Anchorage Industrial Land Assessment. Final Report

Transcription

1 Anchorage Industrial Land Assessment Final Report Presented to: AEDC, MOA April 10, 2009

2 Introduction Assessment of Supply and Demand for Industrial Land from 2010 to 2030 Guidance for Title 21 Rewrite Key Issues: How much industrial land will be required through 2030? Is the existing industrial land supply sufficient over this period? Is redevelopment necessary, and where are the best prospects? What land use policies are recommended to facilitate sustained economic growth? 1

3 Study Area 2

4 Economic Context Alaska s Significant Industries/ Prospects for Growth: Mining/ Oil and Gas Tourism Alternative Energy Shipping/ Logistics 3

5 Major Projects Identified by AEDC Potential Annual Workforce Requirements Over the Next Decade Number of Jobs 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2, Trucking Industry Drivers ANS Gas Line Ops ANS Gas Line Infrastructure ANWR Bristol Bay Oil&Gas Cook Inlet OCS Pebble Construction & Ops Pt. Thompson ANS Gas Line Donlin Creek Construction & Ops C.I. Spur Gas Line Copper River Basin Chuitna Coal Construction & Ops Renewable Energy General Hard Rock Expl. & Dev. Rock Creek Kensington Mine ANS Offshore Upper Cook Inlet Prudhoe Region NPR-A Aging O&G Workers Power Generation General Construction 4

6 Additional Projects (Abbreviated List) Port of Anchorage expansion Healy Coal Mine expansion Bristol Bay OCS Knik Arm Bridge Western Arctic Coal Project Nenana Basin exploration Chukchi Sea OCS BP Milne Point Heavy Oil Project BP Liberty Extended Reach Project Future expansion of Red Dog Mine Instate petrochemical facility projects resulting from ANS gas line Mat-Su railroad spur 29 Alaska mine prospects currently under exploration and development work 5

7 Other Eventualities Affecting Demand Fuel prices (affecting timing of ANS/other, economics of remote fabrication/assembly) Climate change shipping patterns, population & labor force growth, tourism Economic development initiatives - Permanent Fund Knik Arm Bridge/Other Infrastructure Direct foreign investment Military expansion Federal stimulus spending Others 6

8 Goods Movement Economic Drivers Airport Fed Ex and UPS major carriers Other large and small cargo carriers Freight forwarders/support operations Port 90% of goods for 80% of State Transload to rail, truck and barge 3 new cranes with 7 lanes to increase throughput Military mission support Railroad Major gravel input from Mat-Su Borough Other key cargo includes pipe, cement, and consumer goods 7

9 Industrial Support to MOA Infrastructure Projects and Goods Movement Sectors Examples Include: Pipe coating Module assembly/modification Yard/lay-down uses Machine shops (including pipe threading) Architecture/engineering (general purpose) Warehouse/distribution (airport logistics, retail support) Aggregate/batch plants (construction support) 8

10 Economic Context Anchorage is Economic Center of Alaska and is Positioned to Capture International Capital to Support Local Economic Development Workforce Issues (transient, challenge to retain young talent) Partially Functional Industrial Market For-Sale Industrial Buildings: $57 to $240 per square foot (avg. $145/SF in 2008) For Lease Industrial Buildings: $1.00 to $1.10 per building square foot per month Extremely low vacancy rates (2 3%) Very High Site Development Costs 9

11 Anchorage Economic Overview Total Population ( ) Persons in 1,000s Historical Data Source: Woods and Poole Economics, Inc. and EPS. 10

12 Economic Overview (Continued) Total Employment ( ) Employees (in 1,000s) Historical Data Source: Woods and Poole Economics, Inc. and EPS. 11

13 Industrial Development in Anchorage 1,250.0 Cumulative I-1 and I-2 Industrial Development ( ) Total I-1 and I-2 I-1 Zoning I-2 Zoning Industrial Development (in Acres) 1, Source: Woods and Poole Economics, Inc. and EPS. 12

14 Employment Projections Historical Employment Growth Rate in MOA : 2.1 % Average Annual Growth Incorporates a major boom period Low base employment contributes to high growth rates 1.3% since Projections Base Scenario: 1.2% Avg. Annual Growth Constitutes 57,500 New Jobs High Growth Scenario: 1.7% Avg. Annual Growth Constitutes 85,000 New Jobs 13

15 Employment in MOA by Category (high growth) Applied Annual Employment Nominal Item Category 2010 Growth 2030 Change Non-Government Forestry, Fishing-Related, and Other n/a 1, % 1, Mining Mining 2, % 2, Utilities TPU % Construction Construction 13, % 18,626 4,758 Manufacturing Manufacturing 2, % 3, Wholesale Trade Wholesale Trade 5, % 7,311 1,653 Retail Trade Retail Trade 22, % 29,863 7,475 Transportation and Warehousing TPU 12, % 16,833 4,327 Information Services 5, % 6,468 1,398 Financing and Insurance FIRE 7, % 9,764 2,224 Real Estate FIRE 8, % 10,703 2,575 Professional and Technical Services Services 15, % 23,533 8,139 Management Services 1, % 1, Administrative and Waste Services Services 9, % 12,825 3,146 Educational Services Services 2, % 5,238 2,343 Health Care and Social Assistance Services 24, % 47,305 22,441 Arts, Entertainment, and Recreation Services 4, % 6,663 2,342 Accommodation and Food Services Services 15, % 21,288 5,808 Other Services, Except Public Admin. Services 10, % 14,677 4,373 Total Non-Government 166, % 241,404 75,034 Government Federal Civilian Government 9, % 10,665 1,226 Federal Military Government 13, % 15,164 1,653 State and Local Government 20, % 27,977 7,328 Total Government 43, % 53,806 10,207 Total 209, % 295,210 85,241 14

16 Historical/Projected MOA Employment Growth Base Scenario High Growth Scenario Employees (in 1,000s) Historical Data Projection Data Source: Woods and Poole Economics, Inc. and EPS. 15

17 Industrial Land Demand Analysis Industrial Land Demand Analysis Assumptions Employment Density Assumptions Land Use Density (Floor-Area Ratios) MOA Sq. Ft./ Land Use Zoning Category FAR Employee Industrial Services, Assembly, Manufacturing I-1 and I ,000 Miscellaneous Industrial [1] I-1 and I ,800 Warehouse/Distribution I-1 and I ,800 Industrial Flex Space I [1] Miscellaneous Industrial includes Open Storage, Processing, Heavy Manufacturing, Utilities, Trades, and Transportation. "LU_def" 16

18 Estimated Supportable Industrial Space ( ): Base Scenario Industrial Services/ Assembly/ Warehouse Misc. Industrial Total Item Manuf. Distribution Industrial Flex Industrial New Jobs Using Space 4, ,720 Estimated Building Sq. Ft. 4,780,000 1,040, , ,000 6,450,000 Estimated Net Developable Acres Average Annual Absorption "indspace_summary" 17

19 Estimated Supportable Industrial Space ( ): High Growth Scenario Industrial Services/ Assembly/ Warehouse Misc. Industrial Total Item Manuf. Distribution Industrial Flex Industrial New Jobs Using Space 7, ,530 Estimated Building Sq. Ft. 7,100,000 1,580, , ,000 9,640,000 Estimated Net Developable Acres Average Annual Absorption "indspace_summary" 18

20 Summary of Historical and Projected Industrial Development 3, ,500.0 Base Scenario High Growth Scenario Industrial Development (in acres) 2, , , Historical Data Projection Data Source: Woods and Poole Economics, Inc. and EPS. 19

21 Industrial Land Supply GIS/ CAMA-Based Inventory Supplemented by field observation, satellite imagery, and personal interviews. Comprehensive assessment of industrial land supply, with emphasis on general magnitude of supply overall, as well as specific categories: Vacant/ Undeveloped Industrial Land Underutilized/Redevelopable Industrial Land Constrained Land with: Soil Issues Parcel Size Constraints 20

22 Overall Context and Study Area 21

23 Study Area Continued: Eagle River, Chugiak/ Eklutna 22

24 Physical Characteristics: Topography 23

25 Physical Characteristics: Streams, Lakes, and Wetlands 24

26 Physical Characteristics: Soil Conditions 25

27 Physical Characteristics: Circulation Infrastructure 26

28 Port, Railroad, and Other Publicly-Owned Lands 27

29 Physical Characteristics: Open Space 28

30 Anchorage s Industrial Typologies Warehouse/ Supply Laydown and Storage Yard Storage Manufacturing and Fabrication Mixed Use 29

31 Characterization of Industrial Supply Currently Underutilized/ Undeveloped Redevelopable Total District Acres % of Total Acres % of Total Acres % of Total Anchorage Bowl Northwest % % % Northeast % % % Central % % % Southeast % % % Southwest % % % Subtotal Anchorage Bowl % % 1, % Other Areas Chugiak/ Eklutna % % % Eagle River % % % Subtotal Other Areas % % % Total % % 1, % [1] Does not include publicly-owned land. "supply_summ" 30

32 Southwest Sub-Area: 3.8 Acres Vacant, 98.2 Acres Underutilized 31

33 Northwest Sub-Area: 31.0 Acres Vacant, 36.3 Acres Underutilized 32

34 Central Sub-Area: Acres Vacant, Acres Underutilized 33

35 Northeast Sub-Area: 70.8 Acres Vacant, 76.5 Acres Underutilized 34

36 Eagle River Sub-Area: 48.7 Acres Vacant, 10.6 Acres Underutilized 35

37 Chugiak-Eklutna Sub-Area: Acres Vacant, 29.0 Acres Underutilized 36

38 Airport Sub-Area 37

39 Industrial Land Supply and Demand 600 to 900 acres of industrial demand, plus 20% buffer yields 720 to 1,080 acres needed through acres total vacant/ undeveloped industrial land supply in entire MOA Only 600 in Anchorage Bowl 200 in Northern Areas High Base Growth Item Scenario Scenario Land Demand Estimated Demand Land Demand "Buffer" Total Land Demand 720 1,080 Undeveloped Land Supply Anchorage Bowl Subtotal Surplus/ (Deficit) in Anchorage Bowl (115) (475) Eklutna/ Other Total Undeveloped Supply including Eklutna Surplus/ (Deficit) including Eklutna 81 (279) 38

40 HOWEVER Of the 800 acres total vacant/undeveloped industrial land supply in MOA, nearly half has known soil conditions or other factors which could impede the ability for development If this land is cannot be feasibly developed, a significant land shortage is predicted High Base Growth Item Scenario Scenario Gross Vacant Land Supply Less Acreage with Soil Limitations (370) (370) Subtotal Undeveloped Land Supply W/O Soil Limitations Total Land Demand (720) (1,080) Subtotal Surplus/ (Deficit) (289) (649) 39

41 Role of Strategic Redevelopment The EPS Team has identified approximately 662 acres of underutilized/redevelopment land to mitigate the potential industrial land supply shortfall High Base Growth Item Scenario Scenario Subtotal Surplus/ Deficit (excluding parcels with soil limitations) (289) (649) Underutilized Acres (Potential Additional Supply) % of Underutilized Acres % of Underutilized Acres Subtotal Surplus/ (Deficit) Assuming 50% of Underutilized Acres are Redeveloped 42 (318) Assuming 25% of Underutilized Acres are Redeveloped (124) (484) 40

42 Overall Conclusions Continuation of resource- and logistics-driven economy for the foreseeable future. Protect land to support driver industries Stronger multiplier effect from major resource projects Reduce the bust effect by creating permanent economic base initially instigated by major projects (power of entrepreneurship and adaptation) Support industries benefitting from land protection include labor intensive, high value industrial uses 41

43 Feasibility Concerns Owner users are the preeminent buyer/developer of industrial properties. Prevailing land values ($12/SF) are propped-up by the potential for retail development. Industrial development does not pencil out for speculative development, due to extraordinary costs of utility installation and the need to replace peat soils to provide foundational stability. 42

44 Feasibility Concerns (cont.) Industrial development is fickle and requires coaxing Illustration of Development Economics: Developed Value $145/SF Cost of Land $ 12 Site Prep and Vertical Costs $ 125+ Developer Profit $ 13 COST SUBTOTAL $ 150/SF Result: NEGATIVE RESIDUAL LAND VALUE Precludes speculative, multi-tenant development May be remedied by lower land values (less retail speculation) Assistance with infrastructure, site preparation costs also helpful Retail uses are better able to adapt and are compelled by a growing population (better able to pay to play ) 43

45 Overall Conclusions Vacant land located in the Anchorage Bowl is likely insufficient to meet regional industrial demand through 2030, even assuming moderate growth in employment. Although the MOA appears on paper to have an abundance of industrially zoned land, much of this land is constrained and difficult to develop in an economically feasible manner. Approximately 370 acres of vacant industrial supply have potentially problematic soil conditions, which could impede the ability for this land to be feasibly developed. Other vacant land may have other development constraints, such as a lack of adequate infrastructure, poor adjacencies, or small parcel sizes. 44

46 Overall Conclusions (Cont d) Approximately 660 acres of underutilized industrial land exist in Anchorage. Although not vacant, present considerable redevelopment opportunities for industrial growth Public or Quasi-Public landowners hold additional land to accommodate specialized industrial growth. Air cargo, other airport related uses (constrained by FAA limitations) Multi-modal, port-related support facilities (also utilizing ground leases) Long term prospects for other holdings (base reuse?) 45

47 Policy Recommendations Preserve Remaining Industrial Land Proposed Title 21 modifications are needed to protect industrial land from retail and other commercial encroachment Provide Flexible Approach to Industrial Zoning Strike a balance between I-1 and I-2 zoning categories Identify areas of I-1 that can be converted to I-2 as needed, based on market conditions Consider appropriate buffers from sensitive receptors 46

48 Policy Recommendations (Cont d) Redevelopment Feasibility and Financing Approach Find economical means to deliver needed infrastructure Retrofit older industrial areas Reduce overall cost incidence to industrial development 47

49 Policy Recommendations (Cont d) Conduct a formal evaluation of potential development and funding strategies: Identify target redevelopment areas Evaluate potential for master-planned industrial retrofit area Public/ private development and tax allocation bond financing Land-secured tax-exempt bond financing State funding assistance 48

50 Policy Recommendations (Cont d) Required Further Analysis Several local efforts should be considered as an effort to garner additional information and craft viable long term policy: Detailed Land Characterization Study identify and clarify supply anomalies Resource Industry Economic Impact and Supplier Development Strategy Eagle River/Eklutna/Chugiak Comprehensive Industrial Development Strategy 49

51 Public-Private Private Development Public Stakeholder Collaboration Public stakeholders have industrial land development capacity and are critical to supporting regional economic drivers. Airport Expansion plans for North, South, and East Air Parks Critical logistics partner for industrial expansion Port Existing land is 120 acres: adding 135 acres Continued public funding for ongoing port expansion critical Continue partnership with military installations for shared facilities/resources Railroad Large industrial landholder with numerous small lot facilities ground leased primarily as light industrial logistics Currently consolidating parcels to accommodate new users Limited expansion potential Balancing environmental concerns related to Ship Creek with industrial and rail demand 50