June 13, 2008

Warehouses at home in Tulare Co.

By Bob Rodriguez

Tulare County is fast becoming the latest central San Joaquin Valley community to attract large-scale distribution warehouses to the region. Paul Saldaña, president and chief executive officer of the Tulare County Economic Development Corp., said companies are drawn to the area by its affordability, central location and cooperation of city officials.

Saldaña said the EDC is working with eight companies that have expressed interest in locating to Tulare County.

“We are getting more attention, and we expect that to continue,” Saldaña said.

Officials with real estate firm Grubb & Ellis/Pearson Commercial said there are several companies looking for 1 million-plus square feet in Tulare County.

“This is a great area because of its location,” said Lou Ginise, a senior vice president with Grubb & Ellis/Pearson Commercial’s industrial division. “People want to avoid the congestion of the Inland Empire and Northern California. And when land prices go up elsewhere, that also gives us an advantage.”

Tulare County already is home to several large-scale industrial parks with the capability of expanding to meet the massive square footage needs of distribution centers.

And more space could be on the way. Tulare city officials have identified a 272-acre site south of Mefford Field airport for industrial and manufacturing use.

“We are very happy with our agricultural base, but we also recognize that we are on the main line of Union Pacific and on 99 and that is ideal for manufacturers and distribution centers,” said Bob Nance, Tulare’s redevelopment director.

The most recent distribution center to locate to Tulare County is the International Paper Co.

The company recently moved to a new 252,040-square-foot center in the MidState 99 industrial park at Goshen Avenue and Plaza Drive in Visalia.

A Fortune 100 company, International Paper is a global supplier of uncoated paper and packaging materials.

Built by the Allen Group, MidState 99 also built two industrial buildings near International Paper that total 280,000 square feet and are available for lease. The MidState 99 industrial park has 11 buildings with more than 3 million square feet of space. The tenants include, VF Corp., JoAnn Stores, Coast Distribution Systems, Workflow One, Worms Way, Bound Tree Medical and DATS Trucking.

Also building on a large scale is the Fresno-based Diversified Development Group. Last year, the company built a  500,000-square-foot distribution center for Spectrum Brands in its Plaza Drive Industrial Park in Visalia. From Visalia, the company ships batteries, personal-care products and home and garden items to seven western states.

Developers say that businesses can reach more than 65 million consumers within a two-day truck run from Visalia.

And as the price of fuel continues to rise, transportation costs are becoming a bigger factor in choosing a new location.

“These days, deals are done on a transportation-related basis,” said Jon Cross, marketing director for the Allen Group.

June 12, 2008

175-Acre Auto Auction Center Comes to Dallas Logistics Hub

By Tonie Auer

ADESA, a motor vehicle auction, reconditioning, logistical and services company, has agreed to a 20-year lease for a new auto auction center at the 6,000-acre multimodal Dallas Logistics Hub.

Terms of the deal were not disclosed. The Allen Group, developers of the Dallas Logistics Hub in Southern Dallas County, said the build-to-suit  facility will be located on 175 acres within the city of Hutchins. The property will house three buildings  totaling approximately 196,000 square feet of space for an auction arena, administrative and financial  offices and reconditioning facilities.

The Allen Group and ADESA will design, construct and commission the facility as LEED certified. Construction will commence in a few weeks, and the facility is expected to be operational in summer 2009.

The Dallas Logistics Hub broke ground in November on its first two industrial buildings. Those two buildings will provide more than 827,000 square feet of new industrial space for lease and are currently scheduled to be the first LEED-certified industrial buildings in North Texas.

During the first quarter of 2008, a wave of new construction hit the Dallas-Ft. Worth market as developers added nearly 5.5 million square feet of new industrial product, according to the a first quarter report by Grubb & Ellis Co. The South Dallas submarket saw the most new space deliveries during the first quarter, with nearly 2.3 million square feet coming online and an additional 2.5 million square feet in the works.

June 9, 2008

Master-planning the Inland Port

Inland ports add value by tying two pieces of the supply chain together in one facility. And as long as goods can be manufactured more cheaply overseas than in destination consumer countries such as the United States, real estate developers say demand for master-planned logistics hubs will balloon.

Approximately 11.7 million containers and trailers were carried on U.S. railroads in 2005, compared with 6.2 million in 1990, according to the 2007 study “Integrated Logistics Centers” by the Heitman real estate investment management firm.

Sophisticated intermodal facilities, crucial to a successful logistics hub, take advantage of lower fuel, transport and labor costs available through rail providers. They also maximize supply-chain savings by minimizing the unloading and repacking of containers as they proceed from manufacturing source to retail destination.

More than a collection of warehouses or distribution centers, logistics hubs are master-planned communities providing multiple modes of incoming and outbound transportation as well as accessible infrastructure, continuing development and services. “We’re almost like city hall,” said David Pelletier, director of communications for developer Hillwood. “If (tenants) are having a problem with their streets, they come to us, and then we approach the municipal and other authorities.

“We feel with our Alliance development we sort of developed the prototype of a logistics hub,” Pelletier said. Alliance, north of Fort Worth, Texas, opened in 1994, boasting a cargo-focused airport with an adjacent BNSF intermodal facility.

However, it was the intermodal business, rather than the airport, that helped build Alliance’s fortunes, and that, developers say, is the key to logistics hub success.

“Let’s face it: If you are in a 1 million-square-foot (distribution) facility and getting 30,000 containers a year, the drayage from six, eight or 10 miles away … is probably greater than or equal to the rent,” said Richard Allen, chief executive of industrial real estate developer The Allen Group. “The point is, you can’t afford not to be adjacent to an intermodal facility if you’re receiving a great amount of containers.”

Kansas City Southern and CenterPoint Properties, an industrial real estate company, are now developing a former Air Force base in south Kansas City into a 1,300-acre rail logistics hub. Additionally, late last year BNSF and The Allen Group announced plans to build a 1,000-acre logistics park in Gardner, Kan., a short distance from Kansas City. U.S. Customs and Border Protection has an operation in Kansas City, so cargo can move there in-bond from seaports and be cleared at the inland port. The area has also been designated a foreign trade zone.

The planned 6,000-acre Dallas Logistics Hub, also being developed by The Allen Group, has also been designated a foreign trade zone. The Dallas Logistics Hub will receive products from the ports of Los Angeles, Long Beach, Houston and new deep-water ports in western Mexico. The hub is adjacent to Union Pacific’s Southern Dallas Intermodal Terminal, four major highways and Lancaster Airport, which is planning an aircargo distribution facility.

Additionally, The Allen Group recently sold 198 acres at the Dallas Logistics Hub to BNSF railway Co. for an undisclosed sum. The property, 12 miles south of downtown Dallas, includes more than 9,000 feet of rail frontage and would also be adjacent to a proposed Loop 9/trans-Texas rail and truck corridor.

June 9, 2008

Logistics & Warehousing Industry Pumping the Heart of the Country

Logistics & warehousing industry pumping the heart of the country Fishermen can be a demanding bunch. When the time is right for trout or other favorite fish to bite, they want their lines, lures and other gear right away. To help meet these expectations, pure Fishing plans to consolidate five warehouses scattered around North America in Kansas City, MO. The move is part of the impressive growth of Kansas City as a centralized logistics hub.

Pure Fishing – which handles Abu Garcia, Mitchell, Trilene and other popular fishing equipment – will build a 400,000 sq. ft. distribution center in the SkyPort Industrial Park near the Kansas City International Airport.

“The driver is the move to integrate multiple North American warehouses into a single network to speed goods to customers and increase efficiencies,” Jeff Kisling, Pure Fishing vice president of Logistics and Services, told the AJOT. “We evaluated several locations and concluded that Kansas City was the best.” The center will be able to take goods from China through a rail link with US West Coast ports, he said, and products will go out in less-than- truckload shipments or by parcel.

Improvements in cutting inbound lead times will be dramatic, according to Kisling. Inbound goods from China, for example, now go to Pure Fishing’s warehouse in Spirit Lake, IA, from Seattle through Minneapolis. Those going to the Columbia, SC, facility travel from China to the US Southeast coast. “In both cases we plan to save about 10 calendar days going into Kansas City,” Kisling said. “It’s  mostly due to the speed of the direct path, not needing touch points and the rail efficiency of Kansas City.”

He also lauded the speed of outbound shipments from Kansas City. Kisling said a check with a major transportation provider shows that you can reach most destinations from Kansas City in three days. That is better than lead times from Spirit Lake and from Columbia, both to the East and to the West. “That is huge for us because we’re in a very seasonal business,” Kisling said. “We need to be able to get an order Monday and have theretailer receive it on Friday.”

He said Kansas City offers other attractive features. “There’s the cost of production, both in labor and operational costs, the availability of labor and how we’re able to work with city, state and private organizations,” Kisling said. One of the fruits of that cooperation is the granting of Enhanced Enterprise Zone tax credits for creating about 80 jobs. Kisling also said that arriving at an operational plan for the distribution center in 12 months was due to “a strong collaborative partnership.”

Another company that is consolidating distribution in the Kansas City area is Pacific Sunwear of California, Inc. The outdoor apparel and accessories retailer announced in January it would close its Anaheim, CA, center and concentrate distribution operations for its 1,121 stores nationwide at its warehouse in Olathe, KS, near Kansas City. According to American City Business Journals, Inc., PacSun chairwoman and CEO Sally Framesaid, “In analyzing our operations, it became clear that we can better leverage our existing capacity at our Olathe distribution center to improve the efficiency of our supply chain, better service our stores and reduce certain costs.”

One logistics company that can take the long view on Kansas City’s development as a warehousing and distribution hub is Wagner Industries. The grandfather of current CEO and President John Wagner started the company in Kansas City in 1946. “The biggest change has been the transition from single city warehouse operations to large national networks, mostly through 3PLs, third party logistics companies,” he told the AJOT.” The size of the facilities is much different: 150,000 sq. ft. used to be a big deal. Now 400,000 to one million sq. ft. are being discussed.”

Much of the growth is due to Kansas City’s location near the geographic heart of  the country, Wagner said. The city also features America’s second largest railway center (after Chicago) and a strong truck market. Most markets between Kansas City and the East and West coasts can be reached in two days. “Kansas City is starting to see the same development that you’ve seen in Dallas and Chicago,” Wagner said.

Wagner Industries and some other local 3PLs respond to growing interest from shippers and retailers by emphasizing flexibility. Wagner, for example, in 2001 took over distribution and transportation operations for S&M NuTec, a fast-growing local company making products for pets. The original warehouse leased by Wagner handled 40 to 50 pallets; within three years S&M NuTec’s business expanded to some 7,000 pallets. Wagner found a 205,00 sq. ft. warehouse for S&M NuTec while providing comprehensive EDI services for efficient exchange of information. In 2006, Mars, Inc., bought S&M NuTec, strengthening the giant candy maker’s lineup of dog treats. Wagner no longer provides all-around logistics support, but does handle outbound transportation. CEO John Wagner said that shows the company was able to meet S&M NuTec rapidly evolving needs, even after a change in ownership.

Continued strong growth of Kansas City’s distribution industry is assured, Wagner said, pointing to three massive on-going projects. Real estate company CenterPoint Properties purchased the former Richards Gebauer Memorial Airport last year and along with Kansas City Southern (KCS) railway will develop the CenterPoint-KCS Intermodal Center on the land. CenterPoint plans to build more than five million sq. ft. of warehousing and industrial facilities over the next approximately 10 years. Kansas City Southern is constructing an intermodal facility on the rest of the land.

BNSF Railway plans to spend up to $1 billion to build a logistics facility at Gardner, KS, near Kansas City. Industrial land developer The Allen Group will help develop the 1,000-aere park. In the third large project, th Kansas City government’s aviation department has hired developer Trammell Crow to build an 800-acre multi-use facility near Kansas City International Airport. The first phase will include about 2.7 million sq. ft. of space for intermodal and logistics operations and light manufacturing.

June 9, 2008

The Allen Group Completes Facility for International Paper

The Allen Group completes facility for International Paper The Allen Group announced that International Paper Company, a global Fortune 1OO uncoated paper and packaging company, has commenced operations at their new 252,040 square-foot distribution facility at MidState 99 logistics park. The official ribbon-cutting ceremony was held at their new building in Visalia. California.

The Allen Group also officially announced the opening of two speculative industrial buildings adjacent to IP’s build-to-suit facility. MidState Hayes Building 5 (139,590 square foot) and MidState Hayes Building 6 (J 40,700 square feet) are newly constructed warehouse/distribution facilities that are now available for occupancy. The Allen Group offered walking tours of the industrial buildings, as well as the IP distribution facility, immediately following the ribbon-cutting ceremony.

“Visalia is emerging as one of the prime industrial markets in California’s Central Valley,” said David Hernandez, Director of Construction Services for The Allen Group’s Visalia operations. “Many other Fortune 500 companies are taking advantage of this strategic location which offers a quality workforce, more affordable real estate and transportation costs and the ability to reach over 65 million consumers in a two-day truck turn.”

The MidState 99 Distribution Center now has 11 existing buildings totaling over three million square feet of space. Current tenants include VF Corporation, International Paper Company, JoAnn Stores, Coast Distribution Systems, Workflow One, Worms Way, Bound Tree Medical, ORS NASCO and DATS Trucking. Approximately 200 acres of land remain in the park for future buildings as large as one million square feet.

Adesa moving to Hutchins

June 6, 2008

By Sheryl Jean

Dallas County’s giant inland port has landed its first major tenant: an Adesa auto auction on 175 acres in Hutchins.

Indiana-based Adesa Inc., one of the nation’s largest auto auction companies, said the project is valued at more than $40 million and will employ about 350 people.

Adesa has signed a 20 -year lease for about 200,000 square feet in three buildings that developer Allen Group will build at the Dallas Logistics Hub, said Dan McAuliffe, president of Allen Group’s Texas operations.

Construction will begin within 30 days, with the auction house scheduled to open in summer 2009 on the northwest corner of Wintergreen and Lancaster-Hutchins roads.

The Hutchins auto auction will replace a smaller, 250-employee center in Mesquite that Adesa has operated for 12 years. Adesa plans to offer job transfers to those employees.

“The Dallas market is one of the largest car markets in the country,” said Warren Byrd, Adesa’s executive vice president of corporate development.

He said he liked the proximity to the metro area and its easy access to Interstate 45.

It’s part of Adesa’s expansion plans to better compete with a larger rival, Mr. Byrd said.

This year, the company opened an auction near Raleigh, N.C, and it plans to relocate to larger sites in Kansas City, Mo., and Phoenix.

Adesa operates 60 used-car auction centers in North America, including sites in Austin and Houston, salvage auctions and loan offices. In Hutchins, Adesa plans to sell 2,300 vehicles to auto dealers at two to three auctions a week, Mr. Byrd said.

Hutchins Mayor Artis Johnson said he was impressed with a visit this year to an Adesa auction center in Georgia.

He said Adesa will attract more businesses and jobs to the city of 3,500 people.

“I was there during an auction, and I talked to some of the businesses nearby,” Mr. Johnson said. “They said it brought hotels and retail all of the things Hutchins really needs.”

“Adesa is a great project to kick off our development,” Mr. McAuliffe said.

Allen Group hopes to announce tenants in two speculative industrial buildings totaling 828,000

square feet by the end of the summer, he said.

“There’s no doubt in my mind that South Dallas will be a bulk distribution corridor in the Dallas-Fort Worth region, and this [Adesa] is just a small sign of what’s to come,” said Josh McArtor, an industrial broker for CB Richard Ellis in Dallas.

The hub, 6,000 acres near Interstates 20 and 45 in southern Dallas County, says it will be the only development in North America with two major rail freight facilities.

Last month, Burlington Northern Santa Fe bought 198 acres to develop an intermodal facility. Union Pacific Railroad already has an operation near the hub.”

Adesa to expand auto-auction business

June 6, 2008

Adesa Inc., one of the country’s largest wholesale auto auctions, is poised to expand its operations in North Texas by building a 170-acre facility in the largely undeveloped town of Hutchins, located 12 miles southeast of Dallas.

The car auction campus, when ramped up during the next four years, will employ more than 300 people, including at least half of those full time, said Warren Byrd, Adesa’s executive vice president for corporate development.

The deal marks the first tenant landed by The Allen Group for its 5,000-acre planned Dallas Logistics Hub business park. Adesa’s build-to-suit campus will include three buildings totaling 200,000 square feet, said Dan McAuliffe, president of Allen Development of Texas, who confirmed that negotiations between Adesa, Hutchins and The Allen Group are under way to finalize details.

“We have entered into a 20-year lease,” McAuliffe said. Plans call for Adesa’s campus to achieve green standards set out by the Leadership in Energy and Environmental Design, he said.

Adesa leases space at Dallas Logistics Hub

June 5, 2008

Auto auction company Adesa Inc. has entered into a 20-year lease for a new 175-acre auction center at the Dallas Logistics Hub in Hutchins.

The property will house three buildings totaling about 196,000 square feet of space for an auction arena, administrative and financial offices and reconditioning facilities, according to The Allen Group, developers of the Dallas Logistics Hub.

Adesa plans to employ several hundred full- and part-time employees once the facility is fully operational.

Construction will begin in a few weeks, and the facility is expected to be operational in summer 2009.

Adesa, based in Carmel, Ind., provides auction, reconditioning, logistical and other vehicle-related services. It has 60 auction locations in the United States, Canada and Mexico, located near metropolitan areas with a large concentration of used vehicle dealers.

The Dallas Logistics Hub is a 6,000-acre logistics park adjacent to four major highways, dual rail, intermodal facilities and a future air-cargo airport.

The Allen Group is a San Diego-based commercial development firm. It has a regional office in Dallas.

For more on the Adesa deal, read Dallas Business Journal story “Adesa to expand auto-auction business.”

Web sites: www.allengroup.com, www.adesa.com

The Dallas Morning News

Dallas County commissioners to discuss southern development

June 2, 2008

Dallas County commissioners Tuesday morning will discuss taking part in a major plan for aiding development in the southern part of the county, where growth has been exploding around a rail hub and busy trade center.

The county’s inland port is “perhaps the greatest economic development opportunity remaining” in the county, according to a commissioners’ briefing for Tuesday’s meeting.

The problem is that the area south of Interstate 20 is lacking basic infrastructure, such as roads and water and sewer lines. And small cities, like Wilmer and Hutchins that sit in the middle of the development, lack the money and expertise to help fulfill those needs, county officials said.

Without a comprehensive plan for the area, development will be random, piecemeal and of a lesser quality, according to the briefing to commissioners.

With its easy access to three interstate highways, the 6,000-acre Dallas Logistics Hub has become a magnet for development. It can accommodate 60 million square feet of commercial space, and several warehouses and distribution centers are already in operation, with many more planned.

Union Pacific has a major rail operation near the hub, and the Burlington Northern Santa Fe Corp. recently bought almost 200 acres nearby. BNSF, the nation’s second largest railroad, is expected to open an intermodal terminal like Union Pacific’s where freight containers are loaded and unloaded from trains.

Commissioners are expected to discuss whether the county should help pay for the comprehensive plan, which will identify the area’s infrastructure needs and provide a framework for building it. The project is estimated to cost $902,000. Under the proposal, the bulk of it would be split among the North Central Texas Council of Governments, the city of Dallas and the county — with each chipping in $290,000. It is expected to be competed by April 2010.

About one-third of the area being studied is in unincorporated Dallas County. It includes some of Dallas as well as Wilmer, Hutchins and Lancaster. According to the briefing, a seven-member oversight committee would include representatives from those four cities, the council of governments and Dallas County.

The committee would select a consultant to help with the project. The council of governments would develop population, housing and employment projections, as well as labor, transportation and economic base studies.

County commissioners are not scheduled to vote on it Tuesday.