building,” he said. “Somewhere in the area of 8-9 months we’ll open up.”

Anderson later said he did not have any outside prospects yet lined up as tenants, but added, “Within our portfolio, there are prospects.” Doc Cornutt, CEO of Argent Property, wrapped up the session.

“(Our site) will be one of the jewels in the ProLogis network,” he said. “These buildings have all the bells and whistles.”

He then listed four reasons why Argent was in Lancaster. They were that the area was path of good speed for transportation, good distribution speed for products, good transportation infrastructure and good logistics.

Both he and Anderson mentioned the fact that major railroads such as Union Pacific now offered guaranteed shipping times, as compared to years ago, that boosted the importance of having good rail connections as well as highway connections for trucking. He noted that Los Angeles and Long Beach, Calif. were, respectively, the country’s No. 1 and No. 2 ports for containerized shipping, and if combined as one, would be the world’s fifth-largest port in terms of overall shipping. He said being close to the UP terminal in Hutchins, with its connection to the Southern California ports, was vital. Cornutt finished by saluting local leadership.

“This only happens with the leadership of the cities. Y’all have jumped off the high dive, and it’s going to be successful,” he said.

Real Estate Center

Dallas-Fort Worth Industrial Center

(Excerpt from Texas Real Estate Business)

April 13, 2006

Catering to various transportation needs is the name of the game in the Dallas/Fort Worth industrial market. Millions of square feet of space will be developed in the I-20/I-45 corridor during the next few years due to the intermodal facilities’ superior highways, cost of land and workforce, according to Kenneth Wesson, also a managing principal in Lee & Associates’ Dallas office.

“The big buzz will be on the mega rooftops that get built around I-20 and I-45 in the southern sector with the Union Pacific (UP) and Burlington Northern and Santa Fe Railway Company (BNSF) intermodal facilities that are existing and coming on line,” Wesson says.

In particular, the new Union Pacific Dallas Intermodal Terminal facility (DIT) is spurring additional development on the south side of Dallas. San Diego, California-based The Allen Group has entered the market by purchasing land for a master planned park in the southern sector at I-20/I-45.

While the southern sector is becoming a popular submarket, the area north of the Dallas/Fort Worth (D/FW) International Airport continues to be a hot bed of activity for the industrial market, according to John Fulton, senior vice president in Transwestern Commercial Services’ Dallas office. While no major tenant is absorbing the majority of space in Dallas/Fort Worth’s industrial market, which currently has a vacancy of 10.5 percent, national and regional third-party warehousing companies continue to increase space in the area.

The largest deal of 2005 was Whirlpool Corporation taking 852,000 square feet at 1101 Everman Parkway in Fort Worth. Amazon.com signed a lease for 630,800 square feet at 2700 Regent Boulevard near the airport. While rental rates were sitting at $2.75 per square foot for second-generation space and $3.05 for new space, rates have now increased to $3.00 for second generation and $3.15 to $3.35 for new space, according to Trey Fricke, managing principal in Lee & Associates’ Dallas office. In the near future, Denton County along I-35 will be a submarket to watch, according to Fricke.

Today Newspaper: Lancaster

Allen Provides Intermodal Site Details at Special City Reception

April 13, 2006

We are for real and still coming here was the message April 6.

Lancaster residents and civic leaders got a little more information about a planned 6,000-acre intermodal transportation business park at a special reception that date.

The reception was for the Allen Group and its CEO, Richard Allen. He was at the reception along with Director of Community Relations Leslie Jutzi.

The Allen Group has bought 4,500 acres of the land it plans to acquire. Its facility will generally be located north and northeast of Lancaster Airport and will include land in Lancaster, Wilmer, Hutchins and Dallas.

“It will be close to 6,000 acres by the time we get done,” Allen said.

Of course, people want to know when get done might be, and when the first construction work, the next visible sign of getting done, might start. Allen said his company expected to buy the final 1,000-1,500 acres in 60-90 days.

Jutzi and Allen answered the timeline questions.

“In the next year to year and a half, we should start construction,” Jutzi said.

This is a 35- to 40-year buildout, Allen added. This isn’t of regional or state significance, it’s of international significance.

Allen dropped one business tidbit to reinforce that fact.

“BNSF (railroad Burlington Northern Santa Fe) is interested in putting another intermodal terminal here,” he said.

Intermodal terminals are for coordinating railroad shipment of semi trailers, a business that has exploded in recent years with the rapid rise of Chinese exports. Allen added that Union Pacific, which already has an intermodal terminal on I-45, was expected to double the number of its lifts for trailers.

“The location next to three interstate highways and the UP terminal is what made the area so valuable to the Allen Group,” he said.

But the Allen Group site will be more than an intermodal port, or even more than a general business park.

“This will also have retail and residential components,” Allen said.

He told the reception it took 27 partnerships and a year and a half to purchase the first 500 acres at the site.

Lancaster city officials, meanwhile, hope the major development boosts expansion plans at the airport.

Development of an airport like Lancaster’s as a cargo airport is a goal of the NAFTA Trade Corridor. And Lancaster is on its way toward that goal.

The airport has received a $333,334 grant from the Texas Department of Transportation’s Aviation Division, out of that agency’s Federal Aviation Administration state-level funds. The money would fund the lengthening of the current 5,000-foot runway to 6,500 feet, with an eventual goal of 8,000 feet.

The Dallas Morning News

Preparing for Takeoff Lancaster: Conditions are Ripe to Turn Facility Into the Next Alliance

April 9th, 2006

Lancaster Municipal Airport sits alone amid cotton and corn fields in southern Dallas County, a single landing strip and cozy cafe its only amenities.

But city officials say the smallish 306-acre airport can be transformed into the next Alliance Airport, Ross Perot Jr.’s economic engine in far North Fort Worth that is responsible for generating $26 billion since its 1990 opening.

They’re not alone.

“I think Lancaster has a great shot at becoming a second Alliance,” said Bill Blaydes, a Dallas council member and chairman of two groups that focus on trade in that area. “Everything is in place for it to happen.”

The two groups – the River of Trade Corridor and the Dallas NAFTA Trade Corridor coalitions – have made it their mission to protect trade in that southeastern corner of the North Texas region. Establishing more capacity for cargo airports is one of the groups’ platforms.

Though there are some doubters, Lancaster officials think some recent developments will boost their airport’s chances of being a key component of southern Dallas County’s predicted growth, including an airport expansion grant from the Federal Aviation Administration and a new city master plan calling for airport upgrades. They list others factors as well:

– Lancaster airport is within a few miles of Interstates 35, 45 and 20, and the future Loop 9 will hug its southern boundary.

– A new $100 million, 350-acre Union Pacific intermodal railroad facility – which straddles Wilmer and Hutchins and is less than five miles from the Lancaster airport – opened this year.

– The Allen Group – a California-based investment company that specializes in industrial and distribution construction projects – has purchased about 4,500 acres and has options on about 1,500 more bordering the airport and the Union Pacific facility. The firm’s holdings are divided among Lancaster, Dallas, Wilmer and Hutchins. Plans for a Burlington Northern-Santa Fe intermodal facility are in the preliminary stages, too. Other developers are carving up land in the sector.

– Lancaster recently received a letter from the FAA finding a nearby Ellis County landfill compatible with flying operations at the airport. The FAA sometimes has concerns with airports that locate near landfills because birds congregate, presenting a danger during takeoffs and landings.

– Hangar space has more than doubled during the past three years. Plus, there’s a waiting list for planes.

Private Investment

Richard Allen, owner and CEO of The Allen Group, said private investment speaks for the promise of the area.

“We could develop up to 70 million square feet of space on our land. That means jobs – jobs in an area that has high unemployment,” Mr. Allen said. “It would be a big help to what we’re doing if there was a cargo airport there.”

He said federal, state and local entities are lining up to help ensure the region’s success. The FAA recently awarded Lancaster a $333,334 grant for airport expansion. Immediate plans will expand the runway from 5,000 linear feet to 6,500 and eventually to 8,000.

David Fulton, director of the Texas Department of Transportation Aviation Division, said the Lancaster airport has a “very bright future.” The division doles out the FAA money allocated to general aviation airports.

“Corporate aviation is beginning to discover the southern sector,” Mr. Fulton said. City Manager Jim Landon said the airport’s development is following two tracks: corporate jet traffic and cargo flights.

DeSoto Mayor Michael Hurtt said corporate executives could live in his town.

“It cements a quality market for this area,” Mr. Hurtt said. “And if an Alliance takes place, think of all the other developments that surround that airport.”

For example, Alliance is home to more than 140 companies that employ 24,000 workers. More than 2 million square feet of office space has been developed there, and the airport has spurred the construction of 5,200 homes.

The Roadblocks

While funding agencies have little doubt the airport will grow, they’re not convinced it will be another Alliance. Or that it needs to be.

Mike Nicely, the manager of the FAA’s Texas Airport Development Office, said the FAA bases funding on demonstrated need.

“We need to be shown that there is sufficient cargo business for that airport,” Mr. Nicely said. “I don’t know if there’s a need for another cargo airport in this region.”

He said Alliance’s construction was based on a North Central Texas Council of Governments study that revealed holes in the North Texas’ aviation network. A similar regional study may be in the works.

But former Fort Worth Mayor Bob Bolen, who was in office when that city approved Alliance, also questions the viability of a second huge cargo airport in the area.

“You need the critical mass before it becomes a reality,” Mr. Bolen said. “Ten years or 20 years down the road, maybe. But not now.”

Mike Berry, president of Mr. Perot’s Hillwood Properties, which developed Alliance Airport, said he was unfamiliar with Lancaster airport and its development potential. But he noted that with Alliance, Fort Worth’s ability to fund debt to extend services there was an integral part of the development.

Even today, 16 years after it opened, Alliance is only about 30 percent developed, Mr. Berry said.

However, Lancaster officials and Mr. Allen said financing options are available. Lancaster’s Mr. Landon said his city already has water and sewer available to the airport. A recently completed water tower would allow Lancaster to easily extend services to any airport expansions or private developments, he said.

And David Dean of Dean International, the consultant hired for the two coalitions, notes that Lancaster does have one advantage that Alliance didn’t have: Its airport is already in place.

“Clearly, Perot was visionary in starting Alliance,” Mr. Dean said. “But I think there’s room for at least two cargo airports.”

Visalia Times-Delta

More Businesses are Considering the Valley for Developments – but it’s Still not an Easy Sell

2 March 2006

Richard Allen, chief executive officer of The Allen Group, refers to Visalia as the “jewel of the Valley,” a great place to live and a great place to raise children. He feels similarly about the type of environment businesses that consider moving into the area will find. He tells them land costs are low, workers are readily available, distributors would have easy access to rail and highway transportation, and their businesses would operate in a population center of about 35 million customers. And although there have been some major success stories of corporate giants moving into his industrial developments – most recently apparel distributor VF Inc. and the Jo-Ann Stores West Coast Distribution Center – he knows the Central Valley is largely a well-kept secret, and that has just begun to change.

“As Visalia has grown, it has become more accepted in the industrial market,” he said. Much of the interest of late in the Central Valley, and in Visalia in particular, has been by large-scale distributors that are drawn by its central location in the state and by the presence of a major United Parcel Service hub.

“This one thing has driven the success of the Visalia market for Jo-Ann, Coast Distribution, Global Motorsports, Jim’s Formal Wear and others,” he said. Still, he said, making the decision to move a major entity here weighs heavily on the minds of corporate executives.

“You can’t get fired for going to Southern California’s Inland Empire, that’s easy,” he said. “Coming here is a tough decision.” He credits a number of factors for the growing acceptance of the Central Valley, including the bursting of the dot-com bubble, the effect of the Sept. 11, 2001, terrorist attacks and Gov. Arnold Schwarzenegger’s pro-business initiatives. “All those things affect their decisions,” he said. He said the recent influx of homeowners into the Central Valley, which has caused cities to take another look at their plans to handle growth, is a positive endorsement of the region.

“Other cities are dealing with congestion and no-growth initiatives along the coast, which in turn has caused some of the growth in Visalia,” he said. “People are coming here because of that [no-growth] attitude in other places. It stops growth and it forces our children to spend an inordinate amount of money for housing.”

He added that if Visalia and the surrounding communities were to take steps to stop growth, as has been done elsewhere, then the rising home values, the new jobs and the new retail businesses “will happen elsewhere.”

David B. Hernandez, director of construction services, left, and Richard Allen, CEO of The Allen Group, stand on top of Jo-Ann Stores Inc. at Midstate 99 Distribution Center in west Visalia. Plaza Drive can be seen in the background.

Midstate 99 Distribution Center from same perspective as the photograph, facing west.

“You can’t get fired for going to Southern California’s Inland Empire, that’s easy. Coming here is a tough decision.”