August 23, 2008

Many companies still using trucks

By VALERIE GIBBONS

Developer Richard Allen went to great lengths to build two San Joaquin Valley industrial parks next to railway lines, just in case a company wanted to use the line for its distribution.

In 15 years he hasn’t had any takers. It’s not that the Allen Group’s West Visalia and Shafter parks aren’t thriving — they are — it’s that the Central Valley’s 300 mile-long span between the major urban centers of San Francisco, Sacramento and Los Angeles is too short to be an efficient use for rail.

“Using rail to go 200 miles is like using a semi-truck to go 100 feet; it’s just not competitive,” Allen said. The Allen Group’s MidState 99 Distribution Center in west Visalia has 2 million square feet of space, all occupied. 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.

All of the companies use trucks to ship their goods. The scene is much different at the Allen Group’s other parks in Dallas and Kansas. There, major retailers are building towering warehouses and distribution hubs stretching millions of square feet simply because of the rail lines. “They have to be there,” he said. “Because if their center is 30 miles from the railway, they need to load it onto a truck and ship it in — and that’s inefficient.”

But with the rise in fuel prices that business model may be changing —at least for bulk items such as lumber, steel, coal, sand and agricultural products. Zoe Richmond, a spokeswoman for Union Pacific Railroad — which runs trains along the east side of Highway 99 — says traffic has been up nationally this year.

“Our commodity shipments have been up,” she said. “But our other traditional customers who ship containers or cars have been down.” Union Pacific saw its profits rise 18 percent this year. Burlington Northern Santa Fe’s profits from freight were up 16 percent.

It’s a mixed blessing for Tulare County. While more companies are moving to rail to ship their goods through the Valley, the trains don’t stop in Visalia. That leaves the vast majority of the area’s imports and exports moving by truck.

Truck emissions

Officials with the San Joaquin Valley Unified Air Pollution Control District said emissions from heavy- and medium-duty trucks account for 17 percent of the Valley’s air pollution. By 2020, daily truck traffic will grow from today’s average of 18,760 trucks a day to 37,500 trucks a day, the air district said.

That pattern won’t change any time soon for some east county businesses. Reliability and accountability issues have left many orange growers shipping their product by refrigerated truck.

“It’s a perishable commodity and it’s imperative that it get there quickly,” said Bob Blakely, the director of grower services for California Citrus Mutual. Although oranges have a longer shelf life than a tomato or a peach, local orange growers switched from using rail to trucks once the modern highway system came of age. Today, growers can truck their products to anywhere within the country in a matter of days.

“It can make it there within the same time period by train but you never know when it’s going to be parked on [a side track] somewhere for a week,” he said. “The more time it spends in shipping, the higher the rate of decay. If railroads were more reliable that would be a be big hurdle. Rail would be a lot more attractive.”

One New York-based rail company is hoping to bridge that gap. This June Railex, LLC, began building a 200,000-square-foot cold storage facility just off of Highway 99 in Delano. The company plans to ship agricultural commodities east on its own 55-car train to the company’s warehouse in Rotterdam, N.Y. Railex plans to hire 300 people.

The company’s literature says it will guarantee shipments to New York within five days.

Officials with Railex did return calls for comment bypress time.

But it may take more than a one company’s efforts to make rail a priority for local growers.

The problem: Blakely said even though many growers ship overseas to Asian markets, they still use trucks to get the oranges to the ports.

“The oranges can be in-route for up to 14 days but then again they have a higher tolerance for what’s allowable in their products.”

But even if more of those goods were to be shipped to California’s ports by train, Allen said right now the railroads don’t have the capacity to accommodate a whole new class of freight.

“The railroads are making money for the first time in 30 years,” Allen said. “They’re moving a lot more non-containerized goods.

“The problem is that it’s not happening to and from Visalia.”

Rail cars, left, await being coupled by an engine, right, on the San Joaquin Valley Railroad lines Thursday along Goshen Avenue on the west side of Visalia.

Truck traffic in the San Joaquin Valley accounts for:

• 87 percent of the goods shipped out of the Valley
• 81 percent of the goods shipped into the Valley
• 50 percent of all commodities shipments
• 24 percent of all of the traffic on Highway 99
• 30 percent of all of the traffic on Interstate 5

Source: San Joaquin Valley Unified Air Pollution Control District

• U.S. railroads originated 1,606,877 carloads of freight in July 2008, up 16,825 carloads (1.1%) from July 2007.
• Number of railroads: 24
• Shipped 7.5 million carloads of freight
• Food products: 9 percent
• Primary metal products: 5 percent
• Glass/stone: 5 percent
• Chemicals: 5 percent
• Mixed freight: 54 percent
• Other: 21 percent

Source: The Association of American Railroads

Truck traffic in the San Joaquin Valley accounts for:

• 87 percent of the goods shipped out of the Valley
• 81 percent of the goods shipped into the Valley
• 50 percent of all commodities shipments
• 24 percent of all of the traffic on Highway 99
• 30 percent of all of the traffic on Interstate 5

Source: San Joaquin Valley Unified Air Pollution Control District

• U.S. railroads originated 1,606,877 carloads of freight in July 2008, up 16,825 carloads (1.1%) from July 2007.
• Number of railroads: 24
• Shipped 7.5 million carloads of freight
• Food products: 9 percent
• Primary metal products: 5 percent
• Glass/stone: 5 percent
• Chemicals: 5 percent
• Mixed freight: 54 percent
• Other: 21 percent

Source: The Association of American Railroads

August 8, 2008

Tular County Growth Hitting the Target

By BoNhia Lee

The efforts of Tulare County cities to bring in more jobs and increase shopping opportunities are starting to bear fruit Tulare County is known for its annual three-day World Ag Expo, which attracts agricultural enthusiasts and businesses from all over the world.

Last year’s expo attracted more than 1,600 exhibitors and 100,000 visitors, including 1,500 people from 74 different countries. The event generates an annual economic impact of $1.2 billion.

But what happens in Tulare County the other 362 days of the year when eyes are not focused on the world’s largest agricultural event?

That’s when Tulare County cities work on expanding their communities and providing more jobs as well as increased entertainment and shopping choices for their, residents.

That work is paying dividends. The county’s industrial sector has flourished, and retail businesses are filling new shopping center developments. Tulare County roadways are also finally getting a long-awaited facelift.

Location, location, location

Tulare County’s prime location near a main railway corridor and Highway 99 makes it an excellent place for large distribution centers to locate and do business.

Despite the challenging economy, the industrial market remains solid in Tulare County, according to a recent report released by Grubb & Ellis.

In May, The Allen Group, a commercial, office and retail developer, completed two 140,000-square-feet buildings for lease and a 252,000-square-foot distribution facility for International Paper Company at its Midstate 99 Distribution Center in Visalia.

Another 157 acres at Plaza Drive and Riggin Avenue in Visalia is in the process of being annexed to the City of Visalia for industrial development. The City of Tulare is also moving forward with annexation of 280 acres for a business park, according to the report.

“The Central Valley is really becoming an emerging location for distribution for the West Coast,” said Jon Cross, director of marketing for The Allen Group.

Cross said large companies are shifting their focus away from doing business in congested places like Los Angeles, where the cost of leasing space is $io-$i5 per square foot compared to $3-$4 per square foot in the Central Valley.

Companies are starting to realize the biggest benefit in Visalia, especially at the Midstate 99 logistics park, is the location. Cross said. The facility is in a UPS regional hub, allowing companies to distribute goods overnight to 98 percent of California at UPS’ ground rate.

The MidState center has 11 buildings totaling more than 3 million square feet. Current tenants include VF Corp., International Paper Company, Jo-Ann Stores, Coast Distribution Systems, Workflow One, Worms Way, Bound Tree Medical, ORS Nasco and DATS Trucking.

There are still 200 acres of land remaining in the park for future building opportunities, which would allow for additional buildings up to a million square feet.

“One of the unique things about the Central Valley, especially the Visalia; and Tulare County area, is the fact it is benefiting from not being overdeveloped,” Cross said. “There is strong labor, low real estate costs and a great infrastructure system.”

The growth of the industrial sector helps to create jobs in the county, said Jim Claybaugh, executive director of the Visalia Economic Development Corp. More than 5,000 people are employed by different industrial park firms in the area, he said.

Most of the jobs are entry-level positions, so companies can hire people with fewer job skills, then give them training and an opportunity for more upward mobility, Claybaugh said.

Shoppers get more choices

Tulare county residents no longer have to travel to Fresno or other bigger cities to do their shopping. Big-name retailers are setting up shop in town. The southern section of the City of Visalia along Mooney Boulevard has seen a lot of commercial development in the last few years, Claybough said.

The Packwood Regional Shopping Center spans 35 acres along both sides of the street. It’s anchored on one side by Lowe’s Focus I 9 and Best Buy and on the other side by Target.

Retail development has also spread to the city’s poorer north side, where a Lowe’s store anchors a shopping center at Demaree and Riggin avenues. Meanwhile, a new Target store is expected to open this fall at the Orchard Walk East shopping center at Dinuba and Riggin avenues. Sportsman’s Warehouse, a fishing and hunting retailer, is also scheduled to open a store there.

The City of Dinuba has worked on positioning itself as a regional retail center for the last five years. City leaders want to provide residents with 75-80 percent of their retail and entertainment needs within a 10- minute driving radius.

“We’ve put a lot of effort and energy into building our retail center and providing diversity in the kinds of retail options that are here for people, so they don’t have to make that longer drive to Visalia or Fresno,” said Dinuba City Manager Ed Todd.

Right now, Dinuba officials estimate residents are able to carry on about 65 percent of their shopping and entertainment activities within the city.

In 2006, the town’s Wal-Mart at El Monte Way was expanded into a Super Wal-Mart. The store added 60,000 square feet of pace to sell grocery items. The expansion also created 100 new jobs.

Entertainment is also available closer to home with the recent opening of the 18-hole Ridge Creek Dinuba Golf Club. “I think we’re having quite a lot of success in achieving that goal,” Todd said, “and we’re going to continue building on it.”

Measure R funds kick in

Road improvements, using Measure R funds are scheduled to begin this month to help alleviate traffic congestion along several roadways in Tulare County.

Measure R is a one-half cent sales tax passed in 2006 that will generate more than $652 million to ad- dress the county’s major transportation needs in the next 30 years.

Fifty percent of the funds will go to improve freeway interchanges, add lanes and increase safety. Another 35 percent will be spent on improving each city and the county’s transportation system, which includes pothole repair, repaving streets, bridge repair, traffic signals and sidewalk improvement.

About 14 percent will be spent to improve public transit programs such as the addition of bike lanes and air quality improvements. The last one percent goes to the Tulare County of Association of Governments to administer Measure R.

“It’s a really exciting time, because we’re getting that first glimpse of what we can do with Measure R regionally,” said Ted Smalley, executive director of the Tulare County Association of Governments, in the organization’s newsletter.

The first regional project to be funded by Measure R begins this month with a signal installation west of Dinuba at Avenue 416 and Road 56.

Later this month, two other regional projects will begin. One is the construction of the Santa Fe overpass in Visalia. The $i2.6-million project will open a major north and south corridor.

A second project is the widening of Road 80 to alleviate traffic between Dinuba and Visalia. According to traffic counts, about 6,000 vehicles use the road daily. The project will widen the road to four lanes from Avenue 304, also known as Goshen Avenue, to Avenue 328.

Other road projects coming up within the next year include: The widening of Scranton Avenue and Indiana Street in Porterville, improving the Ben Maddox overpass in Visalia, installing traffic signals west of Farmersville at the corner of Avenue 280 and Road 156 and conducting a study of the Avenue 416 bridge in Dinuba.